Labrel Laban 60 Cases Complete

1) Paper vs. Laguesma GR No.
101738 April 12, 2000
G.R. No. 101738 April 12, 2000
PAPER INDUSTRIES CORPORATION OF THE PHILIPPINES, petitioner,

vs.
HON. BIENVENIDO E. LAGUESMA, Undersecretary of Labor and Employment, HON. HENRY
PABEL, Director of the Department of Labor and Employment Regional Office No. XI and/or
the Representation Officer of the Industrial Relations Division who will act for and in his
behalf, PCOP- BISLIG SUPERVISORY AND TECHNICAL STAFF EMPLOYEES UNION,
ASSOCIATED LABOR UNION and FEDERATION OF FREE WORKERS, respondents.
DE LEON, JR., J.:
Before us is a petition for certiorari seeking to annul the Resolution1 and the Order2 dated April 17,
1991 and August 7, 1991, respectively, of public respondent Bienvenido E. Laguesma, acting then
as Undersecretary, now the Secretary, of the Department of Labor and Employment (DOLE), which
reversed the Order dated March 27, 19903 of Med-Arbiter Phibun D. Pura declaring that supervisors
and section heads of petitioner under its new organizational structure are managerial employees and
should be excluded from the list of voters for the purpose of a certification election among
supervisory and technical staff employees of petitioner.4
The facts of the case are the following:
Petitioner Paper Industries Corporation of the Philippines (PICOP) is engaged in the manufacture of
paper and timber products, with principal place of operations at Tabon, Bislig, Surigao del Sur. It has
over 9,0005 employees, 9446 of whom are supervisory and technical staff employees. More or less
487 of these supervisory and technical staff employees are signatory members of the private
respondent PICOP-Bislig Supervisory and Technical Staff Employees Union (PBSTSEU).7
On August 9, 1989, PBSTSEU instituted a Petition8 for Certification Election to determine the sole
and exclusive bargaining agent of the supervisory and technical staff employees of PICOP for
collective bargaining agreement (CBA) purposes.
In a Notice9 dated August 10, 1989, the initial hearing of the petition was set on August 18, 1989 but
it was reset to August 25, 1989, at the instance of PICOP, as it requested a fifteen (15) day period
within which to file its comments and/or position paper. But PICOP failed to file any comment or
position paper. Meanwhile, private respondents Federation of Free Workers (FFW) and Associated
Labor Union (ALU) filed their respective petitions for intervention.
On September 14, 1989, Med-Arbiter Arturo L. Gamolo issued an Order 10 granting the petitions for
interventions of the FFW and ALU. Another Order 11 issued on the same day set the holding of a
certification election among PICOP's supervisory and technical staff employees in Tabon, Bislig,
Surigao del Sur, with four (4) choices, namely: (1) PBSTSEU; (2) FFW; (3) ALU; and (4) no union.
On September 21, 1989, PICOP appealed 12 the Order which set the holding of the certification
election contending that the Med-Arbiter committed grave abuse of discretion in deciding the case
without giving PICOP the opportunity to file its comments/answer, and that PBSTSEU had no
personality to file the petition for certification election.
After PBSTSEU filed its Comments 13 to petitioner's appeal, the Secretary of the Labor 14 issued a
Resolution 15dated November 17, 1989 which upheld the Med-Arbiter's Order dated September 17,
1989, with modification allowing the supervising and staff employees in Cebu, Davao and Iligan City
to participate in the certification election.
During the pre-election conference on January 18, 1990, PICOP questioned and objected to the
inclusion of some section heads and supervisors in the list of voters whose positions it averred were
reclassified as managerial employees in the light of the reorganization effected by it. 16 Under the
Revised Organizational Structure of the PICOP, the company was divided into four (4) main
business groups, namely: Paper Products Business, Timber Products Business, Forest Resource
Business and Support Services Business. A vice- president or assistant vice-president heads each
of these business groups. A division manager heads the divisions comprising each business group.
A department manager heads the departments comprising each division. Section heads and
supervisors, now called section managers and unit managers, head the sections and independent
units, respectively, comprising each department. 17 PICOP advanced the view that considering the
alleged present authority of these section managers and unit managers to hire and fire, they are
classified as managerial employees, and hence, ineligible to form or join any labor organization. 18
Following the submission by the parties of their respective position papers 19 and evidence 20 on this
issue, Med-Arbiter Phibun D. Pura issued an Order 21 dated March 27, 1990, holding that supervisors
and section heads of the petitioner are managerial employees and therefore excluded from the list of
voters for purposes of certification election.
PBSTSEU appealed 22 the Order of the Med-Arbiter to the Office of the Secretary, DOLE. ALU
likewise appealed. 23PICOP submitted evidence militating against the appeal. 24 Public respondent
Bienvenido E. Laguesma, acting as the then Undersecretary of Labor, issued the assailed
Order 25 dated April 17, 1991 setting aside the Order dated March 27, 1990 of the Med-Arbiter and
declaring that the subject supervisors and section heads are supervisory employees eligible to vote
in the certification election.
PICOP sought 26 reconsideration of the Order dated April 7, 1991. However, public respondent in his
Order 27 dated August 7, 1991 denied PICOP's motion for reconsideration.
Hence, this petition.
PICOP anchors its petition on two (2) grounds, to wit:
I.
THE PUBLIC RESPONDENT HONORABLE BIENVENIDO E. LAGUESMA,

UNDERSECRETARY OF LABOR AND EMPLOYMENT, IN A CAPRICIOUS, ARBITRARY
AND WHIMSICAL EXERCISE OF POWER ERRED AND COMMITTED GRAVE ABUSE OF
DISCRETION, TANTAMOUNT TO ACTING WITHOUT OR IN EXCESS OF JURISDICTION
WHEN HE DENIED YOUR PETITIONER'S PLEA TO PRESENT ADDITIONAL EVIDENCE
TO PROVE THAT SOME OF ITS MANAGERIAL EMPLOYEES ARE DISQUALIFIED FROM
JOINING OR FORMING A UNION REPRESENTED BY CO-RESPONDENT PBSTSEU, IN
VIEW OF A SUPERVENING EVENT BROUGHT ABOUT BY THE CHANGES IN THE
ORGANIZATIONAL STRUCTURE OF YOUR PETITIONER WHICH WAS FULLY
IMPLEMENTED IN JANUARY 1991 AFTER THE CASE WAS ELEVATED ON APPEAL
AND SUBMITTED FOR DECISION.
II.
THE PUBLIC RESPONDENT, HONORABLE BIENVENIDO E. LAGUESMA, ALSO ERRED

AND COMMITTED GRAVE ABUSE OF DISCRETION, TANTAMOUNT TO ARBITRARILY
ACTING WITHOUT OR IN EXCESS OF JURISDICTION WHEN HE TOTALLY
DISREGARDED THE DOCUMENTARY EVIDENCE SO FAR SUBMITTED BY YOUR
PETITIONER AND RELIED MAINLY ON THE UNSUBSTANTIATED CLAIM AND MERE
ALLEGATIONS OF PRIVATE RESPONDENT, PBSTSEU, THAT THE REORGANIZATION
OF YOUR PETITIONER WAS A SHAM AND CALCULATED MERELY TO FRUSTRATE
THE UNIONIZATION OF YOUR PETITIONER'S SUPERVISORY PERSONNEL; AND
SOLELY ON THIS BASIS, DENIED YOUR PETITIONER'S URGENT MOTION FOR
RECONSIDERATION. 28
PICOP's main thesis is that the positions Section Heads and Supervisors, who have been
designated as Section Managers and Unit Managers, as the case may be, were converted to
managerial employees under the decentralization and reorganization program it implemented in
1989. Being managerial employees, with alleged authority to hire and fire employees, they are
ineligible for union membership under Article 245 29 of the Labor Code. Furthermore, PICOP
contends that no malice should be imputed against it for implementing its decentralization program
only after the petition for certification election was filed inasmuch as the same is a valid exercise of
its management prerogative, and that said program has long been in the drawing boards of the
company, which was realized only in 1989 and fully implemented in 1991. PICOP emphatically
stresses that it could not have conceptualized the decentralization program only for the purpose of
"thwarting the right of the concerned employees to self-organization."
The petition, not being meritorious, must fail and the same should be as it is hereby dismissed.
First. In United Pepsi-Cola Supervisory Union (UPSU) v. Laguesma, 30 we had occasion to elucidate
on the term "managerial employees." Managerial employees are ranked as Top Managers, Middle
Managers and First Line Managers. Top and Middle Managers have the authority to devise,
implement and control strategic and operational policies while the task of First-Line Managers is
simply to ensure that such policies are carried out by the rank-and- file employees of an
organization. Under this distinction, "managerial employees" therefore fall in two (2) categories,
namely, the "managers" per se composed of Top and Middle Managers, and the "supervisors"
composed of First-Line Managers. 31 Thus, the mere fact that an employee is designated "manager"
does not ipso facto make him one. Designation should be reconciled with the actual job description
of the employee, 32 for it is the job description that determines the nature of employment. 33
In the petition before us, a thorough dissection of the job description 34 of the concerned supervisory
employees and section heads indisputably show that they are not actually managerial but only
supervisory employees since they do not lay down company policies. PICOP's contention that the
subject section heads and unit managers exercise the authority to hire and fire 35 is ambiguous and
quite misleading for the reason that any authority they exercise is not supreme but merely advisory
in character. Theirs is not a final determination of the company policies inasmuch as any action
taken by them on matters relative to hiring, promotion, transfer, suspension and termination of
employees is still subject to confirmation and approval by their respective superior. 36 Thus, where
such power, which is in effect recommendatory in character, is subject to evaluation, review and final
action by the department heads and other higher executives of the company, the same, although
present, is not effective and not an exercise of independent judgment as required by law. 37
Second. No denial of due process can be ascribed to public respondent Undersecretary Laguesma
for the latter's denial to allow PICOP to present additional evidence on the implementation of its
program inasmuch as in the appeal before the said public respondent, PICOP even then had already
submitted voluminous supporting documents. 38 The record of the case is replete with position papers
and exhibits that dealt with the main thesis it relied upon. What the law prohibits is the lack of
opportunity to be heard. 39 PICOP has long harped on its contentions and these were dealt upon and
resolved in detail by public respondent Laguesma. We see no reason or justification to deviate from
his assailed resolutions for the reason that law and jurisprudence aptly support them. 1âwphi 1
Finally, considering all the foregoing, the fact that PICOP voiced out its objection to the holding of
certification election, despite numerous opportunities to ventilate the same, only after respondent
Undersecretary of Labor affirmed the holding thereof, simply bolstered the public respondents'
conclusion that PICOP raised the issue merely to prevent and thwart the concerned section heads
and supervisory employees from exercising a right granted them by law. Needless to stress, no
obstacle must be placed to the holding of certification elections, for it is a statutory policy that should
not be circumvented. 40
WHEREFORE, the petition is hereby DISMISSED, and the Resolution and Order of public
respondent Bienvenido E. Laguesma dated April 17, 1991 and August 17, 1991, respectively, finding
the subject supervisors and section heads as supervisory employees eligible to vote in the
certification election are AFFIRMED. Costs against petitioner.
SO ORDERED. 1âw phi 1.nêt
Bellosillo, Mendoza, Quisumbing and Buena, JJ., concur.
Footnotes
1
Rollo, pp. 35-45.
2
Rollo, pp. 31-34.
3
Rollo, pp. 321-333.
4
Rollo, p. 332.
5
Rollo, p. 542.
6
Rollo, pp. 46-47.
7
Ibid.
Docketed as R-202-ROXI MED-UR-59-89, Department of Labor and Employment (DOLE),

8
Regional Office XI in Davao City, ibid.
9
Issued by Assistant Regional Director Teodulo B. Ramirez, Rollo, p. 48.
10
Rollo, p. 52.
11
Rollo, pp. 49-51.
12
Rollo, pp. 53-62.
13
Dated October 5,1989, Rollo, pp. 63-92.
14
Franklin M. Drilon, now Senator.
15
Rollo, pp. 93-97.
16
Rollo, p. 322.
17
Rollo, p. 543.
18
Rollo, p. 103.
19
Rollo, pp. 98-110, 148-163, 237-249, 265-272, 273-276, 277-289, 311-320.
20
Rollo, pp. 111-146, 164-236, 250-264, 290-310.
21
Rollo, pp. 321-333.
22
Petition dated April 12, 1990, Rollo, pp. 334-361.
23
Rollo, pp. 402-406.
24
Rollo, pp. 542-694.
25
See Note No. 1, supra.
26
Rollo, pp. 703- 715.
27
See Note No. 2, supra.
28
Rollo, p. 14.
29
Art. 245. Ineligibility of managerial employees to join any labor organization; right of
supervisory employees. — Managerial employees are not eligible to join, assist or form any
labor organization. Supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own.
30
288 SCRA 15 [1998].
31
Ibid., citing James A.F. Stoner & Charles Wankel, Management 11 [3rd. ed., 1987].
Pepsi-Cola Products Phil. Inc. v. Secretary of Labor, et al. G.R. No. 96663; Pepsi Cola
32
Products Philippines v. Office of the Secretary Department of Labor et al., G.R. No. 103300,
August 10, 1999; Pagkakaisa ng mga Manggagawa sa Triumph International-United Lumber
and General Workers of the Philippines v. Ferer-Calleja, 181 SCRA 119, 126 [1990].
33
Dunlop Slazenger (Phils.), v. Secretary of Labor and Employment, 300 SCRA 120, 127
[1998] citingEngineering Equipment, Inc. v. NLRC, 133 SCRA 752, 760-761 [1984].
34
Rollo, pp. 545-548, 549-554, 555-558, 559-563.
35
Rollo, p. 103.
36
Authority Chart revised December 20, 1989, Rollo, p. 145; see Atlas Lithographic Services,
Inc. v. Laguesma, 205 SCRA 12, 17 [1992].
Philippine Appliance Corporation v. Laguesma, 226 SCRA 730, 737 [1993] citing Franklin
37
Baker Company of the Philippines v. Trajano, 157 SCRA 416, 422-433 [1988].
38
Rollo, pp. 542-694.
39
Alliance of Democratic Free Labor Organization v. Laguesma, 254 SCRA 565, 574 [1996].
Trade Unions of the Philippines v. Laguesma, 233 SCRA 565, 571 [1994]; Progressive
40
Development Corporation v. Secretary Department of Labor and Employment, 205 SCRA

802, 807 [1992].
2) Tunay vs. Asia GR No.162025 Aug. 3, 2010
THIRD DIVISION
TUNAY NA PAGKAKAISA NG G.R. No. 162025

MANGGAGAWA
SA ASIABREWERY, Present:
Petitioner,
CARPIO MORALES, J.,
Chairperson,
- versus - BRION,
BERSAMIN,
ABAD, and
VILLARAMA, JR., JJ.
ASIA BREWERY, INC., Promulgated:

Respondent.
August 3, 2010
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
VILLARAMA, JR., J.:

For resolution is an appeal by certiorari filed by petitioner under Rule 45 of
the 1997 Rules of Civil Procedure, as amended, assailing the Decision[1] dated
November 22, 2002 and Resolution[2] dated January 28, 2004 rendered by the
Court of Appeals (CA) in CA-G.R. SP No. 55578, granting the petition of
respondent company and reversing the Voluntary Arbitrators
[3]
Decision dated October 14, 1999.
The facts are:
Respondent Asia Brewery, Inc. (ABI) is engaged in the manufacture, sale and
distribution of beer, shandy, bottled water and glass products. ABI entered into a
Collective Bargaining Agreement (CBA),[4] effective for five (5) years
from August 1, 1997 to July 31, 2002, with Bisig at Lakas ng mga Manggagawa sa
Asia-Independent (BLMA-INDEPENDENT), the exclusive bargaining
representative of ABIs rank-and-file employees. On October 3, 2000, ABI and
BLMA-INDEPENDENT signed a renegotiated CBA effective from August 1,
2000 to 31 July 2003.[5]
Article I of the CBA defined the scope of the bargaining unit, as follows:
Section 1. Recognition. The COMPANY recognizes the UNION as the
sole and exclusive bargaining representative of all the regular rank-and-file daily
paid employees within the scope of the appropriate bargaining unit with respect to
rates of pay, hours of work and other terms and conditions of
employment. The UNION shall not represent or accept for membership
employees outside the scope of the bargaining unit herein defined.
Section 2. Bargaining Unit. The bargaining unit shall be comprised of all

regular rank-and-file daily-paid employees of the COMPANY. However, the
following jobs/positions as herein defined shall be excluded from the bargaining
unit, to wit:
1. Managers
2. Assistant Managers
3. Section Heads
4. Supervisors
5. Superintendents
6. Confidential and Executive Secretaries
7. Personnel, Accounting and Marketing Staff
8. Communications Personnel
9. Probationary Employees
10. Security and Fire Brigade Personnel
11. Monthly Employees
12. Purchasing and Quality Control Staff[6] [EMPHASIS
SUPPLIED.]
Subsequently, a dispute arose when ABIs management stopped deducting union

dues from eighty-one (81) employees, believing that their membership in BLMA-
INDEPENDENT violated the CBA. Eighteen (18) of these affected employees are
QA Sampling Inspectors/Inspectresses and Machine Gauge Technician who
formed part of the Quality Control Staff. Twenty (20) checkers are assigned at the
Materials Department of the Administration Division, Full Goods Department of
the Brewery Division and Packaging Division. The rest are secretaries/clerks
directly under their respective division managers.[7]
BLMA-INDEPENDENT claimed that ABIs actions restrained the employees right

to self-organization and brought the matter to the grievance machinery. As the
parties failed to amicably settle the controversy, BLMA-INDEPENDENT lodged a
complaint before the National Conciliation and Mediation Board (NCMB). The
parties eventually agreed to submit the case for arbitration to resolve the issue
of [w]hether or not there is restraint to employees in the exercise of their right to
self-organization.[8]
In his Decision, Voluntary Arbitrator Bienvenido Devera sustained the BLMA-

INDEPENDENT after finding that the records submitted by ABI showed that the
positions of the subject employees qualify under the rank-and-file category
because their functions are merely routinary and clerical. He noted that the
positions occupied by the checkers and secretaries/clerks in the different divisions
are not managerial or supervisory, as evident from the duties and responsibilities
assigned to them. With respect to QA Sampling Inspectors/Inspectresses and
Machine Gauge Technician, he ruled that ABI failed to establish with sufficient
clarity their basic functions as to consider them Quality Control Staff who were
excluded from the coverage of the CBA. Accordingly, the subject employees were
declared eligible for inclusion within the bargaining unit represented by BLMA-
INDEPENDENT.[9]
On appeal, the CA reversed the Voluntary Arbitrator, ruling that:

WHEREFORE, foregoing premises considered, the questioned decision of
the Honorable Voluntary Arbitrator Bienvenido De Vera is hereby REVERSED
and SET ASIDE, and A NEW ONE ENTERED DECLARING THAT:
a) the 81 employees are excluded from and are not eligible for
inclusion in the bargaining unit as defined in Section 2, Article
I of the CBA;
b) the 81 employees cannot validly become members of

respondent and/or if already members, that their membership is
violative of the CBA and that they should disaffiliate from
respondent; and
c) petitioner has not committed any act that restrained or tended to

restrain its employees in the exercise of their right to self-
organization.
NO COSTS.
SO ORDERED.[10]
BLMA-INDEPENDENT filed a motion for reconsideration. In the meantime, a

certification election was held on August 10, 2002 wherein petitioner Tunay na
Pagkakaisa ng Manggagawa sa Asia (TPMA) won. As the incumbent bargaining
representative of ABIs rank-and-file employees claiming interest in the outcome of
the case, petitioner filed with the CA an omnibus motion for reconsideration of the
decision and intervention, with attached petition signed by the union
officers.[11]Both motions were denied by the CA.[12]
The petition is anchored on the following grounds:

(1)
THE COURT OF APPEALS ERRED IN RULING THAT THE 81
EMPLOYEES ARE EXCLUDED FROM AND ARE NOT ELIGIBLE FOR
INCLUSION IN THE BARGAINING UNIT AS DEFINED IN SECTION 2,
ARTICLE 1 OF THE CBA[;]
(2)
THE COURT OF APPEALS ERRED IN HOLDING THAT THE 81
EMPLOYEES CANNOT VALIDLY BECOME UNION MEMBERS, THAT
THEIR MEMBERSHIP IS VIOLATIVE OF THE CBA AND THAT THEY
SHOULD DISAFFILIATE FROM RESPONDENT;
(3)
THE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT
PETITIONER (NOW PRIVATE RESPONDENT) HAS NOT COMMITTED
ANY ACT THAT RESTRAINED OR TENDED TO RESTRAIN ITS
EMPLOYEES IN THE EXERCISE OF THEIR RIGHT TO SELF-
ORGANIZATION.[13]
Although Article 245 of the Labor Code limits the ineligibility to join, form and
assist any labor organization to managerial employees, jurisprudence has extended
this prohibition to confidential employees or those who by reason of their positions
or nature of work are required to assist or act in a fiduciary manner to managerial
employees and hence, are likewise privy to sensitive and highly confidential
records.[14] Confidential employees are thus excluded from the rank-and-file
bargaining unit. The rationale for their separate category and disqualification to
join any labor organization is similar to the inhibition for managerial employees
because if allowed to be affiliated with a Union, the latter might not be assured of
their loyalty in view of evident conflict of interests and the Union can also become
company-denominated with the presence of managerial employees in the Union
membership.[15] Having access to confidential information, confidential employees
may also become the source of undue advantage. Said employees may act as a spy
or spies of either party to a collective bargaining agreement.[16]
In Philips Industrial Development, Inc. v. NLRC,[17] this Court held that petitioners
division secretaries, all Staff of General Management, Personnel and Industrial
Relations Department, Secretaries of Audit, EDP and Financial Systems are
confidential employees not included within the rank-and-file bargaining
unit.[18] Earlier, in Pier 8 Arrastre & Stevedoring Services, Inc. v. Roldan-
Confesor,[19] we declared that legal secretaries who are tasked with, among others,
the typing of legal documents, memoranda and correspondence, the keeping of
records and files, the giving of and receiving notices, and such other duties as
required by the legal personnel of the corporation, fall under the category of
confidential employees and hence excluded from the bargaining unit composed of
rank-and-file employees.[20]
Also considered having access to vital labor information are the executive
secretaries of the General Manager and the executive secretaries of the Quality
Assurance Manager, Product Development Manager, Finance Director,
Management System Manager, Human Resources Manager, Marketing Director,
Engineering Manager, Materials Manager and Production Manager.[21]
In the present case, the CBA expressly excluded Confidential and Executive
Secretaries from the rank-and-file bargaining unit, for which reason ABI seeks
their disaffiliation from petitioner. Petitioner, however, maintains that except for
Daisy Laloon, Evelyn Mabilangan and Lennie Saguan who had been promoted to
monthly paid positions, the following secretaries/clerks are deemed included
among the rank-and-file employees of ABI:[22]
NAME DEPARTMENT IMMEDIATE SUPERIOR
C1 ADMIN DIVISION
1. Angeles, Cristina C. Transportation Mr. Melito K. Tan
2. Barraquio, Carina P. Transportation Mr. Melito K. Tan
3. Cabalo, Marivic B. Transportation Mr. Melito K. Tan
4. Fameronag, Leodigario C. Transportation Mr. Melito K. Tan
1. Abalos, Andrea A. Materials Mr. Andres G. Co

2. Algire, Juvy L. Materials Mr. Andres G. Co
3. Anouevo, Shirley P. Materials Mr. Andres G. Co
4. Aviso, Rosita S. Materials Mr. Andres G. Co
5. Barachina, Pauline C. Materials Mr. Andres G. Co
6. Briones, Catalina P. Materials Mr. Andres G. Co
7. Caralipio, Juanita P. Materials Mr. Andres G. Co
8. Elmido, Ma. Rebecca S. Materials Mr. Andres G. Co
9. Giron, Laura P. Materials Mr. Andres G. Co
10. Mane, Edna A. Materials Mr. Andres G. Co
xxxx
C2 BREWERY DIVISION
1. Laloon, Daisy S. Brewhouse Mr. William Tan
1. Arabit, Myrna F. Bottling Production Mr. Julius Palmares

2. Burgos, Adelaida D. Bottling Production Mr. Julius Palmares
3. Menil, Emmanuel S. Bottling Production Mr. Julius Palmares
4. Nevalga, Marcelo G. Bottling Production Mr. Julius Palmares
1. Mapola, Ma. Esraliza T. Bottling Maintenance Mr. Ernesto Ang

2. Velez, Carmelito A. Bottling Maintenance Mr. Ernesto Ang
1. Bordamonte, Rhumela D. Bottled Water Mr. Faustino Tetonche

2. Deauna, Edna R. Bottled Water Mr. Faustino Tetonche
3. Punongbayan, Marylou F. Bottled Water Mr. Faustino Tetonche
4. Saguan, Lennie Y. Bottled Water Mr. Faustino Tetonche
1. Alcoran, Simeon A. Full Goods Mr. Tsoi Wah Tung

2. Cervantes, Ma. Sherley Y. Full Goods Mr. Tsoi Wah Tung
3. Diongco, Ma. Teresa M. Full Goods Mr. Tsoi Wah Tung
4. Mabilangan, Evelyn M. Full Goods Mr. Tsoi Wah Tung
5. Rivera, Aurora M. Full Goods Mr. Tsoi Wah Tung
6. Salandanan, Nancy G. Full Goods Mr. Tsoi Wah Tung
1. Magbag, Ma. Corazon C. Tank Farm/ Mr. Manuel Yu Liat

Cella Services
1. Capiroso, Francisca A. Quality Assurance Ms. Regina Mirasol
1. Alconaba, Elvira C. Engineering Mr. Clemente Wong

2. Bustillo, Bernardita E. Electrical Mr. Jorge Villarosa
3. Catindig, Ruel A. Civil Works Mr. Roger Giron
4. Sison, Claudia B. Utilities Mr. Venancio Alconaba
xxxx
C3 PACKAGING DIVISION
1. Alvarez, Ma. Luningning L. GP Administration Ms. Susan Bella

2. Caiza, Alma A. GP Technical Mr. Chen Tsai Tyan
3. Cantalejo, Aida S. GP Engineering Mr. Noel Fernandez
4. Castillo, Ma. Riza R. GP Production Mr. Tsai Chen Chih
5. Lamadrid, Susana C. GP Production Mr. Robert Bautista
6. Mendoza, Jennifer L. GP Technical Mr. Mel Oa
As can be gleaned from the above listing, it is rather curious that there would be
several secretaries/clerks for just one (1) department/division performing tasks
which are mostly routine and clerical. Respondent insisted they fall under the
Confidential and Executive Secretaries expressly excluded by the CBA from the
rank-and-file bargaining unit. However, perusal of the job descriptions of these
secretaries/clerks reveals that their assigned duties and responsibilities involve
routine activities of recording and monitoring, and other paper works for their
respective departments while secretarial tasks such as receiving telephone calls and
filing of office correspondence appear to have been commonly imposed as
additional duties.[23] Respondent failed to indicate who among these numerous
secretaries/clerks have access to confidential data relating to management policies
that could give rise to potential conflict of interest with their Union membership.
Clearly, the rationale under our previous rulings for the exclusion of executive
secretaries or division secretaries would have little or no significance considering
the lack of or very limited access to confidential information of these
secretaries/clerks. It is not even farfetched that the job category may exist only on
paper since they are all daily-paid workers. Quite understandably, petitioner had
earlier expressed the view that the positions were just being reclassified as these
employees actually discharged routine functions.
We thus hold that the secretaries/clerks, numbering about forty (40), are rank-and-
file employees and not confidential employees.
With respect to the Sampling Inspectors/Inspectresses and the Gauge Machine

Technician, there seems no dispute that they form part of the Quality Control Staff
who, under the express terms of the CBA, fall under a distinct category. But we
disagree with respondents contention that the twenty (20) checkers are similarly
confidential employees being quality control staff entrusted with the handling and
custody of company properties and sensitive information.
Again, the job descriptions of these checkers assigned in the storeroom section of
the Materials Department, finishing section of the Packaging Department, and the
decorating and glass sections of the Production Department plainly showed that
they perform routine and mechanical tasks preparatory to the delivery of the
finished products.[24] While it may be argued that quality control extends to post-
production phase -- proper packaging of the finished products -- no evidence was
presented by the respondent to prove that these daily-paid checkers actually form
part of the companys Quality Control Staff who as such were exposed to sensitive,
vital and confidential information about [companys] products or have knowledge
of mixtures of the products, their defects, and even their formulas which are
considered trade secrets. Such allegations of respondent must be supported by
evidence.[25]
Consequently, we hold that the twenty (20) checkers may not be considered
confidential employees under the category of Quality Control Staff who were
expressly excluded from the CBA of the rank-and-file bargaining unit.
Confidential employees are defined as those who (1) assist or act in a confidential
capacity, (2) to persons who formulate, determine, and effectuate management
policies in the field of labor relations. The two (2) criteria are cumulative, and both
must be met if an employee is to be considered a confidential employee that is, the
confidential relationship must exist between the employee and his supervisor, and
the supervisor must handle the prescribed responsibilities relating to labor
relations.The exclusion from bargaining units of employees who, in the normal
course of their duties, become aware of management policies relating to labor
relations is a principal objective sought to be accomplished by the confidential
employee rule.[26] There is no showing in this case that the secretaries/clerks and
checkers assisted or acted in a confidential capacity to managerial employees and
obtained confidential information relating to labor relations policies. And even
assuming that they had exposure to internal business operations of the company,
respondent claimed, this is not per se ground for their exclusion in the bargaining
unit of the daily-paid rank-and-file employees.[27]
Not being confidential employees, the secretaries/clerks and checkers are not
disqualified from membership in the Union of respondents rank-and-file
employees. Petitioner argues that respondents act of unilaterally stopping the
deduction of union dues from these employees constitutes unfair labor practice as
it restrained the workers exercise of their right to self-organization, as provided in
Article 248 (a) of the Labor Code.
Unfair labor practice refers to acts that violate the workers right to organize. The
prohibited acts are related to the workers right to self organization and to the
observance of a CBA. For a charge of unfair labor practice to prosper, it must be
shown that ABI 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[28] from ABIs act in discontinuing the union dues deduction from those
employees it believed were excluded by the CBA. Considering that the herein
dispute arose from a simple disagreement in the interpretation of the CBA
provision on excluded employees from the bargaining unit, respondent cannot be
said to have committed unfair labor practice that restrained its employees in the
exercise of their right to self-organization, nor have thereby demonstrated an anti-
union stance.
WHEREFORE, the petition is GRANTED. The Decision dated November 22,

2002 and Resolution dated January 28, 2004 of the Court of Appeals in CA-G.R.
SP No. 55578 are hereby REVERSED and SET ASIDE. The checkers and
secretaries/clerks of respondent company are hereby declared rank-and-file
employees who are eligible to join the Union of the rank-and-file employees.
No costs.
SO ORDERED.
MARTIN S. VILLARAMA, JR.

Associate Justice
WE CONCUR:
CONCHITA CARPIO MORALES

Associate Justice
Chairperson
LUCAS P. BERSAMIN
Associate Justice
ARTURO D. BRION
Associate Justice
ROBERTO A. ABAD
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.
CONCHITA CARPIO MORALES

Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the 1987 Constitution and the Division
Chairpersons Attestation, I certify that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.
RENATO C. CORONA
Chief Justice

Designated additional member per Special Order No. 843 dated May 17, 2010.
[1]
CA rollo, pp. 190-201. Penned by Associate Justice Jose L. Sabio, Jr. and concurred in by Associate Justices
Portia Alio-Hormachuelos and Amelita G. Tolentino.
[2]
Id. at 245-246.
[3]
Id. at 27-40.
[4]
Id. at 80-101.
[5]
Rollo, pp. 103-124.
[6]
Id. at 105.
[7]
CA rollo, pp. 47-49, 61-63.
[8]
Records, pp. 220-221.
[9]
CA rollo, pp. 37-40.
[10]
Id. at 200.
[11]
Id. at 204-219.
[12]
Id. at 245-246.
[13]
Rollo, pp. 53, 59, 61.
[14]
Metrolab Industries, Inc. v. Roldan-Confesor, G.R. No. 108855, February 28, 1996, 254 SCRA 182, 197.
[15]
Bulletin Publishing Corporation v. Sanchez, No. L-74425, October 7, 1986, 144 SCRA 628, 635.
[16]
Golden Farms, Inc. v. Ferrer-Calleja, G.R. No. 78755, July 19, 1989, 175 SCRA 471, 477.
[17]
G.R. No. 88957, June 25, 1992, 210 SCRA 339.
[18]
Id. at 347.
[19]
G.R. No. 110854, February 13, 1995, 241 SCRA 294.
[20]
Id. at 305.
[21]
Metrolab Industries, Inc. v. Roldan-Confesor, supra note 14, at 196-197.
[22]
CA rollo, pp. 62-63.
[23]
Id. at 68-79.
[24]
Id. at 64-67.
[25]
See Standard Chartered Bank Employees Union (SCBEU-NUBE) v. Standard Chartered Bank, G.R. No.
161933, April 22, 2008, 552 SCRA 284, 293.
[26]
San Miguel Corp. Supervisors and Exempt Employees Union v. Laguesma, G.R. No. 110399, August 15, 1997,
277 SCRA 370, 374-375, citing Westinghouse Electric Corp. v. NLRB (CA6) 398 F2d 669 (1968), Ladish Co.,
178 NLRB 90 (1969) and B.F. Goodrich Co., 115 NLRB 722 (1956).
[27]
Id. at 378.
[28]
Union of Filipro Employees-Drug, Food and Allied Industries Unions-Kilusang Mayo Uno v. Nestl Philippines,
Incorporated, G.R. Nos. 158930-31 & 158944-45, March 3, 2008, 547 SCRA 323, 335, citing San Miguel
Corporation v. Del Rosario, G.R. Nos. 168194 & 168603, December 13, 2005, 477 SCRA 604, 619.
3) Golden Farms vs. Ferrer GR No. 78755 July 19, 1989
Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 78755 July 19, 1989
GOLDEN FARMS, INC., petitioner,

vs.
THE HONORABLE DIRECTOR PURA FERRER-CALLEJA, BUREAU OF LABOR RELATIONS
and NATIONAL FEDERATION OF LABOR, respondents.
J. V. Yap Law Office for petitioner.
Beethoven L. Orcullo for private respondent.
PARAS, J.:
Petitioner Golden Farms, Inc., seeks a reversal of the resolution of public respondent Department of
Labor and Employment Director Pura Ferrer-Calleja in BLR Case No. A-2-56-87 which affirmed on
appeal the decision of Labor Arbiter Conrado O. Macasa, Sr., in NLRC Case No. R-418-ROXI-MED-
UR-8886, issuing a directive as follows:
In view of the foregoing, the herein petition for certification election filed by the
National Federation of Labor (NFL) is hereby DISMISSED; whereas, its resultant and
relevant consequence of its recognized representation of the entire rank-and-file
employees of the bargaining unit should be given life and meaning, as it is hereby
directed, and Employer Golden Farms, Incorporated likewise enjoined to negotiate
for a supplementary collective bargaining agreement, or for the inclusion of the
herein monthly paid rank-and- file employees at Luna, Kapalong, Davao del Norte,
and Lanang, Davao City in the still existing negotiated contract, whichever the parties
may consider just and appropriate under the circumstances.
SO ORDERED. (p. 29, Rollo)
The case originated as a Petition for Direct Certification Election or Recognition filed by herein
private respondent in behalf of certain office employees and foremen before Regional Office No. XI,
Davao City of the Ministry of Labor and Employment. Petitioner herein opposed said petition on the
ground among others that a perusal of the names allegedly supporting the said petition showed that
said persons by the nature of their jobs are performing managerial functions and/or occupying
confidential positions such that they cannot validly constitute a separate or distinct group from the
existing collective bargaining unit also represented by private respondent.
Petitioner is a corporation engaged in the production of bananas for export. Private respondent
Union represents the employees/workers of petitioner corporation, who were the same signatories to
an earlier Petition for Certification Election filed in 1984 before the Ministry of Labor known as ROXI
Case No. UR-70-84, which was dismissed by a Resolution issued by Med-Arbiter Conchita Martinez
when it was established that a collective bargaining unit (NFL) between the Corporation and the
rank-and-file employees was and is in existence at the time of the filing of the said petition for
certification election until the present filing. However, in the order of dismissal, it was stated:
After taking into consideration the functions exercised by the foremen as contained in
their joint affidavits (Annexes "A-1", "A-2" & "A-3", Petitioner's Position Paper)
apparently, they fall within the classification of rank-and-file employees. For, as
consistently ruled in a long line of decisions, mere supervisory designations in the
position titles, do not make the holders of such positions any less rank and filers,
without the convincing proof that such supervisory designations are coupled with
actual performance of managerial functions. In the cases at bar, what was submitted
by the respondent companies are only lists of employees holding the positions of
foremen and confidential positions and as such are not covered by the bargaining
unit. Such piece of evidence alone does not constitute convincing proof for us to
adapt respondents' stance (Annexes "A", "B", "C", & "D"). Comment on Petition). (p.
13, Rollo)
Having had no opportunity to contest the abovementioned statement in the order of dismissal,
petitioner herein as private respondent therein, filed a "Manifestation" stating among others:
2. That since the petitions were dismissed the herein employees make clear for the
record that said view would run counter to the provision of the pertinent Collective
Bargaining Agreement whereby the foremen were already acknowledged and agreed
upon to be managerial employees and accordingly excluded from the coverage of
the said CBA;
3. That with respect to those employees holding confidential positions, it is a basic

principle that they cannot be included in any bargaining unit, the fact being that
having access to confidential informations, said employees may be the source of
undue advantage. Said employees may act as spies for either parties to collective
bargaining agreement. This is especially true in this case where the petitioning union
is already the bargaining agent of the rank-and-file employees in the establishment.
To allow confidential employees to join existing bargaining unit will defeat the very
purpose for which an employee holding confidential position was in the first place
excluded. (p. 68, Rollo)
Private respondent herein as petitioner therein appealed the order of dismissal which was
accordingly opposed (Annex "L" p. 69, Rollo) by Golden Farms, Inc., reiterating the grounds and
arguments set forth in its Manifestation filed earlier. The appeal was dismissed and subsequently the
National Federation of Labor Union refiled the Petition for Certification in NLRC Case No. R-418-
ROX-MED-UR-88-86 which was also dismissed. Said order of dismissal is now the subject of this
review for containing directives not within the power of a Med-Arbiter to issue. Petitioner Golden
Farms, Inc., now poses the following questions:
I HAS A MED-ARBITER THE POWER OR AUTHORITY TO DIRECT

MANAGEMENT TO ENTER INTO A SUPPLEMENTAL
COLLECTIVE BARGAINING AGREEMENT WITH A CONTRACTING
UNION.
II MAY SUPERVISORS, CASHIERS, FOREMEN, AND EMPLOYEES
HOLDING CONFIDENTIAL/MANAGERIAL FUNCTION COMPEL
MANAGEMENT TO ENTER INTO A COLLECTIVE BARGAINING
AGREEMENT WITH THEM. (p. 14, Rollo)
The petition merits Our consideration.
Respondents relied heavily on the alleged finding of Med-Arbiter Martinez that the employees who
were signatories to the petition for certification election and represented by respondent Union are
actually rank-and-file workers not disqualified from entering into a collective bargaining agreement
with management. In said findings of fact, Med-Arbiter Martinez singled out in her classification as
rank-and-file employees the foremen of Petitioner Corporation considered from their joint affidavits
and for lack of convincing proof that their supervisory designations are coupled with the actual
performance of managerial functions.
Whether or not such finding is supported by the evidence is beside the point. Respondents herein do
not dispute that the signatories (listed in Annex "A", page 30, Rollo) to the Petition for certification
election subject of this case, were holding the positions of cashier, purchasers, personnel officers,
foremen and employees having access to confidential information such as accounting personnel,
radio and telegraph operators and head of various sections. It is also a fact that respondent Union is
the exclusive bargaining Unit of the rank-and-file employees of petitioner corporation and that an
existing CBA between petitioner corporation and the Union representing these rank-and-file
employees was still enforced at the time the Union filed a petition for certification election in behalf of
the aforementioned signatories. Under the terms of said CBA (Annex "E", p. 40, Rollo) it is expressly
provided that:
Section 1. The COMPANY and the UNION hereby agree that the recognized
bargaining unit for purposes of this agreement shall consist of regular rank-and-file
workers employed by the COMPANY at the plantation presently situated at Alejal,
Carmen, Davao. Consequently, all managerial personnel like, superintendents,
supervisor, foremen, administrative, professional and confidential employees, and
those temporary, casual, contractual, and seasonal workers are excluded from the
bargaining unit and therefore, not covered by this agreement.
(p. 41, Rollo)
Respondents do not dispute the existence of said collective bargaining agreement. We must
therefore respect this CBA which was freely and voluntarily entered into as the law between the
parties for the duration of the period agreed upon. Until then no one can be compelled to accept
changes in the terms of the collective bargaining agreement.
Furthermore, the signatories to the petition for certification election are the very type of employees
by the nature of their positions and functions which We have decreed as disqualified from bargaining
with management in case of Bulletin Publishing Co. Inc. vs. Hon. Augusto Sanchez, etc. (144 SCRA
628) reiterating herein the rationale for such ruling as follows: if these managerial employees would
belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in
view of evident conflict of interests or that the Union can be company- dominated with the presence
of managerial employees in Union membership. A managerial employee is defined under Art. 212
(k) of the new Labor Code as "one who is vested with powers or prerogatives to lay down and
execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or
discipline employees, or to effectively recommend such managerial actions. All employees not falling
within this definitions are considered rank-and-file employees for purposes of this Book."
This rationale holds true also for confidential employees such as accounting personnel, radio and
telegraph operators, who having access to confidential information, may become the source of
undue advantage. Said employee(s) may act as a spy or spies of either party to a collective
bargaining agreement. This is specially true in the present case where the petitioning Union is
already the bargaining agent of the rank-and-file employees in the establishment. To allow the
confidential employees to join the existing Union of the rank-and-file would be in violation of the
terms of the Collective Bargaining Agreement wherein this kind of employees by the nature of their
functions/positions are expressly excluded.
As to the company foremen, while in the performance of supervisory functions, they may be the
extension or alter ego of the management. Adversely, the foremen, by their actuation, may influence
the workers under their supervision to engage in slow down commercial activities or similar activities
detrimental to the policy, interest or business objectives of the company or corporation, hence they
also cannot join.
WHEREFORE, finding the assailed directive of Med-Arbiter Conrado O. Macasa, Sr. which was
affirmed by Director Pura Ferrer-Calleja reiterating the directive of Med- Arbiter Conchita Martinez
"to negotiate for a supplementary collective bargaining agreement, or for the inclusion of the herein
monthly paid rank-and- file employees" to be erroneous as it is in complete disregard of the terms of
the collective bargaining agreement, the same is hereby DECLARED to be without force and effect.
SO ORDERED.
Melencio-Herrera, (Chairperson), Padilla, Sarmiento and Regalado, JJ., concur.
4) Philips vs. NLRC GR No. 88957 June 25, 1992

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 88957 June 25, 1992
PHILIPS INDUSTRIAL DEVELOPMENT, INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and PHILIPS EMPLOYEES ORGANIZATION
(FFW), respondents.
DAVIDE, JR., J.:
In this petition for certiorari and prohibition under Rule 65 of the Rules of Court with a prayer for a
temporary restraining order and/or a writ of preliminary injunction, petitioner Philips Industrial
Development, Inc. (PIDI) seeks to set aside the Decision and Resolution, dated 16 January 1989
and 17 March 1989, respectively, of the National Labor Relations Commission (NLRC) in Case No.
NLRC-NCR-00-11-03936-87 on the ground that it committed grave abuse of discretion amounting to
lack of jurisdiction in holding that service engineers, sales representatives and confidential
employees of PIDI are qualified to be included in the existing bargaining unit.
PIDI is a domestic corporation engaged in the manufacturing and marketing of electronic products
Since 1971, it had a total of six (6) collective bargaining agreements (CBAs) with private respondent
Philips Employees Organization-FFW (PEO-FFW), a registered labor union and the certified
bargaining agent of all the rank and file employees of PIDI. In the first CBA (1971-1974), the
supervisors referred to in R.A. No. 875, confidential employees, security guards, temporary
employees and sales representatives were excluded from the bargaining unit. In the second to the
fifth CBAs (1975-1977; 1978-1980; 1981-1983; and 1984-1986), the sales force, confidential
employees and heads of small units, together with the managerial employees, temporary employees
and security personnel, were specifically excluded from the bargaining unit. 1 The confidential
employees are the division secretaries of light/telecom/data and consumer electronics, marketing
managers, secretaries of the corporate planning and business manager, fiscal and financial system
manager and audit and EDP manager, and the staff of both the General Management and the
Personnel Department. 2
In the sixth CBA covering the years 1987 to 1989, it was agreed upon, among others, that the
subject of inclusion or exclusion of service engineers, sales personnel and confidential employees in
the coverage of the bargaining unit would be submitted for arbitration. Pursuant thereto, on June
1987, PEO-FFW filed a petition before the Bureau of Labor Relations (BLR) praying for an order
"directing the parties to select a voluntary arbitrator in accordance with its rules and regulations."
As the parties failed to agree on a voluntary arbitrator, the BLR endorsed the petition to the
Executive Labor Arbiter of the National Capital Region for compulsory arbitration pursuant to Article
228 of the Labor Code. Docketed as Case No. NLRC-NCR-00-11-03936-87, the case was assigned
to Executive Labor Arbiter Arthur Amansec.
On 17 March 1988, Labor Arbiter Amansec rendered a decision, the dispositive portion of which
states:
In view of the foregoing, a decision is hereby rendered, ordering the respondent to

conduct a referendum to determine the will of the service engineers, sales
representatives as to their inclusion or exclusion in the bargaining unit.
It is hereby declared that the Division Secretaries and all Staff of general
management, personnel and industrial relations department, secretaries of audit,
EDP, financial system are confidential employees and as such are hereby deemed
excluded in the bargaining unit.
SO ORDERED.
PEO-FFW appealed from the decision to the NLRC.
On 16 January 1989, the NLRC rendered the questioned decision, the dispositive portion of which
reads:
WHEREFORE, the foregoing premises considered, the appealed decision of the

Executive Labor Arbiter is hereby SET ASIDE and a new one entered declaring
respondent company's Service Engineers, Sales Force, division secretaries, all Staff
of General Management, Personnel and Industrial Relations Department, Secretaries
of Audit, EDP and Financial Systems are included within the rank and file bargaining
unit.
SO ORDERED.
The reversal is anchored on the respondent NLRC's conclusion that based on Section 1, 3 Rule II,
Book V of the Omnibus Rules Implementing the Labor Code, as amended by Section 3,
Implementing Rules of E.O. No. 111; paragraph (c) Section 2, Rule V of the same Code, as
amended by Section 6 4 of the Implementing Rules of E.O. No. 111; and Article 245 5 of the Labor
Code, as amended:
. . . all workers, except managerial employees and security personnel, are qualified
to join or be a part of the bargaining unit. . . .
It further ruled that:
The Executive Labor Arbiters directive that the service engineers and sales
representatives to (sic) conduct a referendum among themselves is erroneous
inasmuch as it arrogates unto said employees the right to define what the law
means. It would not be amiss to state at this point that there would be no one more
interested in excluding the subject employees from the bargaining unit than
management and that it would not be improbable for the latter to lobby and/or exert
pressure on the employees concerned, thus agitating unrest among the rank-and-file.
Likewise, the Executive Labor Arbiter's declaration that the Division Secretaries and
all Staff of general management, personnel and industrial relations department,
secretaries of audit, EDP and financial system "are confidential employees and as
such are hereby deemed excluded in (sic) the bargaining unit" is contrary to law for
the simple reason that the law, as earlier quoted, does not mention them as among
those to be excluded from thebargaining unit only (sic) managerial
employees and security guards. As a matter of fact, supervisory unions have already
been dissolved and their members who do not fall within the definition of managerial
employees have become eligible to join or assist the rank-and-file organization. 6
Its motion for the reconsideration of this decision having been denied by the NLRC in its Resolution
of 16 March 1989, a copy of which it received on 8 June 1989, petitioner PIDI filed the instant
petition on 20 July 1989, alleging that:
THE NLRC COMMITTED ABUSE OF DISCRETION AMOUNTING TO LACK OF

JURISDICTION IN HOLDING THAT SERVICE ENGINEERS, SALES
REPRESENTATIVES AND CONFIDENTIAL EMPLOYEES OF PETITIONER ARE
QUALIFIED TO BE PART OF THE EXISTING BARGAINING UNIT.
II
THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO

LACK OF JURISDICTION IN NOT APPLYING THE TIME HONORED "GLOBE
DOCTRINE." 7
On 31 July 1989, this Court; required the respondents to comment on the petition, which PEO-FFW
complied with on 28 August 1989. Public respondent NLRC, thru its counsel, the Solicitor General,
moved for, and was granted a 30-day extension to file its Comment.
On 18 September 1989, this Court required the parties to show cause why the petition should not be
dismissed in view of the finality of the NLRC decision as provided for by the penultimate sentence of
Article 223 of the Labor Code, as amended by R.A. No. 6715 R..A. No. 6715, which amended Article
223 of the Labor Code, was enacted on 2 March 1989 and took effect on 21 March 1989. The
parties subsequently complied with the Resolution.
On 16 May 1990, this Court required the parties to submit Memoranda explaining the effect in this
case of Article 223 of the Labor Code, as amended by Section 12 of R.A. No-6715 with respect to
the finality of decisions of the NLRC. The parties complied separately with the same.
On 10 September 1990, this Court gave due course to the petition and required the parties to submit
their respective Memoranda. The petitioner and the Office of the Solicitor General filed their separate
Memoranda. On the other hand, PEO-FFW moved that its Motion and manifestation dated 23
August 1989 be considered as its Memorandum; this Court granted the same.
As stated earlier, the principal issue in this case is whether the NLRC committed grave abuse of
discretion in holding that service engineers, sales representatives and confidential employees
(division secretaries, staff of general management, personnel and industrial relations department,
secretaries of audit, EDP and financial system) are qualified to be included in the existing bargaining
unit. Petitioner maintains that it did, and in support of its stand that said employees should not be
absorbed by the existing bargaining unit, it urges this Court to consider these points:
1) The inclusion of the group in the existing bargaining unit would run counter to the history of this
parties CBA. The parties' five (5) previous CBAs consistently excluded this group of employees from
the scope of the bargaining unit. The rationale for such exclusion is that these employees hold
positions which are highly sensitive, confidential and of a highly fiduciary nature; to include them in
the bargaining unit may subject the company to breaches in security and the possible revelation of
highly sensitive and confidential matters. It would cripple the company's bargaining position and
would give undue advantage to the union.
2) The absence of mutuality of interests between this group of employees and the regular rank and
file militates against such inclusion. A table prepared by the petitioner shows the disparity of
interests between the said groups:
SERVICE ENGINEERS SERVICE

SALES REPRESENTATIVES TECHNICIANS
(Non-Bargaining (Bargaining
AREAS OF INTEREST Unit Employees) Unit Employees)
Qualifications Professional Employees High School/

Vocational
Grads.
Work Schedule With Night Shift None
Schedule
Night Shift 10% of Basic Rate None
Differential Pay
Stand-By Call & On Stand-By Call with: None
Allowance First Line:15% of
basic rate
Second Line: 10% of
basic rate
Uniforms None 2 sets of polo
& pants every
6 months
Retirement Benefits 15 yrs. ser.70% 15 yrs. serv. 50%
16 75% 16 85%
17 80% 17 90%
18 85% 18 100%
19 90% 19 115%
20 100% 20 135%
Year End Performance Merit Increase system None
Evaluation
Sales Commission Yes None
Car Loan Yes None
Precalculated Yes None
Kilometer allowance
The Office of the Solicitor General supports the decision of the Executive Labor Arbiter and refuses
to uphold the position of the NLRC. It holds the view that the division Secretaries; the staff members
of General Management, Personnel and the Industrial Relations Department; and the secretaries of
Audit, EDP and Financial Systems, are disqualified from joining the PEO-FFW as they are
confidential employees. They cannot even form a union of their own for, as held in Golden Farms,
Inc. vs. Ferrer-Calleja, 8 the rationale for the disqualification of managerial employees from joining unions holds true also for
confidential employees. As regards the sales representatives and service engineers, however, there is no doubt that they are entitled to join
or form a union, as they are not disqualified by law from doing so. Considering that they have interests dissimilar to those of the rank and file
employees comprising the existing bargaining unit, and following the Globe Doctrine enunciated in In Re: Globe Machine and Stamping
Company 9 to the effect that in determining the proper bargaining unit the express will or desire of the employees shall be considered, they
should be allowed to determine for themselves what union to join or form. The best way to determine their preference is through a
referendum. As shown by the records, such a. referendum was decreed by the Executive Labor Arbiter.
The petition is impressed with merit.
At the outset, We express Our agreement with the petitioner's view that respondent NLRC did not
quite accurately comprehend the issue raised before it. Indeed, the issue is not whether the subject
employees may join or form a union, but rather, whether or not they may be part of the existing
bargaining unit for the rank and file employees of PIDI.
Even if the issue was, indeed, as perceived by the NLRC, still, a palpable error was committed by it
in ruling that under the law, all workers, except managerial employees and security personnel, are
qualified to join a union, or form part of a bargaining unit. At the time Case No. NLRC-NCR-00-11-
03936-87 was filed in 1987, security personnel were no longer disqualified from joining or forming a
union.
Section 6 of E.O. No. 111, enacted on 24 December 1986, repealed the original provisions of Article
245 of the Labor Code, reading as follows:
Art. 245. Ineligibility of security personnel to join any labor organization. — Security
guards and other personnel employed for the protection and security of the person,
properties and premises of the employer shall not be eligible for membership, in any
labor organization.
and substituted it with the following provision:
Art. 245. Right of employees in the public service. — 10
xxx xxx xxx
By virtue of such repeal and substitution, security guards became eligible for membership in
any labor organization. 11
On the main issue raised before Us, it is quite obvious that respondent NLRC committed grave
abuse of discretion in reversing the decision of the Executive Labor Arbiter and in decreeing that
PIDI's "Service Engineers, Sales Force, division secretaries, all Staff of General Management,
Personnel and Industrial Relations Department, Secretaries of Audit, EDP and Financial Systems
are included within the rank and file bargaining unit."
In the first place, all these employees, with the exception of the service engineers and the sales
force personnel, are confidential employees. Their classification as such is not seriously disputed by
PEO-FFW; the five (5) previous CBAs between PIDI and PEO-FFW explicitly considered them as
confidential employees. By the very nature of their functions, they assist and act in a confidential
capacity to, or have access to confidential matters of, persons who exercise managerial functions in
the field of labor relations. 12 As such, the rationale behind the ineligibility of managerial employees to
form, assist or join a labor union equally applies to them.
In Bulletin Publishing Co., Inc. vs. Hon Augusto Sanchez, 13 this Court elaborated on this rationale,
thus:
. . . The rationale for this inhibition has been stated to be, because if these
managerial employees would belong to or be affiliated with a Union, the latter might
not be assured of their loyalty, to the Union in view of evident conflict of interests.
The Union can also become company-dominated with the presence of managerial
employees in Union membership.
In Golden Farms, Inc. vs. Ferrer-Calleja, 14 this Court explicitly made this rationale applicable to
confidential employees:
This rationale holds true also for confidential employees such as accounting
personnel, radio and telegraph operators, who having access to confidential
information, may become the source of undue advantage. Said employee(s) may act
as a spy or, spies of either party to a collective bargainingagreement. This is
specially true in the present case where the petitioning Union is already the
bargaining agent of the rank-and-file employees in the establishment. To allow the
confidential employees to join the existing Union of the rank-and-file would be in
violation of the terms of the Collective Bargaining Agreement wherein this kind of
employees by the nature of their functions/ positions are expressly excluded.
As regards the service engineers and the sales representatives, two (2) points which respondent
NLRC likewise arbitrarily and erroneously ruled upon agreed to be discussed. Firstly, in holding that
they are included in the bargaining unit for the rank and file employees of PIDI, the NLRC practically
forced them to become members of PEO-FFW or to be subject to its sphere of influence, it being the
certified bargaining agent for the subject bargaining unit. This violates, obstructs, impairs and
impedes the service engineers' and the sales representatives' constitutional right to form unions or
associations 15 and to self-organization. 16 In Victoriano vs. Elizalde Rope Workers Union, 17 this Court
already ruled:
. . . Notwithstanding the different theories propounded by the different schools of

jurisprudence regarding the nature and contents of a "right", it can be safely said that
whatever theory one subscribes to, a right comprehends at least two broad notions,
namely: first, liberty or freedom, i.e., the absence of legal restraint, whereby an
employee may act for himself without being prevented by law; and second, power,
whereby an employee may, as he pleases, join or refrain from joining an association.
It is, therefore, the employee who should decide for himself whether he should join or
not an association; and should he choose to join, he himself makes up his mind as to
which association he would join; and even after he has joined, he still retains the
liberty and the power to leave and cancel his membership with said organization at
any time. 18 It is clear, therefore, that the right to join a union includes the right to
abstain from joining any
union. 19 Inasmuch as what both the Constitution and the Industrial Peace Act have
recognized, and guaranteed to the employee, is the "right" to join associations of his
choice, it would be absurd to say that the law also imposes, in the same breath, upon
the employee the duty to join associations. The law does not enjoin an employee to
sign up with any association.
The decision then of the Executive Labor Arbiter in merely directing the holding of a referendum "to
determine the will of the service engineers, sales representatives as to their inclusion or exclusion in
(sic) the bargaining unit" is the most appropriate procedure that conforms with their right to form,
assist or join in labor union or organization. However, since this decision was rendered before the
effectivity of R.A. No. 6715, it must now be stressed that its future application to the private parties in
this case should, insofar as service engineers and sales representatives holding supervisory
positions or functions are concerned, take into account the present Article 245 20 of the Labor Code
which, as amended by R.A. No. 6715, now reads:
ARTICLE 245. Ineligibility of managerial employees to join any labor organization;

right of supervisory employees. — Managerial employees are not eligible to join,
assist or form any labor organization. Supervisory employees shall not be eligible for
membership in a labor organization of the rank-and-file employees but may join,
assist or form separate labor organizations of their own. (emphasis supplied)
The foregoing disquisitions render unnecessary a discussion on the second ground on the alleged
grave abuse of discretion on the part of the NLRC in not applying the "Globe Doctrine". Suffice it to
state here that since the only issue is the subject employees' inclusion in or exclusion from the
bargaining unit in question, and PIDI never questioned the decision of the Executive Labor Arbiter,
the Globe Doctrine finds no application. Besides, this doctrine applies only in instances of evenly
balanced claims by competitive groups for the right to be established as the bargaining unit, 21 which
do not obtain in this case.
WHEREFORE, the petition is hereby GRANTED. The Decision of public respondent National Labor
Relations Commission in Case No. NLRC-NCR-00-11-03936-87, promulgated on 16 January 1989,
is hereby SET ASIDE while the Decision of the Executive Labor Arbiter in said case dated 17 March
1988 is hereby REINSTATED, subject to the modifications above indicated. Costs against private
respondent.
SO ORDERED.
Gutierrez, Feliciano, Bidin and Romero, JJ., concur.
Footnotes
1 Rollo, 4.
2 Id.
3 On who may join labor unions.
4 On exclusion of security guards from the bargaining unit of the rank and file
employees.
5 On ineligibility of managerial employees to join any labor organization.
6 Rollo, 111.
7 Id., 2.
8 175 SCRA 471 [1989].
9 3 NLRC 294 [1937].
10 In view of the repeal of Article 238 of the Labor Code by Section 5 of E.O. 111,
this Article was deemed renumbered as Article 244.
11 Manila Electric Co. vs. Secretary of Labor and Employment, 197 SCRA 275
[1991].
12 PASCUAL, C., Labor Relations Law, 1986 ed., 159.
13 144 SCRA 628, 635 [1986].
14 Supra.
15 Section 8, Article III (Bill of Rights) and Section 3, Article XIII of the present
Constitution.
16 Article 246, Labor Code of the Philippines, as amended.
17 59 SCRA 54, 66-67 [1974]. See also Anucension vs. National Labor Union, 80
SCRA 350 [1977]; Vassar Industries Employees Union vs. Estrelia, 82 SCRA 280
[1978].
18 Citing Pagkakaisa Samahang Manggagawa ng San Miguel Brewery at mga

Kasangay (PAFLU) vs. Enriquez, 108 Phil. 1010 [1960].
19 Citing Abo vs. PHILAME (KG) Employees & Workers Union, 13 SCRA 120 [1965].
20 Originally Article 246.
21 Rothenberg on Labor Relations, 1949 ed., 483.
5) Pier 8 vs. Roldan GR No. 110854 Feb. 13, 1995

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 110854 February 13, 1995
PIER 8 ARRASTRE & STEVEDORING SERVICES, INC., petitioner,

vs.
HON. MA. NIEVES ROLDAN-CONFESOR, in her capacity as Secretary of Labor and
Employment, and GENERAL MARITIME & STEVEDORES UNION (GMSU), respondents.
PUNO, J.:
Petitioner corporation and private respondent labor union entered into a three-year Collective
Bargaining Agreement (CBA) with expiry date on November 27, 1991. During the freedom period the
National Federation of Labor Unions (NAFLU) questioned the majority status of Private respondent
through a petition for certification election. The election conducted on February 27, 1992 was won by
private respondent. On March 19, 1992, private respondent was certified as the sole and exclusive
bargaining agent of petitioner's rank-and-file employees.
On June 22, 1992, private respondent's CBA proposals were received by petitioner. Counter-
proposals were made by petitioner. Negotiations collapsed, and on August 24, 1992, private-
respondent filed a Notice of Strike with the National Conciliation and Mediation Board (NCMB). The
NCMB tried but failed to settle the parties' controversy.
On September 30, 1992, public respondent Secretary of Labor assumed jurisdiction over the
dispute. She resolved the bargaining deadlock between the parties through an Order, dated March
4, 1993, which reads, in part:
xxx xxx xxx
A. The non-economic issues

1. Scope/coverage of the CBA. Article I of the 1988 CBA provides:
The Company recognizes the Union as the sole and exclusive

collective bargaining representative of all the stevedores,
dockworkers, gang bosses, foremen, rank and file employees
working at Pier 8, North Harbor and its offices and said positions are
[sic] listed in ANNEX "A" hereof.
As such representative the UNION is designated as the collective

bargaining agent with respect to and concerning the terms and
conditions of employment and the interpretations and implementation
of the provisions and conditions of this Agreement.
Annex "A" of the CBA is the listing of positions covered thereby. These are:
1. Foremen;
2. Gang bosses;
3. Winchmen;
4. Signalmen;
5. Stevedores;
6. Dockworkers;
7. Tallymen;
8. Checkers;
9. Forklift and crane operators;
10. Sweepers;
11. Mechanics;
12. Utilitymen;
13. Carpenters; and
14. Other rank and file employees;
The company argues in the first instance that under Article 212(m) in relation to
Article 245 of the Labor Code, supervisors are ineligible for. membership in a labor
organization of rank and file. Being supervisors, foremen should be excluded from
the bargaining unit.
The Company likewise seeks the exclusion on the ground of lack of community of
interest and divergence in functions, mode of compensation and working conditions
of the following:
1. Accounting clerk;
2. Audit clerk;
3. Collector;
4. Payroll clerk;
5. Nurse;
6. Chief biller;
7. Biller;
8. Teller/biller;
9. Personnel clerk;
10. Timekeeper;
11. Asst. timekeeper;
12. Legal secretary;
13. Telephone operator;
14. Janitor/Utility; and
15. Clerk
These positions, the Company argues, cannot be lumped together with the
stevedores or dockworkers who mostly comprise the bargaining unit. Further,
notwithstanding the check-off provisions of the CBA, the incumbents in these
positions have never paid union dues. Finally, some of them occupy confidential
positions and therefore ought to be excluded from the bargaining unit.
The Union generally argues that the Company's proposed exclusions retrogressive. .
..
We see no compelling justification to order the modification of Article I of the 1988

CBA as worded. For by lumping together stevedores and other rank and file
employees, the obvious intent of the parties was to treat all employees not
disqualified from union membership as members of one bargaining unit. This is
regardless of working conditions, mode of compensation, place of work, or other
considerations. In the absence of mutual agreement of the parties or evidence that
the present compositions of the bargaining unit is detrimental to the individual and
organizational rights either of the employees or of the Company, this expressed
intent cannot be set aside.
It may well be that as a consequence of Republic Act No. 6715, foremen are
ineligible to join the union of the rank and file. But this provision can be invoked only
upon proof that the foremen sought to be excluded from the bargaining unit are
cloaked with effective recommendatory powers such as to qualify them under the
legal definitions of supervisors.
xxx xxx xxx
7. Effectivity of the CBA. The Union demands that the CBA should be fully retroactive
to 28 November 1991. The Company is opposed on the ground that under Article
253-A of the labor code, the six-month period within which the parties must come to
an agreement so that the same will be automatically retroactive is long past.
The Union's demand for full retroactivity, we note, will result in undue financial
burden to the Company. On the other hand, the Company's reliance on Article 253-A
is misplaced as this applies only to the renegotiated terms of an existing CBA. Here,
the deadlock arose from negotiations for a new CBA.
These considered, the CBA shall be effective from the time we assumed jurisdiction
over the dispute, that is, on 22 September 1992, and shall remain e effective for five
(5) years thereafter. It shall be understood that except for the representation aspect
all other provisions thereof shall be renegotiated not later than three (3) years after
its effectivity, consistently with Article 253-A of the Labor Code.
B. The economic issues
The comparative positions of the parties are:
COMPANY UNION
xxx xxx xxx
. Vacation and sick leave

5
17 days vacation and sick leave i) For all covered employees
17 days sick leave per year and 17 days sick than gang
for employment with at least gang bosses:
five years of service.
15 working days vacation and
15 working days sick leave
for those with at least 1 year
of service

for those with more than one
year of service up to 5 years
of service

for those with more than 5
years of service up to 10
years of service

for those with more than 10
years of service
Provided that in the case Provided that in the case of a

of a rotation worker, he rotation worker, he must have
must have work for at worked for 140 days in a
least 160 days in a year calendar year as a condition
for availment for availment.
Provided, further that in the

event a rotation worker fails
to complete 140 days work in
a calendar year, he shall still
be entitled to vacation and
sick leave with pay, as follows:
139 - 120 days worked: 90%
119 - 110 days worked: 50%
ii) For Gang bosses:
Same as the above schedule
except that:
1) the condition that a gang

bosses must have worked for at
least 120 days in a calendar
year shall be reduced to 110
days; and
2) where the above number of

days worked is not met, the
gang boss shall still be entitled
to vacation and sick leave with
pay, as follows:
109 - 90 days worked: 90%
89 - 75 days worked: 50%
xxx xxx xxx
. Death aid
7
P1,500.00 to heirs P10,000.00 to heirs of covered
of covered employees employees
P5,000.00 assistance for death

of immediate member of
covered employee's family
xxx xxx xxx
. Emergency loan
12
a) amount of P700.00 but damage 30 days salary payable through

entitlement to dwelling by fire shall payroll deduction in twelve
be included monthly installments
b) cash bond None The company shall put up a

cash
for loss, damage bond of not less than
P40,000.00
or accident for winchmen, crane and forklift
operators.
xxx xxx xxx

Balancing the right of the Company to remain viable and to just returns to its
investments with right of the Union members to just rewards for their labors, we find
the following award to be fair and reasonable:
xxx xxx xxx
. Vacation and Sick Leave

6
a) Non-rotation workers 17 days vacation/17 days sick

leave
for those with at least 1 year of
service
b) Rotation workers other 17 days vacation/17 days sick

leave,
than gang boss provided that the covered
worker
must have worked for at least
155 days
in a calendar year
c) Gang bosses 17 days vacation/17 days sick

leave,
provided that the gang boss
must have
worked for at least 115 days in a
calendar year
xxx xxx xxx
8. Death aid P3,000.00 to the heirs of each covered employee
xxx xxx xxx
12. Emergency loan 30 days pay, payable through payroll deductions of 1/12 of
monthly salary
WHEREFORE, the Pier 8 Arrastre and Stevedoring Services and the General
Maritime Services Union are hereby ordered to execute new collective bargaining
agreement the incorporating the dispositions herein contained. These shall be in
addition to all other existing terms, conditions and benefits of employment, except
those specifically deleted herein, which have previously governed the relations of the
parties. All other disputed items not specifically touched upon herein are deemed
denied, without prejudice to such other agreements as the parties may have reached
in the meantime. The collective bargaining agreement so executed shall be effective
from 22 September 1992 and up to five years thereafter, subject to renegotiation on
the third year of its effectivity pursuant to Article 253-A of the Labor Code.1
Petitioner sought partial reconsideration of the Order. On June 8, 1993, public respondent affirmed
her findings, except for the date of effectivity of the Collective Bargaining Agreement which was
changed to September 30, 1992. This is the date when she assumed jurisdiction over the deadlock.
Petitioner now assails the Order as follows:
THE HONORABLE SECRETARY OF LABOR COMMITTED GRAVE ABUSE OF

DISCRETION IN NOT EXCLUDING CERTAIN POSITIONS FROM THE
BARGAINING AGREEMENT UNIT
II

DISCRETION IN MAKING THE CBA EFFECTIVE ON SEPTEMBER 30, 1992
WHEN SHE ASSUMED JURISDICTION OVER THE LABOR DISPUTE AND NOT
MARCH 4, 1993 WHEN SHE RENDERED JUDGMENT OVER THE DISPUTE
III

DISCRETION IN REDUCING THE NUMBER OF DAYS AN EMPLOYEE SHOULD
ACTUALLY WORK TO BE ENTITLED TO VACATION AND SICK LEAVE BENEFITS
IV

DISCRETION IN INCREASING WITHOUT FACTUAL BASIS THE DEATH AID AND
EMERGENCY LOAN 2
The petition is partially meritorious.
Firstly, petitioner questions public respondent for not excluding four (4) foremen, a legal secretary, a
timekeeper and an assistant timekeeper from the bargaining unit composed of rank-and-file
employees represented by private respondent. Petitioner argues that: (1) the failure of private
respondent to object when the foremen and legal secretary were prohibited from voting in the
certification election constitutes an admission that such employees holdsupervisory/confidential positions; and
(2) the primary duty and responsibility of the timekeeper and assistant timekeeper is "to enforce company rules and regulations by reporting
to petitioner . . . those workers who committed infractions, such as those caught abandoning their posts." and hence, they should not be
considered as rank-and-file employees.
The applicable law governing the proper composition of bargaining unit is Article 245 of the labor
Code, as amended, which provides as follows:
Art. 245. Ineligibility of managerial employees to join any labor

organization; employees to join any labor organization; right of supervisory
employees. — Managerial employees are not eligible to join, assist or form any labor
organization. Supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist or form separate
labor organizations of their own.
Article 212(m) of the same Code, as well as Book V, Rule 1, Section 1(o) of the Omnibus Rules
Implementing the Labor Code, as amended by the Rules and Regulations Implementing R.A.. 6715,
differentiate managerial, supervisory, and rank-and-file employees, thus:
"Managerial Employee" is one who is vested with powers or prerogatives to lay down
and execute management policies and/or to hire, transfer, suspend, layoff recall,
discharge, assign or discipline employees. Supervisory employees are those who, in
the interest of the employer, effectively recommend such managerial actions if the
exercise of such authority is not merely routinary or clerical in nature but requires the
use of independent judgment. All employees not falling within any of the above
definitions are considered rank-and-file employees for purposes of the Book.
This Court has ruled on numerous occasions that the test of supervisory or managerial status is
whether an employee possesses authority to act in the interest of his employer which authority is not
merely routinary or clerical in nature but requires use of independent judgment. 3 What governs the
determination of the nature of employment is not the employee's title, but his job description. If the
nature of the employee's job does not fall under the definition of "managerial" or "supervisory" in the
Labor Code, he is eligible to be a member of the rank-and-file bargaining unit. 4
Foremen are chief and often especially-trained workmen who work with and commonly are in charge
of a group of employees in an industrial plant or in construction work. 5 They are the persons
designated by the employer-management to direct the work of employees and to superintend and
oversee them. 6 They are representatives of the employer-management with authority over particular
groups of workers, processes, operations, or sections of a plant or an entire organization. In the
modern industrial plant, they are at once a link in the chain of command and the bridge between the
management and labor. 7 In the performance their work, foremen definitely use their independent
judgment and are empowered to make recommendations for managerial action with respect to those
employees under their control. Foremen fall squarely under the category of supervisory employees,
and cannot be part of rank-and-file unions.
Upon the other hand, legal secretaries are neither managers nor supervisors. Their work is basically
routinary and clerical. However, they should be differentiated from rank-and-file employees because
they, are tasked with, among others, the typing of legal documents, memoranda and
correspondence, the keeping of records and files, the giving of and receiving notices and such other
duties as required by the legal personnel of the corporation. 8 Legal secretaries therefore fall under
the category of confidential employees. Thus, to them applies our holding in the case of Philips
Industrial Development, Inv., v. NLRC, 210 SCRA 339 (1992), that:
. . . By the very functions, they assist confidential capacity to, or have access to
confidential. matters of, persons to, exercise managerial functions in the field of labor
relations. As such, the rationale behind the ineligibility of managerial employees to
form, assist or join a labor union equally applies to them.
In Bulletin Publishing Co., Inc., vs. Hon. Augusto Sanchez, this Court elaborated on
this rationale, thus:
. . . The rationale, for this inhibition has been stated to be, because if
these managerial employees would belong to or be affiliated with
Union the latter might not, be assured of their loyalty to the Union in
view of evident conflict of interests. The Union can also become
company-dominated with the presence of managerial employees in
Union membership.
In Golden Farms, Inc., vs. Ferrer-Calleja, 9 this court explicitly made this rationale
applicable to confidential employees:
This rationale holds true also for confidential employees . . ., who

having access to confidential information, may become the source of
undue advantage. Said employee(s) may act as a spy or spies of
either party to a collective bargaining agreement. . . .
We thus hold that public respondent acted with grave abuse of discretion in not excluding the four
foremen and legal secretary from the bargaining unit composed of rank-and-file employees.
As for the timekeeper and assistant timekeeper it is clear from petitioner's own pleadings that they
are, neither managerial nor supervisory employees. They are merely tasked to report those who
commit infractions against company rules and regulations. This reportorial function is routinary and
clerical. They do not determine the fate of those who violate company policy rules and regulations
function. It follows that they cannot be excluded from the subject bargaining unit.
The next issue is the date when the new CBA of the parties should be given effect. Public
respondent fixed the effectivity date on September 30, 1992. when she assumed jurisdiction over the
dispute. Petitioner maintains it should be March 4. 1993, when public respondent rendered judgment
over the dispute.
The applicable laws are Articles 253 and 253- A of the Labor Code, thus:
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 and conditions of the existing agreement during the 60-day
period and/or until a new agreement is reached by the parties.
and;
Art. 253-A. Terms of a collective bargaining agreement. — Any Collective Bargaining

Agreement that the parties may enter into shall, insofar as the representation aspect
is concerned, be for a term of five (5) years. No petition questioning the majority
status of the incumbent bargaining agent shall be entertained and no certification
election shall be conducted by the Department of Labor and Employment outside the
sixty-day period immediately before the date of expiry of such five year term of the
Collective Bargaining Agreement. All other provisions of the Collective Bargaining
Agreement shall be renegotiated not later than three (3) years after its execution.
Any agreement on such other provisions of the Collective Bargaining Agreement
entered into within six (6) months from the date of expiry of the term of such other
provisions as fixed in such Collective Bargaining Agreement, shall retroact to the day
immediately following such date. If any such agreement is entered into beyond six
months, the parties shall agree on the duration of collective bargaining agreement,
the parties may exercise their rights under this Code.
In Union of Filipino Employees v. NLRC, 192 SCRA 414 (1990), this court interpreted the above law
as follows:
In light of the foregoing, this Court upholds the pronouncement of the NLRC holding
the CBA to be signed by the parties effective upon the promulgation of the assailed
resolution. It is clear and explicit from Article 253-A that any agreement on such other
provisions of the CBA shall be given retroactive effect only when it is entered into
within six (6) months from its expiry date. If the agreement was entered into outside
the six (6) month period, then the parties shall agree on the duration of the
retroactivity thereof.
The assailed resolution which incorporated the CBA to be signed by the parties was
promulgated June 5, 1989, the expiry date of the past CBA. Based on the provision
of Section 253-A, its retroactivity should be agreed upon. by the parties. But since no
agreement to that effect was made, public respondent did not abuse its discretion in
giving the said CBA a prospective effect. The action of the public respondent is within
the ambit of its authority vested by existing law.
In the case of Lopez Sugar Corporation v. Federation of Free Workers, 189 SCRA 179 (1991), this
Court reiterated the rule that although a CBA has expired, it continues to have legal effects as
between the parties until a new CBA has been entered into. It is the duty of both parties to the 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 freedom period and/or until a new agreement is reached by the
parties. 10 Applied to the case at bench, the legal effects of the immediate past CBA between
petitioner and private respondent terminated, and the effectivity of the new CBA began, only on
March 4, 1993 when public respondent resolved their dispute.
Finally, we find no need to discuss at length the merits of the third and fourth assignments of error.
The questioned Order relevantly states:
In the resolution of the economic issues, the Company urges us to consider among
others, present costs of living, its financial capacity, the present wages being paid by
the other cargo handlers at the North Harbor, and the fact that the present average
wage of its workers is P127.75 a day, which is higher than the statutory minimum
wage of P118.00 a day. The Company's evidence, consisting of its financial
statements for the past three years, shows that its net income was P743,423.45 for
1989, P2,108,569.03 for 1990, and P1,479,671.84 for 1991, or an average of
P1,443,885.10 over the three-year period. It argues that for just the first year of
effectivity of the CBA, the Company's proposals on wages, effect thereof on
overtime, 13th month pay, and vacation and sick leave commutation, will cost about
P520,723,44, or 35.19% of its net income for 1991. The Company likewise urges us
to consider the multiplier effect of its proposals on the second and third years of the
CBA. As additional argument, the Company manifests that a portion of its pier will
undergo a six-month to one-year renovation starting January 1993.
On the other hand, the Union's main line of argument — that is, aside from being
within the financial capacity of the Company to grant, its demands are fair and
reasonable — is not supported by evidence controverting the Company's own
presentation of its financial capacity. The Union in fact uses statements of the
Company for 1989-1991, although it interprets these data as sufficient justification for
its own proposals. It also draws our attention to the bargaining history of the parties,
particularly the 1988 negotiations during which the company was able to grant wage
increases despite operational losses.
Balancing the right of the Company to remain viable and to just returns to its
investments with right of the Union members to just
rewards for their labors, we find the following award to be fair and reasonable . . . . 11
It is evident that the above portion of the impugned Order is based on well-studied evidence. The
conclusions reached by public respondent in the discharge of her statutory duty as compulsory
arbitrator, demand the high respect of this Court. The study and settlement of these disputes fall
within public respondent's distinct administrative expertise. She is especially trained for this delicate
task, and she has within her cognizance such data and information as will assist her in striking the
equitable balance between the needs of management, labor and the public. Unless there is clear
showing of grave abuse of discretion, this Court cannot and will not interfere with the labor expertise
of public respondent Secretary of Labor.
IN VIEW WHEREOF, public respondents Order, dated March 4, 1993, and Resolution, dated June
8, 1993, are hereby MODIFIED to exclude foremen and legal secretaries from the rank-and-file
bargaining unit represented by private respondent union, and to fix the date of effectivity of the five-
year collective bargaining agreement between petitioner corporation and private respondent union
on March 4, 1993. No costs.
SO ORDERED.
Narvasa, C.J., Bidin, Regalado and Mendoza, JJ., concur.
Footnotes
1 Order of the Secretary of Labor and Employment, dated March 4, 1993. See Annex
"A" to Petition, p. 27- 47 of Rollo.
2 Rollo, pp. 6-7.
3 See Philippine Appliance Corporation v. Laguesma, 226 SCRA 730 (1993);

Pagkakaisa ng mga Manggagawa sa Triumph International-United Lumber and
General Workers of the Philippines v. Ferrer-Calleja, 181 SCRA 119 (1990). See
also Atlas Lithographic Services, Inc. v. Laguesma, 205 SCRA 12 (1992); Philtranco
Service Enterprises v. Bureau of Labor Relations, 174 SCRA 338 (1989).
4 See Southern Philippines Federation of Labor (SPFL) v. Calleja, 172 SCRA 676
(1989).
5 See Ballentine's Law Dictionary, 3rd Edition (1969); Webster's Third New
International Dictionary (1971).
6 Black's Law Dictionary, 6th Edition (1990).
7 Webster's Third New International Dictionary (1971).
8 See Black's Law Dictionary, 6th Edition (1990).
9 210 SCRA 471 (1989).

10 National Congress of Unions in the Sugar Industry of the Philippines v. Ferrer-
Calleja, 205 SCRA 478 (1992).
11 Rollo, pp. 44-45.
6) Metro Lab vs. Roldan GR No. 108855 Feb. 28, 1996
FIRST DIVISION
[G.R. No. 108855. February 28, 1996]
METROLAB INDUSTRIES, INC., petitioner, vs. HONORABLE MA.

NIEVES ROLDAN-CONFESOR, in her capacity as Secretary of
the Department of Labor and Employment and METRO DRUG
CORPORATION EMPLOYEES ASSOCIATION-FEDERATION OF
FREE WORKERS, respondents.
SYLLABUS
1. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF ADMINISTRATIVE
AGENCIES; RULE; CASE AT BAR. - We reaffirm the doctrine that considering
their expertise in their respective fields, factual findings of administrative agencies
supported by substantial evidence are accorded great respect and binds this
Court. The Secretary of Labor ruled, thus: x x x Any act committed during the
pendency of the dispute that tends to give rise to further contentious issues or
increase the tensions between the parties should be considered an act of
exacerbation. One must look at the act itself, not on speculative reactions. A
misplaced recourse is not needed to prove that a dispute has been exacerbated.
For instance, the Union could not be expected to file another notice of strike. For
this would depart from its theory of the case that the layoff is subsumed under the
instant dispute, for which a notice of strike had already been filed. On the other
hand, to expect violent reactions, unruly behavior, and any other chaotic or drastic
action from the Union is to expect it to commit acts disruptive of public order or acts
that may be illegal. Under a regime of laws, legal remedies take the place of violent
ones. x xx Protest against the subject layoffs need not be in the form of violent
action or any other drastic measure. In the instant case the Union registered their
dissent by swiftly filing a motion for a cease and desist order. Contrary to petitioners
allegations, the Union strongly condemned the layoffs and threatened mass action if
the Secretary of Labor fails to timely intervene: x x x 3. This unilateral action of
management is a blatant violation of the injunction of this Office against committing
acts which would exacerbate the dispute. Unless such act is enjoined the Union will
be compelled to resort to its legal right to mass actions and concerted activities to
protest and stop the said management action. This mass layoff is clearly one which
would result in a very serious dispute unless this Office swiftly intervenes. x x x
Metrolab and the Union were still in the process of resolving their CBA deadlock
when petitioner implemented the subject layoffs. As a result, motions and
oppositions were filed diverting the parties attention, delaying resolution of the
bargaining deadlock and postponing the signing of their new CBA, thereby
aggravating the whole conflict.
2. LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT;
EXERCISE OF MANAGEMENT PREROGATIVES; NOT ABSOLUTE; SUBJECT
TO EXCEPTIONS IMPOSED BY LAW. - This Court recognizes the exercise of
management prerogatives and often declines to interfere with the legitimate
business decisions of the employer. However, this privilege is not absolute but
subject to limitations imposed by law. In PAL vs. NLRC, (225 SCRA 301 [1993]), we
issued this reminder: ... the exercise of management prerogatives was never
considered boundless. Thus, in Cruz vs. Medina (177 SCRA 565 [1989]), it was
held that managements prerogatives must be without abuse of discretion ...All this
points to the conclusion that the exercise of managerial prerogatives is not
unlimited. It is circumscribed by limi(ations found in law, a collective bargaining
agreement, or the general principles of fair play and justice (University of Sto.
Tomas v. NLRC, 190 SCRA 758 [1990]).
3. ID.; ID.; ID.; ID.; ID.; CASE AT BAR AN EXCEPTION. - The case at bench
constitutes one of the exceptions. The Secretary of Labor is expressly given the
power under the Labor Code to assume jurisdiction and resolve labor disputes
involving industries indispensable to national interest. The disputed injunction is
subsumed under this special grant of authority. Art. 263 (g) of the Labor Code
specifically provides that: x x x (g) When, in his opinion, there exists a labor dispute
causing or likely to cause a strike or lockout in an industry indispensable to the
national interest, the Secretary of Labor and Employment may assume jurisdiction
over the dispute and decide it or certify the same to the Commission for compulsory
arbitration. Such assumption or certification shall have the effect of automatically
enjoining the intended or impending strike or lockout as specified in the assumption
or certification order. If one has already taken place at the time of assumption or
certification, all striking or locked out employees shall immediately return to work
and the employer shall immediately resume operations and readmit all workers
under the same terms and conditions prevailing before the strike or lockout. The
Secretary of Labor and Employment or the Commission may seek the assistance of
law enforcement agencies to ensure compliance with this provision as well as with
such orders as he may issue to enforce the same. . . . That Metrolabs business is of
national interest is not disputed. Metrolab is one of the leading manufacturers and
suppliers of medical and pharmaceutical products to the country. Metrolabs
management prerogatives, therefore, are not being unjustly curtailed but duly
balanced with and tempered by the limitations set by law, taking into account its
special character and the particular circumstances in the case at bench.
4. ID.; LABOR RELATIONS; INELIGIBILITY OF MANAGERIAL EMPLOYEES TO
JOIN, FORM AND ASSIST ANY LABOR ORGANIZATION; PROHIBITION
EXTENDED TO CONFIDENTIAL EMPLOYEES. - Although Article 245 of the Labor
Code limits the ineligibility to join, form and assist any labor organization to
managerial employees, jurisprudence has extended this prohibition to confidential
employees or those who by reason of their positions or nature of work are required
to assist or act in a fiduciary manner to managerial employees and hence, are
likewise privy to sensitive and highly confidential records.
5. ID.; ID.; EXCLUSION OF CONFIDENTIAL EMPLOYEES FROM THE RANK AND
FILE BARGAINING UNIT; NOT TANTAMOUNT TO DISCRIMINATION. -
Confidential employees cannot be classified as rank and file. As previously
discussed, the nature of employment of confidential employees is quite distinct from
the rank and file, thus, warranting a separate category. Excluding confidential
employees from the rank and file bargaining unit, therefore, is not tantamount to
discrimination.
APPEARANCES OF COUNSEL
Bautista Picazo Buyco Tan & Fider for petitioner.
The Solicitor General for public respondent.
Perfecto V. Fernandez, Jose P. Fernandez & Cristobal P. Fernandez for Metro Drug
Corporation.
DECISION
KAPUNAN, J.:
This is a petition for certiorari under Rule 65 of the Revised Rules of Court seeking
the annulment of the Resolution and Omnibus Resolution of the Secretary of Labor and
Employment dated 14 April 1992 and 25 January 1993, respectively, in OS-AJ-04491-
11 (NCMB-NCR-NS-08-595-9 1; NCMB-NCR-NS-09-678-91) on grounds that these
were issued with grave abuse of discretion and in excess of jurisdiction.
Private respondent Metro Drug Corporation Employees Association-Federation of
Free Workers (hereinafter referred to as the Union) is a labor organization representing
the rank and file employees of petitioner Metrolab Industries, Inc. (hereinafter referred to
as Metrolab/MII) and also of Metro Drug, Inc.
On 31 December 1990, the Collective Bargaining Agreement (CBA) between
Metrolab and the Union expired. The negotiations for a new CBA, however, ended in a
deadlock.
Consequently, on 23 August 1991, the Union filed a notice of strike against
Metrolab and Metro Drug Inc. The parties failed to settle their dispute despite the
conciliation efforts of the National Conciliation and Mediation Board.
To contain the escalating dispute, the then Secretary of Labor and Employment,
Ruben D. Torres, issued an assumption order dated 20 September 1991, the dispositive
portion of which reads, thus:
WHEREFORE, PREMISES CONSIDERED, and pursuant to Article 263 (g) of the
Labor Code, as amended, this Office hereby assumes jurisdiction over the entire labor
dispute at Metro Drug, Inc. - Metro Drug Distribution Division and Metrolab
Industries Inc.
Accordingly, any strike or lockout is hereby strictly enjoined. The Companies and the
Metro Drug Corp. Employees Association - FFW are likewise directed to cease and
desist from committing any and all acts that might exacerbate the situation.
Finally, the parties are directed to submit their position papers and evidence on the
aforequoted deadlocked issues to this office within twenty (20) days from receipt
hereof.
SO ORDERED. (Italics ours.)

[1]
On 27 December 1991, then Labor Secretary Torres issued an order resolving all
the disputed items in the CBA and ordered the parties involved to execute a new CBA.
Thereafter, the Union filed a motion for reconsideration.
On 27 January 1992, during the pendency of the abovementioned motion for
reconsideration, Metrolab laid off 94 of its rank and file employees.
On the same date, the Union filed a motion for a cease and desist order to enjoin
Metrolab from implementing the mass layoff, alleging that such act violated the
prohibition against committing acts that would exacerbate the dispute as specifically
directed in the assumption order.[2]
On the other hand, Metrolab contended that the layoff was temporary and in the
exercise of its management prerogative. It maintained that the company would suffer a
yearly gross revenue loss of approximately sixty-six (66) million pesos due to the
withdrawal of its principals in the Toll and Contract Manufacturing Department. Metrolab
further asserted that with the automation of the manufacture of its product Eskinol, the
number of workers required its production is significantly reduced.[3]
Thereafter, on various dates, Metrolab recalled some of the laid off workers on a
temporary basis due to availability of work in the production lines.
On 14 April 1992, Acting Labor Secretary Nieves Confesor issued a resolution
declaring the layoff of Metrolabs 94 rank and file workers illegal and ordered their
reinstatement with full backwages. The dispositive portion reads as follows:
WHEREFORE, the Unions motion for reconsideration is granted in part, and our
order of 28 December 1991 is affirmed subject to the modifications in allowances and
in the close shop provision. The layoff of the 94 employees at MII is hereby declared
illegal for the failure of the latter to comply with our injunction against committing
any act which may exacerbate the dispute and with the 30-day notice
requirement. Accordingly, MII is hereby ordered to reinstate the 94 employees, except
those who have already been recalled, to their former positions or substantially
equivalent, positions with full backwages from the date they were illegally laid off on
27 January 1992 until actually reinstated without loss of seniority rights and other
benefits. Issues relative to the CBA agreed upon by the parties and not embodied in
our earlier order are hereby ordered adopted for incorporation in the CBA. Further,
the dispositions and directives contained in all previous orders and resolutions relative
to the instant dispute, insofar as not inconsistent herein, are reiterated. Finally, the
parties are enjoined to cease and desist from committing any act which may tend to
circumvent this resolution.
SO RESOLVED. [4]
On 6 March 1992, Metrolab filed a Partial Motion for Reconsideration alleging that
the layoff did not aggravate the dispute since no untoward incident occurred as a result
thereof. It, likewise, filed a motion for clarification regarding the constitution of the
bargaining unit covered by the CBA.
On 29 June 1992, after exhaustive negotiations, the parties entered into a new
CBA. The execution, however, was without prejudice to the outcome of the issues
raised in the reconsideration and clarification motions submitted for decision to the
Secretary of Labor.[5]
Pending the resolution of the aforestated motions, on 2 October 1992, Metrolab laid
off 73 of its employees on grounds of redundancy due to lack of work which the Union
again promptly opposed on 5 October 1992.
On 15 October 1992, Labor Secretary Confesor again issued a cease and desist
order. Metrolab moved for a reconsideration.[6]
On 25 January 1993, Labor Secretary Confesor issued the assailed Omnibus
Resolution containing the following orders:
xxx xxx xxx.
1. MIIs motion for partial reconsideration of our 14 April 1992 resolution specifically
that portion thereof assailing our ruling that the layoff of the 94 employees is illegal,
is hereby denied. MII is hereby ordered to pay such employees their full backwages
computed from the time of actual layoff to the time of actual recall;
2. For the parties to incorporate in their respective collective bargaining agreements

the clarifications herein contained; and
3. MIIs motion for reconsideration with respect to the consequences of the second
wave of layoff affecting 73 employees, to the extent of assailing our ruling that such
layoff tended to exacerbate the dispute, is hereby denied. But inasmuch as the legality
of the layoff was not submitted for our resolution and no evidence had been adduced
upon which a categorical finding thereon can be based, the same is hereby referred to
the NLRC for its appropriate action.
Finally, all prohibitory injunctions issued as a result of our assumption of jurisdiction

over this dispute are hereby lifted.
SO RESOLVED. [7]
Labor Secretary Confesor also ruled that executive secretaries are excluded from
the closed-shop provision of the CBA, not from the bargaining unit.
On 4 February 1993, the Union filed a motion for execution. Metrolab
opposed. Hence, the present petition for certiorari with application for issuance of a
Temporary Restraining Order.
On 4 March 1993, we issued a Temporary Restraining Order enjoining the
Secretary of Labor from enforcing and implementing the assailed Resolution and
Omnibus Resolution dated 14 April 1992 and 25 January 1993, respectively.
In its petition, Metrolab assigns the following errors:
A
THE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND

EMPLOYMENT COMMITTED GRAVE ABUSE OF DISCRETION AND
EXCEEDED HER JURISDICTION IN DECLARING THE TEMPORARY LAYOFF
ILLEGAL AND ORDERING THE REINSTATEMENT AND PAYMENT OF
BACKWAGES TO THE AFFECTED EMPLOYEES. *
THE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND

EMPLOYMENT GRAVELY ABUSED HER DISCRETION IN INCLUDING
EXECUTIVE SECRETARIES AS PART OF THE BARGAINING UNIT OF RANK
AND FILE EMPLOYEES. [8]
Anent the first issue, we are asked to determine whether or not public respondent
Labor Secretary committed grave abuse of discretion and exceeded her jurisdiction in
declaring the subject layoffs instituted by Metrolab illegal on grounds that these
unilateral actions aggravated the conflict between Metrolab and the Union who were,
then, locked in a stalemate in CBA negotiations.
Metrolab argues that the Labor Secretarys order enjoining the parties from
committing any act that might exacerbate the dispute is overly broad, sweeping and
vague and should not be used to curtail the employers right to manage his business and
ensure its viability.
We cannot give credence to Metrolabs contention.
This Court recognizes the exercise of management prerogatives and often declines
to interfere with the legitimate business decisions of the employer. However, this
privilege is not absolute but subject to limitations imposed by law.[9]
In PAL v. NLRC,[10] we issued this reminder:
xxx xxx xxx
. . .the exercise of management prerogatives was never considered boundless. Thus,

in Cruz vs. Medina ( 177 SCRA 565 [1989]), it was held that managements
prerogatives must be without abuse of discretion....
xxx xxx xxx
All this points to the conclusion that the exercise of managerial prerogatives is not
unlimited. It is circumscribed by limitations found in law, a collective bargaining
agreement, or the general principles of fair play and justice (University of Sto. Tomas
v. NLRC, 190 SCRA 758 [1990]). . . . (Italics ours.)
xxx xxx xxx.

The case at bench constitutes one of the exceptions. The Secretary of Labor is
expressly given the power under the Labor Code to assume jurisdiction and resolve
labor disputes involving industries indispensable to national interest. The disputed
injunction is subsumed under this special grant of authority. Art. 263 (g) of the Labor
Code specifically provides that:
xxx xxx xxx
(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike
or lockout in an industry indispensable to the national interest, the Secretary of Labor
and Employment may assume jurisdiction over the dispute and decide it or certify the
same to the Commission for compulsory arbitration. Such assumption or certification
shall have the effect of automatically enjoining the intended or impending strike or
lockout as specified in the assumption or certification order. If one has already taken
place at the time of assumption or certification, all striking or locked out employees
shall immediately return to work and the employer shall immediately resume
operations and readmit all workers under the same terms and conditions prevailing
before the strike or lockout. The Secretary of Labor and Employment or the
Commission may seek the assistance of law enforcement agencies to ensure
compliance with this provision as well as with such orders as he may issue to enforce
the same. . . (Italics ours.)
xxx xxx xxx.

That Metrolabs business is of national interest is not disputed. Metrolab is one of
the leading manufacturers and suppliers of medical and pharmaceutical products to the
country.
Metro labs management prerogatives, therefore, are not being unjustly curtailed but
duly balanced with and tempered by the limitations set by law, taking into account its
special character and the particular circumstances in the case at bench.
As aptly declared by public respondent Secretary of Labor in its assailed resolution:
xxx xxx xxx.
MII is right to the extent that as a rule, we may not interfere with the legitimate
exercise of management prerogatives such as layoffs. But it may nevertheless be
appropriate to mention here that one of the substantive evils which Article 263 (g) of
the Labor Code seeks to curb is the exacerbation of a labor dispute to the further
detriment of the national interest. When a labor dispute has in fact occurred and a
general injunction has been issued restraining the commission of disruptive acts,
management prerogatives must always be exercised consistently with the statutory
objective.[11]
xxx xxx xxx.

Metrolab insists that the subject layoffs did not exacerbate their dispute with the
Union since no untoward incident occurred after the layoffs were implemented. There
were no work disruptions or stoppages and no mass actions were threatened or
undertaken. Instead, petitioner asserts, the affected employees calmly accepted their
fate as this was a matter which they had been previously advised would be inevitable.[12]
After a judicious review of the record, we find no compelling reason to overturn the
findings of the Secretary of Labor.
We reaffirm the doctrine that considering their expertise in their respective fields,
factual findings of administrative agencies supported by substantial evidence are
accorded great respect and binds this Court.[13]
The Secretary of Labor ruled, thus:
xxx xxx xxx.
Any act committed during the pendency of the dispute that tends to give rise to further
contentious issues or increase the tensions between the parties should be considered
an act of exacerbation.One must look at the act itself, not on speculative reactions. A
misplaced recourse is not needed to prove that a dispute has been exacerbated. For
instance, the Union could not be expected to file another notice of strike. For this
would depart from its theory of the case that the layoff is subsumed under the instant
dispute, for which a notice of strike had already been filed. On the other hand, to
expect violent reactions, unruly behavior, and any other chaotic or drastic action from
the Union is to expect it to commit acts disruptive of public order or acts that may be
illegal. Under a regime of laws, legal remedies take the place of violent ones. [14]
xxx xxx xxx.
Protest against the subject layoffs need not be in the form of violent action or any
other drastic measure. In the instant case the Union registered their dissent by swiftly
filing a motion for a cease and desist order. Contrary to petitioners allegations, the
Union strongly condemned the layoffs and threatened mass action if the Secretary of
Labor fails to timely intervene:
xxx xxx xxx.
3. This unilateral action of management is a blatant violation of the injunction of this

Office against committing acts which would exacerbate the dispute. Unless such act is
enjoined the Union will be compelled to resort to its legal right to mass actions and
concerted activities to protest and stop the said management action. This mass layoff
is clearly one which would result in a very serious labor dispute unless this Office
swiftly intervenes.[15]
xxx xxx xxx.

Metrolab and the Union were still in the process of resolving their CBA deadlock
when petitioner implemented the subject layoffs. As a result, motions and oppositions
were filed diverting the parties attention, delaying resolution of the bargaining deadlock
and postponing the signing of their new CBA, thereby aggravating the whole conflict.
We, likewise, find untenable Metrolabs contention that the layoff of the 94 rank-and-
file employees was temporary, despite the recall of some of the laid off workers.
If Metrolab intended the layoff of the 94 workers to be temporary, it should have
plainly stated so in the notices it sent to the affected employees and the Department of
Labor and Employment. Consider the tenor of the pertinent portions of the layoff notice
to the affected employees:
xxx xxx xxx.
Dahil sa mga bagay na ito, napilitan ang ating kumpanya na magsagawa ng lay-off ng
mga empleyado sa Rank & File dahil nabawasan ang trabaho at puwesto para sa
kanila. Marami sa atin ang kasama sa lay-off dahil wala nang trabaho para sa
kanila. Mahirap tanggapin ang mga bagay na ito subalit kailangan nating gawin dahil
hindi kaya ng kumpanya ang magbayad ng suweldo kung ang empleyado ay walang
trabaho. Kung tayo ay patuloy na magbabayad ng suweldo, mas hihina ang ating
kumpanya at mas marami ang maaring maapektuhan.
Sa pagpapatupad ng lay-off susundin natin ang LAST IN-FIRST OUT policy. Ang
mga empleyadong may pinakamaikling serbisyo sa kumpanya ang unang
maaapektuhan. Ito ay batay na rin sa nakasaad sa ating CBA na ang mga huling
pumasok sa kumpanya ang unang masasama sa lay-off kapag nagkaroon ng ganitong
mga kalagayan.
Ang mga empleyado na kasama sa lay-off ay nakalista sa sulat na ito. Ang umpisa ng
lay-off ay sa Lunes, Enero 27. Hindi na muna sila papasok sa kumpanya. Makukuha
nila ang suweldo nila sa Enero 30, 1992.
Hindi po natin matitiyak kung gaano katagal ang lay-off ngunit ang aming tingin ay
matatagalan bago magkaroon ng dagdag na trabaho. Dahil dito, sinimulan na namin
ang isang Redundancy Program sa mga supervisors. Nabawasan ang mga puwesto
para sa kanila, kaya sila ay mawawalan ng trabaho at bibigyan na ng redundancy
pay. (Italics ours.)
[16]
xxx xxx xxx.

We agree with the ruling of the Secretary of Labor, thus:
xxx xxx xxx.
. . .MII insists that the layoff in question is temporary not permanent. It then
cites International Hardware, Inc. vs. NLRC, 176 SCRA 256, in which the Supreme
Court held that the 30-day notice required under Article 283 of the Labor Code need
not be complied with if the employer has no intention to permanently severe (sic) the
employment relationship.
We are not convinced by this argument. International Hardware involves a case

where there had been a reduction of workload. Precisely to avoid laying off the
employees, the employer therein opted to give them work on a rotating basis. Though
on a limited scale, work was available. This was the Supreme Courts basis for holding
that there was no intention to permanently severe (sic) the employment relationship.
Here, there is no circumstance at all from which we can infer an intention from MII
not to sever the employment relationship permanently. If there was such an intention,
MII could have made it very clear in the notices of layoff. But as it were, the notices
are couched in a language so uncertain that the only conclusion possible is the
permanent termination, not the continuation, of the employment relationship.
MII also seeks to excuse itself from compliance with the 30-day notice with a
tautology. While insisting that there is really no best time to announce a bad news,
(sic) it also claims that it broke the bad news only on 27 January 1992 because had it
complied with the 30-day notice, it could have broken the bad news on 02 January
1992, the first working day of the year. If there is really no best time to announce a
bad news (sic), it wouldnt have mattered if the same was announced at the first
working day of the year. That way, MII could have at least complied with the
requirement of the law. [17]
The second issue raised by petitioner merits our consideration.

In the assailed Omnibus Resolution, Labor Secretary Confesor clarified the CBA
provisions on closed-shop and the scope of the bargaining unit in this wise:
xxx xxx xxx.
Appropriateness of the bargaining unit.
xxx xxx xxx.
Exclusions. In our 14 April 1992 resolution, we ruled on the issue of exclusion as
follows:
These aside, we reconsider our denial of the modifications which the Union proposes
to introduce on the close shop provision. While we note that the provision as presently
worded has served the relationship of the parties well under previous CBAs, the shift
in constitutional policy toward expanding the right of all workers to self-organization
should now be formally recognized by the parties, subject to the following exclusions
only:
1. Managerial employees; and
2. The executive secretaries of the President, Executive Vice-President, Vice-

President, Vice President for Sales, Personnel Manager, and Director for Corporate
Planning who may have access to vital labor relations information or who may
otherwise act in a confidential capacity to persons who determine or formulate
management policies.
The provisions of Article I (b) and Attachment I of the 1988-1990 CBA shall thus be
modified consistently with the foregoing.
Article I (b) of the 1988-1990 CBA provides:
b)Close Shop. - All Qualified Employees must join the Association immediately upon
regularization as a condition for continued employment. This provision shall not apply
to: (i) managerial employees who are excluded from the scope of the bargaining unit;
(ii) the auditors and executive secretaries of senior executive officers, such as, the
President, Executive Vice-President, Vice-President for Finance, Head of Legal, Vice-
President for Sales, who are excluded from membership in the Association; and (iii)
those employees who are referred to in Attachment I hereof, subject, however, to the
application of the provision of Article II, par. (b) hereof. Consequently, the above-
specified employees are not required to join the Association as a condition for their
continued employment.
On the other hand, Attachment I provides:

Exclusion from the Scope of the Close Shop Provision
The following positions in the Bargaining Unit are not covered by the Close Shop
provision of the CBA (Article I, par. b):
1. Executive Secretaries of Vice-Presidents, or equivalent positions.
2. Executive Secretary of the Personnel Manager, or equivalent positions.
3. Executive Secretary of the Director for Corporate Planning, or equivalent positions.
4. Some personnel in the Personnel Department, EDP Staff at Head Office, Payroll
Staff at Head Office, Accounting Department at Head Office, and Budget Staff, who
because of the nature of their duties and responsibilities need not join the Association
as a condition for their employment.
5. Newly-hired secretaries of Branch Managers and Regional Managers.
Both MDD and MII read the exclusion of managerial employees and executive
secretaries in our 14 April 1992 resolution as exclusion from the bargaining unit. They
point out that managerial employees are lumped under one classification with executive
secretaries, so that since the former are excluded from the bargaining unit, so must the
latter be likewise excluded.
This reading is obviously contrary to the intent of our 14 April 1992 resolution. By
recognizing the expanded scope of the right to self-organization, our intent was to
delimit the types of employees excluded from the close shop provision, not from the
bargaining unit, to executive secretaries only. Otherwise, the conversion of the
exclusionary provision to one that refers to the bargaining unit from one that merely
refers to the close shop provision would effectively curtail all the organizational rights of
executive secretaries.
The exclusion of managerial employees, in accordance with law, must therefore still
carry the qualifying phrase from the bargaining unit in Article I (b)(i) of the 1988-1990
CBA. In the same manner, the exclusion of executive secretaries should be read
together with the qualifying phrase are excluded from membership in the Association of
the same Article and with the heading of Attachment I. The latter refers to Exclusions
from Scope of Close Shop Provision and provides that [t]he following positions in
Bargaining Unit are not covered by the close shop provision of the CBA.
The issue of exclusion has different dimension in the case of MII. In an earlier
motion for clarification, MII points out that it has done away with the positions of
Executive Vice-President, Vice-President for Sales, and Director for Corporate
Planning. Thus, the foregoing group of exclusions is no longer appropriate in its present
organizational structure. Nevertheless, there remain MII officer positions for which there
may be executive secretaries. These include the General Manager and members of the
Management Committee, specifically i) the Quality Assurance Manager; ii) the Product
Development Manager; iii) the Finance Director; iv) the Management System Manager;
v) the Human Resources Manager; vi) the Marketing Director; vii) the Engineering
Manager; viii) the Materials Manager; and ix) the Production Manager.
xxx xxx xxx
The basis for the questioned exclusions, it should be noted, is no other than the
previous CBA between MII and the Union. If MII had undergone an organizational
restructuring since then, this is a fact to which we have never been made privy. In any
event, had this been otherwise the result would have been the same. To repeat, we
limited the exclusions to recognize the expanded scope of the right to self-organization
as embodied in the Constitution.[18]
Metrolab, however, maintains that executive secretaries of the General Manager
and the executive secretaries of the Quality Assurance Manager, Product Development
Manager, Finance Director, Management System Manager, Human Resources
Manager, Marketing Director, Engineering Manager, Materials Manager and Production
Manager, who are all members of the companys Management Committee should not
only be exempted from the closed-shop provision but should be excluded from
membership in the bargaining unit of the rank and file employees as well on grounds
that their executive secretaries are confidential employees, having access to vital labor
information.[19]
We concur with Metrolab.
Although Article 245 of the Labor Code[20] limits the ineligibility to join, form and
assist any labor organization to managerial employees, jurisprudence has extended this
prohibition to confidential employees or those who by reason of their positions or nature
of work are required to assist or act in a fiduciary manner to managerial employees and
hence, are likewise privy to sensitive and highly confidential records.
The rationale behind the exclusion of confidential employees from the bargaining
unit of the rank and file employees and their disqualification to join any labor
organization was succinctly discussed in Philips Industrial Development v. NLRC:[21]
xxx xxx xxx.
On the main issue raised before Us, it is quite obvious that respondent NLRC
committed grave abuse of discretion in reversing the decision of the Executive Labor
Arbiter and in decreeing that PIDIs Service Engineers, Sales Force, division
secretaries, all Staff of General Management, Personnel and Industrial Relations
Department, Secretaries of Audit, EDP and Financial Systems are included within the
rank and file bargaining unit.
In the first place, all these employees, with the exception of the service engineers and
the sales force personnel, are confidential employees. Their classification as such is
not seriously disputed by PEO-FFW; the five (5) previous CBAs between PIDI and
PEO-FFW explicitly considered them as confidential employees. By the very nature
of their functions, they assist and act in a confidential capacity to, or have access to
confidential matters of, persons who exercise managerial functions in the field of
labor relations. As such, the rationale behind the ineligibility of managerial employees
to form, assist or join a labor union equally applies to them.
In Bulletin Publishing Co., Inc. vs. Hon. Augusto Sanchez, this Court elaborated on
this rationale, thus:
x x x The rationale for this inhibition has been stated to be, because if these
managerial employees would belong to or be affiliated with a Union, the latter might
not be assured of their loyalty to the Union in view of evident conflict of
interests. The Union can also become company-dominated with the presence of
managerial employees in Union membership.
In Golden Farms, Inc. vs. Ferrer-Calleja, this Court explicitly made this rationale
applicable to confidential employees:
This rationale holds true also for confidential employees such as accounting
personnel, radio and telegraph operators, who having access to confidential
information, may become the source of undue advantage. Said employee(s) may act as
a spy or spies of either party to a collective bargaining agreement. This is specially
true in the present case where the petitioning Union is already the bargaining agent of
the rank-and-file employees in the establishment. To allow the confidential employees
to join the existing Union of the rank-and-file would be in violation of the terms of the
Collective Bargaining Agreement wherein this kind of employees by the nature of
their functions/positions are expressly excluded.
xxx xxx xxx.

Similarly, in National Association of Trade Union - Republic Planters Bank
Supervisors Chapter v. Torres[22] we declared:
xxx xxx xxx.
. . . As regards the other claim of respondent Bank that Branch Managers/OICs,

Cashiers and Controllers are confidential employees, having control, custody and/ or
access to confidential matters, e.g., the branchs cash position, statements of financial
condition, vault combination, cash codes for telegraphic transfers, demand drafts and
other negotiable instruments, pursuant to Sec. 1166.4 of the Central Bank Manual
regarding joint custody, this claim is not even disputed by petitioner. A confidential
employee is one entrusted with confidence on delicate matters, or with the custody,
handling, or care and protection of the employers property. While Art. 245 of the
Labor Code singles out managerial employees as ineligible to join, assist or form any
labor organization, under the doctrine of necessary, implication, confidential
employees are similarly disqualified. . . .
xxx xxx xxx.
. . .(I)n the collective bargaining process, managerial employees are supposed to be on

the side of the employer, to act as its representatives, and to see to it that its interest
are well protected. The employer is not assured of such protection if these employees
themselves are union members. Collective bargaining in such a situation can become
one-sided. It is the same reason that impelled this Court to consider the position of
confidential employees as included in the disqualification found in Art. 245 as if the
disqualification of confidential employees were written in the provision.If confidential
employees could unionize in order to bargain for advantages for themselves, then they
could be governed by their own motives rather than the interest of the
employers. Moreover, unionization of confidential employees for the purpose of
collective bargaining would mean the extension of the law to persons or individuals
who are supposed to act in the interest of the employers. It is not farfetched that in the
course of collective bargaining, they might jeopardize that interest which they are
duty-bound to protect. . . .
xxx xxx xxx.

And in the latest case of Pier 8 Arrastre & Stevedoring Services, Inc. vs. Roldan-
Confesor,[23] we ruled that:
xxx xxx xxx.
Upon the other hand, legal secretaries are neither managers nor supervisors. Their
work is basically routinary and clerical. However, they should be differentiated from
rank-and-file employees because they are tasked with, among others, the typing of
legal documents, memoranda and correspondence, the keeping of records and files,
the giving of and receiving notices, and such other duties as required by the legal
personnel of the corporation. Legal secretaries therefore fall under the category of
confidential employees. . . .
xxx xxx xxx.

We thus hold that public respondent acted with grave abuse of discretion in not
excluding the four foremen and legal secretary from the bargaining unit composed of
rank-and-file employees.
xxx xxx xxx.
In the case at bench, the Union does not disagree with petitioner that the executive
secretaries are confidential employees. It however, makes the following contentions:
xxx xxx xxx.
There would be no danger of company domination of the Union since the confidential
employees would not be members of and would not participate in the decision making
processes of the Union.
Neither would there be a danger of espionage since the confidential employees would
not have any conflict of interest, not being members of the Union. In any case, there is
always the danger that any employee would leak management secrets to the Union out
of sympathy for his fellow rank and filer even if he were not a member of the union
nor the bargaining unit.
Confidential employees are rank and file employees and they, like all the other rank
and file employees, should be granted the benefits of the Collective Bargaining
Agreement. There is no valid basis for discriminating against them. The mandate of
the Constitution and the Labor Code, primarily of protection to Labor, compels such
conclusion. [24]
xxx xxx xxx.

The Unions assurances fail to convince. The dangers sought to be prevented,
particularly the threat of conflict of interest and espionage, are not eliminated by non-
membership of Metrolabs executive secretaries or confidential employees in the
Union. Forming part of the bargaining unit, the executive secretaries stand to benefit
from any agreement executed between the Union and Metrolab. Such a scenario, thus,
gives rise to a potential conflict between personal interests and their duty as confidential
employees to act for and in behalf of Metrolab. They do not have to be union members
to affect or influence either side.
Finally, confidential employees cannot be classified as rank and file. As previously
discussed, the nature of employment of confidential employees is quite distinct from the
rank and file, thus, warranting a separate category. Excluding confidential employees
from the rank and file bargaining unit, therefore, is not tantamount to discrimination.
WHEREFORE, premises considered, the petition is partially GRANTED. The
resolutions of public respondent Secretary of Labor dated 14 April 1992 and 25 January
1993 are hereby MODIFIED to the extent that executive secretaries of petitioner
Metrolabs General Manager and the executive secretaries of the members of its
Management Committee are excluded from the bargaining unit of petitioners rank and
file employees.
SO ORDERED.
Padilla, Bellosillo, Vitug, and Hermosisima, Jr., JJ., concur.
[1]
Rollo, p.74.
[2]
Id., at 202-204.
[3]
Id., at 8-9.
[4]
[5]
Id., at 303.
[6]
Id., at 236-241.
[7]
Id., at 70-71.
*
Metrolab submits that the issue in the instant petition for certiorari is limited to the determination of
whether or not the Secretary of Labor gravely abused her discretion in ruling that the layoff of its
94 workers exacerbated their labor dispute with the Union. Metrolab underscores that the basis
for the said layoff has never been placed in issue. (Rollo, pp. 327- 328.)
In the same manner, Metrolab prefatorily declared that it does not dispute the Secretary of Labors
certification to the NLRC of the legality (or illegality) of the second layoff of Metrolabs 73 rank and
file workers on grounds of redundancy (Rollo, pp. 11-12). In its Consolidated Reply, Metrolab
states, thus:
5.0. Moreover, the redundancy program of October 1992 is not an issue in the present petition. The
assailed Omnibus Order, in no uncertain terms, ordered that this matter be brought before the
National Labor Relations Commission (NLRC) for adjudication (Please see Annex A-i of the
Petition). Petitioner herein does not question the said part of the Omnibus Resolution in the
present petition. The time for the same is not yet ripe, as the NLRC still has to pass judgment
upon the facts surrounding the redundancy program. As of this writing, the said redundancy
program is presently being litigated before the Arbitration Branch of the NLRC in NLRC-NCR
Case No. 00-05-03325-93 entitled Metro Drug Corporation Employees Association -
FFW v. Metrolab Industries, Inc., et al. before Labor Arbiter Cornelio Linsangan. (Rollo, p. 330.)
[8]
Id., at 13.
[9]
Radio Communications of the Philippines, Inc. v. NLRC, 221 SCRA 782 (1993); Corral v. NLRC, 221
SCRA 693(1993); Rubberworld (Phils.), Inc. v. NLRC, 175 SCRA 450 (1989).
[10]
225 SCRA 301 (1993).
[11]
Rollo, p. 46.
[12]
Id., at 335.
[13]
Association of Marine Officers & Seamen of Reyes & Lim Co. v. Laguesma, 239 SCRA 460
(1994); Maya Farms Employees Organization v. NLRC, 239 SCRA 508 (1994); Rabago v.
NLRC, 200 SCRA 158 (1991); Pan Pacific Industrial Sales, Co., Inc. v. NLRC, 194 SCRA 633
(1991).
[14]
Rollo, p. 57.
[15]
Id., at 202-204; 228-234; Urgent Motion to Resolve Unions Motion dated 27 January 1992, Folder 4,
Original Record.
[16]
Rollo, p. 198.
[17]
Id., at 58-59.
[18]
Rollo, pp. 59-63.
[19]
Id., at 31-32.
[20]
Art. 245. Labor Code. Ineligibility of managerial employees to join any labor organization; right of
supervisory employees. -Managerial employees are not eligible to join, assist or form any labor
organization. Supervisory employees shall not be eligible for membership in a labor organization
of the rank-and-file employees but may join, assist or form separate labor organizations of their
own.
[21]
210 SCRA 339(1992).
[22]
239 SCRA 546(1994).
[23]
241 SCRA 294(1995).
[24]
Rollo, pp. 192-193.
7) Southern vs. Ferrer GR No. 80882 April 24, 1989 172SCRA 676 (PDF SAVED)
8) Coastal vs. DOLE GR No. 157117 Nov. 20, 2006
THIRD DIVISION
COASTAL SUBIC BAY TERMINAL, G.R. No. 157117

INC.,
Petitioner,
Present:
QUISUMBING, J., Chairperson,

CARPIO,
- versus - CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.
DEPARTMENT OF LABOR and

EMPLOYMENT OFFICE OF THE
SECRETARY, COASTAL SUBIC
BAY TERMINAL, INC.
SUPERVISORY UNION- Promulgated:
APSOTEU, and COASTAL SUBIC
BAY TERMINAL, INC. RANK-
AND-FILE UNION-ALU-TUCP, November 20, 2006
Respondents.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
QUISUMBING, J.:
For review on certiorari is the Court of Appeals Decision[1] dated August 31, 2001,
in CA-G.R. SP No. 54128 and the Resolution[2] dated February 5, 2003, denying
petitioners motion for reconsideration. The Court of Appeals had affirmed the
Decision[3] dated March 15, 1999 of the Secretary of the Department of Labor and
Employment (DOLE) reversing the Mediator Arbiters dismissal of private
respondents petitions for certification election.
The facts are as follows:
On July 8, 1998, private respondents Coastal Subic Bay Terminal, Inc. Rank-
and-File Union (CSBTI-RFU) and Coastal Subic Bay Terminal, Inc.
Supervisory Union (CSBTI-SU) filed separate petitions for certification election
before Med-Arbiter Eladio de Jesus of the Regional Office No. III. The rank-and-file
union insists that it is a legitimate labor organization having been issued a charter
certificate by the Associated Labor Union (ALU), and the supervisory union by the
Associated Professional, Supervisory, Office and Technical Employees Union
(APSOTEU). Private respondents also alleged that the establishment in which they
sought to operate was unorganized.
Petitioner Coastal Subic Bay Terminal, Inc. (CSBTI) opposed both petitions
for certification election alleging that the rank-and-file union and supervisory
union were not legitimate labor organizations, and that the proposed bargaining
units were not particularly described.
Without ruling on the legitimacy of the respondent unions, the Med-Arbiter

dismissed, without prejudice to refiling, both petitions which had been
consolidated. The Med-Arbiter held that the ALU and APSOTEU are one and the
same federation having a common set of officers. Thus, the supervisory and the
rank-and-file unions were in effect affiliated with only one federation.[4]
The Med-Arbiter ruled as follows:

Viewed in the light of all the foregoing, this Office finds the simultaneous
filing of the instant petitions to be invalid and unwarranted. Consequently, this
Office has no recourse but to dismiss both petitions without prejudice to
the refiling of either.
WHEREFORE, PREMISES CONSIDERED, let the instant petitions be,

as they are hereby DISMISSED.
SO ORDERED.[5]
Both parties appealed to the Secretary of Labor and Employment, who

reversed the decision of the Med-Arbiter. The Secretary thru Undersecretary
R. Baldoz, ruled that CSBTI-SU and CSBTI-RFU have separate legal personalities
to file their separate petitions for certification election. The Secretary held that
APSOTEU is a legitimate labor organization because it was properly registered
pursuant to the 1989 Revised Rules and Regulations implementing Republic Act
No. 6715, the rule applicable at the time of its registration. It further ruled that
ALU and APSOTEU are separate and distinct labor unions having separate
certificates of registration from the DOLE. They also have different sets of locals.
The Secretary declared CSBTI-RFU and CSBTI-SU as legitimate labor
organizations having been chartered respectively by ALU and APSOTEU after
submitting all the requirements with the Bureau of Labor Relations (BLR).
Accordingly, the Secretary ordered the holding of separate certification
election, viz:
WHEREFORE, the decision of the Med-Arbiter, Regional Office No. III
is hereby REVERSED. Let separate certification elections be conducted
immediately among the appropriate employees of CSBTI, after the usual pre-
election conference, with the following choices:
I. For all rank and file employees of CSBTI:
1. COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-FILE

UNION-ALU-TUCP; and
2. NO UNION.
II. For all supervisory employees of CSBTI:
1. COASTAL SUBIC BAY TERMINAL, INC. SUPERVISORY

EMPLOYEES UNION-APSOTEU; and
2. NO UNION.
The latest payroll of the employer, including its payrolls for the last three
months immediately preceding the issuance of this decision, shall be the basis for
determining the qualified list of voters.
SO DECIDED.[6]
The motion for reconsideration was also denied.[7]
On appeal, the Court of Appeals affirmed the decision of the Secretary. [8] It
held that there was no grave abuse of discretion on the part of the Secretary; its
findings are supported by evidence on record; and thus should be accorded with
respect and finality.[9]
The motion for reconsideration was likewise denied.[10] Hence, the instant
petition by the company anchored on the following grounds:
I
THE HONORABLE COURT OF APPEALS ERRED IN RELYING ON

THE 1989 REVISED RULES AND REGULATIONS IMPLEMENTING RA
6715 AS BASIS TO RECOGNIZE PRIVATE RESPONDENT APSOTEUS
REGISTRATION BY THE DOLE REGIONAL DIRECTOR.
II
THE HONORABLE COURT OF APPEALS ERRED WHEN IT

AFFIRMED PUBLIC RESPONDENTS APPLICATION OF THE PRINCIPLE
OF STARE DECISIS TO HASTILY DISPOSE OF THE LEGAL
PERSONALITY ISSUE OF APSOTEU.
III
THE HONORABLE COURT OF APPEALS DID NOT DECIDE IN

ACCORD WITH LAW AND JURISPRUDENCE WHEN IT AFFIRMED
PUBLIC RESPONDENTS APPLICATION OF THE UNION AUTONOMY
THEORY.
IV
IN AFFIRMING PUBLIC RESPONDENTS FINDING THAT PRIVATE
RESPONDENTS ARE SEPARATE FEDERATIONS, THE HONORABLE
COURT OF APPEALS:
(1) IGNORED JURISPRUDENCE RECOGNIZING THE BINDING

NATURE OF A MED-ARBITERS FACTUAL FINDINGS; AND
(2) DISREGARDED EVIDENCE ON RECORD OF ILLEGAL

COMMINGLING.[11]
Plainly, the issues are (1) Can the supervisory and the rank-and-file unions file
separate petitions for certification election?; (2) Was the Secretarys decision based
on stare decisis correct?; and (3) Were private respondents engaged in
commingling?
The issue on the status of the supervisory union CSBTI-SU depends on the status
of APSOTEU, its mother federation.
Petitioner argues that APSOTEU improperly secured its registration from

the DOLE Regional Director and not from the BLR; that it is the BLR that is
authorized to process applications and issue certificates of registration in
accordance with our ruling in Phil. Association of Free Labor Unions v. Secretary
of Labor;[12] that the certificates of registration issued by the DOLE Regional
Director pursuant to the rules are questionable, and possibly even void ab initio for
being ultra vires; and that the Court of Appeals erred when it ruled that the law
applicable at the time of APSOTEUs registration was the 1989 Revised
Implementing Rules and Regulations of Rep. Act No. 6715.
Petitioner insists that APSOTEU lacks legal personality, and its chartered
affiliate CSBTI-SU cannot attain the status of a legitimate labor organization to file
a petition for certification election. It relies on Villar v. Inciong,[13] where we held
therein that Amigo Employees Union was not a duly registered independent union
absent any record of its registration with the Bureau.
Pertinent is Article 235[14] of the Labor Code which provides that

applications for registration shall be acted upon by the Bureau. Bureau as defined
under the Labor Code means the BLR and/or the Labor Relations Division in the
Regional Offices of the Department of Labor.[15] Further, Section 2, Rule II, Book
V of the 1989 Revised Implementing Rules of the Labor Code (Implementing
Rules) provides that:
Section 2. Where to file application; procedure Any national labor
organization or labor federation or local union may file an application for
registration with the Bureau or the Regional Office where the applicants principal
offices is located. The Bureau or the Regional Office shall immediately process
and approve or deny the application. In case of approval, the Bureau or the
Regional Office shall issue the registration certificate within thirty (30) calendar
days from receipt of the application, together with all the requirements for
registration as hereinafter provided. [16]
The Implementing Rules specifically Section 1, Rule III of Book V, as

amended by Department Order No. 9, thus:
SECTION 1. Where to file applications. The application for registration
of any federation, national or industry union or trade union center shall be filed
with the Bureau. Where the application is filed with the Regional Office, the same
shall be immediately forwarded to the Bureau within forty-eight (48) hours from
filing thereof, together with all the documents supporting the registration.
The applications for registration of an independent union shall be filed

with and acted upon by the Regional Office where the applicants principal office
is located .
xxxx
The DOLE issued Department Order No. 40-03, which took effect on March
15, 2003, further amending Book V of the above implementing rules. The new
implementing rules explicitly provide that applications for registration of labor
organizations shall be filed either with the Regional Office or with the BLR.[17]
Even after the amendments, the rules did not divest the Regional Office and
the BLR of their jurisdiction over applications for registration by labor
organizations. The amendments to the implementing rules merely specified that
when the application was filed with the Regional Office, the application would be
acted upon by the BLR.
The records in this case showed that APSOTEU was registered on March 1,
1991. Accordingly, the law applicable at that time was Section 2, Rule II, Book V
of the Implementing Rules, and not Department Order No. 9 which took effect
only on June 21, 1997. Thus, considering further that APSOTEUs principal office
is located in Diliman, Quezon City, and its registration was filed with the NCR
Regional Office, the certificate of registration is valid.
The petitioner misapplied Villar v. Inciong.[18] In said case, there was no

record in the BLR that Amigo Employees Union was registered.[19]
Did the Court of Appeals err in its application of stare decisis when it
upheld the Secretarys ruling that APSOTEU is a legitimate labor organization and
its personality cannot be assailed unless in an independent action for cancellation
of registration certificate?[20]
We think not.
Section 5, Rule V, Book V of the Implementing Rules states:

Section 5. Effect of registration The labor organization or workers
association shall be deemed registered and vested with legal personality on the
date of issuance of its certificate of registration. Such legal personality cannot
thereafter be subject to collateral attack, but maybe questioned only in an
independent petition for cancellation in accordance with these Rules.[21]
Thus, APSOTEU is a legitimate labor organization and has authority to issue

charter to its affiliates.[22] It may issue a local charter certificate to CSBTI-SU and
correspondingly, CSBTI-SU is legitimate.
Are ALU, a rank-and-file union and APSOTEU, a supervisory union one

and the same because of the commonalities between them? Are they commingled?
The petitioner contends that applying by analogy, the doctrine of piercing

the veil of corporate fiction, APSOTEU and ALU are the same federation. Private
respondents disagree.
First, as earlier discoursed, once a labor union attains the status of a

legitimate labor organization, it continues as such until its certificate of registration
is cancelled or revoked in an independent action for cancellation.[23] In addition,
the legal personality of a labor organization cannot be collaterally
attacked.[24] Thus, when the personality of the labor organization is questioned in
the same manner the veil of corporate fiction is pierced, the action partakes the
nature of a collateral attack. Hence, in the absence of any independent action for
cancellation of registration against either APSOTEU or ALU, and unless and until
their registrations are cancelled, each continues to possess a separate legal
personality. The CSBTI-RFU and CSBTI-SU are therefore affiliated with distinct
and separate federations, despite the commonalities of APSOTEU and ALU.
Under the rules implementing the Labor Code, a chartered local union
acquires legal personality through the charter certificate issued by a duly registered
federation or national union, and reported to the Regional Office in accordance
with the rules implementing the Labor Code.[25] A local union does not owe its
existence to the federation with which it is affiliated. It is a separate and distinct
voluntary association owing its creation to the will of its members. Mere affiliation
does not divest the local union of its own personality, neither does it give the
mother federation the license to act independently of the local union. It only gives
rise to a contract of agency, where the former acts in representation of the
latter.[26] Hence, local unions are considered principals while the federation is
deemed to be merely their agent.[27] As such principals, the unions are entitled to
exercise the rights and privileges of a legitimate labor organization, including the
right to seek certification as the sole and exclusive bargaining agent in the
appropriate employer unit.
A word of caution though, under Article 245 of the Labor

[28]
Code, supervisory employees are not eligible for membership in a labor union of
rank-and-file employees. The supervisory employees are allowed to form their own
union but they are not allowed to join the rank-and-file union because of potential
conflicts of interest.[29] Further, to avoid a situation where supervisors would merge
with the rank-and-file or where the supervisors labor union would represent
conflicting interests, a local supervisors union should not be allowed to affiliate
with the national federation of unions of rank-and-file employees where that
federation actively participates in the union activity within the company. [30] Thus,
the limitation is not confined to a case of supervisors wanting to join a rank-and-
file union. The prohibition extends to a supervisors local union applying for
membership in a national federation the members of which include local unions of
rank-and-file employees.[31] In De La Salle University Medical Center and College
of Medicine v. Laguesma, we reiterated the rule that for the prohibition to apply, it
is not enough that the supervisory union and the rank-and-file union are affiliated
with a single federation. In addition, the supervisors must have direct authority
over the rank-and-file employees.[32]
In the instant case, the national federations that exist as separate entities to
which the rank-and-file and supervisory unions are separately affiliated with, do
have a common set of officers. In addition, APSOTEU, the supervisory federation,
actively participates in the CSBTI-SU while ALU, the rank-and-file federation,
actively participates in the CSBTI-RFU, giving occasion to possible conflicts of
interest among the common officers of the federation of rank-and-file and the
federation of supervisory unions. For as long as they are affiliated with the
APSOTEU and ALU, the supervisory and rank-and-file unions both do not meet
the criteria to attain the status of legitimate labor organizations, and thus could not
separately petition for certification elections.
The purpose of affiliation of the local unions into a common enterprise is to

increase the collective bargaining power in respect of the terms and conditions of
labor.[33] When there is commingling of officers of a rank-and-file union with a
supervisory union, the constitutional policy on labor is circumvented. Labor
organizations should ensure the freedom of employees to organize themselves for
the purpose of leveling the bargaining process but also to ensure the freedom of
workingmen and to keep open the corridor of opportunity to enable them to do it
for themselves.
WHEREFORE, the petition is GRANTED. The Court of Appeals Decision
dated August 31, 2001, in CA-G.R. SP No. 54128 and the Resolution
dated February 5, 2003 are SET ASIDE. The decision of the Med-Arbiter is
hereby AFFIRMED.
SO ORDERED.
LEONARDO A. QUISUMBING
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
CONCHITA CARPIO MORALES DANTE O. TINGA

Associate Justice Associate Justice
PRESBITERO J. VELASCO, JR.

Associate Justice
ATTESTATION
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division
ARTEMIO V. PANGANIBAN
Chief Justice
[1]
Rollo, pp. 51-64.
[2]
Id. at 66.
[3]
Id. at 154-158.
[4]
Id. at 126-127.
[5]
Id. at 127.
[6]
Id. at 158.
[7]
Id. at 171-172.
[8]
Id. at 63.
[9]
Id. at 62.
[10]
Id. at 66.
[11]
Id. at 23-24.
[12]
No. L-22228, February 27, 1969, 27 SCRA 40.
[13]
Nos. L-50283-84, April 20, 1983, 121 SCRA 444.
[14]
ART. 235. Action on application. The Bureau shall act on all applications for registration within thirty (30)
days from filing.
All requisite documents and papers shall be certified under oath by the secretary or the treasurer of the
organization, as the case may be, and attested to by its president.
[15]
Article 212 (b).
[16]
Rules and Regulations Implementing R.A. 6715, approved by Secretary of the Department of Labor and
Employment Franklin Drilon on May 24, 1989.
[17]
Rule III, Section 1 in relation to Rule I, Section 1(f).
Rule III, Section 1. Where to file. Applications for registration of independent labor unions, chartered
locals, workers associations shall be filed with the Regional Office where the applicant principally operates. It
shall be processed by the Labor Relations Division at the Regional Office in accordance with Sections 2-A, 2-C,
and 2-E of this Rule.
Applications for registration of federations, national unions or workers associations operating in more than
one region shall be filed with the Bureau or the Regional Offices, but shall be processed by the Bureau in
accordance with Sections 2-B and 2-D of this Rule.
[18]
Supra note 13.
[19]
LABOR CODE, Article 231.
ART 231. Registry of unions and file of collective agreements. - The Bureau shall keep a registry
of legitimate labor organizations .
xxxx
[20]
Rollo, p. 156.
[21]
Sec. 5, Rule V, Book V of the Implementing Rules of the Labor Code.
[22]
Sec. 1, Rule VI, Book V of the Implementing Rules of the Labor Code.
[23]
Supra note 21.
[24]
See Tagaytay Highlands International Golf Club, Incorporated v. Tagaytay Highlands Employees Union-
PTGWO, G.R. No. 142000, January 22, 2003, 395 SCRA 699, 707.
[25]
Section 1(i), Rule I, Book V of the Implementing Rules of the Labor Code.
[26]
Alliance of Nationalist and Genuine Labor Org. v. Samahan ng mga Manggagawang Nagkakaisa sa Manila Bay
Spinning Mills, G.R. No.118562, July 5, 1996, 258 SCRA 371, 377.
[27]
De La Salle University Medical Center and College of Medicine v. Laguesma, G.R. No. 102084, August 12,
1998, 294 SCRA 141, 149.
[28]
ART. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory
employees. Managerial employees are not eligible to join, assist or form any labor organization. Supervisory
employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may
join, assist or form separate labor organizations of their own.
[29]
Atlas Lithographic Services, Inc. v. Laguesma, G.R. No. 96566, January 6, 1992, 205 SCRA 12, 17.
[30]
Id. at 19.
[31]
Id.
[32]
Supra note 27 at 150.
[33]
Id. at 149 citing Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., No. L-33987, September 4,
1975, 66 SCRA 512, 519.
9) HDMF vs. COA GR No. 142297 June 15, 2004
EN BANC
[G.R. No. 142297. June 15, 2004]
HOME DEVELOPMENT MUTUAL FUND, petitioner, vs. COMMISSION

ON AUDIT, respondent.
DECISION
AZCUNA, J.:
Before us is a petition for certiorari under Rule 65 of the Rules of Court alleging that
the Commission on Audit acted in excess of its jurisdiction or with grave abuse of
discretion amounting to lack of jurisdiction in issuing Resolution No. 2000-086 dated
March 7, 2000, which affirmed COA Decision No. 98-245 dated June 16, 1998. COA
Decision No. 98-245 affirmed the audit disallowance of payment of productivity incentive
bonus by petitioner Home Development Mutual Fund (HDMF) to its personnel pursuant
to Republic Act No. 6971, otherwise known as the Productivity Incentives Act of 1990.
The facts are as follows:
Republic Act No. 6971, An Act to Encourage Productivity and Maintain Industrial
Peace by Providing Incentives to Both Labor and Capital, was approved on November
22, 1990, and took effect on December 9, 1990.
Section 3 of said Act states:
Sec. 3. Coverage.-- This Act shall apply to all business enterprises with or without
existing and duly recognized or certified labor organizations, including government-
owned and controlled corporations performing proprietary functions. It shall cover all
employees and workers including casual, regular, supervisory and managerial
employees.
The Secretary of Labor and Employment and the Secretary of Finance promulgated
the Rules Implementing Republic Act No. 6971[1] on June 4, 1991. Rule II of said
implementing rules provides:
Section 1. Coverage. These Rules shall apply to:
(a) All business enterprises with or without existing duly recognized or

certified labor organizations, including government-owned and
controlled corporations performing proprietary functions;
(b) All employees and workers including casual, regular, rank-and-file,

supervisory and managerial employees.
On November 21, 1991, petitioner HDMF granted Productivity Incentive Bonus

equivalent to one month salary plus allowance to all its personnel pursuant to Republic
Act No. 6971, and its Implementing Rules.[2]
The HDMF granted said bonus despite the advice on August 26, 1991 of
Undersecretary Salvador Enriquez of the Department of Budget and Management
(DBM) to all government-owned and controlled corporations (GOCCs) and government
financial institutions (GFIs) with original charters performing proprietary functions to
defer payment of the productivity incentive bonus to their employees, pending the
issuance of a definite ruling by the Office of the President on the matter.[3]
On December 27, 1991, the Department of Labor and Employment and the
Department of Finance issued the Supplemental Rules Implementing Republic Act No.
6971, which provides, thus:
Section 1.Paragraph (a) Section 1, Rule II of the Rules Implementing RA 6971, shall
be amended to read as follows:
Coverage. These Rules shall apply to:
(a) All business enterprises with or without existing duly certified labor organizations
including government-owned and controlled corporations performing proprietary
functions which are established solely for business or profit or gain and
accordingly excluding those created, maintained or acquired in pursuance of a
policy of the state, enunciated in the constitution or by law, and those whose
officers and employees are covered by the Civil Service. (Emphasis supplied.)
On November 29, 1996, the grant of productivity incentive bonus to the HDMF
personnel in the total amount of P5,136,710.91 was disallowed in audit under Notice of
Disallowance No. 96-006-101 (91).[4] The disallowance was based on COA Decision No.
96-288, dated June 4, 1996, stating that Republic Act No. 6971 does not apply to
government-owned or controlled corporations or to government financial institutions with
original charters performing proprietary functions, such as the HDMF.[5]
In a letter-request dated May 28, 1997, HDMF, through its President and Chief
Executive Officer, Zorayda Amelia C. Alonzo, requested for the lifting of the
disallowance.[6]Alonzo argued that Republic Act No. 6971 applies to the employees of
HDMF since the coverage of the said law includes government-owned and controlled
corporations performing proprietary functions, and the supplemental rules excluding it
from coverage was issued after the HDMF had already granted the productivity
incentive bonus to its employees.
In its Decision No. 98-245[7] dated June 16, 1998, the Commission on Audit affirmed
the audit disallowance. It ruled, thus:
xxxxxxxxx
Appellant (petitioner herein) further averred that while the Supplemental Rules
Implementing R.A. No. 6971 issued by the Department of Labor and Employment
and the Department of Finance dated December 27, 1991, exclude from the coverage
of R.A. No. 6971 GOCCs whose officers and employees are covered by the Civil
Service Law (like the HDMF), payment of the incentive bonus have been effected
prior to the issuance of the said supplemental rules. Simply stated, it is the position of
the appellant that the supplemental rules should not be given retroactive effect.
The Commission finds the appellants arguments untenable. It must be noted that the
grant of the Productivity Incentive Bonus was made on November 21, 1991 or after
receipt of the advice of the Department of Budget and Management Undersecretary
dated August 26, 1991 to defer payment of Productivity Incentive Bonus to all
GOCCs/GFIs with original charters performing proprietary functions, pending
definite ruling of the Office of the President. Despite the said notice, management
proceeded with the payment.
Likewise, the issue as to whether or not GOCCs/GFIs with original charters which are
performing proprietary functions are covered by R.A. No. 6971 had been resolved by
the Secretary of Justice in his letter dated November 8, 1995, stating that GOCCs with
original charter, being covered by the Civil Service Law, and not by the labor laws,
are clearly outside the ambit of R.A. No. 6971.
Verily, the grant of the incentive bonus is contrary to the Supplemental Rules
Implementing R.A. No. 6971 issued by the Department of Labor and Employment
and the Department of Finance dated December 27, 1991, portion of which pertinently
reads as follows:
All business enterprises x x x established solely for business of profit or gain and
accordingly, excluding those created, maintained or acquired in pursuance of a policy
of the state, enunciated in the constitution or by law, and those whose officers and
employees are covered by the Civil Service (underscoring supplied).
Moreover, the issue raised by the appellant that the supplemental rules excluding
GOCCs/GFIs from the coverage of R.A. No. 6971 should not be given retroactive
effect is not tenable since the HDMF from the very beginning is not covered by the
aforesaid law.
Premises considered, the audit disallowance is hereby affirmed, and the refund of the
amount of P5,136,710.91 granted as Productivity Incentive Bonus to HDMF
personnel based on the provisions of R.A. No. 6971 shall be enforced accordingly.
HDMF filed a motion for reconsideration that was denied by the Commission on
Audit in Resolution No. 2000-086 dated March 7, 2000. [8]
Hence, this petition.
Petitioner raises three issues:[9]
1. What is the applicable rule at the time of the grant of the Productivity Incentive
Bonus?
2. Whether the Memorandum from the Department of Finance signed by Secretary
Jesus P. Estanislao dated January 16, 1992 constitutes appropriate authorization
for the grant of Productivity Incentive Allowance for 1991.
3. Whether the Supplemental Implementing Rules are valid? If so, whether it may be
given retroactive effect?
Petitioner contends that when it granted the productivity incentive bonus to its
personnel on November 21, 1991, no other rule but the Implementing Rules of Republic
Act No. 6971 dated June 4, 1991 was in existence. Said Rule includes in its coverage
government-owned and controlled corporations performing proprietary functions,
without any qualification. The Supplementary Rules, which excluded petitioner from
coverage, was issued only after it had already granted the productivity incentive bonus
to its personnel. Hence, the employees already acquired a vested right over the
productivity incentive bonus.
The contention is without merit.
Association of Dedicated Employees of the Philippine Tourism Authority (ADEPT) v.
Commission on Audit,[10] held that the legislature intended Republic Act No. 6971 to
cover only government-owned and controlled corporations incorporated under the
general corporation law, thus:
Petitioner cites an entry in the journal of the House of Representatives to buttress its
submission that PTA is within the coverage of RA 6971, to wit:
Chairman Veloso: The intent of including government-owned and controlled

corporations within the coverage of the Act is the recognition of the principle that
when government goes into business, it (divests) itself of its immunity from suit and
goes down to the level of ordinary private enterprises and subjects itself to the
ordinary laws of the land just like ordinary private enterprises. Now, when people
work therefore in government-owned or controlled corporations, it is as if they are
also, just like in the private sector, entitled to all the benefits of all laws that apply to
workers in the private sector. In my view, even including the right to organize,
bargain VELOSO (Bicameral Conference committee on Labor and Employment, pp.
15-16).
After a careful study, the Court is of the view, and so holds, that contrary to
petitioners interpretation, the government-owned and controlled corporations Mr.
Chairman Veloso had in mind were government-owned and controlled corporations
incorporated under the general corporation law. This is so because only workers in
private corporations and government-owned and controlled corporations, incorporated
under the general corporation law, have the right to bargain (collectively). Those in
government corporations with special charter, which are subject to Civil Service
Laws, have no right to bargain (collectively), except where the terms and conditions
of employment are not fixed by law. Their rights and duties are not comparable with
those in the private sector. (Emphasis supplied.)
xxxxxxxxx
The legislative intent to place only government-owned and controlled corporations

performing proprietary functions under the coverage of RA 6971 is gleanable from the
other provisions of the law. For instance, section 2 of said law envisions industrial
peace and harmony and to provide corresponding incentives to both labor and capital;
section 4 refers to representatives of labor and management, section 5 mentions of
collective bargaining agent(s) of the bargaining unit(s); section 6 relates to existing
collective bargaining agreements, and labor and management; section 7 speaks of
strike or lockout; and section 9 purports to seek the assistance of the
National Conciliation and Mediation Board of the Department of Labor and
Employment and include the name(s) of the voluntary arbitrator or panel of voluntary
arbitrators. All the aforecited provisions of law apply only to private corporations
and government-owned and controlled corporations organized under the general
corporation law. Only they have collective bargaining agents, collective bargaining
units, collective bargaining agreements, and the right to strike or lockout.(Emphasis
supplied.)
To repeat, employees of government corporations created by special charters have

neither the right to strike nor the right to bargain collectively, as defined in the Labor
Code. The case of Social Security System Employees Association indicates the
following remedy of government workers not allowed to strike or bargain collectively,
to wit:
Government employees may, therefore, through their unions or associations, either

petition the Congress for the betterment of the terms and conditions of employment
which are within the ambit of legislation or negotiate with the appropriate
government agencies for the improvement of those which are not fixed by law. If there
be any unresolved grievances, the dispute may be referred to the Public Sector Labor-
Management Council for appropriate action. But employees in the civil service may
not resort to strikes, walkouts and other temporary work stoppages, like workers in the
private sector, to pressure the Government to accede to their demands. (supra,
footnote 14, p. 698; italics ours)
It is a rule in statutory construction that every part of the statute must be interpreted
with reference to the context, i.e., that every part of the statute must be considered
together with the other parts, and kept subservient to the general intent of the whole
enactment. The provisions of RA 6971, taken together, reveal the legislative intent to
include only government-owned and controlled corporations performing proprietary
functions within its coverage.
Petitioner is a government-owned and controlled corporation performing proprietary

functions with original charter or created by special law, specifically Presidential Decree
(PD) No. 1752,[11] amending PD No. 1530. As such, petitioner HDMF is covered by the
Civil Service pursuant to Article IX, Section 2(1)[12] of the 1987 Constitution, and,
therefore, excluded from the coverage of Republic Act No. 6971.
Since Republic Act No. 6971 intended to cover only government-owned and
controlled corporations incorporated under the general corporation law, the power of
administrative officials to promulgate rules in the implementation of the statute is
necessarily limited to what is intended and provided for in the legislative
enactment.[13] Hence, the Supplemental Rules clarified that government-owned and
controlled corporations performing proprietary functions which are created, maintained
or acquired in pursuance of a policy of the state, enunciated in the constitution or by
law, and those whose officers and employees are covered by the Civil Service are
excluded from the coverage of Republic Act No. 6971.
Therefore, even if petitioner HDMF granted the Productivity Incentive Bonus before
the Supplemental Rules were issued clarifying that petitioner was excluded from the
coverage of Republic Act No. 6971, the employees of HDMF did not acquire a vested
right over said bonus because they were not entitled to it under Republic Act No. 6971.
Moreover, the DBM advised petitioner herein, HDMF, on August 26, 1991, to defer
payment of the productivity incentive bonus to their employees, pending the issuance of
a definite ruling by the Office of the President on the matter. Despite said advice, the
Board of Trustees of HDMF opted to grant the said bonus on a voluntary basis as stated
in its Resolution No. 91-549, Series of 1991.[14] It expressed its concern over the welfare
of the officers and employees of the Fund rather than adhering to the stringent
technicality of the law. The Board, therefore, was aware that possibly HDMF may not be
covered by Republic Act No. 6971. It should have exercised prudence by awaiting the
definite ruling on the coverage to prevent legal problems.
Regarding the validity of the Supplemental Rules Implementing Republic Act No.
6971, ADEPT v. Commission on Audit held that said rules issued by the Secretary of
Labor and Employment and the Secretary of Finance were in accord with the
intendment and provisions of Republic Act No. 6971.[15]
Petitioner further claims that it is covered by a memorandum,[16] dated January 16,
1992, which was allegedly issued by Secretary Jesus P. Estanislao, Department of
Finance, stating that [a]s authorized by the President, the GFIs are to pay the traditional
PIA at the year-end 1991, following the standard formulas that have been observed by
the GFIs over the years. Petitioner raises as an issue whether or not said memorandum
constitutes appropriate authorization for its grant of productivity incentive allowance for
1991.
Parenthetically, the decision of the Commission on Audit subject of the petition
herein, never discussed the aforesaid memorandum. The same, in any case, cannot
prevail over the law.
Petitioner finally asserts that its payment of the productivity incentive bonus to its
personnel and the latters acceptance of the same was in good faith and cites ADEPT v.
Commission on Audit as precedent against a refund of said bonus.
In ADEPT v. Commission on Audit, docketed as G.R. No. 119597, the Court
sustained the decision of the Commission on Audit affirming the disallowance by the
Corporate Auditor of the productivity incentive bonus granted to ADEPT (an association
of employees of the Philippine Tourism Authority) for calendar year 1992 pursuant to
Republic Act No. 6971. ADEPT v. Commission on Audit was consolidated with four
other cases, which did not involve the application of Republic Act No. 6971. It was in the
other cases, docketed as G.R. Nos. 109406, 110642, 111494 and 112056, that the
Court enjoined further deductions from the salaries and allowances of petitioners
therein.
In view of the foregoing, the respondent Commission on Audit did not commit grave
abuse of discretion amounting to lack of jurisdiction in affirming the audit disallowance.
WHEREFORE, the petition is DISMISSED. Respondent Commission on Audits
Resolution No. 2000-086, dated March 7, 2000, which affirmed COA Decision No. 98-
245, dated June 16, 1998, is hereby AFFIRMED.
Costs de oficio.
SO ORDERED.
Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Sandoval-Gutierrez, Carpio,
Austria-Martinez, Carpio-Morales, Callejo, Sr., and Tinga, JJ., concur.
Vitug and Corona, JJ., on official leave.
Ynares-Santiago, J., on leave.
[1]
Republic Act No. 6971, Sec. 10. Rule Making Power. The Secretary of Labor and Employment and the
Secretary of Finance, after due notice and hearing, shall jointly promulgate and issue within six
(6) months from the effectivity of this Act such rules and regulations as are necessary to carry out
the provisions hereof.
[2]
Rollo, p. 4.
[3]
COA Decision No. 98-245, Rollo, p. 115.
[4]
Annex G, Rollo, p. 32.
[5]
COA Decision No. 98-245, Rollo, p. 13.
[6]
Rollo, p. 5.
[7]
Annex A, Rollo, p. 13.
[8]
Annex B, Rollo, p. 16.
[9]
Rollo, p. 103.
[10]
295 SCRA 366 (1998).
[11]
Entitled Amending the Act Creating the Home Development Mutual Fund.
[12]
The Civil Service embraces all branches, subdivisions, instrumentalities, and agencies of the
Government, including government-owned and controlled corporations with original charters.
[13]
ADEPT v. Commission on Audit, supra, note 10, at 436.
[14]
Annex E, Rollo, p. 26:
APPROVAL FOR THE INITIAL PAYMENT OF
ONE (1) MONTH SALARY PLUS ALLOWANCES
FOR ALL OFFICERS AND EMPLOYEES OF
PAG-IBIG FUND PURSUANT TO
REPUBLIC ACT NO. 6971
RESOLVED: That in line with Republic Act No. 6971, otherwise known as the
Productivity Incentives Act of 1990 the Board hereby approves, as modified, the request of Labor-
Management Committee (LMC) for the initial payment of the profit sharing, equivalent to one (1)
month salary and allowances for the year 1991 to all officers and employees of the Fund x x x .
RESOLVED FURTHER: That the Board opted to grant the above request solely on a
voluntary basis after taking into consideration the similar grant of other GFIs or GOCCs such as,
the GSIS, SSS, DBP, PNB and NHMC. It has, therefore expressed its concern over the welfare of
the officers and employees of the Fund rather than adhering to the stringent technicality of the
law;
RESOLVED FURTHERMORE: That the Board hereby authorizes Management to
appropriate and set aside the necessary budgetary outlay for this purpose;
RESOLVED FINALLY: To authorize Management to issue and formulate the required
guidelines for the implementation of this resolution.
APPROVED.
[15]
ADEPT v. Commission on Audit, supra, note 10, p. 436.
[16]
Annex C, Rollo, p. 117.
10) Dunlop vs. Sec. GR No. 131248 Dec. 11, 1998
SECOND DIVISION
[G.R. No. 131248. December 11, 1998]
DUNLOP SLAZENGER (PHILS.), INC., petitioner, vs. HON. SECRETARY

OF LABOR AND EMPLOYMENT and DUNLOP SLAZENGER
STAFF ASSOCIATION - APSOTEU, respondents.
DECISION
PUNO, J.:
In this petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, petitioner
seeks the annulment of the Resolution and Order, dated July 19, 1997 and October 16, 1997,[1] of
the public respondent Secretary of Labor and Employment calling for a certification election in
its company.
It appears that on September 15, 1995, the respondent union filed a Petition for Certification
Election among the supervisory, office and technical employees of the petitioner company before
the Department of Labor and Employment, Regional Office No. III, San Fernando, Pampanga. It
alleged that it is a legitimate labor organization, a duly chartered local of the Associated
Professional, Supervisory, Office & Technical Employees Union (APSOTEU); that petitioner is
a domestic corporation engaged in the manufacture of tennis balls and other allied products; that
petitioner is an unorganized establishment and there is no certified bargaining agreement that
will bar the filing of its petition for certification election; and that no certification election has
beenconducted within one (1) year prior to the filing of its petition for certification election.
On October 9, 1995, the petitioner company filed its Answer with Motion to Dismiss based
on three (3) grounds, namely: (1) that the respondent union is comprised of supervisory and
rank-and-file employees and cannot act as bargaining agent for the proposed unit; (2) that a
single certification election cannot be conducted jointly among supervisory and rank-and-file
employees; and (3) that the respondent union lacks legal standing since it failed to submit its
books of accounts.[2]
In its Reply filed on December 5, 1995, the respondent union alleged that its members are
supervisors and not rank-and-file employees. It averred that all its members are paid monthly by
the petitioner company. It alleged that the bargaining unit it seeks to represent is made up of the
monthly paid supervisory employees and other personnel who cannot be classified as belonging
to the rank-and-file. It further contended that it has no obligation to attach its books of accounts
since it is a legitimate labor organization. It urged that the certification election proceeding
cannot be used to question the legal personality of a labor organization.[3] On March 4, 1996,
however, respondent union submitted its new books of accounts consisting of the Cash Receipts
Journal, Cash Disbursements Journal and two (2) ledgers.[4]
On July 15, 1996, Mediator Arbiter Ma. Carmen A. Espinosa granted the petition for
certification election. Respondent Secretary of Labor and Employment affirmed the Arbiter's
decision ruling as follows:
"x x x
"The order of the Med-Arbiter directing the conduct of a certification elections is well
and proper.
"A perusal of the records shows that the bargaining unit that the petitioner seeks to
represent has been properly defined and this is composed of all the supervisory
employees of the respondent company. We wish to emphasize that the right of
supervisory employees to form their own labor organization separate from that of the
rank-and-file union has been recognized by law. This is quite clear from the
provisions of Article 245 of the Labor Code, as amended, which states:
`ART. 245. Ineligibility of managerial employees to join any labor organization; right
of supervisory employees-managerial employees are not eligible to join, assist or form
any labor organization. Supervisory employees shall not be eligible for membership in
a labor organization of the rank and file employees but may join, assist or form
separate labor organizations of their own.'
"As to the contention of the respondent that the petitioning union is composed of both
supervisory and rank and file employees, suffice it to stress that the same is not a
sufficient reason that would warrant the dismissal of the present petition. The same
can be taken care (sic) of during the pre-election conference thru the exclusion-
inclusion proceedings wherein those employees who are occupying rank and file
positions will be excluded from the list of eligible voters.
"Anent the issue on the legitimacy of the petitioner, we agree with the findings of the
Med-Arbiter that the petitioner has acquired the requisite legal personality to file the
present petition for certification elections. This is shown by the fact that the petitioner
has sufficiently complied with the mandatory reportorial requirements provided for
under Section 3, Rule II, Book V of the Rules and Regulations Implementing the
Labor Code, as amended and as enunciated by the Supreme Court in the cases of
Progressive Development Corporation vs. Secretary of Labor, et al., 205 SCRA 802
and Protection Technology Inc. vs. Secretary of Labor, G.R. 11711, March 1, 1995."[5]
Respondent Secretary of Labor denied petitioner's motion for reconsideration; hence, this
petition.
It is petitioner's submission that:
"I
"Respondent Secretary acted arbitrarily and with grave abuse of discretion amounting
to lack or excess of jurisdiction in holding that the respondent union is composed of
all the supervisory employees of the [petitioner] company.
"II
"Respondent Secretary acted arbitrarily and with grave abuse of discretion amounting
to lack or excess of jurisdiction in finding that even if the respondent union is
composed of both supervisory and rank-and-file employees such can be taken cared of
during the pre-election conference thru the exclusion-inclusion proceedings.
"III
"Respondent Secretary acted contrary to law and with grave abuse of discretion
amounting to lack or excess of jurisdiction in upholding the findings of the Med-
Arbiter that the respondent union has complied with all the requirements for it to
attain the legal personality to file the petition for certification election." [6]
The petition is meritorious.

We agree with the public respondent that supervisors can be an appropriate bargaining
unit. This is in accord with our repeated ruling that "[a]n appropriate bargaining unit is a group
of employees of a given employer, composed of all or less than the entire body of employees,
which the collective interests of all the employees, consistent with equity to the employer,
indicate to be best suited to serve reciprocal rights and duties of the parties under the collective
bargaining provisions of law. Otherwise stated, it is a legal collectivity for collective bargaining
purposes whose members have substantially mutual bargaining interests in terms and conditions
of employment as will assure to all employees their collective bargaining rights. A unit to be
appropriate must effect a grouping of employees who have substantial, mutual interests in
wages, hours, working conditions and other subjects of collective bargaining."[7]
The critical issue, however, is whether or not the respondent union can file a petition for
certification election to represent the supervisory employees of the petitioner company. The
resolution of this issue depends on whether the respondent union is composed solely of
supervisory employees or of both supervisory and rank-and-file employees. Article 245 of the
Labor Code clearly provides that "supervisory employees shall not be eligible for membership in
a labor organization of the rank-and-file employees x x x."
To determine who are supervisory and rank-and-file employees reference has to be made to
Article 212 (m) of the Labor Code, as amended, as well as Section 1 (t), Rule I, Book V of the
Omnibus Rules Implementing the Labor Code, as amended, viz:
'''Managerial employee is one who is vested with powers or prerogatives to lay down
and execute management policies and/or to hire, transfer, suspend, layoff, recall,
discharge, assign or discipline employees. Supervisory employees are those who, in
the interest of the employer, effectively recommend such managerial actions if
the exercise of such authority is not merely routinary or clerical in nature but
requires the use of independent judgment. All employees not falling within any of
the above definitions are considered rank-and-file employees for purposes of this
Book [these Rules].'"
Determining the status of supervisory and rank-and-file employees is not a hard row to hoe
in labor law. The test of supervisory status as we have repeatedly ruled is whether an employee
possesses authority to act in the interest of his employer, which authority should not be merely
routinary or clerical in nature but requires the use of independent judgment. Corrollarily, what
determines the nature of employment is not the employee's title, but his job description.[8]
In the instant case, the list of monthly paid employees submitted by the petitioner company
contains the names of about twenty seven (27) supervisory employees, six (6) managerial
employees, one (1) confidential employee and twenty six (26) office and technical employees
holding various positions. The list reveals that the positions occupied by the twenty six (26)
office and technical employees are in fact rank-and-file positions, i.e., A/C mechanic,
draftsmen, storemen, motorpool mechanic, secretaries, accounts clerk, company nurses,
industrial mechanic, boiler men, laboratory technicians, payroll clerk, welder, purchasing
clerk, company drivers and electricians. It is fairly obvious that these positions cannot be
considered as supervisory positions for they do not carry the authority to act in the interest of the
employer or to recommend managerial actions. It is not decisive that these employees are
monthly paid employees. Their mode of compensation is usually a matter of convenience and
does not necessarily determine the nature and character of their job.
We also do not agree with the ruling of the respondent Secretary of Labor that the infirmity
in the membership of the respondent union can be remedied in "the pre-election conference thru
the exclusion-inclusion proceedings wherein those employees who are occupying rank-and-file
positions will be excluded from the list of eligible voters." Public respondent gravely
misappreciates the basic antipathy between the interest of supervisors and the interest of rank-
and-file employees. Due to the irreconcilability of their interests we held in Toyota Motor
Philippines v. Toyota Motors Philippines Corporation Labor Union,[9] viz:
"x x x
"Clearly, based on this provision [Article 245, Labor Code], a labor organization
composed of both rank-and-file and supervisory employees is no labor organization at
all. It cannot, for any guise or purpose, be a legitimate labor organization. Not being
one, an organization which carries a mixture of rank-and-file and supervisory
employees cannot possess any of the rights of a legitimate labor organization,
including the right to file a petition for certification election for the purpose of
collective bargaining. It becomes necessary, therefore, anterior to the granting of an
order allowing a certification election, to inquire into the composition of any labor
organization whenever the status of the labor organization is challenged on the basis
of Article 245 of the Labor Code."
Needless to stress, the respondent union has no legal right to file a certification election to
represent a bargaining unit composed of supervisors for so long as it counts rank-and-file
employees among its members.
IN VIEW WHEREOF, the Resolution and Order dated July 19, 1997 and October 16,
1997, in OS-A-10-171-96 of the public respondent are annulled and set aside. No costs.
SO ORDERED.
Bellosillo (Chairman), Mendoza, and Martinez, JJ., concur.
[1]
In OS-A-10-171-96 [RO-300-9509-RU-007].
[2]
Rollo, pp. 27-36.
[3]
Rollo, pp. 19-20, 38-42.
[4]
Rollo, pp. 44-45.
[5]
Resolution, pp. 3-4; Rollo, pp. 20-21.
[6]
Rollo, pp. 8, 10 and 11.
[7]
San Miguel Corp. Supervisors and Exempt Employees Union v. Laguesma, 277 SCRA 370 [1997]; Toyota Motor
Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union, 268 SCRA 573 [1997]; Belyca
Corporation v. Ferrer-Calleja, 168 SCRA 184 [1988].
[8]
Engineering Equipment, Inc. v. NLRC, 133 SCRA 752 [1984].
[9]
268 SCRA 573 [1997].
11) International vs. Quisumbing GR No. 128845 June 1, 2000
FIRST DIVISION
[G.R. No. 128845. June 1, 2000]
INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS

(ISAE), petitioner, vs. HON. LEONARDO A. QUISUMBING in his capacity
as the Secretary of Labor and Employment; HON. CRESENCIANO B.
TRAJANO in his capacity as the Acting Secretary of Labor and
Employment; DR. BRIAN MACCAULEY in his capacity as the
Superintendent of International School-Manila; and INTERNATIONAL
SCHOOL, INC., respondents.
DECISION
KAPUNAN, J.:
Receiving salaries less than their counterparts hired abroad, the local-hires of private
respondent School, mostly Filipinos, cry discrimination. We agree. That the local-hires
are paid more than their colleagues in other schools is, of course, beside the point. The
point is that employees should be given equal pay for work of equal value. That is a
principle long honored in this jurisdiction. That is a principle that rests on fundamental
notions of justice. That is the principle we uphold today.
Private respondent International School, Inc. (the School, for short), pursuant to
Presidential Decree 732, is a domestic educational institution established primarily for
dependents of foreign diplomatic personnel and other temporary residents.[1] To enable
the School to continue carrying out its educational program and improve its standard of
instruction, Section 2(c) of the same decree authorizes the School to
employ its own teaching and management personnel selected by it either

locally or abroad, from Philippine or other nationalities, such personnel
being exempt from otherwise applicable laws and regulations attending
their employment, except laws that have been or will be enacted for the
protection of employees.
Accordingly, the School hires both foreign and local teachers as members of its faculty,
classifying the same into two: (1) foreign-hires and (2) local-hires. The School employs
four tests to determine whether a faculty member should be classified as a foreign-hire
or a local hire:
a.....What is one's domicile?

b.....Where is one's home economy?
c.....To which country does one owe economic allegiance?
d.....Was the individual hired abroad specifically to work in the School and
was the School responsible for bringing that individual to the Philippines?[2]
Should the answer to any of these queries point to the Philippines, the faculty member
is classified as a local hire; otherwise, he or she is deemed a foreign-hire.
The School grants foreign-hires certain benefits not accorded local-hires. These include
housing, transportation, shipping costs, taxes, and home leave travel allowance.
Foreign-hires are also paid a salary rate twenty-five percent (25%) more than local-
hires. The School justifies the difference on two "significant economic disadvantages"
foreign-hires have to endure, namely: (a) the "dislocation factor" and (b) limited tenure.
The School explains:
A foreign-hire would necessarily have to uproot himself from his home

country, leave his family and friends, and take the risk of deviating from a
promising career path-all for the purpose of pursuing his profession as an
educator, but this time in a foreign land. The new foreign hire is faced with
economic realities: decent abode for oneself and/or for one's family,
effective means of transportation, allowance for the education of one's
children, adequate insurance against illness and death, and of course the
primary benefit of a basic salary/retirement compensation.
Because of a limited tenure, the foreign hire is confronted again with the
same economic reality after his term: that he will eventually and inevitably
return to his home country where he will have to confront the uncertainty
of obtaining suitable employment after a long period in a foreign land.
The compensation scheme is simply the School's adaptive measure to

remain competitive on an international level in terms of attracting
competent professionals in the field of international education. [3]
When negotiations for a new collective bargaining agreement were held on June 1995,
petitioner International School Alliance of Educators, "a legitimate labor union and the
collective bargaining representative of all faculty members"[4] of the School, contested
the difference in salary rates between foreign and local-hires. This issue, as well as the
question of whether foreign-hires should be included in the appropriate bargaining unit,
eventually caused a deadlock between the parties.
On September 7, 1995, petitioner filed a notice of strike. The failure of the National
Conciliation and Mediation Board to bring the parties to a compromise prompted the
Department of Labor and Employment (DOLE) to assume jurisdiction over the dispute.
On June 10, 1996, the DOLE Acting Secretary, Crescenciano B. Trajano, issued an
Order resolving the parity and representation issues in favor of the School. Then DOLE
Secretary Leonardo A. Quisumbing subsequently denied petitioner's motion for
reconsideration in an Order dated March 19, 1997. Petitioner now seeks relief in this
Court.
Petitioner claims that the point-of-hire classification employed by the School is

discriminatory to Filipinos and that the grant of higher salaries to foreign-hires
constitutes racial discrimination.
The School disputes these claims and gives a breakdown of its faculty members,
numbering 38 in all, with nationalities other than Filipino, who have been hired locally
and classified as local hires.[5]The Acting Secretary of Labor found that these non-
Filipino local-hires received the same benefits as the Filipino local-hires:
The compensation package given to local-hires has been shown to apply to all,
regardless of race. Truth to tell, there are foreigners who have been hired locally and
who are paid equally as Filipino local hires.[6]
The Acting Secretary upheld the point-of-hire classification for the distinction in salary
rates:
The principle "equal pay for equal work" does not find application in the
present case. The international character of the School requires the hiring
of foreign personnel to deal with different nationalities and different
cultures, among the student population.
We also take cognizance of the existence of a system of salaries and

benefits accorded to foreign hired personnel which system is universally
recognized. We agree that certain amenities have to be provided to these
people in order to entice them to render their services in the Philippines
and in the process remain competitive in the international market.
Furthermore, we took note of the fact that foreign hires have limited
contract of employment unlike the local hires who enjoy security of tenure.
To apply parity therefore, in wages and other benefits would also require
parity in other terms and conditions of employment which include the
employment contract.
A perusal of the parties' 1992-1995 CBA points us to the conditions and

provisions for salary and professional compensation wherein the parties
agree as follows:
All members of the bargaining unit shall be compensated

only in accordance with Appendix C hereof provided that the
Superintendent of the School has the discretion to recruit
and hire expatriate teachers from abroad, under terms and
conditions that are consistent with accepted international
practice.
Appendix C of said CBA further provides:
The new salary schedule is deemed at equity with the

Overseas Recruited Staff (OSRS) salary schedule. The 25%
differential is reflective of the agreed value of system
displacement and contracted status of the OSRS as
differentiated from the tenured status of Locally Recruited
Staff (LRS).
To our mind, these provisions demonstrate the parties' recognition of the

difference in the status of two types of employees, hence, the difference in
their salaries.
The Union cannot also invoke the equal protection clause to justify its
claim of parity. It is an established principle of constitutional law that the
guarantee of equal protection of the laws is not violated by legislation or
private covenants based on reasonable classification. A classification is
reasonable if it is based on substantial distinctions and apply to all
members of the same class. Verily, there is a substantial distinction
between foreign hires and local hires, the former enjoying only a limited
tenure, having no amenities of their own in the Philippines and have to be
given a good compensation package in order to attract them to join the
teaching faculty of the School.[7]
We cannot agree.
That public policy abhors inequality and discrimination is beyond contention. Our
Constitution and laws reflect the policy against these evils. The Constitution[8] in the
Article on Social Justice and Human Rights exhorts Congress to "give highest priority to
the enactment of measures that protect and enhance the right of all people to human
dignity, reduce social, economic, and political inequalities." The very broad Article 19 of
the Civil Code requires every person, "in the exercise of his rights and in the
performance of his duties, [to] act with justice, give everyone his due, and observe
honesty and good faith."
International law, which springs from general principles of law,[9] likewise proscribes
discrimination. General principles of law include principles of equity,[10] i.e., the general
principles of fairness and justice, based on the test of what is reasonable. [11] The
Universal Declaration of Human Rights,[12] the International Covenant on Economic,
Social, and Cultural Rights,[13] the International Convention on the Elimination of All
Forms of Racial Discrimination,[14] the Convention against Discrimination in
Education,[15] the Convention (No. 111) Concerning Discrimination in Respect of
Employment and Occupation[16] - all embody the general principle against discrimination,
the very antithesis of fairness and justice. The Philippines, through its Constitution, has
incorporated this principle as part of its national laws.
In the workplace, where the relations between capital and labor are often skewed in
favor of capital, inequality and discrimination by the employer are all the more
reprehensible.
The Constitution[17] specifically provides that labor is entitled to "humane conditions of

work." These conditions are not restricted to the physical workplace - the factory, the
office or the field - but include as well the manner by which employers treat their
employees.
The Constitution[18] also directs the State to promote "equality of employment

opportunities for all." Similarly, the Labor Code[19] provides that the State shall "ensure
equal work opportunities regardless of sex, race or creed." It would be an affront to both
the spirit and letter of these provisions if the State, in spite of its primordial obligation to
promote and ensure equal employment opportunities, closes its eyes to unequal and
discriminatory terms and conditions of employment.[20]
Discrimination, particularly in terms of wages, is frowned upon by the Labor Code.

Article 135, for example, prohibits and penalizes[21] the payment of lesser compensation
to a female employee as against a male employee for work of equal value. Article 248
declares it an unfair labor practice for an employer to discriminate in regard to wages in
order to encourage or discourage membership in any labor organization.
Notably, the International Covenant on Economic, Social, and Cultural Rights, supra, in
Article 7 thereof, provides:
The States Parties to the present Covenant recognize the right of

everyone to the enjoyment of just and favourable conditions of work,
which ensure, in particular:
a.....Remuneration which provides all workers, as a minimum, with:
i.....Fair wages and equal remuneration for work of equal

value without distinction of any kind, in particular women
being guaranteed conditions of work not inferior to those
enjoyed by men, with equal pay for equal work;
x x x.
The foregoing provisions impregnably institutionalize in this jurisdiction the long honored
legal truism of "equal pay for equal work." Persons who work with substantially equal
qualifications, skill, effort and responsibility, under similar conditions, should be paid
similar salaries.[22] This rule applies to the School, its "international character"
notwithstanding.
The School contends that petitioner has not adduced evidence that local-hires perform
work equal to that of foreign-hires.[23] The Court finds this argument a little cavalier. If an
employer accords employees the same position and rank, the presumption is that these
employees perform equal work. This presumption is borne by logic and human
experience. If the employer pays one employee less than the rest, it is not for that
employee to explain why he receives less or why the others receive more. That would
be adding insult to injury. The employer has discriminated against that employee; it is
for the employer to explain why the employee is treated unfairly.
The employer in this case has failed to discharge this burden. There is no evidence
here that foreign-hires perform 25% more efficiently or effectively than the local-hires.
Both groups have similar functions and responsibilities, which they perform under
similar working conditions.
The School cannot invoke the need to entice foreign-hires to leave their domicile to
rationalize the distinction in salary rates without violating the principle of equal work for
equal pay.
"Salary" is defined in Black's Law Dictionary (5th ed.) as "a reward or recompense for
services performed." Similarly, the Philippine Legal Encyclopedia states that "salary" is
the "[c]onsideration paid at regular intervals for the rendering of services." In Songco
v. National Labor Relations Commission,[24] we said that:
"salary" means a recompense or consideration made to a person for his

pains or industry in another man's business. Whether it be derived from
"salarium," or more fancifully from "sal," the pay of the Roman soldier, it
carries with it the fundamental idea of compensation for services
rendered. (Emphasis supplied.)
While we recognize the need of the School to attract foreign-hires, salaries should not
be used as an enticement to the prejudice of local-hires. The local-hires perform the
same services as foreign-hires and they ought to be paid the same salaries as the
latter. For the same reason, the "dislocation factor" and the foreign-hires' limited tenure
also cannot serve as valid bases for the distinction in salary rates. The dislocation factor
and limited tenure affecting foreign-hires are adequately compensated by certain
benefits accorded them which are not enjoyed by local-hires, such as housing,
transportation, shipping costs, taxes and home leave travel allowances.
The Constitution enjoins the State to "protect the rights of workers and promote their
welfare,"[25] "to afford labor full protection."[26] The State, therefore, has the right and duty
to regulate the relations between labor and capital.[27] These relations are not merely
contractual but are so impressed with public interest that labor contracts, collective
bargaining agreements included, must yield to the common good.[28] Should such
contracts contain stipulations that are contrary to public policy, courts will not hesitate to
strike down these stipulations.
In this case, we find the point-of-hire classification employed by respondent School to
justify the distinction in the salary rates of foreign-hires and local hires to be an invalid
classification. There is no reasonable distinction between the services rendered by
foreign-hires and local-hires. The practice of the School of according higher salaries to
foreign-hires contravenes public policy and, certainly, does not deserve the sympathy of
this Court.
We agree, however, that foreign-hires do not belong to the same bargaining unit as the
local-hires.
A bargaining unit is "a group of employees of a given employer, comprised of all or less
than all of the entire body of employees, consistent with equity to the employer indicate
to be the best suited to serve the reciprocal rights and duties of the parties under the
collective bargaining provisions of the law."[29] The factors in determining the appropriate
collective bargaining unit are (1) the will of the employees (Globe Doctrine); (2) affinity
and unity of the employees' interest, such as substantial similarity of work and duties, or
similarity of compensation and working conditions (Substantial Mutual Interests Rule);
(3) prior collective bargaining history; and (4) similarity of employment status.[30] The
basic test of an asserted bargaining unit's acceptability is whether or not it is
fundamentally the combination which will best assure to all employees the exercise of
their collective bargaining rights.[31]
It does not appear that foreign-hires have indicated their intention to be grouped
together with local-hires for purposes of collective bargaining. The collective bargaining
history in the School also shows that these groups were always treated separately.
Foreign-hires have limited tenure; local-hires enjoy security of tenure. Although foreign-
hires perform similar functions under the same working conditions as the local-hires,
foreign-hires are accorded certain benefits not granted to local-hires. These benefits,
such as housing, transportation, shipping costs, taxes, and home leave travel
allowance, are reasonably related to their status as foreign-hires, and justify the
exclusion of the former from the latter. To include foreign-hires in a bargaining unit with
local-hires would not assure either group the exercise of their respective collective
bargaining rights.
WHEREFORE, the petition is GIVEN DUE COURSE. The petition is hereby GRANTED
IN PART. The Orders of the Secretary of Labor and Employment dated June 10, 1996
and March 19, 1997, are hereby REVERSED and SET ASIDE insofar as they uphold
the practice of respondent School of according foreign-hires higher salaries than local-
hires.
SO ORDERED.
Puno, and Pardo, JJ., concur.
Davide, Jr., C.J., (Chairman), on official leave.

Ynares-Santiago, J., on leave.
[1]
Issued on June 19, 1975 (authorizing International School, Inc. to Donate Its Real Properties to the Government of
the Republic of the Philippines and Granting It Certain Rights.)
[2]
Rollo, p. 328.
[3]
Id., at 324.
[4]
Id., at 8.
[5]
Id., at 325. The breakdown is as follows:
Americans
Australian - 17
Belgian -2
British -1
Burmese -2
Canadian -1
Chinese -2
French -2
German -1
Indian -1
Japanese -5
Malaysian -1
New -1
Zealander -1
Spanish -1
[6]
Id., at 39.
[7]
Id., at 38-39.
[8]
In Section 1, Article XIII thereof.
[9]
Statute of the International Court of Justice, art. 38.
[10]
M. DEFENSOR-SANTIAGO, International Law 75 (1999), citing Judge Hudson in River Meuse Case, (1937)
Ser. A/B No. 70.
[11]
Ibid., citing Rann of Kutch Arbitration (India vs. Pakistan), 50 ILR 2 (1968)
[12]
Adopted by the General Assembly of the United Nations on December 10, 1948. Article 1 thereof states: "All
human beings are born free and equal in dignity and rights." Article 2 provides, "1. Everyone is entitled to all the
rights and freedoms set forth in this Declaration, without distinction of any kind, such as race, colour, sex, language,
religion, political or other opinion, national or social origin, property, birth or other status."
[13]
Adopted by the General of the United Nations in Resolution 2200 (XXI) of 16 December 1966. Article 2
provides: "2. The States Parties to the present Covenant undertake to guarantee that the rights enunciated in the
present Covenant will be exercised without discrimination of any kind as to race, colour, sex, language, religion,
political or other opinion, national or social origin, property, birth or other status."
[14]
Adopted by the General assembly of the United Nations in Resolution 2106 (XX) 21 December 1965. Article 2 of
the Convention states: "States Parties condemn racial discrimination and undertake to pursue by all appropriate
means and without delay a policy of eliminating racial discrimination in all its forms and promoting understanding
among all races xxx."
[15]
Adopted at Paris, December 14, 1960. Under Article 3, the States Parties undertake, among others, "to abrogate
any statutory provisions and any administrative instructions and to discontinue any administrative practices which
involve discrimination in education." Under Article 4, "The States Parties to this Convention undertake further more
to formulate, develop and apply a national policy which, by methods appropriate to the circumstances and to
national usage, will tend to promote equality of opportunity and of treatment in the matter of education xxx."
[16]
Adopted by the General Conference of the International Labor Organization at Geneva, June 25, 1958. Article 2
provides that, "Each Member for which this Convention is in force undertakes to declare and pursue a national
policy designed to promote, by methods appropriate to national condition and practice, equality of opportunity and
treatment in respect of employment and occupation, with a view to eliminating any discrimination in respect
thereof."
[17]
In Article XIII, Section 3 thereof.
[18]
Id.
[19]
In Article 3 thereof.
[20]
E.g., Article 135 of the Labor Code declares it unlawful for the employer to require, not only as a condition of
employment, but also as a condition for the continuation of employment, that a woman shall not get married.
[21]
In relation to Articles 288 and 289 of the same Code.
[22]
Indeed, the government employs this rule in fixing the compensation of government employees. Thus, Republic
Act No. 6758 (An Act Prescribing a Revised Compensation and Position Classification System in the Government
and for Other Purposes) declares it "the policy of the State to provide equal pay for substantially equal work and to
base differences in pay upon substantive differences in duties and responsibilities, and qualification requirements of
the positions. See also the Preamble of Presidential Decree No. 985 (A Decree Revising the Position Classification
and Compensation Systems in the National Government, and Integrating the same)
[23]
Rollo, p. 491.
[24]
183 SCRA 610 (1990)
[25]
In Section 18, Article II thereof.
[26]
In Section 3, Article XIII thereof. See also Article 3 of the Labor Code.
[27]
See Sec. 3, Article XIII, Constitution. Article 3 of the Labor Code.
[28]
Article 1700, Civil Code.
[29]
Toyota Motor Philippines Corporation vs. Toyota Motor Philippines Federation Labor Union and the Secretary of
Labor and Employment, 268 SCRA 573 (1997); San Miguel Corporation vs. Laguesma, 236 SCRA 595 (1994)
[30]
San Miguel Corporation vs. Laguesma, supra.
[31]
Belyca Corporation vs. Ferrer-Calleja, 168 SCRA 184 (1988)
12) St. James vs. Samahan GR No. 151326 Nov. 23, 2005
FIRST DIVISION
ST. JAMES SCHOOL OF QUEZON CITY, G.R. No. 151326
Petitioner,
Present:
Davide, Jr., C.J.,
Chairman,
Quisumbing,
- versus - Ynares-Santiago,
Carpio, and
Azcuna, JJ.
SAMAHANG MANGGAGAWA SA Promulgated:
ST. JAMES SCHOOL OF QUEZON CITY,
Respondent. November 23, 2005
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
CARPIO, J.:
The Case
Before the Court is a petition for review[1] assailing the 5 September 2001 Decision
and 3 January 2002 Resolution of the Court of Appeals[2] in CA-G.R. SP No.
60197. The Court of Appeals sustained the Decision of the Department of Labor
and Employment (DOLE) directing the opening of the challenged ballots cast
during the certification election.
The Antecedent Facts
The Samahang Manggagawa sa St. James School of Quezon City (Samahang

Manggagawa) filed a petition for certification election to determine the collective
bargaining representative of the motor pool, construction and transportation
employees of St. James School of Quezon City (St. James). On 26 June 1999, the
certification election was held at the DOLE office in Intramuros, Manila. There
were 149 eligible voters and 84 voters cast their votes. St. James filed a
certification election protest challenging the 84 votes. St. James alleged that it had
179 rank and file employees, none of whom voted in the certification election. St.
James argued that those who voted were not its regular employees but construction
workers of an independent contractor, Architect Conrado Bacoy (Architect Bacoy).
In an Order dated 6 January 2000,[3] Med-Arbiter Tomas F. Falconitin (Med-

Arbiter Falconitin) ruled that at the time of the certification election, the 84 voters
were no longer working at St. James. Med-Arbiter Falconitin supported his ruling
using the roster of rank and file employees submitted by St. James, which did not
include the names of the 84 voters. Med-Arbiter Falconitin also ruled that since the
construction projects have ceased, some of the workers were no longer entitled to
vote in the certification election. Finally, Med-Arbiter Falconitin ruled that even if
the 84 workers were to be included in the 179 rank and file employees of St.
James, the total number of voters would be 263. Thus, the 84 votes cast would not
be sufficient to constitute a majority of all eligible voters to have a valid

certification election. The dispositive portion of the Order reads:
WHEREFORE, premises considered, the certification election protest is
hereby given due course.
Accordingly, judgment is hereby rendered, declaring the certification

election for the rank and file employees of respondent/protestant St. James School
of Quezon City conducted on June 26, 1999, a failure; and null and void ab initio.
SO ORDERED.[4]
Samahang Manggagawa appealed to the Secretary of Labor. In its Decision[5] dated

5 May 2000, the DOLE[6] reversed the ruling of Med-Arbiter Falconitin. The
DOLE ruled that Samahang Manggagawa seeks to represent the non-academic
personnel or the rank and file employees from the motor pool, construction and
transportation departments, and not all the rank and file employees of St. James.
According to the DOLE, Med-Arbiter Falconitin erred in including all the rank and
file employees of St. James, whether teaching or non-teaching personnel, in the
computation of the total number of employees. The DOLE ruled that the list
submitted by St. James contained only the administrative, teaching and office
personnel of the school. The dispositive portion of the Decision reads:
WHEREFORE, the appeal is hereby GRANTED and the order dated 06
January 2000 of the Med-Arbiter is REVERSED and SET ASIDE. In lieu thereof,
an order is hereby issued directing the Election Officer, Lilibeth Cagara, DOLE-
National Capital Region to open and canvass the 84 challenged ballots within ten
(10) days from receipt hereof, subject to usual notice and representation by the
parties and thereafter to issue the corresponding certification of the results.
SO DECIDED.[7]
St. James filed a motion for reconsideration. The DOLE[8] denied the motion in its
19 June 2000 Resolution.[9] St. James filed a special civil action before the Court of
Appeals.
In a Decision[10] dated 5 September 2001, the Court of Appeals dismissed the

petition and ruled that the DOLE did not commit grave abuse of discretion in
reversing the ruling of Med-Arbiter Falconitin. In its 3 January 2002

Resolution,[11] the Court of Appeals denied St. James motion for reconsideration.
Hence, the petition before this Court.
The Issues
St. James questions the validity of the formation of the labor union and the
validity of the certification election.[12]
The Ruling of the Court
The petition has no merit.
The Validity of the Formation of the Labor Union
St. James argues that majority of the members of Samahang Manggagawa are not
its employees but employees of Architect Bacoy, an independent contractor.
St. James may no longer question the validity of the formation of the labor
union.
The records[13] show that prior to the holding of the certification election, St.
James filed a petition for cancellation of Samahang Manggagawas union
registration. Among the grounds cited in the petition was the lack of employer-
employee relationship between St. James and Samahang Manggagawas members.
The Med-Arbiter recommended the cancellation of the union registration. DOLE
Regional Director IV Romeo Young (Director Young) adopted the Med-Arbiters

recommendation and cancelled Samahang Manggagawas union registration.
Samahang Manggagawa filed an appeal before the Bureau of Labor Relations
(BLR). In its Decision[14] dated 22 January 1998, the BLR[15] reversed Director
Youngs Decision. In its Resolution[16] of 12 February 1998, the BLR denied St.
James motion for reconsideration. St. James filed a special civil action before the
Court of Appeals. The case was docketed as CA-G.R. SP No. 50918. In its 9
February 2001 Decision,[17] the Court of Appeals dismissed St. James petition and
affirmed the BLRs Decision. The Court of Appeals ruled that the construction
workers are actually St. James regular employees in its motor pool, construction
and transportation departments. The Court of Appeals also ruled that Architect
Bacoy is a labor-only contractor and thus an agent of St. James, which is the real
employer.
St. James filed a petition for certiorari before this Court. The case was
docketed as G.R. No. 149648. In a Resolution dated 10 October 2001, this Court
denied the petition for St. James error in the choice or mode of appeal. [18] The
Courts 10 October 2001 Resolution closed any issue on the validity of the
formation of the labor union.
The Validity of the Certification Election
Section 13, Rule XII, Book V of the Omnibus Rules Implementing the Labor Code
(Omnibus Rules) provides:

Section 13. Proclamation and certification of results by election officer; when
proper. Upon completion of the canvass there being a valid election, the election
officer shall proclaim and certify as winner the union which obtained a majority
of the valid votes cast under any of the following conditions:
a) No protest had been filed or, even if one was filed, the same was not
perfected within the five-day period for perfection of the protest;
b) No challenge of eligibility issue was raised or even if one was raised,

the resolution of the same will not materially change the result.
For this purpose, the election officer shall immediately issue the
corresponding certification, copy furnished all parties, which shall form part of
the records of the case. The winning union shall have the rights, privileges and
obligations of a duly certified collective bargaining representative from the time
the certification is issued. The proclamation and certification so issued shall not
be appealable.
According to St. James, the certification election was conducted without
quorum. St. James alleges that it has 179 rank and file employees in its Quezon
City Campus. When the certification election was held, none of these qualified
rank and file employees cast their votes because they were all on duty in the school
premises. The 84 voters who cast their votes are employees of Architect Bacoy. St.
James also alleges that it has 570 rank and file employees in all its campuses. Even
if the 84 voters are its employees, the votes do not constitute a majority vote of its
rank and file employees because the quorum should be based on its 570 rank and
file employees.
We cannot sustain the argument.
St. James has five campuses the Philamlife and Scout Alcaraz, Quezon City
campuses which are pre-schools; the Paraaque City and Calamba, Laguna
campuses which offer elementary, secondary and college education; and the
Tandang Sora, Quezon City campus which offers elementary and secondary
education.[19]
The members of Samahang Manggagawa are employees in the Tandang Sora

campus. Under its constitution and by-laws, Samahang Manggagawa seeks to
represent the motor pool, construction and transportation employees of the

Tandang Sora campus.[20] Thus, the computation of the quorum should be based on
the rank and file motor pool, construction and transportation employees of the
Tandang Sora campus and not on all the employees in St. James five campuses.
Section 2, Rule XII, Book V of the Omnibus Rules provides:
Section 2. Qualification of voters; inclusion-exclusion proceedings. All

employees who are members of the appropriate bargaining unit sought to be
represented by the petitioner at the time of the certification or consent election
shall be qualified to vote. A dismissed employee whose dismissal is being
contested in a pending case shall be allowed to vote in the election.
In case of disagreement over the voters list or over the eligibility of voters,
all contested voters shall be allowed to vote. However, their votes shall be
segregated and sealed in individual envelopes in accordance with Section 9 of
these Rules.
The motor pool, construction and transportation employees of the Tandang Sora
campus had 149 qualified voters at the time of the certification election. Hence, the
149 qualified voters should be used to determine the existence of a quorum. Since
a majority or 84 out of the 149 qualified voters cast their votes, a quorum existed in
the certification election.
St. James further alleges that the names of the 84 voters are not on the list of its
rank and file employees. On this score, we sustain the factual finding of the DOLE
that the list submitted by St. James consists of its administrative, teaching and
office personnel. These administrative, teaching and office personnel are not
members of Samahang Manggagawa. They do not belong to the bargaining unit
that Samahang Manggagawa seeks to represent. Hence, the list submitted by St.
James may not be used as basis to determine the members of Samahang
Manggagawa.
WHEREFORE, we DENY the petition. We AFFIRM the 5 September 2001

Decision and the 3 January 2002 Resolution of the Court of Appeals in CA-G.R.
SP No. 60197.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice
WE CONCUR:
HILARIO G. DAVIDE, JR.
Chief Justice
Chairman
LEONARDO A. QUISUMBING CONSUELO YNARES-SANTIAGO

ADOLFO S. AZCUNA
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that
the conclusions in the above Decision were reached in consultation before the case
was assigned to the writer of the opinion of the Courts Division.
HILARIO G. DAVIDE, JR.

Chief Justice
[1]
Under Rule 45 of the 1997 Rules of Civil Procedure.
[2]
Penned by Associate Justice Rodrigo V. Cosico with Associate Justices Ramon A. Barcelona and Bienvenido L.
Reyes, concurring.
[3]
CA Rollo, pp. 123-130.
[4]
Ibid., p. 130.
[5]
Rollo, pp. 41-46.
[6]
Through Undersecretary Rosalinda Dimapilis-Baldoz.
[7]
Rollo, p. 46.
[8]
Through Assistant Secretary Benedicto Ernesto R. Bitonio, Jr.
[9]
CA Rollo, pp. 33-34.
[10]
Rollo, pp. 25-33.
[11]
Ibid., p. 24.
[12]
Ibid., p. 163.
[13]
Decision of the Court of Appeals in CA-G.R. SP No. 50918 promulgated on 9 February 2001. Rollo, pp. 126-
139.
[14]
Rollo, pp. 140-152.
[15]
Through Director Benedicto Ernesto R. Bitonio, Jr.
[16]
Rollo, pp. 153-154.
[17]
Penned by Associate Justice Rebecca De Guia-Salvador, with Associate Justices Conchita Carpio Morales (now
Supreme Court Associate Justice) and Candido V. Rivera, concurring. Rollo, pp. 126-137.
[18]
Rollo, p. 125.
[19]
CA Decision in CA-G.R. SP No. 50918. Rollo, pp. 126-127.
[20]
BLR Decision, supra note 14.
13) Belyca vs. Ferrer GR No. 77395 Nov. 29, 1988

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 77395 November 29, 1988

BELYCA CORPORATION, petitioner,
vs.
DIR. PURA FERRER CALLEJA, LABOR RELATIONS, MANILA, MINISTRY OF LABOR AND
EMPLOYMENT; MED-ARBITER, RODOLFO S. MILADO, MINISTRY OF LABOR AND
EMPLOYMENT, REGIONAL OFFICE NO. 10 AND ASSOCIATED LABOR UNION (ALU-TUCP),
MINDANAO REGIONAL OFFICE, CAGAYAN DE ORO CITY, respondents.
Soriano and Arana Law Offices for petitioner.
The Solicitor General for public respondent.
Francisco D. Alas for respondent Associated Labor Unions-TUCP.
PARAS, J.:
This is a petition for certiorari and prohibition with preliminary injunction seeking to annul or to set aside the resolution of the Bureau of Labor
Relations dated November 24, 1986 and denying the appeal, and the Bureau's resolution dated January 13, 1987 denying petitioner's motion
for reconsideration.
The dispositive portion of the questioned resolution dated November 24, 1986 (Rollo, p. 4) reads as
follows:
WHEREFORE, in view of all the foregoing considerations, the Order is affirmed and
the appeal therefrom denied.
Let, therefore, the pertinent records of the case be remanded to the office of origin
for the immediate conduct of the certification election.
The dispositive portion of the resolution dated January 13, 1987 (Rollo, p. 92) reads, as follows:
WHEREFORE, the Motion for Reconsideration filed by respondent Belyca

Corporation (Livestock Agro-Division) is hereby dismissed for lack of merit and the
Bureau's Resolution dated 24 November 1986 is affirmed. Accordingly, let the
records of this case be immediately forwarded to the Office of origin for the holding of
the certification elections.
No further motion shall hereafter be entertained.
The antecedents of the case are as follows:
On June 3, 1986, private respondent Associated Labor Union (ALU)-TUCP, a legitimate labor
organization duly registered with the Ministry of Labor and Employment under Registration
Certificate No. 783-IP, filed with the Regional Office No. 10, Ministry of Labor and Employment at
Cagayan de Oro City, a petition for direct certification as the sole and exclusive bargaining agent of
all the rank and file employees/workers of Belyca Corporation (Livestock and Agro-Division), a duly
organized, registered and existing corporation engaged in the business of poultry raising, piggery
and planting of agricultural crops such as corn, coffee and various vegetables, employing
approximately 205 rank and file employees/workers, the collective bargaining unit sought in the
petition, or in case of doubt of the union's majority representation, for the issuance of an order
authorizing the immediate holding of a certification election (Rollo, p. 18). Although the case was
scheduled for hearing at least three times, no amicable settlement was reached by the parties.
During the scheduled hearing of July 31, 1986 they, however, agreed to submit simultaneously their
respective position papers on or before August 11, 1986 (rollo. p. 62).
Petitioner ALU-TUCP, private respondent herein, in its petition and position paper alleged, among
others, (1) that there is no existing collective bargaining agreement between the respondent
employer, petitioner herein, and any other existing legitimate labor unions; (2) that there had neither
been a certification election conducted in the proposed bargaining unit within the last twelve (12)
months prior to the filing of the petition nor a contending union requesting for certification as the. sole
and exclusive bargaining representative in the proposed bargaining unit; (3) that more than a
majority of respondent employer's rank-and-file employees/workers in the proposed bargaining unit
or one hundred thirty-eight (138) as of the date of the filing of the petition, have signed membership
with the ALU-TUCP and have expressed their written consent and authorization to the filing of the
petition; (4) that in response to petitioner union's two letters to the proprietor/ General Manager of
respondent employer, dated April 21, 1986 and May 8, 1 986, requesting for direct recognition as the
sole and exclusive bargaining agent of the rank-and-file workers, respondent employer has locked
out 119 of its rank-and-file employees in the said bargaining unit and had dismissed earlier the local
union president, vice-president and three other active members of the local unions for which an
unfair labor practice case was filed by petitioner union against respondent employer last July 2, 1986
before the NLRC in Cagayan de Oro City (Rollo, pp. 18; 263). <äre|| anº•1àw>
Respondent employer, on the other hand, alleged in its position paper, among others, (1) that due to
the nature of its business, very few of its employees are permanent, the overwhelming majority of
which are seasonal and casual and regular employees; (2) that of the total 138 rank-and-file
employees who authorized, signed and supported the filing of the petition (a) 14 were no longer
working as of June 3, 1986 (b) 4 resigned after June, 1986 (c) 6 withdrew their membership from
petitioner union (d) 5 were retrenched on June 23, 1986 (e) 12 were dismissed due to malicious
insubordination and destruction of property and (f) 100 simply abandoned their work or stopped
working; (3) that the 128 incumbent employees or workers of the livestock section were merely
transferred from the agricultural section as replacement for those who have either been dismissed,
retrenched or resigned; and (4) that the statutory requirement for holding a certification election has
not been complied with by the union (Rollo, p. 26).
The Labor Arbiter granted the certification election sought for by petitioner union in his order dated
August 18, 1986 (Rollo, p. 62).
On February 4, 1987, respondent employer Belyca Corporation, appealed the order of the Labor
Arbiter to the Bureau of Labor Relations in Manila (Rollo, p. 67) which denied the appeal (Rollo, p.
80) and the motion for reconsideration (Rollo, p. 92). Thus, the instant petition received in this Court
by mail on February 20, 1987 (Rollo, p. 3).
In the resolution of March 4, 1987, the Second Division of this Court required respondent Union to
comment on the petition and issued a temporary restraining order (,Rollo, p. 95).
Respondent union filed its comment on March 30, 1987 (Rollo, p. 190); public respondents filed its
comment on April 8, 1987 (Rollo, p. 218).
On May 4, 1987, the Court resolved to give due course to the petition and to require the parties to
submit their respective memoranda within twenty (20) days from notice (Rollo, p. 225).
The Office of the Solicitor General manifested on June 11, 1987 that it is adopting the comment for
public respondents as its memorandum (Rollo, p. 226); memorandum for respondent ALU was filed
on June 30, 1987 (Rollo, p. 231); and memorandum for petitioner, on July 30, 1987 (Rollo, p. 435).
The issues raised in this petition are:
WHETHER OR NOT THE PROPOSED BARGAINING UNIT IS AN APPROPRIATE

BARGAINING UNIT.
II
WHETHER OR NOT THE STATUTORY REQUIREMENT OF 30% (NOW 20%) OF

THE EMPLOYEES IN THE PROPOSED BARGAINING UNIT, ASKING FOR A
CERTIFICATION ELECTION HAD BEEN STRICTLY COMPLIED WITH.
In the instant case, respondent ALU seeks direct certification as the sole and exclusive bargaining
agent of all the rank-and-file workers of the livestock and agro division of petitioner BELYCA
Corporation (Rollo, p. 232), engaged in piggery, poultry raising and the planting of agricultural crops
such as corn, coffee and various vegetables (Rollo, p. 26). But petitioner contends that the
bargaining unit must include all the workers in its integrated business concerns ranging from piggery,
poultry, to supermarts and cinemas so as not to split an otherwise single bargaining unit into
fragmented bargaining units (Rollo, p. 435).<äre||anº•1àw>
The Labor Code does not specifically define what constitutes an appropriate collective bargaining
unit. Article 256 of the Code provides:
Art. 256. Exclusive bargaining representative.—The labor

organization designated or selected by the majority of the employees
in an appropriate collective bargaining unit shall be exclusive
representative of the employees in such unit for the purpose of
collective bargaining. However, an individual employee or group of
employee shall have the right at any time to present grievances to
their employer.
According to Rothenberg, a proper bargaining unit maybe said to be a group of employees of a

given employer, comprised of all or less than all of the entire body of employees, which the collective
interests of all the employees, consistent with equity to the employer, indicate to be best suited to
serve reciprocal rights and duties of the parties under the collective bargaining provisions of the law
(Rothenberg in Labor Relations, p. 482).
This Court has already taken cognizance of the crucial issue of determining the proper constituency
of a collective bargaining unit.
Among the factors considered in Democratic Labor Association v. Cebu Stevedoring Co. Inc. (103
Phil 1103 [1958]) are: "(1) will of employees (Glove Doctrine); (2) affinity and unity of employee's
interest, such as substantial similarity of work and duties or similarity of compensation and working
conditions; (3) prior collective bargaining history; and (4) employment status, such as temporary,
seasonal and probationary employees".
Under the circumstances of that case, the Court stressed the importance of the fourth factor and
sustained the trial court's conclusion that two separate bargaining units should be formed in dealing
with respondent company, one consisting of regular and permanent employees and another
consisting of casual laborers or stevedores. Otherwise stated, temporary employees should be
treated separately from permanent employees. But more importantly, this Court laid down the test of
proper grouping, which is community and mutuality of interest.
Thus, in a later case, (Alhambra Cigar and Cigarette Manufacturing Co. et al. v. Alhambra
Employees' Association 107 Phil. 28 [1960]) where the employment status was not at issue but the
nature of work of the employees concerned; the Court stressed the importance of the second factor
otherwise known as the substantial-mutual-interest test and found no reason to disturb the finding of
the lower Court that the employees in the administrative, sales and dispensary departments perform
work which has nothing to do with production and maintenance, unlike those in the raw leaf, cigar,
cigarette and packing and engineering and garage departments and therefore community of interest
which justifies the format or existence as a separate appropriate collective bargaining unit.
Still later in PLASLU v. CIR et al. (110 Phil. 180 [1960]) where the employment status of the
employees concerned was again challenged, the Court reiterating the rulings, both in Democratic
Labor Association v. Cebu Stevedoring Co. Inc. supra and Alhambra Cigar and Cigarette Co. et al.
v. Alhambra Employees' Association (supra) held that among the factors to be considered are:
employment status of the employees to be affected, that is the positions and categories of work to
which they belong, and the unity of employees' interest such as substantial similarity of work and
duties.
In any event, whether importance is focused on the employment status or the mutuality of interest of
the employees concerned "the basic test of an asserted bargaining unit's acceptability is whether or
not it is fundamentally the combination which will best assure to all employees the exercise of their
collective bargaining rights (Democratic Labor Association v. Cebu Stevedoring Co. Inc. supra)
Hence, still later following the substantial-mutual interest test, the Court ruled that there is a
substantial difference between the work performed by musicians and that of other persons who
participate in the production of a film which suffice to show that they constitute a proper bargaining
unit. (LVN Pictures, Inc. v. Philippine Musicians Guild, 1 SCRA 132 [1961]).
Coming back to the case at bar, it is beyond question that the employees of the livestock and agro
division of petitioner corporation perform work entirely different from those performed by employees
in the supermarts and cinema. Among others, the noted difference are: their working conditions,
hours of work, rates of pay, including the categories of their positions and employment status. As
stated by petitioner corporation in its position paper, due to the nature of the business in which its
livestock-agro division is engaged very few of its employees in the division are permanent, the
overwhelming majority of which are seasonal and casual and not regular employees (Rollo, p. 26).
Definitely, they have very little in common with the employees of the supermarts and cinemas. To
lump all the employees of petitioner in its integrated business concerns cannot result in an
efficacious bargaining unit comprised of constituents enjoying a community or mutuality of interest.
Undeniably, the rank and file employees of the livestock-agro division fully constitute a bargaining
unit that satisfies both requirements of classification according to employment status and of the
substantial similarity of work and duties which will ultimately assure its members the exercise of their
collective bargaining rights.
II
It is undisputed that petitioner BELYCA Corporation (Livestock and Agro Division) employs more or
less two hundred five (205) rank-and-file employees and workers. It has no existing duly certified
collective bargaining agreement with any legitimate labor organization. There has not been any
certification election conducted in the proposed bargaining unit within the last twelve (12) months
prior to the filing of the petition for direct certification and/or certification election with the Ministry of
Labor and Employment, and there is no contending union requesting for certification as the sole and
exclusive bargaining representative in the proposed bargaining unit.
The records show that on the filing of the petition for certification and/or certification election on June
3, 1986; 124 employees or workers which are more than a majority of the rank-and-file employees or
workers in the proposed bargaining unit had signed membership with respondent ALU-TUCP and
had expressed their written consent and authorization to the filing of the petition. Thus, the Labor
Arbiter ordered the certification election on August 18, 1986 on a finding that 30% of the statutory
requirement under Art. 258 of the Labor Code has been met.
But, petitioner corporation contends that after June 3, 1986 four (4) employees resigned; six (6)
subsequently withdrew their membership; five (5) were retrenched; twelve (12) were dismissed for
illegally and unlawfully barricading the entrance to petitioner's farm; and one hundred (100) simply
abandoned their work.
Petitioner's claim was however belied by the Memorandum of its personnel officer to the 119
employees dated July 28, 1986 showing that the employees were on strike, which was confirmed by
the finding of the Bureau of Labor Relations to the effect that they went on strike on July 24, 1986
(Rollo, p. 419). Earlier the local union president, Warrencio Maputi; the Vice-president, Gilbert
Redoblado and three other active members of the union Carmen Saguing, Roberto Romolo and
Iluminada Bonio were dismissed and a complaint for unfair labor practice, illegal dismissal etc. was
filed by the Union in their behalf on July 2, 1986 before the NLRC of Cagayan de Oro City (Rollo, p.
415). The complaint was amended on August 20, 1986 for respondent Union to represent
<äre||anº• 1àw>
Warrencio Maputi and 137 others against petitioner corporation and Bello Casanova President and
General Manager for unfair labor practice, illegal dismissal, illegal lockout, etc. (Rollo, p. 416).
Under Art. 257 of the Labor Code once the statutory requirement is met, the Director of Labor
Relations has no choice but to call a certification election (Atlas Free Workers Union AFWU PSSLU
Local v. Noriel, 104 SCRA 565 [1981]; Vismico Industrial Workers Association (VIWA) v. Noriel, 131
SCRA 569 [1984]) It becomes in the language of the New Labor Code "Mandatory for the Bureau to
conduct a certification election for the purpose of determining the representative of the employees in
the appropriate bargaining unit and certify the winner as the exclusive bargaining representative of
all employees in the unit." (Federacion Obrera de la Industria Tabaquera y Otros Trabajadores de
Filipinas v. Noriel, 72 SCRA 24 [1976]; Kapisanan Ng Mga Manggagawa v. Noriel, 77 SCRA 414
[1977]); more so when there is no existing collective bargaining agreement. (Samahang
Manggagawa Ng Pacific Mills, Inc. v. Noriel, 134 SCRA 152 [1985]); and there has not been a
certification election in the company for the past three years (PLUM Federation of Industrial and
Agrarian Workers v. Noriel, 119 SCRA 299 [1982]) as in the instant case.
It is significant to note that 124 employees out of the 205 employees of the Belyca Corporation have
expressed their written consent to the certification election or more than a majority of the rank and
file employees and workers; much more than the required 30% and over and above the present
requirement of 20% by Executive Order No. 111 issued on December 24, 1980 and applicable only
to unorganized establishments under Art. 257, of the Labor Code, to which the BELYCA Corporation
belong (Ass. Trade Unions (ATU) v. Trajano, G.R. No. 75321, June 20, 1988).) More than that, any
doubt cast on the authenticity of signatures to the petition for holding a certification election cannot
be a bar to its being granted (Filipino Metals Corp. v. Ople 107 SCRA 211 [1981]). Even doubts as to
the required 30% being met warrant holding of the certification election (PLUM Federation of
Industrial and Agrarian Workers v. Noriel, 119 SCRA 299 [1982]). In fact, once the required
percentage requirement has been reached, the employees' withdrawal from union membership
taking place after the filing of the petition for certification election will not affect said petition. On the
contrary, the presumption arises that the withdrawal was not free but was procured through duress,
coercion or for a valuable consideration (La Suerte Cigar and Cigarette Factory v. Director of the
Bureau of Labor Relations, 123 SCRA 679 [1983]). Hence, the subsequent disaffiliation of the six (6)
employees from the union will not be counted against or deducted from the previous number who
had signed up for certification elections Vismico Industrial Workers Association (VIWA) v. Noriel 131
SCRA 569 [1984]). Similarly, until a decision, final in character, has been issued declaring the strike
<äre||anº• 1àw>
illegal and the mass dismissal or retrenchment valid, the strikers cannot be denied participation in
the certification election notwithstanding, the vigorous condemnation of the strike and the fact that
the picketing were attended by violence. Under the foregoing circumstances, it does not necessarily
follow that the strikers in question are no longer entitled to participate in the certification election on
the theory that they have automatically lost their jobs. (Barrera v. CIR, 107 SCRA 596 [1981]). For
obvious reasons, the duty of the employer to bargain collectively is nullified if the purpose of the
dismissal of the union members is to defeat the union in the consent requirement for certification
election. (Samahang Manggagawa Ng Via Mare v. Noriel, 98 SCRA 507 [1980]). As stressed by this
Court, the holding of a certification election is a statutory policy that should not be circumvented.
(George and Peter Lines Inc. v. Associated Labor Unions (ALU), 134 SCRA 82 [1986]).
Finally, as a general rule, a certification election is the sole concern of the workers. The only
exception is where the employer has to file a petition for certification election pursuant to Art. 259 of
the Labor Code because the latter was requested to bargain collectively. But thereafter the role of
the employer in the certification process ceases. The employer becomes merely a bystander (Trade
Union of the Phil. and Allied Services (TUPAS) v. Trajano, 120 SCRA 64 [1983]).
There is no showing that the instant case falls under the above mentioned exception. However, it will
be noted that petitioner corporation from the outset has actively participated and consistently taken
the position of adversary in the petition for direct certification as the sole and exclusive bargaining
representative and/or certification election filed by respondent Associated Labor Unions (ALU)-
TUCP to the extent of filing this petition for certiorari in this Court. Considering that a petition for
certification election is not a litigation but a mere investigation of a non-adversary character to
determining the bargaining unit to represent the employees (LVN Pictures, Inc. v. Philippine
Musicians Guild, supra; Bulakena Restaurant & Caterer v. Court of Industrial Relations, 45 SCRA 88
[1972]; George Peter Lines, Inc. v. Associated Labor Union, 134 SCRA 82 [1986]; Tanduay Distillery
Labor Union v. NLRC, 149 SCRA 470 [1987]), and its only purpose is to give the employees true
representation in their collective bargaining with an employer (Confederation of Citizens Labor
Unions CCLU v. Noriel, 116 SCRA 694 [1982]), there appears to be no reason for the employer's
objection to the formation of subject union, much less for the filing of the petition for a certification
election.
PREMISES CONSIDERED, (a) the petition is DISMISSED for lack of merit (b) resolution of the
Bureau of Labor Relations dated Nov. 24, 1986 is AFFIRMED; and the temporary restraining order
issued by the Court on March 4, 1987 is LIFTED permanently.
SO ORDERED.
Melencio-Herrera (Chairperson), Padilla, Sarmiento and Regalado, JJ., concur.
14) Me-Shurn vs. Me-Shurn Workers GR No. 156292 Jan. 11, 2005
THIRD DIVISION
[G.R. No. 156292. January 11, 2005]
ME-SHURN CORPORATION AND SAMMY CHOU, petitioners, vs. ME-

SHURN WORKERS UNION-FSM
AND ROSALINA CRUZ, respondents.

DECISION
PANGANIBAN, J.:
To justify the closure of a business and the termination of the services of the
concerned employees, the law requires the employer to prove that it suffered
substantial actual losses. The cessation of a companys operations shortly after the
organization of a labor union, as well as the resumption of business barely a month
after, gives credence to the employees claim that the closure was meant to discourage
union membership and to interfere in union activities. These acts constitute unfair labor
practices.
The Case
Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, seeking to
annul the November 29, 2002 Decision[2] of the Court of Appeals (CA) in CA-GR SP No.
69675, the decretal portion of which reads:
UPON THE VIEW WE TAKE OF THIS CASE, THUS, the judgment must be, as
it hereby is, AFFIRMED, and the present petition DISMISSED for lack of merit.
Costs shall be taxed against petitioners.
[3]
The affirmed November 29, 2001 Decision[4] of the National Labor Relations
Commission (NLRC), Third Division, disposed as follows:
WHEREFORE, the decision appealed from is hereby SET ASIDE, and respondent
Me-Shurn Corp. is hereby ordered to pay the complainants who appeared in the
proceedings conducted by the Labor Arbiter their full backwages from the date their
wages were withheld from them to the date of the finality of this decision.[5]
The Facts
On June 7, 1998, the regular rank and file employees of Me-Shurn Corporation
organized Me-Shurn Workers Union-FSM, an affiliate of the February Six Movement
(FSM).[6] Respondent union had a pending application for registration with the Bureau of
Labor Relations (BLR) through a letter dated June 11, 1998.[7]
Ten days later, or on June 17, 1998, petitioner corporation started placing on forced
leave all the rank and file employees who were members of the unions bargaining unit. [8]
On June 23, 1998, respondent union filed a Petition for Certification Election with
the Med-Arbitration Unit of the Department of Labor and Employment (DOLE), Regional
Office No. 3.[9]
Instead of filing an answer to the Petition, the corporation filed on July 27, 1998, a
comment stating that it would temporarily lay off employees and cease operations, on
account of its alleged inability to meet the export quota required by the Board of
Investment.[10]
While the Petition was pending, 184 union members allegedly submitted a
retraction/withdrawal thereof on July 14, 1998. As a consequence, the med-arbiter
dismissed the Petition. On May 7, 1999, Department of Labor and Employment (DOLE)
Undersecretary Rosalinda Dimapilis-Baldoz granted the unions appeal and ordered the
holding of a certification election among the rank and file employees of the
corporation.[11]
Meanwhile, on August 4, 1998, respondent union filed a Notice of Strike against
petitioner corporation on the ground of unfair labor practice (illegal lockout and union
busting). This matter was docketed as Case No. NCMB-RO3-BEZ-NZ-08-42-98.[12]
On August 31, 1998, Chou Fang Kuen (alias Sammy Chou, the other petitioner
herein) and Raquel Lamayra (the Filipino administrative manager of the corporation)
imposed a precondition for the resumption of operation and the rehiring of laid off
workers. He allegedly required the remaining union officers to sign an Agreement
containing a guarantee that upon their return to work, no union or labor organization
would be organized. Instead, the union officers were to serve as mediators between
labor and management.[13] After the signing of the Agreement, the operations of the
corporation resumed in September 1998.[14]
On November 5, 1998, the union reorganized and elected a new set of officers.
Respondent Rosalina Cruz was elected president.[15] Thereafter, it filed two Complaints
docketed as NLRC Case Nos. RAB-III-11-9586-98 and RAB-III-09-0322-99. These
cases were consolidated and assigned to Labor Arbiter Henry Isorena for compulsory
arbitration. Respondents charged petitioner corporation with unfair labor practice, illegal
dismissal, underpayment of wages and deficiency in separation pay, for which they
prayed for damages and attorneys fees.
The corporation countered that because of economic reversals, it was compelled to
close and cease its operations to prevent serious business losses; that under Article
283 of the Labor Code, it had the right to do so; that in August 1998, it had paid its 342
laid off employees separation pay and benefits in the total amount of P1,682,863.88;
and that by virtue of these payments, the cases had already become moot and
academic. It also averred that its resumption of operations in September 1998 had been
announced and posted at the Bataan Export Processing Zone, and that some of the
former employees had reapplied.
Petitioner corporation questioned the legality of the representation of respondent
union. Allegedly, it was not the latter, but the Me-Shurn Independent Employees Union -
- with Christopher Malit as president -- that was recognized as the existing exclusive
bargaining agent of the rank and file employees and as the one that had concluded a
Collective Bargaining Agreement (CBA) with the corporation on May 19, 1999. [16] Hence,
the corporation asserted that Undersecretary Dimapilis-Baldozs Decision ordering the
holding of a certification election had become moot and academic.
On the other hand, respondents contested the legality of the formation of the Me-
Shurn Independent Employees Union and petitioners recognition of it as the exclusive
bargaining agent of the employees. Respondents argued that the pendency of the
representation issue before the DOLE had barred the alleged recognition of the
aforementioned union.
Labor Arbiter Isorena dismissed the Complaints for lack of merit. He ruled that (1)
actual and expected losses justified the closure of petitioner corporation and its
dismissal of its employees; (2) the voluntary acceptance of separation pay by the
workers precluded them from questioning the validity of their dismissal; and (3) the
claim for separation pay lacked factual basis.[17]
On appeal, the NLRC reversed the Decision of Labor Arbiter Isorena. Finding
petitioners guilty of unfair labor practice, the Commission ruled that the closure of the
corporation shortly after respondent union had been organized, as well as the dismissal
of the employees, had been effected under false pretenses. The true reason therefor
was allegedly to bar the formation of the union. Accordingly, the NLRC held that the
illegally dismissed employees were entitled to back wages.[18]
After the denial of their Motion for Reconsideration,[19] petitioners elevated the cases
to the CA via a Petition for Certiorari under Rule 65.[20] They maintained that the NLRC
had committed grave abuse of discretion and serious errors of fact and law in reversing
the Decision of the labor arbiter and in finding that the corporations cessation of
operations in August 1998 had been tainted with unfair labor practice.
Petitioners added that respondent unions personality to represent the affected
employees had already been repudiated by the workers themselves in the certification
election conducted by the DOLE. Pursuant to the Decision of Undersecretary Dimapilis-
Baldoz in Case No. RO3 00 9806 RU 001, a certification election was held on
September 7, 2000, at the premises of petitioner corporation under the supervision of
the DOLE. The election had the following results:
Me Shurn Workers Union-FSM 1
No Union 135
Spoiled 2
Challenged 52
Total Votes Cast 190 [21]
Ruling of the Court of Appeals
The CA dismissed the Petition because of the failure of petitioners to submit

sufficient proof of business losses. It found that they had wanted merely to abort or
frustrate the formation of respondent union. The burden of proving that the dismissal of
the employees was for a valid or authorized cause rested on the employer.
The appellate court further affirmed the unions legal personality to represent the
employees. It held that (1) registration was not a prerequisite to the right of a labor
organization to litigate; and (2) the cases may be treated as representative suits, with
respondent union acting for the benefit of all its members.
Hence, this Petition.[22]
Issues
In their Supplemental Memorandum, petitioners submit the following issues for our
consideration:
(1) Whether the dismissal of the employees of petitioner Meshurn Corporation is for an
authorized cause, and
(2) Whether respondents can maintain a suit against petitioners.[23]
The Courts Ruling
The Petition lacks merit.

First Issue:
Validity of the Dismissal
The reason invoked by petitioners to justify the cessation of corporate operations

was alleged business losses. Yet, other than generally referring to the financial crisis in
1998 and to their supposed difficulty in obtaining an export quota, interestingly, they
never presented any report on the financial operations of the corporation during the
period before its shutdown. Neither did they submit any credible evidence to
substantiate their allegation of business losses.
Basic is the rule in termination cases that the employer bears the burden of showing
that the dismissal was for a just or authorized cause. Otherwise, the dismissal is
deemed unjustified. Apropos this responsibility, petitioner corporation should have
presented clear and convincing evidence[24] of imminent economic or business reversals
as a form of affirmative defense in the proceedings before the labor arbiter or, under
justifiable circumstances, even on appeal with the NLRC.
However, as previously stated, in all the proceedings before the two quasi-judicial
bodies and even before the CA, no evidence was submitted to show the corporations
alleged business losses. It is only now that petitioners have belatedly submitted the
corporations income tax returns from 1996 to 1999 as proof of alleged continued losses
during those years.
Again, elementary is the principle barring a party from introducing fresh defenses
and facts at the appellate stage.[25] This Court has ruled that matters regarding the
financial condition of a company -- those that justify the closing of its business and show
the losses in its operations -- are questions of fact that must be proven
below.[26]Petitioners must bear the consequence of their neglect. Indeed, their
unexplained failure to present convincing evidence of losses at the early stages of the
case clearly belies the credibility of their present claim.[27]
Obviously, on the basis of the evidence -- or the lack thereof -- the appellate court
cannot be faulted for ruling that the NLRC did not gravely abuse its discretion in finding
that the closure of petitioner corporation was not due to alleged financial losses.
At any rate, even if we admit these additional pieces of evidence, the circumstances
surrounding the cessation of operations of the corporation reveal the doubtful character
of its supposed financial reason.
First, the claim of petitioners that they were compelled to close down the company
to prevent further losses is belied by their resumption of operations barely a month after
the corporation supposedly folded up.
Moreover, petitioners attribute their loss mainly to their failure to obtain an export
quota from the Garments and Textile Export Board (GTEB). Yet, as pointed out by
respondents, the corporation resumed its business without first obtaining an export
quota from the GTEB. Besides, these export quotas pertain only to business with
companies in the United States and do not preclude the corporation from exporting its
products to other countries. In other words, the business that petitioner corporation
engaged in did not depend entirely on exports to the United States.
If it were true that these export quotas constituted the determining and immediate
cause of the closure of the corporation, then why did it reopen for business barely a
month after the alleged cessation of its operations?
Second, the Statements of Income and Deficit for the years 1996 and 1997 show
that at the beginning of 1996, the corporation had a deficit of P2,474,505. Yet, the
closure was effected only after more than a year from such year-end deficit; that is, in
the middle of 1998, shortly after the formation of the union.
On the other hand, the Statement of Income and Deficit for the year 1998 does not
reflect the extent of the losses that petitioner corporation allegedly suffered in the
months prior to its closure in July/August 1998. This document is not an adequate and
competent proof of the alleged losses, considering that it resumed operations in the
succeeding month of September.
Upon careful study of the evidence, it is clear that the corporation was more
profitable in 1997 than in 1996. By the end of 1997, it had a net income of P1,816,397.
If petitioners were seriously desirous of averting losses, why did the corporation not
close in 1996 or earlier, when it began incurring deficits? They have not satisfactorily
explained why the workers dismissal was effected only after the formation of respondent
union in September 1998.
We also take note of the allegation that after several years of attempting to organize
a union, the employees finally succeeded on June 7, 1998. Ten days later, without any
valid notice, all of them were placed on forced leave, allegedly because of lack of quota.
All these considerations give credence to their claim that the closure of the
corporation was a mere subterfuge, a systematic approach intended to dampen the
enthusiasm of the union members.[28]
Third, as a condition for the rehiring of the employees, the union officers were made
to sign an agreement that they would not form any union upon their return to work. This
move was contrary to law.
Fourth, notwithstanding the Petition for Certification Election filed by respondents
and despite knowledge of the pendency thereof, petitioners recognized a newly formed
union and hastily signed with it an alleged Collective Bargaining Agreement. Their
preference for the new union was at the expense of respondent union. Moncada Bijon
Factory v. CIR[29] held that an employer could be held guilty of discrimination, even if the
preferred union was not company-dominated.
Fifth, petitioners were not able to prove their allegation that some of the employees
contracts had expired even before the cessation of operations. We find this claim
inconsistent with their position that all 342 employees of the corporation were paid their
separation pay plus accrued benefits in August 1998.
Sixth, proper written notices of the closure were not sent to the DOLE and the
employees at least one month before the effectivity date of the termination, as required
under the Labor Code. Notice to the DOLE is mandatory to enable the proper
authorities to ascertain whether the closure and/or dismissals were being done in good
faith and not just as a pretext for evading compliance with the employers just obligations
to the affected employees.[30] This requirement is intended to protect the workers right to
security of tenure. The absence of such requirement taints the dismissal.
All these factors strongly give credence to the contention of respondents that the
real reason behind the shutdown of the corporation was the formation of their union.
Note that, to constitute an unfair labor practice, the dismissal need not entirely and
exclusively be motivated by the unions activities or affiliations. It is enough that the
discrimination was a contributing factor.[31] If the basic inspiration for the act of the
employer is derived from the affiliation or activities of the union, the formers assignment
of another reason, no matter how seemingly valid, is unavailing.[32]
Concededly, the determination to cease operations is a management prerogative
that the State does not usually interfere in. Indeed, no business can be required to
continue operating at a loss, simply to maintain the workers in employment. That would
be a taking of property without due process of law. But where it is manifest that the
closure is motivated not by a desire to avoid further losses, but to discourage the
workers from organizing themselves into a union for more effective negotiations with
management, the State is bound to intervene.[33]
Second Issue:
Legal Personality of Respondent Union
Neither are we prepared to believe petitioners argument that respondent union was
not legitimate. It should be pointed out that on June 29, 1998, it filed a Petition for
Certification Election. While this Petition was initially dismissed by the med-arbiter on
the basis of a supposed retraction, note that the appeal was granted and that
Undersecretary Dimapilis-Baldoz ordered the holding of a certification election.
The DOLE would not have entertained the Petition if the union were not a legitimate
labor organization within the meaning of the Labor Code. Under this Code, in an
unorganized establishment, only a legitimate union may file a petition for certification
election.[34] Hence, while it is not clear from the record whether respondent union is a
legitimate organization, we are not readily inclined to believe otherwise, especially in the
light of the pro-labor policies enshrined in the Constitution and the Labor Code.[35]
Verily, the union has the requisite personality to sue in its own name in order to
challenge the unfair labor practice committed by petitioners against it and its
members.[36] It would be an unwarranted impairment of the right to self-organization
through formation of labor associations if thereafter such collective entities would be
barred from instituting action in their representative capacity.[37]
Finally, in view of the discriminatory acts committed by petitioners against
respondent union prior to the holding of the certification election on September 27, 2000
-- acts that included their immediate grant of exclusive recognition to another union as a
bargaining agent despite the pending Petition for certification election -- the results of
that election cannot be said to constitute a repudiation by the affected employees of the
unions right to represent them in the present case.
WHEREFORE, the Petition is DENIED, and the assailed Decision AFFIRMED.
Costs against the petitioners.
SO ORDERED.
Sandoval-Gutierrez, Corona, Carpio-Morales, and Garcia, JJ., concur.

In some pleadings also spelled as Rosalinda.
[1]
Rollo, pp. 3-24.
[2]
Annex 1 of Petition; id., pp. 26-36. Penned by Justice Renato C. Dacudao and concurred in by Justices
Eugenio S. Labitoria (Division chairman) and Danilo B. Pine.
[3]
CA Decision, p. 11; id., p. 36.
[4]
Annex 5 of Petition; id., pp. 65-70. Penned by Commissioner Ireneo B. Bernardo and concurred in by
Presiding Commissioner Lourdes C. Javier and Commissioner Tito F. Genilo.
[5]
NLRC Decision, p. 5; id., p. 69.
[6]
Rollo, p. 27.
[7]
Ibid.
[8]
Respondents Memorandum, p. 2; id., p. 152.
[9]
Rollo, p. 27.
[10]
Id., p. 28.
[11]
Ibid.
[12]
Ibid.
[13]
Ibid.
[14]
Rollo, p. 30.
[15]
Id., p. 28.
[16]
Id., p. 53.
[17]
Annex 3; id., pp. 46-58.
[18]
Annex 5; id., pp. 65-70.
[19]
See NLRC Resolution dated January 24, 2002; CA rollo, p. 46.
[20]
CA rollo, pp. 2-17.
[21]
See Certification from DOLE Regional Office No. III signed by Geraldine M. Panlilio; id., p. 103.
[22]
This case was deemed submitted for decision on August 20, 2004, upon this Courts receipt of
petitioners Supplemental Memorandum signed by Attys. Ma. Victoria A. Soriano-Villadolid,
Michelle L. Yulo and Jean-Paul A. Acut. Earlier, on April 5, 2004, petitioners submitted their
regular Memorandum signed by Atty. Alan A. Leynes. Respondents Memorandum, signed by
Atty. Benjamin C. Alar, was received by this Court on April 1, 2004.
[23]
Petitioners Supplemental Memorandum, pp. 5-6; rollo, pp. 191-192. See also the statement of issues in
petitioners regular Memorandum; rollo, p. 163.
[24]
Camara Shoes v. Kapisanan ng mga Manggagawa sa Camara Shoes, 173 SCRA 127, May 5,
1989; Garcia v. National Labor Relations Commission, 153 SCRA 639, September 4,
1987; National Federation of Labor Unions v. Ople, 143 SCRA 124, July 22, 1986; Manila Hotel
Corporation v. NLRC, 141 SCRA 169, January 22, 1986.
[25]
CLLC E.G. Gochengco Workers Union v. NLRC, 161 SCRA 655, May 30, 1988.
[26]
Philippine Engineering Corporation v. Court of Industrial Relations, 41 SCRA 89, September 30, 1971.
[27]
Camara Shoes v. Kapisanan ng mga Manggagawa sa Camara Shoes, supra.
[28]
Philippine Engineering Corporation v. Court of Industrial Relations; supra, p. 99; per Zaldivar, J.
[29]
4 SCRA 756, March 30, 1962 (also cited in Philippine Charity Sweepstakes Office v. The Association
of Sweepstakes Staff Personnel, 115 SCRA 34, July 16, 1982).
[30]
Guerrero v. National Labor Relations Commission, 261 SCRA 301, August 30, 1996. See
also Wiltshire File Co., Inc. v. NLRC, 193 SCRA 665, February 7, 1991.
[31]
Philippine Engineering Corporation v. Court of Industrial Relations, supra.
[32]
Ibid.
[33]
Carmelcraft Corporation v. NLRC, 186 SCRA 393, June 6, 1990.
[34]
Article 257, Labor Code.
[35]
Article 246, ibid.
[36]
Article 242, ibid; La Carlota Sugar Central v. CIR, 64 SCRA 78, May 19, 1975.
[37]
La Carlota Sugar Central v. CIR; supra, p. 82; per Fernando, J.
15) Associated vs. Ferrer GR No. 82260 July 19, 1989

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 82260 July 19, 1989
ASSOCIATED LABOR UNIONS (ALU), petitioner,

vs.
HON. PURA FERRER-CALLEJA, DIRECTOR, BUREAU OF LABOR RELATIONS,
DEPARTMENT OF LABOR AND EMPLOYMENT AND NATIONAL FEDERATION OF LABOR
(NFL), respondents.
GANCAYCO, J.:
This is a petition for the issuance of the extraordinary remedy of certiorari for the reversal of the
Decision 1 of the Director of Bureau of Labor Relations ordering the holding of a certification election
among the workers of Soriano Fruits Corporation.
The antecedent facts of the case are as follows:
Petitioner Associated Labor Unions, ALU for brevity, had a collective bargaining agreement with the
employer Soriano Fruits Corporation which expired on September 30,1987. Prior to the said date, or
on June 22, 1987, petitioner and the employer signed a collective bargaining agreement which was
to take effect on September 1, 1987 and was to remain so until August 31, 1990. The said collective
bargaining agreement was unanimously approved and ratified by the members of the bargaining
unit.
However, on August 10, 1987, private respondent National Federation of Labor (NFL), filed a petition
for certification election questioning the majority status of the incumbent union, pursuant to
Executive Order 111 and its Implementing Rules, there being more than majority of its members who
have expressed doubts on the sincerity of the incumbent union. 2 Acting on the said petition the Med-
Arbiter scheduled a hearing on August 21, 1987 to determine the majority status of herein petitioner
but the NFL representative failed to appear despite due notice. Consequently, the hearing was reset
to September 8, 1987 to give NFL an opportunity to substantiate its claim but again, the NFL was not
represented. Thereafter, the parties were asked to submit their position papers. To bolster its claim,
ALU submitted several petitions signed by members of the bargaining unit to dismiss any petition
filed by any union which seeks to question the majority status of the incumbent union. The
signatories to the petition also reaffirmed its loyalty to ALU.
On October 2, 1987, the Med-Arbiter promulgated an Order 3 dismissing the petition for certification
election on the ground of failure to prosecute. An appeal to the Bureau of Labor Relations however,
proved fruitful. On December 22, 1987 the respondent Director of the Bureau of Labor Relations
held that the Med-Arbiter erred in dismissing the petition for certification election. The dispositive
portion of the decision reads thus:
WHEREFORE in view of the foregoing, the appeal of petitioner, National Federation

of Labor is hereby given due course and the Order of the Med-Arbiter is set aside.
Let, therefore a certification election proceed at Soriano Fruits Corporation, after a
pre-election conference to thresh out the list of eligible voters, with the following
choices:
1. National Federation of Labor (NFL);
2. Associated Labor Unions (ALU).
SO ORDERED. 4
ALU sought a reconsideration of the above-cited decision but to no avail. Hence, the instant petition
for certiorari.
Petitioner alleges that in granting the petition for certification election, the respondent Director acted
with grave abuse of discretion amounting to lack or in excess of jurisdiction in that:
I. THE HONORABLE DIRECTOR MISSED THE LEGAL INTENT OF ARTICLE 257

AS AMENDED BY EXECUTIVE ORDER 111.
II. THE HONORABLE DIRECTOR ERRED IN CLAIMING THAT THE PETITION IS

SUPPORTED BY MORE THAN TWENTY (20%) OF THE RANK AND FILE.
III. THE RATIFICATION OF THE CONCLUDED COLLECTIVE BARGAINING

AGREEMENT RENDERS THE CERTIFICATION ELECTION MOOT AND
ACADEMIC.
This Court finds the petition bereft of merit.
Petitioner hinges its claim on Art. 257 of the Labor Code which provides:
Art. 257. Petitions in unorganized establishments. In any establishment where there
is no certified bargaining agent, the petition for certification election filed by a
legitimate labor organization shall be supported by the written consent of at least
twenty (20%) percent of all the employees in the bargaining unit. Upon receipt and
verification of such petition, the Med-Arbiter shall automatically order the conduct of a
certification election.
But this provision finds no application in the case at bar primarily because it applies to unorganized
establishments. For the said provision to apply, the establishment concerned must have no certified
bargaining agent. This is not the case in the present petition where there was a collective bargaining
agreement entered into by the management of the Soriano Fruits Corporation and ALU, the
petitioner, which was then the bargaining agent. This Court however, finds that it is Article 256 as
amended by Executive Order 111 which must be considered in the resolution of the present petition.
The said article states:
Article 256. Representation Issues in Organized Establishments. In organized

establishments, when a petition questioning the majority status of the incumbent
bargaining agent is filed before the Ministry within the sixty (60) day period before the
expiration of the collective bargaining agreement, the Med- Arbiter shall automatically
order an election by secret ballot to ascertain the will of the employees in the
appropriate bargaining unit. (Emphasis supplied)
A review of the records of this case would confirm the fact that the petition for certification election
filed by NFL on August 10, 1987 was well within the prescribed sixty (60) day freedom period.
Petitioner however maintains that the respondent Director misconstrued the legal intent behind the
above- cited provision and that it should not have been given a literal interpretation. Petitioner insists
further that the light of the members of the bargaining unit to choose which union should represent
them is not an absolute one since a prior hearing must be had to ascertain the veracity of the
allegations contained in the petition.
This argument is untenable.
The provision of Article 256 which provides that the Med-Arbiter shall automatically order an
election is clear and leaves no room for further interpretation. The mere filing of a petition for
certification election within the freedom period is sufficient basis for the respondent Director to order
the holding of a certification election. The fact that NFL did not appear during the hearings set by the
Med-Arbiter is of no moment. As the Solicitor General correctly pointed out, there is no prohibition on
the conduct of hearings by the Med-Arbiter on the competing stands of the unions. Neither does the
law require the same to be held whereby the absence or presence therefrom of any union
representative would affect the petition for certification election. In fact, it is the denial of the petition
for certification election grounded solely on the absence of NFL in the scheduled hearings which is
frowned upon by the law. This is consistent with the principle in labor legislation that "certification
proceedings is not a litigation in the sense in which the term is ordinarily understood, but an
investigation of non-adversary and fact finding character. As such, it is not bound by technical rules
of evidence." 5
Petitioner suggests that to grant the petition for certification election would "open the floodgates to
unbridled and scrupulous (sic) petitions whose only objective is to prejudice the industrial peace and
stability existing in the Company." 6 This Court believes however that the workers' choice regarding
their representative who inevitably reflects and works for their common interest is of paramount
importance. This policy was lengthily explained in the concurring opinion of then Chief Justice
Fernando in the case of Confederation of Citizens Labor Unions (CCLU) vs. National Labor
Relations Commission 7 where he categorically stated that "the slightest doubt therefore cannot be
entertained that what possesses significance in a petition for certification is that through such a
device the employees are given the opportunity to make known who shall have the right to represent
them. What is equally important is that not only some but all of them should have the right to do so." 8
Petitioner next contends that the respondent Director erred in relying upon the claim of the
respondent Union that the petition for certification election is supported by more than twenty percent
(20%) of the rank and file considering that the said petition merely contained the lone signature of
the NFL representative.
This averment is likewise unmeritorious.
Petitioner bases its argument again on Article 257 which prescribes the twenty percent (20%)
requirement. But it must be reiterated that the said requirement applies only to unorganized
establishments. It is Article 256 instead which must be applied. A perusal of the said Article would
confirm the falsity of the claim of petitioner. Nowhere in the said provision does it require the written
consent of twenty percent (20%) of the employees in the bargaining unit. Hence, the issue of
whether or not the petition for certification election is supported by twenty percent (20%) of the
bargaining unit concerned is immaterial to the case at bar. What is essential is that the petition was
filed during the sixty-day freedom period.
The petition to dismiss the petition for certification elections 9 filed by NFL and signed by some 224
employees signifying their satisfaction with the services of the incumbent union should not be given
any weight at all. The possibility that the workers were merely coerced to sign the petition such that
they did so for fear of reprisal from the members of ALU is not remote. However, this does not
discount the possibility that the workers voluntarily signed the said petition. Whatever reason the
workers may have had for signing the same may be ascertained once a certification election is held.
It is in this democratic process that the workers are given the opportunity to freely choose, by secret
ballot, who they want to represent them. In this manner, the workers are free of any undue pressure
which either competing union may exert upon them.
Finally, the petitioner assails the decision of the respondent Director on the ground that "the
ratification of the collective bargaining agreement renders the certification election moot and
academic." 10
This contention finds no basis in law.
The petitioner was obviously referring to the contract-bar rule where the law prohibits the holding of
certification elections during the lifetime of the collective bargaining agreement. Said agreement was
hastily and prematurely entered into apparently in an attempt to avoid the holding of a certification
election. The records show that the old collective bargaining agreement of the petitioner with Soriano
Fruits Corporation was to expire on August 31, 1987. However, three (3) months and eight (8) days
before its expiry date, or on June 22, 1987, the petitioner renewed the same with the consent and
collaboration of management. The renewed agreement was then ratified by the members of the
bargaining unit and was thereafter sent to the Bureau of Labor Relations for certification. In the
meantime, on August 10, 1987 (21 days before the expiration of the old collective bargaining
agreement on August 31, 1987) a petition for certification election was filed by respondent union,
NFL. From the foregoing facts, it is quite obvious that the renewed agreement cannot constitute a
bar to the instant petition for certification election for the very reason that the same was not yet in
existence when the petition for certification election was filed on August 10, 1987 inasmuch as the
same was to take effect only on September 1, 1987, after the old agreement expires on August 31,
1987.
In the case of Associated Trade Unions-ATU vs. Noriel, 11 this Court held that "it is indubitably clear
from the facts heretofore unfolded that management and petitioner herein proceeded with such
indecent haste in renewing their CBA way ahead of the sixty-day freedom period in their obvious
desire to frustrate the will of the rank and file employees in selecting their bargaining representative.
To countenance the actuation of the company and the petitioner herein would be violative of the
employees constitutional right to self-organization. 12
The Solicitor General, in his comment, brought the attention of this Court to the fact that petitioner
had violated the provisions of Article 25413 when it renewed the collective bargaining agreement
before the commencement of the sixty-day freedom period. This Court does not subscribe to this
view. What the aforecited rule prohibits is the modification and alteration of the present collective
bargaining agreement during its lifetime. In the present case, the alterations and modifications were
to take effect only on September 1, 1987, i.e., after the expiration of the old agreement. It must be
noted that the new agreement did not suspend the old one. Neither did it terminate nor modify the
same. Petitioner therefore did not commit any violation of Article 254 of the Labor Code, contrary to
the allegations of the Solicitor General.
However, it is apparent that certiorari does not lie in the instant petition for this Court does not see
any substantial reason to withhold the primordial right of workers to select their bargaining
representative.
WHEREFORE, premises considered, the instant petition is DISMISSED for lack of merit. The
temporary restraining order issued by resolution of this Court of July 11, 1988 is hereby lifted and
declared to be of no force and effect. The decision is immediately executory. No costs.
SO ORDERED.
Narvasa, Cruz, Grino-Aquino and Medialdea, JJ., concur.
Footnotes
1 Penned by Hon. Pura Ferrer-Calleja.
2 Page 4, Rollo.
3 Penned by Hon. Conrado Macasa, Sr.
4 Page 121, Rollo.
5 LVN Pictures, Inc. vs. Philippine Musician's Guild, 110 Phil. 728 (1961).
6 Page 6, Rollo.
7 60 SCRA 467 (1974) citing Federation of the United Workers Organization vs. CIR,
54 SCRA 305 (1973).
8 Ibid.
9 Annex C, Petition.
10 Page 8, Rollo.
11 88 SCRA 96 (1979).
12 Ibid, 101, citing Antipolo Highway Lines vs. Inciong, 64 SCRA 441 (1975).
13 Article 254 provides that "when there is a collective bargaining agreement, the
duty to bargain collectively shall also mean that neither party shall terminate or
modify such agreement during its lifetime. However, either party can serve a written
notice to terminate or modify the same at least sixty (60) days prior to its expiration
date. It shall be the duty of both parties to respect the terms and conditions of the
existing agreement during the sixty-day period and/or until a new agreement is
reached by the parties.
16) National vs. Secretary GR No. 104556 March 9, 1998

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 104556 March 19, 1998
NATIONAL FEDERATION OF LABOR (NFL), petitioner,

vs.
THE SECRETARY OF LABOR OF THE REPUBLIC OF THE PHILIPPINES AND HIJO
PLANTATION INC., (HPI), respondents.
MENDOZA, J.:
Petitioner NFL (National Federation of Labor) was chosen the bargaining agent of rank-and-file
employees of the Hijo Plantation Inc. (HPI) in Mandaum, Tagum, Davao del Norte at a certification
election held on August 20, 1989. Protests filed by the company and three other unions against the
results of the election were denied by the Department of Labor and Employment in its resolution
dated February 14, 1991 but, on motion of the company (HPI), the DOLE reconsidered its resolution
and ordered another certification election to be held. The DOLE subsequently denied petitioner
NFL's motion for reconsideration.
The present petition is for certiorari to set aside orders of the Secretary of Labor and Employment
dated August 29, 1991, December 26, 1991 and February 17, 1992, ordering the holding of a new
certification election to be conducted in place of the one held on August 20, 1989 and, for this
purpose, reversing its earlier resolution dated February 14, 1991 dismissing the election protests of
private respondent and the unions.
The facts of the case are as follows:
On November 12, 1988, a certification election was conducted among the rank-and-file employees
of the Hijo Plantation, Inc. resulting in the choice of "no union." However, on July 3, 1989, on
allegations that the company intervened in the election, the Director of the Bureau of Labor Relations
nullified the results of the certification election and ordered a new one to be held.
The new election was held on August 20, 1989 under the supervision of the DOLE Regional Office in
Davao City with the following results:
Total Votes cast 1,012
Associated Trade Unions (ATU) 39
RUST KILUSAN 5
National Federation of Labor (NFL) 876
Southern Philippines Federation of Labor 4
SANDIGAN 6
UFW 15
No Union 55
Invalid 13
The Trust Union Society and Trade Workers-KILUSAN (TRUST-Kilusan), the United Lumber and
General Workers of the Philippines (ULGWP), the Hijo Labor Union and the Hijo Plantation, Inc.
sought the nullification of the results of the certification election on the ground that it was conducted
despite the pendency of the appeals filed by Hijo Labor Union and ULGWP from the order, dated
August 17, 1989, of the Med-Arbiter denying their motion for intervention. On the other hand, HPI
claimed that it was not informed or properly represented at the pre-election conference. It alleged
that, if it was represented at all in the pre-election conference, its representative acted beyond his
authority and without its knowledge. Private respondent also alleged that the certification election
was marred by massive fraud and irregularities and that out of 1,692 eligible voters, 913,
representing 54% of the rank-and-file workers of private respondent, were not able to vote, resulting
in a failure of election.
On January 10, 1990, Acting Labor Secretary Dionisio dela Serna directed the Med-Arbiter, Phibun
D. Pura, to investigate the company's claim that 54% of the rank-and-file workers were not able to
vote in the certification election.
In his Report and Recommendation, dated February 9, 1990, Pura stated:

1. A majority of the rank-and-file workers had been disfranchised in the election of August 20, 1989
because of confusion caused by the announcement of the company that the election had been
postponed in view of the appeals of ULGWP and Hijo Labor Union (HLU) from the order denying
their motions for intervention. In addition, the election was held on a Sunday which was non-working
day in the company.
2. There were irregularities committed in the conduct of the election. It was possible that some
people could have voted for those who did not show up. The election was conducted in an open and
hot area. The secrecy of the ballot had been violated. Management representatives were not around
to identify the workers.
3. The total number of votes cast, as duly certified by the representation officer, did not tally with the
41-page listings submitted to the Med-Arbitration Unit. The list contained 1,008 names which were
checked or encircled (indicating that they had voted) and 784 which were not, (indicating that they
did not vote), or a total of 1,792. but according to the representation officer the total votes cast in the
election was 1,012.
Med-Arbiter Pura reported that he interviewed eleven employees who claimed that they were not
able to vote and who were surprised to know that their names had been checked to indicate that
they had voted.
But NFL wrote a letter to Labor Secretary Ruben Torres complaining that it had not been informed of
the investigation conducted by Med-Arbiter Pura and so was not heard on its evidence. For this
reason, the Med-Arbiter was directed by the Labor Secretary to hear interested parties.
The Med-Arbiter therefore summoned the unions. TRUST-Kilusan reiterated its petition for the
annulment of the results of the certification election. Hijo Labor Union manifested that it was joining
private respondent HPI's appeal, adopting as its own the documentary evidence presented by the
company, showing fraud in the election of August 20, 1989. On the other hand, petitioner NFL
reiterated its contention that management had no legal personality to file an appeal because it was
not a party to the election but was only a bystander which did not even extend assistance in the
election. Petitioner denied that private respondent HPI was not represented in the pre-election
conference, because the truth was that a certain Bartolo was present on behalf of the management
and he in fact furnished the DOLE copies of the list of employees, and posted in the company
premises notices of the certification election.
Petitioner NFL insisted that more than majority of the workers voted in the election. It claimed that
out of 1,692 qualified voters, 1,012 actually voted and only 680 failed to cast their vote. It charged
management with resorting to all kinds of manipulation to frustrate the election and make the "Non
Union" win.
In a resolution dated February 14, 1991, the DOLE upheld the August 20, 1989 certification election.
With respect to claim that election could not be held in view of the pendency of the appeals of the
ULGWP and Hijo Labor Union from the order of the Med-Arbiter denying their motions for
intervention, the DOLE said: 1
. . . even before the conduct of the certification election on 12 November 1988 which was
nullified, Hijo Labor Union filed a motion for interventions. The same was however, denied for
being filed unseasonably, and as a result it was not included as one of the choices in the
said election. After it has been so disqualified thru an order which has become final and
executory, ALU filed a second motion for intervention when a second balloting was ordered
conducted. Clearly, said second motion is proforma and intended to delay the proceedings.
Being so, its appeal from the order of denial did not stay the election and the Med-Arbiter
was correct and did not violate any rule when he proceeded with the election even with the
appeal. In fact, the Med-Arbiter need not rule on the motion as it has already been disposed
of with finality.
The same is true with the motion for intervention of ULGWP. The latter withdrew as a party
to the election on September 1988 and its motion to withdraw was granted by the Med-
Arbiter on October motion for intervention filed before the conduct of a second balloting
where the choices has already been pre-determined.
Let it be stressed that ULGWP and HLU were disqualified to participate in the election
through valid orders that have become final and executory even before the first certification
election was conducted. Consequently, they may not be allowed to disrupt the proceeding
through the filing of nuisance motions. Much less are they possessed of the legal standing to
question the results of the second election considering that they are not parties thereto.
The DOLE gave no weight to the report of the Med-Arbiter that the certification election was marred
by massive fraud and irregularities. Although affidavits were submitted showing that the election was
held outside the company premises and private vehicles were used as makeshift precincts, the
DOLE found that this was because respondent company did not allow the use of its premises for the
purpose of holding the election, company guards were allegedly instructed not to allow parties,
voters and DOLE representation officers to enter the company premises, and notice was posted on
the door of the company that the election had been postponed.
Nor was weight given to the findings of the Med-Arbiter that a majority of the rank-and-file workers
had been disfranchised in the August 20, 1989 election and that the secrecy of the ballot had been
violated, first, because the NFL was not given notice of the investigation nor the chance to present
its evidence to dispute this finding and, second, the Med Arbiter's report was not supported by the
minutes of the proceedings nor by any record of the interviews of the 315 workers. Moreover, it was
pointed out that the report did not state the names of the persons investigated, the questions asked
and the answers given. The DOLE held that the report was "totally baseless."
The resolution of February 14, 1991 concluded with a reiteration of the rule that the choice of the
exclusive bargaining representative is the sole concern of the workers. It said: "If indeed there were
irregularities committed during the election, the contending unions should have been the first to
complain considering that they are the ones which have interest that should be protected." 2
Accordingly, the Labor Secretary denied the petition to annul the election filed by the ULGWP,
TRUST-KILUSAN, HLU and the HPI and instead certified petitioner NFL as the sole and exclusive
bargaining representative of the rank-and-file employees of private respondent HPI.
However, on motion of HPI, the Secretary of Labor, on August 29, 1991, reversed his resolution of
February 14, 1991. Petitioner NFL filed a motion for reconsideration but its motion was denied in an
order, dated December 26, 1991. Petitioner's second motion for reconsideration was likewise denied
in another order dated February 17, 1992. Hence, this petition.
First. Petitioner contends that certification election is the sole concern of the employees and the
employer is a mere bystander. The only instance wherein the employer may actively participate is
when it files a petition for certification election under Art. 258 of the Labor Code because it is
requested to bargain collectively. Petitioner says that this is not the case here and so the DOLE
should not have given due course to private respondent's petition for annulment of the results of the
In his resolution of August 29, 1991, the Secretary of Labor said he was reversing his earlier
resolution because "workers of Hijo Plantation, Inc. have deluged this Office with their letter-appeal,
either made singly or collectively expressing their wish to have a new certification election
conducted" and that as a result "the firm position we held regarding the integrity of the electoral
exercise had been somewhat eroded by this recent declaration of the workers, now speaking in their
sovereign capacity."
It is clear from this, that what the DOLE Secretary considered in reversing its earlier rulings was not
the petition of the employer but the letter-appeals that the employees sent to his office denouncing
the irregularities committed during the August 20, 1989 certification election. The petition of private
respondent was simply the occasion for the employees to voice their protests against the election.
Private respondent HPI attached to its Supplemental Appeal filed on September 5, 1989 the
affidavits and appeals of more or less 784 employees who claimed that they had been disfranchised,
as a result of which they were not able to cast their votes at the August 20, 1989 election. It was the
protests of employees which moved the DOLE to reconsider its previous resolution of February 14,
1991, upholding the election.
Nor is it improper for private respondent to show interest in the conduct of the election. Private
respondent is the employer. The manner in which the election was held could make the difference
between industrial strife and industrial harmony in the company. What an employer is prohibited
from doing is to interfere with the conduct of the certification election for the purpose of influencing
its outcome. But certainly an employer has an abiding interest in seeing to it that the election is
clean, peaceful, orderly and credible.
Second. The petitioner argues that any protest concerning the election should be registered and
entered into the minutes of the election proceedings before it can be considered. In addition, the
protest should be formalized by filing it within five (5) days. Petitioner avers that these requirements
are condition precedents in the filing of an appeal. Without these requisites the appeal cannot
prosper. It cites the following provisions of Book V, Rule VI of the Implementing Rules and
Regulations of the Labor Code:
Sec. 3. Representation officer may rule on any on-the-spot question. — The Representation
officer may rule on any on-the-spot question arising from the conduct of the election. The
interested party may however, file a protest with the representation officer before the close of
the proceedings.
Protests not so raised are deemed waived. Such protests shall be contained in the minutes
of the proceedings.
Sec. 4. Protest to be decided in twenty (20) working days. — Where the protest is formalized
before the med-arbiter within five (5) days after the close of the election proceedings, the
med-arbiter shall decide the same within twenty (20) working days from the date of its
formalization. If not formalized within the prescribed period, the protest shall be deemed
dropped. The decision may be appealed to the Bureau in the same manner and on the same
grounds as provided under Rule V.
In this case, petitioner maintains that private respondent did not make any protest regarding the
alleged irregularities (e.g., massive disfranchisement of employees) during the election. Hence, the
appeal and motions for reconsideration of private respondent HPI should have been dismissed
summarily.
The complaint in this case was that a number of employees were not able to cast their votes
because they were not properly notified of the date. They could not therefore have filed their protests
within five (5) days. At all events, the Solicitor General states, that the protests were not filed within
five (5) days, is a mere technicality which should not be allowed to prevail over the workers'
welfare. 3 As this Court stressed in LVN Pictures, Inc. v. Phil. Musicians Guild, 4 it is essential that
the employees must be accorded an opportunity to freely and intelligently determine which labor
organization shall act in their behalf. The workers in this case were denied this opportunity. Not only
were a substantial number of them disfranchised, there were, in addition, allegations of fraud and
other irregularities which put in question the integrity of the election. Workers wrote letters and made
complaints protesting the conduct of the election. The Report of Med-Arbiter Pura who investigated
these allegations found the allegations of fraud and irregularities to be true.
In one case this Court invalidated a certification election upon a showing of disfranchisement, lack of
secrecy in the voting and bribery. 5 We hold the same in this case. The workers' right to self-
organization as enshrined in both the Constitution and Labor Code would be rendered nugatory if
their right to choose their collective bargaining representative were denied. Indeed, the policy of the
Labor Code favors the holding of a certification election as the most conclusive way of choosing the
labor organization to represent workers in a collective bargaining unit. 6 In case of doubt, the doubt
should be resolved in favor of the holding of a certification election.
Third. Petitioner claims that the contending unions, namely, the Association of Trade Union (ATU),
the Union of Filipino Workers (UFW), as well as the representation officers of the DOLE affirmed the
regularity of the conduct of the election and they are now estopped from questioning the election.
In its comment, ATU-TUCP states,
. . . The representative of the Association of Trade Unions really attest to the fact that we
cannot really identify all the voters who voted on that election except some workers who
were our supporters in the absence of Hijo Plantation representatives. We also attest that the
polling precinct were not conducive to secrecy of the voters since it was conducted outside of
the Company premises. The precincts were (sic) the election was held were located in a
passenger waiting shed infront of the canteen across the road; on the yellow pick-up; at the
back of a car; a waiting shed near the Guard House and a waiting shed infront of the Guard
House across the road. Herein private respondents also observed during the election that
there were voters who dictated some voters the phrase "number 3" to those who were
casting their votes and those who were about to vote. Number 3 refers to the National
Federation of Labor in the official ballot.
ATU-TUCP explains that it did not file any protest because it expected workers who had been
aggrieved by the conduct of the election would file their protest since it was in their interests that
they do so.
Fourth. Petitioner points out that the letter-appeals were written almost two years after the election
and they bear the same dates (May 7 and June 14, 1991); they are not verified; they do not contain
details or evidence of intelligent acts; and they do not explain why the writers failed to vote.
Petitioner contends that the letter-appeals were obtained through duress by the company.
We find the allegations to be without merit. The records shows that as early as August 22 and 30,
1989, employees already wrote letters/affidavits/
manifestoes alleging irregularities in the elections and disfranchisement of workers. 7 As the Solicitor
General says in his Comment, 8 these affidavits and manifestoes, which were attached as Annexes
"A" to "CC" and Annexes "DD" to "DD-33" to private respondent's Supplemental Petition of
September 5, 1989 — just 16 days after the August 20, 1989 election. It is not true therefore that the
employees slept on their rights.
As to the claim that letters dated May 7, 1991 and June 14, 1991 bear these same dates because
they were prepared by private respondent HPI and employees were merely asked to sign them,
suffice it to say that this is plain speculation which petitioner has not proven by competent evidence.
As to the letters not being verified, suffice it to say that technical rules of evidence are not binding in
labor cases.
The allegation that the letters did not contain evidence of intelligent acts does not have merit. The
earlier letters 9 of the workers already gave details of what they had witnessed during the election,
namely the open balloting (with no secrecy), and the use of NFL vehicles for polling precinct. These
letters sufficiently give an idea of the irregularities of the certification election. Similarly, the letters
containing the signatures of those who were not able to vote are sufficient. They indicate that the
writers were not able to vote because they thought the election had been postponed, especially
given the fact that the two unions had pending appeals at the time from orders denying them the
right to intervene in the election.
WHEREFORE, the petition for certiorari is DISMISSED and the questioned orders of the Secretary
of Labor and Employment are AFFIRMED.
SO ORDERED.
Regalado, Melo, Puno and Martinez, JJ., concur.
Footnotes
1 Rollo, pp. 185-186.
2 Id., p. 189.
3 Id., p. 238.
4 1 SCRA 132 (1961).
5 Confederation of Citizens Labor Unions v. Noriel, 116 SCRA 699 (1982).
6 See Western Agusan Workers Union-Local 101 of the United Lumber v. Trajano,
96 SCRA 622 (1991).
7 Rollo, pp. 112-175.
8 Id., p. 236.
9 Id., pp. 112-175.

17) Tagaytay vs. PGTWO GR No. 142000 Jan. 22, 2003
THIRD DIVISION
[G.R. No. 142000. January 22, 2003]
TAGAYTAY HIGHLANDS INTERNATIONAL GOLF CLUB

INCORPORATED, petitioner, vs. TAGAYTAY HIGHLANDS
EMPLOYEES UNION-PGTWO, respondent.
DECISION
CARPIO-MORALES, J.:
Before this Court on certiorari under Rule 45 is the petition of the Tagaytay
Highlands International Golf Club Incorporated (THIGCI) assailing the February 15,
2002 decision of the Court of Appeals denying its petition to annul the Department of
Labor and Employment (DOLE) Resolutions of November 12, 1998 and December 29,
1998.
On October 16, 1997, the Tagaytay Highlands Employees Union (THEU)Philippine
Transport and General Workers Organization (PTGWO), Local Chapter No. 776, a
legitimate labor organization said to represent majority of the rank-and-file employees of
THIGCI, filed a petition for certification election before the DOLE Mediation-Arbitration
Unit, Regional Branch No. IV.
THIGCI, in its Comment[1] filed on November 27, 1997, opposed THEUs petition for
certification election on the ground that the list of union members submitted by it was
defective and fatally flawed as it included the names and signatures of supervisors,
resigned, terminated and absent without leave (AWOL) employees, as well as
employees of The Country Club, Inc., a corporation distinct and separate from THIGCI;
and that out of the 192 signatories to the petition, only 71 were actual rank-and-file
employees of THIGCI.
THIGCI thus submitted a list of the names of its 71 actual rank-and-file employees
which it annexed[2] to its Comment to the petition for certification election. And it therein
incorporated the following tabulation[3] showing the number of signatories to said petition
whose membership in the union was being questioned as disqualified and the reasons
for disqualification:
# of Signatures Reasons for Disqualification

13 Supervisors of THIGCI
6 Resigned employees of THIGCI
2 AWOL employees of THIGCI
53 Rank-and-file employees of The Country Club at Tagaytay Highlands, Inc.
14 Supervisors of The Country Club at Tagaytay Highlands, Inc.
6 Resigned employees of The Country Club at Tagaytay Highlands, Inc.
3 Terminated employees of The Country Club at Tagaytay Highlands, Inc.
1 AWOL employees of The Country Club at Tagaytay Highlands, Inc.
4 Signatures that cannot be deciphered
16 Names in list that were erased
2 Names with first names only
THIGCI also alleged that some of the signatures in the list of union members were
secured through fraudulent and deceitful means, and submitted copies of the
handwritten denial and withdrawal of some of its employees from participating in the
petition.[4]
Replying to THIGCIs Comment, THEU asserted that it had complied with all the
requirements for valid affiliation and inclusion in the roster of legitimate labor
organizations pursuant to DOLE Department Order No. 9, series of 1997, [5] on account
of which it was duly granted a Certification of Affiliation by DOLE on October 10,
1997;[6] and thatSection 5, Rule V of said Department Order provides that the legitimacy
of its registration cannot be subject to collateral attack, and for as long as there is no
final order of cancellation, it continues to enjoy the rights accorded to a legitimate
organization.
THEU thus concluded in its Reply[7] that under the circumstances, the Med-Arbiter
should, pursuant to Article 257 of the Labor Code and Section 11, Rule XI of DOLE
Department Order No. 09, automatically order the conduct of a certification election.
By Order of January 28, 1998, [8] DOLE Med-Arbiter Anastacio Bactin ordered the
holding of a certification election among the rank-and-file employees of THIGCI in this
wise, quoted verbatim:
We evaluated carefully this instant petition and we are of the opinion that it is
complete in form and substance. In addition thereto, the accompanying documents
show that indeed petitioner union is a legitimate labor federation and its
local/chapter was duly reported to this Office as one of its affiliate
local/chapter. Its due reporting through the submission of all the requirements for
registration of a local/chapter is a clear showing that it was already included in the
roster of legitimate labor organizations in this Office pursuant to Department Order
No. 9 Series of 1997 with all the legal right and personality to institute this instant
petition. Pursuant therefore to the provisions of Article 257 of the Labor Code, as
amended, and its Implementing Rules as amended by Department Order No. 9, since
the respondents establishment is unorganized, the holding of a certification election is
mandatory for it was clearly established that petitioner is a legitimate labor
organization. Giving due course to this petition is therefore proper and
appropriate. (Emphasis supplied)
[9]
Passing on THIGCIs allegation that some of the union members are supervisory,
resigned and AWOL employees or employees of a separate and distinct corporation,
the Med-Arbiter held that the same should be properly raised in the exclusion-inclusion
proceedings at the pre-election conference. As for the allegation that some of the
signatures were secured through fraudulent and deceitful means, he held that it should
be coursed through an independent petition for cancellation of union registration which
is within the jurisdiction of the DOLE Regional Director. In any event, the Med-Arbiter
held that THIGCI failed to submit the job descriptions of the questioned
employees and other supporting documents to bolster its claim that they are
disqualified from joining THEU.
THIGCI appealed to the Office of the DOLE Secretary which, by Resolution of June
4, 1998, set aside the said Med-Arbiters Order and accordingly dismissed the petition
for certification election on the ground that there is a clear absence of community or
mutuality of interests, it finding that THEU sought to represent two separate bargaining
units (supervisory employees and rank-and-file employees) as well as employees of two
separate and distinct corporate entities.
Upon Motion for Reconsideration by THEU, DOLE Undersecretary Rosalinda
Dimalipis-Baldoz, by authority of the DOLE Secretary, issued DOLE Resolution of
November 12, 1998[10] setting aside the June 4, 1998 Resolution dismissing the petition
for certification election. In the November 12, 1998 Resolution, Undersecretary
Dimapilis-Baldoz held that since THEU is a local chapter, the twenty percent (20%)
membership requirement is not necessary for it to acquire legitimate status, hence, the
alleged retraction and withdrawal of support by 45 of the 70 remaining rank-and-file
members . . . cannot negate the legitimacy it has already acquired before the
petition; that rather than disregard the legitimate status already conferred on THEU by
the Bureau of Labor Relations, the names of alleged disqualified supervisory employees
and employees of the Country Club, Inc., a separate and distinct corporation, should
simply be removed from the THEUs roster of membership; and that regarding the
participation of alleged resigned and AWOL employees and those whose signatures are
illegible, the issue can be resolved during the inclusion-exclusion proceedings at the
pre-election stage.
The records of the case were thus ordered remanded to the Office of the Med-
Arbiter for the conduct of certification election.
THIGCIs Motion for Reconsideration of the November 12, 1998 Resolution having
been denied by the DOLE Undersecretary by Resolution of December 29, 1998, [11] it filed
a petition for certiorari before this Court which, by Resolution of April 14,
1999,[12] referred it to the Court of Appeals in line with its pronouncement in National
Federation of Labor (NFL) v. Hon. Bienvenido E. Laguesma, et al.,[13] and in strict
observance of the hierarchy of courts, as emphasized in the case of St. Martin Funeral
Home v. National Labor Relations Commission.[14]
By Decision of February 15, 2000,[15] the Court of Appeals denied THIGCIs Petition
for Certiorari and affirmed the DOLE Resolution dated November 12, 1998. It held that
while a petition for certification election is an exception to the innocent bystander rule,
hence, the employer may pray for the dismissal of such petition on the basis of lack of
mutuality of interests of the members of the union as well as lack of employer-employee
relationship following this Courts ruling in Toyota Motor Philippines Corporation v.
Toyota Motor Philippines Corporation Labor Union et al[16] and Dunlop Slazenger [Phils.]
v. Hon. Secretary of Labor and Employment et al,[17] petitioner failed to adduce
substantial evidence to support its allegations.
Hence, the present petition for certiorari, raising the following
ISSUES/ASSIGNMENT OF ERRORS:
THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE

RESOLUTION DATED 12 NOVEMER 1998 HOLDING THAT SUPERVISORY
EMPLOYEES AND NON-EMPLOYEES COULD SIMPLY BE REMOVED FROM
APPELLEES ROSTER OF RANK-AND-FILE MEMBERSHIP INSTEAD OF
RESOLVING THE LEGITIMACY OF RESPONDENT UNIONS STATUS
THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE

RESOLUTION DATED 12 NOVEMBER 1998 HOLDING THAT THE
DISQUALIFIED EMPLOYEES STATUS COULD READILY BE RESOLVED
DURING THE INCLUSION AND EXCLUSION PROCEEDINGS
THE COURT OF APPEALS GRIEVOUSLY ERRED IN NOT HOLDING THAT

THE ALLEGATIONS OF PETITIONER HAD BEEN DULY PROVEN BY
FAILURE OF RESPONDENT UNION TO DENY THE SAME AND BY THE
SHEER WEIGHT OF EVIDENCE INTRODUCED BY PETITIONER AND
CONTAINED IN THE RECORDS OF THE CASE [18]
The statutory authority for the exclusion of supervisory employees in a rank-and-file

union, and vice-versa, is Article 245 of the Labor Code, to wit:
Article 245. Ineligibility of managerial employees to join any labor organization;
right of supervisory employees. Managerial employees are not eligible to join, assist
or form any labor organization. Supervisory employees shall not be eligible for
membership in a labor organization of the rank-and-file employees but may join,
assist or form separate labor organizations of their own.
While above-quoted Article 245 expressly prohibits supervisory employees from

joining a rank-and-file union, it does not provide what would be the effect if a rank-and-
file union counts supervisory employees among its members, or vice-versa.
Citing Toyota[19] which held that a labor organization composed of both rank-and-file
and supervisory employees is no labor organization at all, and the subsequent case
of Progressive Development Corp. Pizza Hut v. Ledesma[20] which held that:
The Labor Code requires that in organized and unorganized establishments, a petition
for certification election must be filed by a legitimate labor organization. The
acquisition of rights by any union or labor organization, particularly the right to file a
petition for certification election, first and foremost, depends on whether or not the
labor organization has attained the status of a legitimate labor organization.
In the case before us, the Med-Arbiter summarily disregarded the petitioners prayer
that the former look into the legitimacy of the respondent Union by a sweeping
declaration that the union was in the possession of a charter certificate so that for all
intents and purposes, Sumasaklaw sa Manggagawa sa Pizza Hut (was) a legitimate
organization, (Underscoring and emphasis supplied),
[21]
petitioner contends that, quoting Toyota, [i]t becomes necessary . . ., anterior to the
granting of an order allowing a certification election, to inquire into the composition of
any labor organization whenever the status of the labor organization is challenged on
the basis of Article 245 of the Labor Code.[22]
Continuing, petitioner argues that without resolving the status of THEU, the DOLE
Undersecretary conveniently deferred the resolution on the serious infirmity in the
membership of [THEU] and ordered the holding of the certification election which is
frowned upon as the following ruling of this Court shows:
We also do not agree with the ruling of the respondent Secretary of Labor that the
infirmity in the membership of the respondent union can be remedied in the pre-
election conference thru the exclusion-inclusion proceedings wherein those
employees who are occupying rank-and-file positions will be excluded from the list of
eligible voters. Public respondent gravely misappreciated the basic antipathy between
the interest of supervisors and the interest of rank-and-file employees. Due to the
irreconcilability of their interest we held in Toyota Motor Philippines v. Toyota
Motors Philippines Corporation Labor Union, viz:
xxx
Clearly, based on this provision [Article 245], a labor organization composed of both
rank-and-file and supervisory employees is no labor organization at all. It cannot, for
any guise or purpose, be a legitimate labor organization. Not being one, an
organization which carries a mixture of rank-and-file and supervisory employees
cannot posses any of the rights of a legitimate labor organization, including the right
to file a petition for certification election for the purpose of collective
bargaining. It becomes necessary, therefore, anterior to the granting of an order
allowing a certification election, to inquire into the composition of any labor
organization whenever the status of the labor organization is challenged on the basis
of Article 245 of the Labor Code.(Emphasis by petitioner) (Dunlop Slazenger
(Phils.), v. Secretary of Labor, 300 SCRA 120 [1998]; Underscoring and emphasis
supplied by petitioner.)
The petition fails. After a certificate of registration is issued to a union, its legal
personality cannot be subject to collateral attack. It may be questioned only in an
independent petition for cancellation in accordance with Section 5 of Rule V, Book IV of
the Rules to Implement the Labor Code (Implementing Rules) which section reads:
Sec. 5. Effect of registration. The labor organization or workers association shall be

deemed registered and vested with legal personality on the date of issuance of its
certificate of registration.Such legal personality cannot thereafter be subject to
collateral attack, but may be questioned only in an independent petition for
cancellation in accordance with these Rules. (Emphasis supplied)
The grounds for cancellation of union registration are provided for under Article 239
of the Labor Code, as follows:
Art. 239. Grounds for cancellation of union registration. The following shall
constitute grounds for cancellation of union registration:
(a) Misrepresentation, false statement or fraud in connection with the adoption or

ratification of the constitution and by-laws or amendments thereto, the minutes of
ratification, and the list of members who took part in the ratification;
(b) Failure to submit the documents mentioned in the preceding paragraph within
thirty (30) days from adoption or ratification of the constitution and by-laws or
amendments thereto;
(c) Misrepresentation, false statements or fraud in connection with the election of

officers, minutes of the election of officers, the list of voters, or failure to subject these
documents together with the list of the newly elected/appointed officers and their
postal addresses within thirty (30) days from election;
(d) Failure to submit the annual financial report to the Bureau within thirty (30) days
after the losing of every fiscal year and misrepresentation, false entries or fraud in the
preparation of the financial report itself;
(e) Acting as a labor contractor or engaging in the cabo system, or otherwise engaging
in any activity prohibited by law;
(f) Entering into collective bargaining agreements which provide terms and conditions
of employment below minimum standards established by law;
(g) Asking for or accepting attorneys fees or negotiation fees from employers;
(h) Other than for mandatory activities under this Code, checking off special
assessments or any other fees without duly signed individual written authorizations of
the members;
(i) Failure to submit list of individual members to the Bureau once a year or whenever
required by the Bureau; and
(j) Failure to comply with the requirements under Articles 237 and 238, (Emphasis
supplied),
while the procedure for cancellation of registration is provided for in Rule VIII, Book V of
the Implementing Rules.
The inclusion in a union of disqualified employees is not among the grounds for
cancellation, unless such inclusion is due to misrepresentation, false statement or
fraud under the circumstances enumerated in Sections (a) and (c) of Article 239 of
above-quoted Article 239 of the Labor Code.
THEU, having been validly issued a certificate of registration, should be considered
to have already acquired juridical personality which may not be assailed collaterally.
As for petitioners allegation that some of the signatures in the petition for
certification election were obtained through fraud, false statement and
misrepresentation, the proper procedure is, as reflected above, for it to file a petition for
cancellation of the certificate of registration, and not to intervene in a petition for
Regarding the alleged withdrawal of union members from participating in the
certification election, this Courts following ruling is instructive:
[T]he best forum for determining whether there were indeed retractions from some of
the laborers is in the certification election itself wherein the workers can freely
express their choice in a secret ballot. Suffice it to say that the will of the rank-and-
file employees should in every possible instance be determined by secret ballot rather
than by administrative or quasi-judicial inquiry.Such representation and certification
election cases are not to be taken as contentious litigations for suits but as mere
investigations of a non-adversary, fact-finding character as to which of the competing
unions represents the genuine choice of the workers to be their sole and exclusive
collective bargaining representative with their employer. [23]
As for the lack of mutuality of interest argument of petitioner, it, at all events, does
not lie given, as found by the court a quo, its failure to present substantial evidence that
the assailed employees are actually occupying supervisory positions.
While petitioner submitted a list of its employees with their corresponding job titles
and ranks,[24] there is nothing mentioned about the supervisors respective duties, powers
and prerogatives that would show that they can effectively recommend managerial
actions which require the use of independent judgment.[25]
As this Court put it in Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor:[26]
Designation should be reconciled with the actual job description of subject employees
x x x The mere fact that an employee is designated manager does not necessarily
make him one. Otherwise, there would be an absurd situation where one can be given
the title just to be deprived of the right to be a member of a union. In the case
of National Steel Corporation vs. Laguesma (G. R. No. 103743, January 29, 1996), it
was stressed that:
What is essential is the nature of the employees function and not the nomenclature
or title given to the job which determines whether the employee has rank-and-file or
managerial status or whether he is a supervisory employee. (Emphasis supplied). [27]
WHEREFORE, the petition is hereby DENIED. Let the records of the case be
remanded to the office of origin, the Mediation-Arbitration Unit, Regional Branch No. IV,
for the immediate conduct of a certification election subject to the usual pre-election
conference.
SO ORDERED.
Puno, (Chairman), Panganiban, Sandoval-Gutierrez and Corona, JJ., concur.
[1]
CA Rollo at 59 62.
[2]
Ibid at 63.
[3]
Ibid at 60.
[4]
Ibid at 64-66.
Dated May 1, 1997 which took effect on June 21, 1997, Amending the Rules Implementing Book V of
[5]
the Labor Code as Amended.

[6]
CA Rollo at 58.
[7]
Ibid at 6770.
[8]
Ibid at 74-79.
[9]
Ibid at 77 78.
[10]
Ibid at 22-27.
[11]
Rollo at 29-30.
[12]
CA Rollo at 111.
[13]
G. R. No. 123426, March 10, 1999 (304 SCRA 405.
[14]
G. R. No. 130866, September 16, 1998 (295 SCRA 494).
[15]
Rollo at 35-44.
[16]
G. R. No. 121084, February 19, 1997 (268 SCRA 573).
[17]
G. R. No. 131248, December 11, 1998 (300 SCRA 120).
[18]
Rollo at 17 18.
[19]
Supra.
[20]
G. R. No. 115077, April 18, 1997 (271 SCRA 593).
[21]
Id at 602.
[22]
Supra at 582.
Atlas Free Workers Union (AFWU)PSSLU Local v. Noriel. No. L-51905, May 26, 1981 (104 SCRA 565,
[23]
572-73, citations omitted), vide LVN Pictures, Inc. vs. Phil. Musicians Guild, 110 Phil, 725; Federation of
Free Workers v. Paredes, 54 SCRA 76 (1973); Phil. Communications, Electronics and Electricity Workers
Federation v. CIR, 56 SCRA 480 (1974).
[24]
Records at 347-354.
Vide AD Gothong Manufacturing Corporation Employees UnionALU v. Confessor. G. R. No. 113638,
[25]
November 16, 1999, 318 SCRA 58.

[26]
G. R. No. 96663, August 10, 1999, 312 SCRA 104.
[27]
G. R. No. 96663, August 10, 1999 (312 SCRA 104, 118).
18) UE vs. Noriel GR No. L-44350 Nov. 25, 1978
SECOND DIVISION
[G.R. No. L-44350. November 25, 1976.]

U.E. AUTOMOTIVE EMPLOYEES AND WORKERS UNIONTRADE UNIONS OF THE PHILIPPINES AND
ALLIED SERVICES, Petitioners, v. CARMELO C. NORIEL, PHILIPPINE FEDERATION OF LABOR, AND
U. E. AUTOMOTIVE MANUFACTURING CO., INC., Respondents.
Tupaz & Associates, for Petitioners.
Acting Solicitor General Hugo E. Gutierrez, Jr., Assistant Solicitor General Reynato S. Puno and
Trial Attorney Joselito B. Floro for respondent Carmelo C. Noriel.
Alejandro C. Villaviza for respondent Phil Federation of Labor.
Poblador, Nazareno, Azada, Tomacruz & Paredes for respondent Company.
DECISION
FERNANDO, J.:
It is a notable feature of our Constitution that freedom of association is explicitly ordained; 1 it is not merely
derivative, peripheral or penumbral, as is the case in the United States. 2 It can trace its origin to the
Malolos Constitution. 3 More specifically, where it concerns the expanded rights of labor under the present
Charter, it is categorically made an obligation of the State to assure full enjoyment "of workers to self-
organization [and] collective bargaining." 4 It would be to show less than full respect to the above mandates
of the fundamental law, considering that petitioner union obtained the requisite majority at a fair and honest
election, if it would not be recognized as the sole bargaining agent. The objection by respondent Director
fins no support in the wording of the law. To sustain it, however, even on the assumption that it has merit,
just because when petitioner asked for a certification election, there was lacking the three-day period under
the Industrial Peace Act then in force 5 for it to be entitled to the rights and privileges of a labor
organization, would be to accord priority to form over substance. Moreover, it was not denied that
respondent Director of Labor Relations on January 2, 1975 certified that it was petitioner which should be
"the sole and exclusive bargaining representative of all rank and file employees and workers of the U.E.
Automotive Manufacturing, Inc." 6 He had no choice as the voting was 59 in favor of petitioner and 52 for
private respondent Union. It would appear evident, therefore, that in the light of the constitutional
provisions set forth above and with the present Labor Code, the certification and ordering the holding of a
new election did amount to a grave abuse of discretion. That was to run counter to what the law commands.
7
The facts are undisputed. The comment submitted by respondent Director Carmelo C. Noriel, through Acting
Solicitor General Hugo E. Gutierrez, Jr. and Assistant Solicitor General Reynato S. Puno, 8 made it clear.
There was, on August 15, 1974, a petition for certification election with the National Labor Relations
Commission filed by petitioner. Thereafter, on August 26, 1974, private respondent Philippine Federation of
Labor submitted a motion for intervention. Three conferences between such labor organizations resulted in
an agreement to hold a consent election actually conducted on September 19, 1974 among the rank and file
workers of respondent management firm. Petitioner obtained fifty-nine votes, with respondent union having
only fifty-two votes in such consent election. There was, on September 19, 1874, a motion by petitioner to
issue an order of certification duly granted on January 2, 1975 by respondent Director who did certify
petitioner as the sole land exclusive collective bargaining representative of such rank and file employees of
respondent firm. There was, however, a motion for reconsideration which was granted notwithstanding
opposition by the union on January 22, 1975, setting aside the previous order certifying petitioner as the
sole bargaining representative. It is such an order sustaining a motion for reconsideration that resulted in
this petition. 9
The submission of respondent Director to sustain the validity of his order in the comment submitted on his
behalf follows: "Petitioner union is not a legitimate labor organization. Section 2(f) of Republic Act Number
875 defines a legitimate labor organization as any labor organization registered by the Department of Labor.
Petitioner union is not duly registered with the Department of Labor. The records of the Labor Registration
Division of the Bureau of Labor Relations, Department of Labor show that the application for registration of
petitioner union was filed therein on July 19, 1974. Petitioner union filed a petition for certification on August
15, 1974 or merely after a period of twenty-seven (27) days. Section 23(b) of Republic Act Number 875
explicitly provides, thus: ‘Any labor organization, association or union of workers duly organized for the
material, intellectual and moral well-being of the members shall acquire legal personality and be entitled to
all the rights and privileges within thirty days of filing with Office of the Secretary of Labor notice of its due
application and existence and the following documents, together with the amount of five pesos as
registration fee, except as provided in paragraph "d" of this section (Emphasis supplied).’ It is clear
therefore that the petition for certification election was filed before the expiration of the period of thirty (30)
days. It is futile therefore for the petitioner to claim that it has already legal personality and is entitled to all
the rights and privileges granted by law to legitimate labor organizations by virtue of Section 23(b) of
Republic Act Number 875." 10 As noted at the outset, such an argument rests on an infirm and shaky
foundation. It definitely runs counter to what this Court has held and continues to hold in a number of cases
in accordance with the constitutional freedom of association, more specifically, where labor is concerned, to
the fundamental rights of self-organization. Hence the merit in the present petition.
1. There is pertinence to this excerpt from a recent decision, Federacion Obrera de la Industria Tabaquera v.
Noriel; 11 "Clearly, what is at stake is the constitutional right to freedom of association on the part of
employees. Petitioner labor union was in the part of employees. Petitioner labor union was in the past
apparently able to enlist the Corporation. Thereafter, a number of such individuals joined private respondent
labor union. That is a matter clearly left to their sole uncontrolled judgment. There is this excerpt from Pan
American World Airways, Inc. v. Pan American Employees Association: "There is both a constitutional and
statutory recognition that laborers have the right to form unions to take care of their interests vis-a-vis their
employees. Their freedom to form organizations would be rendered nugatory if they could not choose their
own leaders to speak on their behalf and to bargain for them.’ It cannot be otherwise, for the freedom to
choose which labor organization to join is an aspect of the Industrial Peace Act, there was a statute setting
forth the guidelines for the registration of labor unions. As implied in Manila Hotel Co. v. Court of Industrial
Relations, it was enacted pursuant to what is ordained in the Constitution. Thus in Umali v. Lovina, it was
held that mandamus lies to compel the registration of a labor organization. There is this apt summary of
what is signified in Philippine Land-Air-Sea Labor Union v. Court of Industrial Relations, ‘to allow a labor
union to organize itself and acquire a personality distinct and separate from its members and to serve as an
instrumentality to conclude collective bargaining agreements . . .’ It is no coincidence that in the first
decision of this Court citing the industrial Peace Act, Pambujan United Mine Workers v. Samar Mining
Company, the role of a labor union as the agency for the expression of the collective will affecting its
members both present and prospective, was stressed. That statute certainly was much more emphatic as to
the vital aspect of such a right as expressly set forth in the policy of the law. What is more, there is in such
enactment this categorical provision on the right of employees to self-organization and to form, join or assist
labor organizations of their own choosing for the purpose of collective bargaining through representatives of
their own choosing and engage in concerted activities for the purpose of collective bargaining and other
mutual aid or protection.’ The new Labor Code is equally explicit on the matter. Thus: ‘The State shall
assure the rights of workers of self-organization, collective bargaining, security of tenure and just and
humane conditions of work.’" 12
2. The matter received further elaboration in the Federation Obrera decision in these words: "It is thus of
the very essence of the regime of industrial democracy sought to be attained through the collective
bargaining process that there be no obstacle to the freedom identified with the exercise of the right to self-
organization. Labor is to be represented by a union that can express its collective will. In the event, and this
is usually the case, that there is more than one such group fighting for that privilege, a certification election
must be conducted. That is the teaching of a recent decision under the new Labor Code, United Employees
Union of Gelmart Industries v. Noriel. There is this relevant except: "The institution of collective bargaining
is, to recall Cox, a prime manifestation of industrial democracy at work. The two parties to the relationship,
labor and management, make their own rules by coming to terms. That is to govern themselves in matters
that really count. As labor, however, is composed of a number of individuals, it is indispensable that they be
represented by a labor organization of their choice. Thus may be discerned how crucial is a certification
election. So our decisions from the case of PLDT Employees Union v. PLDT Co. Free Telephone Workers
Union to the latest, Philippine Communications, Electronics & Electricity Workers’ Federation (PCWF) v. Court
of Industrial Relations, have made clear.’ An even later pronouncement in Philippine Association of Free
Labor Unions v. Bureau of Labor Relations, speaks similarly; ‘Petitioner thus appears to be woefully lacking
in awareness of the significance of a certification election for the collective bargaining process. It is the
fairest and most effective way of determining which labor organization can truly represent the working force.
It is a fundamental postulate that the will of the majority, if given expression in an honest election with
freedom on the part of the voters to make their choice, is controlling. No better advice can assure the
institution of industrial democracy with the two parties to a business enterprise, management and labor,
establishing a regime of self-rule.’" 13
3. Deference to the above principles so often reiterated in a host of decisions ought to have exerted a
compelling force on respondent Director of Labor Relations. As a matter of fact, that appeared to be the
case. He did certify on January 2, 1975 that petitioner should be "the sole and exclusive collective
bargaining representative of all rank-and-file employees and workers of the UE Automotive Manufacturing,
Inc." 14 The voting, have been 59 in favor of petitioner and 52 for private respondent Union, had to be
respected. Had he stood firm, there would have been no occasion for the certioraripetition. He did, however,
have a change of mind. On February 24, 1975, he set aside such certification. In his comment, earlier
referred to, he would predicate this turnabout on the Union lacking the three-day period before filing the
petition for certification under the appropriate provision of the Industrial Peace Act then in force. That could
be an explanation, but certainly not a justification. It would amount, to use a phrase favored by Justice
Cardozo, to a stultification of a constitutional right.
4. The excuse offered for the action taken place lacks any persuasive force. It may even be looked upon as
insubstantial, not to say flimsy. The law is quite clear; the expression is within thirty days, not after thirty
days. Even if meritorious, however, it can be disregarded under the maxim de minimis non curat lex. 15
Then, too, the weakness of such a pretext is made apparent by the well-settled principle in the Philippines
that where it concerns the weight to be accorded to the wishes of the majority as expressed in an election
conducted fairly and honestly, certain provisions that may be considered mandatory before the voting takes
place becomes thereafter merely directory in order that the wishes of the electorate prevail. 16 The
indefensible character of the order of February 24, 1975 setting aside the previous order certifying to
petitioner as the exclusive bargaining representative becomes truly apparent.
5. Nor is the different outcome called for just because at the time of the challenged order, there was as yet
no registration of petitioner Union. If at all, that is a circumstance far from flattering as far as the Bureau of
Labor Relations is concerned. It must be remembered that as admitted in the comment of respondent
Director, the application for registration was filed on July 19, 1974. The challenged order was issued seven
months later. There is no allegation that such application suffered from any infirmity. Moreover, if such were
the case, the attention of petitioner should have been called so that it could be corrected. Only thus may the
right to association be accorded full respect. As far back as Umali v. Lovina, 17 a 1950 decision, it was held
by this Court that under appropriate circumstances, mandamus lies to compel registration. There is, in
addition, a letter signed by a certain Jesus C. Cuenca, who identified himself as the Acting Registrar of Labor
Organizations, stating that this Office "has taken due note of your letter of July 25, 1974 informing us that
this union has been accepted by the Federation as local chapter No. 580." 18 When it is taken into
consideration that the Bureau of Labor Relations itself had allowed another labor union not registered but
affiliated with the same Federation to be entitled to the rights of a duly certified labor organization, there
would appear clearly an element of arbitrariness in the actuation of respondent Director. 19 It is likewise
impressed with a character of a denial of equal protection. Lastly, this Court, in Nationalista Party v.
Bautista, 20 where one of the defenses raised is lack of capacity of petitioner as a juridical person entitled to
institute proceedings, after holding that it was entitled to the remedy of prohibition sought, allowed it either
to amend its petition so as to substitute a juridical person, or to show that it is entitled to institute such
proceeding. So it should be in this Case. In the absence of any fatal defect to the application for registration,
there is no justification for withholding it from petitioner to enable it to exercise fully its constitutional right
to freedom of association. In the alternative, the petition could very well be considered as having been filed
by the parent labor federation. What is decisive is that the members of petitioner Union did exercise their
fundamental right to self-organization and did win in a fair and honest election.
WHEREFORE, the writ of prohibition is granted, the challenged order of February 24, 1975 setting aside the
certification is nullified and declared void, and the previous order of January 2, 1975 certifying to petitioner
Union as the ‘sole and exclusive collective bargaining representative of all rank and file employees and
workers of the U.E. Automotive Manufacturing Company, Inc.," declared valid and binding. Whatever other
rights petitioner Union may have under the present Labor Code should likewise be accorded recognition by
respondent Director of the Bureau of Labor Relations. This decision is immediately executory. No costs.
Barredo, Antonio, Aquino and Concepcion, Jr., JJ., concur.
Endnotes:
1. According to Article IV, Section 7 of the Constitution: "The right to from associations or societies for
purposes not contrary to law shall not be abridged." The very same language was used in Article III, Section
1, par. 6 of the 1935 Constitution.
2. Cf. National Association for the Advancement of Colored People v. Alabama, 357 US 449 (1958); Bates v.
City of Little Rock, 361 US 516 (1960); National Association for the Advancement of Colored People v.
Alabama, 371 US 415 (1963).
3. "Neither shall any Filipino," according to Article 20, par. 2 of the Malolos Constitution, be deprived of:
"The right of joining any association for all objects of human life which may not be contrary to public morals;
. . ."
cralaw virtua1aw l ibra ry
4. Article II, Section 9 of the Constitution reads in full: "The State shall afford protection to labor, promote
full employment, and equality in employment, ensure equal work opportunities regardless of sex. race, or
creed, and regulate the relations between workers and employers. The State shall assure the rights of
workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of
work. The State may provide for compulsory arbitration." cralaw virtua1aw li bra ry
5. According to Section 23, par. (8) of the Industrial Peace Act: "Any labor organization, association or union
of workers duly organized for the material, intellectual and moral well-being of its members shall acquire
legal personality and be entitled to all the rights and privileges granted by law to legitimate labor
organizations within thirty days of filing with the office of the Secretary of Labor notice of its due
organization and existence and the following documents, together with the amount of five pesos as
registration . . ." cralaw virt ua1aw lib ra ry
6. Petition, Annex G.
7. Presidential Decree No. 442 (1974).
8. Trial Attorney Joselito B. Floro assisted them.
9. Comment of respondent Carmelo C. Noriel, 1-4.
10. Ibid, 4-5.
11. L-41937, July 6, 1976.
12. Ibid. The Pan American World Airways decision, promulgated in 1969, is reported in 27 SCRA 1202;
Manila Hotel Co. in 80 Phil. 145 (1948); Umali in 86 Phil. 313 (1950); Philippine Land-Air-Sea Labor Union in
93 Phil 747 (1953); Pambujan United Mine Workers in 94 Phi. 932 (1954).
13. Ibid. The P.L.D.T. Employees Union case, a 1955 decision, is reported in 97 Phil. 424 and Philippine
Communications, promulgated in 1974, in 56 SCRA 480. The latter made reference to twelve other decisions
starting from Standard Cigarette Workers Union in 101 Phil. 126 (1957) to Federation of Free Workers v.
Paredes, 54 SCRA 75 (1973). Philippine Association of Free Labor Unions v. Bureau of Labor Relations was
handed down January 27, 1976 and reported in 69 SCRA 132.
14. Petition, Annex G.
15. Cf. Tumey v. State of Ohio, 273 US 510 (1927); Burns v. De Bakey, La. App. 186 So. 374 (1939); Smith
Oil and Refining Co. v. Department of Finance, 21 NE 2d 292 (1939); Bristol Myers Co. v. Lit Bros., 6 A2d
843 (1939); Pompton Stationery Corporation v. Passaic County News Co., 21 A. 2d 849 (1941); Philips v.
Coreen, 155 SW2d 841 (1941); Schwartz v. Essex County Board of Taxation, 28 A2d 482 (1942); Mitchell v.
Littlejohn Transp. Co., 10 So 2d 651 (1942); Lunsden v. Erstine, 172 SW 2d 409 (1943) Thompson v.
Pollack, 53 NE 2d 737 (1944); Buettner v. Polar Bar Ice Cream Co., 17 So 2d 486 (1944); Reeves v.
Jackson, 184 SW 2d 256 (1944); Denison West Twenty-Fifth St. Imp. Co. v. Great Atlantic & Pacific Tea Co.,
69 NE 3rd 79 (1946).
16. Cf. Valenzuela v. de Jesus, 42 Phil. 428 (1921); De los Angeles v. Rodriguez, 46 Phil. 595 (1924); De
Guzman v. Board of Canvassers, 48 Phil. 211 (1925); Kiamzon v. Ojeda, 54 Phil. 775 (1930); Nico v.
Blanco, 81 Phil. 213 (1948); Illescas v. Court of Appeals, 94 Phil. 215 (1953); Canceran v. Comelec, 107
Phil. 607 (1960); Collado v. Alonzo, L-23637, Dec. 24, 1965, 15 SCRA 562; Medenilla v. Kayanan, L-28448,
July 30, 1971, 40 SCRA 154.
17. 86 Phil. 313.

18. Petition, Annex K.
19. Ibid, par. (I), 7.
20. 85 Phi. 101 (1949).
19) National Union vs. Minister GR No. L-5346 Dec. 14, 1981

SUPREME COURT
Manila
EN BANC
G. R. No. L-53406 December 14, 1981
NATIONAL UNION OF BANK EMPLOYEES, petitioner,

vs.
THE HONORABLE MINISTER OF LABOR, THE HONORABLE DEPUTY MINISTER OF LABOR,
THE HONORABLE DIRECTOR OF THE BUREAU OF LABOR RELATIONS, PRODUCERS BANK
OF THE PHILIPPINES, respondents.
MAKASIAR, J.:
This is a petition for mandamus filed by petitioner Union to compel public respondents to conduct a
certification election among the rank and file employees of the respondent employer in Case No.
LRD-M-8-360-79 or in the alternative, to require the respondent Minister of Labor or his Deputy to
act on private respondent's "Appeal" and on petitioner's "Motion to Dismiss with Motion to Execute."
It appears that on August 17, 1979, petitioner Union filed a petition to be directly certified as
collective bargaining agent of the rank and file employees of private respondent corporation (Annex
"A"; p. 26, rec.).
On September 7, 1979, the date of the hearing, private respondent was required to submit on
October 5, 1979 a payroll of employees as of July 31, 1979. On the same date, in a handwritten
manifestation, respondent employer through counsel, agreed that as soon as the registration
certificate of the local union was issued by the Ministry of Labor and that it was shown that the local
union represents the majority of the rank and file, the Bank would recognize the said union and
would negotiate accordingly (Annex "B" p. 27, rec.).
On October 5, 1979, the above said registration certificate of the local union [Certificate No. 9352-
LC, issued by the Ministry of Labor] was secured. On October 15, 1979, petitioner filed a
Manifestation and Urgent Motion to Decide and submitted a copy of the Registration Certificate of
the local union and union membership application of 183 members out of more or less 259 rank and
file employees of employer Bank, authorizing the National Union of Bank Employees (NUBE) [herein
petitioner] to represent them "as their sole and exclusive collective bargaining agent in all matters
relating to salary rates, hours of work and other terms and conditions of employment in the
Producers Bank of the Philippines" (p. 38, rec.). Nonetheless, respondent corporation failed to
submit the required payroll and the list of rank and file workers based on said payroll.
On October 18, 1979, Med-Arbiter Climaco G. Plagata issued an order directing the holding of a
certification election, the dispositive portion of which reads:
WHEREFORE, premises considered, a certification election is hereby ordered held,

conducted, and supervised by representation officers of this office within 20 days
from receipt hereof. The same representation officers shall conduct pre-election
conferences in order to thresh out the mechanics and other minor details of this
election including the inclusion and exclusion proceedings to determine the qualified
electors in this election. The choice shall be either YES, for Petitioner, or No, for NO
UNION DESIRED.
SO ORDERED (Annex "C", pp. 28-29, rec.).
On October 19, 1979, respondent corporation filed a motion to suspend further proceedings in view
of an allegedly prejudicial issue consisting of a pending proceeding for cancellation of the
registration of petitioning union for allegedly engaging in prohibited and unlawful activities in violation
of the laws (Annex "D" pp. 30-32, rec.).
On October 23, 1979, by agreement of the parties, respondent then Deputy Minister of Labor Amado
Inciong, acting for the Minister of Labor, assumed jurisdiction over the certification election case and
the application for clearance to terminate the services of thirteen (13) union officers by private
respondent corporation. Thus, an order was issued on the same date which reads:
On October 23, 1979 the parties entered into an agreement that the Office of the
Ministry of Labor shall assume jurisdiction over the following disputes under P.D. No.
823 in the interest of speedy labor justice and industrial peace:
1. certification election case; and
2. application for clearance to terminate thirteen (13) employees with

preventive suspension.
(Agreement, October 23, 1979).
Accordingly, the Deputy Minister deputized Atty. Luna C. Piezas, Chief of the Med-
Arbiter Section, National Capital Region, to conduct summary investigations for the
purpose of determining the definition of the appropriate bargaining unit sought to be
represented by the petitioning union as wen as compliance with the 30% mandatory
written consent in support of the petition under the bargaining unit as shall have been
defined.
On the application for clearance to terminate with preventive suspension, this Office
deems it necessary, for the mutual protection of each party's interest and to assure
continuance of the exercise of their respective rights within legal limits, to lift the
imposition of preventive suspension on the subject employees. The lifting of the
preventive suspension shall include Messrs. Castro and Sumibcay who are presently
on leave of absence with pay in pursuance of the agreement reached at the level of
the Regional Director. Further, should the two (2) employees' leave credits be
exhausted, they are to go on leave without pay, but this shall not be construed as
done in pursuance of the preventive suspension.
Finally, the lifting of the preventive suspension shall be without prejudice to the
continuance of the hearing on the application for clearance involving the thirteen (13)
employees the determination of the merits of which shall be disposed of at the
Regional level (Annex "E", pp. 33-34, rec.).
Hence, Med-Arbiter Luna Piezas conducted hearings but withdrew, in view of the alleged utter
disrespect for authority, gross bad faith, malicious refusal to appreciate effective, prompt and honest
service and resorting in malicious and deliberate lying in dealing with Ministry of Labor officials by a
certain Mr. Jun Umali, spokesman of the Producers' Bank Employees Association. The case was
then transferred to Med-Arbiter Alberto Abis on November 7, 1979 (Annex " F ", p. 35, rec.).
During the hearing on November 9, 1979, respondent Bank failed to submit a list of rank and file
employees proposed to be excluded from the bargaining unit. Respondent Bank's counsel however,
in a verbal manifestation pressed for the exclusion of the following personnel from the bargaining
unit:
1. Secretaries;
2. Staff of Personnel Department;
3. Drivers;
4. Telephone Operators;
5. Accounting Department;
6. Credit Investigators;
7. Collectors;
8. Messengers;
9. Auditing Department Personnel;
10. Signature Verifiers;
11. Legal Department Personnel;
12. Loan Security Custodians; and
13. Trust Department Personnel.
On November 19, 1979, Med-Arbiter Alberto Abis Jr. ordered the holding of certification election
among the rank and file employees but sustained the stand of respondent company as to the
exclusion of certain employees. Thus, the pertinent portion of said order reads:
After a careful perusal of the records, evaluation of the evidence on hand and
consideration of the positions taken by the parties, we find and so hold that
Petitioner-Union has substantially complied with the mandatory and jurisdictional
requirement of 30% subscription of all the employees in the bargaining unit as
prescribed by Section 2, Rule 5, Book V of the Rules and Regulations Implementing
the Labor Code. Submission by the Petitioner during the hearing of copies of the
application and membership forms of its members wherein they have duly authorized
Petitioner 'as their sole and exclusive collective bargaining agent constitutes
substantial compliance of the mandatory and jurisdictional 30% subscription
requirement, it appearing from the records that out of the 264 total rank and file
employees, 188 are union members who have so authorized Petitioner to represent.
With respect to respondent bank's motion to suspend the proceedings in the instant
case pending resolution of the cancellation proceedings now pending in the Bureau
of Labor Relations, we find that the same is not tenable in the absence of a
restraining order.
In consideration of the agreement of the parties, it is hereby ordered that the scope
or coverage of the appropriate bargaining unit should include the Head Office of the
Producers Bank of the Philippines and all its branch offices and shall comprise of an
the regular rank and file employees of the bank. Excluded are all managerial and
supervisory employees, probationary, contractual and casual employees and security
guards. It is further ordered that by virtue and in consonance with industry practice as
revealed by the CBAs of 18 banks submitted by Petitioner-Union, the following
positions should likewise be excluded from the bargaining unit; Secretaries of bank
officials; employees of the Personnel Department; EXCEPT Manuel Sumibcay Primi
Zamora and Carmelita Sy; employees of the Accounting Department; employees of
the Legal Department employees of the Trust Department, credit investigators,
telephone operators, and loan security custodians. Signature verifiers, drivers,
messengers and other non-confidential employees included in the bank's list of
proposed exclusions should be allowed to vote, but the votes should be segregated
as challenged. In case a doubt arises as to whether or not the position held by an
employee is confidential in nature, the employee should be allowed to vote, but his
vote should be segregated as challenged .
WHEREFORE, in the light of the foregoing considerations, it is hereby ordered that a

certification election be conducted among the regular rank and file employees of the
Producers Bank of the Philippines (the appropriate bargaining unit of which is defined
above) after the usual pre-election conference called to formulate the list of qualified
voters and discuss the mechanics of the election.
It is further ordered that the election in the bank's branches outside the Metro Manila
area be conducted by the appropriate Regional Offices of the Ministry of Labor
having jurisdiction over them.
SO ORDERED (pp. 5-7, Annex "G"; pp. 41-43, rec.; emphasis supplied).
On November 29, 1979, petitioner filed a partial appeal to the Director of Bureau of Labor Relations
questioning the exclusions made by Med-Arbiter Abis of those employees who are not among those
expressly enumerated under the law to be excluded. It vigorously urged the inclusion of the rest of
the employees which is allegedly the usual practice in the banking industry. It likewise urged the
holding of a certification election allowing all those excluded by Med-Arbiter Abis to vote but
segregating their votes as challenged in the meantime. Hence, it averred:
It is in the position of the petitioner that notwithstanding the statements above that
the petition for certification should be held immediately by allowing all those not
excluded from Arbiter Abis' order to vote without prejudice to a final decision on the
matters subject of these appeal. Which we also submit that in order to expedite the
proceedings these exclusions should also be allowed to vote even pending resolution
of the appeal but segregating them for further consideration (pp. 3-4, Annex "H"; p.
46- 47, rec.).
On December 4, 1979, respondent bank likewise appealed from the aforesaid November 19, 1979
order of Med-Arbiter Alberto Abis, Jr. to the Minister of Labor on the following grounds:
(1) that the act of Med-Arbiter Abis in issuing the abovesaid Order is ultra vires, full
and complete jurisdiction over the questioned petition being vested in the office of the
Minister of Labor and hence the only adjudicative body empowered to resolve the
petition;
(2) that the fact that petitioner's Union registration was subject of cancellation
proceedings with the Bureau of Labor Relations rendered the issuance of the
abovequestioned Order directing the holding of a certification election premature;
and
(3) that the bargaining unit was not appropriately defined [Annex " I " pp. 49-57, rec.].
On December 7, 1979, the entire records of the case were allegedly elevated as an appealed case
by Regional Director Francisco L. Estrella to the Director of the Bureau of Labor Relations and was
docketed thereat as appealed case No. A-1599-79.
On January 21, 1980, the Union of Producers Bank Employees Chapter-NATU filed a motion to
intervene in the said petition for certification election alleging among other things that it has also
some signed up members in the respondent Bank and consequently has an interest in the petition
for certification election filed by petitioner as it will directly affect their rights as to who will represent
the employees in the collective bargaining negotiations (Annex "P"; pp. 100-101, rec.).
On January 24, 1980, the Bureau of Labor Relations Director Carmelo C. Noriel rendered a decision
affirming the Med-Arbiter's order with certain modifications, the pertinent portion of which reads:
Preliminarily, the issue of jurisdiction is being raised by respondent bank but we need
not be drawn into nor tarry in this issue but instead proceed to consider the merits of
the case. Suffice it rather to say that the appealed order was signed by the med-
arbiter a quo and the records of the case were elevated on appeal to this Bureau by
the Regional Director of the National Capital Region. Besides respondent should not
unduly press the jurisdictional issue. Such question does not lead nor contribute to
the resolution of the real pressing issue—the certification election issue. What is at
stake here is the right of the employees to organize and be represented for collective
bargaining purposes by a union at the respondent bank where none existed up to the
present time. On this consideration alone, respondent's vigorous objection alleging
want of jurisdiction cracks from tangency of the issue.
xxx xxx xxx

The matter of defining the bargaining unit, that is to say the appropriateness thereof,
usually presents for determination three questions to wit, the general type of the
bargaining unit or whether it should be an industrial unit embracing an the employees
in a broad class or a craft unit that is confined to a small specialized group within a
broad class, the scope of the bargaining unit or whether it would embrace all
employees in a given class at only one plant or at several plants of an employer, and
the specific composition of the bargaining unit, that is, whether or not the unit should
include employees of different occupational groups, like clerks, inspectors, technical
employees, etc. On these questions, we are not without legal guidelines. The law
and the Rules are clear. The petition for certification election, whether filed by a
legitimate labor organization or by an employer case, shall contain inter alia, the
description of the bargaining unit which shall be the employer unit unless
circumstances otherwise require. Thus, the policy under the Labor Code on the
matter of fixing the bargaining unit is to favor larger units and this is sought to be
implemented on a two-tiered basis. On the lower tier, the law mandates the employer
unit as the normal unit of organization at the company level, thus discouraging if not
stopping fragmentation into small craft or occupational units as what prevailed prior
to the Labor Code. But the Code envisions further consolidation into larger
bargaining units. Thus, on the higher tier, the law mandates the eventual
restructuring of the labor movement along the "one union, one industry" basis. There
should therefore be no doubt as to the law and policy on the fixing of the appropriate
bargaining unit which is generally the employer unit. Applying this rule to the instant
case, the appropriate bargaining unit should embrace all the regular rank and file
employees at the head as well as branch offices of respondent bank. Of course, the
exception to this employer unit rule is when circumstances otherwise require. But
such is not at issue here, respondent not having adduced circumstances that would
justify a contrary composition of the bargaining unit.
Respondent however insists on the definition of the appropriate bargaining unit upon
the question of whether or not to exclude admittedly regular rank and file employees
which it considers confidential, managerial and technical. This question, it should be
pointed out, does not enter the matter of defining the bargaining unit. The definition
of the appropriate unit refers to the grouping or more precisely, the legal collectivity
of eligible employees for purposes of collective bargaining. The presumption is that
these employees are entitled to the rights to self-organization and collective
bargaining, otherwise they would not be, in the first place be considered at all in the
determination of the appropriate bargaining unit.
The question therefore of excluding certain rank and file employees for being
allegedly confidential, managerial or technical does not simply involve a definition of
the bargaining unit but rather raises the fundamental issue of coverage under or
eligibility for the exercise of the workers' rights to self-organization and collective
bargaining. On this score, the law on coverage and exclusion on the matter should
by now be very clear. Article 244 of the Labor Code states that all persons employed
in commercial, industrial and agricultural enterprises, including religious, charitable,
medical or educational institutions operating for profit shall have the right to self-
organization and to form, join, or assist labor organizations for purposes of collective
bargaining. Articles 245 and 246 (ibid) provide that security guards and managerial
employees are not eligible to form, assist or join any labor organization. As defined
by the Code, a managerial employee is one who is vested with powers or
prerogatives to lay down and execute management policies and/or to hire, transfer,
suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively
recommend such managerial actions. All employees not falling within this definition
are considered rank and file employees for purposes of self-organization and
collective bargaining.
It is in the light of the foregoing provisions of law that the challenged order, in so far
as it excludes all managerial and supervisory employees, secretaries of bank
officials, credit investigators, telephone operators, loan security custodians,
employees in the accounting, auditing, legal, trust and personnel departments
respectively, should be modified for being either superfluous, discriminatory or simply
contrary to law. The express exclusion of managerial employees in the Order is
superfluous for the same is already provided for by law and is presumed when the
bargaining unit was defined as comprising all the regular rank and file employees of
the bank. It is also anomalous and discriminatory when it excluded employees of the
personnel department but included specific individuals like Manuel Simibcay Primi
Zamora and Carmelita Sy. Exclusion as managerial employee is not based on the
personality of the occupant but rather on the nature and function of the position. The
exclusion of the other positions is likewise contrary to law, there being no clear
showing that they are managerial employees. The mere fact of being a supervisor or
a confidential employee does not exclude him from coverage. He must strictly come
within the category of a managerial employee as defined by the Code. The
Constitution assures to all workers such rights to self-organization and collective
bargaining. Exclusions, being the exception and being in derogation of such
constitutional mandate, should be construed in strictissimi juris.
Furthermore, to uphold the order of exclusion would be to allow the emasculation of

the workers' right to self-organization and to collective bargaining, statutory rights
which have received constitutional recognition when they were enshrined in the 1973
Constitution. Indeed, the further rulings that 'other non-confidential employees
included in the bank's list of proposed exclusion be allowed to vote but the votes
should be segregated as challenged and that in case of doubt as to whether or not
the position held by an employee is confidential in nature, the employee should be
allowed to vote but his vote should be segregated as challenged' both complete the
said order's self-nullifying effects.
At the most and indeed as a policy, exclusion of confidential employees from the
bargaining unit is a matter for negotiation and agreement of the parties. Thus, the
parties may agree in the CBA, to exclude certain highly confidential positions from
the bargaining unit. Absent such agreement, coverage must be observed. In any
event, any negotiation and agreement can come after the representation issue is
resolved and this is just the situation in the instant case.
In fine, the appropriate bargaining unit shall include a regular rank and file employees
of the respondent including the positions excluded in the challenged order dated 19
November 1979, with the exception of the secretaries to the Bank President,
Executive Vice-President, Senior Vice President and other Vice-Presidents as
agreed upon by the parties during the hearings.
Respondent vehemently interposes also the pendency of cancellation proceedings

against petitioner as a prejudicial issue which should suspend the petition for
We cannot fully concur with this contention Unless there is an order of cancellation
which is final the union's certificate of registration remains and its legal personality
intact. It is entitled to the rights and privileges accorded by law, including the right to
represent its members and employees in a bargaining unit for collective bargaining
purposes including participation in a representation proceeding. This is especially
true where the grounds for the cancellation of its union certificate do not appear
indubitable.
The rights of workers to self-organization finds general and specific constitutional

guarantees. Section 7, Article IV of the Philippine Constitution provides that the right
to form associations or societies purposes not contrary to law shall not be abridged.
This right more pronounced in the case of labor. Section 9, Article II (ibid) specifically
declares that the State shall assure the rights of workers to self-organization
,collective bargaining, security of tenure and just and humane conditions of work.
Such constitutional guarantees should not be lightly taken much less easily 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.
On the 30% consent requirement, respondent contends that the bargaining unit is not
appropriately defined 'hence, the med-arbiter's finding that there was compliance
with the 30% 'jurisdictional requirement is patently erroneous. To this we must
disagree. As earlier stated, the definition of the appropriate bargaining unit does not
call for an actual head count or Identification of the particular employees belonging
thereto. That is done in the pre-election conference. It is sufficient that the bargaining
unit is defined such that the employees who are part thereof may be readily
ascertained for purposes of exclusions and inclusions during the pre-election
conference when the list of eligible voters are determined.
In this regard, respondent does not really seriously question the 264 total number of
employees except for the alleged exclusion which should reduce the number thus
allegedly affecting the sufficiency of the supporting signatures submitted. We have
already ruled against the exclusions as violative of the constitutional guarantee of
workers' right to self-organization. Consequently, since 188 of the 264 employees
subscribed to the petition, which constitutes 70% of the total employees in bargaining
unit, the 30% consent requirement has been more than sufficiently complied with. In
any case, even if we grant the alleged exclusions totalling about 45, the same will not
give any refuge to respondent's position. For assuming momentarily that the
exclusions are valid, the same will not fatally affect the 30% consent compliance.
Finally, lest it be so easily forgotten, a certification election is but an administration

device for determining the true choice of the employees in the appropriate bargaining
unit as to their bargainer representative. Unnecessary obstacles should not therefore
be thrown on its way. Rather, the parties should take their case, if they have, directly
to the real and ultimate arbiter on the matter, the employees sought to be
represented in the bargaining unit.
WHEREFORE, in the light of the foregoing considerations, the Order dated 19

November 1979 calling for a certification election is hereby affirmed with the
modification that the same shall be conducted among all the regular rank and file
employees of the respondent bank at its head and branch offices, including those
excluded in said Order, except only the positions of secretary to the Bank President,
Executive Vice-President and other Vice-Presidents which agreed to be excluded
from the bargaining unit by the parties during the hearings. The choice shall be
between the petitioner and no union.
Let the certification election be conducted within twenty (20) days from receipt
hereof. The pre-election conference shall be immediately called to thresh out the
mechanics of the election. The list of qualified voters shall be based on the July 1979
payroll of the company.
SO ORDERED (pp. 5-9, Annex "J" pp. 63-67, rec.; emphasis supplied).
On February 11, 1980, petitioner received an undated and unverified appeal of the respondent bank
to the Minister of Labor questioning the decision of Bureau of Labor Relations Director Carmelo C.
Noriel which appeal alleged that:
I. THE QUESTIONED ORDER IS NULL AND VOID FOR HAVING BEEN ISSUED
WITHOUT OR IN EXCESS OF JURISDICTION SINCE —
(i) It is this Honorable Office, not the BLR, that has jurisdiction over the parties'
appeals from the Order of Med-Arbiter Alberto A. Abis, Jr.
II. ASSUMING, AD ARGUENDO, THAT THE BLR HAS JURISDICTION, THE

APPEALED ORDER IS NONETHELESS NULL AND VOID, THE BLR HAVING
GRAVELY ABUSED ITS DISCRETION IN NOT FINDING THAT THE ORDER,
DATED NOVEMBER 19, 1979, OF MED-ARBITER ABIS IS NULL AND VOID FOR
HAVING BEEN ISSUED WITHOUT AUTHORITY/JURISDICTION CONSIDERING
THAT —
(i) Full and complete jurisdiction over this petition is vested in this
Office, which, under P.D. 823, as amended, and by agreement of the
parties, is the adjudicative body solely and exclusively empowered to
resolve this petition.
(ii) The fact that petitioner's Union registration is now the subject of
cancellation proceedings before the BLR renders the issuance of an
Order directing the holding of a certification election premature; and
(iii) The bargaining unit is not appropriately defined; hence, the BLR'S
and before it, the Med-Arbiter's finding that there was compliance
with the 30% jurisdictional requirement is completely without basis
and, therefore, grossly erroneous.
III. THE MOTION FOR INTERVENTION FILED BY INTERVENOR UNION OF

PRODUCERS BANK EMPLOYEE'S CHAPTER-NATU WHICH THE BLR, FOR
UNKNOWN REASON(S), FAILED TO RESOLVE, RENDERS IMPERATIVE THE
REDETERMINATION OF WHETHER OR NOT THE MANDATORY 30%
JURISDICTIONAL REQUIREMENT HAS BEEN MET. (Pp. 2-3, Annex "K", pp. 69-
70, rec.).
On February 21, 1980, petitioner union filed a manifestation on respondent's undated and unverified
appeal (Annex "L"; pp. 91-94, rec.).
On the same date, petitioner filed a motion to dismiss with motion to execute (Annex " M " pp. 95-96,
rec.).
On March 3, 1980, petitioner filed an urgent motion to resolve respondent's appeal together with
pertitioner's motion to dismiss and motion for execution ( Annex "N"; pp. 97-98, rec.).
On March 14, 1980, petitioner received a copy of a letter endorsement dated March 7, 1980 which
reads:
Respectfully referred to the Honorable Minister of Labor, the herein attached Motion
to Execute and Manifestation to Dismiss with Motion to Execute and Manifestation on
Respondent's undated and unverified Appeal dated Feb. 21, 1980 and February 20,
1980 respectively, for appropriate action.
In a memorandum dated 9 November 1979, the Deputy Minister of Labor completely

inhibited himself in this case (p. 169, rec.).
Public respondent Director Carmelo C. Noriel did not proceed to hold the certification election,
neither did the Minister of Labor act on the appeal of private respondent and on petitioner's motion to
dismiss with motion to execute.
Hence, petitioner filed the instant petition on March 19, 1980.
On May 2, 1980, private respondent Bank filed its comments (pp. 111-122, rec.).
On June 25, 1980, public respondents filed their comment (pp. 131-142, rec.).
On August 16, 1980, petitioner filed its memorandum (pp. 155-169, rec.).
On September 2, 1980, private respondent Bank filed its memorandum (pp. 179-197, rec.).
On October 1, 1980, public respondents filed a manifestation in lieu of memorandum alleging inter
alia that:
1. The instant petition for mandamus seeks to compel the respondent Minister of
Labor to act on respondent Producers Bank's Appeal and on petitioner's motion to
execute the decision of respondent Director of Labor Relations dated January 24,
1980, directing the holding of a certification election in said bank;
2. The said petition, however, is now moot and academic because:
(a) Respondent Minister of Labor had already acted on the said

appeal in his decision dated April 11, 1980 the dispositive portion of
which is as follows:
Wherefore, respondent Bank's Appeal is hereby dismissed and the

validity of the Decision of January 24, 1980, herein adopted is hereby
recognized. No motion for reconsideration of this Order shall be
entertained.
(b) Petitioner may now file, if it so desires, with respondent Director of
Labor Relations, a motion for the execution of his decision so that the
certification election can be held at respondent bank;
WHEREFORE, it is respectfully prayed that the instant petition be dismissed for

being moot and academic (pp. 201-202, rec.; emphasis supplied).
On October 10, 1980, petitioner filed a "Manifestation Re: Decision of the Minister of Labor" alleging
among other things that.
xxx xxx xxx
2. Petitioner had not received any copy of such April 11, 1980 decision of the
Minister of Labor mentioned by the Honorable Solicitor General. In fact, the
Comment of the public respondents dated June 11, 1980 signed by Assistant
Solicitor General Octavio R. Ramirez and Trial Attorney Elihu A. Ybañez made no
mention of the same in the private respondent's memorandum of September 2,
1980" (p. 204, rec.).
On October 28, 1980, petitioner filed a comment on manifestation of the Honorable Solicitor General
dated 30 September 1980 and motion alleging therein that despite inquiries made, no official copy of
the alleged April 11, 1980 decision of the Minister of Labor mentioned in the manifestation of the
Solicitor General has been furnished the petitioner. Hence, it prayed that the Minister of Labor be
requested to submit to this Court a certified copy of the aforesaid April 11, 1986 decision of the
Minister of Labor.
On October 30, 1980, petitioner filed a manifestation and comment stating that:
1. On October 29, 1980, it received a copy of the decision of the Honorable Minister
of Labor in Case No. NCR-LRD-8-360-79 as may be seen from Annex "A".
2. The decision is dated October 23, 1980 and not April 11, 1980 as stated in the
Manifestation in Lieu of Memorandum of the Office of the Honorable Solicitor
General, dated 30 September 1980.
3. Petitioner respectfully request an explanation from the public respondents on this

apparent discrepancy which has in fact misled even this Honorable Court (p. 21 1,
rec.).
On November 11, 1980, private respondent Bank filed a manifestation/motion stating that the
aforementioned April 11, 1980 decision of the Minister of Labor is non- existent, as in fact the
Minister of Labor issued an order affirming the decision of BLR Director Noriel only on October 23,
1980.
xxx xxx xxx
3. Notwithstanding the issuance of the October 23, 1980 Order by the Minister of
Labor, the Bank respectfully submits that this petition for mandamus, initiated by
petitioner on March 19, 1980 and given due course by this Honorable Court should
not be dismissed. The petitioner herein prays from this Honorable Court that public
respondents be ordered to conduct the certification election as ordered by Med-
Arbiter Plagata, Abis and BLR Director Noriel among the rank-and-file employees ...
of the Bank. Alternatively, the petitioner prays that the Minister of Labor or his Deputy
be required "to act forthwith" on the appeal filed by petitioner herein As could be
gleaned clearly from the allegations and prayer in this petition for mandamus, the
petitioner primarily seeks the holding of a certification election Only secondarily is it
asking this Court to command the Minister of Labor or his Deputy to resolve the
appeal filed by the Bank.
4. The affirmance by the Minister of the disputed order of BLR Director Noriel thus
renders moot and academic only the secondary or alternative prayer of the Union in
this mandamus case. What still remains for resolution by this Honorable Courts the
issue squarely put before it on the propriety or impropriety of holding a certification
election. This issue has been traversed by the petitioner and the Bank in their
respective memoranda filed with this Court, with the Bank stressing that a
certification election would be improper because, among others, the petitioning Union
violated the strike ban, there is a pending case for cancellation of its registration
certificate, and applications for clearance to dismiss the Union's striking members are
pending approval by the BLR Director.
5. A dismissal of this petition for mandamus would unduly delay the resolution of the
issue of whether a certification election should be held or not.
IN VIEW OF THE FOREGOING, it is respectfully moved that this Honorable Court rule on the issue
of whether or not a certification election should be held under circumstances obtaining in the present
case (pp. 214-216, rec.; emphasis supplied).
On November 24, 1980, public respondents filed a reply to the manifestation and comment of
petitioner explaining the discrepancy of the two dates—October 23, 1980, the actual date of the
order of the Minister of Labor affirming the decision of the BLR Director and April 11, 1980, the date
mentioned by the Solicitor General as the alleged date of the aforesaid order of the Minister of
Labor. Thus, the pertinent portion of the letter of Director Noriel to the Solicitor General likewise
explaining the apparent discrepancy of the aforesaid dates reads:
It should likewise invite your attention to the date of the Order which is October 23,
1980 and not April 11, 1980 as indicated in the "Manifestation in Lieu of
Memorandum" dated September 30, 1980 of the Solicitor General filed with the
Supreme Court. The April 11, 1980 date must have been based on a draft order
which was inadvertently included in the records of the case that was forwarded to
your office. We wish to point out, however, that the dispositive portion as quoted in
the Manifestation is exactly the same as that in the Order eventually signed and
released by the Labor Minister on October 23, 1980 (p. 220, rec.).
Public respondents further averred that "(I)n any event, whether the order is dated April 11, 1980 or
October 23, 1980 will not matter since both 'orders' dismissed the appeal of the respondent Bank,
upon which dismissal the Manifestation in Lieu of Memorandum dated September 30, 1980, of public
respondents, was based." Public respondents thus reiterated their prayer that the instant petition be
dismissed for being allegedly moot and academic (pp. 219-222, rec.).
On December 5, 1980, petitioner filed a comment to manifestation/motion of counsel for private

respondent alleging inter alia that "... should the Honorable Court be minded to resolve the issue
raised in the Manifestation/Motion of private respondent-i.e.-whether the alleged strike ban violation
is a bar to a certification election, it will be noted that the matter of whether there has been a
'violation' of the strike ban or not is still to be heard by the Regional Director through Labor Arbiter
Crescencio Trajano after this Honorable Court dismissed G.R. No. L-52026 on the matter of
jurisdiction competence of the Regional Director to hear the question raised therein. To the present,
although, the Regional Director has commenced to act on the case, there is no decision on whether
the strike ban has been violated by the petitioner union." Petitioner union vigorously asserted that
while private respondent Bank has a pending petition for cancellation of the registration certificate of
herein petitioner union, it is still premature for private respondent Bank to claim that the petitioner
union has violated the strike ban. Petitioner then alleged that "(T)here is also no
proof or decision that acts indulged in by the petitioner and its members amounted to a strike and
even assuming arguendo that such act (which was the holding of a meeting for 30 minutes before
office time in the morning) constitutes a 'strike' and further that such act violates the strike ban. It has
been held through Honorable Justice Antonio P. Barredo in Petrophil. vs. Malayang Manggagawa sa
ESSO (75 SCRA 73) that only the leaders and members who participated in the illegal activity are
held responsible. If this were so, then the rest of the members who are innocent are still entitled to
the benefits of collective bargaining. There is thus no need to delay the holding of a certification
election on the alleged ground that there is a pending action of the respondent company against the
petitioner union for 'violation of the strike ban' " (pp. 226-227, rec.).
It is likewise pointed out by petitioner union that even if it would be ultimately confirmed that indeed
petitioner union has violated the strike ban, cancellation of the registration certificate of petitioner
union is not the only disciplinary action or sanction provided for under the law but other penalties
may be imposed and not necessarily cancellation of its registration certificate.
On January 12, 1981, pursuant to the resolution of this Court dated December 4, 1980, petitioner
union filed its rejoinder which reiterated the stand of the Solicitor General that the present case has
become moot and academic by virtue of the decision of the Minister of Labor affirming the decision
of the BLR Director which ordered a certification election (p. 230, rec.).
It is quite obvious from the facts set forth above that the question of jurisdiction vigorously asserted
by herein private respondent Bank has become moot and academic.
What therefore remains for this Court to resolve is the issue as to whether or not a certification
election should be held under the circumstances obtaining in the present case. Is it proper to order a
certification election despite the pendency of the petition to cancel herein petitioner union's certificate
of registration?
The Court rules in the affirmative. The pendency of the petition for cancellation of the registration
certificate of herein petitioner union is not a bar to the holding of a certification election. The
pendency of the petition for cancellation of the registration certificate of petitioner union founded on
the alleged illegal strikes staged by the leaders and members of the intervenor union and petitioner
union should not suspend the holding of a certification election, because there is no order directing
such cancellation (cf. Dairy Queen Products Company of the Philippines, Inc. vs. Court of Industrial
Relations, et al. No. L-35009, Aug. 31, 1977). In said Dairy Queen case, one of the issues raised
was whether the lower court erred and concomitantly committed grave abuse of discretion in
disregarding the fact that therein respondent union's permit and license have been cancelled by the
then Department of Labor and therefore could not be certified as the sole and exclusive bargaining
representative of the rank and file employees of therein petitioner company.
While the rationale of the decision was principally rested on the subsequent rescission of the
decision ordering the cancellation of the registration certificate of the respondent union, thereby
restoring its legal personality and an the rights and privileges accorded by law to a legitimate
organization, this Court likewise declared: "There is no showing, however, that when the respondent
court issued the order dated December 8, 1971, certifying the Dairy Queen Employees Association
CCLU as the sole and exclusive bargaining representative of all regular rank and file employees of
the Dairy Queen Products Company of the Philippines, Inc., for purposes of collective bargaining
with respect to wages, rates of pay, hours of work and other terms and conditions for appointment,
the order of cancellation of the registration certificate of the Dairy Queen Employees Association-
CC-1,U had become final" 78 SCRA 444-445. supra, emphasis supplied).
It may be worthy to note also that the petition for cancellation of petitioner union's registration
certificate based on the alleged illegal strikes staged on October 12, 1979 and later November 5-7,
1979 was evidently intended to delay the early disposition of the case for certification election
considering that the same was apparently filed only after the October 18, 1979 Order of Med-Arbiter
Plagata which directed the holding of a certification election.
Aside from the fact that the petition for cancellation of the registration certificate of petitioner union
has not yet been finally resolved, there is another fact that militates against the stand of private
respondent Bank, the liberal approach observed by this Court as to matters of certification election.
In a recent case, Atlas Free Workers Union (AFWU)-PSSLU Local vs. Hon. Carmelo C. Noriel, et al.
(No. 51005, May 26, 1981), "[T]he Court resolves to grant the petition (for mandamus) in line with
the liberal approach consistently adhered to by this Court in matters of certification election. The
whole democratic process is geared towards the determination of representation, not only in
government but in other sectors as well, by election. Thus, the Court has declared its commitment to
the view that a certification election is crucial to the institution of collective bargaining, for it gives
substance to the principle of majority rule as one ' of the basic concepts of a democratic policy"
(National Mines and Allied Workers Union vs. Luna, 83 SCRA 610).
Likewise, Scout Ramon V. Albano Memorial College vs. Noriel, et al. (L-48347, Oct. 3, 1978, 85
SCRA 494, 497, 498), this Court citing a long catena of cases ruled:
... The institution of collective bargaining is, to recall Cox, a prime manifestation of
industrial democracy at work. The two parties to the relationship, labor and
management, make their own rules by coming to terms. That is to govern themselves
in matters that really count. As labor, however, is composed of a number of
individuals, it is indispensable that they be represented by a labor organization of
their choice. Thus may be discerned how crucial is a certification election. So our
decisions from the earliest case of PLDT Employees Union v. PLDT Co. Free
Telephone Workers Union to the latest, Philippine Communications, Electronics &
Electricity Workers' Federation (PCWF) v. Court of Industrial Relations, had made
clear. The same principle was again given expression in language equally emphatic
in the subsequent case of Philippine Association of Free Labor Unions v. Bureau of
Labor Relations: 'Petitioner thus appears to be woefully lacking in awareness of the
significance of a certification election for the collective bargaining process. It is the
fairest and most effective way of determining which labor organization can truly
represent the working force. It is a fundamental postulate that the will of the majority,
if given expression in an honest election with freedom on the part of the voters to
make their choice, is controlling. No better device can assure the institution of
industrial democracy with the two parties to a business enterprise, management and
labor, establishing a regime of self-rule.' That is to accord respect to the policy of the
Labor Code, indisputably partial to the holding of a certification election so as to
arrive in a manner definitive and certain concerning the choice of the labor
organization to represent the workers in a collective bargaining unit (emphasis
supplied).
It is true that under Section 8, Rule II, Book V of the Labor Code, cancellation of registration
certificate may be imposed on the following instances:
(a) Violation of Articles 234, 238, 239 and 240 of the Code;
(b) Failure to comply with Article 237 of the Code;
(c) Violation of any of the provisions of Article 242 of the Code; and
(d) Any violation of the provisions of this Book.
The aforementioned provisions should be read in relation to Article 273, Chapter IV, Title VIII which
explicitly provides:
Art. 273. Penalties. — (a) Violation of any provision of this Title shall be punished by
a fine of One Thousand Pesos [P l, 000.00] to Ten Thousand Pesos [P 10, 000.00]
and/or imprisonment of one (1) year to five (5) years.
(b) Any person violating any provision of this Title shall be dealt with in accordance
with General Order No. 2-A and General Order No. 49.
(c) Violation of this Title by any legitimate labor organization shall be grounds for
disciplinary action including, but not limited to, the cancellation of its registration
permit.
xxxxxxxxx
(emphasis supplied).
From the aforequoted provisions, We are likewise convinced that as it can be gleaned from said
provisions, cancellation of the registration certificate is not the only resultant penalty in case of any
violation of the Labor Code.
Certainly, the penalty imposable should be commensurate to the nature or gravity of the Legal
activities conducted and to the number of members and leaders of the union staging the illegal
strike.
As aptly ruled by respondent Bureau of Labor Relations Director Noriel: "The rights of workers to
self-organization finds general and specific constitutional guarantees. Section 7, Article IV of the
Philippine Constitution provides that the right to form associations or societies for purposes not
contrary to law shall not be abridged. This right is more pronounced in the case of labor. Section 9,
Article II (ibid) specifically declares that the State shall assure the rights of workers to self-
organization, collective bargaining, security of tenure and just and humane conditions of work. Such
constitutional guarantees should not be lightly taken much less easily 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" (p. 8, Annex "J"; p. 66, rec.).
WHEREFORE, THE WRIT OF mandamus PRAYED FOR IS GRANTED AND RESPONDENT BLR
DIRECTOR NORIEL HEREBY ORDERED TO CALL AND DIRECT THE IMMEDIATE HOLDING OF
A CERTIFICATION ELECTION. NO COSTS.
SO ORDERED.
Fernando, C.J. Teehankee, Barredo, Concepcion Jr., Fernandez, Guerrero, De Castro and
Melencio-Herrera, JJ., concur.
Aquino, J., took no part.
Abad Santos, J., concur in the result.
20) Barrera vs. CIR GR No. L-32853 Sept. 25, 1981 107 SCRA 596

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-32853 September 25, 1981
JUAN S. BARRERA, (doing business under the firm and trade name, MACHINERY AND
STEEL PRODUCTS ENGINEERING MASPE petitioner,
vs.
THE HONORABLE COURT OF INDUSTRIAL RELATIONS, Philippine Associated Workers
Union (PAWO) and MASPE WORKERS' UNION, respondents.
FERNANDO C.J.:
It was the absence of any definite ruling at the time this petition was filed on the question of whether
or not a pending certification election proceeding may be dismissed or held in abeyance, there being
such a motion on the part of the employer Juan S. Barrera, doing business under the firm and trade
name of Machinery and Steel Products Engineering MASPE alleging an unfair labor practice against
one of the contending parties, private respondent MASPE Workers Union, the other being private
respondent Philippine Associated Workers Union, that led this Court to give it due course. The unfair
labor practice imputed to such labor union consisted of failure to bargain collectively, aggravated by
an illegal strike. Respondent Court of Industrial Relations denied such a motion to dismiss, stating
that the grounds therein alleged "appear not to be indubitable A motion for reconsideration having
proved futile, this petition was filed.
Subsequently, to be precise, in 1973, in the case of B. F. Goodrich Philippines, Inc. vs. Goodrich
(Marikina Factory) Confidential and Salaried Employees Union-NATU. 1 such a question was given
an answer by this Court, one adverse to the claim of petitioner. This petition, therefore, must be
dismissed.
The case for petitioner was put most vigorously in the exhaustive and scholarly brief of its counsel,
Manuel M. Crudo To quote from its pertinent portion: "On September 22, 1970 the petitioner Barrera
filed a motion to dismiss or hold case in abeyance, in CIR Case No. 2759-MC. In said motion, we
called attention to the admission of MASPE Workers Union as intervenor in the case. We stated that
the intervenor union, its officers and members had committed various acts of unfair labor
practice and were on illegal strike punctuated by force, violence and intimidation. We called attention
to our formal charge of unfair labor practice against the intervenor union. We called attention to the
fact that in the charge of unfair labor practice among the reliefs prayed for were to declare
respondents therein collectively and individually guilty of unfair labor practice; to declare the strike,
and other concerted actions resorted to in pursuance of said unfair labor practice illegal to declare
the MASPE Workers Union as consequently having lost all rights and privileges accorded by law to a
legitimate labor union; and to declare all individual respondents therein and others as having lost
their employment status by virtue of the illegality of the strike staged by them. We then pointed out
that unless the case for unfair labor practice against MASPE Workers Union, its officers and
members is decided the status of that union and its members who are respondents would
be uncertain (i.e., in relation to the requested certification election and the outcome thereof). * * *
Unfortunately, the respondent Honorable Court of Industrial Relations denied our motion to dismiss
or hold case in abeyance. * * * ." 2It remains only to be added that subsequently the Court of
Industrial Relations en banc denied a motion for reconsideration, failing "to find sufficient justification
to alter or to modify the aforesaid Order." 3
To repeat, the petition cannot prosper.
1. As set forth in the B. F. Goodrich Philippines, Inc. decision: "There is novelty in the specific
question raised, as to whether or not a certification election may be stayed at the instance of the
employer, pending the determination of an unfair labor practice case filed by it against certain
employees affiliated with respondent-unions. That is a matter of which this Court has not had an
opportunity to speak on previously. What is settled law, dating from the case of Standard Cigarette
Workers' Union v. Court of Industrial Relations, decided in 1957, is that if it were a labor organization
objecting to the participation in a certification election of a company dominated union, as a result of
which a complaint for an unfair labor practice case against the employer was filed, the status of the
latter union must be first cleared in such a proceeding before such voting could take place." 4
2. This is the more relevant excerpt: "The unique situation before us, however, is exactly the reverse.
It is management that would have an unfair labor practice case filed by it for illegal strike engaged in
by some of its employees concluded, before it would agree to the holding of a certification election.
That is the stand of petitioner. It does not carry conviction. The reason that justifies the
postponement of a certification election pending an inquiry, as to the bona fides of a labor union,
precisely calls for a different conclusion. If under the circumstances disclosed, management is
allowed to have its way, the result might be to dilute or fritter away the strength of an organization
bent on a more zealous defense of labor's prerogatives. The difficulties and obstacles that must be
then hurdled would not be lost on the rest of the personnel who had not as yet made up their minds
one way or the other. This is not to say that management is to be precluded from filing an unfair
labor practice case. It is merely to stress that such a suit should not be allowed to lend itself as a
means, whether intended or not, to prevent a truly free expression of the will of the labor group as to
the organization that will represent it. It is not only the loss of time involved, in itself not likely to
enhance the prospect of respondent-unions, but also the fear engendered in the mind of an ordinary
employee that management has many weapons in its arsenal to bring the full force of its undeniable
power against those of its employees dissatisfied with things as they are. There is no valid reason
then for the postponement sought. This is one instance that calls for the application of the
maxim, lex dilationes semper exhorret. Moreover, is there not in the posture taken by petitioner a
contravention of what is expressly set forth in the Industrial Peace Act, which speaks of the labor
organizations 'designated or selected for the purpose of collective bargaining by the majority of the
employees in an appropriate collective bargaining unit [be the exclusive] representative of all the
employees in such unit for the purpose of collective bargaining.' The law clearly contemplates all the
employees, not only some of them. As much as possible then, there is to be no unwarranted
reduction in the number of those taking part in a certification election, even under the guise that in
the meanwhile, which may take some time, some of those who are employees could possibly lose
such status, by virtue of a pending unfair labor practice case." 5
3. Even on the assumption that the vigorous condenmation of the strike and the picketing were
attended by violence, it does not automatically follow that thereby the strikers in question are no
longer entitled to participate in the certification election for having automatically lost their jobs. So it
was made clear in another B.F. Goodrich decision: 6 What was set forth in the facts as found by
respondent Judge Salvador would indicate that it was during the picketing, certainly not peaceful,
that the imputed acts of violence did occur. It cannot be ignored, however, that there were injuries on
both sides because management did not, understandably, play a passive role confronted as it was
with the unruly disruptive tactics of labor. This is not, by any means, to condone activities of such
character, irrespective of the parties responsible. It is merely to explain what cannot be justified.
Nonetheless, did the acts in question call for an automatic finding of illegality? Again, the order
issued on February 4, 1972 appeared to be oblivious of a 1971 decision of this Court, Shell Oil
Workers' Union v. Shell Company of the Philippines, Ltd. There it was clearly held: 'A strike
otherwise valid, if violent in character, may be placed beyond the pale. Care is to be taken, however,
especially where an unfair labor practice is involved, to avoid stamping it with illegality just because it
is tainted by such acts. To avoid rendering illusory the recognition of the right to strike, responsibility
in such a case should be individual and not collective. A different conclusion would be called for, of
course, if the existence of force while the strike lasts is pervasive and widespread, consistently and
deliberately resorted to as a matter of policy. It could be reasonably concluded then that even if
justified as to ends, it becomes illegal because of the means employed.' It must be pointed out
likewise that the facts as there found would seem to indicate a greater degree of violence. Thus:
'Respondent Court must have been unduly impressed by the evidence submitted by the Shell
Company to the effect that the strike was marred by acts of force, intimidation and violence on the
evening of June 14 and twice in the mornings of June 15 and 16, 1967 in Manila. Attention was
likewise called to the fact that even on the following day, with police officials stationed at the strike
bound area, molotov bombs did explode and the streets were obstructed witlh wooden planks
containing protruding nails. Moreover, in the branches of the Shell Company in Iloilo City as well as
in Bacolod, on dates unspecified, physical injuries appeared to have been inflicted on management
personnel. Respondent Court in the appealed decision did penalize with loss of employment the ten
individuals responsible for such acts. Nor is it to be lost sight of that before the certification on June
27, 1967, one month had elapsed during which the Union was on strike. Except on those few days
specified then, the Shell Company could not allege that the strike was conducted in a manner other
than peaceful Under the circumstances, it would be going too far to consider that it thereby became
illegal.' Then, mention was made of a decision in Insular Life Assurance Co., Ltd. Employees'
Association vs. Insular Life Assurance Co., Ltd. [where] there is the recognition by this Court,
speaking through Justice Castro, of picketing as such being "inherently explosive." It is thus clear
that not every form of violence suffices to affix the seal of illegality on a strike or to cause the loss of
employment by the guilty party. " 7
WHEREFORE, this petition is dismissed and the appealed order affirmed. No costs.
Aquino, Guerrero, Abad Santos and De Castro, JJ., concur.
Barredo, J., is on leave.
Concepcion Jr., J., is on leave.

Footnotes
1 L-34069-70, February 28, 1973, 49 SCRA 532.
2 Brief for the Petitioner, 9-10.
3 Petition, Annex P.
4 49 SCRA 532, 538. Standard Cigarette Workers' Union v. Court of Industrial

Relations is reported in 101 Phil. 126.
5 Ibid, 540-541.
6 Almira v. B. F. Goodrich Philippines, Inc., L-34974, July 25, 1974, 58 SCRA 120.
7 Ibid, 127-128. Shell Oil Workers Union, L-28607, May 31, 1971, is reported in 39
SCRA 276; Insular Life Assurance Co., L25291, January 30, l971, in 37 SCRA 244.
21) Samahan vs. Secretary GR No. 107792 March 2, 1998
SECOND DIVISION
[G.R. No. 107792. March 2, 1998]
SAMAHANG MANGGAGAWA SA PERMEX (SMP-PIILU-

TUCP), petitioners, vs. THE SECRETARY OF LABOR, NATIONAL
FEDERATION OF LABOR, PERMEX PRODUCER AND
EXPORTER CORPORATION, respondents.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari of the decision, dated October 8, 1992 and
order dated November 12, 1992, of Undersecretary of Labor and Employment
Bienvenido Laguesma, ordering a certification election to be conducted among the
employees of respondent company.
The facts of the case are as follows. On January 15, 1991, a certification election
was conducted among employees of respondent Permex Producer and Exporter
Corporation (hereafter referred to as Permex Producer). The results of the elections
were as follows:
National Federation of Labor (NFL) - 235
No Union - 466
Spoiled Ballots - 18
Marked Ballots - 9
Challenged Ballots - 7
However, some employees of Permex Producer formed a labor organization known

as the Samahang Manggagawa sa Permex (SMP) which they registered with the
Department of Labor and Employment on March 11, 1991. The union later affiliated with
the Philippine Integrated Industries Labor Union (PIILU).
On August 16, 1991, Samahang Manggagawa sa Permex-Philippine Integrated
Industries Labor Union (SMP-PIILU), wrote the respondent company requesting
recognition as the sole and exclusive bargaining representative of employees at the
Permex Producer. On October 19, 1991 Permex Producer recognized SMP-PIILU and,
on December 1, entered into a collective bargaining agreement with it. The CBA was
ratified between December 9 and 10, 1991 by the majority of the rank and file
employees of Permex Producer. On December 13, 1991, it was certified by the DOLE.
On February 25, 1992, respondent NFL filed a petition for certification election, but it
was dismissed by Med-Arbiter Edgar B. Gongalos in an order dated August 20, 1992.
Respondent NFL then appealed the order to the Secretary of Labor and Employment.
On October 8, 1992, the Secretary of Labor, through Undersecretary Bienvenido
Laguesma, set aside the order of the Med-Arbiter and ordered a certification election to
be conducted among the rank and file employees at the Permex Producer, with the
following choices:
1. National Federation of Labor
2. Samahang Manggagawa sa Permex
3. No union
Petitioner moved for a reconsideration but its motion was denied in an order dated
November 12, 1992. Hence, this petition.
Two arguments are put forth in support of the petition. First, it is contended that
petitioner has been recognized by the majority of the employees at Permex Producer as
their sole collective bargaining agent. Petitioner argues that when a group of employees
constituting themselves into an organization and claiming to represent a majority of the
work force requests the employer to bargain collectively, the employer may do one of
two things. First, if the employer is satisfied with the employees claim the employer may
voluntarily recognize the union by merely bargaining collectively with it. The formal
written confirmation is ordinarily stated in the collective bargaining agreement. Second,
if on the other hand, the employer refuses to recognize the union voluntarily, it may
petition the Bureau of Labor Relations to conduct a certification election. If the employer
does not submit a petition for certification election, the union claiming to represent the
employees may submit the petition so that it may be directly certified as the employees
representative or a certification election may be held.
The case of Ilaw at Buklod ng Manggagawa v. Ferrer-Calleja,[1] cited by the Solicitor
General in his comment filed in behalf of the NLRC, is particularly apropos. There, the
union also requested voluntary recognition by the company. Instead of granting the
request, the company petitioned for a certification election. The union moved to dismiss
on the ground that it did not ask the company to bargain collectively with it. As its motion
was denied, the union brought the matter to this Court. In sustaining the companys
stand, this Court ruled:
...Ordinarily, in an unorganized establishment like the Calasiao Beer Region, it is
the union that files a petition for a certification election if there is no certified bargaining
agent for the workers in the establishment. If a union asks the employer to voluntarily
recognize it as the bargaining agent of the employees, as the petitioner did, it in effect
asks the employer to certify it as the bargaining representative of the employees A
CERTIFICATION WHICH THE EMPLOYER HAS NO AUTHORITY TO GIVE, for it is
the employees prerogative (not the employers) to determine whether they want a union
to represent them, and, if so, which one it should be. (emphasis supplied)
In accordance with this ruling, Permex Producer should not have given its voluntary
recognition to SMP-PIILU-TUCP when the latter asked for recognition as exclusive
collective bargaining agent of the employees of the company. The company did not
have the power to declare the union the exclusive representative of the workers for the
purpose of collective bargaining.
Indeed, petitioners contention runs counter to the trend towards the holding of
certification election. By virtue of Executive Order No. 111, which became effective on
March 4, 1987, the direct certification previously allowed under the Labor Code had
been discontinued as a method of selecting the exclusive bargaining agents of the
workers.[2]Certification election is the most effective and the most democratic way of
determining which labor organization can truly represent the working force in the
appropriate bargaining unit of a company.[3]
Petitioner argues that of the 763 qualified employees of Permex Producer,
479 supported its application for registration with the DOLE and that when petitioner
signed the CBA with the company, the CBA was ratified by 542 employees. Petitioner
contends that such support by the majority of the employees justifies its finding that the
CBA made by it is valid and binding.
But it is not enough that a union has the support of the majority of the employees. It
is equally important that everyone in the bargaining unit be given the opportunity to
express himself.[4]
This is especially so because, in this case, the recognition given to the union came
barely ten (10) months after the employees had voted no union in the certification
election conducted in the company. As pointed out by respondent Secretary of Labor in
his decision, there can be no determination of a bargaining representative within a year
of the proclamation of the results of the certification election. [5] Here the results, which
showed that 61% of the employees voted for no union, were certified only on February
25, 1991 but on December 1, 1991 Permex Producer already recognized the union and
entered into a CBA with it.
There is something dubious about the fact that just ten (10) months after the
employees had voted that they did not want any union to represent them, they would
beexpressing support for petitioner. The doubt is compounded by the fact that in sworn
affidavits some employees claimed that they had either been coerced or misled into
signing a document which turned out to be in support of petitioner as its collective
bargaining agent. Although there were retractions, we agree with the Solicitor General
that retractions of statements by employees adverse to a company (or its favored union)
are oftentimes tainted with coercion and intimidation. For how could one explain the
seeming flip-flopping of position taken by the employees? The figures claimed by
petitioner to have been given to it in support cannot readily be accepted as true.
Second. Petitioner invokes the contract-bar rule. They contend that under Arts. 253,
253-A and 256 of the Labor Code and Book V, Rule 5, 3 of its Implementing Rules and
Regulations, a petition for certification election or motion for intervention may be
entertained only within 60 days prior to the date of expiration of an existing collective
bargaining agreement. The purpose of the rule is to ensure stability in the relationships
of the workers and the management by preventing frequent modifications of any
collective bargaining agreement earlier entered into by them in good faith and for the
stipulated original period. Excepted from the contract-bar rule are certain types of
contracts which do not foster industrial stability, such as contracts where the identity of
the representative is in doubt. Any stability derived from such contracts must be
subordinated to the employees freedom of choice because it does not establish the kind
of industrial peace contemplated by the law.[6] Such situation obtains in this case. The
petitioner entered into a CBA with Permex Producer when its status as exclusive
bargaining agent of the employees had not been established yet.
WHEREFORE, the challenged decision and order of the respondent Secretary of
Labor are AFFIRMED.
SO ORDERED.
Regalado (Chairman), Melo, Puno and Martinez, JJ., concur.
[1] 182 SCRA 561 (1990).

[2] Central Negros Electric Cooperative v. Secretary of Labor and Employment, 201 SCRA 591 (1991).
[3]National Mines and Allied Workers Union v. Secretary of Labor, 227 SCRA 821 (1993); Associated
Trade Unions v. Trajano, 162 SCRA 319 (1988).
[4] Central Negros Electric Cooperative, Inc. v. Secretary of DOLE, 201 SCRA at 592.
[5] IMPLEMENTING RULES, Bk V, Rule V, 3.
[6] Firestone Tire and Rubber Company Employees Union v. Estrella, 81 SCRA 49 (1978).
22) International vs. Calleja GR No. 85750 Sept. 28, 1990

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 85750 September 28, 1990
INTERNATIONAL CATHOLIC IMMIGRATION COMMISSION, petitioner

vs
HON. PURA CALLEJA IN HER CAPACITY AS DIRECTOR OF THE BUREAU OF LABOR
RELATIONS AND TRADE UNIONS OF THE PHILIPPINES AND ALLIED SERVICES (TUPAS)
WFTU respondents.
G.R. No. 89331 September 28, 1990
KAPISANAN NG MANGGAGAWA AT TAC SA IRRI-ORGANIZED LABOR ASSOCIATION IN

LINE INDUSTRIES AND AGRICULTURE, petitioner,
vs
SECRETARY OF LABOR AND EMPLOYMENT AND INTERNATIONAL RICE RESEARCH
INSTITUTE, INC., respondents.
Araullo, Zambrano, Gruba, Chua Law Firm for petitioner in 85750.
Dominguez, Armamento, Cabana & Associates for petitioner in G.R. No. 89331.
Jimenez & Associates for IRRI.
Alfredo L. Bentulan for private respondent in 85750.
MELENCIO-HERRERA, J.:
Consolidated on 11 December 1989, these two cases involve the validity of the claim of immunity by the International Catholic Migration
Commission (ICMC) and the International Rice Research Institute, Inc. (IRRI) from the application of Philippine labor laws.
I
Facts and Issues
A. G.R. No. 85750 — the International Catholic Migration Commission (ICMC) Case.
As an aftermath of the Vietnam War, the plight of Vietnamese refugees fleeing from South Vietnam's
communist rule confronted the international community.
In response to this crisis, on 23 February 1981, an Agreement was forged between the Philippine
Government and the United Nations High Commissioner for Refugees whereby an operating center
for processing Indo-Chinese refugees for eventual resettlement to other countries was to be
established in Bataan (Annex "A", Rollo, pp. 22-32).
ICMC was one of those accredited by the Philippine Government to operate the refugee processing
center in Morong, Bataan. It was incorporated in New York, USA, at the request of the Holy See, as
a non-profit agency involved in international humanitarian and voluntary work. It is duly registered
with the United Nations Economic and Social Council (ECOSOC) and enjoys Consultative Status,
Category II. As an international organization rendering voluntary and humanitarian services in the
Philippines, its activities are parallel to those of the International Committee for Migration (ICM) and
the International Committee of the Red Cross (ICRC) [DOLE Records of BLR Case No. A-2-62-
87, ICMC v. Calleja, Vol. 1].
On 14 July 1986, Trade Unions of the Philippines and Allied Services (TUPAS) filed with the then
Ministry of Labor and Employment a Petition for Certification Election among the rank and file
members employed by ICMC The latter opposed the petition on the ground that it is an international
organization registered with the United Nations and, hence, enjoys diplomatic immunity.
On 5 February 1987, Med-Arbiter Anastacio L. Bactin sustained ICMC and dismissed the petition for
lack of jurisdiction.
On appeal by TUPAS, Director Pura Calleja of the Bureau of Labor Relations (BLR), reversed the
Med-Arbiter's Decision and ordered the immediate conduct of a certification election. At that time,
ICMC's request for recognition as a specialized agency was still pending with the Department of
Foreign Affairs (DEFORAF).
Subsequently, however, on 15 July 1988, the Philippine Government, through the DEFORAF,
granted ICMC the status of a specialized agency with corresponding diplomatic privileges and
immunities, as evidenced by a Memorandum of Agreement between the Government and ICMC
(Annex "E", Petition, Rollo, pp. 41-43), infra.
ICMC then sought the immediate dismissal of the TUPAS Petition for Certification Election invoking
the immunity expressly granted but the same was denied by respondent BLR Director who, again,
ordered the immediate conduct of a pre-election conference. ICMC's two Motions for
Reconsideration were denied despite an opinion rendered by DEFORAF on 17 October 1988 that
said BLR Order violated ICMC's diplomatic immunity.
Thus, on 24 November 1988, ICMC filed the present Petition for Certiorari with Preliminary Injunction
assailing the BLR Order.
On 28 November 1988, the Court issued a Temporary Restraining Order enjoining the holding of the
On 10 January 1989, the DEFORAF, through its Legal Adviser, retired Justice Jorge C. Coquia of
the Court of Appeals, filed a Motion for Intervention alleging that, as the highest executive
department with the competence and authority to act on matters involving diplomatic immunity and
privileges, and tasked with the conduct of Philippine diplomatic and consular relations with foreign
governments and UN organizations, it has a legal interest in the outcome of this case.
Over the opposition of the Solicitor General, the Court allowed DEFORAF intervention.
On 12 July 1989, the Second Division gave due course to the ICMC Petition and required the
submittal of memoranda by the parties, which has been complied with.
As initially stated, the issue is whether or not the grant of diplomatic privileges and immunites to
ICMC extends to immunity from the application of Philippine labor laws.
ICMC sustains the affirmative of the proposition citing (1) its Memorandum of Agreement with the
Philippine Government giving it the status of a specialized agency, (infra); (2) the Convention on the
Privileges and Immunities of Specialized Agencies, adopted by the UN General Assembly on 21
November 1947 and concurred in by the Philippine Senate through Resolution No. 91 on 17 May
1949 (the Philippine Instrument of Ratification was signed by the President on 30 August 1949 and
deposited with the UN on 20 March 1950) infra; and (3) Article II, Section 2 of the 1987 Constitution,
which declares that the Philippines adopts the generally accepted principles of international law as
part of the law of the land.
Intervenor DEFORAF upholds ICMC'S claim of diplomatic immunity and seeks an affirmance of the
DEFORAF determination that the BLR Order for a certification election among the ICMC employees
is violative of the diplomatic immunity of said organization.
Respondent BLR Director, on the other hand, with whom the Solicitor General agrees, cites State
policy and Philippine labor laws to justify its assailed Order, particularly, Article II, Section 18 and
Article III, Section 8 of the 1987 Constitution, infra; and Articles 243 and 246 of the Labor Code, as
amended, ibid. In addition, she contends that a certification election is not a litigation but a mere
investigation of a non-adversary, fact-finding character. It is not a suit against ICMC its property,
funds or assets, but is the sole concern of the workers themselves.
B. G.R. No. 89331 — (The International Rice Research Institute [IRRI] Case).
Before a Decision could be rendered in the ICMC Case, the Third Division, on 11 December 1989,
resolved to consolidate G.R. No. 89331 pending before it with G.R. No. 85750, the lower-numbered
case pending with the Second Division, upon manifestation by the Solicitor General that both cases
involve similar issues.
The facts disclose that on 9 December 1959, the Philippine Government and the Ford and
Rockefeller Foundations signed a Memorandum of Understanding establishing the International Rice
Research Institute (IRRI) at Los Baños, Laguna. It was intended to be an autonomous, philanthropic,
tax-free, non-profit, non-stock organization designed to carry out the principal objective of conducting
"basic research on the rice plant, on all phases of rice production, management, distribution and
utilization with a view to attaining nutritive and economic advantage or benefit for the people of Asia
and other major rice-growing areas through improvement in quality and quantity of rice."
Initially, IRRI was organized and registered with the Securities and Exchange Commission as a
private corporation subject to all laws and regulations. However, by virtue of Pres. Decree No. 1620,
promulgated on 19 April 1979, IRRI was granted the status, prerogatives, privileges and immunities
of an international organization.
The Organized Labor Association in Line Industries and Agriculture (OLALIA), is a legitimate labor
organization with an existing local union, the Kapisanan ng Manggagawa at TAC sa IRRI
(Kapisanan, for short) in respondent IRRI.
On 20 April 1987, the Kapisanan filed a Petition for Direct Certification Election with Region IV,
Regional Office of the Department of Labor and Employment (DOLE).
IRRI opposed the petition invoking Pres. Decree No. 1620 conferring upon it the status of an
international organization and granting it immunity from all civil, criminal and administrative
proceedings under Philippine laws.
On 7 July 1987, Med-Arbiter Leonardo M. Garcia, upheld the opposition on the basis of Pres.
Decree No. 1620 and dismissed the Petition for Direct Certification.
On appeal, the BLR Director, who is the public respondent in the ICMC Case, set aside the Med-
Arbiter's Order and authorized the calling of a certification election among the rank-and-file
employees of IRRI. Said Director relied on Article 243 of the Labor Code, as amended, infra and
Article XIII, Section 3 of the 1987 Constitution, 1 and held that "the immunities and privileges granted
to IRRI do not include exemption from coverage of our Labor Laws." Reconsideration sought by IRRI
was denied.
On appeal, the Secretary of Labor, in a Resolution of 5 July 1989, set aside the BLR Director's
Order, dismissed the Petition for Certification Election, and held that the grant of specialized agency
status by the Philippine Government to the IRRI bars DOLE from assuming and exercising
jurisdiction over IRRI Said Resolution reads in part as follows:
Presidential Decree No. 1620 which grants to the IRRI the status, prerogatives,
privileges and immunities of an international organization is clear and explicit. It
provides in categorical terms that:
Art. 3 — The Institute shall enjoy immunity from any penal, civil and administrative
proceedings, except insofar as immunity has been expressly waived by the Director-
General of the Institution or his authorized representative.
Verily, unless and until the Institute expressly waives its immunity, no summons,
subpoena, orders, decisions or proceedings ordered by any court or administrative
or quasi-judicial agency are enforceable as against the Institute. In the case at bar
there was no such waiver made by the Director-General of the Institute. Indeed, the
Institute, at the very first opportunity already vehemently questioned the jurisdiction
of this Department by filing an ex-parte motion to dismiss the case.
Hence, the present Petition for Certiorari filed by Kapisanan alleging grave abuse of discretion by
respondent Secretary of Labor in upholding IRRI's diplomatic immunity.
The Third Division, to which the case was originally assigned, required the respondents to comment
on the petition. In a Manifestation filed on 4 August 1990, the Secretary of Labor declared that it
was "not adopting as his own" the decision of the BLR Director in the ICMC Case as well as the
Comment of the Solicitor General sustaining said Director. The last pleading was filed by IRRI on 14
August 1990.
Instead of a Comment, the Solicitor General filed a Manifestation and Motion praying that he be
excused from filing a comment "it appearing that in the earlier case of International Catholic
Migration Commission v. Hon. Pura Calleja, G.R. No. 85750. the Office of the Solicitor General had
sustained the stand of Director Calleja on the very same issue now before it, which position has
been superseded by respondent Secretary of Labor in G.R. No. 89331," the present case. The Court
acceded to the Solicitor General's prayer.
The Court is now asked to rule upon whether or not the Secretary of Labor committed grave abuse
of discretion in dismissing the Petition for Certification Election filed by Kapisanan.
Kapisanan contends that Article 3 of Pres. Decree No. 1620 granting IRRI the status, privileges,
prerogatives and immunities of an international organization, invoked by the Secretary of Labor, is
unconstitutional in so far as it deprives the Filipino workers of their fundamental and constitutional
right to form trade unions for the purpose of collective bargaining as enshrined in the 1987
Constitution.
A procedural issue is also raised. Kapisanan faults respondent Secretary of Labor for entertaining
IRRI'S appeal from the Order of the Director of the Bureau of Labor Relations directing the holding of
a certification election. Kapisanan contends that pursuant to Sections 7, 8, 9 and 10 of Rule V 2 of
the Omnibus Rules Implementing the Labor Code, the Order of the BLR Director had become final
and unappeable and that, therefore, the Secretary of Labor had no more jurisdiction over the said
appeal.
On the other hand, in entertaining the appeal, the Secretary of Labor relied on Section 25 of Rep.
Act. No. 6715, which took effect on 21 March 1989, providing for the direct filing of appeal from the
Med-Arbiter to the Office of the Secretary of Labor and Employment instead of to the Director of the
Bureau of Labor Relations in cases involving certification election orders.
III
Findings in Both Cases.
There can be no question that diplomatic immunity has, in fact, been granted ICMC and IRRI.
Article II of the Memorandum of Agreement between the Philippine Government and ICMC provides
that ICMC shall have a status "similar to that of a specialized agency." Article III, Sections 4 and 5 of
the Convention on the Privileges and Immunities of Specialized Agencies, adopted by the UN
General Assembly on 21 November 1947 and concurred in by the Philippine Senate through
Resolution No. 19 on 17 May 1949, explicitly provides:
Art. III, Section 4. The specialized agencies, their property and assets, wherever
located and by whomsoever held, shall enjoy immunity from every form of legal
process except insofar as in any particular case they have expressly waived their
immunity. It is, however, understood that no waiver of immunity shall extend to any
measure of execution.
Sec. 5. — The premises of the specialized agencies shall be inviolable. The property
and assets of the specialized agencies, wherever located and by whomsoever held
shall be immune from search, requisition, confiscation, expropriation and any other
form of interference, whether by executive, administrative, judicial or legislative
action. (Emphasis supplied).
IRRI is similarly situated, Pres. Decree No. 1620, Article 3, is explicit in its grant of immunity, thus:
Art. 3. Immunity from Legal Process. — The Institute shall enjoy immunity from any
penal, civil and administrative proceedings, except insofar as that immunity has been
expressly waived by the Director-General of the Institute or his authorized
representatives.
Thus it is that the DEFORAF, through its Legal Adviser, sustained ICMC'S invocation of immunity
when in a Memorandum, dated 17 October 1988, it expressed the view that "the Order of the
Director of the Bureau of Labor Relations dated 21 September 1988 for the conduct of Certification
Election within ICMC violates the diplomatic immunity of the organization." Similarly, in respect of
IRRI, the DEFORAF speaking through The Acting Secretary of Foreign Affairs, Jose D. Ingles, in a
letter, dated 17 June 1987, to the Secretary of Labor, maintained that "IRRI enjoys immunity from
the jurisdiction of DOLE in this particular instance."
The foregoing opinions constitute a categorical recognition by the Executive Branch of the
Government that ICMC and IRRI enjoy immunities accorded to international organizations, which
determination has been held to be a political question conclusive upon the Courts in order not to
embarrass a political department of Government.
It is a recognized principle of international law and under our system of separation of

powers that diplomatic immunity is essentially a political question and courts should
refuse to look beyond a determination by the executive branch of the government,
and where the plea of diplomatic immunity is recognized and affirmed by the
executive branch of the government as in the case at bar, it is then the duty of the
courts to accept the claim of immunity upon appropriate suggestion by the principal
law officer of the government . . . or other officer acting under his direction. Hence, in
adherence to the settled principle that courts may not so exercise their jurisdiction . .
. as to embarrass the executive arm of the government in conducting foreign
relations, it is accepted doctrine that in such cases the judicial department of (this)
government follows the action of the political branch and will not embarrass the latter
by assuming an antagonistic jurisdiction. 3
A brief look into the nature of international organizations and specialized agencies is in order. The
term "international organization" is generally used to describe an organization set up by agreement
between two or more states. 4 Under contemporary international law, such organizations are
endowed with some degree of international legal personality 5 such that they are capable of
exercising specific rights, duties and powers. 6 They are organized mainly as a means for conducting
general international business in which the member states have an interest. 7 The United Nations, for
instance, is an international organization dedicated to the propagation of world peace.
"Specialized agencies" are international organizations having functions in particular fields. The term
appears in Articles 57 8 and 63 9 of the Charter of the United Nations:
The Charter, while it invests the United Nations with the general task of promoting
progress and international cooperation in economic, social, health, cultural,
educational and related matters, contemplates that these tasks will be mainly fulfilled
not by organs of the United Nations itself but by autonomous international
organizations established by inter-governmental agreements outside the United
Nations. There are now many such international agencies having functions in many
different fields, e.g. in posts, telecommunications, railways, canals, rivers, sea
transport, civil aviation, meteorology, atomic energy, finance, trade, education and
culture, health and refugees. Some are virtually world-wide in their membership,
some are regional or otherwise limited in their membership. The Charter provides
that those agencies which have "wide international responsibilities" are to be brought
into relationship with the United Nations by agreements entered into between them
and the Economic and Social Council, are then to be known as "specialized
agencies." 10
The rapid growth of international organizations under contemporary international law has paved the
way for the development of the concept of international immunities.
It is now usual for the constitutions of international organizations to contain

provisions conferring certain immunities on the organizations themselves,
representatives of their member states and persons acting on behalf of the
organizations. A series of conventions, agreements and protocols defining the
immunities of various international organizations in relation to their members
generally are now widely in force; . . . 11
There are basically three propositions underlying the grant of international immunities to international
organizations. These principles, contained in the ILO Memorandum are stated thus: 1) international
institutions should have a status which protects them against control or interference by any one
government in the performance of functions for the effective discharge of which they are responsible
to democratically constituted international bodies in which all the nations concerned are represented;
2) no country should derive any national financial advantage by levying fiscal charges on common
international funds; and 3) the international organization should, as a collectivity of States members,
be accorded the facilities for the conduct of its official business customarily extended to each other
by its individual member States. 12 The theory behind all three propositions is said to be essentially
institutional in character. "It is not concerned with the status, dignity or privileges of individuals, but
with the elements of functional independence necessary to free international institutions from
national control and to enable them to discharge their responsibilities impartially on behalf of all their
members. 13 The raison d'etre for these immunities is the assurance of unimpeded performance of
their functions by the agencies concerned.
The grant of immunity from local jurisdiction to ICMC and IRRI is clearly necessitated by their
international character and respective purposes. The objective is to avoid the danger of partiality and
interference by the host country in their internal workings. The exercise of jurisdiction by the
Department of Labor in these instances would defeat the very purpose of immunity, which is to
shield the affairs of international organizations, in accordance with international practice, from
political pressure or control by the host country to the prejudice of member States of the
organization, and to ensure the unhampered performance of their functions.
ICMC's and IRRI's immunity from local jurisdiction by no means deprives labor of its basic rights,
which are guaranteed by Article II, Section 18, 14 Article III, Section 8, 15 and Article XIII, Section 3
(supra), of the 1987 Constitution; and implemented by Articles 243 and 246 of the Labor
Code, 16 relied on by the BLR Director and by Kapisanan.
For, ICMC employees are not without recourse whenever there are disputes to be settled. Section
31 of the Convention on the Privileges and Immunities of the Specialized Agencies of the United
Nations 17 provides that "each specialized agency shall make provision for appropriate modes of
settlement of: (a) disputes arising out of contracts or other disputes of private character to which the
specialized agency is a party." Moreover, pursuant to Article IV of the Memorandum of Agreement
between ICMC the the Philippine Government, whenever there is any abuse of privilege by ICMC,
the Government is free to withdraw the privileges and immunities accorded. Thus:
Art. IV. Cooperation with Government Authorities. — 1. The Commission shall

cooperate at all times with the appropriate authorities of the Government to ensure
the observance of Philippine laws, rules and regulations, facilitate the proper
administration of justice and prevent the occurrences of any abuse of the privileges
and immunities granted its officials and alien employees in Article III of this
Agreement to the Commission.
2. In the event that the Government determines that there has been an abuse of the
privileges and immunities granted under this Agreement, consultations shall be held
between the Government and the Commission to determine whether any such abuse
has occurred and, if so, the Government shall withdraw the privileges and immunities
granted the Commission and its officials.
Neither are the employees of IRRI without remedy in case of dispute with management as, in fact,
there had been organized a forum for better management-employee relationship as evidenced by
the formation of the Council of IRRI Employees and Management (CIEM) wherein "both
management and employees were and still are represented for purposes of maintaining mutual and
beneficial cooperation between IRRI and its employees." The existence of this Union factually and
tellingly belies the argument that Pres. Decree No. 1620, which grants to IRRI the status, privileges
and immunities of an international organization, deprives its employees of the right to self-
organization.
The immunity granted being "from every form of legal process except in so far as in any particular
case they have expressly waived their immunity," it is inaccurate to state that a certification election
is beyond the scope of that immunity for the reason that it is not a suit against ICMC. A certification
election cannot be viewed as an independent or isolated process. It could tugger off a series of
events in the collective bargaining process together with related incidents and/or concerted activities,
which could inevitably involve ICMC in the "legal process," which includes "any penal, civil and
administrative proceedings." The eventuality of Court litigation is neither remote and from which
international organizations are precisely shielded to safeguard them from the disruption of their
functions. Clauses on jurisdictional immunity are said to be standard provisions in the constitutions
of international Organizations. "The immunity covers the organization concerned, its property and its
assets. It is equally applicable to proceedings in personam and proceedings in rem." 18
We take note of a Manifestation, dated 28 September 1989, in the ICMC Case (p. 161, Rollo),
wherein TUPAS calls attention to the case entitled "International Catholic Migration Commission v.
NLRC, et als., (G.R. No. 72222, 30 January 1989, 169 SCRA 606), and claims that, having taken
cognizance of that dispute (on the issue of payment of salary for the unexpired portion of a six-
month probationary employment), the Court is now estopped from passing upon the question of
DOLE jurisdiction petition over ICMC.
We find no merit to said submission. Not only did the facts of said controversy occur between 1983-
1985, or before the grant to ICMC on 15 July 1988 of the status of a specialized agency with
corresponding immunities, but also because ICMC in that case did not invoke its immunity and,
therefore, may be deemed to have waived it, assuming that during that period (1983-1985) it was
tacitly recognized as enjoying such immunity.
Anent the procedural issue raised in the IRRI Case, suffice it to state that the Decision of the BLR
Director, dated 15 February 1989, had not become final because of a Motion for Reconsideration
filed by IRRI Said Motion was acted upon only on 30 March 1989 when Rep. Act No. 6715, which
provides for direct appeals from the Orders of the Med-Arbiter to the Secretary of Labor in
certification election cases either from the order or the results of the election itself, was already in
effect, specifically since 21 March 1989. Hence, no grave abuse of discretion may be imputed to
respondent Secretary of Labor in his assumption of appellate jurisdiction, contrary to Kapisanan's
allegations. The pertinent portion of that law provides:
Art. 259. — Any party to an election may appeal the order or results of the election
as determined by the Med-Arbiter directly to the Secretary of Labor and Employment
on the ground that the rules and regulations or parts thereof established by the
Secretary of Labor and Employment for the conduct of the election have been
violated. Such appeal shall be decided within 15 calendar days (Emphasis supplied).
En passant, the Court is gratified to note that the heretofore antagonistic positions assumed by two
departments of the executive branch of government have been rectified and the resultant
embarrassment to the Philippine Government in the eyes of the international community now,
hopefully, effaced.
WHEREFORE, in G.R. No. 85750 (the ICMC Case), the Petition is GRANTED, the Order of the
Bureau of Labor Relations for certification election is SET ASIDE, and the Temporary Restraining
Order earlier issued is made PERMANENT.
In G.R. No. 89331 (the IRRI Case), the Petition is Dismissed, no grave abuse of discretion having
been committed by the Secretary of Labor and Employment in dismissing the Petition for
Certification Election.
No pronouncement as to costs.
SO ORDERED.
Padilla, Sarmiento and Regalado, JJ., concur.
Paras, J., is on leave.
Footnotes
1 Article XIII, Section 3. The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full employment opportunities for
all. It shall guarantee the rights of all workers to self-organization, collective
bargaining and negotiations and peaceful concerted activities including the right to
strike in accordance with law. They shall be entitled to security of tenure, humane
conditions of work and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits as may be provided by
law.
2 RULE V. Section 7. Appeal — Any aggrieved party may appeal the order of the
Med-Arbiter to the Bureau only on the following grounds: a) grave abuse of discretion
and b) gross incompetence. The appeal shall specifically state the grounds relied
upon by the appellant with supporting memorandum.
Section 8. Where to file appeal — appellant shall file his appeal which shall be under
oath, in the Regional Office where the case originated, copy furnished the appellee.
Section 9. Period to Appeal. — The appeal shall be filed within ten (10) working days
from receipt of the Order by the appellant. Likewise, the appellee shall file his answer
thereto within ten (10) working days from receipt of the appeal. The Regional Director
shall immediately forward the entire records of the case to the Bureau.
Section 10. Decision of the Bureau is final and unappealable. — The Bureau shall
have twenty (20) working days within which to decide the appeal from receipt of the
records of the case. The decision of the Bureau in all cases shall be final and
unappealable.
3 World Health Organization and Dr. Leonce Verstuyft v. Hon. Benjamin Aquino, et
al., L-35131, 29 November 1972, 48 SCRA 242.
4 MICHAEL AKEHURST A MODERN INTRODUCTION TO INTERNATIONAL LAW

(1984) at 69.
5 The leading judicial authority on the personality of international organizations is the

advisory opinion even by the ICJ in the Reparation for Injuries Suffered in the Service
of the United Nations Case ([1949] I.C.J. Rep 174) where the Court recognized the
UNs international personality.
6 M. AKEHURST supra, at 70.
7 J.L. BRIERLY, THE LAW OF NATIONS (1963) at 95.
8 Article 57. — 1. The various specialized-agencies, established by inter-

governmental agreement and having wide international responsibilities, as defined in
their basic instruments, in economic, social, cultural, educational, health, and related
fields, shall be brought into relationship with the United Nations in accordance with
the provisions of Article 63.
2. Such agencies thus brought into relationship with the United Nations are
hereinafter referred to as specialized agencies.
9 Article 63. — 1. The Economic and Social Council may enter into agreements with
any of the agencies referred to in Article 57, defining the terms on which the agency
concerned shall be brought into relationship with the United Nations. Such
agreements shall be subject to approval by the General Assembly.
2. It may co-ordinate the activities of the specialized agencies through consultation

with and recommendations to such agencies and through recommendations to the
General Assembly and to the Members of the United Nations.
10 BRIERLY, supra, at 121-122.

11 C. WILFRED JENKS, INTERNATIONAL IMMUNITIES (1961) at 2-3.
12 Ibid., at 17.
13 Ibid.
14 Article II, Section 18. The State affirms labor as a primary social economic force.
It shall protect the rights of workers and promote their welfare.
15 Article III, Section 8. The right of the people, including those employed in the
public and private sectors, to form unions, associations, or societies for purposes not
contrary to law shall not be abridged.
16 Article 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
employees may form labor organizations for their mutual aid and protection.
Article 246. Non-abridgement of Right to Self-organization. — It shall be unlawful for

any person to restrain, coerce, discriminate against or unduly interfere with
employees and workers in their exercise of the right to self-organization. Such right
shall include the rignt to form, join, or assist labor organizations for the purpose of
collective bargaining through representatives of their own choosing and to engage in
lawful concerted activities for the same purpose or for their mutual aid and protection,
subject to the provisions of Article 264 of this Code.
17 This Convention, adopted by the U.N. General Assembly on November 21, 1947,
was concurred in by the Philippine Senate under Senate Resolution No. 21, dated 17
May 1949. The Philippine Instrument of Ratification was signed by the Philippine
President on 21 February 1959. (Vol. 1, Phil. Treaty Series, p. 621).
18 JENKS, supra at 38.
23) California vs. Laguesma GR No. 97020 June 8, 1992
SECOND DIVISION
[G.R. No. 97020. June 8, 1992.]
CALIFORNIA MANUFACTURING CORPORATION, Petitioner, v. THE HONORABLE UNDERSECRETARY

OF LABOR BIENVENIDO E. LAGUESMA ABD FEDERATION OF FREE WORKERS (FFW), CALIFORNIA
MFG. CORP. SUPERVISORS UNION CHAPTER (CALMASUCO), Respondents.
V.E. del Rosario & Associates for Petitioner.
Ferdinand E. Laguna for Private Respondent.

SYLLABUS
1. LABOR AND SOCIAL LEGISLATION; LABOR RELATIONS; CERTIFICATION ELECTION; NOT APPLICABLE TO
ESTABLISHMENTS WHERE THERE EXISTS A CERTIFIED BARGAINING AGENT. — The Court has already
categorically ruled that Article 257 of the Labor Code is applicable to unorganized labor organizations and
not to establishments where there exists a certified bargaining agent which had previously entered into a
collective bargaining agreement with the management (Associated Labor Unions [ALU] v. Calleja, G.R. No.
85085, November 6, 1989, 179 SCRA 127). Otherwise stated, the establishment concerned must have no
certified bargaining agent (Associated Labor Unions [ALU] v. Calleja, G.R. No. 82260, July 19, 1989, 175
SCRA 490). In the instant case, it is beyond cavil that the supervisors of CMC which constitute a bargaining
unit separate and distinct from that of the rank-and-file, have no such agent, thus they correctly filed a
petition for certification election thru union FFW-CALMASUCO, likewise indubitably a legitimate labor
organization.
2. ID.; ID.; ID.; TWENTY-FIVE PERCENT (25%) SUBSCRIPTION REQUIREMENT; IMMATERIAL THERETO;
REASONS THEREFOR. — CMC’s insistence on the 25% subscription requirement, is clearly immaterial. The
same has been expressly deleted by Section 24 of Republic Act No. 6715 and is presently prescribed only in
organized establishments, that is, those with existing bargaining agents. Compliance with the said
requirement need not need even be established with absolute certainty. The Court has consistently ruled
that "even conceding that the statutory requirement of 30% (now 25%) of the labor force asking for a
certification election had not been strictly complied with, the Director (now the Med-Arbiter) is still
empowered to order that it be held precisely for the purpose of ascertaining which of the contending labor
organizations shall be the exclusive collective bargaining agent (Atlas Free Workers Union (AFWU-PSSLU
Local v. Noriel, G.R. No. L-51905, May 26, 1981, 104 SCRA 565). The requirement than is relevant only
when it becomes mandatory to conduct a certification election. In all other instances, the discretion,
according to the rulings of this Tribunal, ought to be ordinarily exercised in favor of a petition for
certification (National Mines and Allied Workers Union (NAMAWU-UIL) v. Luna, Et Al., G.R. No. L-46722,
June 15, 1978, 83 SCRA 607).
3. ID.; ID.; ID.; AS A GENERAL RULE, AN EMPLOYER HAS NO STANDING TO QUESTION THEREOF;
EXCEPTION. — CMC, as employer has no standing to question a certification election (Asian Design and
Manufacturing Corporation v. Calleja, Et Al., G.R. No. 77415, June 29, 1989, 174 SCRA 477). Such is the
sole concern of the worker has to file the petition for certification election pursuant to Article 259 (now 258)
of the Labor Code because it was requested to bargain collectively. Thereafter, the role of the employer in
the certification process ceases. The employer becomes merely a by-stander. Oft-quoted is the
pronouncement of the Court on management interference in certification elections, thus: "On matters that
should be the exclusive concern of labor, the choice of a collective bargaining representative, the employer
is definitely an intruder. His participation, to say the least, deserves no encouragement. This Court should
be the last agency to lend support to such an attempt at interference with purely internal affair of labor."
(Trade Unions of the Philippines and Allied Services (TUPAS) v. Trajano, G.R. No. L-61153,, January 17,
1983, 120 SCRA 64 citing Consolidated Farms, Inc. v. Noriel, G.R. No. L-47752, July 31, 1978, 84 SCRA
469, 473).
DECISION
PARAS, J.:
This is a petition for review on certiorari with prayer for preliminary injunction and/or temporary restraining
order seeking to annul and set aside the (a) resolution * of the Department of Labor and Employment dated
October 16, 1990 in OS-A-10-283-90 (NCR-OD-M-90-05-095) entitled "In Re: Petition for Certification
Election Among the Supervisors of California Manufacturing Corporation, Federation of Free Workers (FFW)
California Mfg. Corp. Supervisors Union Chapter (CALMASUCO), petitioner-appellee, California Manufacturing
Corporation, employer-appellant" which denied herein petitioner’s appeal and affirmed the order of Med-
Arbiter Arsenia Q. Ocampo dated August 22, 1990 directing the conduct of a certification election among the
supervisory employees of California Manufacturing Corporation, and (b) the Order ** of the same
Department denying petitioner’s motion for reconsideration.
As culled from the records, the following facts appear undisputed: chanrob1es virtual 1aw library
On May 24, 1990, a petition for certification election among the supervisors of California Manufacturing
Corporation (CMC for brevity) was filed by the Federation of Free Workers (FFW) — California Manufacturing
Corporation Supervisors Union Chapter (CALMASUCO), alleging inter alia, that it is a duly registered
federation with registry certificate no. 1952-TTT-IP, while FFW-CALMASUCO Chapter is a duly registered
chapter with registry certificate no. 1-AFBI-038 issued on May 21, 1990 (Annex "A", Rollo, p. 63); that the
employer CMC employs one hundred fifty (150) supervisors; that there is no recognized supervisors union
existing in the company; that the petition is filed in accordance with Article 257 of the Labor Code, as
amended by Republic Act No. 6715; and that the petition is nevertheless supported by a substantial number
of signatures of the employees concerned (Annexes "E" and "F", Ibid., pp. 28-29). chanrobles vi rt ualaw libra ry cha nrob les.co m:chan roble s.com.p h
In its answer, CMC, now petitioner herein, alleged among others, that the petition for the holding of a
certification election should be denied as it is not supported by the required twenty-five percent (25%) of all
its supervisors and that a big number of the supposed signatories to the petition are not actually supervisors
as they have no subordinates to supervise, nor do they have the powers and functions which under the law
would classify them as supervisors (Annex "D", Ibid., p. 25).
On July 24, 1990, FFW-CALMASUCO filed its reply maintaining that under the law, when there is no existing
unit yet in a particular bargaining unit at the time a petition for certification election is filed, the 25% rule on
the signatories does not apply; that the "organized establishment" contemplated by law does not refer to a
"company" per se but rather refers to a "bargaining unit" which may be of different classifications in a single
company; that CMC has at least two (2) different bargaining units, namely, the supervisory (unorganized)
and the rank-and-file (organized); that the signatories to the petition have been performing supervisory
functions; that since it is CMC which promoted them to the positions of supervisors, it is already estopped
from claiming that they are not supervisors; that the said supervisors were excluded from the coverage of
the collective bargaining agreement of its rank-and-file employees; and that the contested signatories are
indeed supervisors as shown in the "CMC Master List of Employees" of January 2, 1990 and the CMS
Publication (Annex "G", Ibid., p. 30).
On August 22, 1990, the Med-Arbiter issued an order, the decretal portion of which reads: jgc:chan robles. com.ph
"WHEREFORE, premises considered, it is hereby ordered that a certification election be conducted among
the supervisory employees of California Manufacturing Corporation within twenty (20) days from receipt
hereof with the usual pre-election conference of the parties to thresh out the mechanics of the election. The
payroll of the company three (3) months prior to the filing of the petition shall be used as the basis in
determining the list of eligible voters.
‘The choices are: chanro b1es vi rtua l 1aw lib ra ry
‘1. Federation of Free Workers (FFW) — California Manufacturing Corporation Supervisors Union Chapter
(CALMASUCO); and
‘2. No union.’
"SO ORDERED." (Annex "H", Ibid., p. 33)
CMC thereafter appealed to the Department of Labor and Employment which, however, affirmed the above
order in its assailed resolution dated October 16, 1990 (Annex "B", Ibid., p. 18). CMC’s subsequent motion
for reconsideration was also denied in its order dated November 17, 1990 (Annex "A", Ibid., p. 15), hence,
his petition.
cha nrob les.co m : virt ual law li bra ry
The issues are presented by CMC in this wise: jgc:chan roble s.com. ph
"a) whether or not the term "unorganized establishment" in Article 257 of the Labor Code refers to a
bargaining unit or a business establishment;
"b) whether or not non-supervisors can participate in a supervisor’s certification election; and
"c) whether or not the two (2) different and separate plants of herein petitioner in Parañaque and Las Piñas
can be treated as a single bargaining unit." cralaw virt ua1aw lib ra ry
The petition must be denied.
The Court has already categorically ruled that Article 257 of the Labor Code is applicable to unorganized
labor organizations and not to establishments where there exists a certified bargaining agent which had
previously entered into a collective bargaining agreement with the management (Associated Labor Unions
[ALU] v. Calleja, G.R. No. 85085, November 6, 1989, 179 SCRA 127) (Underscoring supplied). Otherwise
stated, the establishment concerned must have no certified bargaining agent (Associated Labor Unions
[ALU] v. Calleja, G.R. No. 82260, July 19, 1989, 175 SCRA 490). In the instant case, it is beyond cavil that
the supervisors of CMC which constitute a bargaining unit separate and distinct from that of the rank-and-
file, have no such agent, thus they correctly filed a petition for certification election thru union FFW-
CALMASUCO, likewise indubitably a legitimate labor organization. CMC’s insistence on the 25% subscription
requirement, is clearly immaterial. The same has been expressly deleted by Section 24 of Republic Act No.
6715 and is presently prescribed only in organized establishments, that is, those with existing bargaining
agents. Compliance with the said requirement need not even be established with absolute certainty. The
Court has consistently ruled that "even conceding that the statutory requirement of 30% (now 25%) of the
labor force asking for a certification election had not been strictly complied with, the Director (now the Med-
Arbiter) is still empowered to order that it be held precisely for the purpose of ascertaining which of the
contending labor organizations shall be the exclusive collective bargaining agent (Atlas Free Workers Union
(AFWU)-PSSLU Local v. Noriel, G.R. No. L-51905, May 26, 1981, 104 SCRA 565). The requirement then is
relevant only when it becomes mandatory to conduct a certification election. In all other instances, the
discretion, according to the rulings of this Tribunal, ought to be ordinarily exercised in favor of a petition for
certification (National Mines and Allied Workers Union (NAMAWU-UIF) v. Luna, Et Al., G.R. No. L-46722,
June 15, 1978, 83 SCRA 607).
In any event, CMC as employer has no standing to question a certification election (Asian Design and
Manufacturing Corporation v. Calleja, Et Al., G.R. No. 77415, June 29, 1989, 174 SCRA 477). Such is the
sole concern of the workers. The only exception is where the employer has to file the petition for
certification election pursuant to Article 259 (now 258) of the Labor Code because it was requested to
bargain collectively. Thereafter, the role of the employer in the certification process ceases. The employer
becomes merely a by-stander. Oft-quoted is the pronouncement of the Court on management interference
in certification elections, thus:
jgc:chan roble s.com.p h
"On matters that should be the exclusive concern of labor, the choice of a collective bargaining
representative, the employer is definitely an intruder. His participation, to say the least, deserves no
encouragement. This Court should be the last agency to lend support to such an attempt at interference
with purely internal affair of labor." (Trade Unions of the Philippines and Allied Services (TUPAS) v. Trajano,
G.R. No. L-61153, January 17, 1983, 120 SCRA 64 citing Consolidated Farms, Inc. v. Noriel, G.R. No. L-
47752. July 31, 1978, 84 SCRA 469, 473).
PREMISES CONSIDERED, the petition is DISMISSED for utter lack of merit.
SO ORDERED.
Narvasa, C.J., Padilla and Regalado, JJ., concur.
Nocon, J., is on leave.
24) Kaisahan vs. Trajano GR No. 118915 Sept. 9, 1991 201 SCRA 453 (PDF downloaded)
25) Capitol vs. Laguesma GR No. 118915 Feb.4, 1997, 267 SCRA 503

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 118915 February 4, 1997
CAPITOL MEDICAL CENTER OF CONCERNED EMPLOYEES-UNIFIED FILIPINO SERVICE

WORKERS, (CMC-ACE-UFSW), petitioners,
vs.
HON. BIENVENIDO E. LAGUESMA, Undersecretary of the Department of Labor and
Employment; CAPITOL MEDICAL CENTER EMPLOYEES ASSOCIATION-ALLIANCE OF
FILIPINO WORKERS AND CAPITOL MEDICAL CENTER INCORPORATED AND DRA. THELMA
CLEMENTE, President, respondents.
HERMOSISIMA, JR., J.:
This petition for certiorari and prohibition seeks to reserves and set aside the Order dated November
18, 1994 of public respondent Bienvenido E. Laguesma, Undersecretary of the Department of Labor
and Employment in Case No. OS.-A-136-94 1 which dismissed the petition for certification election
filed by petitioner for lack of merit and further directed private respondent hospital to negotiate a
collective bargaining agreement with respondent union, Capitol Medical Center Employees
Association-Alliance of Filipino Workers.
The antecedent facts are undisputed.
On February 17, 1992, Med-Arbiter Rasidali C. Abdullah issued an Order which granted respondent
union's petition for certification election among the rank-and-file employees of the Capitol Medical
Center.2 Respondent CMC appealed the Order to the Office of the Secretary by questioning the legal
status of respondent union's affiliation with the Alliance of Filipino Workers (AFW). To correct any
supposed infirmity in its legal status, respondent union registered itself independently and withdrew
the petition which had earlier been granted. Thereafter, it filed another petition for certification
election.
On May 29, 1992, Med-Arbiter Manases T. Cruz issued an order granting the petition for certification
election.3Respondent CMC again appealed to the Office of the Secretary which affirmed4 the Order
of the Med-Arbiter granting the certification election.
On December 9, 1992, elections were finally held with respondent union garnering 204 votes, 168 in
favor of no union and 8 spoiled ballots out of a total of 380 votes cast. Thereafter, on January 4,
1993, Med-Arbiter Cruz issued an Order certifying respondent union as the sole and exclusive
bargaining representative of the rank and file employees at CMC. 5
Unsatisfied with the outcome of the elections, respondent CMC again appealed to the Office of the
Secretary of Labor which appeal was denied on February 26, 1993.6 A subsequent motion for
reconsideration filed by respondent CMC was likewise denied on March 23, 1993.7
Respondent CMC's basic contention was the supposed pendency of its petition for cancellation of
respondent union's certificate of registration in Case No. NCR-OD-M-92211-028. In the said case,
Med-Arbiter Paterno Adap issued an Order dated February 4, 1993 which declared respondent
union's certificate of registration as null and void.8 However, this order was reversed on appeal by
the Officer-in-Charge of the Bureau of Labor Relations in her Order issued on April 13, 1993. The
said Order dismissed the motion for cancellation of the certificate of registration of respondent union
and declared that it was not only a bona fide affiliate or local of a federation (AFW), but a duly
registered union as well. Subsequently, this case reached this Court in Capitol Medical Center,
Inc. v. Hon. Perlita Velasco, G.R. No. 110718, where we issued a Resolution dated December 13,
1993, dismissing the petition of CMC for failure to sufficiently show that public respondent committed
grave abuse of discretion.9 The motion for reconsideration filed by CMC was likewise denied in our
Resolution dated February 2, 1994. 10 Thereafter, on March 23, 1994, we issued an entry of
judgment certifying that the Resolution dated December 13, 1993 has become final and executory. 11
Respondent union, after being declared as the certified bargaining agent of the rank-and-file
employees of respondent CMC by Med-Arbiter Cruz, presented economic proposals for the
negotiation of a collective bargaining agreement (CBA). However, respondent CMC contended that
CBA negotiations should be suspended in view of the Order issued on February 4, 1993 by Med-
Arbiter Adap declaring the registration of respondent union as null and void. In spite of the refusal of
respondent CMC, respondent union still persisted in its demand for CBA negotiations, claiming that it
has already been declared as the sole and exclusive bargaining agent of the rank-and-file
employees of the hospital.
Due to respondent CMC's refusal to bargain collectively, respondent union filed a notice of strike on
March 1, 1993. After complying with the other legal requirements, respondent union staged a strike
on April 15, 1993. On April 16, 1993, the Secretary of Labor assumed jurisdiction over the case and
issued an order certifying the same to the National Labor Relations Commission for compulsory
arbitration where the said case is still pending. 12
It is at this juncture that petitioner union, on March 24, 1994, filed a petition for certification election
among the regular rank-and-file employees of the Capitol Medical Center Inc. It alleged in its petition
that: 1) three hundred thirty one (331) out of the four hundred (400) total rank-and-file employees of
respondent CMC signed a petition to conduct a certification election; and 2) that the said employees
are withdrawing their authorization for the said union to represent them as they have joined and
formed the union Capitol Medical Center Alliance of Concerned Employees (CMC-ACE). They also
alleged that a certification election can now be conducted as more that 12 months have lapsed since
the last certification election was held. Moreover, no certification election was conducted during the
twelve (12) months prior to the petition, and no collective bargaining agreement has as yet been
concluded between respondent union and respondent CMC despite the lapse of twelve months from
the time the said union was voted as the collective bargaining representative.
On April 12, 1994, respondent union opposed the petition and moved for its dismissal. It contended
that it is the certified bargaining agent of the rank-and-file employees of the Hospital, which was
confirmed by the Secretary of Labor and Employment and by this Court. It also alleged that it was
not remiss in asserting its right as the certified bargaining agent for it continuously demanded the
negotiation of a CBA with the hospital despite the latter's avoidance to bargain collectively.
Respondent union was even constrained to strike on April 15, 1993, where the Secretary of Labor
intervened and certified the dispute for compulsory arbitration. Furthermore, it alleged that majority
of the signatories who supported the petition were managerial and confidential employees and not
members of the rank-and-file, and that there was no valid disaffiliation of its members, contrary to
petitioner's allegations.
Petitioner, in its rejoinder, claimed that there is no legal impediment to the conduct of a certification
election as more than twelve (12) months had lapsed since respondent union was certified as the
exclusive bargaining agent and no CBA was as yet concluded. It also claimed that the other issues
raised could only be resolved by conducting another certification election.
In its surrejoinder, respondent union alleged that the petition to conduct a certification election was
improper, immoral and in manifest disregard of the decisions rendered by the Secretary of Labor and
by this Court. It claimed that CMC employed "legal obstructionism's" in order to let twelve months
pass without a CBA having been concluded between them so as to pave the way for the entry of
petitioner union.
On May 12, 1994, Med-Arbiter Brigida Fadrigon, issued an Order granting the petition for
certification election among the rank and file
employees. 13 It ruled that the issue was the majority status of respondent union. Since no
certification election was held within one year from the date of issuance of a final certification
election result and there was no bargaining deadlock between respondent union and the employees
that had been submitted to conciliation or had become the subject of a valid notice of strike or lock
out, there is no bar to the holding of a certification election. 14
Respondent union appeared from the said Order, alleging that the Med-Arbiter erred in granting the
petition for certification election and in holding that this case falls under Section 3, Rule V Book V of
the Rules Implementing the Labor Code. 15 It also prayed that the said provision must not be applied
strictly in view of the facts in this case.
Petitioner union did not file any opposition to the appeal.
On November 18, 1994, public respondent rendered a Resolution granting the appeal. 16 He
ratiocinated that while the petition was indeed filed after the lapse of one year form the time of
declaration of a final certification result, and that no bargaining deadlock had been submitted for
conciliation or arbitration, respondent union was not remiss on its right to enter into a CBA for it was
the CMC which refused to bargain collectively. 17
CMC and petitioner union separately filed motions for reconsideration of the said Order.
CMC contended that in certification election proceedings, the employer cannot be ordered to bargain
collectively with a union since the only issue involved is the determination of the bargaining agent of
the employees.
Petitioner union claimed that to completely disregard the will of the 331 rank-and-file employees for a
certification election would result in the denial of their substantial rights and interests. Moreover,it
contended that public respondent's "indictment" that petitioner "capitalize (sic) on the ensuing delay
which was caused by the Hospital, . . ." was unsupported by the facts and the records.
On January 11, 1995, public respondent issued a Resolution which denied the two motions for
reconsideration hence this petition. 18
The pivotal issue in this case is whether or not public respondent committed grave abuse of
discretion in dismissing the petition for certification election, and in directing the hospital to negotiate
a collective bargaining agreement with the said respondent union.
Petitioner alleges that public respondent Undersecretary Laguesma denied it due process when it
ruled against the holding of a certification election. It further claims that the denial of due process
can be gleaned from the manner by which the assailed resolution was written, i.e., instead of the
correct name of the mother federation UNIFIED, it was referred to as UNITED; and that the
respondent union's name CMCEA-AFW was referred to as CMCEA-AFLO. Petitioner maintains that
such errors indicate that the assailed resolution was prepared with "indecent haste."
We do not subscribe to petitioner's contention.
The errors pointed to by petitioner can be classified as mere typographical errors which cannot
materially alter the substance and merit of the assailed resolution.
Petitioner cannot merely anchor its position on the aforementioned erroneous' names just to attain a
reversal of the questioned resolution. As correctly observed by the Solicitor General, petitioner is
merely "nit-picking vainly trying to make a monumental issue out of a negligible error of the public
respondent." 19
Petitioner also assails public respondents' findings that the former "capitalize (sic) on the ensuing
delay which was caused by the hospital and which resulted in the non-conclusion of a CBA within
the certification year.'' 20 It further argues that the denial of its motion fro a fair hearing was clear case
of denial of its right to due process.
Such contention of petitioner deserves scant consideration.
A perusal of the record shows that petitioner failed to file its opposition to oppose the grounds for
respondent union's appeal.
It was given an opportunity to be heard but lost it when it refused to file an appellee's memorandum.
Petitioner insists that the circumstances prescribed in Section 3, Rule V, Book V Of the Rules
Implementing the Labor Code where a certification election should be conducted, viz: (1) that one
year had lapsed since the issuance of a final certification result; and (2) that there is no bargaining
deadlock to which the incumbent or certified bargaining agent is a party has been submitted to
conciliation or arbitration, or had become the subject of a valid notice of strike or lockout, are present
in this case. It further claims that since there is no evidence on record that there exists a CBA
deadlock, the law allowing the conduct of a certification election after twelve months must be given
effect in the interest of the right of the workers to freely choose their sole and exclusive bargaining
agent.
While it is true that, in the case at bench, one year had lapsed since the time of declaration of a final
certification result, and that there is no collective bargaining deadlock, public respondent did not
commit grave abuse of discretion when it ruled in respondent union's favor since the delay in the
forging of the CBA could not be attributed to the fault of the latter.
A scrutiny of the records will further reveal that after respondent union was certified as the
bargaining agent of CMC, it invited the employer hospital to the bargaining table by submitting its
economic proposal for a CBA. However, CMC refused to negotiate with respondent union and
instead challenged the latter's legal personality through a petition for cancellation of the certificate of
registration which eventually reached this Court. The decision affirming the legal status of
respondent union should have left CMC with no other recourse but to bargain collectively; but still it
did not. Respondent union was left with no other recourse but to file a notice of strike against CMC
for unfair labor practice with the National Conciliation and Mediation Board. This eventually led to a
strike on April 15, 1993.
Petitioner union on the other hand, after this Court issued an entry of judgment on March 23, 1994,
filed the subject petition for certification election on March 24, 1994, claiming that twelve months had
lapsed since the last certification election.
Was there a bargaining deadlock between CMC and respondent union, before the filing of petitioner
of a petition for certification election, which had been submitted to conciliation or had become the
subject of a valid notice of strike or lockout?
In the case of Divine Word University of Tacloban v. Secretary of Labor and Employment, 21 we had
the occasion to define what a deadlock is, viz:\
A "deadlock" is . . . the counteraction of things producing entire stoppage; . . . . There

is a deadlock when there is a complete blocking or stoppage resulting from the action
of equal and opposed forces . . . . The word is synonymous with the word impasse,
which . . "presupposes reasonable effort at good faith bargaining which, despite
noble intentions, does not conclude in agreement between the parties."
Although there is no "deadlock" in its strict sense as there is no "counteraction" of forces present in
this case nor "reasonable effort at good faith bargaining," such can be attributed to CMC's fault as
the bargaining proposals of respondent union were never answered by CMC. In fact, what happened
in this case is worse than a bargaining deadlock for CMC employed all legal means to block the
certification of respondent union as the bargaining agent of the rank-and-file; and use it as its
leverage for its failure to bargain with respondent union. Thus, we can only conclude that CMC was
unwilling to negotiate and reach an agreement with respondent union. CMC has not at any instance
shown willingness to discuss the economic proposals given by respondent union. 22
As correctly ratiocinated by public respondent, to wit:
For herein petitioner to capitalize on the ensuing delay which was caused by the
hospital and which resulted in the non-conclusion of a CBA within the certification
year, would be to negate and render a mockery of the proceedings undertaken
before this Department and to put an unjustified premium on the failure of the
respondent hospital to perform its duty to bargain collectively as mandated in Article
252 of the Labor Code, as amended, which states".
"Article 252. Meaning of duty to bargain collectively — the duty to

bargain collectively means the performance of a mutual obligation to
meet and convene promptly and expeditiously in good faith for the
purpose of negotiating an agreement with respect to wages, hours of
work and all other terms and conditions of employment including
proposals for adjusting any grievance or questions arising under such
agreement and executing a contract incorporating such agreements if
requested by either party but such duty does not compel any party to
agree to a proposal or to make any concession."
The duly certified bargaining agent, CMCEA-AFW, should not be made to further
bear the brunt flowing from the respondent hospital's reluctance and thinly disguised
refusal to bargain. 23
If the law proscribes the conduct of a certification election when there is a bargaining deadlock
submitted to conciliation or arbitration, with more reason should it not be conducted if, despite
attempts to bring an employer to the negotiation table by the "no reasonable effort in good faith" on
the employer certified bargaining agent, there was to bargain collectively.
In the case of Kaisahan ng Manggagawang Pilipino vs. Trajano 201 SCRA 453 (1991), penned by
Chief Justice Andres R. Narvasa, the factual milieu of which is similar to this case, this Court allowed
the holding of a certification election and ruled that the one year period known as the "certification
year" has long since expired. We also ruled, that:
. . . prior to the filing of the petition for election in this case, there was no such
"bargaining deadlock . . (which) had been submitted to conciliation or arbitration or
had become the subject of a valid notice of strike or lockout." To be sure, there are in
the record assertions by NAFLU that its attempts to bring VIRON to the negotiation
table had been unsuccessful because of the latter's recalcitrance, and unfulfilled
promises to bargain collectively; but there is no proof that it had taken tiny action to
legally coerce VIRON to comply with its statutory duty to bargain collectively. It could
have charged VIRON with unfair labor practice; but it did not. It could have gone on a
legitimate strike in protest against VIRON's refusal to bargain collectively and compel
it to do so; but it did not. There are assertions by NAFLU, too, that its attempts to
bargain collectively had been delayed by continuing challenges to the resolution
pronouncing it the sole bargaining representative in VIRON; but there is no adequate
substantiation thereof, or of how it did in fact prevent initiation of the bargaining
process between it and VIRON. 24
Although the statements pertinent to this case are merely obiter, still the fact remains that in
the Kaisahan case, NAFLU was counselled by this Court on the steps that it should have undertaken
to protect its interest, but which it failed to do so.
This is what is strikingly different between the Kaisahan case and the case at bench for in the latter
case, there was proof that the certified bargaining agent, respondent union, had taken an action to
legally coerce the employer to comply with its statutory duty to bargain collectively, i.e., charging the
employer with unfair labor practice and conducting a strike in protest against the employer's refusal
to bargain. 25 It is only just and equitable that the circumstances in this case should be considered as
similar in nature to a "bargaining deadlock" when no certification election could be held. This is also
to make sure that no floodgates will be opened for the circumvention of the law by unscrupulous
employers to prevent any certified bargaining agent from negotiating a CBA. Thus, Section 3, Rule
V, Book V of the Implement Rules should be interpreted liberally so as to include a
circumstance, e.g. where a CBA could not be concluded due to the failure of one party to willingly
perform its duty to bargain collectively.
The order for the hospital to bargain is based on its failure to bargain collectively with respondent
union.
WHEREFORE, the Resolution dated November 18, 1994 of public respondent Laguesma is
AFFIRMED and the instant petition is hereby DISMISSED.
SO ORDERED
Padilla, Bellosillo, Vitug and Kapunan, JJ., concur.
Footnotes
1 NCR-00-M-9403-052.
2 Rollo, pp. 145-153.
3 Rollo, pp. 154-158.

4 Rollo, pp. 164-169.
5 Rollo, pp. 172-173.
6 Rollo, pp. 174-176.
7 Rollo, pp. 177-178.
8 Rollo, pp. 199-203.
9 Rollo, p. 281.
10 Rollo, p. 282.
11 Rollo, p. 283.
12 Rollo, pp. 209-210.
13 Rollo, pp. 26-31.
14 Ibid.
15 Rollo, pp. 71-77.
16 Rollo, pp. 33-41.
17 Ibid.
18 Rollo, pp. 43-44.
19 Rollo, p. 351.
20 Rollo, p. 14.
21 213 SCRA 759 (1992).
22 cf. Kiok Loy v. National Labor Relations Commission, 141 SCRA 179 (1987).
23 Rollo, p. 40.
24 Emphasis supplied.
25 Kaisahan ng Manggagawang Pilipino v. Trajano, 201 SCRA 453 (1991).
26) Eastland vs. Noriel GR No. L-45528 Feb.10, 1982 111 SCRA 674 9 (PDF downloaded)
27) Yokohama vs. Yokohama EEs GR No. 159553 Dec. 10, 2007
SECOND DIVISION
[G.R. NO. 159553 : December 10, 2007]
YOKOHAMA TIRE PHILIPPINES, INC. Petitioner, v. YOKOHAMA EMPLOYEES UNION Respondent.
DECISION
QUISUMBING, J.:
In this appeal, petitioner Yokohama Tire Philippines, Inc. (hereafter Yokohama, for brevity) assails the
Decision1 dated April 9, 2003 of the Court of Appeals in CA-G.R. SP No. 74273 and its Resolution2 dated
August 15, 2003, denying the motion for reconsideration.
The antecedent facts are as follows:
On October 7, 1999, respondent Yokohama Employees Union (Union) filed a petition for certification election
among the rank-and-file employees of Yokohama. Upon appeal from the Med-Arbiter's order dismissing the
petition, the Secretary of the Department of Labor and Employment (DOLE) ordered an election with (1)
"Yokohama Employees' Union" and (2) "No Union" as choices.3 The election held on November 23, 2001
yielded the following result:
YOKOHAMA EMPLOYEES UNION - 131

NO UNION - 117
SPOILED - 2
---------
250
VOTES CHALLENGED BY [YOKOHAMA] - 78
VOTES CHALLENGED BY [UNION] - 73
---------
-
TOTAL CHALLENGED VOTES - 151
TOTAL VOTES CAST - 401 4
Yokohama challenged 78 votes cast by dismissed employees. On the other hand, the Union challenged 68
votes cast by newly regularized rank-and-file employees and another five (5) votes by alleged supervisor-
trainees. Yokohama formalized its protest and raised as an issue the eligibility to vote of the 78 dismissed
employees,5 while the Union submitted only a handwritten manifestation during the election.
On January 21, 2002, the Med-Arbiter resolved the parties' protests, decreeing as follows:
WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered as follows:
xxx
2. The appreciation of the votes of the sixty-five (65) dismissed employees who contested their dismissal
before the National Labor Relations Commission shall be suspended until the final disposition of their
complaint for illegal dismissal. . . .
3. The votes of the sixty-eight (68) so-called "newly-regularized" rank-and-file employees shall be
appreciated in the final tabulation.
xxx
SO ORDERED.6 (Emphasis supplied.)
On May 22, 2002, the DOLE Acting Secretary disposed of the appeals as follows:
WHEREFORE, the partial appeal of [Yokohama] is DENIED and the appeal of [the union] is PARTIALLY
GRANTED. Thus, the Order of the Med-Arbiter dated 21 January 2002 is hereby MODIFIED as follows:
xxx
2. The votes of dismissed employees who contested their dismissal before the National Labor
Relations Commission (NLRC) shall be appreciated in the final tabulation of the certification
election results.
3. The votes of the sixty-eight (68) newly regularized rank-and-file employees shall be excluded.
xxx
SO RESOLVED.7 (Emphasis supplied.)
The Court of Appeals affirmed in toto the decision of the DOLE Acting Secretary.8 The appellate court held
that the 78 employees who contested their dismissal were entitled to vote under Article 212 (f)9 of the Labor
Code and Section 2, Rule XII10 of the rules implementing Book V of the Labor Code. However, it disallowed
the votes of the 68 newly regularized employees since they were not included in the voters' list submitted
during the July 12, 2001 pre-election conference. The appellate court also noted that Yokohama's insistence
on their inclusion lends suspicion that it wanted to create a company union, and ruled that Yokohama had no
right to intervene in the certification election. Finally, it ruled that the union's handwritten manifestation
during the election was substantial compliance with the rule on protest.
Yokohama appealed.
On September 15, 2003, we issued a temporary restraining order against the implementation of the May 22,
2002 Decision of the DOLE Acting Secretary and the October 15, 2002 Resolution of the DOLE Secretary,
denying Yokohama's motion for reconsideration.11
In a manifestation with motion to annul the DOLE Secretary's entry of judgment filed with this Court on
October 16, 2003, Yokohama attached a Resolution12 dated April 25, 2003 of the Med-Arbiter. The resolution
denied Yokohama's motion to suspend proceedings and cited the decision of the Court of Appeals. The
resolution also certified that the Union obtained a majority of 208 votes in the certification election while "No
Union" obtained 121 votes. Yokohama also attached an entry of judgment13 issued by the DOLE stating that
the April 25, 2003 Resolution of the Med-Arbiter was affirmed by the DOLE Secretary's Office on July 29,
2003 and became final on September 29, 2003.
In a subsequent manifestation/motion with erratum filed on October 21, 2003, Yokohama deleted an
allegation in its October 16, 2003 manifestation which was included "through inadvertence and clerical
mishap." Said allegation reads:
xxx
. . . Notably, the Resolution dated 29 July 2003 which affirmed the Resolution dated 25 April
2003 is still not final and executory considering the timely filing of a motion for its
reconsideration on 15 August 2003 which until now has yet to be resolved.14
In this appeal, petitioner raises the following issues:
I.
WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN DISALLOWING THE APPRECIATION OF
THE VOTES OF SIXTY-EIGHT REGULAR RANK-AND-FILE.
II.
WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN UPHOLDING THE [DOLE SECRETARY'S]
DECLARATION THAT [THE UNION'S] MANIFESTATION ON THE DAY OF THE CERTIFICATION ELECTION WAS
SUFFICIENT COMPLIANCE WITH THE RULE ON FORMALIZATION OF PROTESTS.
III.
WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN ALLOWING THE APPRECIATION OF
VOTES OF ALL OF ITS EMPLOYEES WHO WERE PREVIOUSLY DISMISSED FOR SERIOUS MISCONDUCT AND
ABANDONMENT OF WORK WHICH ARE CAUSES UNRELATED TO THE CERTIFICATION ELECTION.15
We shall first resolve the last assigned issue: Was it proper to appreciate the votes of the dismissed
employees? cra law lib rary
Petitioner argues that "the Court of Appeals erred in ruling that the votes of the dismissed employees should
be appreciated." Petitioner posits that "employees who have quit or have been dismissed for just cause prior
to the date of the certification election are excluded from participating in the certification election."
Petitioner had questioned the eligibility to vote of the 78 dismissed employees.
Respondent counters that Section 2, Rule XII16 of the rules implementing Book V of the Labor Code allows a
dismissed employee to vote in the certification election if the case contesting the dismissal is still pending.
Section 2, Rule XII, the rule in force during the November 23, 2001 certification election clearly,
unequivocally and unambiguously allows dismissed employees to vote during the certification election if the
case they filed contesting their dismissal is still pending at the time of the election.17
Here, the votes of employees with illegal dismissal cases were challenged by petitioner although their cases
were still pending at the time of the certification election on November 23, 2001. These cases were filed on
June 27, 200118 and the appeal of the Labor Arbiter's February 28, 2003 Decision was resolved by the NLRC
only on August 29, 2003.19
Even the new rule20 has explicitly stated that without a final judgment declaring the legality of dismissal,
dismissed employees are eligible or qualified voters. Thus,
Rule IX
Conduct of Certification Election
Section 5. Qualification of voters; inclusion-exclusion. - . . . An employee who has been dismissed from work
but has contested the legality of the dismissal in a forum of appropriate jurisdiction at the time of the
issuance of the order for the conduct of a certification election shall be considered a qualified voter, unless
his/her dismissal was declared valid in a final judgment at the time of the conduct of the certification
election.
cha nrob les vi rtua l law lib rary
xxx
Thus, we find no reversible error on the part of the DOLE Acting Secretary and the Court of Appeals in
ordering the appreciation of the votes of the dismissed employees.
Finally, we need not resolve the other issues for being moot. The 68 votes of the newly regularized rank-
and-file employees, even if counted in favor of "No Union," will not materially alter the result. There would
still be 208 votes in favor of respondent and 18921 votes in favor of "No Union."
We also note that the certification election is already a fait accompli, and clearly petitioner's rank-and-file
employees had chosen respondent as their bargaining representative.
WHEREFORE, the petition is DENIED for lack of merit. The assailed Decision dated April 9, 2003 of the Court
of Appeals in CA-G.R. SP No. 74273 and the Resolution dated August 15, 2003 are AFFIRMED. The
temporary restraining order issued on September 15, 2003 is hereby DISSOLVED. No pronouncement as to
costs.
SO ORDERED.
Endnotes:
1
Rollo, pp. 45-53. Penned by Associate Justice Rebecca De Guia-Salvador, with Associate Justices Marina L.
Buzon and Rosmari D. Carandang concurring.
2
Id. at 55-57. Penned by Associate Justice Rebecca De Guia-Salvador, with Associate Justices Perlita J. Tria
Tirona and Rosmari D. Carandang concurring.
3
Id. at 333.
4
Id. at 452.
5
Id. at 106.
6
Id. at 221.
7
Id. at 226-227.
8
Id. at 53.
9
ART. 212. Definitions . . .
xxx
(f) "Employee" includes any person in the employ of an employer. The term shall not be limited to the
employees of a particular employer, unless this Code so explicitly states. It shall include any individual
whose work has ceased as a result of or in connection with any current labor dispute or because of any
unfair labor practice if he has not obtained any other substantially equivalent and regular employment.
x x x x (Emphasis supplied.)
10
Section 2. Qualification of voters; inclusion-exclusion proceedings. - All employees who are members of
the appropriate bargaining unit sought to be represented by the petitioner at the time of the certification or
consent election shall be qualified to vote. A dismissed employee whose dismissal is being contested in a
pending case shall be allowed to vote in the election. (Emphasis supplied.)
In case of disagreement over the voters' list or over the eligibility of voters, all contested voters shall be
allowed to vote. However, their votes shall be segregated and sealed in individual envelopes in accordance
with Section 9 of these Rules. (See Department Order No. 9 which took effect on June 21, 1997.)
11
Rollo, pp. 286-288.
12
Id. at 307.
13
Id. at 306.
14
Id. at 334-335.
15
Id. at 457.
16
Supra note 10.
17
Id.
18
Rollo, pp. 148-149.
19
Id. at 397-407.
20
See Department Order No. 40-03, Series of 2003.
21
121 + 68 = 189.
28) National vs. Secretary GR No. 104556 Marc 9, 1998 287 SCRA 599, 607 (PDF downloaded)
29) Algire vs. De Mesa GR No. 97622 Oct. 19, 1994

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 97622 October 19, 1994
CATALINO ALGIRE and OTHER OFFICERS OF UNIVERSAL ROBINA TEXTILE MONTHLY

SALARIED EMPLOYEES UNION (URTMSEU), petitioners,
vs.
REGALADO DE MESA, et al., and HON. SECRETARY OF LABOR, respondents.
C.A. Montano Law Office for petitioner.
Cabio and Ravanes Law Offices and Jaime D. Lauron for private respondents.
ROMERO, J.:
This petition for certiorari seeks to nullify and set aside the decision dated January 31, 1991 of the
Secretary of Labor which reversed on appeal the Order dated December 20, 1990 issued by Med-
arbiter Rolando S. dela Cruz declaring petitioners as the duly-elected officers of the Universal
Robina Textile Monthly Salaried Employees union (URTMSEU) as well as the order dated March 5,
1991 denying petitioner Catalino Algire's motion for reconsideration.
The case arose out of the election of the rightful officers to represent the union in the Collective
Bargaining Agreement (CBA) with the management of Universal Robina Textile at its plant in Km.
50, Bo. San Cristobal, Calamba, Laguna.
Universal Robina Textile Monthly Salaried Employees Union, (URTMSEU), through private
respondent Regalado de Mesa, filed on September 4, 1990 a petition for the holding of an election of
union officers with the Arbitration Branch of the Department of Labor and Employment (DOLE).
Acting thereon, DOLE's med-arbiter Rolando S. de la Cruz issued an Order dated October 19, 1990
directing that such an election be held.
In the pre-election conference, it was agreed that the election by secret ballot be conducted on
November 15, 1990 between petitioners (Catalino Algire, et al.) and private respondents (Regalado
de Mesa, et al.) under the supervision of DOLE through its duly appointed representation officer.
The official ballot contained the following pertinent instructions:
Nais kong pakatawan sa grupo ni:
LINO ALGIRE REGALADO

and DE MESA
his officers and his
officers
1. Mark Check (/) or cross (x) inside the box specified above who among the two
contending parties you desire to be represented for the purpose of collecting
bargaining.
2. This is a secret ballot. Don't write any other markings. 1
The result of the election were as follows:
Lino Algire group — 133

Regalado de Mesa — 133
Spoiled — 6
———
Total votes cast 272
On November 19, 1990, Catalino Algire filed a Petition and/or Motion (RO 400-9009-AU-002), which
DOLE's Med Arbitration unit treated as a protest, to the effect that one of the ballots wherein one
voter placed two checks inside the box opposite the phrase "Lino Algire and his officers," hereinafter
referred to as the "questioned ballot," should not have been declared spoiled, as the same was a
valid vote in their favor. The group argued that the two checks made even clearer the intention of the
voter to exercise his political franchise in favor of Algire's group.
During the schedules hearing thereof, both parties agreed to open the envelope containing the
spoiled ballots and it was found out that, indeed, one ballot contained two (2) checks in the box
opposite petitioner Algire's name and his officers.
On December 20, 1990, med-arbiter de la Cruz issued an order declaring the questioned ballot valid,
thereby counting the same in Algire's favor and accordingly certified petitioner's group as the union's
elected officers. 2
Regalado de Mesa, et al. appealed from the decision of the med-arbiter to the Secretary of Labor in
Case No. OS-A-1-37-91 (RO 400-9009-AU-002). On January 31, 1991, the latter's office granted the
appeal and reversed the aforesaid Order. In its stead, it entered a new one ordering "the calling of
another election of officers of the Universal Robina Textile Monthly Salaried Employees Union
(URTMSEU), with the same choices as in the election of
15 November, 1990, after the usual pre-election conference." 3
Director Maximo B. Lim of the Industrial Relations Division, Regional Office No. IV of the DOLE set
the hearing for another pre-election conference on March 22, 1991, reset to April 2, 1991, and finally
reset to April 5, 1991.
Catalino Algire's group filed a motion for reconsideration of the Order. It was denied for lack of merit
and the decision sought to be reconsidered was sustained.
Algire, et al. filed this petition on the following issues:
(1) the Secretary of Labor erred in applying Sections 1 and 8 (6), Rule VI, Book V of
the Rules and Regulations implementing the Labor Code to the herein case,
considering that the case is an intra-union activity, which act constitutes a grave
abuse in the exercise of authority amounting to lack of jurisdiction.
(2) the assailed decision and order are not supported by law and evidence.
with an ex-parte motion for issuance of a temporary restraining order, alleging that the assailed
decision of the office of the Secretary of Labor as public respondent is by nature immediately
executory and the holding of an election at any time after April 5, 1991, would render the petition
moot and academic unless restrained by this Court.
On April 5, 1991, we issued a temporary restraining order enjoining the holding of another election of
union officers pursuant to the January 31, 1991 decision. 4
There is no merit in the petition.
The contention of the petitioner is that a representation officer (referring to a person duly authorized
to conduct and supervise certification elections in accordance with Rule VI of the Implementing
Rules and Regulations of the Labor Code) can validly rule only on on-the-spot questions arising from
the conduct of the elections, but the determination of the validity of the questioned ballot is not within
his competence. Therefore, any ruling made by the representation officer concerning the validity of
the ballot is deemed an absolute nullity because — such is the allegation — it was done without or in
excess of his functions amounting to lack of jurisdiction.
To resolve the issue of union representation at the Universal Robina Textile plant, what was agreed
to be held at the company's premises and which became the root of this controversy, was a consent
election, not a certification election.
It is unmistakable that the election held on November 15, 1990 was a consent election and not a
certification election. It was an agreed one, the purpose being merely to determine the issue of
majority representation of all the workers in the appropriate collective bargaining unit. It is a separate
and distinct process and has nothing to do with the import and effort of a certification election. 5
The ruling of DOLE's representative in that election that the questioned ballot is spoiled is not based
on any legal provision or rule justifying or requiring such action by such officer but simply in
pursuance of the intent of the parties, expressed in the written instructions contained in the ballot,
which is to prohibit unauthorized markings thereon other than a check or a cross, obviously intended
to identify the votes in order to preserve the sanctity of the ballot, which is in fact the objective of the
contending parties.
If indeed petitioner's group had any opposition to the representation officer's ruling that the
questioned ballot was spoiled, it should have done so seasonably during the canvass of votes. Its
failure or inaction to assail such ballot's validity shall be deemed a waiver of any defect or irregularity
arising from said election. Moreover, petitioners even question at this stage the clear instruction to
mark a check or cross opposite the same of the candidate's group, arguing that such instruction was
not clear, as two checks "may be interpreted that a voter may vote for Lino Algire but not with (sic)
his officers or
vice-versa,"6 notwithstanding the fact that a pre-election conference had already been held where no
such question was raised.
In any event, the choice by the majority of employees of the union officers that should best represent
them in the forthcoming collective bargaining negotiations should be achieved through the
democratic process of an election, the proper forum where the true will of the majority may not be
circumvented but clearly defined. The workers must be allowed to freely express their choice once
and for all in a determination where anything is open to their sound judgment and the possibility of
fraud and misrepresentation is minimized, if not eliminated, without any unnecessary delay and/or
maneuvering.
WHEREFORE, the petition is DENIED and the challenged decision is hereby AFFIRMED.
SO ORDERED.
Bidin, Melo and Vitug, JJ., concur
Feliciano, J., is on leave
#Footnotes
1 Annex "A", Rollo, p. 25.

2 Rollo, pp. 26-31.
3 Rollo, pp. 32-33.
4 Rollo, p. 41.
5 Warren Manufacturing Worker's union v. Bureau of Labor Relations, G.R.

No. 76185, March 30, 1988, 159 SCRA 387.
6 Rollo, p. 10 of Memorandum on p. 107.
30) Insular vs. Hotel Davao GR Nos. 174040-41, Sept. 22, 2010
Supreme Court
Manila
SECOND DIVISION
INSULAR HOTEL EMPLOYEES G.R. Nos. 174040-41

UNION-NFL,
Petitioner, Present:
CARPIO, J., Chairperson,

- versus - VELASCO, JR., *
PERALTA,
BERSAMIN, ** and
ABAD, JJ.
WATERFRONT INSULAR HOTEL
DAVAO,
Promulgated:
Respondent.
September 22, 2010
x-----------------------------------------------------------------------------------------x
DECISION
PERALTA, J.:
Before this Court is a petition for review on certiorari,[1] under Rule 45 of the
Rules of Court, seeking to set aside the Decision[2] dated October 11, 2005, and
the Resolution[3] dated July 13, 2006 of the Court of Appeals (CA) in consolidated
labor cases docketed as CA-G.R. SP No. 83831 and CA-G.R. SP No. 83657. Said
Decision reversed the Decision[4] dated the April 5, 2004 of the Accredited
Voluntary Arbitrator Rosalina L. Montejo (AVA Montejo).
The facts of the case, as culled from the records, are as follows:
On November 6, 2000, respondent Waterfront Insular Hotel Davao (respondent)

sent the Department of Labor and Employment (DOLE), Region XI, Davao City, a
Notice of Suspension of Operations[5] notifying the same that it will suspend its
operations for a period of six months due to severe and serious business losses. In
said notice, respondent assured the DOLE that if the company could not resume
its operations within the six-month period, the company would pay the affected
employees all the benefits legally due to them.
During the period of the suspension, Domy R. Rojas (Rojas), the President of
Davao Insular Hotel Free Employees Union (DIHFEU-NFL), the recognized labor
organization in Waterfront Davao, sent respondent a number of letters asking
management to reconsider its decision.
In a letter[6] dated November 8, 2000, Rojas intimated that the members of the
Union were determined to keep their jobs and that they believed they too had to
help respondent, thus:
xxxx
Sir, we are determined to keep our jobs and push the Hotel up from sinking. We believe
that we have to help in this (sic) critical times. Initially, we intend to suspend the re-
negotiations of our CBA. We could talk further on possible adjustments on economic
benefits, the details of which we are hoping to discuss with you or any of your
emissaries. x x x[7]
In another letter[8] dated November 10, 2000, Rojas reiterated the Union's desire
to help respondent, to wit:
We would like to thank you for giving us the opportunity to meet [with] your
representatives in order for us to air our sentiments and extend our helping hands for a
possible reconsideration of the company's decision.
The talks have enabled us to initially come up with a suggestion of solving the high cost
on payroll.
We propose that 25 years and above be paid their due retirement benefits and put their
length of service to zero without loss of status of employment with a minimum hiring
rate.
Thru this scheme, the company would be able to save a substantial amount and reduce
greatly the payroll costs without affecting the finance of the families of the employees
because they will still have a job from where they could get their income.
Moreover, we are also open to a possible reduction of some economic benefits as our
gesture of sincere desire to help.
We are looking forward to a more fruitful round of talks in order to save the hotel.[9]
In another letter[10] dated November 20, 2000, Rojas sent respondent more
proposals as a form of the Union's gesture of their intention to help the company,
thus:
1) Suspension of [the] CBA for ten years, No strike no lock-out shall be enforced.
2) Pay all the employees their benefits due, and put the length of service to zero
with a minimum hiring rate. Payment of benefits may be on a staggered basis or as
available.
3) Night premium and holiday pays shall be according to law. Overtime hours
rendered shall be offsetted as practiced.
4) Reduce the sick leaves and vacation leaves to 15 days/15days.
5) Emergency leave and birthday off are hereby waived.
6) Duty meal allowance is fixed at P30.00 only. No more midnight snacks and
double meal allowance. The cook drinks be stopped as practiced.
7) We will shoulder 50% of the group health insurance and family medical
allowance be reduced to 1,500.00 instead of 3,000.00.
8) The practice of bringing home our uniforms for laundry be continued.

9) Fixed manning shall be implemented, the rest of manpower requirements
maybe sourced thru WAP and casual hiring. Manpower for fixed manning shall be 145
rank-and-file union members.
10) Union will cooperate fully on strict implementation of house rules in order to
attain desired productivity and discipline. The union will not tolerate problem
members.
11) The union in its desire to be of utmost service would adopt multi-tasking for the
hotel to be more competitive.
It is understood that with the suspension of the CBA renegotiations, the same existing
CBA shall be adopted and that all provisions therein shall remain enforced except for
those mentioned in this proposal.
These proposals shall automatically supersede the affected provisions of the CBA.[11]
In a handwritten letter[12] dated November 25, 2000, Rojas once again appealed
to respondent for it to consider their proposals and to re-open the hotel. In said
letter, Rojas stated that manpower for fixed manning shall be one hundred (100)
rank-and-file Union members instead of the one hundred forty-five (145)
originally proposed.
Finally, sometime in January 2001, DIHFEU-NFL, through Rojas, submitted to

respondent a Manifesto[13] concretizing their earlier proposals.
After series of negotiations, respondent and DIHFEU-NFL, represented by its

President, Rojas, and Vice-Presidents, Exequiel J. Varela Jr. and Avelino C. Bation,
Jr.,signed a Memorandum of Agreement[14] (MOA) wherein respondent agreed to
re-open the hotel subject to certain concessions offered by DIHFEU-NFL in its
Manifesto.
Accordingly, respondent downsized its manpower structure to 100 rank-and-file

employees as set forth in the terms of the MOA. Moreover, as agreed upon in the
MOA, a new pay scale was also prepared by respondent.
The retained employees individually signed a Reconfirmation of

Employment[15] which embodied the new terms and conditions of their continued
employment. Each employee was assisted by Rojas who also signed the
document.
On June 15, 2001, respondent resumed its business operations.
On August 22, 2002, Darius Joves (Joves) and Debbie Planas, claiming to be
local officers of the National Federation of Labor (NFL), filed a Notice of
Mediation[16] before the National Conciliation and Mediation Board (NCMB),
Region XI, Davao City. In said Notice, it was stated that the Union involved was
DARIUS JOVES/DEBBIE PLANAS ET. AL, National Federation of Labor. The issue
raised in said Notice was the Diminution of wages and other benefits through
unlawful Memorandum of Agreement.
On August 29, 2002, the NCMB called Joves and respondent to a conference to
explore the possibility of settling the conflict. In the said conference, respondent
and petitioner Insular Hotel Employees Union-NFL (IHEU-NFL), represented by
Joves, signed a Submission Agreement[17] wherein they chose AVA Alfredo C.
Olvida (AVA Olvida) to act as voluntary arbitrator. Submitted for the resolution of
AVA Olvida was the determination of whether or not there was a diminution of
wages and other benefits through an unlawful MOA. In support of his authority to
file the complaint, Joves, assisted by Atty. Danilo Cullo (Cullo), presented several
Special Powers of Attorney (SPA) which were, however, undated and unnotarized.
On September 2, 2002, respondent filed with the NCMB a Manifestation with
Motion for a Second Preliminary Conference,[18] raising the following grounds:
1) The persons who filed the instant complaint in the name of the Insular Hotel
Employees Union-NFL have no authority to represent the Union;
2) The individuals who executed the special powers of attorney in favor of the person
who filed the instant complaint have no standing to cause the filing of the instant
complaint; and
3) The existence of an intra-union dispute renders the filing of the instant case
premature.[19]
On September 16, 2002, a second preliminary conference was conducted in the

NCMB, where Cullo denied any existence of an intra-union dispute among the
members of the union. Cullo, however, confirmed that the case was filed not by
the IHEU-NFL but by the NFL. When asked to present his authority from NFL, Cullo
admitted that the case was, in fact, filed by individual employees named in the
SPAs. The hearing officer directed both parties to elevate the aforementioned
issues to AVA Olvida.[20]
The case was docketed as Case No. AC-220-RB-11-09-022-02 and referred to AVA
Olvida. Respondent again raised its objections, specifically arguing that the
persons who signed the complaint were not the authorized representatives of the
Union indicated in the Submission Agreement nor were they parties to the
MOA. AVA Olvida directed respondent to file a formal motion to withdraw its
submission to voluntary arbitration.
On October 16, 2002, respondent filed its Motion to Withdraw.[21] Cullo then filed
an Opposition[22] where the same was captioned:
NATIONAL FEDERATION OF LABOR
And 79 Individual Employees, Union Members,
Complainants,
-versus-
Waterfront Insular Hotel Davao,
Respondent.
In said Opposition, Cullo reiterated that the complainants were not representing
IHEU-NFL, to wit:
xxxx
2. Respondent must have been lost when it said that the individuals who executed the SPA
have no standing to represent the union nor to assail the validity of Memorandum of
Agreement (MOA). What is correct is that the individual complainants are not
representing the union but filing the complaint through their appointed attorneys-in-fact
to assert their individual rights as workers who are entitled to the benefits granted by law
and stipulated in the collective bargaining agreement.[23]
On November 11, 2002, AVA Olvida issued a Resolution[24] denying respondent's
Motion to Withdraw. On December 16, 2002, respondent filed a Motion for
Reconsideration[25] where it stressed that the Submission Agreement was void
because the Union did not consent thereto. Respondent pointed out that the
Union had not issued any resolution duly authorizing the individual employees or
NFL to file the notice of mediation with the NCMB.
Cullo filed a Comment/Opposition[26] to respondent's Motion for Reconsideration.

Again, Cullo admitted that the case was not initiated by the IHEU-NFL, to wit:
The case was initiated by complainants by filling up Revised Form No. 1 of the NCMB
duly furnishing respondent, copy of which is hereto attached as Annex A for reference
and consideration of the Honorable Voluntary Arbitrator. There is no mention there of
Insular Hotel Employees Union, but only National Federation of Labor (NFL). The one
appearing at the Submission Agreement was only a matter of filling up the blanks
particularly on the question there of Union; which was filled up with Insular Hotel
Employees Union-NFL. There is nothing there that indicates that it is a complainant as
the case is initiated by the individual workers and National Federation of Labor, not by
the local union. The local union was not included as party-complainant considering that
it was a party to the assailed MOA.[27]
On March 18, 2003, AVA Olvida issued a Resolution[28] denying respondent's

Motion for Reconsideration. He, however, ruled that respondent was correct
when it raised its objection to NFL as proper party-complainant, thus:
Anent to the real complainant in this instant voluntary arbitration case, the respondent
is correct when it raised objection to the National Federation of Labor (NFL) and as
proper party-complainants.
The proper party-complainant is INSULAR HOTEL EMPLOYEES UNION-NFL, the

recognized and incumbent bargaining agent of the rank-and-file employees of the
respondent hotel. In the submission agreement of the parties dated August 29, 2002,
the party complainant written is INSULAR HOTEL EMPLOYEES UNION-NFL and not the
NATIONAL FEDERATION OF LABOR and 79 other members.
However, since the NFL is the mother federation of the local union, and signatory to the
existing CBA, it can represent the union, the officers, the members or union and officers
or members, as the case may be, in all stages of proceedings in courts or administrative
bodies provided that the issue of the case will involve labor-management relationship
like in the case at bar.
The dispositive portion of the March 18, 2003 Resolution of AVA Olvida reads:
WHEREFORE, premises considered, the motion for reconsideration filed by respondent

is DENIED. The resolution dated November 11, 2002 is modified in so far as the party-
complainant is concerned; thus, instead of National Federation of Labor and 79
individual employees, union members, shall be Insular Hotel Employees Union-NFL et.
al., as stated in the joint submission agreement dated August 29, 2002. Respondent is
directed to comply with the decision of this Arbitrator dated November 11, 2002,
No further motion of the same nature shall be entertained.[29]
On May 9, 2003, respondent filed its Position Paper Ad Cautelam,[30] where it

declared, among others, that the same was without prejudice to its earlier
objections against the jurisdiction of the NCMB and AVA Olvida and the standing
of the persons who filed the notice of mediation.
Cullo, now using the caption Insular Hotel Employees Union-

NFL, Complainant, filed a Comment[31] dated June 5, 2003. On June 23, 2003,
respondent filed its Reply.[32]
Later, respondent filed a Motion for Inhibition[33] alleging AVA Olvida's bias and
prejudice towards the cause of the employees. In an Order[34] dated July 25, 2003,
AVA Olvida voluntarily inhibited himself out of delicadeza and ordered the
remand of the case to the NCMB.
On August 12, 2003, the NCMB issued a Notice requiring the parties to appear
before the conciliator for the selection of a new voluntary arbitrator.
In a letter[35] dated August 19, 2003 addressed to the NCMB, respondent
reiterated its position that the individual union members have no standing to file
the notice of mediation before the NCMB. Respondent stressed that the
complaint should have been filed by the Union.
On September 12, 2003, the NCMB sent both parties a Notice[36] asking them to
appear before it for the selection of the new voluntary arbitrator. Respondent,
however, maintained its stand that the NCMB had no jurisdiction over the case.
Consequently, at the instance of Cullo, the NCMB approved ex parte the selection
of AVA Montejo as the new voluntary arbitrator.
On April 5, 2004, AVA Montejo rendered a Decision[37] ruling in favor of Cullo, the
dispositive portion of which reads:
WHEREOF, in view of the all the foregoing, judgment is hereby rendered:
1. Declaring the Memorandum of Agreement in question as invalid as it is contrary

to law and public policy;
2. Declaring that there is a diminution of the wages and other benefits of the Union
members and officers under the said invalid MOA.
3. Ordering respondent management to immediately reinstate the workers wage

rates and other benefits that they were receiving and enjoying before the signing of the
invalid MOA;
4. Ordering the management respondent to pay attorneys fees in an amount

equivalent to ten percent (10%) of whatever total amount that the workers union may
receive representing individual wage differentials.
As to the other claims of the Union regarding diminution of other benefits, this
accredited voluntary arbitrator is of the opinion that she has no authority to entertain,
particularly as to the computation thereof.
SO ORDERED.[38]
Both parties appealed the Decision of AVA Montejo to the CA. Cullo only assailed
the Decision in so far as it did not categorically order respondent to pay the
covered workers their differentials in wages reckoned from the effectivity of the
MOA up to the actual reinstatement of the reduced wages and benefits. Cullos'
petition was docketed as CA-G.R. SP No. 83831. Respondent, for its part,
questioned among others the jurisdiction of the NCMB. Respondent maintained
that the MOA it had entered into with the officers of the Union was valid.
Respondent's petition was docketed as CA-G.R. SP No. 83657. Both cases were
consolidated by the CA.
On October 11, 2005, the CA rendered a Decision[39] ruling in favor of respondent,

the dispositive portion of which reads:
WHEREFORE, premises considered, the petition for review in CA-G.R. SP No. 83657 is
hereby GRANTED, while the petition in CA-G.R. SP No. 83831 is DENIED. Consequently,
the assailed Decision dated April 5, 2004 rendered by AVA Rosalina L. Montejo is hereby
REVERSED and a new one entered declaring the Memorandum of Agreement dated May
8, 2001 VALID and ENFORCEABLE. Parties are DIRECTED to comply with the terms and
conditions thereof.
SO ORDERED.[40]
Aggrieved, Cullo filed a Motion for Reconsideration, which was, however, denied
by the CA in a Resolution[41] dated July 13, 2006.
Hence, herein petition, with Cullo raising the following issues for this Court's
resolution, to wit:
I.
WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS
ERRORS IN FINDING THAT THE ACCREDITED VOLUNTARY ARBITRATOR HAS NO
JURISDICTION OVER THE CASE SIMPLY BECAUSE THE NOTICE OF MEDIATION DOES NOT
MENTION THE NAME OF THE LOCAL UNION BUT ONLY THE AFFILIATE FEDERATION
THEREBY DISREGARDING THE SUBMISSION AGREEMENT DULY SIGNED BY THE PARTIES
AND THEIR LEGAL COUNSELS THAT MENTIONS THE NAME OF THE LOCAL UNION.
II.
WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR
BY DISREGARDING THE PROVISIONS OF THE CBA SIMPLY BECAUSE IT BELIEVED THE
UNPROVEN ALLEGATIONS OF RESPONDENT HOTEL THAT IT WAS SUFFERING FROM
FINANCIAL CRISIS.
III.
THE HONORABLE COURT OF APPEALS MUST HAVE SERIOUSLY ERRED IN CONCLUDING

THAT ARTICLE 100 OF THE LABOR CODE APPLIES ONLY TO BENEFITS ENJOYED PRIOR TO
THE ADOPTION OF THE LABOR CODE WHICH, IN EFFECT, ALLOWS THE DIMINUTION OF
THE BENEFITS ENJOYED BY EMPLOYEES FROM ITS ADOPTION HENCEFORTH.[42]
The petition is not meritorious.
Anent the first error raised, Cullo argues that the CA erred when it overlooked the
fact that before the case was submitted to voluntary arbitration, the parties
signed a Submission Agreement which mentioned the name of the local union
and not only NFL. Cullo, thus, contends that the CA committed error when it ruled
that the voluntary arbitrator had no jurisdiction over the case simply because the
Notice of Mediation did not state the name of the local union thereby
disregarding the Submission Agreement which states the names of local union as
Insular Hotel Employees Union-NFL.[43]
In its Memorandum,[44] respondent maintains its position that the NCMB and
Voluntary Arbitrators had no jurisdiction over the complaint. Respondent,
however, now also contends that IHEU-NFL is a non-entity since it is DIHFEU-
NFL which is considered by the DOLE as the only registered union in Waterfront
Davao.[45]Respondent argues that the Submission Agreement does not name the
local union DIHFEU-NFL and that it had timely withdrawn its consent to arbitrate
by filing a motion to withdraw.
A review of the development of the case shows that there has been much
confusion as to the identity of the party which filed the case against respondent.
In the Notice of Mediation[46] filed before the NCMB, it stated that the union
involved was DARIUS JOVES/DEBBIE PLANAS ET. AL., National Federation of Labor.
In the Submission Agreement,[47] however, it stated that the union involved was
INSULAR HOTEL EMPLOYEES UNION-NFL.
Furthermore, a perusal of the records would reveal that after signing the
Submission Agreement, respondent persistently questioned the authority and
standing of the individual employees to file the complaint. Cullo then clarified in
subsequent documents captioned as National Federation of Labor and 79
Individual Employees, Union Members, Complainants that the individual
complainants are not representing the union, but filing the complaint through
their appointed attorneys-in-fact.[48]AVA Olvida, however, in a Resolution dated
March 18, 2003, agreed with respondent that the proper party-complainant
should be INSULAR HOTEL EMPLOYEES UNION-NFL, to wit:
x x x In the submission agreement of the parties dated August 29, 2002, the party
complainant written is INSULAR HOTEL EMPLOYEES UNION-NFL and not the NATIONAL
FEDERATION OF LABOR and 79 other members.[49]
The dispositive portion of the Resolution dated March 18, 2003 of AVA Olvida
reads:
WHEREFORE, premises considered, the motion for reconsideration filed by respondent

is DENIED. The resolution dated November 11, 2002, is modified in so far as the party
complainant is concerned, thus, instead of National Federation of Labor and 79
individual employees, union members, shall be Insular Hotel Employees Union-NFL et.
al., as stated in the joint submission agreement dated August 29, 2002. Respondent is
directed to comply with the decision of this Arbitrator dated November 11, 2002.[50]
After the March 18, 2003 Resolution of AVA Olvida, Cullo adopted Insular Hotel
Employees Union-NFL et. al., Complainant as the caption in all his subsequent
pleadings. Respondent, however, was still adamant that neither Cullo nor the
individual employees had authority to file the case in behalf of the Union.
While it is undisputed that a submission agreement was signed by respondent

and IHEU-NFL, then represented by Joves and Cullo, this Court finds that there are
two circumstances which affect its validity: first, the Notice of Mediation was filed
by a party who had no authority to do so; second, that respondent had
persistently voiced out its objection questioning the authority of Joves, Cullo and
the individual members of the Union to file the complaint before the NCMB.
Procedurally, the first step to submit a case for mediation is to file a notice of
preventive mediation with the NCMB. It is only after this step that a submission
agreement may be entered into by the parties concerned.
Section 3, Rule IV of the NCMB Manual of Procedure provides who may file a
notice of preventive mediation, to wit:
Who may file a notice or declare a strike or lockout or request preventive mediation. -
Any certified or duly recognized bargaining representative may file a notice or declare a
strike or request for preventive mediation in cases of bargaining deadlocks and unfair
labor practices. The employer may file a notice or declare a lockout or request for
preventive mediation in the same cases. In the absence of a certified or duly recognized
bargaining representative, any legitimate labor organization in the establishment may file
a notice, request preventive mediation or declare a strike, but only on grounds of unfair
labor practice.
From the foregoing, it is clear that only a certified or duly recognized bargaining
agent may file a notice or request for preventive mediation. It is curious that even
Cullo himself admitted, in a number of pleadings, that the case was filed not by
the Union but by individual members thereof. Clearly, therefore, the NCMB had
no jurisdiction to entertain the notice filed before it.
Even though respondent signed a Submission Agreement, it had, however,

immediately manifested its desire to withdraw from the proceedings after it
became apparent that the Union had no part in the complaint. As a matter of fact,
only four days had lapsed after the signing of the Submission Agreement when
respondent called the attention of AVA Olvida in a Manifestation with Motion for
a Second Preliminary Conference[51] that the persons who filed the instant
complaint in the name of Insular Hotel Employees Union-NFL had no authority to
represent the Union. Respondent cannot be estopped in raising the jurisdictional
issue, because it is basic that the issue of jurisdiction may be raised at any stage of
the proceedings, even on appeal, and is not lost by waiver or by estoppel.
In Figueroa v. People,[52] this Court explained that estoppel is the exception rather
than the rule, to wit:
Applying the said doctrine to the instant case, the petitioner is in no way estopped by
laches in assailing the jurisdiction of the RTC, considering that he raised the lack thereof
in his appeal before the appellate court. At that time, no considerable period had yet
elapsed for laches to attach. True, delay alone, though unreasonable, will not sustain the
defense of estoppel by laches unless it further appears that the party, knowing his rights,
has not sought to enforce them until the condition of the party pleading laches has in
good faith become so changed that he cannot be restored to his former state, if the rights
be then enforced, due to loss of evidence, change of title, intervention of equities, and
other causes. In applying the principle of estoppel by laches in the exceptional case
of Sibonghanoy, the Court therein considered the patent and revolting inequity and
unfairness of having the judgment creditors go up their Calvary once more after more or
less 15 years.The same, however, does not obtain in the instant case.
We note at this point that estoppel, being in the nature of a forfeiture, is not favored by
law. It is to be applied rarelyonly from necessity, and only in extraordinary circumstances.
The doctrine must be applied with great care and the equity must be strong
in its favor.When misapplied, the doctrine of estoppel may be a most effective weapon
for the accomplishment of injustice. x x x (Italics supplied.)[53]
The question to be resolved then is, do the individual members of the Union have
the requisite standing to question the MOA before the NCMB? On this
note, Tabigue v. International Copra Export Corporation (INTERCO)[54] is
instructive:
Respecting petitioners thesis that unsettled grievances should be referred to voluntary

arbitration as called for in the CBA, the same does not lie.The pertinent portion of the
CBA reads:
In case of any dispute arising from the interpretation or implementation

of this Agreement or any matter affecting the relations of Labor and
Management, the UNION and the COMPANY agree to exhaust all
possibilities of conciliation through the grievance machinery. The
committee shall resolve all problems submitted to it within fifteen (15)
days after the problems ha[ve] been discussed by the members. If the
dispute or grievance cannot be settled by the Committee, or if the
committee failed to act on the matter within the period of fifteen (15)
days herein stipulated, the UNION and the COMPANY agree to submit
the issue to Voluntary Arbitration. Selection of the arbitrator shall be
made within seven (7) days from the date of notification by the
aggrieved party. The Arbitrator shall be selected by lottery from four (4)
qualified individuals nominated by in equal numbers by both parties
taken from the list of Arbitrators prepared by the National Conciliation
and Mediation Board (NCMB). If the Company and the Union
representatives within ten (10) days fail to agree on the Arbitrator, the
NCMB shall name the Arbitrator. The decision of the Arbitrator shall be
final and binding upon the parties. However, the Arbitrator shall not
have the authority to change any provisions of the Agreement.The cost
of arbitration shall be borne equally by the parties.
Petitioners have not, however, been duly authorized to represent the union. Apropos is
this Courts pronouncement in Atlas Farms, Inc. v. National Labor Relations Commission,
viz:
x x x Pursuant to Article 260 of the Labor Code, the parties to a CBA shall
name or designate their respective representatives to the grievance
machinery and if the grievance is unsettled in that level, it shall
automatically be referred to the voluntary arbitrators designated in
advance by parties to a CBA. Consequently, only disputes involving the
union and the company shall be referred to the grievance machinery
or voluntary arbitrators. (Emphasis and underscoring supplied.)[55]
If the individual members of the Union have no authority to file the case, does the
federation to which the local union is affiliated have the standing to do so? On
this note, Coastal Subic Bay Terminal, Inc. v. Department of Labor and
Employment[56] is enlightening, thus:
x x x A local union does not owe its existence to the federation with which it is affiliated.
It is a separate and distinct voluntary association owing its creation to the will of its
members. Mere affiliation does not divest the local union of its own personality,
neither does it give the mother federation the license to act independently of the local
union. It only gives rise to a contract of agency, where the former acts in representation
of the latter. Hence, local unions are considered principals while the federation is
deemed to be merely their agent. x x x[57]
Based on the foregoing, this Court agrees with approval with the disquisition of
the CA when it ruled that NFL had no authority to file the complaint in behalf of
the individual employees, to wit:
Anent the first issue, We hold that the voluntary arbitrator had no jurisdiction over the
case. Waterfront contents that the Notice of Mediation does not mention the name of
the Union but merely referred to the National Federation of Labor (NFL) with which the
Union is affiliated. In the subsequent pleadings, NFL's legal counsel even confirmed that
the case was not filed by the union but by NFL and the individual employees named in the
SPAs which were not even dated nor notarized.
Even granting that petitioner Union was affiliated with NFL, still the relationship between
that of the local union and the labor federation or national union with which the former
was affiliated is generally understood to be that of agency, where the local is the principal
and the federation the agency. Being merely an agent of the local union, NFL should have
presented its authority to file the Notice of Mediation. While We commend NFL's
zealousness in protecting the rights of lowly workers, We cannot, however, allow it to go
beyond what it is empowered to do.
As provided under the NCMB Manual of Procedures, only a certified or duly recognized
bargaining representative and an employer may file a notice of mediation, declare a strike
or lockout or request preventive mediation. The Collective Bargaining Agreement (CBA),
on the other, recognizes that DIHFEU-NFL is the exclusive bargaining representative of all
permanent employees. The inclusion of the word NFL after the name of the local union
merely stresses that the local union is NFL's affiliate. It does not, however, mean that the
local union cannot stand on its own. The local union owes its creation and continued
existence to the will of its members and not to the federation to which it belongs. The
spring cannot rise higher than its source, so to speak.[58]
In its Memorandum, respondent contends that IHEU-NFL is a non-entity and that

DIHFEU-NFL is the only recognized bargaining unit in their establishment. While
the resolution of the said argument is already moot and academic given the
discussion above, this Court shall address the same nevertheless.
While the November 16, 2006 Certification[59] of the DOLE clearly states
that IHEU-NFL is not a registered labor organization, this Court finds that
respondent is estopped from questioning the same as it did not raise the said
issue in the proceedings before the NCMB and the Voluntary Arbitrators. A
perusal of the records reveals that the main theory posed by respondent was
whether or not the individual employees had the authority to file the complaint
notwithstanding the apparent non-participation of the union. Respondent never
put in issue the fact that DIHFEU-NFL was not the same as IHEU-NFL.
Consequently, it is already too late in the day to assert the same.
Anent the second issue raised by Cullo, the same is again without merit.
Cullo contends that respondent was not really suffering from serious losses as
found by the CA. Cullo anchors his position on the denial by the Wage Board of
respondent's petition for exemption from Wage Order No. RTWPB-X1-08 on the
ground that it is a distressed establishment.[60] In said denial, the Board ruled:
A careful analysis of applicant's audited financial statements showed that during the
period ending December 31, 1999, it registered retained earnings amounting
to P8,661,260.00. Applicant's interim financial statements for the quarter ending June
30, 2000 cannot be considered, as the same was not audited. Accordingly, this Board
finds that applicant is not qualified for exemption as a distressed establishment pursuant
to the aforecited criteria.[61]
In its Decision, the CA held that upholding the validity of the MOA would mean
the continuance of the hotel's operation and financial viability, to wit:
x x x We cannot close Our eyes to the impending financial distress that an employer may
suffer should the terms of employment under the said CBA continue.
If indeed We are to tilt the balance of justice to labor, then We would be inclined to favor
for the nonce petitioner Waterfront. To uphold the validity of the MOA would mean the
continuance of the hotel's operation and financial viability. Otherwise, the eventual
permanent closure of the hotel would only result to prejudice of the employees, as a
consequence thereof, will necessarily lose their jobs.[62]
In its petition before the CA, respondent submitted its audited financial
statements[63] which show that for the years 1998, 1999, until September 30,
2000, its total operating losses amounted to P48,409,385.00. Based on the
foregoing, the CA was not without basis when it declared that respondent was
suffering from impending financial distress. While the Wage Board denied
respondent's petition for exemption, this Court notes that the denial was partly
due to the fact that the June 2000 financial statements then submitted by
respondent were not audited. Cullo did not question nor discredit the accuracy
and authenticity of respondent's audited financial statements. This Court,
therefore, has no reason to question the veracity of the contents
thereof. Moreover, it bears to point out that respondent's audited financial
statements covering the years 2001 to 2005 show that it still continues to suffer
losses.[64]
Finally, anent the last issue raised by Cullo, the same is without merit.
Cullo argues that the CA must have erred in concluding that Article 100 of the
Labor Code applies only to benefits already enjoyed at the time of the
promulgation of the Labor Code.
Article 100 of the Labor Code provides:
PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS- Nothing in this Book

shall be construed to eliminate or in any way diminish supplements, or other employee
benefits being enjoyed at the time of the promulgation of this Code.
On this note, Apex Mining Company, Inc. v. NLRC[65] is instructive, to wit:
Clearly, the prohibition against elimination or diminution of benefits set out in Article 100
of the Labor Code is specifically concerned with benefits already enjoyed at the time of
the promulgation of the Labor Code. Article 100 does not, in other words, purport to
apply to situations arising after the promulgation date of the Labor Code x x x.[66]
Even assuming arguendo that Article 100 applies to the case at bar, this Court
agrees with respondent that the same does not prohibit a union from offering
and agreeing to reduce wages and benefits of the employees. In Rivera v.
Espiritu,[67] this Court ruled that the right to free collective bargaining, after all,
includes the right to suspend it, thus:
A CBA is a contract executed upon request of either the employer or the exclusive
bargaining representative incorporating the agreement reached after negotiations 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. The primary purpose of a CBA is the stabilization of labor-management
relations in order to create a climate of a sound and stable industrial peace. In
construing a CBA, the courts must be practical and realistic and give due consideration
to the context in which it is negotiated and the purpose which it is intended to serve.
The assailed PAL-PALEA agreement was the result of voluntary collective bargaining
negotiations undertaken in the light of the severe financial situation faced by the
employer, with the peculiar and unique intention of not merely promoting industrial
peace at PAL, but preventing the latters closure. We find no conflict between said
agreement and Article 253-A of the Labor Code. Article 253-A has a two-fold purpose.
One is to promote industrial stability and predictability. Inasmuch as the agreement
sought to promote industrial peace at PAL during its rehabilitation, said agreement
satisfies the first purpose of Article 253-A. The other is to assign specific timetables
wherein negotiations become a matter of right and requirement. Nothing in Article 253-
A, prohibits the parties from waiving or suspending the mandatory timetables and
agreeing on the remedies to enforce the same.
In the instant case, it was PALEA, as the exclusive bargaining agent of PALs ground
employees, that voluntarily entered into the CBA with PAL. It was also PALEA that
voluntarily opted for the 10-year suspension of the CBA. Either case was the unions
exercise of its right to collective bargaining. The right to free collective bargaining, after
all, includes the right to suspend it.[68]
Lastly, this Court is not unmindful of the fact that DIHFEU-NFL's Constitution and
By-Laws specifically provides that the results of the collective bargaining
negotiations shall be subject to ratification and approval by majority vote of the
Union members at a meeting convened, or by plebiscite held for such special
purpose.[69] Accordingly, it is undisputed that the MOA was not subject to
ratification by the general membership of the Union. The question to be resolved
then is, does the non-ratification of the MOA in accordance with the Union's
constitution prove fatal to the validity thereof?
It must be remembered that after the MOA was signed, the members of the
Union individually signed contracts denominated as Reconfirmation of
Employment.[70]Cullo did not dispute the fact that of the 87 members of the
Union, who signed and accepted the Reconfirmation of Employment, 71 are the
respondent employees in the case at bar. Moreover, it bears to stress that all the
employees were assisted by Rojas, DIHFEU-NFL's president, who even co-signed
each contract.
Stipulated in each Reconfirmation of Employment were the new salary and

benefits scheme. In addition, it bears to stress that specific provisions of the new
contract also made reference to the MOA. Thus, the individual members of the
union cannot feign knowledge of the execution of the MOA. Each contract was
freely entered into and there is no indication that the same was attended by
fraud, misrepresentation or duress. To this Court's mind, the signing of the
individual Reconfirmation of Employment should, therefore, be deemed an
implied ratification by the Union members of the MOA.
In Planters Products, Inc. v. NLRC,[71] this Court refrained from declaring a CBA
invalid notwithstanding that the same was not ratified in view of the fact that the
employees had enjoyed benefits under it, thus:
Under Article 231 of the Labor Code and Sec. 1, Rule IX, Book V of the Implementing
Rules, the parties to a collective [bargaining] agreement are required to furnish copies of
the appropriate Regional Office with accompanying proof of ratification by the majority
of all the workers in a bargaining unit. This was not done in the case at bar. But we do not
declare the 1984-1987 CBA invalid or void considering that the employees have enjoyed
benefits from it. They cannot receive benefits under provisions favorable to them and
later insist that the CBA is void simply because other provisions turn out not to the liking
of certain employees. x x x. Moreover, the two CBAs prior to the 1984-1987 CBA were not
also formally ratified, yet the employees are basing their present claims on these CBAs. It
is iniquitous to receive benefits from a CBA and later on disclaim its validity.[72]
Applied to the case at bar, while the terms of the MOA undoubtedly reduced the
salaries and certain benefits previously enjoyed by the members of the Union, it
cannot escape this Court's attention that it was the execution of the MOA which
paved the way for the re-opening of the hotel, notwithstanding its financial
distress. More importantly, the execution of the MOA allowed respondents to
keep their jobs. It would certainly be iniquitous for the members of the Union to
sign new contracts prompting the re-opening of the hotel only to later on renege
on their agreement on the fact of the non-ratification of the MOA.
In addition, it bears to point out that Rojas did not act unilaterally when he
negotiated with respondent's management. The Constitution and By-Laws of
DIHFEU-NFL clearly provide that the president is authorized to represent the
union on all occasions and in all matters in which representation of the union may
be agreed or required.[73] Furthermore, Rojas was properly authorized under a
Board of Directors Resolution[74] to negotiate with respondent, the pertinent
portions of which read:
SECRETARY's CERTIFICATE
I, MA. SOCORRO LISETTE B. IBARRA, x x x, do hereby certify that, at a meeting of the

Board of Directors of the DIHFEU-NFL, on 28 Feb. 2001 with a quorum duly constituted,
the following resolutions were unanimously approved:
RESOLVED, as it is hereby resolved that the Manifesto dated 25 Feb.

2001 be approved ratified and adopted;
RESOLVED, FURTHER, that Mr. Domy R. Rojas, the president of the

DIHFEU-NFL, be hereby authorized to negotiate with Waterfront
Insular Hotel Davao and to work for the latter's acceptance of the
proposals contained in DIHFEU-NFL Manifesto; and
RESOLVED, FINALLY, that Mr. Domy R. Rojas is hereby authorized to

sign any and all documents to implement, and carry into effect, his
foregoing authority.[75]
Withal, while the scales of justice usually tilt in favor of labor, the peculiar
circumstances herein prevent this Court from applying the same in the instant
petition. Even if our laws endeavor to give life to the constitutional policy on
social justice and on the protection of labor, it does not mean that every labor
dispute will be decided in favor of the workers. The law also recognizes that
management has rights which are also entitled to respect and enforcement in the
interest of fair play.[76]
WHEREFORE, premises considered, the petition is DENIED. The Decision dated

October 11, 2005, and the Resolution dated July 13, 2006 of the Court of Appeals
in consolidated labor cases docketed as CA-G.R. SP No. 83831 and CA-G.R. SP No.
83657, are AFFIRMED.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
PRESBITERO J. VELASCO, JR. LUCAS P. BERSAMIN

ROBERTO A. ABAD
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
Second Division, Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division
RENATO C. CORONA
Chief Justice
*
Designated as an additional member in lieu of Associate Justice Antonio Eduardo B. Nachura per Special Order
No. 883 dated September 1, 2010.
**
Designated as an additional member in lieu of Associate Justice Jose Catral Mendoza per Special Order No. 886
dated September 1, 2010.
[1]
Rollo, pp. 7-63.
[2]
Penned by Associate Justice Rodrigo F. Lim, Jr., with Associate Justices Teresita Dy-Liacco Flores and Ramon
R. Garcia concurring; id. at 66-82.
[3]
Id. at 84-85.
[4]
Rollo, pp. 86-96.
[5]
CA rollo, Vol. 1, p. 342.
[6]
Rollo, p. 558.
[7]
Id.
[8]
Id. at 559.
[9]
Id.
[10]
Id. at 560-561.
[11]
Id.
[12]
Id. at 562-563.
[13]
CA rollo, Vol. 1, pp. 362-364.
MANIFESTO
On behalf of all its members, the Davao Insular Hotel Free Employees Union-National Federation of Labor (the
Union), hereby declares:
WHEREAS, the Union recognizes and admits that the Davao Insular Hotel (the Hotel), in the sound exercise of its
managerial prerogatives, has temporarily ceased its operations on December 7, 2000, due to substantial economic
losses;
WHEREAS, the Union acknowledges that the heavy losses experienced by the Hotel were basically brought about
by several factors, one of which is the huge payroll cost;
NOW, THEREFORE, to uplift and revive the Hotels financial viability, and, thus encourage the Hotel to resume its
operations, the Union hereby submits to the Hotel the following proposals:
A. RETIREMENT & REDUCED BENEFITS:

1. Retirement. The Hotel shall pay all employees qualified to retire their retirement
benefits under the terms and conditions of the existing Collective Bargaining Agreement (CBA) and
retrench those not yet qualified.Retired employees who may later on be rehired by the Hotel shall be
considered as newly hired employees and are entitled to applicable existing minimum wage rates. As
such, they hereby expressly waive any right that they may have with respect to their length of service.
2. Overtime and Holiday Pay. Night shift differential premium and holiday pay shall be paid
in accordance with the provisions of the Labor Code. Offsetting of overtime shall be continued.
3. Leaves. Vacation and sick leave periods shall be limited to a maximum of ten (10) days
each, while emergency and birthday leaves are hereby expressly waived.
4. Duty Meal Privileges. Meal allowance shall be reduced to P30.00 per duty. Midnight
snacks, double meal allowance and cooks drinks shall no longer be allowed.
5. Corporate Group Healthcare Programs. Only one (1) person shall be covered by the
healthcare program. Family medical allowance shall be reduced to P1,500.00 per year.
6. Uniforms Laundry. The practice of bringing home employees uniforms for washing shall
be continued.
7. Other Terms and Conditions. - The standards prescribed in the Labor Code of the
Philippines shall be observed as regards all other terms and conditions of employment not specifically
mentioned in this Manifesto.
B. RESTRUCTURE OF MANPOWER
1. Hiring Procedure. Within the first year of its re-opening, the Hotel shall rehire eighty (80
employees with regular status at the time of the Hotels closure. After the first year of operations, if
management should deem fit, ten (10) more employees with regular status at the time of closure may be
rehired provided that the Hotel achieves an owners profit (net profit) within the same period. In the event
of increased owners profits, the Hotel may again increase the number of its employees by rehiring
employees presently with regular status. Notwithstanding the foregoing provisions, the Hotel may, in its
discretion, fill up its other manning requirements in excess of the eighty (80) rehired employees from an
independent recruitment agency.
2. Salary Scale. The Union hereby abandons the existing pay scale. Thus, the respective
salaries of the eighty (80) rehired employees shall be in accordance with a new scheme to be devised by
the Hotel.
C. MISCELLANEOUS
1. Industrial Peace. The Union agrees not to cause, conduct or support any form of strike within
the next ten (10) years of the Hotels operations. It likewise agrees to treat the present Collective
Bargaining Agreement as inoperative within the same period insofar as the economic provisions are
concerned. Upon the lapse of the above period, at which time the term of the Collective Bargaining
Agreement shall be deemed to have lapsed, the parties may negotiate for a new Collective Bargaining
Agreement.
2. Disciplinary Committee. The Hotel shall establish a disciplinary committee which will decide
disciplinary cases involving violations of the Hotels House Rules and Regulations. The committee shall be
composed of eight persons, four (4) of whom shall be members of the management, while the remaining
four (4) shall be members of the Union. The members of the committee shall choose a presiding officer
among themselves. The findings of the committee shall be forwarded to the Human Relations
Department Manager, who shall give his recommendations to the General Manager. The decision of the
General Manager shall be final and immediately executory.
3. Multi-Tasking and Multi-Skilled Employees. Rehired employees shall be trained to perform
multi-tasking jobs.
4. Non-intervention of the Union. The Union further undertakes not to intervene in any matter
that is primarily within the exclusive discretion of the Hotel management, such as, but not limited to, the
grant of business concessions within the Hotel.
[14]
CA rollo, Vol., pp. 366-371.
MEMORANDUM OF AGREEMENT
Know All Men By These Presents:
This Memorandum of Agreement, entered into this day of May 08 2001 at Cebu City, Philippines, by and between:
DAVAO INSULAR HOTEL, COMPANY, INC., a corporation duly organized and existing under the
laws of the Philippines and doing business under the name and style: Waterfront Insular Hotel
Davao, hereinafter Hotel;
-and-
DAVAO INSULAR HOTEL FREE EMPLOYEES UNION-NATIONAL FEDERATION OF LABOR

(DIHFEUNFL), the duly recognized exclusive bargaining agent among the rank-and-file employees
of the Hotel; hereinafter the Union
WITNESSETH:
WHEREAS, due to severe economic losses, the Hotel was constrained to temporarily cease operations on
December 7, 2000.
WHEREAS, the Union acknowledges and admits that the closure of the Hotel was in accordance with the
sound, valid, and good faith exercise of the Hotels managerial prerogatives, and that the heavy business losses
experienced by the Hotel were brought about by factors that actually exist, one which is the huge payroll cost;
WHEREAS, the parties recognize that a condition precedent to the Hotels resumption of business
operations is its ability to remain financially viable during the first ten (10) years following its resumption of
operations;
WHEREAS, the parties acknowledge that the Hotels financial viability can only be achieved by a
comprehensive reorganization of its system of operations;
WHEREAS, on January 6, 2001, the economic provisions of the Collective Bargaining Agreement dated
January 6, 1998 (hereinafter, the CBA) between the Hotel and the Union are due for re-negotiation; WHEREAS, the
Union, through a Manifesto dated February 24, 2001, in an effort to help the Hotel achieve financial viability for
purposes of resuming its business operations and avoiding permanent closure, initiated the re-negotiation of the
economic provisions of the CBA by offering reduced employee benefits;
NOW, THEREFORE, in view of the foregoing premises, the parties, pursuant to Section 2 of Article XXVI of
the CBA, hereby agree to the following amendments to the CBA:
A. TENURE AND PRIORITY OF EMPLOYMENT (Article III)
The following shall be introduced as Sections 5, 6 and 7 under Article II of the CBA:
Section 5. Reduction of Personnel. To help reduce the Hotels payroll cost upon its resumption of
operations, the parties hereby agrees to the retention of 100 rank-and file personnel with regular
status at the time of the temporary closure of the hotel. Employees excluded by the parties may
avail of their retirement benefits in accordance with the terms and conditions of Article XXIII of
this Agreement.
Section 6. Multi-Tasking and Multi-Skilled Employees. Retained employees shall be trained to

perform multi-tasking jobs.
Section 7. Hiring Procedure. Within the first year or resumption of its operations and provided
that it achieves an owners profit (net profit), the Hotel may, if management should deem fit,
source its manpower requirements from among those excluded employees mentioned in the
immediately preceding paragraph, or any qualified member/s of their immediate families in
accordance with Section 4, Article III of the CBA.However, this provision shall not in any way
preclude the Hotel, in the valid exercise of its management prerogative, from filling up its other
manning requirements, in excess of the one hundred (100) retained employees, from an
independent recruitment agency or elsewhere.
B. RIGHTS AND DUTIES (Article IV)
Sections 1 and 2a of Article IV of the CBA are hereby amended to read as follows:
Section 1. Industrial Peace The Union agrees not to cause, conduct or support any form of strike
within the next ten (10 years following the Hotels resumption of operations.
Section 2a. Non-intervention of the Union The Union further undertakes not to intervene in any
matter that is primarily within the exclusive discretion of the Hotel management, such as, but not
limited to, the grant of business concessions within the Hotel.
The following provisions are hereby incorporated as Sections 2b and 2c under Article IV of the CBA:
2b. Disciplinary Action NO employee shall be subjected to disciplinary action without due process
and without just cause.
2c. Disciplinary Committee The Hotel shall establish a disciplinary committee that will decide
disciplinary cases involving employees violations of the Hotels House Rules and regulations. The
committee shall be composed of eight (8) members, four of whom shall represent management,
while the remaining four shall be members-representatives of the Union. The members of the
committee shall choose a presiding officer among themselves. The findings of the committee
shall be forwarded to the Human Resources Department Manager, who shall give his
recommendations to the General Manager, shall become immediately final and executory.
C. COMPENSATION (Article V)
Section 4 and Section 5 of Article V of the CBA are hereby amended as follows:
Section 4a. Salary Scale The salary scale of the retired rank-and file employees shall be in
accordance with a new compensation scheme to be determined by the Hotel, which shall in no
case be less than the existing minimum rates prescribed by the Regional Tripartite Wages and
Productivity Board.
Section 5. Duty Meals Meal allowance for regular employee shall be Thirty Pesos (P30.00) per
duty.
Sections 5a and 5b under Article V are hereby expressly repealed.
D. WORK SCHEDULE, OVERTIME, NIGHT DIFFERENTIAL (Article VI)
Sections 1a, 2, 2b, and 4 of Article VI are hereby amended to read as follows:
Section 1a. Additional Rates Employees requested for duty during his day off shall be paid his rest
day premium in accordance with the requirements of the provisions of the Labor Code.
Section 2. Overtime Work Overtime premiums shall be determined in accordance with the
requirements of the provisions of the Labor Code. Offsetting of overtime shall be continued.
Section 4. Nightshift Differential Payment of night shift differential premium shall be in

accordance with the requirements of the provisions of the Labor Code.
E. HEALTH BENEFITS (Article VIII)
Section 2 of Article VIII is hereby amended to read as follows:
Section 2. Medical Allowance The employee shall charge the cost of medicine and/or medical
assistance incurred by him up to the amount of P1,500.00 per year.
F. UNIFORM (Article IX)
The following provision shall be introduced under Article IX as Section 5:
Section 5. Uniforms Laundry Laundry of uniforms shall be the sole responsibility of the
employees and shall be done outside the Hotel premises.
G. VACATION LEAVE (Article XI)
Section 1 of Article XI are hereby amended to read as follows:
Section 1. Number of Days Vacation Leave Employees who have rendered at least one year of
continuous service shall be entitled to a vacation leave of ten (10) working days after each
completed year of service.
Sections 1a and 1b are hereby repealed.
H. SICK LEAVE (Article XII)

Section 1a of Article XII is hereby amended to read as follows;
Section 1a. Number of Days Sick Leave Employees shall be granted ten (10) working days sick
leave with pay per year.
Unused sick leave at the end of each year shall be 100% convertible to cash.
I. EMERGENCY LEAVE (Article XXIII)
The following provisions shall be introduced as Section 6 under Article XXIII of the CBA:
Article XIII of the CBA on Emergency Leave is hereby expressly repealed.
xxxx
K. AMENDMENTS, DISSEMINATION, DURATION RENEWAL (Article XXVI)
Section 1 of Article XXVI of the CBA shall be amended to read as follows:
Section 1. Effectivity and Duration This Agreement, as amended, shall be in full force and effect
immediately upon its execution by the parties. The Union expressly waives its rights to
renegotiate the wages and all other provisions contained in the Agreement, as amended, for a
period of ten (10) years following the Hotels resumption of operations.
The following provisions shall be introduced under Article XXVI of the CBA as Sections 5 and 6:
Section 5. Separability Clause Should any of the above provisions be hereinafter declared invalid,
the other provisions unaffected thereby shall continue to remain in full force and effect.
Section 6. Repealing Clause All terms and conditions of the Agreement inconsistent with the
foregoing provisions shall be deemed superseded and repealed by the provisions hereof.
IN WITNESS WHEREOF. The parties have hereunto affixed their signature this on the date and at the place
mentioned above.
[15]
See rollo, pp. 596-770.
[16]
[17]
Id. at 112.
[18]
Id. at 113- 115.
[19]
Id. at 113.
[20]
Rollo, p. 71.
[21]
CA rollo,Vol. 1, pp. 117-119.
[22]
Id. at 123-125.
[23]
Id. at 123. (Emphasis supplied).
[24]
Id. at 78-82.
[25]
Id. at 251-268.
[26]
Id. at 283-304.
[27]
Id. at 288.
[28]
Id. at 83-88.
[29]
Id. at 88.
[30]
Id. at 317-341.
[31]
Id. at 380-405.
[32]
Id. at 406-424.
[33]
[34]
Id. at 675.
[35]
Id. at 676-677.
[36]
Id. at 678.
[37]
[38]
Id. at 100.
[39]
Rollo, pp. 66-82.
[40]
Id. at 81.
[41]
Id. at 84-85.
[42]
Id. at 47-48.
[43]
Id. at 48.
[44]
Id. at 877-906.
[45]
See DOLE Certification dated November 16, 2006, id. at 551.
[46]
[47]
Id. at 112.
[48]
See Opposition to Motion to Withdraw, CA rollo, Vol. 1, id. at 123-125.
[49]
[50]
Id. at 88.
[51]
Id. at 113- 115.
[52]
G.R. No. 147406, July 14, 2008, 558 SCRA 63.
[53]
Id. at 81-83.
[54]
G.R. No. 183335, December 23, 2009, 609 SCRA 223.
[55]
Id. at 231-232.
[56]
G.R. No. 157117, November 20, 2006, 507 SCRA 300.
[57]
Id. at 311-312. (Emphasis supplied.)
[58]
Rollo, pp. 77-78.
[59]
Id. at 551.
[60]
See rollo, pp. 25-26.
[61]
Id. at 25. (Emphasis supplied.)
[62]
Id. at 79.
[63]
CA rollo, Vol.1, pp. 343-355.
[64]
2001- P39,495,634.00
2002 - P32,845,995.00
2003 - P23,924,784.00
2004 - P 9,540,927.00
2005 - P 3,330,939.00
See Audited Financial Statements, rollo, pp. 567-594.
[65]
G.R. No. 86200, February 25, 1992, 206 SCRA 497.
[66]
Id. at 501.
[67]
425 Phil. 169 (2002).
[68]
Id. at 182-183. (Emphasis supplied.)
[69]
[70]
See copies of Reconfirmation of Employment, rollo, pp. 596-770.
[71]
251 Phil. 310 (1989).
[72]
Id. at 322. (Emphasis supplied).
[73]
See Article VII, Section 1 of DIHFEU-NFL Constitution and By-Laws, CA rollo, Vol. 1, p. 271.
[74]
Rollo, p. 595.
[75]
Id. (Emphasis supplied).
[76]
Duncan Association of Detailman-PTGWO v. Glaxo Wellcome Philippines, Inc., 481 Phil. 687, 700 (2004).
31) Volkschel vs. BLR GR No. 45824 June 19, 1985

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-45824 June 19, 1985
VOLKSCHEL LABOR UNION, petitioner,

vs.
BUREAU OF LABOR RELATIONS, ASSOCIATED LABOR UNION FOR METAL, WORKERS,
DMG, INC., PEOPLE'S CAR, INC., KARBAYAN INC., and RTC TRADING, INC., respondents.
Ignacio P. Lacsina for petitioner.
William D. Dichoso for respondent DMG, Inc.
Abraham B. Drapiza for private respondent.
CUEVAS, J.:
Petition for certiorari to review the Resolutions dated January 25, 1977 and March 14, 1977 of the
Bureau of Labor Relations.
On April 25. 1977, however, a Supplemental Petition was filed seeking the issuance of —
(1) A preliminary mandatory injunction commanding respondents to return to

petitioner the union dues amounting to about P55,000.00 lawfully pertaining to it but
illegally levied upon, collected and handed over by respondent Bureau, acting
through the NLRC sheriff, to respondent Associated Labor Union for Metal workers,
with the collusion of respondents DMG, Inc., Karbayan, Inc. and RTC Machineries,
Inc.;
(2) A preliminary restraining order prohibiting respondents from making further

delivery to respondent Associated Labor Union for Metal workers of Union dues
collected or to be collected through check-off from the wages of petitioner's members
by respondents, DMG, Inc., Karbayan, Inc., RTC Machineries, Inc., and People's
Car, Inc., under or by virtue of the questioned writ of execution issued by respondent
Bureau, dated April 4, 1977.
Petitioner was once affiliated with the Associated Labor Union for Metal Workers (ALUMETAL for
short). On August 1, 1975, both unions, using the name Volkschel Labor Union Associated Labor
Union for Metal Workers, jointly entered into a collective bargaining agreement with respondent
companies. One of the subjects dealt with is the payment of union dues which is provided for in
Section 3, Article 1, of the CBA, which reads:
Section 3. CHECK-OFF. — The COMPANY agrees to make payroll deductions not

softener than twice a month of UNION membership dues and such special
assessments fees or fines as may be duly authorized by the UNION, provided that
the same is covered by the individual check-off authorization of the UNION
members. All said deductions shall be promptly transmitted within five (5) days by the
COMPANY to the UNION Treasurer. The COMPANY shall prepare two (2) checks.
One (1) check will be under the name of the local union as their local fund including
local special assessment funds and the other check will be for the ALU Regional
Office regarding the remittance of the UNION dues deduction.
On March 10, 1976, a majority of petitioner's members decided to disaffiliate from respondent
federation in order to operate on its own as an independent labor group pursuant to Article 241
(formerly Article 240) of the Labor Code of the Philippines, the pertinent portion of which reads:
Incumbent affiliates of existing federations or national unions may disaffiliate only for
the purpose of joining a federation or national union in the industry or region in which
it properly belongs or for the purpose of operating as an independent labor group.
Accordingly, a resolution was adopted and signed by petitioner's members revoking their check-off
authorization in favor of ALUMETAL and notices thereof were served on ALUMETAL and
respondent companies.
Confronted with the predicament of whether or not to continue deducting from employees' wages
and remitting union dues to respondent, ALUMETAL which wrote respondent companies advising
them to continue deducting union dues and remitting them to said federation, respondent companies
sought the legal opinion of the respondent Bureau as regards the controversy between the two
unions. On November 11, 1976, Med-Arbiter George A. Eduvalla of respondent Bureau rendered a
Resolution which in effect found the disaffiliation legal but at the same time gave the opinion that,
petitioner's members should continue paying their dues to ALUMETAL in the concept of agency
fees. 1
From the said Resolution, of the Med-Arbiter both petitioner and respondent ALUMETAL appealed
to the Director of respondent Bureau. Petitioner' contended that the Med-Arbiter's opinion to the
effect that petitioner's members remained obligated to pay dues to respondent ALUMETAL was
inconsistent with the dispositive finding that petitioner's disaffiliation from ALUMETAL was valid.
ALUMETAL, on the other hand, assailed the Resolution in question asserting that the disaffiliation
should have been declared contrary to law.
On January 25, 1977, respondent Bureau, through its Acting Director, Francisco L. Estrella,
REVERSED the Med-Arbiter's Resolution., and declared that the Bureau recognized "the continued
affiliation of Volkschel Labor Union with the Associated Labor Union for Metal Workers." 2
Petitioner appealed the Acting Director's Resolution to the Secretary of Labor know Minister of Labor
and Employment) who, treating the appeal as a Motion for Reconsideration referred the same back
to respondent Bureau On March 14, 1977, the Bureau denied the appeal for lack of merit.
Hence, the instant petition.

Meanwhile, on April 4, 1977, on motion of ALUMETAL, the then Acting Secretary of Labor, Amado
Gat Inciong, issued a of execution commanding the Sheriff of the National Labor Relations
Commission to enforce and execute the order of January 25, 1977, which has become final and
executory. 3 Pursuant thereto, the NLRC Sheriff enforced and implemented the Order of January 25,
1977, as a result of which respondent companies turned over and handed to respondent federation
the union dues and other assessments in accordance with the check-off provision of the CBA,
From the pleadings filed and arguments of counsel, the following issues present themselves for this
Court's resolution.
Is petitioner union's disaffiliation from respondent federation valid?
II
Do respondent companies have the right to effect union dues collections despite
revocation by the employees of the check-off authorization? and
III
Is respondent federation entitled to union dues payments from petitioner union's

members notwithstanding their disaffiliation from said federation?
We resolve the first issue in the affirmative.
The right of a local union to disaffiliate from its mother union is well-settled. In previous cases, it has
been repeatedly held that a local union, being a separate and voluntary association, is free to serve
the interest of all its members including the freedom to disaffiliate when circumstances
warrant. 4 This right is consistent with the Constitutional guarantee of freedom of association (Article
IV, Section 7, Philippine Constitution).
Petitioner contends that the disaffiliation was not due to any opportunists motives on its part. Rather
it was prompted by the federation's deliberate and habitual dereliction of duties as mother federation
towards petitioner union. Employees' grievances were allegedly left unattended to by respondent
federation to the detriment of the employees' rights and interests.
In reversing the Med-Arbiter's resolution, respondent Bureau declared: the Department of Labor is
set on a task to restructure the labor movement to the end that the workers will unite themselves
along industry lines. Carried to its complete fruition, only one union for every industry will remain to
bargain collectively for the workers. The clear policy therefore even now is to conjoin workers and
worker groups, not to dismember them. 5 This policy is commendable. However, we must not lose
sight of the constitutional mandate of protecting labor and the workers' right to self-organization. In
the implementation and interpretation of the provisions of the Labor Code and its implementing
regulations, the workingman's welfare should be the primordial and paramount consideration. In the
case at bar, it would go against the spirit of the labor law to restrict petitioner's right to self-
organization due to the existence of the CBA. We agree with the Med-Arbiter's opinion that "A
disaffiliation does not disturb the enforceability and administration of a collective agreement; it does
not occasion a change of administrators of the contract nor even an amendment of the provisions
thereof." 6 But nowhere in the record does it appear that the contract entered into by the petitioner
and ALUMETAL prohibits the withdrawal of the former from the latter.
This now brings us to the second issue. Under Section 3, Article I, of the CBA, the obligation of the
respondent companies to deduct and remit dues to ALUMETAL is conditioned on the individual
check-off authorization of petitioner's members, In other words, ALUMETAL is entitled to receive the
dues from respondent companies as long as petitioner union is affiliated with it and respondent
companies are authorized by their employees (members of petitioner union) to deduct union dues.
Without said affiliation, the employer has no link to the mother union. The obligation of an employee
to pay union dues is coterminous with his affiliation or membership. "The employees' check-off
authorization, even if declared irrevocable, is good only as long as they remain members of the
union concerned." 7 A contract between an employer and the parent organization as bargaining
agent for the employees is terminated by the disaffiliation of the local of which the employees are
members. 8 Respondent companies therefore were wrong in continuing the check-off in favor of
respondent federation since they were duly notified of the disaffiliation and of petitioner's members
having already rescinded their check-off authorization.
With the view we take on those two issues, we find no necessity in dwelling further on the last issue.
Suffice it to state that respondent federation is not entitled to union dues payments from petitioner's
members. "A local union which has validly withdrawn from its affiliation with the parent association
and which continues to represent the employees of an employer is entitled to the check-off dues
under a collective bargaining contract." 9
WHEREFORE, the Resolutions of the Bureau of Labor Relations of January 25, 1977 and March 14,
1977 are REVERSED and SET ASIDE. Respondent ALUMETAL is ordered to return to petitioner
union all the union dues enforced and collected through the NLRC Sheriff by virtue of the writ of
execution dated April 4, 1977 issued by respondent Bureau.
No costs.
SO ORDERED.
Makasiar, Aquino, Concepcion, Jr., Abad Santos and Escolin, JJ., concur.
Footnotes
1 Annex "A", Pages 2-3.
2 Annex "C", Page 3.
3 Annex "A", Supplemental Petition.
4 liberty Cotton Mills Workers Union v. Liberty Cotton Mills, 66 SCRA 512; People's
Industrial & Commercial Employees and Workers Organization (FFW) v. People's
Industrial & Commercial Corporation, 112 SCRA 440.
5 Annex "C", Page 2.
6 Annex "A", Page 2.
7 Phil. Federation of Petroleum Workers v. Court of Industrial Relations, 37 SCRA

711.
8 51 C.J.S. 865 (citing Textile Workers Union of America, C.I.O. versus Bellman
Brook Bleaching Company).
32) Phil. vs. NLRC GR No. 127374 Jan. 31, 2002
SECOND DIVISION
[G.R. No. 127374. January 31, 2002]
PHILIPPINE SKYLANDERS, INC., MARILES C. ROMULO and

FRANCISCO DAKILA, petitioners, vs. NATIONAL LABOR
RELATIONS COMMISSION, LABOR ARBITER EMERSON
TUMANON, PHILIPPINE ASSOCIATION OF FREE LABOR
UNIONS (PAFLU) SEPTEMBER(now UNIFIED PAFLU) and
SERAFIN AYROSO, respondents.
[G.R. No. 127431. January 31, 2002]
PHILIPPINE SKYLANDERS AND WORKERS ASSOCIATION-NCW,

MACARIO CABANIAS, PEPITO RODILLAS, SHARON CASTILLO,
DANILO CARBONEL, MANUEL EDA, ROLANDO FELIX,
JOCELYN FRONDA, RICARDO LUMBA, JOSEPH MARISOL,
NERISA MORTEL, TEOFILOQUIRONG, LEONARDO REYES,
MANUEL CADIENTE and HERMINIA RIOSA, petitioners, vs.
PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU)
SEPTEMBER (now UNIFIED PAFLU) and NATIONAL LABOR
RELATIONS COMMISSION, SECOND DIVISION, respondents.
DECISION
BELLOSILLO, J.:
This is a petition for certiorari[1] seeking to set aside the 31 July 1996 Decision [2] of
the National Labor Relations Commission affirming the 30 June 1995 Decision of the
Labor Arbiter holding petitioners Philippine Skylanders, Inc., Mariles C. Romulo[3] and
Francisco Dakila as well as the elected officers of the Philippine Skylanders Employees
and Workers Association-PAFLU[4] guilty of unfair labor practice and ordering them to
pay private respondent Philippine Association of Free Labor Union (PAFLU)
September[5]P150,000.00 as damages. Petitioners likewise seek the reversal of the 31
October 1996 Resolution of the NLRC denying their Motion for Reconsideration.
In November 1993 the Philippine Skylanders Employees Association (PSEA), a
local labor union affiliated with the Philippine Association of Free Labor Unions (PAFLU)
September (PAFLU), won in the certification election conducted among the rank and file
employees of Philippine Skylanders, Inc. (PSI). Its rival union, Philippine Skylanders
Employees Association-WATU (PSEA-WATU) immediately protested the result of the
election before the Secretary of Labor.
Several months later, pending settlement of the controversy, PSEA sent PAFLU a
notice of disaffiliation citing as reason PAFLU's supposed deliberate and habitual
dereliction of duty toward its members. Attached to the notice was a copy of the
resolution adopted and signed by the officers and members of PSEA authorizing their
local union to disaffiliate from its mother federation.
PSEA subsequently affiliated itself with the National Congress of Workers (NCW),
changed its name to Philippine Skylanders Employees Association - National Congress
of Workers (PSEA-NCW), and to maintain continuity within the organization, allowed the
former officers of PSEA-PAFLU to continue occupying their positions as elected officers
in the newly-forged PSEA-NCW.
On 17 March 1994 PSEA-NCW entered into a collective bargaining agreement with
PSI which was immediately registered with the Department of Labor and Employment.
Meanwhile, apparently oblivious to PSEA's shift of allegiance, PAFLU Secretary
General Serafin Ayroso wrote Mariles C. Romulo requesting a copy of PSI's audited
financial statement. Ayroso explained that with the dismissal of PSEA-WATUs election
protest the time was ripe for the parties to enter into a collective bargaining agreement.
On 30 July 1994 PSI through its personnel manager Francisco Dakila denied the
request citing as reason PSEA's disaffiliation from PAFLU and its subsequent affiliation
with NCW.
Agitated by PSI's recognition of PSEA-NCW, PAFLU through Serafin Ayroso filed a
complaint for unfair labor practice against PSI, its president Mariles Romulo and
personnel manager Francisco Dakila. PAFLU alleged that aside from PSIs refusal to
bargain collectively with its workers, the company through its president and personnel
manager, was also liable for interfering with its employees' union activities. [6]
Two (2) days later or on 6 October 1994 Ayroso filed another complaint in behalf of
PAFLU for unfair labor practice against Francisco Dakila. Through Ayroso PAFLU
claimed that Dakila was present in PSEA's organizational meeting thereby confirming
his illicit participation in union activities. Ayroso added that the members of the local
union had unwittingly fallen into the manipulative machinations of PSI and were lured
into endorsing a collective bargaining agreement which was detrimental to their
interests.[7] The two (2) complaints were thereafter consolidated.
On 1 February 1995 PAFLU amended its complaint by including the elected officers
of PSEA-PAFLU as additional party respondents. PAFLU averred that the local officers
of PSEA-PAFLU, namely Macario Cabanias, Pepito Rodillas, Sharon Castillo, Danilo
Carbonel, Manuel Eda, Rolando Felix, Jocelyn Fronda, Ricardo Lumba, Joseph Mirasol,
Nerisa Mortel, Teofilo Quirong, Leonardo Reyes, Manuel Cadiente, and Herminia Riosa,
were equally guilty of unfair labor practice since they brazenly allowed themselves to be
manipulated and influenced by petitioner Francisco Dakila.[8]
PSI, its president Mariles C. Romulo, and its personnel manager Dakila moved for
the dismissal of the complaint on the ground that the issue of disaffiliation was an inter-
union conflict which lay beyond the jurisdiction of the Labor Arbiter. On the other hand,
PSEA-NCW took the cudgels for its officers who were being sued in their capacities as
former officers of PSEA-PAFLU and asserted that since PSEA was no longer affiliated
with PAFLU, Ayroso or PAFLU for that matter had no personality to file the instant
complaint. In support of this assertion, PSEA-NCW submitted in evidence
a Katunayan signed by 111 out of 120 rank and file employees of PSI disauthorizing
Ayroso or PAFLU from instituting any action in their behalf.[9]
In a Decision rendered on 30 June 1995 the Labor Arbiter declared PSEA's
disaffiliation from PAFLU invalid and held PSI, PSEA-PAFLU and their respective
officers guilty of unfair labor practice. The Decision explained that despite PSEA-
PAFLU's status as the sole and exclusive bargaining agent of PSI's rank and file
employees, the company knowingly sanctioned and confederated with Dakila in actively
assisting a rival union. This, according to the Labor Arbiter, was a classic case of
interference for which PSI could be held responsible. As PSEA-NCW's personality was
not accorded recognition, its collective bargaining agreement with PSI was struck down
for being invalid. Ayroso's legal personality to file the complaint was sustained on the
ratiocination that under the Labor Code no petition questioning the majority status of the
incumbent bargaining agent shall be entertained outside of the sixty (60)-day period
immediately before the expiry date of such five (5)-year term of the collective bargaining
agreement that the parties may enter into. Accordingly, judgment was rendered ordering
PSI, PSEA-PAFLU and their officers to pay PAFLU P150,000.00 in damages.[10]
PSI, PSEA and their respective officers appealed to the National Labor Relations
Commission (NLRC). But the NLRC upheld the Decision of the Labor Arbiter and
conjectured that since an election protest questioning PSEA-PAFLU's certification as
the sole and exclusive bargaining agent was pending resolution before the Secretary of
Labor, PSEA could not validly separate from PAFLU, join another national federation
and subsequently enter into a collective bargaining agreement with its employer-
company.[11]
Petitioners separately moved for reconsideration but both motions were
denied. Hence, these petitions for certiorari filed by PSI and PSEA-NCW together with
their respective officers pleading for a reversal of the NLRC's Decision which they
claimed to have been rendered in excess of jurisdiction. In due time, both petitions were
consolidated.
In these petitions, petitioner PSEA together with its officers argued that by virtue of
their disaffiliation PAFLU as a mere agent had no authority to represent them before
any proceedings. They further asserted that being an independent labor union PSEA
may freely serve the interest of all its members and readily disaffiliate from its mother
federation when circumstances so warrant. This right, they averred, was consistent with
the constitutional guarantee of freedom of association.[12]
For their part, petitioners PSI, Romulo and Dakila alleged that their decision to
bargain collectively with PSEA-NCW was actuated, to a large extent, by PAFLU's
behavior.Having heard no objections or protestations from PAFLU relative to PSEA's
disaffiliation, they reckoned that PSEA's subsequent association with NSW was
done bona fide.[13]
The Solicitor General filed a Manifestation in Lieu of Comment recommending that
both petitions be granted. In his Manifestation, the Solicitor General argued against the
Labor Arbiter's assumption of jurisdiction citing the following as reasons: first, there was
no employer-employee relationship between complainant Ayroso and PSI over which
the Labor Arbiter could rightfully assert his jurisdiction; second, since the case involved
a dispute between PAFLU as mother federation and PSEA as local union, the
controversy fell within the jurisdiction of the Bureau of Labor Relations; and lastly, the
relationship of principal-agent between PAFLU and PSEA had been severed by the
local union through the lawful exercise of its right of disaffiliation.[14]
Stripped of non-essentials, the fundamental issue tapers down to the legitimacy of
PSEA's disaffiliation. To be more precise, may PSEA, which is an independent and
separate local union, validly disaffiliate from PAFLU pending the settlement of an
election protest questioning its status as the sole and exclusive bargaining agent of
PSI's rank and file employees?
At the outset, let it be noted that the issue of disaffiliation is an inter-union conflict
the jurisdiction of which properly lies with the Bureau of Labor Relations (BLR) and not
with the Labor Arbiter.[15] Nonetheless, with due recognition of this fact, we deem it
proper to settle the controversy at this instance since to remand the case to the BLR
would only mean intolerable delay for the parties.
The right of a local union to disaffiliate from its mother federation is not a novel
thesis unillumined by case law. In the landmark case of Liberty Cotton Mills Workers
Union vs. Liberty Cotton Mills, Inc.[16] we upheld the right of local unions to separate from
their mother federation on the ground that as separate and voluntary associations, local
unions do not owe their creation and existence to the national federation to which they
are affiliated but, instead, to the will of their members. The sole essence of affiliation is
to increase, by collective action, the common bargaining power of local unions for the
effective enhancement and protection of their interests. Admittedly, there are times
when without succor and support local unions may find it hard, unaided by other support
groups, to secure justice for themselves.
Yet the local unions remain the basic units of association, free to serve their own
interests subject to the restraints imposed by the constitution and by-laws of the national
federation, and free also to renounce the affiliation upon the terms laid down in the
agreement which brought such affiliation into existence.
Such dictum has been punctiliously followed since then.[17]
Upon an application of the aforecited principle to the issue at hand, the impropriety
of the questioned Decisions becomes clearly apparent. There is nothing shown in the
records nor is it claimed by PAFLU that the local union was expressly forbidden to
disaffiliate from the federation nor were there any conditions imposed for a valid
breakaway.As such, the pendency of an election protest involving both the mother
federation and the local union did not constitute a bar to a valid disaffiliation. Neither
was it disputed by PAFLU that 111 signatories out of the 120 members of the local
union, or an equivalent of 92.5% of the total union membership supported the claim of
disaffiliation and had in fact disauthorized PAFLU from instituting any complaint in their
behalf. Surely, this is not a case where one (1) or two (2) members of the local union
decided to disaffiliate from the mother federation, but it is a case where almost all local
union members decided to disaffiliate.
It was entirely reasonable then for PSI to enter into a collective bargaining
agreement with PSEA-NCW. As PSEA had validly severed itself from PAFLU, there
would be no restrictions which could validly hinder it from subsequently affiliating with
NCW and entering into a collective bargaining agreement in behalf of its members.
There is a further consideration that likewise argues for the granting of the
petitions. It stands unchallenged that PAFLU instituted the complaint for unfair labor
practice against the wishes of workers whose interests it was supposedly
protecting. The mere act of disaffiliation did not divest PSEA of its own personality;
neither did it give PAFLU the license to act independently of the local union. Recreant to
its mission, PAFLU cannot simply ignore the demands of the local chapter and decide
for its welfare. PAFLU might have forgotten that as an agent it could only act in
representation of and in accordance with the interests of the local union. The complaint
then for unfair labor practice lodged by PAFLU against PSI, PSEA and their respective
officers, having been filed by a party which has no legal personality to institute the
complaint, should have been dismissed at the first instance for failure to state a cause
of action.
Policy considerations dictate that in weighing the claims of a local union as against
those of a national federation, those of the former must be preferred. Parenthetically
though, the desires of the mother federation to protect its locals are not altogether to be
shunned. It will however be to err greatly against the Constitution if the desires of the
federation would be favored over those of its members. That, at any rate, is the policy of
the law. For if it were otherwise, instead of protection, there would be disregard and
neglect of the lowly workingmen.
WHEREFORE, the petitions of Philippine Skylanders, Inc. and of Philippine
Skylanders and Workers Association-NCW, together with their respective officers, are
GRANTED. The Decision of the National Labor Relations Commission of 31 July 1996
affirming the Decision of the Labor Arbiter of 30 June 1995 holding petitioners Philippine
Skylanders and Workers Association-NCW, Philippine Skylanders, Inc. and their
respective officers, guilty of unfair labor practice and ordering them to pay damages to
private respondent Philippine Association of Free Labor Unions (PAFLU) September
(now UNIFIED PAFLU) as well as the Resolution of 31 October 1996 denying
reconsideration is REVERSED and SET ASIDE. No costs.
SO ORDERED.
Mendoza, Quisumbing, Buena, and De Leon, Jr., JJ., concur.
[1]
This petition for certiorari was instituted with the Supreme Court on 23 December 1996. Hence, it does
not come within our ruling in St. Martin Funeral Home v. National Labor Relations Commission
and Bienvenido Aricayos (G.R. No. 130866, 16 September 1998, 295 SCRA 494) where we
decreed that appeals from decisions of the National Labor Relations Commission should be
initially presented to the Court of Appeals.
[2]
Decision penned by Commissioner Rogelio I. Rayala, concurred in by Commissioners Raul T. Aquino
and Victoriano R. Calaylay, Second Division National Labor Relations Commission; Rollo, G.R.
No. 127374, pp. 45-57.
[3]
Spelled also as "Marites C. Romulo" and "Matules C. Romulo" in the records.
[4]
Private respondent PAFLU refuses to acknowledge PSEAs disaffiliation and continuously refers to
petitioner local union as PSEA-PAFLU while the local union insists on its new affiliation -- PSEA-
NCW. Hence, PSEA, PSEA-PAFLU and PSEA-NCW refer to one and the same organization.
[5]
Now known as "Unified PAFLU."
[6]
Original Records, pp. 4-16.
[7]
Id., pp. 22-27.
[8]
Id., pp. 101-123.
[9]
Id., pp. 47-51.
[10]
Decision penned by Labor Arbiter Emerson C. Tumanon; id., pp. 198-208.
[11]
See Note 1.
[12]
Id., pp. 13-44.
[13]
Rollo, G.R. No. 127431, pp. 12-44.
[14]
Id., pp. 206- 239.
[15]
Sec.1, Book V, Rules and Regulations Implementing the Labor Code: (2) An inter-union dispute refers
to any conflict between and among union members x x x including cases arising from chartering
or affiliation of labor organizations.
[16]
No. L-33987, 4 September 1975, 66 SCRA 512.
[17]
Malayang Samahan ng mga Manggagawa sa M. Greenfield v. Ramos, G.R. No. 113907, 28 February
2000, 326 SCRA 428; Tropical Hut Employees Union-CGW v. Tropical Hut Food Market, Inc.,
G.R. Nos. 43495-99, 20 January 1990, 181 SCRA 173; Volkschel Labor Union v. Bureau of Labor
Relations, No. L-45824, 19 June 1985, 137 SCRA 42; Adamson & Adamson Inc., v. CIR, No. L-
35120, 31 January 1984, 127 SCRA 268; Villar v. Inciong, 206 Phil. 366, (1983); PINCO
Employees and Workers Organization v. PINCOCO, 198 Phil. 166 (1982).
33) Elisco vs. Noriel GR No. 41955 Dec. 29, 1977

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-41955 December 29, 1977
ELISCO-ELIROL LABOR UNION (NAFLU) and its OFFICERS AND MEMBERS OF THE BOARD
OF DIRECTORS, petitioners
vs.
CARMELO NORIEL, in his capacity as Director of the Bureau of Labor Relations, ELIZALDE
STEEL CONSOLIDATED, INC. and NATIONAL FEDERATION OF LABOR UNIONS
(NAFLU), respondents.
Villaluz, Villaluz & Villaluz, Padilla Law Offices and Rizalindo V. Diaz for petitioners.
Acting Solicitor General Hugo E. Gutierrez, Jr., Assistant Solicitor Reynato S. Puno and Solicitor
Ramon A. Barcelona respondent Director.
Rolando M. Olalia for respondent Union (NAFLU).
TEEHANKEE, J.:
The Court sets aside respondent director's appealed resolution and rules in accordance with the
prevailing law and settled jurisprudence that the petitioner union consisting of the members-
employees of respondent corporation is the principal party to the collective bargaining agreement
(rather than the respondent mother union which is merely its agent) and is therefore entitled to be
recognized as the sole and exclusive bargaining representative entitled to administer and enforce
the collective bargaining agreement with the employer corporation.
The undisputed antecedent facts which gave rise to the present petition are stated in the petition as
follows:
2. That sometime on February 1974, petitioner-Elisco Elirol Labor Union (NAFLU),

negotiated and executed a collective bargaining agreement with respondent-Elizalde
Steel Consolidated, Inc.1
3. That upon verification by individual petitioners at the Registration division, Bureau of

Labor Relations, Department of Labor, the Elisco-Elirol Labor Union (NAFLU), the
contracting party in said collective bargaining agreement, was not then registered and
therefore not entitled to the benefits and privileges embodied in said collective bargaining
agreement; thus on March 3, 1975, the member of petitioner-appellant union in a general
membership meeting decided in a resolution to register their union to protect and
preserve the integrity and inviolability of the collective bargaining agreement between the
Elisco-Elirol Labor Union (NAFLU) and the Elizalde Steel Consolidated, Inc.
4. That said resolution of the members of petitioner-appellant union was passed

upon by the officers and members of the Board of Directors on May 20, 1975, at a
special meeting called for the purpose, resolution No. 6, s. 1975 was approved
requesting the Acting Directors, Registration Division, Bureau of Labor Relations, to
register the union Elisco-Elirol Labor Union (NAFLU).
5. That by virtue of resolution No. 6, Petitioner-appellant union applied for registration

with the Bureau of Labor Relations, hence on May 28, 1975, Certificate of
Registration No. 8511-IP was issued by said Office.
6. That with the issuance of the certificate of registration petitioner-appellant acquired

a personality separate and distinct from any other labor union.
7. That steps were taken by petitioner-appellant to enforce the collective bargaining

agreement as the principal party to the same representing the workers covered by
such agreement immediately after the issuance of the certificate of registration.
8. That on June 10, 1975, at a special meeting called for the purpose, the general
membership of petitioner union decided that their mother union, the National
Federation of Labor Unions, can no longer safeguard the rights of its members
insofar as working conditions and other terms of employment are concerned and that
the interest and welfare of petitioner can be served best if it will stay independent and
disaffiliated from said mother union, hence, the general membership adopted a
resolution to disaffiliate from the National Federation of Labor Unions.
9. That on June 11, 1975, petitioner, acting through its President Hilario Riza
informed respondents of said disaffiliation by means of a letter, and subsequently
requested respondents to recognize petitioner as the sole and exclusive bargaining
representative of the employees thereof.
10. That respondent without any justifiable reason refused and continues to refuse to
recognize petitioner as the sole and exclusive bargaining representative of its
employees, and, now actually dismissed the petitioner union's officers and board
members.2 In this connection, a complaint for unfair labor practice was filed by
petitioners against respondents for the latter's refusal to bargain collectively with
petitioner, which complaint is presently docketed as Case No. LR-RO4-6-1662.
11. That by virtue of said refusal of respondent company to recognize petitioner as

the sole and exclusive bargaining representative of the employees, petitioners filed a
petition before the Bureau of Labor Relations, Department of Labor on July 2, 1975,
with Case No. LR-861 against respondents Elizalde Steel Consolidated, Inc. and the
National Federation of Labor Unions be ordered to stop from presenting itself as the
collective bargaining agent and pursuant thereto, a writ of preliminary mandatory and
prohibitory injunction be issued.
12. That on August 19, 1975. the Bureau of Labor Relations, through Med-Arbiter
Reynaldo B. Carta, before whom the case was beard, issued an Order dismissing
the petition for lack of merit.
On appeal to respondent Director of the Bureau of Labor Relations, said respondent

issued his Resolution of October 30, 1975 affirming the dismissal of petitioner-union's
petition as follows:
On February, 1974 the members of the petitioner union who were then yet affiliated
with the National Association of Free Labor Union negotiated and executed with the
respondent company a collective bargaining agreement with expiry date in
November, 1976.
On May 28, 1975, after the same members, by valid resolution of the Board of
directors and approved by the general membership, have formed themselves into an
i t organization and applied for registration as a union, a certificate of registration was
issued by the Department of Labor. And on June 10, 1975 again by a valid resolution
the same members disaffiliated with the NAFLU.
The issue for resolution is —
Which of the two unions should be recognized as the sole and exclusive bargaining
representative of the employees and ultimately recognized to administer and
supervise the enforcement of the collective bargaining agreement.
Petitioner-union contends that it having the necessary interest and being the real
party must be the sole union to be recognized and given authority to bargain with the
company.
Setting aside jurisprudence and the collective bargaining agreement of the

parties, the appellant is correct. For to grant to the former mother union (NAFLU) the
authority to administer and enforce their collective bargaining agreement without
presumably any members in the bargaining unit is quite absurd. But to transfer also
the authority to the newly formed union although the members of the same were the
same members who composed then the local chapter of the mother union is also in
violation of the CBA particularly article IV which is the union security clause, wherein
it is a condition for a continued employment in the company to maintain membership
in the Union. Theoretically therefore, when the employees disaffiliated from the
mother union and formed themselves into a new union, their status as employees
was also terminated. As such they could not therefore absolutely and legally claim
that they still comprise the majority of the bargaining unit.
Secondly, to vest, upon the new union the authority to bargain is in violation of the
whole CBA, under the theory that when the mother union (NAFLU) entered and
executed the same in its separate and distinct personality aside from the people
composing the same. In fine, the CBA then was executed by and between the
company and the (NAFLU) with the latter as an entity having its own capacity and
personality different from the members composing the same.
Lastly, to preserve and avoid unstability and disorder in the labor movement as
correctly ruled by the med-arbiter, the status quo should be preserved, there being
no compelling reason to alter the same.3
Hence, the petition at bar. We find the petition to be clearly meritorious and reverse the appealed
resolution.
1. Respondent director correctly perceived in his Resolution that "to grant to the former mother union
(NAFLU) the authority to administer and enforce their collective bargaining agreement without
presumably any members in the bargaining unit is quite absurd" but fell unto the grave error of
holding that "When the employees disaffiliated from the mother union and formed themselves into a
new union, their status as employees was also terminated."
His error was in not perceiving that the employees and members of the local union did not form a
new union but merely registered the local union as was their right. Petitioner Elisco-Elirol Labor
Union-NAFLU, consisting of employees and members of the local union was the principal party to
the agreement. NAFLU as the "mother union" in participation in the execution of the bargaining
agreement with respondent company acted merely as agent of the local union, which remained the
basic unit of the association existing principally and freely to serve the common interest of all its
members, including the freedom to disaffiliated when the circumstances so warranted as in the
present case.
2. Contrary to respondent director's misimpression, our jurisprudence fully supports 'petitioner's

stand. In Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc.4 , the Court expressly cited
and affirmed the basic principle that "(T)he locals are separate and distinct units primarily designed to
secure and maintain an equality of bargaining power between the employer and their employee-members
in the economic struggle for the fruits of the joint productive effort of labor and capital; and the association
of the locals into the national union (as PAFLU) was in furtherance of the same end.These associations
are consensual entities capable of entering into such legal relations with their members. The essential
purpose was the affirmation of the local unions into a common enterprise to increase by collective action
the common bargaining power in respect of the terms and conditions of labor. Yet the locals remained the
basic units of association, free to serve their own and the common interest of all, subject to the restraints
imposed by the Constitution and By-Laws of the Association, and free also to renounce the affiliation for
mutual welfare upon the terms laid down in the agreement which brought it into existence."
Corollarily, the "substitutionary" doctrine likewise fully supports petitioner's stand. Petitioner union to
whom the employees owe their allegiance has from the beginning expressly avowed that it "does not
intend to change and/or amend the provisions of the present collective bargaining agreement but
only to be given the chance to enforce the same since there is a shift of allegiance in the majority of
the employees at respondent company." As was stressed by the Court in Benguet Consolidated Inc.
vs. BCI Employees & W Union-PAFLU5 —
... This principle, formulated by the NLRB as its initial compromise solution to the
problem facing it when there occurs a shift in employees' union allegiance after the
execution of a bargaining contract with their employer, merely states that even during
the effectivity of a collective bargaining agreement executed between employer and
employees thru their agent, the employees can change said agent but the contract
continues to bind then up to its expiration date. They may bargain however for the
shortening of said expiration date.
In formulating the "substitutionary" doctrine, the only consideration involved as

the employees' interestin the existing bargaining agreement. The agent's interest
never entered the picture. In fact, the justification for said doctrine was:
... that the majority of the employees, as an entity under the statute, is the true party
in interest to the contract, holding rights through the agency of the union
representative. Thus, any exclusive interest claimed by the agent is defeasible at the
will of the principal.
3. It need only be mentioned finally that the Secretary of Labor in his decision of April 23, 1976 and
order of January 10, 1977 denying reconsideration in the sister unfair labor practice case and
ordering respondent corporation to immediately lift the suspension and reinstate the complainant
officers and board members of petitioner union6 has likewise adhered to the foregoing basic principles
and settled jurisprudence in contrast to respondent director (as well as therein respondent NLRC which
similarly adhered to the archaic and illogical view that the officers and board members of petitioner local
union committed an "act of disloyalty" in disaffiliating from the mother union when practically all its
members had so voted to disaffiliate and the mother union [as mere agent] no longer had any local union
or members to represent), ruling that "(G)ranting arguendo that the disaffiliation from the NAFLU is a legal
cause for expulsion and dismissal, it could not detract from the fact that only 13 individual complainants
out of almost 700 members who disaffiliated, were singled out for expulsion and recommended for
dismissal. The actuation of NAFLU conclusively constitute discrimination. Since the suspension of the
complainants was effected at the instance of NAFLU, it should be held liable to the payment of back
wages."
The Presidential Assistant for Legal Affairs Ronaldo B. Zamora has likewise dismissed as untenable
in a similar case respondents' views that "such maintenance of membership" clause be distorted as
"intended for the security of the union rather than the security of tenure for the workers", ruling that
"(W)hat is paramount, as it is expressly and explicitly emphasize in an exacting language under the
New Constitution, is the security of tenure of the workers, not the security of the union. To impress,
therefore, such "maintenance of membership" — which is intended for the security of the union
rather than the security of tenure of the workers — as a bar to employees' changing their affiliation is
not only to infringe on the constitutional right of freedom of association, but also to trample upon the
constitutional right of workers to security of tenure and to render meaningless whatever "adequate
social services" the State may establish or maintain in the field of employment "to guarantee the
enjoyment by the people of a decent standard of living."7
It is expected that with this decision, any suspension or lay-off of the complainants officers and board
members or employees of petitioner union arising from the respondents' misconception of the clearly
applicable principles and jurisprudence upholding the primacy of the employees and their freely chosen
local union as the true party in interest to the collective bargaining agreement will be forthwith rectified
and set aside.
ACCORDINGLY, the petition is granted and the appealed resolution is set aside and petitioner local
union is declared to be the sole and exclusive bargaining representative of the employees of
respondent corporation entitled to administer and enforce any subsisting collective bargaining
agreement with said employer corporation. This decision shall be immediately executory upon its
promulgation.
Makasiar, Muñoz Palma, Fernandez and Guerrero, JJ., concur.
Martin, J., took no part.
Footnotes
1 The term of the agreement is for three years until November 1976, and thereafter
to be "deemed renewed from year to year, unless either party gives written notice of
its desire to introduce changes."
2 The names of petitioner union's officers and members as taken from the decision of
April 23, 1976 of the Secretary of Labor in the unfair labor practice case, (NLRC
Case No. RB-1735-75) which arose out of the same facts and respondents'
suspension of the local union's officers and board members are: Hilario Riza,
Gumercindo Macapugas, Juanita Anacta, Rodolfo Herrera, Antonio Samaneda,
Senen Garcia, Alfredo Gavia, Renato Millama, Jaime Pagkalinawan, Francisco
Remegio, Rodolfo Camerino, Conrado Gutierrez and Francisco Sarmiento.
3 Emphasis supplied.
4 66 SCRA 512, 519, Emphasis copied.
5 23 SCRA, 465, 471.
6 See fn. 2 and paragraph 10, page 2 hereof.
34) Samahan vs. NLRC GR No. 113856 Sept. 7, 1998

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 113856 September 7, 1998
SAMAHANG MANGGAGAWA SA TOP FORM MANUFACTURING UNITED WORKERS OF THE

PHILIPPINES (SMTFM-UWP), its officers and members, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, HON. JOSE G. DE VERA and TOP FORM
MANUFACTURING PHIL., INC., respondents.
ROMERO, J.:
The issue in this petition for certiorari is whether or not an employer committed an unfair labor
practice by bargaining in bad faith and discriminating against its employees. The charge arose from
the employer's refusal to grant across-the-board increases to its employees in implementing Wage
Orders Nos. 01 and 02 of the Regional Tripartite Wages and Productivity Board of the National
Capital Region (RTWPB-NCR). Such refusal was aggravated by the fact that prior to the issuance of
said wage orders, the employer allegedly promised at the collective bargaining conferences to
implement any government-mandated wage increases on an across-the-board basis.
Petitioner Samahang Manggagawa sa Top Form Manufacturing — United Workers of the Philippines
(SMTFM) was the certified collective bargaining representative of all regular rank and file employees
of private respondent Top Form Manufacturing Philippines, Inc. At the collective bargaining
negotiation held at the Milky Way Restaurant in Makati, Metro Manila on February 27, 1990, the
parties agreed to discuss unresolved economic issues. According to the minutes of the meeting,
Article VII of the collective bargaining agreement was discussed. The following appear in said
Minutes:
Art. VII, Wages
Sect. 1. — Defer —
Sect. 2. Status quo
Sec. 3. Union proposed that any future wage increase given by the government
should be implemented by the company across-the-board or non-conditional.
Management requested the union to retain this provision since their sincerity was
already proven when the P25.00 wage increase was granted across-the-board. The
union acknowledges management's sincerity but they are worried that in case there
is a new set of management, they can just show their CBA. The union decided to
defer this provision. 1
In their joint affidavit dated January 30, 1992, 2 union members Salve L. Barnes, Eulisa Mendoza,
Lourdes Barbero and Concesa Ibañez affirmed that at the subsequent collective bargaining
negotiations, the union insisted on the incorporation in the collective bargaining agreement (CBA) of
the union proposal on "automatic across-the-board wage increase." They added that:
11. On the strength of the representation of the negotiating panel of the company
and the above undertaking/promise made by its negotiating panel, our union agreed
to drop said proposal relying on the undertakings made by the officials of the
company who negotiated with us, namely, Mr. William Reynolds, Mr. Samuel Wong
and Mrs. Remedios Felizardo. Also, in the past years, the company has granted to
us government mandated wage increases on across-the-board basis.
On October 15, 1990, the RTWPB-NCR issued Wage Order No. 01 granting an increase of P17.00
per day in the salary of workers. This was followed by Wage Order No. 02 dated December 20, 1990
providing for a P12.00 daily increase in salary.
As expected, the union requested the implementation of said wage orders. However, they
demanded that the increase be on an across-the-board basis. Private respondent refused to accede
to that demand. Instead, it implemented a scheme of increases purportedly to avoid wage distortion.
Thus, private respondent granted the P17.00 increase under Wage Order No. 01 to
workers/employees receiving salary of P125.00 per day and below. The P12.00 increase mandated
by Wage Order No. 02 was granted to those receiving the salary of P140.00 per day and below. For
employees receiving salary higher than P125.00 or P140.00 per day, private respondent granted an
escalated increase ranging from P6.99 to P14.30 and from P6.00 to P10.00, respectively. 3
On October 24, 1991, the union, through its legal counsel, wrote private respondent a letter
demanding that it should "fulfill its pledge of sincerity to the union by granting an across-the-board
wage increases (sic) to all employees under the wage orders." The union reiterated that it had
agreed to "retain the old provision of CBA" on the strength of private respondent's "promise and
assurance" of an across-the-board salary increase should the government mandate salary
increases. 4 Several conferences between the parties notwithstanding, private respondent adamantly
maintained its position on the salary increases it had granted that were purportedly designed to
avoid wage distortion.
Consequently, the union filed a complaint with the NCR NLRC alleging that private respondent's act
of "reneging on its undertaking/promise clearly constitutes act of unfair labor practice through
bargaining in bad faith." It charged private respondent with acts of unfair labor practices or violation
of Article 247 of the Labor Code, as amended, specifically "bargaining in bad faith," and prayed that
it be awarded actual, moral and exemplary damages.5 In its position paper, the union added that it
was charging private respondent with "violation of Article 100 of the Labor Code." 6
Private respondent, on the other hand, contended that in implementing Wage Orders Nos. 01 and
02, it had avoided "the existence of a wage distortion" that would arise from such implementation. It
emphasized that only "after a reasonable length of time from the implementation" of the wage orders
"that the union surprisingly raised the question that the company should have implemented said
wage orders on an across-the-board basis." It asserted that there was no agreement to the effect
that future wage increases mandated by the government should be implemented on an across-the-
board basis. Otherwise, that agreement would have been incorporated and expressly stipulated in
the CBA. It quoted the provision of the CBA that reflects the parties' intention to "fully set forth"
therein all their agreements that had been arrived at after negotiations that gave the parties
"unlimited right and opportunity to make demands and proposals with respect to any subject or
matter not removed by law from the area of collective bargaining." The same CBA provided that
during its effectivity, the parties "each voluntarily and unqualifiedly waives the right, and each agrees
that the other shall not be obligated, to bargain collectively, with respect to any subject or matter not
specifically referred to or covered by this Agreement, even though such subject or matter may not
have been within the knowledge or contemplation of either or both of the parties at the time they
negotiated or signed this Agreement." 7
On March 11, 1992, Labor Arbiter Jose G. de Vera rendered a decision dismissing the complaint for
lack of merit. 8He considered two main issues in the case: (a) whether or not respondents are guilty
of unfair labor practice, and (b) whether or not the respondents are liable to implement Wage Orders
Nos. 01 and 02 on an across-the-board basis. Finding no basis to rule in the affirmative on both
issues, he explained as follows:
The charge of bargaining in bad faith that the complainant union attributes to the
respondents is bereft of any certitude inasmuch as based on the complainant union's
own admission, the latter vacillated on its own proposal to adopt an across-the-board
stand or future wage increases. In fact, the union acknowledges the management's
sincerity when the latter allegedly implemented Republic Act 6727 on an across-the-
board basis. That such union proposal was not adopted in the existing CBA was due
to the fact that it was the union itself which decided for its deferment. It is, therefore,
misleading to claim that the management undertook/promised to implement future
wage increases on an across-the-board basis when as the evidence shows it was
the union who asked for the deferment of its own proposal to that effect.
The alleged discrimination in the implementation of the subject wage orders does not
inspire belief at all where the wage orders themselves do not allow the grant of wage
increases on an across-the-board basis. That there were employees who were
granted the full extent of the increase authorized and some others who received less
and still others who did not receive any increase at all, would not ripen into what the
complainants termed as discrimination. That the implementation of the subject wage
orders resulted into an uneven implementation of wage increases is justified under
the law to prevent any wage distortion. What the respondents did under the
circumstances in order to deter an eventual wage distortion without any arbitral
proceedings is certainly commendable.
The alleged violation of Article 100 of the Labor Code, as amended, as well as Article
XVII, Section 7 of the existing CBA as herein earlier quoted is likewise found by this
Branch to have no basis in fact and in law. No benefits or privileges previously
enjoyed by the employees were withdrawn as a result of the implementation of the
subject orders. Likewise, the alleged company practice of implementing wage
increases declared by the government on an across-the-board basis has not been
duly established by the complainants' evidence. The complainants asserted that the
company implemented Republic Act No. 6727 which granted a wage increase of
P25.00 effective July 1, 1989 on an across-the-board basis. Granting that the same
is true, such isolated single act that respondents adopted would definitely not ripen
into a company practice. It has been said that "a sparrow or two returning to
Capistrano does not a summer make."
Finally, on the second issue of whether or not the employees of the respondents are
entitled to an across-the-board wage increase pursuant to Wage Orders Nos. 01 and
02, in the face of the above discussion as well as our finding that the respondents
correctly applied the law on wage increases, this Branch rules in the negative.
Likewise, for want of factual basis and under the circumstances where our findings
above are adverse to the complainants, their prayer for moral and exemplary
damages and attorney's fees may not be granted.
Not satisfied, petitioner appealed to the NLRC that, in turn, promulgated the assailed Resolution of
April 29, 1993 9dismissing the appeal for lack of merit. Still dissatisfied, petitioner sought
reconsideration which, however, was denied by the NLRC in the Resolution dated January 17, 1994.
Hence, the instant petition for certiorari contending that:
-A-
THE PUBLIC RESPONDENTS GROSSLY ERRED IN NOT DECLARING THE

PRIVATE RESPONDENTS GUILTY OF ACTS OF UNFAIR LABOR PRACTICES
WHEN, OBVIOUSLY, THE LATTER HAS BARGAINED IN BAD FAITH WITH THE
UNION AND HAS VIOLATED THE CBA WHICH IT EXECUTED WITH THE HEREIN
PETITIONER UNION.
-B-
THE PUBLIC RESPONDENTS SERIOUSLY ERRED IN NOT DECLARING THE

PRIVATE RESPONDENTS GUILTY OF ACTS OF DISCRIMINATION IN THE
IMPLEMENTATION OF NCR WAGE ORDER NOS. 01 AND 02.
-C-
THE PUBLIC RESPONDENTS SERIOUSLY ERRED IN NOT FINDING THE

PRIVATE RESPONDENTS GUILTY OF HAVING VIOLATED SECTION 4, ARTICLE
XVII OF THE EXISTING CBA.
-D-
THE PUBLIC RESPONDENTS GRAVELY ERRED IN NOT DECLARING THE

PRIVATE RESPONDENTS GUILTY OF HAVING VIOLATED ARTICLE 100 OF THE
LABOR CODE OF THE PHILIPPINES, AS AMENDED.
-E-
ASSUMING, WITHOUT ADMITTING THAT THE PUBLIC RESPONDENTS HAVE
CORRECTLY RULED THAT THE PRIVATE RESPONDENTS ARE GUILTY OF
ACTS OF UNFAIR LABOR PRACTICES, THEY COMMITTED SERIOUS ERROR IN
NOT FINDING THAT THERE IS A SIGNIFICANT DISTORTION IN THE WAGE
STRUCTURE OF THE RESPONDENT COMPANY.
-F-
THE PUBLIC RESPONDENTS ERRED IN NOT AWARDING TO THE

PETITIONERS HEREIN ACTUAL, MORAL, AND EXEMPLARY DAMAGES AND
ATTORNEY'S FEES.
As the Court sees it, the pivotal issues in this petition can be reduced into two, to wit: (a) whether or
not private respondent committed an unfair labor practice in its refusal to grant across-the-board
wage increases in implementing Wage Orders Nos. 01 and 02, and (b) whether or not there was a
significant wage distortion of the wage structure in private respondent as a result of the manner by
which said wage orders were implemented.
With respect to the first issue, petitioner union anchors its arguments on the alleged commitment of
private respondent to grant an automatic across-the-board wage increase in the event that a
statutory or legislated wage increase is promulgated. It cites as basis therefor, the aforequoted
portion of the Minutes of the collective bargaining negotiation on February 27, 1990 regarding
wages, arguing additionally that said Minutes forms part of the entire agreement between the
parties.
The basic premise of this argument is definitely untenable. To start with, if there was indeed a
promise or undertaking on the part of private respondent to obligate itself to grant an automatic
across-the-board wage increase, petitioner union should have requested or demanded that such
"promise or undertaking" be incorporated in the CBA. After all, petitioner union has the means under
the law to compel private respondent to incorporate this specific economic proposal in the CBA. It
could have invoked Article 252 of the Labor Code defining "duty to bargain," thus, the duty includes
"executing a contract incorporating such agreements if requested by either party." Petitioner union's
assertion that it had insisted on the incorporation of the same proposal may have a factual basis
considering the allegations in the aforementioned joint affidavit of its members. However, Article 252
also states that the duty to bargain "does not compel any party to agree to a proposal or make any
concession." Thus, petitioner union may not validly claim that the proposal embodied in the Minutes
of the negotiation forms part of the CBA that it finally entered into with private respondent.
The CBA is the law between the contracting parties 10 — the collective bargaining representative and
the employer-company. Compliance with a CBA is mandated by the expressed policy to give
protection to labor. 11 In the same vein, CBA provisions should be "construed liberally rather than
narrowly and technically, and the courts must place a practical and realistic construction upon it,
giving due consideration to the context in which it is negotiated and purpose which it is intended to
serve." 12 This is founded on the dictum that a CBA is not an ordinary contract but one impressed
with public interest. 13 It goes without saying, however, that only provisions embodied in the CBA
should be so interpreted and complied with. Where a proposal raised by a contracting party does not
find print in the CBA, 14 it is not a part thereof and the proponent has no claim whatsoever to its
implementation.
Hence, petitioner union's contention that the Minutes of the collective bargaining negotiation meeting
forms part of the entire agreement is pointless. The Minutes reflects the proceedings and
discussions undertaken in the process of bargaining for worker benefits in the same way that the
minutes of court proceedings show what transpired therein. 15 At the negotiations, it is but natural for
both management and labor to adopt positions or make demands and offer proposals and counter-
proposals. However, nothing is considered final until the parties have reached an agreement. In fact,
one of management's usual negotiation strategies is to ". . . agree tentatively as you go along with
the understanding that nothing is binding until the entire agreement is reached." 16 If indeed private
respondentpromised to continue with the practice of granting across-the-board salary increases
ordered by the government, such promise could only be demandable in law if incorporated in the
CBA.
Moreover, by making such promise, private respondent may not be considered in bad faith or at the
very least, resorting to the scheme of feigning to undertake the negotiation proceedings through
empty promises. As earlier stated, petitioner union had, under the law, the right and the opportunity
to insist on the foreseeable fulfillment of the private respondent's promise by demanding its
incorporation in the CBA. Because the proposal was never embodied in the CBA, the promise has
remained just that, a promise, the implementation of which cannot be validly demanded under the
law.
Petitioner's reliance on this Court's pronouncements 17 in Kiok Loy v. NLRC 18 is, therefore,
misplaced. In that case, the employer refused to bargain with the collective bargaining
representative, ignoring all notices for negotiations and requests for counter proposals that the union
had to resort to conciliation proceedings. In that case, the Court opined that "(a) Company's refusal
to make counter-proposal, if considered in relation to the entire bargaining process, may indicate
bad faith and this is specially true where the Union's request for a counter-proposal is left
unanswered." Considering the facts of that case, the Court concluded that the company was
"unwilling to negotiate and reach an agreement with the Union." 19
In the case at bench, however, petitioner union does not deny that discussion on its proposal that all
government-mandated salary increases should be on an across-the-board basis was "deferred,"
purportedly because it relied upon the "undertaking" of the negotiating panel of private
respondent. 20 Neither does petitioner union deny the fact that "there is no provision of the 1990 CBA
containing a stipulation that the company will grant across-the-board to its employees the mandated
wage increase." They simply assert that private respondent committed "acts of unfair labor practices
by virtue of its contractual commitment made during the collective bargaining process." 21 The mere
fact, however, that the proposal in question was not included in the CBA indicates that
no contractual commitmentthereon was ever made by private respondent as no agreement had
been arrived at by the parties. Thus:
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 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. . . . 32
With the execution of the CBA, bad faith bargaining can no longer be imputed upon any of the
parties thereto. All provisions in the CBA are supposed to have been jointly and voluntarily
incorporated therein by the parties. This is not a case where private respondent exhibited an
indifferent attitude towards collective bargaining because the negotiations were not the unilateral
activity of petitioner union. The CBA is proof enough that private respondent exerted "reasonable
effort at good faith bargaining." 23
Indeed, the adamant insistence on a bargaining position to the point where the negotiations reach an
impasse does not establish bad faith. Neither can bad faith be inferred from a party's insistence on
the inclusion of a particular substantive provision unless it concerns trivial matters or is obviously
intolerable. 24
The question as to what are mandatory and what are merely permissive subjects of
collective bargaining is of significance on the right of a party to insist on his position
to the point of stalemate. A party may refuse to enter into a collective bargaining
contract unless it includes a desired provision as to a matter which is a mandatory
subject of collective bargaining; but a refusal to contract unless the agreement
covers a matter which is not a mandatory subject is in substance a refusal to bargain
about matters which are mandatory subjects of collective bargaining, and it is no
answer to the charge of refusal to bargain in good faith that the insistence on the
disputed clause was not the sole cause of the failure to agree or that agreement was
not reached with respect to other disputed clauses. 25
On account of the importance of the economic issue proposed by petitioner union, it could have
refused to bargain and to enter into a CBA with private respondent. On the other hand, private
respondent's firm stand against the proposal did not mean that it was bargaining in bad faith. It had
the right "to insist on (its) position to the point of stalemate." On the part of petitioner union, the
importance of its proposal dawned on it only after the wage orders were issued after the CBA had
been entered into. Indeed, from the facts of this case, the charge of bad faith bargaining on the part
of private respondent was nothing but a belated reaction to the implementation of the wage orders
that private respondent made in accordance with law. In other words, petitioner union harbored the
notion that its members and the other employees could have had a better deal in terms of wage
increases had it relentlessly pursued the incorporation in the CBA of its proposal. The inevitable
conclusion is that private respondent did not commit the unfair labor practices of bargaining in bad
faith and discriminating against its employees for implementing the wage orders pursuant to law.
The Court likewise finds unmeritorious petitioner union's contention that by its failure to grant across-
the-board wage increases, private respondent violated the provisions of Section 5, Article VII of the
existing CBA 26 as well as Article 100 of the Labor Code. The CBA provision states:
Sec. 5. The COMPANY agrees to comply with all the applicable provisions of the
Labor Code of the Philippines, as amended, and all other laws, decrees, orders,
instructions, jurisprudence, rules and regulations affecting labor.
Art. 100 of the Labor Code on prohibition against elimination or diminution of benefits
provides that "(n)othing in this Book shall be construed to eliminate or in any way diminish
supplements, or other employee benefits being enjoyed at the time of promulgation of this
Code."
We agree with the Labor Arbiter and the NLRC that no benefits or privileges previously enjoyed by
petitioner union and the other employees were withdrawn as a result of the manner by which private
respondent implemented the wage orders. Granted that private respondent had granted an across-
the-board increase pursuant to Republic Act No. 6727, that single instance may not be considered
an established company practice. Petitioner union's argument in this regard is actually tied up with
its claim that the implementation of Wage Orders Nos. 01 and 02 by private respondent resulted in
wage distortion.
The issue of whether or not a wage distortion exists is a question of

fact 27 that is within the jurisdiction of the quasi-judicial tribunals below. Factual findings of
administrative agencies are accorded respect and even finality in this Court if they are supported by
substantial evidence. 28 Thus, in Metropolitan Bank and Trust Company, Inc. v. NLRC, the Court
said:
The issue of whether or not a wage distortion exists as a consequence of the grant of
a wage increase to certain employees, we agree, is, by and large, a question of fact
the determination of which is the statutory function of the NLRC. Judicial review of
labor cases, we may add, does not go beyond the evaluation of the sufficiency of the
evidence upon which the labor officials' findings rest. As such, the factual findings of
the NLRC are generally accorded not only respect but also finality provided that its
decisions are supported by substantial evidence and devoid of any taint of unfairness
or arbitrariness. When, however, the members of the same labor tribunal are not in
accord on those aspects of a case, as in this case, this Court is well cautioned not to
be as so conscious in passing upon the sufficiency of the evidence, let alone the
conclusions derived
therefrom. 29
Unlike in above-cited case where the Decision of the NLRC was not unanimous, the NLRC Decision
in this case which was penned by the dissenter in that case, Presiding Commissioner Edna Bonto-
Perez unanimously ruled that no wage distortions marred private respondent's implementation of the
wage orders. The NLRC said:
On the issue of wage distortion, we are satisfied that there was a meaningful
implementation of Wage Orders Nos. 01 and 02. This debunks the claim that there
was wage distortion as could be shown by the itemized wages implementation
quoted above. It should be noted that this itemization has not been successfully
traversed by the appellants. . . . . 30
The NLRC then quoted the labor arbiter's ruling on wage distortion.
We find no reason to depart from the conclusions of both the labor arbiter and the NLRC. It
is apropos to note, moreover, that petitioner's contention on the issue of wage distortion and the
resulting allegation of discrimination against the private respondent's employees are anchored on its
dubious position that private respondent's promise to grant an across-the-board increase in
government-mandated salary benefits reflected in the Minutes of the negotiation is an enforceable
part of the CBA.
In the resolution of labor cases, this Court has always been guided by the State policy enshrined in
the Constitution that the rights of workers and the promotion of their welfare shall be protected. 31 The
Court is likewise guided by the goal of attaining industrial peace by the proper application of the law.
It cannot favor one party, be it labor or management, in arriving at a just solution to a controversy if
the party has no valid support to its claims. It is not within this Court's power to rule beyond the ambit
of the law.
WHEREFORE, the instant petition for certiorari is hereby DISMISSED and the questioned
Resolutions of the NLRC AFFIRMED. No costs.
SO ORDERED.
Narvasa, C.J., Kapunan and Purisima, JJ., concur.
Footnotes
1 Annex D to Petition: Rollo, pp. 71-74.
2 Annex K to Petition; Rollo, pp. 139-143.
3 NLRC Resolution of April 29, 1993, p. 2; Rollo, p. 61.
4 Annex E to Petition; Rollo, pp. 80-81.
5 Annex F to Petition; Rollo, pp. 75-78.
6 Rollo, p. 93.
7 Ibid., p. 95.
8 Ibid., p. 53.
9 Penned by Presiding Commissioner Edna Bonto-Perez and concurred in by

Commissioners Domingo H. Zapanta and Rogelio I. Rayala.
10 Marcopper Mining Corporation v. NLRC, 325 Phil. 618, 632 (1996).
11 Meycauayan College v. Drilon. G.R. No. 81144. May 7, 1990, 185 SCRA 50, 56 citing Art.
3 of the Labor Code.
12 Marcopper Mining Corporation v. NLRC, supra, at p. 634.
13 Art. 1700 of the Civil Code provides: "The relations between capital and labor are not
merely contractual. They are so impressed with public interest that labor contracts must yield
to the common good. Therefore, such contracts are subject to the special laws on labor
unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions,
hours of labor and similar subjects."
14 Art. 252 of the Labor Code provides that 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 an all
other terms and conditions of employment including proposals for adjusting any grievances
or questions arising under such agreement and executing a contractincorporating 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. Notably, however, the first paragraph of Sec. 13 of
Rep. Act No. 875. the Industrial peace Act, provides the execution of a written
contract incorporating the collective bargaining agreement as part of the parties' duty to
bargain collectively.
15 While the "minutes" kept by the judge are not the memorial of the judgment, and are not
records required by law to be kept, they constitute legal evidence of what was adjudged, and
as such may serve as the foundation for the correction of errors of the clerk in the
performance of his duty. The minutes are only evidence of what was done (27 WORDS AND
PHRASES 425 citing State ex rel. Sheridan Pub. Co. v. Goodrich, 140 S.W. 629, 630, 159
Mo. App. 422, citing Kreisel v. Snavely, 115 S.W. 1060, 135 Mo. App. 158).
16 William G. Caphs and Robert A. Graney. "The Technique of Labor-Management
Negotiations." University of Illinois Law Forum, Summer 1955, p. 293 cited in C.A.
AZUCENA, THE LABOR CODE WITH COMMENTS AND CASES. Vol. 11. 1993 ed., p. 228.
17 Petitioners' Memorandum. pp. 18-20.
18 G.R. No. 54334, January 22, 1986, 141 SCRA 179.
19 Ibid., at pp. 185 & 186.
20 Petitioners' Memorandum, pp. 14-15.
21 Ibid., p. 17.
22 51 C.J.S. 910.
23 Divine Word University of Tacloban v. Secretary of Labor and Employment, G.R. No.
91915, September 11, 1992, 213 SCRA 759, 773.
24 Ibid., at p. 910.
25 Ibid., at p. 912-913.
26 Petitioner's Memorandum. p. 35.
27 Manila Mandarin Employees Union v. NLRC, G.R. No. 108556, November 19, 1996, 264
SCRA 320, 336 citing Associate Labor Unions-TUCP v. NLRC. G.R. No. 109328, August 16,
1994, 235 SCRA 395; Metropolitan Bank and Trust Co. Employees Union-ALU-TUCP v.
NLRC, G.R. No. 102636, September 10, 1993, 226 SCRA 268; Cardona v. NLRC, G.R. No.
89007, March 11, 1991, 195 SCRA 92.
28 Philippine Savings Bank v. NLRC, 330 Phil, 106 (1996).
29 Supra, at p. 275.
30 Rollo, p. 66.
31 Sec. 18. Art. II, 1987 Constitution.
35) Picop vs. Tañeca GR No. 160828 Aug. 9, 2010
Supreme Court
Manila
SECOND DIVISION
PICOP RESOURCES, G.R. No. 160828

INCORPORATED (PRI),
Petitioner,
Present:
- versus
ANACLETO L. TAECA, GEREMIAS S. CARPIO, J., Chairperson,

TATO, JAIME N. CAMPOS,
MARTINIANO A. MAGAYON, JOSEPH B. NACHURA,
BALGOA, MANUEL G. ABUCAY, MOISES
PERALTA
M. ALBARAN, MARGARITO G.
ALICANTE, JERRY ROMEO T. AVILA, ABAD, and
LORENZO D. CANON, RAUL P. DUERO,
MENDOZA, JJ.
DANILO Y. ILAN, MANUEL M.
MATURAN, JR., LUISITO R. POPERA,
CLEMENTINO C. QUIMAN, ROBERTO Q.
SILOT, CHARLITO D. SINDAY, REMBERT
B. SUZONALLAN J. TRIMIDAL, and Promulgated:
NAMAPRI-SPFL,
Respondents.
August 9, 2010
x----------------------------------------------------------------------------------------x
DECISION
PERALTA, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court
seeking the reversal of the Decision[1] dated July 25, 2003 and Resolution[2] dated
October 23, 2003 of the Court of Appeals in CA-G.R. SP No. 71760, setting aside
the Resolutions dated October 8, 2001[3] and April 29, 2002[4] of the National
Labor Relations Commission in NLRC CA No. M-006309-2001 and reinstating
the Decision[5] 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 sa PRI 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.
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 Decision[8] 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 P420,339.30 as shown in the said Annex A plus damages in the amount of P10,000.00
each, or a total of P210,000.00 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:
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.
Citing Article 253 of the Labor Code,[14] PRI contends that as parties to the CBA,
they are enjoined to keep the status 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 status quo 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 status quo 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.
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.
DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
ANTONIO EDUARDO B. NACHURA ROBERTO A. ABAD
JOSE CATRAL MENDOZA
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Courts Division.
ANTONIO T. CARPIO
Associate Justice
Second Division, Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairpersons Attestation, I certify that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer of
the opinion of the Courts Division.
RENATO C. CORONA
Chief Justice
[1]
Penned by Associate Justice Remedios Salazar-Fernando, with Associate Justices Delilah Vidallon-Magtolis and
Edgardo F. Sundiam, concurring; rollo, pp. 50-65.
[2]
Id. at 48.
[3]
Rollo, pp. 219-227.
[4]
Id. at 233-234.
[5]
Id. at 166-178.
[6]
Now deceased.
[7]
Emphasis supplied.
[8]
Rollo, pp. 166-175.
[9]
Id. at 175.
[10]
Id. at 30.
[11]
356 Phil. 811 (1998).
[12]
VMC Rural Electric Service Cooperative, Inc. v. Court of Appeals, G.R. No. 153144, October 12, 2006, 504 SCRA
336, 348.
[13]
Id.
[14]
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 and conditions of the existing agreement during the
60-day period and/or until a new agreement is reached by the parties.
[15]
Inguillo v. First Philippine Scales, Inc., G.R. No. 165407, June 5, 2009, 588 SCRA 471, 485-486.
[16]
Alabang Country Club, Inc. v. National Labor Relations Commission, G.R. No. 170287, February 14, 2008, 545
SCRA 351, 362.
[17]
Rollo, p. 131.
[18]
Art. 253-A. Terms of a collective bargaining agreement. Any Collective Bargaining Agreement that the parties
may enter into shall, insofar as the representation aspect is concerned, be for a term of five (5) years. No petition
questioning the majority status of the incumbent bargaining agent shall be entertained and no certification election
shall be conducted by the Department of Labor and Employment outside of the sixty-day period immediately before
the date of expiry of such five-year term of the Collective Bargaining Agreement. All other provisions of the
Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its execution. Any
agreement on such other provisions of the Collective Bargaining Agreement entered into within six (6) months from
the date of expiry of the term of such other provisions as fixed in such Collective Bargaining Agreement, shall
retroact to the day immediately following such date. If any such agreement is entered into beyond six months, the
parties shall agree on the duration of retroactivity thereof. In case of a deadlock in the renegotiation of the Collective
Bargaining Agreement, the parties may exercise their rights under this Code. (As amended by Section 21, Republic
Act No. 6715, March 21, 1989).
[19]
Emphasis supplied.
[20]
Vassar Industries Employees Union [VIEU] v. Estrella, 172 Phil. 272, 278-279 (1978); Todays Knitting Free
Workers Union v. Noriel, No. L-45057, February 28, 1977, 75 SCRA 450.
[21]
Labor Code, Article 253-A.
[22]
Rollo, pp. 130-136.
[23]
Associated Labor Unions (ALU) v. Ferrer-Calleja, G.R. No. 85085, November 6, 1989, 179 SCRA 127, 134
[24]
Id.
[25]
Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., 179 Phil. 317, 321-322 (1979); Cario v.
National Labor Relations Commission, G.R. No. 91086, May 8, 1990, 185 SCRA 177, 189.
[26]
See General Milling Corporation v. Ernesto Casio, et al., G.R. No. 149552, March 10, 2010.
36) New Pacific vs. NLRC GR No. 124224 March 17, 2000
FIRST DIVISION
[G.R. No. 124224. March 17, 2000]
NEW PACIFIC TIMBER SUPPLY COMPANY, CO., INC., petitioner, vs.

NATIONAL LABOR RELATIONS COMMISSION, MUSIB M. BUAT, LEON
G. GONZAGA, JR., ET AL., NATIONAL FEDERATION OF LABOR,
MARIANO AKILIT and 350 OTHERS, respondents. Juris sc
DECISION
KAPUNAN, J.:
May the term of a Collective Bargaining Agreement (CBA) as to its economic provisions
be extended beyond the term expressly stipulated therein, and, in the absence of a new
CBA, even beyond the three-year period provided by law? Are employees hired after
the stipulated term of a CBA entitled to the benefits provided thereunder?
These are the issues at the heart of the instant petition for certiorari with prayer for the
issuance of preliminary injunction and/or temporary restraining order filed by petitioner
New Pacific Timber & Supply Company, Incorporated against the National Labor
Relations Commission (NLRC), et al. and the National Federation of Labor, et al.
The antecedent facts, as found by the NLRC, are as follows:
The National Federation of Labor (NFL, for brevity) was certified as the sole and
exclusive bargaining representative of all the regular rank-and-file employees of New
Pacific Timber & Supply Co., Inc. (hereinafter referred to as petitioner Company). [1] As
such, NFL started to negotiate for better terms and conditions of employment for the
employees in the bargaining unit which it represented. However, the same was
allegedly met with stiff resistance by petitioner Company, so that the former was
prompted to file a complaint for unfair labor practice (ULP) against the latter on the
ground of refusal to bargain collectively.[2]Misj uris
On March 31, 1987, then Executive Labor Arbiter Hakim S. Abdulwahid issued an order
declaring (a) herein petitioner Company guilty of ULP; and (b) the CBA proposals
submitted by the NFL as the CBA between the regular rank-and-file employees in the
bargaining unit and petitioner Company.[3]
Petitioner Company appealed the above order to the NLRC. On November 15, 1989,
the NLRC rendered a decision dismissing the appeal for lack of merit. A motion for
reconsideration thereof was, likewise, denied in a Resolution, dated November 12,
1990.[4]
Unsatisfied, petitioner Company filed a petition for certiorari with this Court. But the
Court dismissed said petition in a Resolution, dated January 21, 1991. [5]
Thereafter, the records of the case were remanded to the arbitration branch of origin for
the execution of Labor Arbiter Abdulwahid's Order, dated March 31, 1987, granting
monetary benefits consisting of wage increases, housing allowances, bonuses, etc. to
the regular rank-and-file employees. Following a series of conferences to thresh out the
details of computation, Labor Arbiter Reynaldo S. Villena issued an Order, dated
October 18, 1993, directing petitioner Company to pay the 142 employees entitled to
the aforesaid benefits the respective amounts due them under the CBA. Petitioner
Company complied; and, the corresponding quitclaims were executed. The case was
considered closed following NFL's manifestation that it will no longer appeal the October
18, 1993 Order of Labor Arbiter Villena.[6]Jj lex
However, notwithstanding such manifestation, a "Petition for Relief" was filed in behalf
of 186 of the private respondents "Mariano J. Akilit and 350 others" on May 12, 1994. In
their petition, they claimed that they were wrongfully excluded from enjoying the benefits
under the CBA since the agreement with NFL and petitioner Company limited the CBA's
implementation to only the 142 rank-and-file employees enumerated. They claimed that
NFL's misrepresentations had precluded them from appealing their exclusion. [7]
Treating the petition for relief as an appeal, the NLRC entertained the same. On August
4, 1994, said commission issued a resolution[8] declaring that the 186 excluded
employees "form part and parcel of the then existing rank-and-file bargaining unit" and
were, therefore, entitled to the benefits under the CBA. The NLRC held, thus:
WHEREFORE, the appeal is hereby granted and the Order of the Labor
arbiter dated October 18, 1993 is hereby Set Aside and Vacated. In lieu
hereof, a new Order is hereby issued directing respondent New Pacific
Timber & Supply Co., Inc. to pay all its regular rank-and-file workers their
wage differentials and other benefits arising from the decreed CBA as
explained above, within ten (10) days from receipt of this order.
SO ORDERED.[9]
Petitioner Company filed a motion for reconsideration of the aforequoted resolution.

Meanwhile, four separate groups of the private respondents, including the original 186
who had filed the "Petition for Relief" filed individual money claims, docketed as NLRC
Cases Nos. M-001991-94 to M-001994-94, before the Arbitration Branch of the NLRC,
Cagayan de Oro City. However, Labor Arbiter Villena dismissed these cases in Orders,
dated March 11, 1994; April 13, 1994; March 9, 1994; and, May 10, 1994. The
employees appealed the respective dismissal of their complaints to the NLRC. The
latter consolidated these appeals with the aforementioned motion for reconsideration
filed by petitioner Company. New miso
On February 29, 1996, the NLRC issued a resolution, the dispositive portion of which
reads as follows:
WHEREFORE, the instant petition for reconsideration of respondent

is Denied for lack of merit and the Resolution of this Commission dated
August 4, 1994 Sustained. The separate orders of the Labor Arbiter dated
March 11, 1994, April 13, 1994, March 9, 1994 and May 10, 1994,
respectively, in NLRC Cases Nos. M-001991-94 to M-001994-94 are Set
Aside and Vacated for lack of legal bases.
Conformably, respondent New Pacific Timber and Supply Co., Inc. is

hereby directed to pay individual complainants their CBA benefits in the
aggregate amount of P13,559,510.37, the detailed computation thereof is
contained in Annex "A" which forms an integral part of this resolution, plus
ten (10%) percent thereof as Attorney's fees.
SO ORDERED.[10]
Hence, the instant petition wherein petitioner Company raises the following issues: Acct mis
THE PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF

DISCRETION IN ALLOWING THE "PETITION FOR RELIEF" TO
PROSPER.
II
THE PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF

DISCRETION IN RULING THAT PRIVATE RESPONDENTS MARIANO
AKILIT AND 350 OTHERS ARE ENTITLED TO BENEFITS UNDER THE
COLLECTIVE BARGAINING AGREEMENT IN SPITE OF THE FACT
THAT THEY WERE NOT EMPLOYED BY THE PETITIONER MUCH
LESS WERE THEY MEMBERS OF THE BARGAINING UNIT DURING
THE TERM OF THE CBA. Mis act
III
PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF
DISCRETION IN MAKING FACTUAL FINDINGS WITHOUT BASIS.
IV
THE DISPOSITIVE PORTIONS OF THE ASSAILED RESOLUTIONS ARE

DEFECTIVE AND/OR REVEAL THE GRAVE ABUSE OF DISCRETION
COMMITTED BY PUBLIC RESPONDENT.[11]
Petitioner Company contends that a "Petition for Relief" is not the proper mode of
seeking a review of a decision rendered by the arbitration branch of the
NLRC.[12] According to the petitioner, nowhere in the Labor Code or in the NLRC Rules
of Procedure is there such a pleading. Rather, the remedy of a party aggrieved by an
unfavorable ruling of the labor arbiter is to appeal said judgment to the NLRC. [13]
Petitioner asseverates that even assuming that the NLRC correctly treated the petition
for relief as an appeal, still, it should not have allowed the same to prosper, because the
petition was filed several months after the ten-day reglementary period for filing an
appeal had expired; and, therefore, it failed to comply with the requirements of an
appeal under the Labor Code and the NLRC Rules of Procedure.
Petitioner Company further contends that in filing separate complaints and/or money
claims at the arbitration level in spite of their pending petition for relief and in spite of the
final order, dated October 18, 1993, in NLRC Case No.RAB-IX-0334-82, the private
respondents were in fact forum-shopping, an act which is proscribed as trifling with the
courts and abusing their practices. S djad
Anent the second issue, petitioner argues that the private respondents are not entitled
to the benefits under the CBA because employees hired after the term of a CBA are not
parties to the agreement, and therefore, may not claim benefits thereunder, even if they
subsequently become members of the bargaining unit.
As for the term of the CBA, petitioner maintains that Article 253 of the Labor Code refers
to the continuation in full force and effect of the previous CBA's terms and conditions.
By necessity, it could not possibly refer to terms and conditions which, as expressly
stipulated, ceased to have force and effect.[14]
According to petitioner, the provision on wage increase in the 1981 to 1984 CBA
between petitioner Company and NFL provided for yearly wage increases. Logically,
these provisions ended in the year 1984 - the last year that the economic provisions of
the CBA were, pursuant to contract and law, effective. Petitioner claims that there is no
contractual basis for the grant of CBA benefits such as wage increases in 1985 and
subsequent years, since the CBA stipulates only the increases for the years 1981 to
1984.
Moreover, petitioner alleges that it was through no fault of theirs that no new CBA was
entered pending appeal of the decision in NLRC Case No. RAB-IX-0334-82.
Finally, petitioner Company claims that it was never given the opportunity to submit a
counter-computation of the benefits supposedly due the private respondents. Instead,
the NLRC allegedly relied on the self-serving computations of private
respondents. Sppedsc
Petitioner's contentions are untenable.
We find no grave abuse of discretion on the part of the NLRC, when it entertained the
petition for relief filed by the private respondents and treated it as an appeal. even if it
was filed beyond the reglementary period for filing an appeal. Ordinarily, once a
judgment has become final and executory, it can no longer be disturbed, altered or
modified. However, a careful scrutiny of the facts and circumstances of the instant case
warrants liberality in the application of technical rules and procedure. It would be a
greater injustice to deprive the concerned employees of the monetary benefits rightly
due them because of a circumstance over which they had no control. As stated above,
private respondents, in their petition for relief, claimed that they were wrongfully
excluded from the list of those entitled to the CBA benefits by their union, NFL, without
their knowledge; and, because they were under the impression that they were ably
represented, they were not able to appeal their case on time. C alrsc
The Supreme Court has allowed appeals from decisions of the labor arbiter to the
NLRC, even if filed beyond the reglementary period, in the interest of
justice.[15] Moreover, under Article 218 (c) of the Labor Code, the NLRC may, in the
exercise of its appellate powers, "correct, amend or waive any error, defect or
irregularity whether in substance or in form." Further, Article 221 of the same provides
that: "In any proceeding before the Commission or any of the Labor Arbiters, the rules of
evidence prevailing in courts of law or equity shall not be controlling and it is the spirit
and intention of this Code that the Commission and its members and the Labor Arbiters
shall use every and all reasonable means to ascertain the facts in each case speedily
and objectively and without regard to technicalities of law or procedure, all in the interest
of due process. x x x"[16]
Anent the issue of whether or not the term of an existing CBA, particularly as to its
economic provisions, can be extended beyond the period stipulated therein, and even
beyond the three-year period prescribed by law, in the absence of a new agreement,
Article 253 of the Labor Code explicitly provides:
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 and conditions of the existing agreement during the 60-day period
and/or until a new agreement is reached by the parties.(Underlining
supplied. )
It is clear from the above provision of law that until a new Collective Bargaining
Agreement has been executed by and between the parties, they are duty-bound to keep
the status quo and to continue in full force and effect the terms and conditions of the
existing agreement. The law does not provide for any exception nor qualification as to
which of the economic provisions of the existing agreement are to retain force and
effect; therefore, it must be understood as encompassing all the terms and conditions in
the said agreement. Sccal r
In the case at bar, no new agreement was entered into by and between petitioner
Company and NFL pending appeal of the decision in NLRC Case No. RAB-IX-0334-82;
nor were any of the economic provisions and/or terms and conditions pertaining to
monetary benefits in the existing agreement modified or altered. Therefore, the existing
CBA in its entirety, continues to have legal effect.
In a recent case, the Court had occassion to rule that Articles 253 and 253-A[17] mandate
the 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 prior to the expiration of
the old CBA and/or until a new agreement is reached by the parties. Consequently, the
automatic renewal clause provided for by the law, which is deemed incorporated in all
CBA's, provides the reason why the new CBA can only be given a prospective
effect.[18]Calrsp ped
In the case of Lopez Sugar Corporation vs. Federation of Free Workers, et.al,[19] this
Court reiterated the rule that although a CBA has expired, it continues to have legal
effects as between the parties until a new CBA has been entered into. It is the duty of
both parties to the CBA 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.[20]
To rule otherwise, i.e., that the economic provisions of the existing CBA in the instant
case ceased to have force and effect in the year 1984, would be to create a gap during
which no agreement would govern, from the time the old contract expired to the time a
new agreement shall have been entered into. For if, as contended by the petitioner, the
economic provisions of the existing CBA were to have no legal effect, what agreement
as to wage increases and other monetary benefits would govern at all? None, it would
seem, if we are to follow the logic of petitioner Company. Consequently, the employees
from the year 1985 onwards would be deprived of a substantial amount of monetary
benefits which they could have enjoyed had the terms and conditions of the CBA
remained in force and effect. Such a situation runs contrary to the very intent and
purpose of Articles 253 and 253-A of the Labor Code which is to curb labor unrest and
to promote industrial peace, as can be gleaned from the discussions of the legislators
leading to the passage of said laws, thus:
HON. CHAIRMAN HERRERA: Pag nag-survey tayo sa mga unyon,

ganoon ang mangyayari. And I think our responsibility here is to create a
legal framework to promote industrial peace and to develop responsible
and fair labor movement.
HON. CHAIRMAN VELOSO: In other words, the longer the period of the
effectivity.... Sce dp
xxx
HON. CHAIRMAN VELOSO: (continuing).... in other words, the longer

period of effectivity of the CBA, the better for industrial peace.
xxx.[21]
Having established that the CBA between petitioner Company and NFL remained in full
force and effect even beyond the stipulated term, in the absence of a new agreement;
and, therefore, that the economic provisions such as wage increases continued to have
legal effect, we are now faced with the question of who are entitled to the benefits
provided thereunder.
Petitioner Company insists that the rank-and-file employees hired after the term of the
CBA inspite of their subsequent membership in the bargaining unit, are not parties to
the agreement, and certainly may not claim the benefits thereunder.
We do not agree. In a long line of cases, this Court has held that when a collective
bargaining contract is entered into by the union representing the employees and the
employer, even the non-member employees are entitled to the benefits of the contract.
To accord its benefits only to members of the union without any valid reason would
constitute undue discrimination against nonmembers.[22] It is even conceded, that a
laborer can claim benefits from a CBA entered into between the company and the union
of which he is a member at the time of the conclusion of the agreement, after he has
resigned from said union.[23]Edp sc
In the same vein, the benefits under the CBA in the instant case should be extended to
those employees who only became such after the year 1984. To exclude them would
constitute undue discrimination and deprive them of monetary benefits they would
otherwise be entitled to under a new collective bargaining contract to which they would
have been parties. Since in this particular case, no new agreement had been entered
into after the CBA's stipulated term, it is only fair and just that the employees hired
thereafter be included in the existing CBA. This is in consonance with our ruling that the
terms and conditions of a collective bargaining agreement continue to have force and
effect beyond the stipulated term when no new agreement is executed by and between
the parties to avoid or prevent the situation where no collective bargaining agreement at
all would govern between the employer company and its employees.
Anent the other issues raised by petitioner Company, the Court finds that these pertain
to questions of fact that have already been passed upon by the NLRC. It is axiomatic
that, the factual findings of the National Labor Relations Commission, which have
acquired expertise because its jurisdiction is confined to specific matters, are accorded
respect and finality by the Supreme Court, when these are supported by substantial
evidence. A perusal of the assailed resolution reveals that the same was reached on the
basis of the required quantum of evidence.
WHEREFORE, in view of the foregoing, the instant petition for certiorari is hereby
DISMISSED for lack of merit.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, and Ynares-Santiago, JJ., concur.
Pardo, J., on official business abroad. Ed p
[1]
Rollo, p. 42.
[2]
Ibid.
[3]
Id., at 42.
[4]
Id., at 43.
[5]
Id., at 43.
[6]
Id., at 46.
[7]
Id., at 137.
[8]
Id., at 40.
[9]
Id., at 138.
[10]
Id., at 69-70.
[11]
Id., at 12.
[12]
Id., at 12.
[13]
Id., at 13.
[14]
Id., at 25.
[15]
City Fair Corporation vs. NLRC, 243 SCRA 572 (1995).
[16]
Id., at 576.
[17]
Art. 253-A. Terms of a collective bargaining agreement. - Any Collective Bargaining Agreement that the parties
may enter into shall insofar as the representation aspect is concerned, be for a term of five (5) years. xxx All other
provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its
execution. Any agreement on such other provisions of the Collective Bargaining Agreement entered into within six
(6) months from the date of expiry of the term of such other provisions as fixed in such Collective Bargaining
Agreement, shall retroact to the day immediately following such date. If any such agreement is entered into beyond
six months, the parties shall agree on the duration of retroactivity thereof. In case of a deadlock in the renegotiation
of the collective bargaining agreement, the parties may exercise their rights under this Code.
[18]
Union of Filipro Employees vs .NLRC, 192 SCRA 414 (1990).
[19]
189 SCRA 179.
[20]
Pier 8 Arrastre & Stevedoring Services, Inc. vs. Hon. Ma. Nieves Roldan-Confesor, et al., 241 SCRA 294 (1995).
[21]
Conference Committee on Labor, December 15, 1988.
[22]
International Oil Factory Workers Union vs. Hon. Martinez, et. al., 110 Phil. 595 (1960); National Brewery &
Allied Industries Labor Union vs. San Miguel Brewery, Inc., et. al., 118 Phil 806 (1963).
[23]
Kapisanan Ng Mga Manggagawang Pinagyakap vs. Franklin Baker Co. of the Phil., June 3, 1949.
37) Kiok Loy vs. NLRC GR No. L-54334 Jan. 22, 1986 141 SCRA 179, 188

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-54334 January 22, 1986
KIOK LOY, doing business under the name and style SWEDEN ICE CREAM PLANT, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC) and PAMBANSANG KILUSAN NG
PAGGAWA (KILUSAN), respondents.
Ablan and Associates for petitioner.
Abdulcadir T. Ibrahim for private respondent.
CUEVAS, J.:
Petition for certiorari to annul the decision 1 of the National Labor Relations Commission (NLRC)
dated July 20, 1979 which found petitioner Sweden Ice Cream guilty of unfair labor practice for
unjustified refusal to bargain, in violation of par. (g) of Article 2492 of the New Labor Code, 3 and
declared the draft proposal of the Union for a collective bargaining agreement as the governing
collective bargaining agreement between the employees and the management.
The pertinent background facts are as follows:
In a certification election held on October 3, 1978, the Pambansang Kilusang Paggawa (Union for
short), a legitimate late labor federation, won and was subsequently certified in a resolution dated
November 29, 1978 by the Bureau of Labor Relations as the sole and exclusive bargaining agent of
the rank-and-file employees of Sweden Ice Cream Plant (Company for short). The Company's
motion for reconsideration of the said resolution was denied on January 25, 1978.
Thereafter, and more specifically on December 7, 1978, the Union furnished 4 the Company with two
copies of its proposed collective bargaining agreement. At the same time, it requested the Company
for its counter proposals. Eliciting no response to the aforesaid request, the Union again wrote the
Company reiterating its request for collective bargaining negotiations and for the Company to furnish
them with its counter proposals. Both requests were ignored and remained unacted upon by the
Company.
Left with no other alternative in its attempt to bring the Company to the bargaining table, the Union,
on February 14, 1979, filed a "Notice of Strike", with the Bureau of Labor Relations (BLR) on ground
of unresolved economic issues in collective bargaining. 5
Conciliation proceedings then followed during the thirty-day statutory cooling-off period. But all
attempts towards an amicable settlement failed, prompting the Bureau of Labor Relations to certify
the case to the National Labor Relations Commission (NLRC) for compulsory arbitration pursuant to
Presidential Decree No. 823, as amended. The labor arbiter, Andres Fidelino, to whom the case was
assigned, set the initial hearing for April 29, 1979. For failure however, of the parties to submit their
respective position papers as required, the said hearing was cancelled and reset to another date.
Meanwhile, the Union submitted its position paper. The Company did not, and instead requested for
a resetting which was granted. The Company was directed anew to submit its financial statements
for the years 1976, 1977, and 1978.
The case was further reset to May 11, 1979 due to the withdrawal of the Company's counsel of
record, Atty. Rodolfo dela Cruz. On May 24, 1978, Atty. Fortunato Panganiban formally entered his
appearance as counsel for the Company only to request for another postponement allegedly for the
purpose of acquainting himself with the case. Meanwhile, the Company submitted its position paper
on May 28, 1979.
When the case was called for hearing on June 4, 1979 as scheduled, the Company's representative,
Mr. Ching, who was supposed to be examined, failed to appear. Atty. Panganiban then requested for
another postponement which the labor arbiter denied. He also ruled that the Company has waived
its right to present further evidence and, therefore, considered the case submitted for resolution.
On July 18, 1979, labor arbiter Andres Fidelino submitted its report to the National Labor Relations
Commission. On July 20, 1979, the National Labor Relations Commission rendered its decision, the
dispositive portion of which reads as follows:
WHEREFORE, the respondent Sweden Ice Cream is hereby declared guilty of

unjustified refusal to bargain, in violation of Section (g) Article 248 (now Article 249),
of P.D. 442, as amended. Further, the draft proposal for a collective bargaining
agreement (Exh. "E ") hereto attached and made an integral part of this decision,
sent by the Union (Private respondent) to the respondent (petitioner herein) and
which is hereby found to be reasonable under the premises, is hereby declared to be
the collective agreement which should govern the relationship between the parties
herein.
SO ORDERED. (Emphasis supplied)
Petitioner now comes before Us assailing the aforesaid decision contending that the National Labor
Relations Commission acted without or in excess of its jurisdiction or with grave abuse of discretion
amounting to lack of jurisdiction in rendering the challenged decision. On August 4, 1980, this Court
dismissed the petition for lack of merit. Upon motion of the petitioner, however, the Resolution of
dismissal was reconsidered and the petition was given due course in a Resolution dated April 1,
1981.
Petitioner Company now maintains that its right to procedural due process has been violated when it
was precluded from presenting further evidence in support of its stand and when its request for
further postponement was denied. Petitioner further contends that the National Labor Relations
Commission's finding of unfair labor practice for refusal to bargain is not supported by law and the
evidence considering that it was only on May 24, 1979 when the Union furnished them with a copy of
the proposed Collective Bargaining Agreement and it was only then that they came to know of the
Union's demands; and finally, that the Collective Bargaining Agreement approved and adopted by
the National Labor Relations Commission is unreasonable and lacks legal basis.
The petition lacks merit. Consequently, its dismissal is in order.
Collective bargaining which is defined as negotiations towards a collective agreement,6 is one of the
democratic frameworks under the New Labor Code, designed to stabilize the relation between labor
and management and to create a climate of sound and stable industrial peace. It is a mutual
responsibility of the employer and the Union and is characterized as a legal obligation. So much so
that Article 249, par. (g) of the Labor Code makes it an unfair labor practice for an employer to
refuse "to meet and convene promptly and expeditiously in good faith for the purpose of negotiating
an agreement with respect to wages, hours of work, and all other terms and conditions of
employment including proposals for adjusting any grievance or question arising under such an
agreement and executing a contract incorporating such agreement, if requested by either party.
While it is a mutual obligation of the parties to bargain, the employer, however, is not under any legal
duty to initiate contract negotiation.7 The mechanics of collective bargaining is set in motion only
when the following jurisdictional preconditions are present, namely, (1) possession of the status of
majority representation of the employees' representative in accordance with any of the means of
selection or designation provided for by the Labor Code; (2) proof of majority representation; and (3)
a demand to bargain under Article 251, par. (a) of the New Labor Code . ... all of which preconditions
are undisputedly present in the instant case.
From the over-all conduct of petitioner company in relation to the task of negotiation, there can be no
doubt that the Union has a valid cause to complain against its (Company's) attitude, the totality of
which is indicative of the latter's disregard of, and failure to live up to, what is enjoined by the Labor
Code — to bargain in good faith.
We are in total conformity with respondent NLRC's pronouncement that petitioner Company is
GUILTY of unfair labor practice. It has been indubitably established that (1) respondent Union was a
duly certified bargaining agent; (2) it made a definite request to bargain, accompanied with a copy of
the proposed Collective Bargaining Agreement, to the Company not only once but twice which were
left unanswered and unacted upon; and (3) the Company made no counter proposal whatsoever all
of which conclusively indicate lack of a sincere desire to negotiate. 8 A Company's refusal to make
counter proposal if considered in relation to the entire bargaining process, may indicate bad faith and
this is specially true where the Union's request for a counter proposal is left unanswered. 9 Even
during the period of compulsory arbitration before the NLRC, petitioner Company's approach and
attitude-stalling the negotiation by a series of postponements, non-appearance at the hearing
conducted, and undue delay in submitting its financial statements, lead to no other conclusion
except that it is unwilling to negotiate and reach an agreement with the Union. Petitioner has not at
any instance, evinced good faith or willingness to discuss freely and fully the claims and demands
set forth by the Union much less justify its opposition thereto. 10
The case at bar is not a case of first impression, for in the Herald Delivery Carriers Union (PAFLU)
vs. Herald Publications 11 the rule had been laid down that "unfair labor practice is committed when it
is shown that the respondent employer, after having been served with a written bargaining proposal
by the petitioning Union, did not even bother to submit an answer or reply to the said proposal This
doctrine was reiterated anew in Bradman vs. Court of Industrial Relations 12 wherein it was further
ruled that "while the law does not compel the parties to reach an agreement, it does contemplate
that both parties will approach the negotiation with an open mind and make a reasonable effort to
reach a common ground of agreement
As a last-ditch attempt to effect a reversal of the decision sought to be reviewed, petitioner
capitalizes on the issue of due process claiming, that it was denied the right to be heard and present
its side when the Labor Arbiter denied the Company's motion for further postponement.
Petitioner's aforesaid submittal failed to impress Us. Considering the various postponements granted
in its behalf, the claimed denial of due process appeared totally bereft of any legal and factual
support. As herein earlier stated, petitioner had not even honored respondent Union with any reply to
the latter's successive letters, all geared towards bringing the Company to the bargaining table. It did
not even bother to furnish or serve the Union with its counter proposal despite persistent requests
made therefor. Certainly, the moves and overall behavior of petitioner-company were in total
derogation of the policy enshrined in the New Labor Code which is aimed towards expediting
settlement of economic disputes. Hence, this Court is not prepared to affix its imprimatur to such an
illegal scheme and dubious maneuvers.
Neither are WE persuaded by petitioner-company's stand that the Collective Bargaining Agreement
which was approved and adopted by the NLRC is a total nullity for it lacks the company's consent,
much less its argument that once the Collective Bargaining Agreement is implemented, the
Company will face the prospect of closing down because it has to pay a staggering amount of
economic benefits to the Union that will equal if not exceed its capital. Such a stand and the
evidence in support thereof should have been presented before the Labor Arbiter which is the proper
forum for the purpose.
We agree with the pronouncement that it is not obligatory upon either side of a labor controversy to
precipitately accept or agree to the proposals of the other. But an erring party should not be tolerated
and allowed with impunity to resort to schemes feigning negotiations by going through empty
gestures.13 More so, as in the instant case, where the intervention of the National Labor Relations
Commission was properly sought for after conciliation efforts undertaken by the BLR failed. The
instant case being a certified one, it must be resolved by the NLRC pursuant to the mandate of P.D.
873, as amended, which authorizes the said body to determine the reasonableness of the terms and
conditions of employment embodied in any Collective Bargaining Agreement. To that extent, utmost
deference to its findings of reasonableness of any Collective Bargaining Agreement as the governing
agreement by the employees and management must be accorded due respect by this Court.
WHEREFORE, the instant petition is DISMISSED. The temporary restraining order issued on August
27, 1980, is LIFTED and SET ASIDE.
No pronouncement as to costs.
SO ORDERED.
Concepcion, Jr., (Chairman), Abad Santos, Escolin and Alampay, JJ., concur.
Footnotes
1 Pages 23-26, Rollo.
2 Previously Article 248 renumbered as Article 249 by Batas Pambansa Blg. 70, May
1, 1980.
3 P.D. 442, as amended.
4 Thru a letter attached thereto to BLR Resolution.
5 BLR-S-2-692-79.
6 Pampanga Bus Co. vs. Pambusco Employees, 68 Phil. 541.
7 National Labor Relations Board vs. Columbian Enameling & Stamping Co., 306
U.S. 292 '83 L. Ed. 660,59 Ct 501 (1939).
8 National Labor Relations Board vs. George Piling & Sons Co., 119 F. (2nd) 32.
9 Teller, II Labor Disputes & Collective Bargaining 889, citing Glove Cotton Mills vs.
NLRB 103 F. (2nd) 91.
10 Herald Delivery Carriers Union (PAFLU) vs. Herald Publications, Inc., 55 SCRA
713 (1974), citing NLRB vs. Piling & Sons, Co., 119 F. (2nd) 32 (1941).
11 55 SCRA 713 (1974).
12 78 SCRA 10 (1977), citing Prof. Archibald Cox, "The Duty to Bargain in Good
Faith", 71 Harv. Law Rev. 1401, 1405 (1934).
13 Rothenberg on Labor Relations, p. 435m citing NLRB vs. Boss Mfg. Co., 107 F.
(2nd) 574; NLRB vs. Sunshine Mining Co., 110 F (2nd) 780; NLRB vs. Condenser
Corp., 128 F. (2nd) 67.
38) Divine vs. Secretary GR No 91915 Sept. 11, 1992 213 SCRA 759
39)
THIRD DIVISION
[G.R. No. 91915. September 11, 1992.]
DIVINE WORD UNIVERSITY OF TACLOBAN, Petitioner, v. SECRETARY OF LABOR AND

EMPLOYMENT and DIVINE WORD UNIVERSITY EMPLOYEES UNION-ALU, Respondents.
Generosa R. Jacinto for Petitioner.
Joji L. Barrios for Private Respondent.

40)
41) D E C I S I O N
42)
43) ROMERO, J.:

44)
45) Assailed in this petition for certiorari for being violative of the "constitutional right of employees to
self-organization which includes the right to form, join or assist labor organizations of their own
choosing for purposes of collective bargaining," 1 are the Orders of May 23, 1989 and January 17,
1990 issued by then Secretary of Labor and Employment Franklin H. Drilon and Acting Secretary of
Labor and Employment Dionisio D. de la Serna, respectively. chan roble s virtual lawl ibra ry
Culled from the records are the following facts which led to the filing of the instant petition: c hanro b1es vi rtua l 1aw li bra ry
On September 6, 1984, Med-Arbiter Bienvenido C. Elorcha certified the Divine Word University
Employees Union (DWUEU) as the sole and exclusive bargaining agent of the Divine Word University
(University for brevity). On March 7, 1985, DWUEU submitted its collective bargaining proposals. On
March 26, 1985, the University replied and requested a preliminary conference to be held on May
28, 1985. However, two days before the scheduled conference or on May 26, 1985, DWUEU’s
resigned vice-president Mr. Brigido Urminita (or Urmeneta) wrote a letter addressed to the
University unilaterally withdrawing the CBA proposals. Consequently, the preliminary conference
was cancelled. 2
After almost three years, or on March 11, 1988, DWUEU, which had by then affiliated with the
Associated Labor Union, 3 requested a conference with the University for the purpose of continuing
the collective bargaining negotiations. 4 Not having heard from the University, DWUEU-ALU sent a
follow-up letter on March 23, 1988 reiterating its request for a conference and warning the
University against committing acts of interference through its various meetings with both the
academic and non-academic employees regarding their union affiliation and activities. Despite the
letter, the University persisted in maintaining silence.
On April 25, 1988, DWUEU-ALU filed with the National Conciliation and Mediation Board of the
Department of Labor and Employment a notice of strike on the grounds of bargaining deadlock and
unfair labor practice acts, specifically, refusal to bargain, discrimination and coercion on (sic)
employees. 5 The conferences which were held after the filing of the notice of strike led to the
conclusion of an agreement between the University and DWUEU-ALU on May 10, 1888 with the
following terms: chan roble s virtual law lib rary
"1. Union will submit their (sic) CBA proposals on Friday, May 13, 1988 for whatever action
management will take.
2. Union and management agrees (sic) to sit down and determine (sic) the number of employees
that will represent their bargaining unit.
3. Conciliation proceedings is (sic) temporarily suspended until the parties inform this office of
further development.
4. The issues of discrimination: re Ms. Colinayo and Ms. Cinco Flores is settled.
5. Issue (sic) on coercion and refusal to bargain shall be subject of continuing dialogue.
6. Atty. Jacinto shall be given 10 days notice in the next conciliation meeting." 6
However, it turned out that an hour before the May 10, 1988 agreement was concluded, the
University had filed a petition for certification election with the Region VIII office of the Department
of Labor and Employment. 7
On the other hand, on May 19, 1988, DWUEU-ALU, consonant with the agreement, submitted its
collective bargaining proposals. These were ignored by the University. Thereafter, through the
National Conciliation and Mediation Board (NCMB) of Region VIII, marathon conciliation conferences
were conducted but to no avail. Hence, on August 25, 1988, then Secretary of Labor Franklin M.
Drilon, exercising his powers under Art. 263(g) of the Labor Code, issued an Order assuming
jurisdiction over the labor dispute and directing all striking workers to report back to work within
twenty-four (24) hours and the management to accept them back under the same terms and
conditions prevailing prior to the work stoppage. The Secretary also designated the NCMB to hear
the case and to submit its report thereon. 8
On the same day, Med-Arbiter Rodolfo S. Milado, acting on the University’s petition for certification
election, issued an Order directing the conduct of a certification election to be participated in by
DWUEU-ALU and "no union," after he found the petition to be "well-supported in fact and in law." 9
Said Order prompted the DWUEU-ALU to file with the Secretary of Labor an urgent motion seeking
to enjoin Milado from further acting on the matter of the certification election. On September 20,
1988, the Labor Secretary granted said motion and directed Milado to hold in abeyance any and all
certification election proceedings at the University pending the resolution of the labor dispute. 10
The Labor Secretary’s Order, predicated on his extraordinary powers under Art. 263 (g) of the Labor
Code, conformed with this Court s Resolution of October 29, 1987 in the Bulletin Today cases (G.R.
Nos. 79276 and 79883) where the issue of strong disagreement among the parties on the question
of representation was deemed subsumed in the labor dispute certified for compulsory arbitration.
The Secretary added: jgc:chanrob les.com. ph
"Underscoring the necessity to conform with this settled doctrine is the fact that the dispute over
which this Office assumed jurisdiction arose from the alleged continued refusal by the University to
negotiate a CBA with the Union despite the latter’s certification as exclusive bargaining agent in
1984. Necessarily related thereto is the representativity issue raised by the University in its
certification election petition. The resolution of these issues in one proceeding is, in the words of the
Supreme Court, ‘meet and proper in view of the very special circumstances obtaining in this case,
and will prevent split jurisdiction and that multiplicity of proceedings which the law abhors’ (24
December 1987 [should be December 17, 1987] resolution of the Supreme Court in the Bulletin
Today cases, supra). chanrobles vi rtua l lawli bra ry
Moreover, to allow a certification election to proceed at this point in time might further rupture the
already strained labor-management relations pervading at the University. The assumption order
issued by this Office merely served as a temporary bond to hold together such a fragile relationship.
More importantly, the projected election hastily decreed would preempt the proper resolution of the
issues raised and pursued so zealously by the employees that prompted them to stage their strike."
11
The NCMB of Region VIII conducted hearings on the case from October 17-18, 1988. On October
26, 1988, the Divine Word University Independent Faculty and Employees Union (DWUIFEU), which
was registered earlier that day, filed a motion for intervention alleging that it had "at least 20% of
the rank and file employees" of the University. 12
Exercising once again his extraordinary powers under Art. 263(g) of the Labor Code, the Secretary
consolidated "the entire labor dispute including all incidents arising therefrom, or necessarily related
thereto" in his Order of May 23, 1989 13 and the following cases were "subsumed or consolidated to
the labor dispute" : the petition for certification election docketed as MED-ARB-Case No. 5-04-88,
the DWUEU’s complaint docketed as NLRC Case No. 8-0321-88, and the University’s complaint
docketed as NLRC Case No. 8-0323-88. Thus, in said Order of May 23, 1989, the Secretary of Labor
resolved these issues:" (1) whether there was refusal to bargain and an impasse in bargaining; (2)
whether the complaints for unfair labor practices against each other filed by both parties, including
the legality of the strike with the NLRC, which later on was subsumed by the assumption Order, are
with merits; and, (3) whether or not the certification election can be passed upon by this Office." cralaw virt ua1aw lib ra ry
On the first issue, the Secretary of Labor said: jgc:chanro bles. com.ph
"It is a matter of record that when the Union filed its Notice of Strike (Exh. A) two of the issues it
raised were bargaining deadlock and refusal to bargain. It is also worth mentioning that the CBA
proposals by the Union were submitted on March 7, 1985 (Exh. 9) after Med-Arbiter Bienvenido
Elorcha issued a certification election Order dated September 6, 1984 (Exh. 4). An examination of
the CBA proposals submitted by the Union of the University showed there was (sic) some
negotiations that has (sic) taken place as indicated on the handwritten notations made in the CBA
proposal (Exh. F). The said proposals include among others, union scope, union recognition, union
security, union rights, job security, practices and privileges, terms and conditions of work, leave of
absence, hours of work, compensation salary and wages, workers’ rights and safety, workers’
education, retirement longevity pay, strike and lockouts and grievance machinery.
The said CBA proposals were indorsed by DWU President to Atty. Generosa R. Jacinto, Divine Word
University legal counsel together with a copy of the Union CBA proposals. The submission of the
CBA proposals and the reply letter of the DWU counsel, dated March 26, 1985 to the Union indicated
that the CBA negotiations process was set into motion. DWU’s counsel even suggested that the
preliminary conference between the union and the university be scheduled on 28 May 1985 at 2:30
P.M. which unfortunately did not take place due to the alleged withdrawal of the CBA proposals.
Undeniably, the Union and the DWU have not been able to conclude a CBA since its certification on
6 September 1984 by then Med-Arbiter Bienvenido Elorcha. But the non-conclusion of a CBA within
one year, as in this case, does not automatically authorize the holding of a certification election
when it appears that a bargaining deadlock issue has been submitted to conciliation by the certified
bargaining agent. The records show that the Notice of Strike was filed by the Union on 25 April
1988, citing bargaining deadlock as one of the grounds (Annex ‘1’), while the Petition for
Certification Election was filed by the DWU on 10 May 1988. The filing of the notice of strike was
precipitated by the University’s act of not replying to the Union’s letters of March 11 and March 23,
1988.
This being the case, Section 3, Rule V, Book V of the Rules Implementing the Labor Code applies
and we quote: chanrob les.co m:cra law:red
‘Sec. 3. When to file. In the absence of a collective bargaining agreement submitted in accordance
with Article 231 of the Code, a petition for certification election may be filed at any time. However,
no certification election may be held within one year from the date of issuance of declaration of a
final certification election result. Neither may a representation question be entertained it (sic) before
the filing of a petition for certification election, a bargaining deadlock to which an incumbent or
certified bargaining agent is a party has been submitted to conciliation or arbitration or had become
the subject of a valid notice of strike or lockout.’
Clearly, a bargaining deadlock exists and as a matter of fact this is being conciliated by the National
Conciliation and Mediation Board at the time the University filed its Petition for Certification Election
on 10 May 1988. In fact the deadlock remained unresolved and was in fact mutually agreed upon to
be conciliated further by the NCMB as per items 1 and 5 of the ‘Agreement’ (Exhibit ‘L’).
The aforequoted rule clearly barred the Med-Arbiter from further entertaining the petition for
certification election. Furthermore, the various communications sent to the University by the Union
prior to the filing of the notice of strike was enough opportunity for the former to raise the issue of
representation if it really casts doubt to the majority status of the Union. More importantly, if DWU
indeed doubted the status of the union, how come it entered into an agreement with the latter on
May 10, 1988. Apparently, the move to file the petition on the same day was an afterthought on the
part of the University which this Office considers as fatal." 14
The same Order dismissed not only the case filed by DWUEU-ALU for unfair labor practice on the
ground of the union’s failure to prove the commission of the unfair labor practice acts specifically
complained of (NLRC Case No. 8-0321-88) but also the complaint filed by the University for unfair
labor practices and illegal strike for "obvious lack of merit brought about by its utter failure to
submit evidence" (NLRC Case No. 8-0323-88).
Citing the Bulletin Today cases, the said Order pronounced as untenable the University s claim that
the assumption Order earlier issued by the Office of the Secretary of Labor merely held in abeyance
the holding of a certification election and that the representation issue was not deemed consolidated
by virtue of the said assumption Order. Accordingly, the Order has this dispositive portion: jgc:cha nrob les.co m.ph
"WHEREFORE, ALL THE FOREGOING PREMISES CONSIDERED, the Divine Word University of
Tacloban and the Divine Word University Employees Union are hereby directed to enter into a
collective bargaining agreement by adopting the Union’s CBA proposals sent to the DWU President
on 19 May 1988 (Exhibit ‘6’). DWU is hereby warned that any unwarranted delay in the execution of
the collective bargaining agreement will be construed as an unfair labor practice act. Moreover, the
petition for certification election filed by the University is hereby dismissed for lack of merit and the
Order of Med-Arbiter Rodolfo Milado set aside. Likewise, NLRC CASES Nos. 8-0321-88 and 8-0323
filed by the Union and the DWU, respectively, are hereby dismissed for lack of merit.
SO ORDERED." 15
The University filed a motion for the reconsideration of said Order. It was opposed by the DWUEU-
ALU. However, since on May 5, 1989 the DWUEU-ALU had filed a second notice of strike charging
the University with violation of the return-to-work order of the Secretary of Labor and unfair labor
practices such as dismissal of union officers, coercion of employees and illegal suspension, 16 the
Office of the Secretary called for a series of conciliation and mediation conferences between the
parties. At the July 5, 1989 conference, the University agreed to submit its proposals on how to
settle amicably the labor dispute on or before July 17, 1989.
On said date, however, the University failed to appear. Instead, its representative phoned in a
request for the resetting of the conference purportedly because its Board of Directors had failed to
muster a quorum. Hence, after so informing ALU’s Eastern Visayas Vice-President, the conference
was rescheduled for July 19, 1989. The University once again failed to appear. chanroble s virtualawl ibra ry cha nrob les.co m:chan rob les.com.p h
In view of the University’s intransigence, the DWUEU-ALU pursued its second notice of strike on
November 24, 1989. Four days later, the University filed with the Office of the Secretary of Labor a
motion praying that said Office assume jurisdiction over the dispute or certify the same to the NLRC
for compulsory arbitration on the ground that the strike affected not only the University but also its
other academic and non-academic employees, the students and their parents. On December 4,
1989, the Office of the Secretary of Labor received a Resolution passed by the students of the
University urging said Office’s assumption of jurisdiction over the labor dispute and the earliest
resolution of the case.
Consequently, on December 29, 1989, Secretary Drilon issued an Order reiterating the August 28,
1988 Order which assumed jurisdiction over the labor dispute. He ordered all striking workers to
return to work within 24 hours and the University to accept them back under the same terms and
conditions of employment; deemed the issues raised in the May 5, 1989 notice of strike as
"subsumed in this case" ; ordered the Director of Regional Office No. VIII to hear the issues raised
in said notice of strike and to submit his findings and recommendations within ten days from
submission of the case by the parties, and enjoined the parties to cease and desist from any act
that may "aggravate the employer-employee relationship." cralaw virt ua1aw li bra ry
On January 17, 1990, Acting Secretary of Labor Dionisio L. de la Serna, "dismissed" for lack of merit
the University’s motion for reconsideration and affirmed the Order of May 23, 1989. He noted the
fact that the March 7, 1985 collective bargaining proposals of the DWUEU had not been validly
withdrawn as the union’s Vice-President had resigned and the withdrawal was signed only by three
of the eight members of the Executive Board of said union. Granting that the withdrawal was valid,
the Acting Secretary believed that it did not "exculpate the University from the duty to bargain with
the Union" because the collective bargaining processes had been "set in motion from the time the
CBA proposals was (sic) received by the University until the impasse took place on account of its
failure to reply to the Union’s letters pursuing its CBA Proposals dated March 11 and 23, 1988." cralaw virtua 1aw lib rary
On the University’s assertion that no negotiations took place insofar as the March 7, 1985 collective
bargaining proposals are concerned, the Acting Secretary found that: jgc:chanrobles. com.ph
". . . The records indicate otherwise Conciliation meetings were conducted precisely to discuss the
CBA proposals the Union submitted to the University on March 7, 1985. As a matter of fact, the
University admitted the existence of the deadlock when a provision was incorporated in the
agreement it signed on May 10, 1988 with the Union which reads: chanro b1es vi rtua l 1aw lib ra ry
‘a. That on the matter of Bargaining Deadlock —
1. Union will submit their (renewed) CBA proposals on Friday May 13, 1988 for whatever action
management will take.
2. Union and Management agree to sit down and determine the number of employees that will
represent (constitute) their bargaining unit;
x x x’
On account of the deadlock regarding the March 7, 1985 CBA proposals, it was agreed that the
Union submit a renewed CBA proposal which it did on May 19, 1988. The records indicate that no
response was made by the University. The uncooperative posture of the University to respond and
continue with the negotiations could very well be explained when one (1) hour prior to the start of
the conciliation on May 10, 1988, the University filed a Petition for Certification with (sic) Regional
Office. The surreptitious filing of the petition and at the same time cunningly entering into an
agreement which required the Union to submit a renewed CBA proposal, is patently negotiating in
bad faith. The University should have candidly and timely raised the issue of representation, if it
believed that such issue was valid, not by entering into an agreement. The May 10, 1988
Agreement only served to falsely heighten the expectations of the Union and this Office that a
mutually acceptable settlement of the dispute was in the offing. This Office cannot tolerate such
actuations by the University." 17
The Acting Secretary then concluded that for reneging on the agreement of May 10, 1988 and for its
"reluctance and subscription to legal delay," the University should be "declared in default." He also
maintained that since under the circumstances the University cannot claim deprivation of due
process, the Office of the Secretary of Labor may rightfully impose the Union’s May 19, 1988
collective bargaining agreement proposals motu proprio. On the University’s contention that the
motion for intervention of the DWU-IFEU was not resolved, the Acting Secretary ruled that said
motion was in effect denied when the petition for certification election filed by the University was
dismissed in the Order of May 23, 1989. chanrobles vi rt ual lawli bra ry
Hence, the University had recourse to instant petition.
In its petition for certiorari and prohibition with preliminary injunction filed on February 9, 1990, the
University raises as grounds therefor the following: j gc:cha nrob les.com .ph
"A. Respondent Secretary committed grave and patent abuse of discretion amounting to lack of
jurisdiction in issuing his order dated 17 January 1990 finally denying petitioner’s motion for
reconsideration in the face of the order dated 29 December 1989 and subsequent acts of DOLE
official subsuming the second notice of strike with the first notice of strike.
B. In the absence of a certified CBA and there having been no certification election held in petitioner
unit for more than five (5) years, a certification election is mandatory.
C. Respondent Secretary committed grave and patent abuse of discretion in issuing his orders dated
23 May 1989 and 17 January 1990 disregarding evidence on record, provisions of law and
established jurisprudence.
D. Petitioner was denied due process." 18
Citing the dispositive portion of the December 29, 1989 Order of the Secretary of Labor which
states that the issues raised in the May 5, 1989 notice of strike "are ordered subsumed in this case"
and elaborating on the meaning of the word "subsume," i.e., "to include within a larger class, group,
order, etc.," 19 the petitioner University argues that the Secretary of Labor "cannot resolve
petitioner’s and (intervenor) DWU-IFEU’s motions for reconsideration (in the NS. 1) of the Order
dated 23 May 1989 until the proceedings in the subsumed NS. 2 are terminated." It opines that
since the Regional Director is an extension of the Secretary of Labor, the latter should have waited
for the recommendation of the former on the issues in notices of strike nos. 1 and 2 before the he
issued the Order of January 17, 1990.
We agree with the Acting Secretary of Labor’s observation that the action for intervention had in
effect been denied by the dismissal of the petition for certification election in the May 23, 1989
Order. The sub silencio treatment of the motion for intervention in said Order does not mean that
the motion was overlooked. It only means, as shown by the findings of facts in the same Order, that
there was no necessity for the holding of a certification election wherein the DWU-IFEU could
participate. In this regard, petitioner’s undue interest in the resolution of the DWU-IFEU’s motion for
intervention becomes significant since a certification election is the sole concern of employees
except where the employer itself has to file a petition for certification election. But once an
employer has filed said petition, as the petitioner did in this case, its active role ceases and it
becomes a mere bystander. Any uncalled-for concern on the part of the employer may give rise to
the suspicion that it is batting for a company union. 20
Petitioner’s contention that the Acting Secretary of Labor should have deferred the issuance of the
Order of January 17, 1990 until after his receipt of the Regional Director’s recommendation on the
notices of strike is, under the circumstances, untenable. Ideally, a single decision or order should
settle all controversies resulting from a labor dispute. This is in consonance with the principle of
avoiding multiplicity of suits. However, the exigencies of a case may also demand that some
matters be threshed out and resolved ahead of the others. Any contrary interpretation of the
Secretary of Labor’s powers under Art. 263(g) of the Labor Code on this matter would only result in
confusion and delay in the resolution of the manageable aspects of the labor dispute. chanrob les lawl ibra ry : red nad
In this case, resolution of the motion for reconsideration at the earliest possible time was urgently
needed to set at rest the issues regarding the first notice of strike, the certification election and the
unfair labor practice cases filed by the University and the DWUEU-ALU. The nature of the business
of the University demanded immediate and effective action on the part of the respondent public
officials. Otherwise, not only the contending parties in the dispute would be adversely affected but
more importantly, the studentry and their parents. It should be emphasized that on January 17,
1990, the second notice of strike could not have been resolved as yet considering that at that time,
Regional Director Teddy S. Cabeltes was still conducting the conference between the parties in
pursuance of the directive in the Order of December 19, 1989. The Secretary, or for that matter,
the Acting Secretary, could not have intended the efforts of the Regional Director to be inutile or
fruitless. Thus, when he set aside the issues raised in the second notice of strike, the Acting
Secretary was acting in accordance with the exigencies of the circumstances of the case. Hardly can
it be said to be an abuse of his discretion.
On the issue of whether or not a certification election should have been ordered by the Secretary of
Labor, pertinent are the following respective provisions of the Labor Code and Rule V, Book V of the
Implementing Rules and Regulations of the same Code: jgc:chanrobles. com.ph
"ART. 258. When an employer may file petition. — When requested to bargain collectively, an
employer may petition the Bureau for an election. If there is no existing certified collective
bargaining agreement in the unit, the Bureau shall, after hearing, order a certification election.
All certification cases shall be decided within twenty (20) working days.
The Bureau shall conduct a certification election within twenty (20) days in accordance with the
rules and regulations prescribed by the Secretary of Labor.
Sec. 3. When to file. — In the absence of a collective bargaining agreement duly registered in
accordance with Article 231 of the Code, a petition for certification election may be filed at any time.
However, no certification election may be held within one year from the date of issuance of a final
certification election result. Neither may a representation question be entertained if, before the filing
of a petition for certification election, a bargaining deadlock to which an incumbent or certified
bargaining agent is a party had been submitted to conciliation or arbitration or had become the
subject of valid notice of strike or lockout. (Emphasis supplied)
If a collective bargaining agreement has been duly registered in accordance with Article 231 of the
Code, a petition for certification election or a motion for intervention can only be entertained within
sixty (60) days prior to the expiry date of such agreement." cralaw virtua 1aw lib rary
These provisions make it plain that in the absence of a collective bargaining agreement, an
employer who is requested to bargain collectively may file a petition for certification election any
time except upon a clear showing that one of these two instances exists: (a) the petition is filed
within one year from the date of issuance of a final certification election result or (b) when a
bargaining deadlock had been submitted to conciliation or arbitration or had become the subject of
a valid notice of strike or lockout.
While there is no question that the petition for certification election was filed by the herein petitioner
after almost four years from the time of the certification election and, therefore, there is no
question as to the timeliness of the petition, the problem appears to lie in the fact that the
Secretary of Labor had found that a bargaining deadlock exists. chanro bles law lib rary : red nad
A "deadlock" is defined as the "counteraction of things producing entire stoppage: a state of inaction
or of neutralization caused by the opposition of persons or of factions (as in government or a voting
body): standstill." 21 There is a deadlock when there is a "complete blocking or stoppage resulting
from the action of equal and opposed forces; as, the deadlock of a jury or legislature." 22 The word
is synonymous with the word impasse 23 which, within the meaning of the American federal labor
laws, "presupposes reasonable effort at good faith bargaining which, despite noble intentions, does
not conclude in agreement between the parties." 24
A thorough study of the records reveals that there was no "reasonable effort at good faith
bargaining" specially on the part of the University. Its indifferent attitude towards collective
bargaining inevitably resulted in the failure of the parties to arrive at an agreement. As it was
evident that unilateral moves were being undertaken only by the DWUEU-ALU, there was no
"counteraction" of forces or an impasse to speak of. While collective bargaining should be initiated
by the union, there is a corresponding responsibility on the part of the employer to respond in some
manner to such acts. This is clear from the provisions of the Labor Code Art. 250(a) of which
states:jgc:chanrob les.co m.ph
"ART. 250. Procedure in collective bargaining. — The following procedures shall be observed in
collective bargaining: cha nrob 1es vi rtua l 1aw lib rary
(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other
party with a statement of its proposals. The other party shall make a reply thereto not later than
ten (10) calendar days from receipt of such notice.
(b) Should differences arise on the basis of such notice and reply, either party may request for a
conference which shall begin not later than ten (10) calendar days from the date of request.
(c) If the dispute is not settled, the Board shall intervene upon request of either or both parties or
at its own initiative and immediately call the parties to conciliation meetings. The Board shall have
the power to issue subpoenas requiring the attendance of the parties to such meetings. It shall be
the duty of the parties to participate fully and promptly in the conciliation meetings the Board may
call;
(d) During the conciliation proceedings in the Board, the parties are prohibited from doing any act
which may disrupt or impede the early settlement of the disputes; and chanro bles. com.ph : vi rtua l law lib rary
(e) The Board shall exert all efforts to settle disputes amicably and encourage the parties to submit
their case to a voluntary arbitrator." cralaw virtua1aw li bra ry
Considering the procedure outlined above, the Court cannot help but notice that the DWUEU was
not entirely blameless in the matter of the delay in the bargaining process. While it is true that as
early as March 7, 1985, said union had submitted its collective bargaining proposals and that, its
subsequent withdrawal by the DWUEU Vice-President being unauthorized and therefore ineffective,
the same proposals could be considered as subsisting, the fact remains that said union remained
passive for three years. The records do not show that during this three-year period, it exerted any
effort to pursue collective bargaining as a means of attaining better terms of employment.
It was only after its affiliation with the ALU that the same union, through the ALU Director for
Operations, requested an "initial conference" for the purpose of collective bargaining. 25 That the
DWUEU abandoned its collective bargaining proposals prior to its affiliation with ALU is further
confirmed by the fact that in the aforequoted May 10, 1988 agreement with the University, said
Union bound itself to submit a new set of proposals on May 13, 1988. Under the circumstances, the
agreement of May 10, 1988 may as well be considered the written notice to bargain referred to in
the aforequoted Art. 250(a) of the Labor Code, which thereby set into motion the machinery for
collective bargaining, as in fact, on May 19, 1988, DWUEU-ALU submitted its collective bargaining
proposals.
Be that as it may, the Court is not inclined to rule that there has been a deadlock or an impasse in
the collective bargaining process. As the Court earlier observed, there has not been a "reasonable
effort at good faith bargaining" on the part of the University. While DWUEU-ALU was opening all
possible avenues for the conclusion of an agreement, the record is replete with evidence on the
University’s reluctance and thinly disguised refusal to bargain with the duly certified bargaining
agent, such that the inescapable conclusion is that the University evidently had no intention of
bargaining with it. Thus, while the Court recognizes that technically, the University has the right to
file the petition for certification election as there was no bargaining deadlock to speak of, to grant
its prayer that the herein assailed Orders be annulled would put an unjustified premium on bad faith
bargaining.
Bad faith on the part of the University is further exemplified by the fact that an hour before the start
of the May 10, 1988 conference, it surreptitiously filed the petition for certification election. And yet
during said conference, it committed itself to "sit down" with the Union. Obviously, the University
tried to preempt the conference which would have legally foreclosed its right to file the petition for
certification election. In so doing, the University failed to act in accordance with Art. 252 of the
Labor Code which defines the meaning of the duty to bargain collectively as "the performance of a
mutual obligation to meet and convene promptly and expeditiously in good faith." Moreover, by
filing the petition for certification election while agreeing to confer with the DWUEU-ALU, the
University violated the mandate of Art. 19 of the Civil Code that" (e)very person must, in the
exercise of his rights and in the performance of his duties, act with justice, give everyone his due,
and observe honesty and good faith." cralaw virtua 1aw lib rary
Moreover, the University’s unscrupulous attitude towards the DWUEU-ALU is also betrayed by its
belated questioning of the status of the said union. The communications between them afforded the
University ample opportunity to raise the issue of representation if indeed it was doubtful of the
DWUEU-ALU’s status as a majority union, but it failed to do so. On the other hand, in the agreement
of May 10, 1988, the University even agreed "to sit down and determine the number of employees
that will represent their bargaining unit." This clearly indicates that the University recognized the
DWUEU-ALU as the bargaining representative of the employees and is, therefore, estopped from
questioning the majority status of the said union. chanrobles.c om.ph : vi rtual law lib rary
Hence, petitioner’s contention that the DWUEU-ALU’s proposals may not be unilaterally imposed on
it on the ground that a collective bargaining agreement is a contract wherein the consent of both
parties is indispensable is devoid of merit. A similar argument had already been disregarded in the
case of Kiok Loy v. NLRC, 26 where we upheld the order of the NLRC declaring the union’s draft CBA
proposal as the collective agreement which should govern the relationship between the parties. Kiok
Loy v. NLRC is applicable in the instant case considering that the facts therein have also been
indubitably established in this case. These factors are: (a) the union is the duly certified bargaining
agent; (b) it made a definite request to bargain and submitted its collective bargaining proposals,
and (c) the University made no counter proposal whatsoever. As we said in Kiok Loy," [a]
company’s refusal to make counter proposal if considered in relation to the entire bargaining
process, may indicate bad faith and this is especially true where the Union’s request for a counter
proposal is left unanswered." 27 Moreover, the Court added in the same case that "it is not
obligatory upon either side of a labor controversy to precipitately accept or agree to the proposals of
the other. But an erring party should not be tolerated and allowed with impunity to resort to
schemes feigning negotiations by going through empty gestures." 28
That being the case, the petitioner may not validly assert that its consent should be a primordial
consideration in the bargaining process. By its acts, no less than its inaction which bespeak its
insincerity, it has forfeited whatever rights it could have asserted as an employer. We, therefore,
find it superfluous to discuss the two other contentions in its petition.
WHEREFORE, the instant petition is hereby DISMISSED for lack of merit. This decision is
immediately executory. Costs against the petitioner.
SO ORDERED.
Bidin, Davide, Jr. and Melo, JJ., concur.
Gutierrez, Jr., J., is on leave.

46) Endnotes:
47)
48)
1. Petition, p. 3; Rollo, p. 4.
2. Rollo, p. 101.
3. DWUEU became an affiliate of ALU on February 9, 1988 upon the issuance of Charter
Certificate No. 347. Rollo, p. 73.
4. DWUEU-ALU’s Comment, p. 2; Rollo, p. 298.

5. Annex "A" of Petition; Rollo, p. 63.
6. Annex "B-1" of Petition; Rollo, p. 66.
7. Annex "B" of Petition; Rollo, pp. 64-65.
8. Annex "C" of Petition; Rollo, pp. 67-69.
9. Annex "D" of Petition; Rollo, pp. 70-77.
10. Annex "E" of Petition; Rollo, p. 78-79.
11. Id.
12. Annex "G" of Petition; Rollo, pp. 97-98.
13. Annex "H" of Petition; Rollo, pp. 100-104.
14. Ibid., pp. 102-103.
15. Ibid., p. 104.
16. Rollo, p. 177.
17. Rollo, pp. 201-202.
20. See: Trade Unions of the Philippines and Allied Services v. Trajano, G.R. No. 61153,
January 17, 1983, 120 SCRA 64, 66.
21. Webster’s Third New International Dictionary, 1986 Ed., p. 580.
22. Webster’s New Twentieth Century Dictionary, 2nd Ed., p. 465.
23. William C. Burton’s Legal Thesaurus, 1980 Ed., p. 133.
24. N.L.R.B. v. Bancroft, 635 F.2d 492 (1981).
25. Rollo, p. 154.
26. G.R. No. 54334, January 22, 1986, 141 SCRA 179.
27. Ibid., p. 186.
28. Ibid., p. 188.
39) General vs. CA GR No. 146728 Feb. 11, 2004
SECOND DIVISION
[G.R. No. 146728. February 11, 2004]

GENERAL MILLING CORPORATION, petitioner, vs. HON. COURT OF
APPEALS, GENERAL MILLING CORPORATION INDEPENDENT
LABOR UNION (GMC-ILU), and RITO MANGUBAT, respondents.
DECISION
QUISUMBING, J.:
Before us is a petition for certiorari assailing the decision[1] dated July 19, 2000, of
the Court of Appeals in CA-G.R. SP No. 50383, which earlier reversed the
decision[2]dated January 30, 1998 of the National Labor Relations Commission (NLRC)
in NLRC Case No. V-0112-94.
The antecedent facts are as follows:
In its two plants located at Cebu City and Lapu-Lapu City, petitioner General Milling
Corporation (GMC) employed 190 workers. They were all members of private
respondent General Milling Corporation Independent Labor Union (union, for brevity), a
duly certified bargaining agent.
On April 28, 1989, GMC and the union concluded a collective bargaining agreement
(CBA) which included the issue of representation effective for a term of three years.The
CBA was effective for three years retroactive to December 1, 1988. Hence, it would
expire on November 30, 1991.
On November 29, 1991, a day before the expiration of the CBA, the union sent
GMC a proposed CBA, with a request that a counter-proposal be submitted within ten
(10) days.
As early as October 1991, however, GMC had received collective and individual
letters from workers who stated that they had withdrawn from their union membership,
on grounds of religious affiliation and personal differences. Believing that the union no
longer had standing to negotiate a CBA, GMC did not send any counter-proposal.
On December 16, 1991, GMC wrote a letter to the unions officers, Rito Mangubat
and Victor Lastimoso. The letter stated that it felt there was no basis to negotiate with a
union which no longer existed, but that management was nonetheless always willing to
dialogue with them on matters of common concern and was open to suggestions on
how the company may improve its operations.
In answer, the union officers wrote a letter dated December 19, 1991 disclaiming
any massive disaffiliation or resignation from the union and submitted a manifesto,
signed by its members, stating that they had not withdrawn from the union.
On January 13, 1992, GMC dismissed Marcia Tumbiga, a union member, on the
ground of incompetence. The union protested and requested GMC to submit the matter
to the grievance procedure provided in the CBA. GMC, however, advised the union to
refer to our letter dated December 16, 1991.[3]
Thus, the union filed, on July 2, 1992, a complaint against GMC with the NLRC,
Arbitration Division, Cebu City. The complaint alleged unfair labor practice on the part of
GMC for: (1) refusal to bargain collectively; (2) interference with the right to self-
organization; and (3) discrimination. The labor arbiter dismissed the case with the
recommendation that a petition for certification election be held to determine if the union
still enjoyed the support of the workers.
The union appealed to the NLRC.
On January 30, 1998, the NLRC set aside the labor arbiters decision. Citing Article
253-A of the Labor Code, as amended by Rep. Act No. 6715, [4] which fixed the terms of
a collective bargaining agreement, the NLRC ordered GMC to abide by the CBA draft
that the union proposed for a period of two (2) years beginning December 1, 1991, the
date when the original CBA ended, to November 30, 1993. The NLRC also ordered
GMC to pay the attorneys fees.[5]
In its decision, the NLRC pointed out that upon the effectivity of Rep. Act No. 6715,
the duration of a CBA, insofar as the representation aspect is concerned, is five (5)
years which, in the case of GMC-Independent Labor Union was from December 1, 1988
to November 30, 1993. All other provisions of the CBA are to be renegotiated not later
than three (3) years after its execution. Thus, the NLRC held that respondent union
remained as the exclusive bargaining agent with the right to renegotiate the economic
provisions of the CBA. Consequently, it was unfair labor practice for GMC not to enter
into negotiation with the union.
The NLRC likewise held that the individual letters of withdrawal from the union
submitted by 13 of its members from February to June 1993 confirmed the pressure
exerted by GMC on its employees to resign from the union. Thus, the NLRC also found
GMC guilty of unfair labor practice for interfering with the right of its employees to self-
organization.
With respect to the unions claim of discrimination, the NLRC found the claim
unsupported by substantial evidence.
On GMCs motion for reconsideration, the NLRC set aside its decision of January
30, 1998, through a resolution dated October 6, 1998. It found GMCs doubts as to the
status of the union justified and the allegation of coercion exerted by GMC on the
unions members to resign unfounded. Hence, the union filed a petition
for certiorari before the Court of Appeals. For failure of the union to attach the required
copies of pleadings and other documents and material portions of the record to support
the allegations in its petition, the CA dismissed the petition on February 9, 1999. The
same petition was subsequently filed by the union, this time with the necessary
documents. In its resolution dated April 26, 1999, the appellate court treated the refiled
petition as a motion for reconsideration and gave the petition due course.
On July 19, 2000, the appellate court rendered a decision the dispositive portion of
which reads:
WHEREFORE, the petition is hereby GRANTED. The NLRC Resolution of October

6, 1998 is hereby SET ASIDE, and its decision of January 30, 1998 is, except with
respect to the award of attorneys fees which is hereby deleted, REINSTATED. [6]
A motion for reconsideration was seasonably filed by GMC, but in a resolution dated
October 26, 2000, the CA denied it for lack of merit.
Hence, the instant petition for certiorari alleging that:
I
THE COURT OF APPEALS DECISION VIOLATED THE CONSTITUTIONAL RULE
THAT NO DECISION SHALL BE RENDERED BY ANY COURT WITHOUT
EXPRESSING THEREIN CLEARLY AND DISTINCTLY THE FACTS AND THE LAW
ON WHICH IT IS BASED.
II
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN
REVERSING THE DECISION OF THE NATIONAL LABOR RELATIONS
COMMISSION IN THE ABSENCE OF ANY FINDING OF SUBSTANTIAL ERROR OR
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION.
III
THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN NOT
APPRECIATING THAT THE NLRC HAS NO JURISDICTION TO DETERMINE THE
TERMS AND CONDITIONS OF A COLLECTIVE BARGAINING AGREEMENT.[7]
Thus, in the instant case, the principal issue for our determination is whether or not
the Court of Appeals acted with grave abuse of discretion amounting to lack or excess
of jurisdiction in (1) finding GMC guilty of unfair labor practice for violating the duty to
bargain collectively and/or interfering with the right of its employees to self-organization,
and (2) imposing upon GMC the draft CBA proposed by the union for two years to begin
from the expiration of the original CBA.
On the first issue, Article 253-A of the Labor Code, as amended by Rep. Act No.
6715, states:
ART. 253-A. Terms of a collective bargaining agreement. Any Collective

Bargaining Agreement that the parties may enter into shall, insofar as the
representation aspect is concerned, be for a term of five (5) years. No petition
questioning the majority status of the incumbent bargaining agent shall be entertained
and no certification election shall be conducted by the Department of Labor and
Employment outside of the sixty-day period immediately before the date of expiry of
such five year term of the Collective Bargaining Agreement. All other provisions of
the Collective Bargaining Agreement shall be renegotiated not later than three (3)
years after its execution....
The law mandates that the representation provision of a CBA should last for five
years. The relation between labor and management should be undisturbed until the last
60 days of the fifth year. Hence, it is indisputable that when the union requested for a
renegotiation of the economic terms of the CBA on November 29, 1991, it was still the
certified collective bargaining agent of the workers, because it was seeking said
renegotiation within five (5) years from the date of effectivity of the CBA on December 1,
1988. The unions proposal was also submitted within the prescribed 3-year period from
the date of effectivity of the CBA, albeit just before the last day of said period. It was
obvious that GMC had no valid reason to refuse to negotiate in good faith with the
union. For refusing to send a counter-proposal to the union and to bargain anew on the
economic terms of the CBA, the company committed an unfair labor practice under
Article 248 of the Labor Code, which provides that:
ART. 248. Unfair labor practices of employers. It shall be unlawful for an employer
to commit any of the following unfair labor practice:
...
(g) To violate the duty to bargain collectively as prescribed by this Code;
...
Article 252 of the Labor Code elucidates the meaning of the phrase duty to bargain
collectively, thus:
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....
We have held that the crucial question whether or not a party has met his statutory
duty to bargain in good faith typically turn$ on the facts of the individual case.[8] There is
no per se test of good faith in bargaining.[9] Good faith or bad faith is an inference to be
drawn from the facts.[10] The effect of an employers or a unions actions individually is not
the test of good-faith bargaining, but the impact of all such occasions or actions,
considered as a whole.[11]
Under Article 252 abovecited, both parties are required to perform their mutual
obligation to meet and convene promptly and expeditiously in good faith for the purpose
of negotiating an agreement. The union lived up to this obligation when it presented
proposals for a new CBA to GMC within three (3) years from the effectivity of the
original CBA. But GMC failed in its duty under Article 252. What it did was to devise a
flimsy excuse, by questioning the existence of the union and the status of its
membership to prevent any negotiation.
It bears stressing that the procedure in collective bargaining prescribed by the Code
is mandatory because of the basic interest of the state in ensuring lasting industrial
peace. Thus:
ART. 250. Procedure in collective bargaining. The following procedures shall be

observed in collective bargaining:
(a) When a party desires to negotiate an agreement, it shall serve a written notice upon
the other party with a statement of its proposals. The other party shall make a reply
thereto not later than ten (10) calendar days from receipt of such
notice. (Underscoring supplied.)
GMCs failure to make a timely reply to the proposals presented by the union is
indicative of its utter lack of interest in bargaining with the union. Its excuse that it felt
the union no longer represented the workers, was mainly dilatory as it turned out to be
utterly baseless.
We hold that GMCs refusal to make a counter-proposal to the unions proposal for
CBA negotiation is an indication of its bad faith. Where the employer did not even
bother to submit an answer to the bargaining proposals of the union, there is a clear
evasion of the duty to bargain collectively.[12]
Failing to comply with the mandatory obligation to submit a reply to the unions
proposals, GMC violated its duty to bargain collectively, making it liable for unfair labor
practice. Perforce, the Court of Appeals did not commit grave abuse of discretion
amounting to lack or excess of jurisdiction in finding that GMC is, under the
circumstances, guilty of unfair labor practice.
Did GMC interfere with the employees right to self-organization? The CA found that
the letters between February to June 1993 by 13 union members signifying their
resignation from the union clearly indicated that GMC exerted pressure on its
employees. The records show that GMC presented these letters to prove that the union
no longer enjoyed the support of the workers. The fact that the resignations of the union
members occurred during the pendency of the case before the labor arbiter shows
GMCs desperate attempts to cast doubt on the legitimate status of the union. We agree
with the CAs conclusion that the ill-timed letters of resignation from the union members
indicate that GMC had interfered with the right of its employees to self-organization.
Thus, we hold that the appellate court did not commit grave abuse of discretion in
finding GMC guilty of unfair labor practice for interfering with the right of its employees
to self-organization.
Finally, did the CA gravely abuse its discretion when it imposed on GMC the draft
CBA proposed by the union for two years commencing from the expiration of the
original CBA?
The Code provides:
ART. 253. Duty to bargain collectively when there exists a collective bargaining
agreement. ....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 [prior to its expiration date] and/or until a new
agreement is reached by the parties. (Underscoring supplied.)
The provision mandates the parties to keep the status quo while they are still in the
process of working out their respective proposal and counter proposal. The general rule
is that when a CBA already exists, its provision shall continue to govern the relationship
between the parties, until a new one is agreed upon. The rule necessarily presupposes
that all other things are equal. That is, that neither party is guilty of bad faith. However,
when one of the parties abuses this grace period by purposely delaying the bargaining
process, a departure from the general rule is warranted.
In Kiok Loy vs. NLRC,[13] we found that petitioner therein, Sweden Ice Cream Plant,
refused to submit any counter proposal to the CBA proposed by its employees certified
bargaining agent. We ruled that the former had thereby lost its right to bargain the terms
and conditions of the CBA. Thus, we did not hesitate to impose on the erring company
the CBA proposed by its employees union - lock, stock and barrel. Our findings in Kiok
Loy are similar to the facts in the present case, to wit:
petitioner Companys approach and attitude stalling the negotiation by a series of

postponements, non-appearance at the hearing conducted, and undue delay in
submitting its financial statements, lead to no other conclusion except that it is
unwilling to negotiate and reach an agreement with the Union. Petitioner has not at
any instance, evinced good faith or willingness to discuss freely and fully the claims
and demands set forth by the Union much less justify its objection thereto. [14]
Likewise, in Divine Word University of Tacloban vs. Secretary of Labor and

Employment,[15] petitioner therein, Divine Word University of Tacloban, refused to
perform its duty to bargain collectively. Thus, we upheld the unilateral imposition on the
university of the CBA proposed by the Divine Word University Employees Union. We
said further:
That being the said case, the petitioner may not validly assert that its consent should
be a primordial consideration in the bargaining process. By its acts, no less than its
action which bespeak its insincerity, it has forfeited whatever rights it could have
asserted as an employer. [16]
Applying the principle in the foregoing cases to the instant case, it would be unfair to
the union and its members if the terms and conditions contained in the old CBA would
continue to be imposed on GMCs employees for the remaining two (2) years of the
CBAs duration. We are not inclined to gratify GMC with an extended term of the old
CBA after it resorted to delaying tactics to prevent negotiations. Since it was GMC
which violated the duty to bargain collectively, based on Kiok Loy and Divine Word
University of Tacloban, it had lost its statutory right to negotiate or renegotiate the terms
and conditions of the draft CBA proposed by the union.
We carefully note, however, that as strictly distinguished from the facts of this case,
there was no pre-existing CBA between the parties in Kiok Loy and Divine Word
University of Tacloban. Nonetheless, we deem it proper to apply in this case the
rationale of the doctrine in the said two cases. To rule otherwise would be to allow GMC
to have its cake and eat it too.
Under ordinary circumstances, it is not obligatory upon either side of a labor
controversy to precipitately accept or agree to the proposals of the other. But an erring
party should not be allowed to resort with impunity to schemes feigning negotiations by
going through empty gestures.[17] Thus, by imposing on GMC the provisions of the draft
CBA proposed by the union, in our view, the interests of equity and fair play were
properly served and both parties regained equal footing, which was lost when GMC
thwarted the negotiations for new economic terms of the CBA.
The findings of fact by the CA, affirming those of the NLRC as to the
reasonableness of the draft CBA proposed by the union should not be disturbed since
they are supported by substantial evidence. On this score, we see no cogent reason to
rule otherwise. Hence, we hold that the Court of Appeals did not commit grave abuse of
discretion amounting to lack or excess of jurisdiction when it imposed on GMC, after it
had committed unfair labor practice, the draft CBA proposed by the union for the
remaining two (2) years of the duration of the original CBA. Fairness, equity, and social
justice are best served in this case by sustaining the appellate courts decision on this
issue.
WHEREFORE, the petition is DISMISSED and the assailed decision dated July 19,
2000, and the resolution dated October 26, 2000, of the Court of Appeals in CA-G.R.
SP No. 50383, are AFFIRMED. Costs against petitioner.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.
[1]
Rollo, pp. 172-179. Penned by Associate Justice Conchita Carpio Morales (now a member of this
Court), with Associate Justices Teodoro P. Regino and Mercedes Gozo-Dadole.
[2]
Id. at 34-48.
[3]
Id. at 175; See also CA Rollo, CA G.R. No. 51763, p. 83.
[4]
Effective March 21, 1989.
[5]
Rollo, p. 44.
[6]
Id. at 178.
[7]
Id. at 10.
[8]
Hongkong and Shanghai Banking Corporation Employees Union v. National Labor Relations
Commission, G.R. No. 125038, 6 November 1997, 281 SCRA 509, 518.
[9]
Ibid.
[10]
Ibid.
[11]
Ibid.
[12]
Colegio De San Juan De Letran v. Association of Employees and Faculty of Letran, G.R. No. 141471,
18 September 2000, 340 SCRA 587, 595.
[13]
No. L-54334, 22 January 1986, 141 SCRA 179, 188.
[14]
Supra.
[15]
213 SCRA 759, 11 September 1992.
[16]
Supra.
[17]
Ibid., citing H. ROTHENBERG, ROTHENBERG ON LABOR RELATIONS 435 (1949), NLRB v.
Sunshine Mining Co., 110 F. 2d 780, NLRB v. Condenser Corp., 128 F. 2d 67.
40) Malayang Samahan vs. Ramos GR No. 113907 Feb. 28,2000
THIRD DIVISION
[G.R. No. 113907. February 28, 2000]
MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD

(MSMG-UWP), ITS PRESIDENT BEDA MAGDALENA VILLANUEVA,
MARIO DAGANIO, DONATO GUERRERO BELLA P. SANCHEZ, ELENA
TOBIS, RHODA TAMAYO, LIWAYWAY MALLILIN, ELOISA SANTOS,
DOMINADOR REBULLO, JOSE IRLAND, TEOFILA QUEJADA, VICENTE
SAMONTINA, FELICITAS DURIAN, ANTONIO POLDO, ANGELINA
TUGNA, SALVADOR PENALOSA, LUZVIMINDA TUBIG, ILUMINADA
RIVERA, ROMULO SUMILANG, NENITA BARBELONIA, LEVI BASILIA,
RICARDO PALAGA, MERCY ROBLES, LEODEGARIO GARIN, DOMINGO
ECLARINAL, MELCHOR GALLARDO, MARCELO GARIN, ROSALINA
BAUTISTA, MARY ANN TALIGATOS, ALEJANDRO SANTOS, ANTONIO
FRAGA, LUZ GAPULTOS, MAGDALENA URSUA, EUGENIO ORDAN,
LIGAYA MANALO, PEPITO DELA PAZ, PERLITA DIMAQUIAT, MYRNA
VASQUEZ, FLORENTINA SAMPAGA, ARACELI FRAGA, MAXIMINA
FAUSTINO, MARINA TAN, OLIGARIO LOMO, PRECILA EUSEBIO, SUSAN
ABOGANO, CAROLINA MANINANG, GINA GLIFONIA, OSCAR SOTTO,
CELEDONA MALIGAYA, EFREN VELASQUEZ, DELIA ANOVER,
JOSEPHINE TALIMORO, MAGDALENA TABOR, NARCISA SARMIENTO,
SUSAN MACASIEB, FELICIDAD SISON, PRICELA CARTA, MILA
MACAHILIG, CORAZON NUNALA, VISITACION ELAMBRE, ELIZABETH
INOFRE, VIOLETA BARTE, LUZVIMINDA VILLOSA, NORMA SALVADOR,
ELIZABETH BOGATE, MERLYN BALBOA, EUFRECINA SARMIENTO,
SIMPLICIA BORLEO, MATERNIDAD DAVID, LAILA JOP, POTENCIANA
CULALA, LUCIVITA NAVARRO, ROLANDO BOTIN, AMELITA
MAGALONA, AGNES CENA, NOLI BARTOLAY, DANTE AQUINO,
HERMINIA RILLON, CANDIDA APARIJADO, LYDIA JIMENEZ, ELIZABETH
ANOCHE, ALDA MURO, TERESA VILLANUEVA, TERESITA RECUENCO,
ELIZA SERRANO, ESTELLA POLINAR, GERTRUDES NUNEZ, FELIPE
BADIOLA, ROSLYN FERNANDEZ, OSCAR PAGUTA, NATIVIDAD
BALIWAS, ELIZABETH BARCIBAL, CYNTHIA ESTELLER, TEODORA
SANTOS, ALICIA PILAR, MILA PATENO, GLORIA CATRIZ, MILA
MACAHILIG, ADELAIDA DE LEON, ROSENDO EDILO, ARSENIA
ESPIRITU, NUMERIANO CABRERA, CONCEPSION ARRIOLA, PAULINA
DIMAPASOK, ANGELA SANGCO, PRESILA ARIAS, ZENAIDA NUNES,
EDITHA IGNACIO, ROSA GUIRON, TERESITA CANETA, ALICIA ARRO,
TEOFILO RUWETAS, CARLING AGCAOILI, ROSA NOLASCO, GERLIE
PALALON, CLAUDIO DIRAS, LETICIA ALBOS, AURORA ALUBOG,
LOLITA ACALEN, GREGORIO ALIVIO, GUILLERMO ANICETA, ANGELIE
ANDRADA, SUSAN ANGELES, ISABELITA AURIN, MANUELA AVELINA,
CARLING AGCAOILI, TERESITA ALANO, LOLITA AURIN, EMMABETH
ARCIAGA, CRESENCIA ACUNA, LUZVMINDA ABINES, FLORENCIA
ADALID, OLIVIA AGUSTIN, EVANGELINE ALCORAN, ROSALINA
ALFERES, LORNA AMANTE, FLORENTINA AMBITO, JULIETA
AMANONCO, CARMEN AMARILLO, JOSEFINA AMBAGAN, ZENAIDA
ANAYA, MARIA ANGLO, EDITHA ANTA ZO, MARY JANE ANTE, ANDREA
AQUINO, ROWENA ARABIT, MARIETA ARAGON, REBECCA ARCENA,
LYDIA ARCIDO, FERNANDO ARENAS, GREGORIO ARGUELLES,
EDITHA ARRIOLA, EMMA ATIENZA, EMMA ATIENZA, TEODY ATIENZA,
ELIZABETH AUSTRIA, DIOSA AZARES, SOLIDA AZAINA, MILAGROS
BUAG, MARIA BANADERA, EDNALYN BRAGA, OFELIA BITANGA,
FREDISMINDA BUGUIS, VIOLETA BALLESTEROS, ROSARIO
BALLADJAY, BETTY BORIO, ROMANA BAUTISTA, SUSARA BRAVO,
LILIA BAHINGTING, ENIETA BALDOZA, DAMIANA BANGCORE,
HERMINIA BARIL, PETRONA BARRIOS, MILAGROS BARRAMEDA,
PERLA BAUTISTA, CLARITA BAUTISTA, ROSALINA BAUTISTA,
ADELINA BELGA, CONSOLACION BENAS, MARIA BEREZO, MERCEDES
BEREBER, VIOLETA BISCOCHO, ERNESTO BRIONES, ALVINA
BROSOTO, AGUSTINA BUNYI, CARMEN BUGNOT, ERLINDA
BUENAFLOR, LITA BAQUIN, CONSEJO BABOL, CRISANTA BACOLOD,
CELIA DE BACTAT, MAZIMA BAGA, ELENA BALADAD, ROSARIO
BALADJAY, AMALIA BALAGTAS, ANITA BALAGTAS, MARIA BALAKIT,
RUFINA BALATAN, REBECCA BALDERAMA, AMELIA BALLESTER,
BELEN BARQUIO, BERNANDITA BASILIDES, HELEN BATO, HELEN
BAUTISTA, ROMANA BAUTISTA, ALMEDA BAYTA, AVELINA BELAYON,
NORMA DE BELEN, THELMA DE BELEN, JOCELYN BELTRAN, ELENA
BENITEZ, VIRGINIA BERNARDINO, MERLINA BINUYAG, LINA BINUYA,
BLESILDA BISNAR, SHIRLEY BOLIVAR, CRESENTACION MEDLO,
JOCELYN BONIFACIO, AMELIA BORBE, AMALIA BOROMEO, ZENAIDA
BRAVO, RODRIGO BEULDA, TERESITA MENDEZ, ELENA CAMAN,
LALIANE CANDELARIA, MARRY CARUJANO, REVELINA CORANES,
MARITESS CABRERA, JUSTINA CLAZADA, APOLONIA DELA CRUZ,
VICTORIA CRUZ, JOSEFINA DELA CRUZ, MARITESS CATANGHAL,
EDNA CRUZ, LUCIA DE CASTRO, JOSIE CARIASO, OFELIA
CERVANTES, MEDITA CORTADO, AMALIA CASAJEROS, LUCINA
CASTILIO, EMMA CARPIO, ANACORITA CABALES, YOLANDA CAMO,
MILA CAMAZUELA, ANITA CANTO, ESTELA CANCERAN, FEMENCIA
CANCIO, CYNTHIA CAPALAD, MERLE CASTILLO, JESUSA CASTRO,
CECILIA CASTILLO, SILVERITA CASTRODES, VIVIAN CELLANO,
NORMA CELINO, TERESITA CELSO, GLORIA COLINA, EFIPANIA
CONSTANTINO, SALVACION CONSULTA, MEDITA CORTADO, AIDA
CRUZ, MARISSA DELA CRUZ, EDITO CORCILLES, JELYNE CRUZ, ROSA
CORPOS, ROSITA CUGONA, ELSIE CABELLES, EMMA CADUT,
VICTORIA CALANZA, BARBARA CALATA, IMELDA CALDERON,
CRISTINA CALIDGUID, EMMALINDA CAMALON, MARIA CAMERINO,
CARMENCITA CAMPO, CONNIE CANEZO, LOURDES CAPANANG, MA.
MILAGROS CAPILI, MYRNA T. CAPIRAL, FLOR SAMPAGA, SUSAN B.
CARINO, ROSARIO CARIZON, VIRGINIA DEL CARMEN, EMMA CARPIO,
PRESCILA CARTA, FE CASERO, LUZ DE CASTRO, ANNA
CATARONGAN, JOSEFINA CASTISIMO, JOY MANALO, EMMIE
CAWALING, JOVITA CARA, MARINA CERBITO, MARY CAREJANO,
ESTELA R. CHAVEZ, CONCEPCION PARAJA, GINA CLAUDIO,
FLORDELIZA CORALES, EDITO CORCIELER, ROSA C. CORROS,
AMELIA CRUZ, JELYNE CRUZ, WILFREDO DELA CRUZ, REINA
CUEVAS, MARILOU DEJECES, JOSEPHINE DESACULA, EDITHA DEE,
EDITHA DIAZ, VIRGIE DOMONDON, CELSA DOROPAW, VIOLETA
DUMELINA, MARIBEL DIMATATAC, ELBERTO DAGANIO, LETECIA
DAGOHOY, DINDO DALUZ, ANGELITA DANTES, GLORIA DAYO, LUCIA
DE CASTRO, CARLITA DE GUZMAN, CARMEN DELA CRUZ, MERCY DE
LEON, MARY DELOS REYES, MARIETA DEPILO, MATILDE DIBLAS,
JULIETA DIMAYUGA, TEODORA DIMAYUGA, YOLANDA DOMDOM,
LUCITA DONATO, NELMA DORADO, RITA DORADO, SUSAN DUNTON,
HERMINIA SAN ESTEBAN, AMALI EUGENIO, OLIVIA EUSOYA,
ERNESTO ESCOBIN, EVELYN ESCUREL, LYDIA ESCOBIN, VICENTE E.
ELOIDA, ELENA EGAR, GLORIA ERENO, NORMA ESPIRIDION, ARSENIA
ESPIRITU, AURORA ESTACIO, DEMETRIA ESTONELO, MILAGROS
FONSEGA, LYDIA FLORENTINO, JULIA FARABIER, TRINIDAD FATALLA,
IMELDA FLORES, JESSINA FRANCO, MA. CRISTINA FRIJAS,
ESPECTACION FERRER, BERDENA FLORES, LEONILA FRANCISCO,
BERNARDA FAUSTINO, DOLORES FACUNDO, CRESTITA FAMILARAN,
EMELITA FIGUERAS, MA. VIRGINIA FLORENDO, AURORA FRANCISCO,
MA. JESUSA FRANCISCO, NENITA FUENTES, MARILOU GOLINGAN,
JUANITA GUERRERO, LYDIA GUEVARRA, SOCORRO GONZAGA,
PATRICIA GOMEO, ROSALINDA GALAPIN, CARMELITA GALVEZ,
TERESA GLE, SONIA GONZALES, PRIMITA GOMEZ, THERESA GALUA,
JOSEFINA GELUA, BRENDA GONZAGA, FLORA GALLARDO, LUCINDA
GRACILLA, VICTORIA GOZUM, NENITA GAMAO, EDNA GARCIA,
DANILO GARCIA, ROSARIO GIRAY, ARACELI GOMEZ, JOEMARIE
GONZAGA, NELIA GONZAGA, MARY GRANCE GOZON, CARMEN
GONZALES, MERLITA GREGORIO, HERMINIA GONZALES, CARLITA DE
GUZMAN, MODESTA GABRENTINA, EDITHA GADDI, SALVACIO
GALIAS, MERLINDA GALIDO, MELINDA GAMIT, JULIETA GARCIA,
EMELITA GAVINO, CHARITO GILLIA, GENERA GONEDA, CRESTITA
GONZALES, HERMINIA GONZALES, FRANCISCA GUILING, JULIAN
HERNANDEZ, GLECERIA HERRADURA, SUSANA HIPOLITO, NERISSA
HAZ, SUSAN HERNAEZ, APOLONIA ISON, SUSAN IBARRA, LUDIVINA
IGNACIO, CHOLITA INFANTE, JULIETA ITURRIOS, ANITA IBO, MIRASOL
INGALLA, JULIO JARDINIANO, MERLITA JULAO, JULIETA JULIAN,
MARIBETH DE JOSE, JOSEPHINE JENER, IMELDA JATAP, JULIETA
JAVIER, SALOME JAVIER, VICTORIA JAVIER, SALVACION JOMOLO,
EDNA JARNE, LYDIA JIMENEZ, TERESITA DE JUAN, MARILYN
LUARCA, ROSITA LOSITO, ROSALINA LUMAYAG, LORNA LARGA,
CRESTETA DE LEON, ZENAIDA LEGASPI, ADELAIDA LEON, IMELDA DE
LEON, MELITINA LUMABI, LYDIA LUMABI, ASUNCION LUMACANG,
REGINA LAPIADRIO, MELANIA LUBUGUAN, EVANGELINE LACAP,
PELAGIA LACSI, LORNA LAGUI, VIRGIE LAITAN, VIRGINIA LEE,
CRESTELITA DE LEON, FELICISIMA LEONERO, DIOSA LOPE,
ANGELITA LOPEZ, TERESITA LORICA, JUANITA MENDIETA, JUANITA
MARANQUEZ, JANET MALIFERO, INAS MORADOS, MELANIE MANING,
LUCENA MABANGLO, CLARITA MEJIA, IRENE MENDOZA, LILIA
MORTA, VIGINIA MARAY, CHARITO MASINAHON, FILMA MALAYA, LILIA
MORTA, VIRGINIA MARAY, CHARITO MASINAHON, FILMA MALAYA,
LILIA MORTA, ROSITA MATIBAG, LORENZA MLINA, SABINA DEL
MUNDO, EDITHA MUYCO, NARCISA MABEZA, MA. FE MACATANGAY,
CONCEPCION MAGDARAOG, IMELDA MAHIYA, ELSA MALLARI,
LIGAYA MANAHAN, SOLEDA MANLAPAS, VIRGINIA MAPA, JOSEI
MARCOS, LIBRADA MARQUEZ, VIRGINIA MAZA, JULIANITA MENDIETA,
EDILBERTA MENDOZA, IRENE MERCADO, HELEN MEROY, CRISTINA
MEJARES, CECILIA MILLET, EMELITA MINON, JOSEPHINE MIRANA,
PERLITA MIRANO, EVANGELINE MISBAL, ELEANOR MORALES,
TERESITA MORILLA, LYDIA NUDO, MYRIAM NAVAL, CAROLINA NOLIA,
ALICIA NUNEZ, MAGDALENA NAGUIDA, ELSA NICOL, LILIA
NACIONALES, MA. LIZA MABO, REMEDIOS NIEVES, MARGARITA
NUYLAN, TERESITA NIEVES, PORFERIA NARAG, RHODORA NUCASA,
CORAZON OCRAY, LILIA OLIMPO, VERONA OVERENCIA, FERMIN
OSENA, FLORENCIA OLIVAROS, SOLEDAD OBEAS, NARISSA
OLIVEROS, PELAGIA ORTEGA, SUSAN ORTEGA, CRISTINA PRENCIPE,
PURITA PENGSON, REBECCA PACERAN, EDNA PARINA, MARIETA
PINAT, EPIFANIA PAJERLAN, ROSALINA PASIBE, CECILIA DELA PAZ,
LORETA PENA, APOLONIA PALCONIT, FRANCISCO PAGUIO, LYDIA
PAMINTAHON, ELSIE PACALDO, TERESITA PADILLA, MYRNA PINEDA,
MERCEIDTA PEREZ, NOVENA PORLUCAS, TERESITA PODPOD,
ADORACION PORNOBI, ALICIA PERILLO, HELEN JOY PENDAL,
LOURDES PACHECO, LUZVIMINDA PAGALA, LORETA PAGAPULAN,
FRANCISCO PAGUIO, PRISCO PALACA, FLORA PAMINTUAN, NOEMI
PARISALES, JOSEPHINE PATRICIO, CRISTINA PE BENITO, ANGELA
PECO, ANGELITA PENA, ESTER PENONES, NORMA PEREZ, MAURA
PERSEVERANCIA, MARINA PETILLA, JOSIE PIA, ZULVILITA PIODO,
REBECCA PACERAN, CLARITA POLICARPIO, MAXIMO POTENTO,
PORFIRIO POTENTO, FLORDELIZA PUMARAS, FERNANDO QUEVEDO,
JULIANA QUINDOZA, CHARITO QUIROZ, CARMELITA ROSINO,
RODELIA RAYONDOYON, FLORENCIA RAGOS, REBECCA ROSALES,
ROSALYN RIVERO, FRANCISCO RUIZ, FRANCIA ROSERO, EMELY
RUBIO, EDILBERTO RUIO, JUANA RUBY, RAQUEL REYES, MERCY
ROBLES, ESTELA RELANO, ROSITA REYES NIMFA RENDON, EPIFANIO
RAMIRO, MURIEL REALCO, BERNARDITA RED, LEONITA RODIL,
BENITA REBOLA, DELMA REGALARIO, LENY REDILLAS, JULIETA
DELA ROSA, FELICITAS DELA ROSA, SUSAN RAFALLO, ELENA
RONDINA, NORMA RACELIS, JOSEPHINE RAGEL, ESPERANZA
RAMIREZ, LUZVIMINDA RANADA, CRISTINA RAPINSAN, JOCELYN RED,
ORLANDO REYES, TERESITA REYES, ANGELITA ROBERTO, DELIA
ROCHA, EDLTRUDES ROMERO, MELECIA ROSALES, ZENAIDA ROTAO,
BELEN RUBIS, FE RUEDA, SYLVIA SONGCAYAWON, CRISTINA
SANANO, NERCISA SARMIENTO, HELEN SIBAL, ESTELITA SANTOS,
NORMA SILVESTRE, DARLITA SINGSON, EUFROCINA SARMIENTO,
MYRNA SAMSON, EMERLINA SADIA, LORNA SALAZAR, AVELINA
SALVADOR, NACIFORA SALAZAR, TITA SEUS, MARIFE SANTOS,
GRACIA SARMIENTO, ANGELITA SUMANGIL, ELIZABETH SICAT, MA.
VICTORIA SIDELA, ANALITA SALVADOR, MARITES SANTOS, VIRGINIA
SANTOS, THELMA SARONG, NILDA SAYAT, FANCITA SEGUNDO,
FYNAIDA SAGUI, EDITHA SALAZAR, EDNA SALZAR, EMMA
SALENDARIO, SOLEDAD SAMSON, EDNA SAN DIEGO, TERESITA SAN
GABRIEL, GERTRUDES SAN JOSE, EGLECERIA OSANCHEZ,
ESTRELLA SANCHEZ, CECILIA DELOS SANTOS, LUISA SEGOVIA,
JOCELYN SENDING ELENA SONGALIA, FELICITAS SORIANO, OFELIA
TIBAYAN, AIDA TIRNIDA, MONICA TIBAYAN, CRISTETA TAMBARAN,
GLORIA TACDA, NENVINA, FELINA TEVES, ANTONINA DELA TORRE,
MAXIMA TANILON, NENA TABAT, ZOSIMA TOLOSA, MARITA TENOSO,
IMELDA TANIO, LUZ TANIO, EVANGELINE TAYO, JOSEFINA TINGTING,
ARSENIA TISOY, MAGDALENA TRAJANO, JOSEFINA UBALDE, GINA
UMALI, IRMA VALENZUELA, FELY VALDEZ, PAULINA VALEZ,
ROSELITA VALLENTE, LOURDES VELASCO, AIDA VILLA, FRANCISCA
VILLARITO, ZENAIDA VISMONTE, DELIA VILLAMIEL, NENITA VASQUEZ,
JOCELYN VILLASIS, FERMARGARITA VARGAS, CELIA VALLE, MILA
CONCEPCION VIRAY, DOMINGA VALDEZ, LUZVIMINDA VOCINA,
MADELINE VIVERO, RUFINA VELASCO, AUREA VIDALEON, GLORIA
DEL VALLE, THELMA VALLOYAS, CYNTHIA DELA VEGA, ADELA
VILLAGOMEZ, TERESITA VINLUAN, EUFEMIA VITAN, GLORIA
VILLAFLORES, EDORACION VALDEZ, ANGELITA VALDEZ, ILUMINADA
VALENCI, MYRNA VASQUEZ, EVELYN VEJERAMO, TEODORA
VELASQUEZ, EDAN VILLANUEVA, PURITA VILLASENOR, SALVADOR
WILSON, EMELINA YU, ADELFA YU, ANA ABRIGUE, VIRGINIA ADOBAS,
VICTORIA ANTIPUESTO, MERCEDITA CASTILLO, JOCELYN CASTRO,
CREMENIA DELA CRUZ, JOSEPHINE IGNACIO, MELITA ILILANGOS,
LIGAYA LUMAYAT, DELIA LUMBES, ROSITA LIBRADO, DELIA
LAGRAMADA, GEMMA MAGPANTAY, EMILY MENDOZA, FIDELA
PANGANIBAN, LEONOR RIZALDO, ILUMINDA RIVERA, DIVINA
SAMBAYAN, ELMERITA SOLAYAO, NANCY SAMALA, JOSIE SUMARAN,
LUZVIMINDA ABINES, ALMA ACOL, ROBERTO ADRIATICO, GLORIA
AGUINALDO, ROSARIO ALEYO, CRISTETA ALEJANDRO, LILIA
ALMOGUERA, CARMEN AMARILLO, TRINIDAD ARDANIEL, CERINA
AVENTAJADO, ZENAIDA AVAYA, LOLITA ARABIS, MARIA ARSENIA,
SOFIA AGUINALDO, SALVE ABAD, JOSEFINA AMBANGAN EMILIA
AQUINO, JOSEFINA AQUINO, JULIANA AUSAN, AMERCIANA ACOSTA,
CONCEPCION ALEROZA, DIANA ADOVOS, FELY ADVINCULA,
SEOMINTA ARIAS, JOSEPHINE ARCEDE, NORMA AMISTOSO,
PRESENTACION ALONOS, EMMA ATIENZA, LEONIDA AQUINO, ANITA
ARILLON, ADELAIDA ARELLANO, NORMA AMISTOSO, JOSEPHINE
ARCEDE, SEMIONITA ARIAS, JOSEFINA BANTUG, LOLITA BARTE,
HERMINIA BASCO, MARGARITA BOTARDO, RUFINO BUGNOT, LOLITA
BUSTILLO, ISABEL BALAKIT, ROSARIO BARRERO, TESSIE BALBOS,
NORMA BENISANO, GUILLERMA BRUGES, BERNADETTE
BARTOLOME, SHIRLEY BELMONTE, MERONA BELZA, AZUCENA
BERNALES, JOSE BASCO, NIMPHA BANTOG, BENILDA BUBAN,
REGINA BUBAN, SALOME BARRAMEDA, IRENE BISCO, FELICITAS
BAUTISTA, VIOLETA BURA, LINA BINUYA, BIBIANA BAARDE, ELSA
BAES, ANASTACIA BELONZO, SONIA BENOYO, ELIZABETH
BACUNGAN, PATRICIA BARRAMEDA, ERLINDA BARCELONA, EMMA
BANICO, APOLONIA BUNAO, LUCITA BOLEA, PACIFICA BARCELONA,
EDITHA BASIJAN, RENITA BADAMA, ELENA BALADAD, CRESENCIA
BAJO, BERNADITA BASILID, MELINDA BEATO, YOLANDA BATANES,
EDITHA BORILLA, ANITA BAS, ELSA CALIPUNDAN, MARIA CAMERINO,
VIRGINIA CAMPOSANO, MILAGROS CAPILI, CARINA CARINO, EUFEMIA
CASIHAN, NENITA CASTRO, FLORENCIA CASUBUAN, GIRLIE
CENTENO, MARIANITA CHIQUITO, IMELDA DELA CRUZ, TEODOSIA
CONG, TEOFILA CARACOL, TERESITA CANTA, IRENEA CUNANAN,
JULITA CANDILOSAS, VIOLETA CIERES, MILAGROS DELA CRUZ,
FLOREPES CAPULONG, CARMENCITA CAMPO, MARILYN CARILLO,
RUTH DELA CRUZ, RITA CIJAS, LYDIA CASTOR, VIRGIE CALUBAD,
EMELITA CABERA, CRISTETA CRUZ, ERLINDA COGADAS, IMELDA
CALDERON, SUSIE LUZ CEZAR, ESTELA CHAVEZ, NORMA CABRERA,
ELDA DAGATAN, LEONISA DIMACUNA, ERNA DUGTONG, FLORDELISA
DIGMA, VIRGILIO DADIOS, LOLITA DAGTA, ADELAIDA DORADO,
CELSA DATUMANONG, VIRGINIA DOCTOLERO, EDNA SAN DIEGO,
JULIETA DANG, JULIETA DORANTINAO, LOLITA DAGANO, JUDITH
DIAZ, MARIA ENICANE, MARITA ESCARDE, ENRIMITA ESMAYOR,
ROSARIO EPIRITU, REMEDIOS EMBOLTORIO, IRENE ESTUITA,
TERESITA ERESE, ERMELINDA ELEZO, MARIA ESTAREJA, MERLITA
ESQUERRA, YOLANDA FELICITAS, FRUTO FRANCIA, MARTHA FRUTO,
LILIA FLORES, SALVACION FORTALESA, JUDITH FAJARDO, SUSANA
FERNANDO, EDWIN FRANCISCO, NENITA GREGORY, ROSA CAMILO,
MARIVIC GERRARDO, CHARITA GOREMBALEM, NORMA GRANDE,
DOLORES GUTIERREZ, CHARLIE GARCIA, LUZ GALVEZ, ADELAIDA
GAMILLA, LUZ GAPULTOS, ERLINDA GARCIA, HELEN GARCIA,
ERLINDA GAUDIA, FRANCISCA GUILING, MINTA HERRERA, ASUNCION
HONOA, JUAN HERNANDEZ, LUCERIA ANNA MAE HERNANDEZ,
JULIANA HERNANDEZ, EDITHA IGNACIO, ANITA INOCENCIO, EULALIA
INSORIO, ESTELITA IRLANDA, MILAGROS IGNACIO, LINDA
JABONILLO, ADELIMA JAEL, ROWENA JARABJO, ROBERT JAVILINAR,
CLARITA JOSE, CARMENCITA JUNDEZ, SOFIA LALUCIS, GLORIA
LABITORIA, ANGELITA LODES, ERLINDA LATOGA, EVELYN LEGASPI,
ROMEO LIMCHOCO, JESUS LARA, ESTRELLA DE LUNA, LORETA
LAREZA, JOSEPHINE ALSCO, MERCY DE LEON, CONSOLACION
LIBAO, MARILYN LIWAG, TERESITA LIZAZO, LILIA MACAPAGAL,
SALVACION MACAREZA, AMALIA MADO, TERESITA MADRIAGA,
JOVITA MAGNAYE, JEAN MALABAD, FRANCISCA MENDOZA, NELCITA
MANGANTANG, TERESITA NELLA, GENEROZA MERCADO, CRISTETA
MOJANA, BERNARDA MONGADO, LYDIA MIRANDA, ELISA
MADRILEJOS, LOIDA MAGSINO, AMELIA MALTO, JULITA MAHIBA,
MYRNA MAYORES, LUISA MARAIG, FLORENCIA MARAIG, EMMA
MONZON, IMELDA MAGDANGAN, VICTORIA MARTIN, NOEMI
MANGUILLO, BASILIZA MEDINA, VICTORIO MERCADO, ESTELA
MAYPA, EMILIA MENDOZA, LINA MAGPANTAY, FELICIANA MANLOLO,
ELENA MANACOP, WILMA MORENO, JUANA MENDOZA, EVELYN DEL
MUNDO, ROSIE MATUTINA, MATILDE MANALO, TERESITA MENDEZ,
FELIPINA MAGONCIA, MARIA MANZANO, LIGAYA MANALO, LETICIA
MARCHA, MARINA MANDIGMA, LETICIA MANDASOC, PRESCILLA
MARTINEZ, JULIA MENDOZA, PACITA MAGALLANES, ANGELINA
MARJES, SHIRLEY MELIGRITO, IRENE MERCADO, ELISA MAATUBANG,
MARCELINA NICOLAS, AGUSTINA NICOLAS, ROSA NOLASCO, WILMA
NILAYE, VIOLETA ORACION, ANGELA OSTAYA, JUANITA OSAYOS,
MAGDALENA OCAMPO, MARDIANA OCTA, ROSELA OPAO, LIBRADA
OCAMPO, YOLANDA OLIVER, MARCIA ORLANDA, PAGDUNAN, RITA
PABILONA, MYRA PALACA, BETHLEHEM PALINES, GINA PALIGAR,
NORMA PALIGAR, DELMA PEREZ, CLAUDIA PRADO, JULIE PUTONG,
LUDIVINA PAGSALINGAN, MERLYN PANALIGAN, VIOLETA
PANAMBITAN, NOREN PAR, ERLINDA PARAGAS, MILA PARINO,
REBECCA PENAFLOR, IMELDA PENAMORA, JERMICILLIN PERALTA,
REBECCA PIAPES, EDITHA PILAR, MAROBETH PILLADO, DIOSCORO
PIMENTEL, AURORA LAS PINAS, EVANGELINA PINON, MA. NITA
PONDOC, MA. MERCEDES PODPOD, ANGELITO PANDEZ, LIGAYA
PIGTAIN, LEONILA QUIAMBAO, ELENA QUINO, MARITESS QUIJANO,
CHOLITA REBUENO, LOLITA REYES, JOCELYN RAMOS, ROSITA
RAMIREZ, ELINORA RAMOS, ISABEL RAMOS, ANNABELLE
RESURRECCION, EMMA REYES, ALILY ROXAS, MARY GRACE DELOS
REYES, JOCELYN DEL ROSARIO, JOSEFINA RABUSA, ANGELITA
ROTAIRO, SAMCETA ROSETA, EDERLINA RUIZ, ZENAIDA ROSARIO,
BENITA REBOLA, ROSITA REVILLA, ROSITA SANTOS, ROWENA
SALAZAR, EMILYN SARMIENTO, ANA SENIS, ELOISA SANTOS,
NARCISA SONGLIAD, ELMA SONGALIA, AMPARA SABIO, JESSIE
SANCHEZ, VIVIAN SAMILO, GLORIA SUMALINOG, ROSALINA DELOS
SANTOS, MARIETA SOMBRERO, HELEN SERRETARIO, TEODORO
SULIT, BELLA SONGUINES, LINDA SARANTAN, ESTELLA SALABAR,
MILAGROS SISON, GLORIA TALIDAGA, CECILIA TEODORO, ROMILLA
TUAZON, AMELITA TABULAO, MACARIA TORRES, LUTGARDA TUSI,
ESTELLA TORREJOS, VICTORIA TAN, MERLITA DELA VEGA, WEVINA
ORENCIA, REMEDIOS BALECHA, TERESITA TIBAR, LACHICA
LEONORA, JULITA YBUT, JOSEFINA ZABALA, WINNIE ZALDARIAGA,
BENHUR ANTENERO, MARCELINA ANTENERO, ANTONINA ALAPAN,
EDITHA ANTOZO, ROWENA ARABIT, ANDRA AQUINO, TERESITA
ANGULO, MARIA ANGLO, MYRNA ALBOS, ELENITA AUSTRIA, ANNA
ABRIGUE, VIRGINIA ADOBAS, VICTORIA ANTIPUESTO, REMEDIOS
BOLECHE, MACARIA BARRIOS, THELMA BELEN, ESTELLA BARRETTO,
JOCELYN CHAVEZ, VIRGINIA CAPISTRANO, BENEDICTA CINCO,
YOLLY CATPANG, REINA CUEVAS, VICTORIA CALANZA, FE CASERO,
ROBERTA CATALBAS, LOURDES CAPANANG, CLEMENCIA CRUZ,
JOCELYN COSTO, MERCEDITA CASTILLO, EDITHA DEE, LUCITA
DONATO, NORMA ESPIRIDION, LORETA FERNANDEZ, AURORA
FRANCISCO, VILMA FAJARDO, MODESTA GABRENTINA, TERESITA
GABRIEL, SALVACION GAMBOA, JOSEPHINE IGNACIO, SUSAN
IBARRA, ESPERANZA JABSON, OSCAR JAMBARO, ROSANNA JARDIN,
CORAZON JALOCON, ZENAIDA LEGASPI, DELLA LAGRAMADA,
ROSITA LIBRANDO, LIGAYA LUMAYOT, DELIA LUMBIS, LEONORA
LANCHICA, RELAGIA LACSI, JOSEFINA LUMBO, VIOLETA DE LUNA,
EVELYN MADRID, TERESITA MORILLA, GEMMA MAGPANTAY, EMILY
MENDOZA, IRENEA MEDINA, NARCISA MABEZA, ROSANNA MEDINA,
DELIA MARTINEZ, ROSARIO MAG-ISA, EDITHA MENDOZA, EDILBERTA
MENDOZA, FIDELA PANGANIBAN, OFELIA PANGANIBAN, AZUCENA
POSTGO, LOURDES PACHECO, LILIA PADILLA, MARISSA PEREZ,
FLORDELIZA PUMARES, LUZ REYES, NORMA RACELIS, LEONOR
RIZALDO, JOSIE SUMASAR, NANCY SAMALA, EMERLITA SOLAYAO,
MERCEDITA SAMANIEGO, BLANDINA SIMBULAN, JOCELYN SENDING,
LUISITA TABERRERO, TERESITA TIBAR, ESTERLINA VALDEZ, GLORIA
VEJERANO, ILUMINADA VALENCIA, MERLITA DELA VEGA, VIRGIE
LAITAN, JULIET VILLARAMA, LUISISTA OCAMPO, NARIO ANDRES,
ANSELMA TULFO, GLORIA MATEO, FLANIA MENDOZA, CONNIE
CANGO, EDITHA SALAZAR, MYRNA DELOS SANTOS, TERESITA
SERGIO, CHARITO GILLA, FLORENTINA HERNAEZ, BERNARDINO
VIRGINIA, AMPO ANACORITA, SYLVIA POASADAS, ESTRELLA
ESPIRITU, CONCORDIA LUZURIAGA, MARINA CERBITO, EMMA REYES,
NOEMI PENISALES, CLARITA POLICARPIO, BELEN BANGUIO,
HERMINIA ADVINCULA, LILIA MORTA, REGINA LAPIDARIO, LORNA
LARGA, TERESITA VINLUAN, MARITA TENOSO, NILDS SAYAT, THELMA
SARONG, DELMA REGALIS, SUSAN RAFAULO, ELENA RONDINA,
MYRNA PIENDA, VIOLETA DUMELINA, FLORENCIA ADALID, FILMA
MELAYA, ERLINDA DE BAUTISTA, MATILDE DE BLAS, DOLORES
FACUNDO, REBECCA LEDAMA, MA. FE MACATANGAY, EMELITA
MINON, NORMA PAGUIO, ELIZA VASQUEZ, GLORIA VILLARINO, MA.
JESUS FRANCISCO, TERESITA GURPIDO, LIGAYA MANALO, FE
PINEDA, MIRIAM OCMAR, LUISA SEGOVIA, TEODY ATIENZA, SOLEDA
AZCURE, CARMEN DELA CRUZ, DMETRIA ESTONELO, MA. FLORIDA
LOAZNO, IMELDA MAHIYA, EDILBERTA MENDOZA, SYLVIA POSADAS,
SUSANA ORTEGA, JOSEPHINE D. TALIMORO, TERESITA LORECA,
ARSENIA TISOY, LIGAYA MANALO, TERESITA GURPIO, FE PINEDA,
and MARIA JESUS FRANCISCO, petitioners, vs. HON. CRESENCIO J.
RAMOS, NATIONAL LABOR RELATIONS COMMISSION, M. GREENFIELD
(B), INC., SAUL TAWIL, CARLOS T. JAVELOSA, RENATO C. PUANGCO,
WINCEL LIGOT, MARCIANO HALOG, GODOFREDO PACENO, SR.,
GERVACIO CASILLANO, LORENZO ITAOC, ATTY. GODOFREDO
PACENO, JR., MARGARITO CABRERA, GAUDENCIO RACHO,
SANTIAGO IBANEZ, AND RODRIGO AGUILING, respondents.
DECISION
PURISIMA, J.:
At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court to annul
the decision of the National Labor Relations Commission in an unfair labor practice
case instituted by a local union against its employer company and the officers of its
national federation.
The petitioner, Malayang Samahan ng mga Manggagawa sa M. Greenfield, Inc., (B)

(MSMG), hereinafter referred to as the "local union", is an affiliate of the private
respondent, United Lumber and General Workers of the Philippines (ULGWP), referred
to as the "federation". The collective bargaining agreement between MSMG and M.
Greenfield, Inc. names the parties as follows:
"This agreement made and entered into by and between:
M. GREENFIELD, INC. (B) a corporation duly organized in

accordance with the laws of the Republic of the Philippines with
office address at Km. 14, Merville Road, Paraaque, Metro Manila,
represented in this act by its General manager, Mr. Carlos T.
Javelosa, hereinafter referred to as the Company;
-and-
MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M.

GREENFIELD (B) (MSMG)/UNITED LUMBER AND GENERAL
WORKERS OF THE PHILIPPINES (ULGWP), a legitimate labor
organization with address at Suite 404, Trinity Building, T.M. Kalaw
Street, Manila, represented in this act by a Negotiating Committee
headed by its National President, Mr. Godofredo Paceno, Sr.,
referred to in this Agreement as the UNION."[1]
The CBA includes, among others, the following pertinent provisions:
Article II-Union Security
Section 1. Coverage and Scope. All employees who are covered by this
Agreement and presently members of the UNION shall remain members
of the UNION for the duration of this Agreement as a condition precedent
to continued employment with the COMPANY.
xxxxxx
xxxxxx
Section 4. Dismissal. Any such employee mentioned in Section 2 hereof,

who fails to maintain his membership in the UNION for non-payment of
UNION dues, for resignation and for violation of UNIONs Constitution and
By-Laws and any new employee as defined in Section 2 of this Article
shall upon written notice of such failure to join or to maintain membership
in the UNION and upon written recommendation to the COMPANY by the
UNION, be dismissed from the employment by the COMPANY; provided,
however, that the UNION shall hold the COMPANY free and blameless
from any and all liabilities that may arise should the dismissed employee
question, in any manner, his dismissal; provided, further that the matter of
the employees dismissal under this Article may be submitted as a
grievance under Article XIII and, provided, finally, that no such written
recommendation shall be made upon the COMPANY nor shall COMPANY
be compelled to act upon any such recommendation within the period of
sixty (60) days prior to the expiry date of this Agreement conformably to
law."
Article IX
Section 4. Program Fund - The Company shall provide the amount of P10,
000.00 a month for a continuing labor education program which shall be
remitted to the Federation x x x."[2]
On September 12, 1986, a local union election was held under the auspices of the
ULGWP wherein the herein petitioner, Beda Magdalena Villanueva, and the other union
officers were proclaimed as winners. Minutes of the said election were duly filed with the
Bureau of Labor Relations on September 29, 1986.
On March 21, 1987, a Petition for Impeachment was filed with the national federation
ULGWP by the defeated candidates in the aforementioned election.
On June 16, 1987, the federation conducted an audit of the local union funds. The
investigation did not yield any unfavorable result and the local union officers were
cleared of the charges of anomaly in the custody, handling and disposition of the union
funds.
The 14 defeated candidates filed a Petition for Impeachment/Expulsion of the local

union officers with the DOLE NCR on November 5, 1987, docketed as NCR-OD-M-11-
780-87. However, the same was dismissed on March 2, 1988, by Med-Arbiter Renato
Parungo for failure to substantiate the charges and to present evidence in support of the
allegations.
On April 17, 1988, the local union held a general membership meeting at the Caruncho
Complex in Pasig. Several union members failed to attend the meeting, prompting the
Executive Board to create a committee tasked to investigate the non-attendance of
several union members in the said assembly, pursuant to Sections 4 and 5, Article V of
the Constitution and By-Laws of the union, which read:
"Seksyon 4. Ang mga kinukusang hindi pagdalo o hindi paglahok sa lahat

ng hakbangin ng unyon ng sinumang kasapi o pinuno ay maaaring
maging sanhi ng pagtitiwalag o pagpapataw ng multa ng hindi hihigit sa
P50.00 sa bawat araw na nagkulang.
Seksyon 5. Ang sinumang dadalo na aalis ng hindi pa natatapos ang

pulong ay ituturing na pagliban at maparusahan ito ng alinsunod sa Article
V, Seksyong 4 ng Saligang Batas na ito. Sino mang kasapi o pisyales na
mahuli and dating sa takdang oras ng di lalampas sa isang oras ay
magmumulta ng P25.00 at babawasin sa sahod sa pamamagitan ng
salary deduction at higit sa isang oras ng pagdating ng huli ay ituturing na
pagliban.[3]
On June 27, 1988, the local union wrote respondent company a letter requesting it to
deduct the union fines from the wages/salaries of those union members who failed to
attend the general membership meeting. A portion of the said letter stated:
"xxx xxx xxx
In connection with Section 4 Article II of our existing Collective Bargaining

Agreement, please deduct the amount of P50.00 from each of the union
members named in said annexes on the payroll of July 2-8, 1988 as fine
for their failure to attend said general membership meeting."[4]
In a Memorandum dated July 3, 1988, the Secretary General of the national federation,
Godofredo Paceo, Jr. disapproved the resolution of the local union imposing the P50.00
fine. The union officers protested such action by the Federation in a Reply dated July 4,
1988.
On July 11, 1988, the Federation wrote respondent company a letter advising the latter
not to deduct the fifty-peso fine from the salaries of the union members requesting that:
" x x x any and all future representations by MSMG affecting a number of

members be first cleared from the federation before corresponding action
by the Company."[5]
The following day, respondent company sent a reply to petitioner unions request in a
letter, stating that it cannot deduct fines from the employees salary without going
against certain laws. The company suggested that the union refer the matter to the
proper government office for resolution in order to avoid placing the company in the
middle of the issue.
The imposition of P50.00 fine became the subject of bitter disagreement between the
Federation and the local union culminating in the latters declaration of general
autonomy from the former through Resolution No. 10 passed by the local executive
board and ratified by the general membership on July 16, 1988.
In retaliation, the national federation asked respondent company to stop the remittance
of the local unions share in the education funds effective August 1988. This was
objected to by the local union which demanded that the education fund be remitted to it
in full.
The company was thus constrained to file a Complaint for Interpleader with a Petition
for Declaratory Relief with the Med-Arbitration Branch of the Department of Labor and
Employment, docketed as Case No. OD-M-8-435-88. This was resolved on October 28,
1988, by Med-Arbiter Anastacio Bactin in an Order, disposing thus:
"WHEREFORE, premises considered, it is hereby ordered:
1. That the United Lumber and General Workers of the Philippines

(ULGWP) through its local union officers shall administer the collective
bargaining agreement (CBA).
2. That petitioner company shall remit the P10,000.00 monthly labor

education program fund to the ULGWP subject to the condition that it shall
use the said amount for its intended purpose.
3. That the Treasurer of the MSMG shall be authorized to collect from the
356 union members the amount of P50.00 as penalty for their failure to
attend the general membership assembly on April 17, 1988.
However, if the MSMG Officers could present the individual written

authorizations of the 356 union members, then the company is obliged to
deduct from the salaries of the 356 union members the P50.00 fine." [6]
On appeal, Director Pura-Ferrer Calleja issued a Resolution dated February 7, 1989,
which modified in part the earlier disposition, to wit:
"WHEREFORE, premises considered, the appealed portion is hereby

modified to the extent that the company should remit the amount of five
thousand pesos (P5,000.00) of the P10,000.00 monthly labor education
program fund to ULGWP and the other P5,000.00 to MSMG, both unions
to use the same for its intended purpose."[7]
Meanwhile, on September 2, 1988, several local unions (Top Form, M. Greenfield,

Grosby, Triumph International, General Milling, and Vander Hons chapters) filed a
Petition for Audit and Examination of the federation and education funds of ULGWP
which was granted by Med-Arbiter Rasidali Abdullah on December 25, 1988 in an Order
which directed the audit and examination of the books of account of ULGWP.
On September 30, 1988, the officials of ULGWP called a Special National Executive
Board Meeting at Nasipit, Agusan del Norte where a Resolution was passed placing the
MSMG under trusteeship and appointing respondent Cesar Clarete as administrator.
On October 27, 1988, the said administrator wrote the respondent company informing
the latter of its designation of a certain Alfredo Kalingking as local union president and
"disauthorizing" the incumbent union officers from representing the employees. This
action by the national federation was protested by the petitioners in a letter to
respondent company dated November 11, 1988.
On November 13, 1988, the petitioner union officers received identical letters from the
administrator requiring them to explain within 72 hours why they should not be removed
from their office and expelled from union membership.
On November 26, 1988, petitioners replied:
(a) Questioning the validity of the alleged National Executive Board

Resolution placing their union under trusteeship;
(b) Justifying the action of their union in declaring a general autonomy

from ULGWP due to the latters inability to give proper educational,
organizational and legal services to its affiliates and the pendency of the
audit of the federation funds;
(c) Advising that their union did not commit any act of disloyalty as it has
remained an affiliate of ULGWP;
(d) Giving ULGWP a period of five (5) days to cease and desist from
further committing acts of coercion, intimidation and harrassment.[8]
However, as early as November 21, 1988, the officers were expelled from the ULGWP.
The termination letter read:
"Effective today, November 21, 1988, you are hereby expelled from
UNITED LUMBER AND GENERAL WORKERS OF THE PHILIPPINES
(ULGWP) for committing acts of disloyalty and/or acts inimical to the
interest and violative to the Constitution and by-laws of your federation.
You failed and/or refused to offer an explanation inspite of the time

granted to you.
Since you are no longer a member of good standing, ULGWP is

constrained to recommend for your termination from your employment,
and provided in Article II Section 4, known as UNION SECURITY, in the
Collective Bargaining agreement."[9]
On the same day, the federation advised respondent company of the expulsion of the
30 union officers and demanded their separation from employment pursuant to the
Union Security Clause in their collective bargaining agreement. This demand was
reiterated twice, through letters dated February 21 and March 4, 1989, respectively, to
respondent company.
Thereafter, the Federation filed a Notice of Strike with the National Conciliation and
Mediation Board to compel the company to effect the immediate termination of the
expelled union officers.
On March 7, 1989, under the pressure of a threatened strike, respondent company

terminated the 30 union officers from employment, serving them identical copies of the
termination letter reproduced below:
We received a demand letter dated 21 November 1988 from the United

Lumber and General Workers of the Philippines (ULGWP) demanding for
your dismissal from employment pursuant to the provisions of Article II,
Section 4 of the existing Collective Bargaining Agreement (CBA). In the
said demand letter, ULGWP informed us that as of November 21, 1988,
you were expelled from the said federation "for committing acts of
disloyalty and/or acts inimical to the interest of ULGWP and violative to its
Constitution and By-laws particularly Article V, Section 6, 9, and 12, Article
XIII, Section 8."
In subsequent letters dated 21 February and 4 March 1989, the ULGWP

reiterated its demand for your dismissal, pointing out that notwithstanding
your expulsion from the federation, you have continued in your
employment with the company in violation of Sec. 1 and 4 of Article II of
our CBA, and of existing provisions of law.
In view thereof, we are left with no alternative but to comply with the
provisions of the Union Security Clause of our CBA. Accordingly, we
hereby serve notice upon you that we are dismissing you from your
employment with M. Greenfield, Inc., pursuant to Sections 1 and 4, Article
II of the CBA effective immediately."[10]
On that same day, the expelled union officers assigned in the first shift were physically
or bodily brought out of the company premises by the companys security guards.
Likewise, those assigned to the second shift were not allowed to report for work. This
provoked some of the members of the local union to demonstrate their protest for the
dismissal of the said union officers. Some union members left their work posts and
walked out of the company premises.
On the other hand, the Federation, having achieved its objective, withdrew the Notice of
Strike filed with the NCMB.
On March 8, 1989, the petitioners filed a Notice of Strike with the NCMB, DOLE, Manila,
docketed as Case No. NCMB-NCR-NS-03-216-89, alleging the following grounds for
the strike:
(a) Discrimination
(b) Interference in union activities
(c) Mass dismissal of union officers and shop stewards
(d) Threats, coercion and intimidation
(e) Union busting
The following day, March 9, 1989, a strike vote referendum was conducted and out of 2,
103 union members who cast their votes, 2,086 members voted to declare a strike.
On March 10, 1989, the thirty (30) dismissed union officers filed an urgent petition,
docketed as Case No. NCMB-NCR-NS-03-216-89, with the Offfice of the Secretary of
the Department of Labor and Employment praying for the suspension of the effects of
their termination from employment. However, the petition was dismissed by then
Secretary Franklin Drilon on April 11, 1989, the pertinent portion of which stated as
follows:
"At this point in time, it is clear that the dispute at M. Greenfield is purely
an intra-union matter. No mass lay-off is evident as the terminations have
been limited to those allegedly leading the secessionist group leaving
MSMG-ULGWP to form a union under the KMU. xxx
xxx xxx xxx

WHEREFORE, finding no sufficient jurisdiction to warrant the exercise of
our extraordinary authority under Article 277 (b) of the Labor Code, as
amended, the instant Petition is hereby DISMISSED for lack of merit.
SO ORDERED."[11]
On March 13 and 14, 1989, a total of 78 union shop stewards were placed under
preventive suspension by respondent company. This prompted the union members to
again stage a walk-out and resulted in the official declaration of strike at around 3:30 in
the afternoon of March 14, 1989. The strike was attended with violence, force and
intimidation on both sides resulting to physical injuries to several employees, both
striking and non-striking, and damage to company properties.
The employees who participated in the strike and allegedly figured in the violent incident
were placed under preventive suspension by respondent company. The company also
sent return-to-work notices to the home addresses of the striking employees thrice
successively, on March 27, April 8 and April 31, 1989, respectively. However,
respondent company admitted that only 261 employees were eventually accepted back
to work. Those who did not respond to the return-to-work notice were sent termination
letters dated May 17, 1989, reproduced below:
M. Greenfield Inc., (B)
Km. 14, Merville Rd., Paraaque, M.M.
May 17, 1989
xxx
On March 14, 1989, without justifiable cause and without due notice, you
left your work assignment at the prejudice of the Companys operations.
On March 27, April 11, and April 21, 1989, we sent you notices to report to
the Company. Inspite of your receipt of said notices, we have not heard
from you up to this date.
Accordingly, for your failure to report, it is construed that you have

effectively abandoned your employment and the Company is, therefore,
constrained to dismiss you for said cause.
Very truly yours,
M. GREENFIELD, INC., (B)
By:
WENZEL STEPHEN LIGOT

Asst. HRD Manager"[12]
On August 7, 1989, the petitioners filed a verified complaint with the Arbitration Branch,
National Capital Region, DOLE, Manila, docketed as Case No. NCR-00-09-04199-89,
charging private respondents of unfair labor practice which consists of union busting,
illegal dismissal, illegal suspension, interference in union activities, discrimination,
threats, intimidation, coercion, violence, and oppresion.
After the filing of the complaint, the lease contracts on the respondent companys office
and factory at Merville Subdivision, Paraaque expired and were not renewed. Upon
demand of the owners of the premises, the company was compelled to vacate its office
and factory.
Thereafter, the company transferred its administration and account/client servicing

department at AFP-RSBS Industrial Park in Taguig, Metro Manila. For failure to find a
suitable place in Metro Manila for relocation of its factory and manufacturing operations,
the company was constrained to move the said departments to Tacloban, Leyte. Hence,
on April 16, 1990, respondent company accordingly notified its employees of a
temporary shutdown. in operations. Employees who were interested in relocating to
Tacloban were advised to enlist on or before April 23, 1990.
The complaint for unfair labor practice was assigned to Labor Arbiter Manuel Asuncion
but was thereafter reassigned to Labor Arbiter Cresencio Ramos when respondents
moved to inhibit him from acting on the case.
On December 15, 1992, finding the termination to be valid in compliance with the union
security clause of the collective bargaining agreement, Labor Arbiter Cresencio Ramos
dismissed the complaint.
Petitioners then appealed to the NLRC. During its pendency, Commissioner Romeo
Putong retired from the service, leaving only two commissioners, Commissioner Vicente
Veloso III and Hon. Chairman Bartolome Carale in the First Division. When
Commissioner Veloso inhibited himself from the case, Commissioner Joaquin Tanodra
of the Third Division was temporarily designated to sit in the First Division for the proper
disposition of the case.
The First Division affirmed the Labor Arbiters disposition. With the denial of their motion
for reconsideration on January 28, 1994, petitioners elevated the case to this Court,
attributing grave abuse of discretion to public respondent NLRC in:
I. UPHOLDING THE DISMISSAL OF THE UNION OFFICERS BY

RESPONDENT COMPANY AS VALID;
II. HOLDING THAT THE STRIKE STAGED BYTHE PETITIONERS AS

ILLEGAL;
III. HOLDING THAT THE PETITIONER EMPLOYEES WERE DEEMED
TO HAVE ABANDONED THEIR WORK AND HENCE, VALIDLY
DISMISSED BY RESPONDENT COMPANY; AND
IV. NOT FINDING RESPONDENT COMPANY AND RESPONDENT

FEDERATION OFFICERS GUILTY OF ACTS OF UNFAIR LABOR
PRACTICE.
Notwithstanding the several issues raised by the petitioners and respondents in the
voluminous pleadings presented before the NLRC and this Court, they revolve around
and proceed from the issue of whether or not respondent company was justified in
dismissing petitioner employees merely upon the labor federations demand for the
enforcement of the union security clause embodied in their collective bargaining
agreement.
Before delving into the main issue, the procedural flaw pointed out by the petitioners
should first be resolved.
Petitioners contend that the decision rendered by the First Division of the NLRC is not
valid because Commissioner Tanodra, who is from the Third Division, did not have any
lawful authority to sit, much less write the ponencia, on a case pending before the First
Division. It is claimed that a commissioner from one division of the NLRC cannot be
assigned or temporarily designated to another division because each division is
assigned a particular territorial jurisdiction. Thus, the decision rendered did not have any
legal effect at all for being irregularly issued.
Petitioners argument is misplaced. Article 213 of the Labor Code in enumerating the
powers of the Chairman of the National Labor Relations Commission provides that:
"The concurrence of two (2) Commissioners of a division shall be

necessary for the pronouncement of a judgment or resolution. Whenever
the required membership in a division is not complete and the
concurrence of two (2) commissioners to arrive at a judgment or resolution
cannot be obtained, the Chairman shall designate such number of
additional Commissioners from the other divisions as may be necessary."
It must be remembered that during the pendency of the case in the First Division of the
NLRC, one of the three commissioners, Commissioner Romeo Putong, retired, leaving
Chairman Bartolome Carale and Commissioner Vicente Veloso III. Subsequently,
Commissioner Veloso inhibited himself from the case because the counsel for the
petitioners was his former classmate in law school. The First Division was thus left with
only one commissioner. Since the law requires the concurrence of two commisioners to
arrive at a judgment or resolution, the Commission was constrained to temporarily
designate a commissioner from another division to complete the First Division. There is
nothing irregular at all in such a temporary designation for the law empowers the
Chairman to make temporary assignments whenever the required concurrence is not
met. The law does not say that a commissioner from the first division cannot be
temporarily assigned to the second or third division to fill the gap or vice versa. The
territorial divisions do not confer exclusive jurisdiction to each division and are merely
designed for administrative efficiency.
Going into the merits of the case, the court finds that the Complaint for unfair labor
practice filed by the petitioners against respondent company which charges union
busting, illegal dismissal, illegal suspension, interference in union activities,
discrimination, threats, intimidation, coercion, violence, and oppression actually
proceeds from one main issue which is the termination of several employees by
respondent company upon the demand of the labor federation pursuant to the union
security clause embodied in their collective bargaining agreement.
Petitioners contend that their dismissal from work was effected in an arbitrary, hasty,
capricious and illegal manner because it was undertaken by the respondent company
without any prior administrative investigation; that, had respondent company conducted
prior independent investigation it would have found that their expulsion from the union
was unlawful similarly for lack of prior administrative investigation; that the federation
cannot recommend the dismissal of the union officers because it was not a principal
party to the collective bargaining agreement between the company and the union; that
public respondents acted with grave abuse of discretion when they declared petitioners
dismissals as valid and the union strike as illegal and in not declaring that respondents
were guilty of unfair labor practice.
Private respondents, on the other hand, maintain that the thirty dismissed employees
who were former officers of the federation have no cause of action against the
company, the termination of their employment having been made upon the demand of
the federation pursuant to the union security clause of the CBA; the expelled officers of
the local union were accorded due process of law prior to their expulsion from their
federation; that the strike conducted by the petitioners was illegal for noncompliance
with the requirements; that the employees who participated in the illegal strike and in
the commission of violence thereof were validly terminated from work; that petitioners
were deemed to have abandoned their employment when they did not respond to the
three return to work notices sent to them; that petitioner labor union has no legal
personality to file and prosecute the case for and on behalf of the individual employees
as the right to do so is personal to the latter; and that, the officers of respondent
company cannot be liable because as mere corporate officers, they acted within the
scope of their authority.
Public respondent, through the Labor Arbiter, ruled that the dismissed union officers
were validly and legally terminated because the dismissal was effected in compliance
with the union security clause of the CBA which is the law between the parties. And this
was affimed by the Commission on appeal. Moreover, the Labor Arbiter declared that
notwithstanding the lack of a prior administrative investigation by respondent company,
under the union security clause provision in the CBA, the company cannot look into the
legality or illegality of the recommendation to dismiss by the union nd the obligation to
dismiss is ministerial on the part of the company.[13]
This ruling of the NLRC is erroneous. Although this Court has ruled that union security
clauses embodied in the collective bargaining agreement may be validly enforced and
that dismissals pursuant thereto may likewise be valid, this does not erode the
fundamental requirement of due process. The reason behind the enforcement of union
security clauses which is the sanctity and inviolability of contracts[14] cannot override
ones right to due process.
In the case of Cario vs. National Labor Relations Commission,[15] this Court pronounced
that while the company, under a maintenance of membership provision of the collective
bargaining agreement, is bound to dismiss any employee expelled by the union for
disloyalty upon its written request, this undertaking should not be done hastily and
summarily. The company acts in bad faith in dismissing a worker without giving him the
benefit of a hearing.
"The power to dismiss is a normal prerogative of the employer. However,

this is not without limitation. 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, xxx. 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
respect and protect the rights of their employees, which include the right to
labor."
In the case under scrutiny, petitioner union officers were expelled by the federation for
allegedly commiting acts of disloyalty and/or inimical to the interest of ULGWP and in
violation of its Constitution and By-laws. Upon demand of the federation, the company
terminated the petitioners without conducting a separate and independent investigation.
Respondent company did not inquire into the cause of the expulsion and whether or not
the federation had sufficient grounds to effect the same. Relying merely upon the
federations allegations, respondent company terminated petitioners from employment
when a separate inquiry could have revealed if the federation had acted arbitrarily and
capriciously in expelling the union officers. Respondent companys allegation that
petitioners were accorded due process is belied by the termination letters received by
the petitioners which state that the dismissal shall be immediately effective.
As held in the aforecited case of Cario, "the right of an employee to be informed of the
charges against him and to reasonable opportunity to present his side in a controversy
with either the company or his own union is not wiped away by a union security clause
or a union shop clause in a collective bargaining agreement. An employee is entitled to
be protected not only from a company which disregards his rights but also from his own
union the leadership of which could yield to the temptation of swift and arbitrary
expulsion from membership and mere dismissal from his job."
While respondent company may validly dismiss the employees expelled by the union for
disloyalty under the union security clause of the collective bargaining agreement upon
the recommendation by the union, this dismissal should not be done hastily and
summarily thereby eroding the employees right to due process, self-organization and
security of tenure. The enforcement of union security clauses is authorized by law
provided such enforcement is not characterized by arbitrariness, and always with due
process.[16] Even on the assumption that the federation had valid grounds to expell the
union officers, due process requires that these union officers be accorded a separate
hearing by respondent company.
In its decision, public respondent also declared that if complainants (herein petitioners)
have any recourse in law, their right of action is against the federation and not against
the company or its officers, relying on the findings of the Labor Secretary that the issue
of expulsion of petitioner union officers by the federation is a purely intra-union matter.
Again, such a contention is untenable. While it is true that the issue of expulsion of the
local union officers is originally between the local union and the federation, hence, intra-
union in character, the issue was later on converted into a termination dispute when the
company dismissed the petitioners from work without the benefit of a separate notice
and hearing. As a matter of fact, the records reveal that the the termination was
effective on the same day that the the termination notice was served on the petitioners.
In the case of Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc.[17], the
Court held the company liable for the payment of backwages for having acted in bad
faith in effecting the dismissal of the employees.
"xxx Bad faith on the part of the respondent company may be gleaned
from the fact that the petitioner workers were dismissed hastily and
summarily. At best, it was guilty of a tortious act, for which it must assume
solidary liability, since it apparently chose to summarily dismiss the
workers at the unions instance secure in the unions contractual
undertaking that the union would hold it free from any liability arising from
such dismissal."
Thus, notwithstanding the fact that the dismissal was at the instance of the federation
and that it undertook to hold the company free from any liability resulting from such a
dismissal, the company may still be held liable if it was remiss in its duty to accord the
would-be dismissed employees their right to be heard on the matter.
Anent petitioners contention that the federation was not a principal party to the collective
bargaining agreement between the company and the union, suffice it to say that the
matter was already ruled upon in the Interpleader case filed by respondent company.
Med-Arbiter Anastacio Bactin thus ruled:
After a careful examination of the facts and evidences presented by the

parties, this Officer hereby renders its decision as follows:
1.) It appears on record that in the Collective Bargaining Agreement (CBA)
which took effect on July 1, 1986, the contracting parties are M.
Greenfield, Inc. (B) and Malayang Samahan ng Mga Manggagawa sa M.
Greenfield, Inc. (B) (MSMG)/United Lumber and General Workers of the
Philippines (ULGWP). However, MSMG was not yet a registered labor
organization at the time of the signing of the CBA. Hence, the union
referred to in the CBA is the ULGWP."[18]
Likewise on appeal, Director Pura Ferrer-Calleja put the issue to rest as follows:
It is undisputed that ULGWP is the certified sole and exclusive collective

bargaining agent of all the regular rank-and-file workers of the company,
M. Greenfield, Inc. (pages 31-32 of the records).
It has been established also that the company and ULGWP signed a 3-
year collective bargaining agreement effective July 1, 1986 up to June 30,
1989.[19]
Although the issue of whether or not the federation had reasonable grounds to expel the
petitioner union officers is properly within the original and exclusive jurisdiction of the
Bureau of Labor Relations, being an intra-union conflict, this Court deems it justifiable
that such issue be nonetheless ruled upon, as the Labor Arbiter did, for to remand the
same to the Bureau of Labor Relations would be to intolerably delay the case.
The Labor Arbiter found that petitioner union officers were justifiably expelled from the
federation for committing acts of disloyalty when it "undertook to disaffiliate from the
federation by charging ULGWP with failure to provide any legal, educational or
organizational support to the local. x x x and declared autonomy, wherein they prohibit
the federation from interfering in any internal and external affairs of the local union." [20]
It is well-settled that findings of facts of the NLRC are entitled to great respect and are
generally binding on this Court, but it is equally well-settled that the Court will not uphold
erroneous conclusions of the NLRC as when the Court finds insufficient or insubstantial
evidence on record to support those factual findings. The same holds true when it is
perceived that far too much is concluded, inferred or deduced from the bare or
incomplete facts appearing of record.[21]
In its decision, the Labor Arbiter declared that the act of disaffiliation and declaration of
autonomy by the local union was part of its "plan to take over the respondent
federation." This is purely conjecture and speculation on the part of public respondent,
totally unsupported by the evidence.
A local union has the right to disaffiliate from its mother union or declare its autonomy. A
local union, being a separate and voluntary association, is free to serve the interests of
all its members including the freedom to disaffiliate or declare its autonomy from the
federation to which it belongs when circumstances warrant, in accordance with the
constitutional guarantee of freedom of association.[22]
The purpose of affiliation by a local union with a mother union or a federation
"xxx is to increase by collective action the bargaining power in respect of

the terms and conditions of labor. Yet the locals remained the basic units
of association, free to serve their own and the common interest of all,
subject to the restraints imposed by the Constitution and By-Laws of the
Association, and free also to renounce the affiliation for mutual welfare
upon the terms laid down in the agreement which brought it into
existence."[23]
Thus, a local union which has affiliated itself with a federation is free to sever such
affiliation anytime and such disaffiliation cannot be considered disloyalty. In the absence
of specific provisions in the federations constitution prohibiting disaffiliation or the
declaration of autonomy of a local union, a local may dissociate with its parent union.[24]
The evidence on hand does not show that there is such a provision in ULGWPs
constitution. Respondents reliance upon Article V, Section 6, of the federations
constitution is not right because said section, in fact, bolsters the petitioner unions claim
of its right to declare autonomy:
Section 6. The autonomy of a local union affiliated with ULGWP shall be

respected insofar as it pertains to its internal affairs, except as provided
elsewhere in this Constitution.
There is no disloyalty to speak of, neither is there any violation of the federations
constitution because there is nothing in the said constitution which specifically prohibits
disaffiliation or declaration of autonomy. Hence, there cannot be any valid dismissal
because Article II, Section 4 of the union security clause in the CBA limits the dismissal
to only three (3) grounds, to wit: failure to maintain membership in the union (1) for non-
payment of union dues, (2) for resignation; and (3) for violation of the unions
Constitution and By-Laws.
To support the finding of disloyalty, the Labor Arbiter gave weight to the fact that on
February 26, 1989, the petitioners declared as vacant all the responsible positions of
ULGWP, filled these vacancies through an election and filed a petition for the
registration of UWP as a national federation. It should be pointed out, however, that
these occurred after the federation had already expelled the union officers. The
expulsion was effective November 21, 1988. Therefore, the act of establishing a
different federation, entirely separate from the federation which expelled them, is but a
normal retaliatory reaction to their expulsion.
With regard to the issue of the legality or illegality of the strike, the Labor Arbiter held
that the strike was illegal for the following reasons: (1) it was based on an intra-union
dispute which cannot properly be the subject of a strike, the right to strike being limited
to cases of bargaining deadlocks and unfair labor practice (2) it was made in violation of
the "no strike, no lock-out" clause in the CBA, and (3) it was attended with violence,
force and intimidation upon the persons of the company officials, other employees
reporting for work and third persons having legitimate business with the company,
resulting to serious physical injuries to several employees and damage to company
property.
On the submission that the strike was illegal for being grounded on a non-strikeable
issue, that is, the intra-union conflict between the federation and the local union, it bears
reiterating that when respondent company dismissed the union officers, the issue was
transformed into a termination dispute and brought respondent company into the
picture. Petitioners believed in good faith that in dismissing them upon request by the
federation, respondent company was guilty of unfair labor pratice in that it violated the
petitioners right to self-organization. The strike was staged to protest respondent
companys act of dismissing the union officers. Even if the allegations of unfair labor
practice are subsequently found out to be untrue, the presumption of legality of the
strike prevails.[25]
Another reason why the Labor Arbiter declared the strike illegal is due to the existence
of a no strike no lockout provision in the CBA. Again, such a ruling is erroneous. A no
strike, no lock out provision can only be invoked when the strike is economic in nature,
i.e. to force wage or other concessions from the employer which he is not required by
law to grant.[26] Such a provision cannot be used to assail the legality of a strike which is
grounded on unfair labor practice, as was the honest belief of herein petitioners. Again,
whether or not there was indeed unfair labor practice does not affect the strike.
On the allegation of violence committed in the course of the strike, it must be

remembered that the Labor Arbiter and the Commission found that "the parties are
agreed that there were violent incidents x x x resulting to injuries to both sides, the
union and management."[27] The evidence on record show that the violence cannot be
attributed to the striking employees alone for the company itself employed hired men to
pacify the strikers. With violence committed on both sides, the management and the
employees, such violence cannot be a ground for declaring the strike as illegal.
With respect to the dismissal of individual petitioners, the Labor Arbiter declared that
their refusal to heed respondents recall to work notice is a clear indication that they
were no longer interested in continuing their employment and is deemed abandonment.
It is admitted that three return to work notices were sent by respondent company to the
striking employees on March 27, April 11, and April 21, 1989 and that 261 employees
who responded to the notice were admittted back to work.
However, jurisprudence holds that for abandonment of work to exist, it is essential (1)
that the employee must have failed to report for work or must have been absent without
valid or justifiable reason; and (2) that there must have been a clear intention to sever
the employer-employee relationship manifested by some overt acts.[28] Deliberate and
unjustified refusal on the part of the employee to go back to his work post amd resume
his employment must be established. Absence must be accompanied by overt acts
unerringly pointing to the fact that the employee simply does not want to work
anymore.[29] And the burden of proof to show that there was unjustified refusal to go back
to work rests on the employer.
In the present case, respondents failed to prove that there was a clear intention on the
part of the striking employees to sever their employer-employee relationship. Although
admittedly the company sent three return to work notices to them, it has not been
substantially proven that these notices were actually sent and received by the
employees. As a matter of fact, some employees deny that they ever received such
notices. Others alleged that they were refused entry to the company premises by the
security guards and were advised to secure a clearance from ULGWP and to sign a
waiver. Some employees who responded to the notice were allegedly told to wait for
further notice from respondent company as there was lack of work.
Furthermore, this Court has ruled that an employee who took steps to protest his lay-off
cannot be said to have abandoned his work.[30] The filing of a complaint for illegal
dismissal is inconsistent with the allegation of abandonment. In the case under
consideration, the petitioners did, in fact, file a complaint when they were refused
reinstatement by respondent company.
Anent public respondents finding that there was no unfair labor practice on the part of
respondent company and federation officers, the Court sustains the same. As earlier
discussed, union security clauses in collective bargaining agreements, if freely and
voluntarily entered into, are valid and binding. Corrolarily, dismissals pursuant to union
security clauses are valid and legal subject only to the requirement of due process, that
is, notice and hearing prior to dismissal. Thus, the dismissal of an employee by the
company pursuant to a labor unions demand in accordance with a union security
agreement does not constitute unfair labor practice.[31]
However, the dismissal was invalidated in this case because of respondent companys
failure to accord petitioners with due process, that is, notice and hearing prior to their
termination. Also, said dismissal was invalidated because the reason relied upon by
respondent Federation was not valid. Nonetheless, the dismissal still does not constitute
unfair labor practice.
Lastly, the Court is of the opinion, and so holds, that respondent company officials
cannot be held personally liable for damages on account of the employees dismissal
because the employer corporation has a personality separate and distinct from its
officers who merely acted as its agents.
It has come to the attention of this Court that the 30-day prior notice requirement for the
dismissal of employees has been repeatedly violated and the sanction imposed for such
violation enunciated in Wenphil Corporation vs. NLRC[32] has become an ineffective
deterrent. Thus, the Court recently promulgated a decision to reinforce and make more
effective the requirement of notice and hearing, a procedure that must be observed
before termination of employment can be legally effected.
In Ruben Serrano vs. NLRC and Isetann Department Store (G.R. No. 117040, January
27, 2000), the Court ruled that an employee who is dismissed, whether or not for just or
authorized cause but without prior notice of his termination, is entitled to full backwages
from the time he was terminated until the decision in his case becomes final, when the
dismissal was for cause; and in case the dismissal was without just or valid cause, the
backwages shall be computed from the time of his dismissal until his actual
reinstatement. In the case at bar, where the requirement of notice and hearing was not
complied with, the aforecited doctrine laid down in the Serrano case applies.
WHEREFORE, the Petition is GRANTED; the decision of the National Labor Relations
Commission in case No. NCR-00-09-04199-89 is REVERSED and SET ASIDE; and the
respondent company is hereby ordered to immediately reinstate the petitioners to their
respective positions. Should reinstatement be not feasible, respondent company shall
pay separation pay of one month salary for every year of service. Since petitioners were
terminated without the requisite written notice at least 30 days prior to their termination,
following the recent ruling in the case of Ruben Serrano vs. National Labor Relations
Commission and Isetann Department Store, the respondent company is hereby ordered
to pay full backwages to petitioner-employees while the Federation is also ordered to
pay full backwages to petitioner-union officers who were dismissed upon its instigation.
Since the dismissal of petitioners was without cause, backwages shall be computed
from the time the herein petitioner employees and union officers were dismissed until
their actual reinstatement. Should reinstatement be not feasible, their backwages shall
be computed from the time petitioners were terminated until the finality of this decision.
Costs against the respondent company.
SO ORDERED.
Gonzaga-Reyes, J., concur.
Melo, J., (Chairman), in the result.
Vitug, and Panganiban, JJ., reiterate separate opinion in Serrano vs. NLRC, G.R.
117040 Jan. 27, 2000.
[1]
Rollo, p. 29
[2]
Ibid, p. 30-31, p. 823-824
[3]
Rollo, p. 34
[4]
Rollo, p.35
[5]
Ibid., p.40
[6]
Rollo, p.47
[7]
Ibid, p. 48
[8]
Rollo, p. 1522-1523.
[9]
Ibid., 1523-1524
[10]
Rollo, p. 58-59.
[11]
Rollo, p. 937.
[12]
Rollo, p. 837.
[13]
Decicion of the Labor Arbiter, p. 16 (p. 197 of Rollo)
[14]
Tanduay Distillery Labor Union vvs. NLRC, 149 SCRA 470 citing Victorias Milling Co., Inc. vs. Victorias-
Manapla Workers Organization, 9 SCRA 154
[15]
G. R. No. 91086, 8 May 1990, 185 SCRA 177.
[16]
Sanyo Philippines Workers Union-PSSLU vs. Canizares, 211 SCRA 361
[17]
90 SCRA 391
[18]
Rollo, p. 199
[19]
Ibid.
[20]
Rollo, p. 200
[21]
Bontia vs. NLRC, 255 SCRA 167
[22]
Volkschel vs. Bureau of Labor Relations, 137 SCRA 42
[23]
Tropical Hut Employees Union-CGW vs. Tropical Hut Food Market Inc., 181 SCRA 173; Adamson, Inc. vs. CIR,
127 SCRA 268; Liberty Cotton Mills Worker Union vs. Liberty Cotton Mills, Inc., 66 SCRA 512
[24]
Ferrer vs. National Labor Relations Commission, 224 SCRA 410; Peoples Industrial and Commercial Employees
and Workers Organization (FFW) vs. Peoples Industrial and Commercial Corp., 112 SCRA 440
[25]
Master Iron Labor Union vs. National Labor Relation s Commission , 219 SCRA 47.
[26]
Panay Electric Company Inc. vs. NLRC, 248 SCRA 688; Peoples Industrial and Commercial Employees and
Workers Organization (FFW) vs. PIC Corp., 112 SCRA 440; Consolidated Labor Association of the Philippines vs.
Marsman and Co., Inc., 11 SCRA 589; Master Iron Labor Union vs. NLRC, 219 SCRA 47; Phil. Metal Foundries
Inc. vs. CIR, 90 SCRA 135;
[27]
Decision of the Labor Arbiter, Rollo, p. 203
[28]
Philippine Advertising Counselors, Inc. vs. National Labor Relations Commission, 263 SCRA 395; Balayan
Colleges vs. National Labor Relations Commission, 255 SCRA 1.
[29]
Nueva Ecija I Electric Cooperative, Inc. vs. Minister of Labor, 184 SCRA 25, 30.
[30]
Bontia vs. National Labor Relations Commission, 255 SCRA 167; Batangas Laguna Tayabas Bus Company vs.
NLRC, 212 SCRA 792; Jackson Building Condominium Corporation vs. NLRC, 246 SCRA 329
[31]
Tanduay Distillery Labor Union vs. NLRC, 149 SCRA 470;Seno vs. Mendoza, 21 SCRA 1124.
[32]
170 SCRA 69 (1989)

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1) Paper vs. Laguesma GR No.

101738 April 12, 2000

G.R. No. 101738 April 12, 2000

PAPER INDUSTRIES CORPORATION OF THE PHILIPPINES, petitioner,

DE LEON, JR., J.:

The facts of the case are the following:

Hence, this petition.

PICOP anchors its petition on two (2) grounds, to wit:

THE PUBLIC RESPONDENT HONORABLE BIENVENIDO E. LAGUESMA,

THE PUBLIC RESPONDENT, HONORABLE BIENVENIDO E. LAGUESMA, ALSO ERRED

SO ORDERED. 1âw phi 1.nêt

Bellosillo, Mendoza, Quisumbing and Buena, JJ., concur.

Docketed as R-202-ROXI MED-UR-59-89, Department of Labor and Employment (DOLE),

Regional Office XI in Davao City, ibid.

Development Corporation v. Secretary Department of Labor and Employment, 205 SCRA

2) Tunay vs. Asia GR No.162025 Aug. 3, 2010

TUNAY NA PAGKAKAISA NG G.R. No. 162025

ASIA BREWERY, INC., Promulgated:

VILLARAMA, JR., J.:

The facts are:

Section 2. Bargaining Unit. The bargaining unit shall be comprised of all

Subsequently, a dispute arose when ABIs management stopped deducting union

BLMA-INDEPENDENT claimed that ABIs actions restrained the employees right

In his Decision, Voluntary Arbitrator Bienvenido Devera sustained the BLMA-

On appeal, the CA reversed the Voluntary Arbitrator, ruling that:

b) the 81 employees cannot validly become members of

c) petitioner has not committed any act that restrained or tended to

BLMA-INDEPENDENT filed a motion for reconsideration. In the meantime, a

The petition is anchored on the following grounds:

1. Abalos, Andrea A. Materials Mr. Andres G. Co

1. Laloon, Daisy S. Brewhouse Mr. William Tan

1. Arabit, Myrna F. Bottling Production Mr. Julius Palmares

1. Mapola, Ma. Esraliza T. Bottling Maintenance Mr. Ernesto Ang

1. Bordamonte, Rhumela D. Bottled Water Mr. Faustino Tetonche

1. Alcoran, Simeon A. Full Goods Mr. Tsoi Wah Tung

1. Magbag, Ma. Corazon C. Tank Farm/ Mr. Manuel Yu Liat

1. Capiroso, Francisca A. Quality Assurance Ms. Regina Mirasol

1. Alconaba, Elvira C. Engineering Mr. Clemente Wong

1. Alvarez, Ma. Luningning L. GP Administration Ms. Susan Bella

With respect to the Sampling Inspectors/Inspectresses and the Gauge Machine

WHEREFORE, the petition is GRANTED. The Decision dated November 22,

MARTIN S. VILLARAMA, JR.

CONCHITA CARPIO MORALES

CONCHITA CARPIO MORALES

Republic of the Philippines

G.R. No. 78755 July 19, 1989

GOLDEN FARMS, INC., petitioner,

J. V. Yap Law Office for petitioner.

Beethoven L. Orcullo for private respondent.

SO ORDERED. (p. 29, Rollo)

3. That with respect to those employees holding confidential positions, it is a basic

I HAS A MED-ARBITER THE POWER OR AUTHORITY TO DIRECT

The petition merits Our consideration.

(p. 41, Rollo)

Melencio-Herrera, (Chairperson), Padilla, Sarmiento and Regalado, JJ., concur.

4) Philips vs. NLRC GR No. 88957 June 25, 1992

Republic of the Philippines

G.R. No. 88957 June 25, 1992

PHILIPS INDUSTRIAL DEVELOPMENT, INC., petitioner,

DAVIDE, JR., J.:

In view of the foregoing, a decision is hereby rendered, ordering the respondent to

PEO-FFW appealed from the decision to the NLRC.

WHEREFORE, the foregoing premises considered, the appealed decision of the

It further ruled that: