DIGESTS Labor Day 2 1
53 KAPISANAN NG MGA MANGGAGAWA NG ALAK (NAFLU) vs.
Contents
35) TUNAY NA PAGKAKAISA NG MANGGAGAWA SA ASIA BREWERY, vs.
ASIA BREWERY, INC., .................................................................................................. 1
36 STANDARD CHARTERED (SCBEU-NUBE). v. STANDARD CHARTERED
BANK ............................................................................................................................... 2
37 SAN MIGUEL SUPERVISORS AND EXEMPT UNION V. LAGUESMA .......... 3
38 Sugbuanon Rural Bank Inc. v. USEC Laguesma (DOLE), Med-Arbiter Manit,
Sugbuanon Rural Bank Association of Professional Supervisory, Office, and
Technical Employees Union-Trade Unions Congress of the Philippines (2000) .... 5
39. METROLAB INDUSTRIES, INC. vs. Hon. MA. NIEVES ROLDAN-
CONFESOR, Sec. of DOLE, and METRODRUG CORP. EMPLOYEES
ASSOCIATION-FEDERATION OF FREE WORKERS .............................................. 5
40 PEPSI COLA PRODUCTS v. SEC OF LABOR ....................................................... 7
41 BENGUET ELECTRIC COOPERATIVE, INC vs. HON. PURA FERRER-
CALLEJA, Director of the Bureau of Labor Relations, and BENECO EMPLOYEES
LABOR UNION .............................................................................................................. 9
42. Central Negros Electric Cooperative vs DOLE ................................................... 10
43. REPUBLIC OF THE PHILIPPINES, represented by the SOCIAL SECURITY
COMMISSION and SOCIAL SECURITY SYSTEM,v. ASIAPRO
COOPERATIVE, ........................................................................................................... 11
44 REPUBLIC PLANTERS VS. LAGUESMA ............................................................ 14
45 MACTAN WORKERS UNION V. ABOITIZ ........................................................ 14
46 UNIVERSITY OF STO. TOMAS vs. NATIONAL LABOR RELATIONS
COMMISSION, UST FACULTY UNION .................................................................. 15
47. Sta. Lucia East Comm. Corp. v. Sec. of Labor ..................................................... 16
48 DUNLOP SLAZENGER (PHILS) vs SECRETARY OF LABOR and
EMPLOYMENT ............................................................................................................ 16
49. San Miguel Corp v. San Miguel etc. ..................................................................... 17
50 Progressive Dev. Corp. v. Sec. of Labor, et al ....................................................... 18
51 COASTAL SUBIC BAY TERMINAL, INC., vs. DEPARTMENT OF LABOR
and EMPLOYMENT – OFFICE OF THE SECRETARY, COASTAL SUBIC BAY
TERMINAL, INC. SUPERVISORY UNION-APSOTEU, and COASTAL SUBIC
BAY TERMINAL, INC. RANK-AND-FILE UNION-ALU-TUCP .......................... 20
52 Oceanic Air Products v CIR .................................................................................... 22
HAMILTON DISTILLERY COMPANY, CO BON BENG, MARIANO ANG ENG
and HAMILTON WORKERS' UNION (1962)........................................................... 23
54. UNITED SEAMEN'S UNION OF THE PHILIPPINES, vs. DAVAO
SHIPOWNERS ASSOCIATION. ................................................................................. 24
55 GUIJARNO v. COURT OF INDUSTRIAL RELATIONS .................................... 25
35) TUNAY NA PAGKAKAISA NG MANGGAGAWA SA
ASIA BREWERY, vs. ASIA BREWERY, INC.,
G.R. No. 162025
August 3, 2010
TOPIC: Confidential Employees
PONENTE: VILLARAMA, JR., J. Respondent insisted they fall under the "Con-
fidential and Executive Secretaries" expressly excluded by the CBA from the rank-
and-file bargaining unit. However, perusal of the job descriptions of these secre-
taries/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 du-
ties.
FACTS:
1. 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), effective for five (5) years with Bisig at
Lakas ng mga Manggagawa sa Asia-Independent (BLMA), the exclusive bargain-
ing representative of ABI’s rank-and-file employees. Under the CBA, 12 jobs were
defined to be excluded from the bargaining agreement.
2. Subsequently, a dispute arose when ABI’s management stopped deducting un-
ion dues from eighty-one (81) employees, believing that their membership in
BLMA violated the CBA.
3. BLMA claimed that ABI’s actions restrained the employees’ right to self-organ-
ization and brought the matter to the grievance machinery. As the parties failed to
amicably settle the controversy, BLMA lodged a complaint before the National
 DIGESTS Labor Day 2 2

Conciliation and Mediation Board (NCMB). The parties eventually agreed to sub- Clearly, the rationale under our previous rulings for the exclusion of executive
mit the case for arbitration to resolve the issue of "whether or not there is restraint secretaries or division secretaries would have little or no significance considering
to employees in the exercise of their right to self-organization." the lack of or very limited access to confidential information of these secretar-
ies/clerks. It is not even farfetched that the job category may exist only on paper
4. Voluntary Arbitrator (VA) ruled in favor of BLMA. Accordingly, the subject em-
since they are all daily-paid workers. Quite understandably, petitioner had earlier
ployees were declared eligible for inclusion within the bargaining unit represented
expressed the view that the positions were just being "reclassified" as these em-
by BLMA. On appeal by ABI to the CA, it reversed the VA, ruling that the 81 em-
ployees actually discharged routine functions. We thus hold that the secretar-
ployees are excluded from and are not eligible for inclusion in the bargaining unit
ies/clerks, numbering about forty (40), are rank-and-file employees and not con-
as defined in Section 2, Article I of the CBA; the 81 employees cannot validly be-
fidential employees.
come members of respondent and/or if already members, that their membership
is violative of the CBA and that they should disaffiliate from respondent; and pe- Sub Issue:
titioner has not committed any act that restrained or tended to restrain its employ-
Whether or not the company committed unfair labor practice by restraining to em-
ees in the exercise of their right to self-organization.
ployees in the exercise of their right to self-organization.
5. In the meantime, a certification election was held on August 10, 2002 wherein
Held: No. Considering that the herein dispute arose from a simple disagreement
petitioner Tunay na Pagkakaisa ng Manggagawa sa Asia (TPMA) won. As the in-
in the interpretation of the CBA provision on excluded employees from the bar-
cumbent bargaining representative of ABI’s rank-and-file employees claiming in-
gaining unit, respondent cannot be said to have committed unfair labor practice
terest in the outcome of the case, petitioner filed with the CA an omnibus motion
that restrained its employees in the exercise of their right to self-organization, nor
for reconsideration of the decision and intervention, with attached petition signed
have thereby demonstrated an anti-union stance.
by the union officers. Both motions were denied by the CA
CASE LAW/ DOCTRINE:
ISSUE: Whether or not the workers were confidential employees
Confidential employees are defined as those who (1) assist or act in a confidential
HELD: No. We hold that the secretaries/clerks, numbering about forty (40), are
capacity, (2) to persons who formulate, determine, and effectuate management
rank-and-file employees and not confidential employees.
policies in the field of labor relations. The two criteria are cumulative, and both
RATIO: 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,
Although Article 245 of the Labor Code limits the ineligibility to join, form and
and the supervisor must handle the prescribed responsibilities relating to labor
assist any labor organization to managerial employees, jurisprudence has ex-
relations. In the present case, there is no showing that the secretaries/clerks and
tended this prohibition to confidential employees or those who by reason of their
checkers assisted or acted in a confidential capacity to managerial employees and
positions or nature of work are required to assist or act in a fiduciary manner to
obtained confidential information relating to labor relations policies. And even as-
managerial employees and hence, are likewise privy to sensitive and highly con-
suming that they had exposure to internal business operations of the company, as
fidential records. Confidential employees are thus excluded from the rank-and-file
respondent claims, this is not per se ground for their exclusion in the bargaining
bargaining unit. The rationale for their separate category and disqualification to
unit of the rank-and-file employees.
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 36 STANDARD CHARTERED (SCBEU-NUBE). v.
membership. Having access to confidential information, confidential employees STANDARD CHARTERED BANK
may also become the source of undue advantage. Said employees may act as a spy 2008
or spies of either party to a collective bargaining agreement.
Austria-Martinez, J.
In the present case, the CBA expressly excluded "Confidential and Executive Sec-
retaries" from the rank-and-file bargaining unit, for which reason ABI seeks their TOPIC. Workers with no right to self-organization (collective bargaining); Mana-
disaffiliation from petitioner. Respondent failed to indicate who among these nu- gerial and confidential employees; Test
merous workers have access to confidential data relating to management policies Facts: The 1998-2000 Collective Bargaining Agreement between the Standard
that could give rise to potential conflict of interest with their Union membership. Chartered Bank employees Union (SCBEU-NUBE) and the Standard Chartered

Bank expired so the parties tried to renew it but then a deadlock ensued. Under
the old CBA, the following are excluded as appropriate bargaining unit:
A. All covenanted and assistant officers (now called National Officers)
B. One confidential secretary of each of the:
1. Chief Executive, Philippine Branche
2. Deputy Chief Executive/Head, Corporate Banking Group
3. Head, Finance
4. Head, Human Resources
5. Manager, Cebu
6. Manager, Iloilo
7. Covenanted Officers provided said positions shall be filled by new recruits.
C. The Chief Cashiers and Assistant Cashiers in Manila, Cebu and Iloilo, and in
any other branch that the BANK may establish in the country.
D. Personnel of the Telex Department
E. All Security Guards
F. Probationary employees, without prejudice to Article 277 (c) of the Labor
Code, as amended by R.A. 6715, casuals or emergency employees; and
G. One (1) HR Staff
But then in the renewal sought by SCBEU-NUBE, they only wanted the exclusion
to apply only to the following employees from the appropriate bargaining unit –
all managers who are vested with the right to hire and fire employees, confiden-
tial employees, those with access to labor relations materials, Chief Cashiers, As-
sistant Cashiers, personnel of the Telex Department and one Human Resources
(HR) staff.
A notice of strike was given to the Department of Labor due to this deadlock.
Then DOLE Secretary Patricia Sto. Tomas issued an order dismissing the Union’s
plea.
ISSUE: Whether or not the confidential employees can be removed from the ex-
clusion as appropriate bargaining unit by SCBEU-NUBE
HELD: No (but justification is procedural) in this case. Procedural: whether or
not the employees sought to be excluded from the appropriate bargaining unit
are confidential employees is a question of fact, which is not a proper issue in a
petition for review under Rule 45 of the Rules of Court.
Substantive: The disqualification of managerial and confidential employees from
joining a bargaining unit for rank and file employees is already well-entrenched
in jurisprudence. While Article 245 of the Labor Code limits the ineligibility to
join, form and assist any labor organization to managerial employees, jurispru-
dence 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 fiduci-
ary manner to managerial employees and hence, are likewise privy to sensitive
and highly confidential records.
As regards the qualification of bank cashiers as confidential employees, National
Association of Trade Unions (NATU) – Republic Planters Bank Supervisors
Chapter v. Torres16 declared that they are confidential employees having con-
DIGESTS Labor Day 2 3
trol, custody and/or access to confidential matters, e.g., the branch's cash posi-
tion, statements of financial condition, vault combination, cash codes for tele-
graphic transfers, demand drafts and other negotiable instruments, pursuant to
Sec. 1166.4 of the Central Bank Manual regarding joint custody, and therefore,
disqualified from joining or assisting a union; or joining, assisting or forming any
other labor organization.17
Golden Farms, Inc. v. Ferrer-Calleja18 meanwhile stated that "confidential em-
ployees such as accounting personnel, radio and telegraph operators who, hav-
ing access to confidential information, may become the source of undue ad-
vantage. Said employee(s) may act as spy or spies of either party to a collective
bargaining agreement."19
Finally, in Philips Industrial Development, Inc. v. National Labor Relations Com-
mission,20 the Court designated personnel staff, in which human resources staff
may be qualified, as confidential employees because by the very nature of their
functions, they assist and act in a confidential capacity to, or have access to confi-
dential matters of, persons who exercise managerial functions in the field of labor
relations.
SCBEU-NUBE insists that the foregoing employees are not confidential employ-
ees; however, it failed to buttress its claim. Aside from its generalized arguments,
and despite the Secretary’s finding that there was no evidence to support it,
SCBEU-NUBE still failed to substantiate its claim. SCBEU-NUBE did not even
bother to state the nature of the duties and functions of these employees, depriv-
ing the Court of any basis on which it may be concluded that they are indeed
confidential employees.
**The resolution of this case has been overtaken by the execution of the parties'
2003-2005 CBA. While this would render the case moot and academic, neverthe-
less, the likelihood that the same issues will come up in the parties' future CBA
negotiations is not far-fetched, thus compelling its resolution.
37 SAN MIGUEL SUPERVISORS AND EXEMPT UNION
V. LAGUESMA
GR No. 110399 / 15 Aug 1997 / J. Romero
Facts:
 Dec 19 1990 - The med-arbiter Danilo Reynante issued an order ordering
the conduct of certification among the supervisors and exempt employees
of SMC Magnolia Poultry Product Plants of Cabuyao, San Fernando and
Otis as one bargaining unit.
 Jan 18 1991 - San Miguel Corp (respondent) filed a notic eof appeal with the
public respondent Laguesma, Undersecretary of DOLE, pointing out the
Med-Arbiter's error in grouping the three plants into one bargaining unit

and in including supervisory levels 3 and above whos epositions are confi-
dential in nature.
 Jul 23 1991 - Laguesma granted the appeal and remanded the case to the
med-arbiter.
 Aug 7 1991 - Petitioner Union filed MR, Laguesma granted and directed
conduct of separate certification elections among supervisor levels 1 to 4
and exempt employees in each plant (separate for each).
 Sep 21 1991 - SMC filed MR, which was also granted!? citing the case of
Philips Industrial Dev't Inc. v. NLRC which reads in part:
o Confidential employees, like managerial employees are not allowed
to form, join or assist a labor union for purposes of collective bar-
gaining.
 Laguesma found that S3 and S4 and so-called exempt employees are confi-
dential employees and are therefore not allowed to form, join or assist a
labor union for purposes of collective bargaining, and thus are not allowed
to participate in the certification election.
 Union petition for certiorari to the SC.
Issue:
 WON The supervisor levels 3 and 4 and exempt employees of the company
are considered confidential employees. NO
 WON the employees of the 3 plants constitute an appropriate single bar-
gaining unit. YES
Held:
First issue:
 Confidential employees are 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
 Both must be met as the criteria are cumulative.
 The exclusion of confidential employees from bargaining units has the ra-
tionale that employees should not be placed in a position involving a po-
tential conflict of interest.
 An important element o f the "confidential employee rule" is the employee's
need to use labor relations information. The contention of SMC is that S3
and S4 and the exempt employees come within the meaning of "confidential
DIGESTS Labor Day 2 4
employees" because they answered yes in the Position Questionnaire sub-
mitted by the Union to the question "Do you handle confidential data or
documents?"
 But in the same questionnaire it was stated that the confidential information
handled by the questioned employees relate to product formulation, prod-
uct standards and product specification which by no means relate to "labor
relations"
 Even granting arguendo that an employee has access to confidential labor
relations information but such is merely incidental to his duties and
knowledge thereof is not necessary in the performance of such duties, said
access does not render the employee a confidential employee.
 The functions of the supervisors 3 and higher:
1. To undertake decisions to discontinue/temporarily stop shift opera-
tions when situations require.
2. To effectively oversee the quality control function at the processing
lines in the storage of chicken and other products.
3. To administer efficient system of evaluation of products in the out-
lets.
4. To be directly responsible for the recall, holding and rejection of di-
rect manufacturing materials.
5. To recommend and initiate actions in the maintenance of sanitation
and hygiene throughout the plant.
 It is evident that the confidential information said employees have access
to concern the employer's internal business operations. This has no rele-
vance to negotiations and settlement of grievances wherein the interests of
a union and the management are invariably adversarial.
 Since the employees are not classifiable under the confidential type, they
may appropriately form a bargaining unit for purposes of collective bar-
gaining.
 Even assuming they are confidential employees, jurisprudence has estab-
lished that there is no legal prohibition against confidential employees who
are not performing managerial functions to form and join a union.
Second issue:
 An appropriate bargaining unit may be defined as "a group of employees
of a given employer, comprised of all or less than all of the entire body of
employees, which the collective interest of all the employees, consistent
with equity to the employer, indicate to be best suited to serve the reciprocal

rights and duties o the parties under the collective bargaining provisions of
the law"
 The employees have "community or mutuality of interest" which is the
standard in determining the proper constituency of a collective bargaining
unit.
 They all belong to Magnolia Poultry Division of San Miguel Corporation.
Although they are from three different plants, they perform work of the
same nature, receive the same compensation, and most importantly share a
common stake in the concerted activities.
 Geographic location is immaterial. It can be completely disregarded if the
communal interests of the employees are not sacrificed as demonstrated in
UP v. Calleja-Ferrer.
38 Sugbuanon Rural Bank Inc. v. USEC Laguesma (DOLE),
Med-Arbiter Manit, Sugbuanon Rural Bank Association of
Professional Supervisory, Office, and Technical Employ-
ees Union-Trade Unions Congress of the Philippines
(2000)
1. APSOTEU-TUCP (Union) is a legitimate labor organization affiliated
with Trade Unions Congress of the Philippines (TUCP)
2. Union filed for a certification of election to represent the supervisory em-
ployees of petitioner bank (SRBI).
3. SRBI filed a motion to dismiss, citing the following grounds:
a. Target members of the Union are all managerial or confidential
employees who are prohibited by law from joining unions.
b. Another labor union affiliated with TUCP is seeking to repre-
sent the rank-and-file employees of SRBI, which would be a vi-
olation of principle of separation of unions as per Atlas Lito-
graphic Services Inc. v. Laguesma.
4. Union’s opposed the motion in its answer:
a. Target members were merely supervisory employees
b. Labor Code Article 245 expressly allows supervisory employees
to join a union.
5. Target employees – TOTAL OF 5
a. 2 cashiers
b. 2 accountants
c. 1 acting chief of the loans department
6. A series of motions were filed all the way up to the DOLE USEC, who
denied SRBI’s appeal
a. SOTEU-TUCP is a legitimate labor organization
DIGESTS Labor Day 2 5
b. Question of managerial or confidential status of employees
should be taken up in a separate proceeding, not one for certifi-
cation election.
ISSUES: (1) WON target employees were managerial or confidential (NO) (2)
WON there was conflict of interest among the unions seeking to represent SRBI
employees (NO).
SC RULING:
Criteria for determining if Managerial– LC 212(m) “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 dis-
cipline employees. Supervisory employees are those who, in the interest of the em-
ployer, effectively recommend such managerial actions if the exercise of such au-
thority is not merely routinary or clerical in nature but requires the use of inde-
pendent judgment. All employees not falling within any of the above definitions
are considered rank-and-file employees for purposes of this Book.
Criteria for determining if Confidential Employees – those who (1) assist or act in
a confidential capacity, in regard (2) to persons who formulate, determine, and
effectuate management policies specifically in field of labor relations. Criteria are
cumulative and must be met if an employee is to be considered a confidential em-
ployee.
IN THIS CASE: The 5 employees are supervisory employees who at best have rec-
ommendatory powers and with respect to their functions only. In similar cases
decided, the determining factor that determined whether one was managerial was
the ability to recommend hiring, appointment, and promotion of subordinates.
With respect to being a confidential employee, although the bank’s day-to-day op-
erations were run mainly by these 5 employees, none were in charge of labor rela-
tions. Thus, LC 245 does not expressly prohibit all confidential employees from
joining a labor union, only those whose responsibilities are with respect to labor
relations policies.
ISSUE #2 -- APSOTEU-TUCP is a separate entity from TUCP and ALU-TUCP.
Since it will only represent supervisory employees, no conflict of interest.
39. METROLAB INDUSTRIES, INC. vs. Hon. MA.
NIEVES ROLDAN-CONFESOR, Sec. of DOLE, and
METRODRUG CORP. EMPLOYEES ASSOCIATION-
FEDERATION OF FREE WORKERS
Feb. 28, 1996; J. Kapunan

Summary: Petitioner Metrolab and respondent Union were still in the process of
resolving their CBA deadlock when petitioner implemented 2 waves of layoffs. As
a result, motions and oppositions were filed delaying resolution of the bargaining
deadlock and postponing the signing of their new CBA. Sec. of Labor declared that
the 1st layoff is illegal and that executive secretaries are excluded from the CBA’s
closed-shop provision but not from the bargaining unit. SC modified SoL’s reso-
lutions to the extent that executive secretaries of petitioner’s General Manager and
the executive secretaries of the members of its Management Committee are ex-
cluded from the bargaining unit of petitioner’s rank and file employees.
Doctrine: Although Art. 245 of the Labor Code limits the ineligibility to join, form
and assist any labor organization to managerial employees, under the doctrine of
necessary implication, confidential employees are similarly disqualified. Confi-
dential employees are 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. If confidential em-
ployees 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 em-
ployers. Moreover, unionization of confidential employees for the purpose of col-
lective 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 (National Association of Trade Union-Republic Plant-
ers Bank Supervisors Chapter v. Torres).
Facts:
 Private respondent Metro Drug Corporation Employees Association-Feder-
ation of Free Workers (Union) is a labor organization representing the rank
and file employees of petitioner Metrolab Industries, Inc. (Metrolab) and also
of Metro Drug, Inc.
 The CBA between Metrolab and the Union expired but the negotiations for
a new CBA ended in a deadlock. So, the Union filed a notice of strike against
Metrolab and Metro Drug Inc. The parties failed to settle their dispute de-
spite the conciliation efforts of the NCMB.
 To contain the escalating dispute, the then Sec. of Labor Torres, issued an
assumption order and an order resolving all the disputed items in the CBA
and ordered the parties involved to execute a new CBA.
 The Union filed a motion for reconsideration.
o During the pendency of the MR, Metrolab laid off 94 of its rank and
file employees (1st layoff).
 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
DIGESTS Labor Day 2 6
against committing acts that would exacerbate the dispute as specifically di-
rected in the assumption order.
o Metrolab contended that the layoff was temporary and in the exercise
of its management prerogative. It then recalled some of the laid off
workers on a temporary basis due to availability of work in the pro-
duction lines.
 (14 April 1992 Resolution) Acting Labor Sec. Confesor declared the layoff of
Metrolab’s 94 rank and file workers illegal and ordered their reinstatement
with full backwages.
 Metrolab filed a Partial MR and a motion for clarification regarding the con-
stitution of the bargaining unit covered by the CBA.
 The parties entered into a new CBA but the execution was without prejudice
to the outcome of the issues raised in the reconsideration and clarification
motions submitted for decision to the Sec. of Labor.
o Pending the aforestated motions, Metrolab laid off 73 of its employees
on grounds of redundancy due to lack of work (2nd layoff) which the
Union again promptly opposed.
 Confesor issued a cease and desist order. Metrolab moved for reconsidera-
tion.
 (25 January 1993 Omnibus Resolution) Confesor issued the ff orders:
o 1st wave of lay-off is illegal on grounds that this aggravated the con-
flict between Metrolab and the Union who were then locked in a stale-
mate in CBA negotiations. Metrolab to pay laid-off employees their
full backwages computed from the time of actual layoff to the time of
actual recall;
o The parties to incorporate in their respective CBAs the clarifications
contained in the Omnibus Resolution; and
o The legality of the 2nd wave of layoff is referred to the NLRC for its
appropriate action.
 Confesor also ruled that executive secretaries are excluded from the
closed-shop provision of the CBA, not from the bargaining unit.
 The Union filed a motion for execution. Metrolab opposed. Hence, the pre-
sent petition.
Issues:
1. WON Labor Sec. committed grave abuse of discretion and exceeded her juris-
diction in declaring the subject layoffs instituted by Metrolab illegal (NO)

2. (TOPICAL) WON Confesor gravely abused her discretion in including execu-
tive secretaries as part of the bargaining unit of rank and file employees (YES)
Ratio:
1. While the Court recognizes the exercise of management prerogatives and often
declines to interfere with the legitimate business decisions of the employer, this
privilege is not absolute but subject to limitations imposed by law, i.e Art. 263
(g). Metrolab’s business is of national interest since it is one of the leading man-
ufacturers and suppliers of medical and pharmaceutical products to the coun-
try. Thus, Metrolab’s management prerogatives are not being unjustly cur-
tailed but duly balanced with and tempered by the limitations set by law, tak-
ing into account its special character and the particular circumstances in the
case at bench.
2. (TOPICAL) 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 discussed in the ff jurisprudence:
- Bulletin Publishing Co., Inc. v. Hon. Augusto Sanchez: xxx if these manage-
rial 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 con-
flict of interests. The Union can also become company-dominated with
the presence of managerial employees in Union membership.
- Golden Farms, Inc. v. Ferrer-Calleja: xxx confidential employees such as ac-
counting 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 CBA.
- Pier 8 Arrastre & Stevedoring Services, Inc. v. Roldan-Confesor: xxx legal sec-
retaries 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 typ-
ing of legal documents, memoranda and correspondence, the keeping of
records and files, the giving of and receiving notices, and such other du-
ties as required by the legal personnel of the corporation. Legal secretar-
ies therefore fall under the category of confidential employees. . . .
The Union argues that confidential employees are rank and file employees and
they should be granted the benefits of the CBA. There is no valid basis for discrim-
inating against them. The Court holds that the dangers sought to be prevented,
particularly the threat of conflict of interest and espionage, are not eliminated by
non-membership of Metrolab’s 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
DIGESTS Labor Day 2 7
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. 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.
40 PEPSI COLA PRODUCTS v. SEC OF LABOR
August 10, 1999
J. Purisima
SUMMARY:
This case involves the issue of whether a union of supervisors of Pepsi can
affiliate themselves with a federation that includes rank and file unions. The
court held that they cannot do so since they are representatives of the em-
ployer and may have conflicting interests with the rank and file employees.
DOCTRINE:
-A confidential employee is one entrusted with confidence on delicate matters
or with the custody, handling or care and protection of the employer’s prop-
erty. While Art. 245 of the LC singles out managerial employee as ineligible
to join, assist or form any labor organization, under the doctrine of necessary
implication, confidential employees are similarly disqualified.
- In 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.
Test: - What is essential is the nature of the employee’s 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 em-
ployee
FACTS
This is a consolidation of 2 cases.
I. GR 96663
 DIGESTS Labor Day 2 8

1. Pepsi-Cola Employees Organization-UOEF (Union) filed a peti- - The intent of the law is to avoid a situation where supervisors will be
tion for certification election with the Med-Arbiter seeking to be comingling with those employees whom they directly supervise in their
the exclusive bargaining agents of supervisors of Pepsi-Cola own bargaining unit.
Philippines (Pepsi).
2. WON confidential employees can join the labor union of rank and file
2. The Med-Arbiter granted the petition with the explicit state-
employees – no
ment that it was an affiliate of Union Obreros Estivadores de
- In the collective bargaining process, managerial employees are supposed
Filipinas (federation) together with 2 rank and file union Pepsi
to be on the side of the employer, to act as its representatives, and to see
Cola Labor Unity(PCLU) and Pepsi-Cola Employees Union of
to it that its interest are well protected. The employer is not assured of
the Philippines(PEUP).
such protection if these employees themselves are union members. Col-
3. Pepsi filed a petition to set aside, cancel and/or revoke charter
lective bargaining in such a situation can become one-sided.
affiliation of the union on the grounds that (a) the members of
- Confidential employees are included in the disqualification found in Art.
the Union are manages and (b) a supervisors’ union can not af-
245 as if the disqualification of confidential employees were written in
filiate with a federation whose members include the rank and
the provision. If confidential employees could unionize in order to bar-
file union.
gain for advantages for themselves, then they could be governed by their
4. So the issue in this case is: WON a supervisors’ union can affili-
own motives rather than the interest of the employers.
ate with the same Federation of which 2 rank and file unions are
- Unionization of confidential employees for the purpose of collective bar-
also members, without violating Art. 245 of the Labor Code.
gaining would mean the extension of the law to persons or individuals
5. The issue here eventually became moot and academic since the
who are supposed to act “in the interest of” the employers. It is not
Union withdrew from the federation.
farfetched that in the course of collective bargaining, they might jeopard-
II. GR 103300
ize that interest which they are duty bound to protect.
1. What is assailed in this case is the Med-Arbiter’s decision of or-
- Golden Farms vs. Ferrer-Calleja: “confidential employees such as ac-
dering the conduct of a certification election to be participated
counting personnel, radio and telegraph operators who, having access to
by and among the supervisory workers of Pepsi.
confidential information, may become the source of undue advantage.
2. The BLR eventually issued a Registration Certificate in favor of
Said employee(s) may act as spy or spies of either party to a collective
the Union.
bargaining agreement.”
3. Pepsi questioned the decision claiming that these employees are
managerial employees and is prohibited from affiliating with a Test: Designation should be reconciled with the actual job description of the sub-
federation already affiliated with the rank and file union. ject employees. They do not exercise a final determination of the company policies
since they have to report to their respective superior. The mere fact that an em-
ISSUE/S:
ployee is designated manager does not necessarily make him one. Otherwise, there
1. WON the supervisors union can be affiliated with a Federation with 2 would be an absurd situation where one can be given the title just to be deprived
rank and file unions directly under the supervision of the former.- NO of the right to be a member of a union.
2. WON confidential employees can join the labor union of rank and file
- What is essential is the nature of the employee’s function and not the no-
employees. -NO
menclature or title given to the job which determines whether the em-
RATIO ployee has rank and file or managerial status, or whether he is a supervi-
sory employee
1. WON the supervisors union can be affiliated with a federation with 2
rank and file unions directly under the supervision of the former – no RULING:
- A supervisors’ union cannot join a local union of rank and file union. This Confidential employees not eligible for membership in a supervisors’ union.
prohibition even extends to a supervisors’ local union applying for mem-
G.R. No. 79025. December 29, 1989.
bership in a national federation the members of which include local un-
ions of the rank and file.

41 BENGUET ELECTRIC COOPERATIVE, INC vs. HON.
PURA FERRER-CALLEJA, Director of the Bureau of Labor
Relations, and BENECO EMPLOYEES LABOR UNION
Facts:
Beneco Worker's Labor Union-Association of Democratic Labor Organizations
(BWLU- ADLO) filed a petition for direct certification as the sole and exclusive
bargaining representative of all the rank and file employees of Benguet Electric
Cooperative, Inc. (BENECO) alleging that BENECO has in its employ 214 rank and
file employees; that 198 or 92.5% of these employees have supported the filing of
the petition; that no certification election has been conducted for the last 12
months; that there is no existing collective bargaining representative of the rank
and file employees sought to represented by BWLU- ADLO; and, that there is no
collective bargaining agreement in the cooperative.
An opposition to the petition was filed by the Beneco Employees Labor Union
(BELU) contending that it was certified as the sole and exclusive bargaining rep-
resentative of the subject workers pursuant to an order issued by the med-arbiter;
that pending resolution by the NLRC are two cases it filed against BENECO in-
volving bargaining deadlock and unfair labor practice; and, that the pendency of
these cases bars any representation question.
BENECO, on the other hand, filed a motion to dismiss the petition claiming that it
is a non-profit electric cooperative engaged in providing electric services to its
members and patron-consumers; and, that the employees sought to be represented
by BWLU-ADLO are not eligible to form, join or assist labor organizations of their
own choosing because they are members and joint owners of the cooperative.
The med-arbiter issued an order giving due course to the petition for certification
election. However, the med-arbiter limited the election among the rank and file
employees of BENECO who are non-members thereof and without any involve-
ment in the actual ownership of the cooperative. The med-arbiter found that there
are 37 employees who are not members and without any involvement in the actual
ownership of the cooperative.
BELU and BENECO appealed but the same was dismissed for lack of merit. So
BENECO filed with the SC a petition for certiorari which the SC dismissed for lack
of merit in a minute resolution dated April 1986.
The ordered certification election was held in October 1986. Prior to the conduct
thereof BENECO's counsel verbally manifested that "the cooperative is protesting
that employees who are members-consumers are being allowed to vote when they
are not eligible to be members of any labor union for purposes of collective bar-
gaining; much less, to vote in this certification election." BENECO submitted a cer-
DIGESTS Labor Day 2 9
tification showing that only 4 employees are not members of BENECO and in-
sisted that only these employees are eligible to vote in the certification election.
Canvass of the votes showed that BELU garnered 49 of the 83 "valid" votes cast.
Thereafter BENECO formalized its verbal manifestation by filing a Protest. The
med-arbiter dismissed the protest. BLR director Calleja affirmed the med-arbiter's
order and certified BELU as the sole and exclusive bargaining agent of all the rank
and file employees of BENECO.
Issue: W/N employees of a cooperative are qualified to form or join a labor organ-
ization for purposes of collective bargaining. NO
Ratio:
Under Article 256 LC, to have a valid certification 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 workers in the unit." BENECO asserts that the certification election
held was null and void since members-employees who are not eligible to form and
join a labor union for purposes of collective bargaining were allowed to vote
therein.
The issue has already been resolved and clarified in the case of Cooperative Rural
Bank of Davao City, Inc. vs. Ferrer Calleja, et al. and reiterated in the cases of Batangas-
Electric Cooperative Labor Union v. Young, et al. and San Jose City Electric Service Co-
operative, Inc. v. Ministry of Labor and Employment, et al. wherein the Court had
stated that the right to collective bargaining is not available to an employee of a
cooperative who at the same time is a member and co-owner thereof. With respect,
however, to employees who are neither members nor co-owners of the cooperative
they are entitled to exercise the rights to self-organization, collective bargaining
and negotiation as mandated by the Constitution and applicable statutes.
Calleja argues that to deny the members of petitioner cooperative the right to form,
assist or join a labor union of their own choice for purposes of collective bargaining
would amount to a patent violation of their right to self-organization.
The above contention is untenable. Contrary to respondents' claim, the fact that
the members-employees of BENECO do not participate in the actual management
of the cooperative does not make them eligible to form, assist or join a labor or-
ganization for the purpose of collective bargaining with petitioner. The Court's
ruling in the Davao City case that members of cooperative cannot join a labor un-
ion for purposes of collective bargaining was based on the fact that as members of
the cooperative they are co-owners thereof. As such, they cannot invoke the right
to collective bargaining for "certainly an owner cannot bargain with himself or his
co-owners." It is the fact of ownership of the cooperative, and not involvement in
the management thereof, which disqualifies a member from joining any labor or-

ganization within the cooperative. Thus, irrespective of the degree of their partic-
ipation in the actual management of the cooperative, all members thereof cannot
form, assist or join a labor organization for the purpose of collective bargaining.
Respondent union further claims that if nominal ownership in a cooperative is
"enough to take away the constitutional protections afforded to labor, then there
would be no hindrance for employers to grant, on a scheme of generous profit
sharing, stock bonuses to their employees and thereafter claim that since their em-
ployees are stockholders, albeit in a minimal and involuntary manner, they are
now also co-owners and thus disqualified to form unions."
The above contention is based on the erroneous presumption that membership in
a cooperative is the same as ownership of stocks in ordinary corporations. While
cooperatives may exercise some of the rights and privileges given to ordinary cor-
porations provided under existing laws, such cooperatives enjoy other privileges
not granted to the latter. Similarly, members of cooperatives have rights and obli-
gations different from those of stockholders of ordinary corporations. It was pre-
cisely because of the special nature of cooperatives, that the Court held in the Da-
vao City case that members-employees thereof cannot form or join a labor union
for purposes of collective bargaining. The Court held that:
A cooperative is by its nature different from an ordinary business concern
being run either by persons, partnerships, or corporations. Its owners
and/or members are the ones who run and operate the business while the
others are its employees. As above stated, irrespective of the number of
shares owned by each member they are entitled to cast one vote each in
deciding upon the affairs of the cooperative. An employee therefore of
such a cooperative who is a member and co-owner thereof cannot invoke
the right to collective bargaining for certainly an owner cannot bargain
with himself or his co-owners.
Article 256 of the Labor Code provides, among others, that:
To have a valid, election, at least a majority of all eligible voters in the unit
must have cast their votes. The labor union receiving the majority of the
valid votes cast shall be certified as the exclusive bargaining agent of all
workers in the unit.
In this case it cannot be determined whether or not respondent union was duly
elected by the eligible voters of the bargaining unit since even employees who are
ineligible to join a labor union within the cooperative because of their membership
therein were allowed to vote in the certification election. Considering the forego-
ing, the Court finds that respondent director committed grave abuse of discretion
in certifying respondent union as the sole and exclusive bargaining representative
of the rank and file employees of petitioner cooperative.
DIGESTS Labor Day 2 10
42. Central Negros Electric Cooperative vs DOLE
By: mjvbrigola
Facts:
Aug 15, 1987: CENECO entered into a collective bargaining agreement with
CURE, a labor union representing its rank-and-file employees, providing for a
term of three years retroactive to April 1, 1987 and extending up to March 31, 1990.
On December 28, 1989, CURE wrote CENECO proposing that negotiations be con-
ducted for a new collective bargaining agreement (CBA).
Jan18, 1990: CENECO denied CURE’s request on the ground that, under applica-
ble decisions of the Supreme Court, employees who at the same time are members
of an electric cooperative are not entitled to form or join a union.
Prior to the submission of the proposal for CBA renegotiation, CURE members, in
a general assembly held on December 9, 1989, approved Resolution No. 35
whereby it was agreed that ‘tall union members shall withdraw, retract, or recall
the union members’ membership from Central Negros Electric Cooperative, Inc.
in order to avail (of) the full benefits under the existing Collective Bargaining
Agreement entered into by and between CENECO and CURE, and the supposed
benefits that our union may avail of under the renewed CBA.
However, the withdrawal from membership was denied by CENECO on February
27, 1990 under Resolution No. 90.
Issue: WON the employees of CENECO who withdrew their membership from
the cooperative are entitled to form or join CURE for purposes of the negotiations
for a collective bargaining agreement proposed by the latter.
Held: The right of the employees to self-organization is a compelling reason why
their withdrawal from the cooperative must be allowed. As pointed out by CURE,
the resignation of the member- employees is an expression of their preference for
union membership over that of membership in the cooperative. The avowed pol-
icy of the State to afford fall protection to labor and to promote the primacy of free
collective bargaining mandates that the employees’ right to form and join unions
for purposes of collective bargaining be accorded the highest consideration.
Thus, member employees of a cooperative may withdraw as members of the co-
operative in order to join labor union. Membership in a cooperative is voluntary;
inherent in it is the right not to join.
NOTES: (San Jose Electric Service Cooperative vs. Ministry of Labor)
1. A cooperative, therefore, is by its nature different from an ordinary business concern
being run either, by persons, partnerships or corporations. Its owners and/or members are
the ones who run and operate the business while the others are its employees.

2. An employee therefore of such a cooperative who is a member and co-owner thereof can-
not invoke the right to collective bargaining for certainly an owner cannot bargain with
himself or his co-owners. Employees of cooperatives who are themselves members of the
cooperative have no right to form or join labor organizations for purposes of collective bar-
gaining for being themselves co-owners of the cooperative.
3. However, in so far as it involves cooperatives with employees who are not members or
co-owners thereof, certainly such employees are entitled to exercise the rights of all workers
to organization, collective bargaining, negotiations and others as are enshrined in the Con-
stitution and existing laws of the country
43. REPUBLIC OF THE PHILIPPINES, represented by the
SOCIAL SECURITY COMMISSION and SOCIAL SECU-
RITY SYSTEM,v. ASIAPRO COOPERATIVE,
November 23, 2007
Facts
Asiapro, as a cooperative, is composed of owners-members. Under its by-laws,
owners-members are of two categories, to wit:
(1) regular member, who is entitled to all the rights and privileges of mem-
bership; and
(2) associate member, who has no right to vote and be voted upon and shall
be entitled only to such rights and privileges provided in its by-laws.
Its primary objectives are to provide savings and credit facilities and to develop
other livelihood services for its owners-members.
Said cooperative entered into several Service Contract, with Stanfilco - a division
of DOLE Philippines, Inc. and a company based in Bukidnon. The owners-mem-
bers do not receive compensation or wages from the cooperative. Instead, they
receive a share in the service surplus which the cooperative earns from different
areas of trade it engages in, such as the income derived from the said Service Con-
tracts with Stanfilco. The owners-members get their income from the service sur-
plus generated by the quality and amount of services they rendered, which is de-
termined by the Board of Directors of the cooperative.
The owners-members of the cooperative, who were assigned to Stanfilco re-
quested the services of the latter to register them with SSS as self-employed and
to remit their contributions as such. Also, to comply with Section 19-A of RA 1161,
as amended by RA 8282, the SSS contributions of the said owners-members were
equal to the share of both the employer and the employee.
SSS informed the latter that based on the Service Contracts it executed with Stan-
filco, cooperative is actually a manpower contractor supplying employees to
DIGESTS Labor Day 2 11
Stanfilco and for that reason, it is an employer of its owners-members working
with Stanfilco. Thus, cooperative should register itself with petitioner SSS as an
employer. Cooperative replied that it is not an employer because its owners-mem-
bers are the cooperative itself; hence, it cannot be its own employer
SSS filed a Petition before SSC against the cooperative and Stanfilco praying that
the cooperative or, in the alternative, Stanfilco be directed to register as an em-
ployer and to report cooperative’s owners-members as covered employees and to
remit the necessary contributions. Cooperative filed its with Motion to Dismiss al-
leging that no ER-EE relationship exists between it and its owners-members, thus,
SSC has no jurisdiction over the cooperative. Stanfilco, on the other hand, filed an
Answer with Cross-claim against the cooperative.
SSC denied the Motion to Dismiss filed by the cooperative.
Cooperative filed a Petition for Certiorari before the CA alleging that the SCC has
no jurisdiction considering that it failed to first resolve the issue of the existence of
an ER-EE relationship between cooperative and its owners-members and that the
cooperative is not an employer within the contemplation of the Labor Law but is
a multi-purpose cooperative created pursuant to RA 6938 and composed of own-
ers-members, not employees.
Complaint of SSS in SSC dismissed by the CA.
Petitioner’s Arguments
 SSC has jurisdiction as it involved an issue of WON a worker is entitled
to compulsory coverage under the SSS Law.
 Section 5 of RA 1161, as amended by RA 8282, expressly confers upon
SSC the power to settle disputes on compulsory coverage, benefits, con-
tributions and penalties thereon or any other matter related thereto. Like-
wise, Section 9 of the same law clearly provides that SSS coverage is com-
pulsory upon all employees.
 Granting arguendo that there is a prior need to determine the existence of
an ER-EE relationship between the cooperative and its owners-members,
said issue does not preclude SSC from taking cognizance of the petition-
complaint. Considering that the principal relief sought in the said peti-
tion-complaint has to be resolved by reference to the Social Security Law
and not to the Labor Code or other labor relations statutes, therefore, ju-
risdiction over the same solely belongs to SSC.
 The existence of an ER-EE relationship is a question of fact where presen-
tation of evidence is necessary.
 Petitioners also maintain that the cooperative is already estopped from
assailing the jurisdiction of the petitioner SSC because it has already filed

its Answer before it, thus, cooperative has already submitted itself to the
jurisdiction of the petitioner SSC.
 The cooperative is the employer of its owners-members considering that
it undertook to provide services to Stanfilco, the performance of which
is under the full and sole control of the cooperative.
Respondents’s Arguments
 Its owners-members own the cooperative, thus, no ER-EE relationship
can arise between them. The persons of the employer and the employee
are merged in the owners-members themselves.
 cooperative’s owners-members even requested the cooperative to regis-
ter them with the petitioner SSS as self-employed individuals. Hence,
petitioner SSC has no jurisdiction over the petition-complaint filed before
it by petitioner SSS.
 question of whether an ER-EE relationship exists between it and its own-
ers-members is a legal and not a factual issue as the facts are undisputed
and need only to be interpreted by the applicable law and jurisprudence.
 it cannot be considered estopped from assailing the jurisdiction of SSC
simply because it filed an Answer with Motion to Dismiss, especially
where the issue of jurisdiction is raised at the very first instance and
where the only relief being sought is the dismissal of the petition-com-
plaint for lack of jurisdiction.
Issues
Whether the petitioner SSC has jurisdiction over the petition-complaint filed before it by
petitioner SSS against the cooperative.
Ruling
Petitioner SSC’s jurisdiction is clearly stated in Section 5 of RA 8282 as well as in
Section 1, Rule III of the 1997 SSS Revised Rules of Procedure.
Section 5 of RA 8282 provides:
SEC. 5. Settlement of Disputes. – (a) Any dispute arising under this Act with respect
to coverage, benefits, contributions and penalties thereon or any other matter re-
lated thereto, shall be cognizable by the Commission, x x x
Similarly, Section 1, Rule III of the 1997 SSS Revised Rules of Procedure states:
Section 1. Jurisdiction. – Any dispute arising under the Social Security Act with re-
spect to coverage, entitlement of benefits, collection and settlement of contribu-
tions and penalties thereon, or any other matter related thereto, shall be cognizable
by the Commission after the SSS through its President, Manager or Officer-in-
DIGESTS Labor Day 2 12
charge of the Department/Branch/Representative Office concerned had first
taken action thereon in writing.
Any issue regarding the compulsory coverage of the SSS is well within the exclu-
sive domain of SSC. The mandatory coverage under the SSS Law is premised on
the existence of an ER-EE relationship[ except in cases of compulsory coverage of
the self-employed.
It is axiomatic that the allegations in the complaint, not the defenses set up in
the Answer or in the Motion to Dismiss, determine which court has jurisdiction
over an action; otherwise, the question of jurisdiction would depend almost en-
tirely upon the defendant. Accordingly, based on the allegations in the complaint
filed before the SSC, the case clearly falls within its jurisdiction.
Nonetheless, since the existence of an ER-EE relationship between the cooperative
and its owners-members was put in issue and considering that the compulsory
coverage of the SSS Law is predicated on the existence of such relationship, it be-
hooves the petitioner SSC to determine if there is really an ER-EE relationship that
exists between the cooperative and its owners-members.
The question on the existence of an ER-EE relationship is not within the exclusive
jurisdiction of the NLRC. Article 217 of the Labor Code enumerating the jurisdic-
tion of the Labor Arbiters and the NLRC provides that:
ART. 217. JURISDICTION OF LABOR ARBITERS AND THE COMMISSION. - (a)
6. Except claims for Employees Compensation, Social Security, Medicare and
maternity benefits, all other claims, arising from employer-employee relations, in-
cluding those of persons in domestic or household service, involving an amount
exceeding five thousand pesos (P5,000.00) regardless of whether accompanied
with a claim for reinstatement.
The question on the existence of an ER-EE relationship for the purpose of deter-
mining the coverage of the SSS is explicitly excluded from the jurisdiction of the
NLRC and falls within the jurisdiction of the SSC which is primarily charged with
the duty of settling disputes arising under the Social Security Law of 1997.
As an incident to the issue of compulsory coverage, it may inquire into the pres-
ence or absence of an ER-EE relationship without need of waiting for a prior
pronouncement or submitting the issue to the NLRC for prior determination.
Since SSC and the NLRC are independent bodies and their jurisdiction are well-
defined by the separate statutes creating them, SSC has the authority to inquire
into the relationship existing between the worker and the person or entity to whom
he renders service to determine if the employment, indeed, is one that is excepted
by the Social Security Law of 1997 from compulsory coverage.
In determining the existence of an ER-EE relationship, the following elements are
considered: (1) the selection and engagement of the workers; (2) the payment of
wages by whatever means; (3) the power of dismissal; and (4) the power to control

the worker’s conduct, with the latter assuming primacy in the overall considera-
tion.[25] The most important element is the employer’s control of the employee’s
conduct, not only as to the result of the work to be done, but also as to the means
and methods to accomplish.
EXISTENCE OF EE-ER RELATIONSHIP
1. In the Service Contracts that it is the cooperative which has
the exclusive discretion in the selection and engagement of
the owners-members as well as its team leaders who will
be assigned at Stanfilco.
2. Wages are defined as “remuneration or earnings, however
designated, capable of being expressed in terms of money,
whether fixed or ascertained, on a time, task, piece or com-
mission basis, or other method of calculating the same, which
is payable by an employer to an employee under a written
or unwritten contract of employment for work done or to
be done, or for service rendered or to be rendered.” The so-
called shares in the service surplus given by the cooperative
to its owners-members were in reality wages, as the same
were equivalent to an amount not lower than that prescribed
by existing labor laws, rules and regulations, including the
wage order applicable to the area and industry; or the same
shall not be lower than the prevailing rates of wages. It can-
not be doubted then that those stipends or shares in the ser-
vice surplus are indeed wages, because these are given to the
owners-members as compensation
3. the cooperative has the power to investigate, discipline and
remove the owners-members and its team leaders who
were rendering services at Stanfilco.
4. cooperative has the sole control over the manner and means
of performing the services under the Service Contracts with
Stanfilco as well as the means and methods of work.
The cooperative must not be allowed to deny its employment relationship with its
owners-members by invoking the questionable Service Contracts provision, when
in actuality, it does exist. The existence of an ER-EE relationship cannot be ne-
gated by expressly repudiating it in a contract, when the terms and surrounding
circumstances show otherwise. The employment status of a person is defined
and prescribed by law and not by what the parties say it should be.
The Service Contract provision in question must be struck down for being contrary
to law and public policy since it is apparently being used by the cooperative
merely to circumvent the compulsory coverage of its employees, who are also its
owners-members, by the Social Security Law.
DIGESTS Labor Day 2 13
This Court is not unmindful of the pronouncement it made in Cooperative Rural
Bank of Davao City, Inc. v. Ferrer-Calleja wherein it held that:
A cooperative, therefore, is by its nature different from an ordinary business con-
cern, being run either by persons, partnerships, or corporations. Its owners and/or
members are the ones who run and operate the business while the others are its
employees x x x.
An employee therefore of such a cooperative who is a member and co-owner
thereof cannot invoke the right to collective bargaining for certainly an owner
cannot bargain with himself or his co-owners. The Solicitor General correctly
opined that employees of cooperatives who are themselves members of the co-
operative have no right to form or join labor organizations for purposes of col-
lective bargaining for being themselves co-owners of the cooperative.
However, in so far as it involves cooperatives with employees who are not mem-
bers or co-owners thereof, certainly such employees are entitled to exercise the
rights of all workers to organization, collective bargaining, negotiations and oth-
ers as are enshrined in the Constitution and existing laws of the country.
The situation in the aforesaid case is very much different from the present case.
The declaration made by the Court was made in the context of whether an em-
ployee who is also an owner-member of a cooperative can exercise the right to
bargain collectively with the employer who is the cooperative wherein he is an
owner-member. Obviously, an owner-member cannot bargain collectively with
the cooperative of which he is also the owner because an owner cannot bargain
with himself. In the instant case, there is no issue regarding an owner-member’s
right to bargain collectively with the cooperative. The question involved here is
whether an ER-EE relationship can exist between the cooperative and an owner-
member. In fact, a closer look at Cooperative Rural Bank of Davao City, Inc. will show
that it actually recognized that an owner-member of a cooperative can be its own
employee.
It bears stressing, too, that a cooperative acquires juridical personality upon its
registration with the Cooperative Development Authority. It has its Board of Di-
rectors, which directs and supervises its business; meaning, its Board of Directors
is the one in charge in the conduct and management of its affairs. With that, a
cooperative can be likened to a corporation with a personality separate and dis-
tinct from its owners-members. Consequently, an owner-member of a cooperative
can be an employee of the latter and an ER-EE relationship can exist between them.
In the present case, it is not disputed that the cooperative had registered itself with
the Cooperative Development Authority. The management of the affairs of the co-
operative is vested in its Board of Directors and not in its owners-members as a
whole. Therefore, it is completely logical that the cooperative, as a juridical person
represented by its Board of Directors, can enter into an employment with its own-
ers-members.

In sum, having declared that there is an ER-EE relationship between the coopera-
tive and its owners-member, we conclude that the SSC has jurisdiction over the
petition-complaint filed before it by the petitioner SSS.
Petition Granted. SSC is hereby DIRECTED to continue hearing the petition-com-
plaint filed before it by the petitioner SSS as regards the compulsory coverage of
the cooperative and its owners-members. No costs.
44 REPUBLIC PLANTERS VS. LAGUESMA
FACTS:
 Republic Planters bank General Services Employees Union-National As-
sociation of Trade Unions filed a petition for certification election to de-
termine the sole and exclusive bargaining representative of the 30 em-
ployees outside the bargaining unit of Republic Planters Bank.
 Republic Planters opposed saying that the petitioner union is comprised
of 30 employees of Superior Maintenance Services who are assigned to
the bank as messengers and janitors under a Contract of Services, there is
already a bargaining unit represented by RPBEU, and that there is no
prior determination that the members of petitioner are employees of the
bank.
 Med-Arbiter dismissed the petition since there is already a bargaining
unit and pursuant to one union, one company policy of the bank. The
excluded employees may join the existing bargaining unit.
 Bank appealed protesting the finding of employer-employee relation-
ship. Undersecretary Laguesma reversed the said decision of the med-
arbiter.
 Hence petitioner union filed this petition for certiorari.
ISSUE: Whether petitioner Union be allowed to file the petition for certification
election
HELD: NO.
 The petition for certification election is premature - no petition for certi-
fication election may be entertained if filed outside the sixty-day period
immediately before the expiration of the collective bargaining agreement.
 The members of the petitioner union are not employees of Planters Bank
- if the union members are not employees, no right to organize for pur-
poses of bargaining, nor to be certified as bargaining agent can be recog-
nized. Since the persons involved are not employees of the company, we
held that they are not entitled to the constitutional right to join or form a
DIGESTS Labor Day 2 14
labor organization for purposes of collective bargaining. (Sewer Sewing
Machine v. Drilon)
45 MACTAN WORKERS UNION V. ABOITIZ
47 SCRA 517
FACTS:
 Defendant Cebu Shipyard and Engineering Works, Inc. in Lapu-Lapu
City is employing laborers and employees belonging to two rival labor
unions, namely plaintiff, Mactan Workers Union (MWU) and intervenor
appellant Associated Labor Union (ALU).
 On November 28, 1964, the defendant Cebu Shipyard and Engineering
Works, Inc. and the ALU Union entered into a Collective Bargaining
Agreement which mandates a profit sharing bonus of 10% of its net in-
come derived from the direct operation of its shipyard and shop in Lapu-
Lapu City for its laborers and workers. The profit sharing bonus shall be
paid by the company to ALU of which ALU will deliver it to the employ-
ees. Unclaimed bonuses shall be returned to the management. The deliv-
ery will be in 2 instalments, 1st payable in March and the 2nd payable in
June every year.
 In 1965, the 2nd instalment given in June was not received by members of
the rival MWU because they did not go to the ALU office to receive their
shares.
 After the 60 day period lapsed, ALU returned the funds to the manage-
ment with an advice to management to refrain from delivering the
amount to the members of MWU without a court order otherwise ALU
will take steps to protect the interests of its members.
 Because of the warning from ALU, the company deposited the amount
of P4,035.82 with the Labor Administrator.
 The MWU filed a case with the lower court to recover the amount. The
lower court ordered the company to deliver the sum of money to ALU
and for ALU to pay the members of MWU their corresponding shares.
Hence, the appeal of intervenor ALU.
ISSUE:
1. WON the intervenor ALU and defendant company violated the terms
and conditions of the CBA
2. WON plaintiff MWU followed the proper grievance procedure
3. WON intervenor ALU only represents its members and not the entire
workforce of defendant company
HELD: Decision of the lower court is hereby affirmed. Petition dismissed.

1. Yes, the terms and conditions of the CBA constitute the law between the
parties. Those who are entitled to its benefits can invoke its provisions. It
is a well-settled doctrine that the benefits of a CBA extend to the laborers
and employees in the collective bargaining unit including those who do
not belong to the chosen bargaining labor organization.
2. Yes, the Mactan Workers Union claim of P4,035.82 plus damages and at-
torney’s fees will have a sum of less than P10,000.00 and under Sec 88 of
the Judiciary Act mandates that the city judge shall have original juris-
diction where value of reward does not exceed P10,000.00. In the case of
Seno v. Mendoza, in the language of Justice Makalintal in seeking the en-
forcement of a provision of the CBA, jurisdiction pertains to the ordinary
court and not to the industrial court.
3. The Labor Union that gets the majority vote as the exclusive bargaining
representative does not act for its members alone. It represents all the
employees in such a bargaining unit. It is not to be forgotten that what is
entitled to constitutional protection is labor, more specifically the work-
ers, not labor organizations. That is the raison d’etre of labor unions.
46 UNIVERSITY OF STO. TOMAS vs. NATIONAL LA-
BOR RELATIONS COMMISSION, UST FACULTY UN-
ION
FACT: The University of Sto. Tomas (UST) terminated the employment of all 16
union officers and directors of respondent UST Faculty Union on the ground that
in publishing or causing to be published in Strike the libelous and defamatory at-
tacks against the Father Rector, has committed the offenses of grave misconduct,
serious disrespect to a superior and conduct unbecoming a faculty member. As a
result of the dismissal of said employees, some faculty members staged mass
leaves of absence and several days thereafter, disrupting classes in all levels at the
University. The faculty union filed a complaint for illegal dismissal and unfair la-
bor practice with the DOLE. The labor arbiter certified the matter to the Secretary
of Labor and Employment for a possible suspension of the effects of termination.
Secretary Franklin Drilon subsequently issued an order suspending the termina-
tion of the 16 employees. Petitioner UST filed a motion for reconsideration. Secre-
tary Drilon issued another order modifying his previous order, ordering UST to
readmit all its faculty members under the same terms and conditions prevailing
prior to the present dispute. The NLRC subsequently caned the parties to a con-
ference. The respondent union filed before the NLRC a motion to implement the
orders of the Honorable Secretary of Labor and Employment; while petitioner filed
its opposition to the private respondent's motion. The NLRC issued a resolution,
which is the subject of this petition for certiorari.
ISSUES: Whether or not the order of the alternative remedies of actual reinstate-
ment or payroll reinstatement of the dismissed faculty members is proper?
DIGESTS Labor Day 2 15
Whether or not the University can be required to pay full backwages of the dis-
missed employees? Whether or not NLRC is correct when it arrogated upon itself
the exercise of the right and prerogatives reposed by law to the petitioner univer-
sity in the latter’s capacity as employer?
HELD: (1) It was held that it was error for the NLRC to order the alternative rem-
edies of payroll reinstatement or actual reinstatement. However, the order did not
amount to grave abuse of discretion. Such error is merely an error of judgment
which is not correctible by a special civil action for certiorari. The NLRC was only
trying its best to work out a satisfactory ad hoc solution to a festering and serious
problem. The payroll reinstatement will actually minimize the petitioners’ prob-
lems in the payment of full backwages.
(2) A return-to-work order is immediately effective and executory despite the fil-
ing of a motion for reconsideration by the petitioner. Additionally, although the
Secretary's order was modified, the return-to-work portion of the earlier order
which states that "the faculty members should be admitted under the same terms
and conditions prevailing prior to the dispute" was affirmed. Since the factual
findings of quasi-judicial agencies like the NLRC are generally accorded not only
respect but even finality if such findings are supported by substantial evidence.
There is no showing that such substantial evidence is not present. The reinstated
faculty members' refusal to assume their substantially equivalent academic assign-
ments does not contravene the Secretary's return-to-work order. They were merely
insisting on being given actual teaching loads, on the return-to-work order being
followed. It was found that their persistence justified as they are rightfully and
legally entitled to actual reinstatement. Since the petitioner failed to comply with
the Secretary's order of actual reinstatement, it was adjudged that the NLRC's
award of backwages until actual reinstatement is correct.
(3) The hiring, firing, transfer, demotion and promotion of employees are tradi-
tionally Identified as management prerogatives. However, these are not absolute
prerogatives. They are subject to limitations found in law, a CBA, or general prin-
ciples of fair play and justice. Article 263(g) is one such limitation provided by law.
To the extent that Art. 263(g) calls for the admission of all workers under the same
terms and conditions prevailing before the strike, the petitioner University is re-
stricted from exercising its generally unbounded right to transfer or reassign its
employees. The petitioner manifests the fear that if the temporarily reinstated fac-
ulty members will be allowed to handle actual teaching assignments in the class-
room, the latter would take advantage of the situation by making the classroom
the forum not for the purpose of imparting knowledge to the students but for the
purpose of assailing and lambasting the administration. There may be a basis for
such a fear. However, such a fear is speculative and does not warrant a deviation
from the principle that the dismissed faculty members must be actually reinstated
pending resolution of the labor dispute.

47. Sta. Lucia East Comm. Corp. v. Sec. of Labor
Sta. Lucia East Commercial Corporation v.
Hon. Secretary Of Labor and Employment and Sta. Lucia East Commercial Cor-
poration Workers Association (CLUP Local Chapter)
G.R. No. 162355 | 14 August 2009 | 1st Division | Carpio, J.
FACTS:
 Confederated Labor Union of the Philippines (CLUP) instituted a petition for
certification election among the regular rank-and-file employees of Sta. Lucia
East Commercial Corporation (SLECC) and its Affiliates.
 Med-Arbiter Bactin ordered the dismissal of the petition due to inappropri-
ateness of the bargaining unit.
 CLUP-SLECC and its Affiliates Workers Union appealed the order of dismissal
to DOLE.
 CLUP-SLECC and its Affiliates Workers Union moved for the withdrawal of
the appeal.
 Office of the Secretary of Labor granted the motion and affirmed the dismissal
of the petition.
 CLUP-SLECC and its Affiliates Workers Union reorganized itself and re-regis-
tered as CLUP-SLECC Workers Association (CLUP-SLECCWA), limiting its
membership to the rank-and-file employees of SLECC.
 CLUP-SLECCWA alleged that SLECC employs about 115 employees and that
more than 20% of employees belonging to the rank-and-file category are its
members.
 CLUP-SLECCWA claimed that no certification election has been held among
them within the last 12 months prior to the filing of the petition, and while
there is another union registered with DOLE covering the same employees,
namely Samahang Manggagawa sa Sta. Lucia East Commercial (SMSLEC), it
has NOT been recognized as the exclusive bargaining agent of SLECC’s em-
ployees.
 SLECC filed a motion to dismiss the said petition. It averred that it has volun-
tarily recognized SMSLEC as the exclusive bargaining agent of its regular rank-
and-file employees, and that collective bargaining negotiations already com-
menced between them. SLECC argued that the petition should be dismissed
for violating the one year and negotiation bar rules.
 Thereafter, a CBA between SMSLEC and SLECC was ratified by its rank-and-
file employees and registered with DOLE.
 CLUP-SLECCWA filed its Opposition and Comment to SLECC’s Motion to
Dismiss. It assailed the validity of the voluntary recognition of SMSLEC by
SLECC and their consequent negotiations and execution of a CBA.
 According to CLUP-SLECCWA, the same were tainted with malice, collusion
and conspiracy involving some officials of the Regional Office.
ISSUE:
DIGESTS Labor Day 2 16
Whether or not SLECC’s voluntary recognition of SMSLEC was done while a le-
gitimate labor organization was still in existence (i.e. CLUP-SLECC and its Affili-
ates Workers Union) in the bargaining unit? [Yes]
HELD:
YES. Art. 212(g) defines a labor organization as “any union or association of em-
ployees which exists in whole or in part for the purpose of collective bargaining or
of dealing with employers concerning terms and conditions of employment.”
Upon compliance with all the documentary requirements, the Regional Office or
Bureau shall issue in favor of the applicant labor organization a certificate indicat-
ing that it is included in the roster of legitimate labor organizations. Any applicant
labor organization shall acquire legal personality and shall be entitled to the rights
and privileges granted by law to legitimate labor organizations upon issuance of
the certificate of registration.
The concepts of a union and of a legitimate labor organization are different from,
but related to, the concept of a bargaining unit. 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, indicated to be the best
suited to serve the reciprocal rights and duties of the parties under the collective
bargaining provisions of the law.”
CLUP-SLECC and its Affiliates Workers Union’s initial problem was that they con-
stituted a legitimate labor organization representing a non-appropriate bargaining
unit. However, CLUP-SLECC and its Affiliates Workers Union subsequently re-
registered as CLUP-SLECCWA, limiting its members to the rank-and-file of
SLECC. SLECC cannot ignore that CLUP-SLECC and its Affiliates Workers Union
was a legitimate labor organization at the time of SLECC’s voluntary recognition of
SMSLEC. SLECC and SMSLEC cannot, by themselves, decide whether CLUP-
SLECC and its Affiliates Workers Union represented an appropriate bargaining
unit.
The inclusion in the union of disqualified employees is NOT among the grounds
for cancellation of registration, unless such inclusion is due to misrepresentation,
false statement or fraud under the circumstances enumerated in Secs. (a) to (c) of
Art. 239. Thus, CLUP-SLECC and its Affiliates Workers Union, having been val-
idly issued a certificate of registration, should be considered as having acquired
juridical personality which may NOT be attacked collaterally. The proper proce-
dure for SLECC is to file a petition for cancellation of certificate of registration of
CLUP-SLECC and its Affiliates Workers Union and not to immediately commence
voluntary recognition proceedings with SMSLEC.
48 DUNLOP SLAZENGER (PHILS) vs SECRETARY OF
LABOR and EMPLOYMENT

Facts
The Dunlop Slazenger Staff Association filed a petition for certification election
before the DOLE. Its employer, herein petitioner Dunlop Slazenger (manufactures
tennis balls), contests such on the ff. grounds: (1) that the union is comprised of
both supervisory and rank and file employees, thus it cannot act as a bargaining
agent for the proposed unit, (2) that a single certification election cannot be con-
ducted jointly among supervisory and rank-and-file employees, and (3) that re-
spondent union lacks legal standing since it failed to submit its book of accounts.
The Mediator Arbiter granted the petition for certification election, ruling that:
(1) the bargaining unit is composed of all supervisory employees of Dunlop
Slazenger, who can form their own, separate labor organization pursuant to Art.
2451 of the Labor Code
(2) that the pre-election conference will take care of excluding rank and file em-
ployees from the petitioning union, and
(3) that the union has acquired requisite legal personality to file this petition as it
sufficiently complied with the mandatory reportorial requirements under the La-
bor Code IRR.
Employer thus seeks to annul the grant of certification election.
Issue: w/n respondent union can file a petition for certiorari election to represent
the supervisory employees of the company
Held: NO. Article 245 of the Labor Code, as provided below, prohibits the for-
mation of a labor organization among supervisory and rank and files employees.
Such a mixed composition does not make for a labor organization at all, and cannot
thus claim the right to file for a petition for certification election.
An 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 collec-
tive bargaining provisions of law,” or is a “legal collectivity for collective bargain-
ing purposes whose members have substantially mutual bargaining interests in
terms and conditions of employment as will assure to all employees their collective
bargaining rights.” For a unit to be appropriate, it must be a group of employees
with substantial, mutual interests in wages, hours, working conditions and other
subjects of collective bargaining.
In this case, the list of employees provided consisted of 27 supervisory employees,
6 managerial employees, 1 confidential employee, and 26 technical employees, the
1ART. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employee-
managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall
DIGESTS Labor Day 2 17
technical employees being rank and file. They are mechanics, draftsmen, store-
men, secretaries, and such employees that do not possess the authority to act in
the employers’ interest beyond the routinary and clerical scope (test of supervisory
status). On the other hand, “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 defini-
tions are considered rank-and-file employees for purposes of this Book [these
Rules].” As such, supervisory and rank and file employees cannot be said to share
the same substantial interests as to form one bargaining unit.
49. San Miguel Corp v. San Miguel etc.
J. Chico-Nazario
FACTS:
 Petitioner is the incumbent bargaining agent for the bargaining unit com-
prised of the regular monthly-paid rank and file employees of the three
divisions of SMC, namely, the SMCSU, SMBP, and the SMPP. It had been
the certified bargaining agent for 20 years – from 1987 to 1997.
 Respondent is registered as a chapter of PDMP. PDMP issued Charter
Certificate No. 112 to respondent on 15 June 1999. In compliance with
registration requirements, respondent submitted the requisite docu-
ments to the BLR for the purpose of acquiring legal personality. Upon
submission of its charter certificate and other documents, respondent
was issued Certificate of Creation of Local or Chapter by the BLR There-
after, respondent filed with the Med-Arbiter of the DOLE-NCR, three
separate petitions for certification election to represent SMPP, SMCSU,
and SMBP.
 All three petitions were dismissed, on the ground that the separate peti-
tions fragmented a single bargaining unit.
 On 17 August 1999, petitioner filed with the DOLE-NCR a petition seek-
ing the cancellation of respondent's registration and its dropping from
the rolls of legitimate labor organizations. In its petition, petitioner ac-
cused respondent of committing fraud and falsification, and non-compli-
ance with registration requirements in obtaining its certificate of registra-
tion. It raised allegations that respondent violated Articles 239(a-c) and
234(c) of the Labor Code. Moreover, petitioner claimed that PDMP is not
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.

a legitimate labor organization, but a trade union center, hence, it cannot
directly create a local or chapter.
 On 14 July 2000, DOLE-NCR Regional Director Maximo B. Lim issued an
Order dismissing the allegations of fraud and misrepresentation, and ir-
regularity in the submission of documents by respondent. Regional Di-
rector Lim further ruled that respondent is allowed to directly create a
local or chapter. However, he found that respondent did not comply with
the 20% membership requirement and, thus, ordered the cancellation of
its certificate of registration and removal from the rolls of legitimate labor
organizations.
 Respondent appealed to the BLR. BLR ruled in favor of the Respondent
and upheld the registration of SMPPEU-PDMP. BLR reversed the Re-
gional Director's ruling that the 20% membership is a requirement for re-
spondent to attain legal personality as a labor organization. MR was filed
but likewise denied.
 Petitioner went to the CA. However the appeal was also denied. Accord-
ing to the CA, Respondent is an affiliate of a registered federation PDMP,
having been issued a charter certificate. As such, there is no need for
SMPPEU to show a membership of 20% of the employees of the bargain-
ing unit in order to be recognized as a legitimate labor union. MR was
filed but also denied.
 Hence this petition to the SC.
ISSUE:
 WON the respondent is not required to submit the number of employees
and names of all its members comprising at least 20% of the employees
in the bargaining unit where it seeks to operate.
HELD:
 Yes. This Court, in the landmark case of Progressive Development Cor-
poration v. Secretary, Department of Labor and Employment, declared
that when an unregistered union becomes a branch, local or chapter,
some of the aforementioned requirements for registration are no longer
necessary or compulsory. Whereas an applicant for registration of an in-
dependent union is mandated to submit, among other things, the number
of employees and names of all its members comprising at least 20% of the
employees in the bargaining unit where it seeks to operate, as provided
under Article 234 of the Labor Code and Section 2 of Rule III, Book V of
the Implementing Rules, the same is no longer required of a branch, local
or chapter. The intent of the law in imposing less requirements in the case
of a branch or local of a registered federation or national union is to en-
courage the affiliation of a local union with a federation or national union
DIGESTS Labor Day 2 18
in order to increase the local union's bargaining powers respecting terms
and conditions of labor.
 However, the Court later declared that PDMP cannot directly create a
local or a chapter, it being a trade union center. Hence it reverses the find-
ing of the appellate court and BLR on this ground, and rules that PDMP
cannot directly create a local or chapter.
 Under the pertinent statutes and applicable implementing rules, the
power granted to labor organizations to directly create a chapter or local
through chartering is given to a federation or national union, not to a
trade union center which is without authority to charter directly.
 Hence SMPPEU-PDMP cannot be created under the more lenient re-
quirements for chartering, but must have complied with the more strin-
gent rules for creation and registration of an independent union, includ-
ing the 20% membership requirement.
50 Progressive Dev. Corp. v. Sec. of Labor, et al
Facts:
- Pambansang Kilusan ng Paggawa (Kilusan)-TUCP met with several em-
ployees of PDC for the purpose of forming a union which shall become
its chapter
- In this meeting, Progressive Dev. Employees Union was formed
- Kilusan then filed with DOLE a petition for certification election among
the rank-and-file employees of Progressive Dev. Corp. alleging that it is
a legitimate labor federation and it issued a charter certificate to its local
chapter, PDEU. It claimed that there was no existing collective bargaining
agreement and that no other legitimate labor organization existed in the
bargaining unit.
- PDC filed a motion to dismiss contending that the local union, PDEU,
failed to comply with Rule II, Sec. 3, Book V of the LC-IRR as it did not
submit its constitution and by-laws, detailed list of officers and/or mem-
bers, and its book of accounts required for registration
- When Kilusan proferred evidence of its compliance, PDC maintained
that the alleged minutes of the organization meeting was unauthenti-
cated, the list of members did not bear the corresponding signatures, and
the constitution and by-laws were not duly subscribed
- Med Arbiter:

o mere issuance of charter certificate by the federation was sub-
stantial compliance
o certification election should be conducted to resolve the ques-
tion of representation considering that the establishment was
unorganized
- USEC Laguesma (upon appeal by PDC): denied
- PDC argues:
o a labor organization (such as the Kilusan) may not validly invest
the status of legitimacy upon a local or chapter through the mere
expedient of issuing a charter certificate and submitting such
certificate to the BLR
o local union or chapter must at the same time comply with the
requirement of submission of duly subscribed constitution and
by-laws, list of officers and books of accounts
o there must be due recognition or acknowledgment accorded to
the local or chapter by BLR through a certificate of registration
- SolGen: substantial compliance
o Under Art. 257, Med-Arbiter is mandated to conduct a certifica-
tion election in any establishment where there is no certified
bargaining agreement
Issue(s):
w/n the local union/affiliate, PDEU, was a legitimate labor organization
when does a branch, local or affiliate of a federation become a legitimate labor
organization?
2 Art. 234. Any applicant labor organization, association or group of unions or workers shall acquire legal personality
and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of
the certificate of registration based on the following requirements:
(a) Fifty-pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the
organizational meeting and the list of the workers who participated in such meetings;
(c) The names of all its members comprising at least twenty 20% percent of all the employees in the bargaining unit
where it seek to operate;
(d) If the applicant has been in existence for one or more years, copies , of its annual financial reports; and
(e) Four copies of the constitution and by-laws of the applicant union, the minutes of its adoption or ratification
and the list of the members who participated in it.
3 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 organiza-
tion, as the case may be, and attested to by its president.
DIGESTS Labor Day 2 19
Held:
No. While Art. 257 directs the automatic conduct of a certification election in an
unorganized establishment, it also requires that the petition for certification must
be filed by a legitimate labor organization.
A legitimate labor organization under Art. 212(h) is “any labor organization duly
registered with the DOLE and includes any branch or local thereof.” It acquires
legitimacy only upon registration with the Bureau of Labor Relations following
the requirements under Art. 2342 and Art. 2353. Moreover, section 4 of Rule II, Book
V of the LC-IRR requires that the application should be signed by at least 20% of
the employees in the appropriate bargaining unit and be accompanied by a sworn
statement of the applicant union that there is no certified bargaining agent or,
where there is an existing collective bargaining agreement duly submitted to the
DOLE, that the application is filed during the last 60 days of the agreement.
Under Rule II, Sec. 3, Book V4, there is a differentiation between chapters which
did not undergo registration prior to affiliation with a federation and those which
independently registered. Implicit in the foregoing differentiation is the fact that a
local or chapter need not be independently registered. By force of law (in this case,
Article 212[h]), such local or chapter becomes a legitimate labor organization upon
compliance with the aforementioned provisions of Sec. 3.
Since the "procedure governing the reporting of independently registered unions"
refers to the certification and attestation requirements contained in Article 235,
paragraph 2, it follows that the constitution and by-laws, set of officers and books
of accounts submitted by the local and chapter must likewise comply with these
requirements.
Thus, a local or chapter therefore becomes a legitimate labor organization only
upon submission of the following to the BLR:
1) A charter certificate, within 30 days from its issuance by the labor federation or
national union, and
4 Sec. 3. Union affiliation; direct membership with national union. — An affiliate of a labor federation or national
union may be a local or chapter thereof or an independently registered union.
a) The labor federation or national union concerned shall issue a charter certificate indicating the creation or es-
tablishment of a local or chapter, copy of which shall be submitted to the Bureau of Labor Relations within thirty
(30) days from issuance of such charter certificate.
b) An independently registered union shall be considered an affiliate of a labor federation or national union after
submission to the Bureau of the contract or agreement of affiliation within thirty (30) days after its execution.
xxx xxx xxx
e) The local or chapter of a labor federation or national union shall have and maintain a constitution and by-laws,
set of officers and books and accounts. For reporting purposes, the procedure governing the reporting of inde-
pendently registered unions, federations or national unions shall be observed.

2) The constitution and by-laws, a statement on the set of officers, and the books
of accounts all of which are certified under oath by the secretary or treasurer, as
the case may be, of such local or chapter, and attested to by its president.
Absent compliance with these mandatory requirements, the local or chapter does
not become a legitimate labor organization. The failure of the secretary of PDEU-
Kilusan to certify the required documents under oath is fatal to its acquisition of a
legitimate status.
The certification and attestation requirements are preventive measures against the
commission of fraud. They likewise afford a measure of protection to unsuspect-
ing employees who may be lured into joining unscrupulous or fly-by-night unions
whose sole purpose is to control union funds or to use the union for dubious ends.
On the relationship between mother union and local union:
The mother union, acting for and in behalf of its affiliate, has the status of
an agent while the local union remained the basic unit of the association, free to
serve the common interest of all its members, subject only to the restraints imposed
by the constitution and by-laws of the association. Thus, where the petition for
certification election was filed by the federation which is merely an agent, the pe-
tition is deemed to be filed by the chapter, the principal, which must be a legitimate
labor organization. The chapter cannot merely rely on the legitimate status of the
mother union.
51 COASTAL SUBIC BAY TERMINAL, INC.,
vs. DEPARTMENT OF LABOR and EMPLOYMENT – OF-
FICE OF THE SECRETARY, COASTAL SUBIC BAY TER-
MINAL, INC. SUPERVISORY UNION-APSOTEU, and
COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-
FILE UNION-ALU-TUCP
November 20, 2006
Quisumbing, J.
FACTS:
 On July 8, 1998, 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-Ar-
biter Eladio de Jesus of the DOLE Regional Office No. III.
o The rank-and-file union insists that it is a legitimate labor organization
having been issued a charter certificate by the Associated Labor Union
DIGESTS Labor Day 2 20
(ALU), and the supervisory union by the Associated Professional, Su-
pervisory, Office and Technical Employees Union (APSOTEU).
o They also alleged that the establishment in which they sought to operate
was unorganized.
 The company Coastal Subic Bay Terminal, Inc. (CSBTI) opposed both peti-
tions for certification election alleging that the rank-and-file union and super-
visory union were not legitimate labor organizations, and that the proposed
bargaining units were not particularly described.
 MED-ARBITER: dismissed both petitions without ruling on the legitimacy of
the respondent unions. The Med-Arbiter held that the ALU and APSOTEU
are one and the same federation having a common set of officers. Thus, the
supervisory (CSBTI-SU) and the rank-and-file unions (CSBTI-RFU) were in
effect affiliated with only one federation.
 DOLE SECRETARY BALDOZ: ruled that CSBTI-SU and CSBTI-RFU have
separate legal personalities to file their separate petitions for certification elec-
tion. Moreover, APSOTEU is a legitimate labor organization because it was
properly registered pursuant to the 1989 Revised Rules and Regulations im-
plementing Republic Act No. 6715, the rule applicable at the time of its regis-
tration. It further ruled that ALU and APSOTEU are separate and distinct la-
bor unions having separate certificates of registration from the DOLE and
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 sep-
arate certification elections for CSBTI-RFU and CSBTI-SU.
 CA: affirmed the DOLE Secretary.
ISSUES:
1. WON APSOTEU (to which CBSTI-SU is affiliated) is a legitimate labor
organization and can thus issue charter to its affiliates.
2. WON APSOTEU’s personality can be collaterally attacked in a case
that involves its affiliate CSBTI-SU.
3. WON ALU (rank-and-file union) and APSOTEU (supervisory union)
are one and the same because of the commonalities between them.
4. WON there is commingling between ALU and APSOTEU.
HELD:
1. Yes, it is a legitimate labor organization that can issue charter to its af-
filiates.
2. No, its personality cannot be collaterally attacked.

3. Since the personalities of ALU and APSOTEU cannot be collaterally
assailed in this case involving their affiliates, in the absence of any in-
dependent action for cancellation of registration against either APSO-
TEU or ALU, and unless and until their registrations are cancelled, each
continues to possess a separate legal personality.
4. Yes, there is commingling between ALU (rank-and-file union) and AP-
SOTEU (supervisory union). Thus, their petitions for certification must
be denied.
RATIO:
1. APSOTEU is a legitimate labor organization.
 The SC rejected the company’s insistence that APSOTEU lacks legal person-
ality, and its chartered affiliate CSBTI-SU cannot attain the status of a legiti-
mate labor organization to file a petition for certification election.
o According to the Court, the company’s argument that APSOTEU im-
properly obtained its registration from the DOLE Regional Director and
not the BLR is misplaced.
o It said that Art. 235 of the Labor Code and Section 1, Rule III of Book V,
as amended by Department Order No. 9 (later also amended by DOLE
D.O. No. 40-03) explicitly provide that applications for registration of la-
bor organizations shall be filed either with the Regional Office or with the
BLR.
o Moreover, the SC emphasized that 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.
 In this case, APSOTEU was registered on March 1, 1991.
o Accordingly, the SC said that the law applicable at that time was Section
2, Rule II, Book V of the Implementing Rules, and not Department Order
No. 9 (as provided above) which took effect only on June 21, 1997.
o However, the conclusion is still the same as to the validity of APSOTEU’s
registration: since APSOTEU’s principal office is located in Diliman, Que-
zon City, and its registration was filed with the NCR Regional Office, the
certificate of registration is valid.
5 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 person-
ality cannot thereafter be subject to collateral attack, but maybe questioned only in an independent peti-
tion for cancellation in accordance with these Rules.
DIGESTS Labor Day 2 21
 The SC further explained that the case of Villar vs. Inciong cannot be applied
here as insisted by the company, since in that case there was no record in the
BLR that Amigo Employees Union (the questioned labor organization) was
registered.
2. APSOTEU’s personality cannot be collaterally attacked.
 According to the SC, APSOTEU is a legitimate labor organization and its per-
sonality cannot be assailed unless in an independent action for cancellation of
registration certificate.
 Citing Section 5, Rule V, Book V of the Implementing Rules5, it said that AP-
SOTEU is a legitimate labor organization and has authority to issue charter to
its affiliates.
o Thus, it may issue a local charter certificate to CSBTI-SU and correspond-
ingly, CSBTI-SU is legitimate.
3. ALU and APSOTEU’s personality cannot be assailed in this case. Thus, they
continue to possess separate legal personalities.
 The SC rejected the company’s contention that applying by analogy, the doc-
trine of piercing the veil of corporate fiction, APSOTEU and ALU are the same
federation.
 According to the SC, once a labor union attains the status of a legitimate labor
organization, it continues as such until its certificate of registration is can-
celled or revoked in an independent action for cancellation.
o The legal personality of a labor organization cannot be collaterally at-
tacked.
o 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.
o Hence, in the absence of any independent action for cancellation of reg-
istration against either APSOTEU or ALU, and unless and until their reg-
istrations are cancelled, each continues to possess a separate legal person-
ality.
o 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 ac-
quires legal personality through the charter certificate issued by a duly regis-
tered federation or national union, and reported to the Regional Office in ac-
cordance with the rules implementing the Labor Code.
o A local union does not owe its existence to the federation with which it is
affiliated.
o 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.
o Hence, local unions are considered principals while the federation is
deemed to be merely their agent. -> As such principals, the unions are
entitled to exercise the rights and privileges of a legitimate labor or-
ganization, including the right to seek certification as the sole and ex-
clusive bargaining agent in the appropriate employer unit.
4. There is commingling between ALU and APSOTEU and thus, their sepa-
rate petitions for certification cannot be entertained.
 Uunder Article 245 of the Labor Code, supervisory employees are not eligible
for membership in a labor union of rank-and-file employees.
o 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 con-
flicts of interest.
o Further, to avoid a situation where supervisors would merge with the
rank-and-file or where the supervisors’ labor union would represent con-
flicting interests, a local supervisors’ union should not be allowed to af-
filiate with the national federation of unions of rank-and-file employees
where that federation actively participates in the union activity within
the company.
o The prohibition extends to a supervisors’ local union applying for mem-
bership in a national federation the members of which include local un-
ions of rank-and-file employees.
o In addition, the supervisors must have direct authority over the rank-
and-file employees.
 In this case, the SC pointed out the fact that the national federations that exist
as separate entities to which the rank-and-file and supervisory unions are sep-
arately affiliated with, do have a common set of officers.
o In addition, APSOTEU, the supervisory federation, actively participates
in the CSBTI-SU while ALU, the rank-and-file federation, actively partic-
ipates in the CSBTI-RFU, giving occasion to possible conflicts of interest
DIGESTS Labor Day 2 22
among the common officers of the federation of rank-and-file and the fed-
eration of supervisory unions.
 According to the Court, 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. -> When there is commingling of officers of a rank-and-file union
with a supervisory union, the constitutional policy on labor is circumvented.
In the end, the company’s (Coastal Subic Bay Terminal Inc.) petition was still
GRANTED. The CA decision was SET ASIDE. The Med-Arbiter’s ruling was UP-
HELD.
Digested by: Lindsey Supremo Fabella
52 Oceanic Air Products v CIR
Facts:
 Oceanic Air Products Incorporated Employees Union was organized on
May 2, 1958 and registered in the said office on June 16, 1958.
 Filed a complaint for the improvement of the working conditions
 Management did not answered the said complaint.
 So Han Suy, the production manager, received another copy of the letter
of demands of complainant union
 Mr. Narciso Chan, the president of respondent company dismissed Jorge
de Guia, president of complainant union; Cosme Laureano, vice-presi-
dent; Domingo Nanong, secretary-treasurer; Nemesio de Guia, board
member; Bonifacio Baligasay, board member, Leon Acebar and Salvador
Gajudo, members of said union. The other officers, Maximo Benedicto,
auditor, Federico Pineda and Adelaido Zaragoza disaffiliated from com-
plainant union and joined Oceanic Products Employees Union.
Issue:
 WON dismissal of the officers and members of complainant union was
due to their union affiliation and/or union activities or for a just cause.
YES
 WON the Oceanic Products Employees Union is a company dominated
or assisted union. YES

Ratio
 The courts found that the company incurred losses in 1956, 1957 and 1958
 However, the reduction of personnel was not effected until July 3, 1968,
after receipt of the demands, made by complainant union
 No reason was provided why the company had chosen the ranking offic-
ers (the president, the vice-president, the secretary-treasurer and a board
member) and members of complainant union as the employees to be ad-
versely affected by the cut of personnel; and why the company had
spared from the operation thereof precisely the former auditor and two
(2) former members of the board of directors of said complainant union,
who had quit the same and joined respondent union.
2nd issue:
- It was shown that people were forced to join the respondent union. Spe-
cifically, the respondent company, had forced him to sign therefore a
blank form, presumably an application for admission in respondent un-
ion, under pain of dismissal
53 KAPISANAN NG MGA MANGGAGAWA NG ALAK
(NAFLU) vs. HAMILTON DISTILLERY COMPANY, CO
BON BENG, MARIANO ANG ENG and HAMILTON
WORKERS' UNION (1962)
CONCEPCION, J.:
NATURE: Appeal by certiorari from a decision of the Court of Industrial Relations
dismissing the complaint for unfair labor practice.
FACTS: Respondent Hamilton Distillery Company or Hamilton Wine Manufac-
turing Co. is a commercial establishment engaged in the manufacture of wine in
the Philippines, whereas respondents Co Bon Beng and Mariano Ang Eng are the
superintendent or cashier and the manager respectively thereof.
On September 24, 1957, two (2) labors unions, composed of employees and labor-
ers of the Company, were registered with the Department of Labor, namely, peti-
tioner Kapisanan ng mga Manggagawa ng Alak (NAFLU), and respondent Ham-
ilton Workers' Union. Thereupon, the latter and the Company entered into a col-
lective bargaining agreement, incorporated into a private instrument purporting
to have been executed on September 24, 1957. Moreover, the Company issued a
notice bearing the same date, addressed to all of its employees, giving non-mem-
bers of the Workers' Union thirty (30) days within which to join the same, or else,
be dismissed.
DIGESTS Labor Day 2 23
Beginning from September 30, 1957, those who remained affiliated to the NAFLU
were allowed to work only two (2) days a week; and that on October 28, 1957 52
members of the NAFLU, who had not joined the Workers' Union were dismissed
by the Company.
SIDE NOTE: Valentin Kaw, (Chinese national), the president of the Hamilton Workers'
Union, was the time-keeper of the Company, and that the treasurer thereof was his brother
Benito Kaw, another Chinese.
The dismissed employees reported the matter to the CIR, with which a formal
complaint for unfair labor practice was filed. Respondents denied the charge and
invoked, in justification for said dismissal of members of the NAFLU, a "closed
shop" clause in the collective bargaining agreement between the Company and the
Workers Union.
The CIR rendered a decision dismissing the unfair labor practice case. A reconsid-
eration of such decision having been denied by the Court sitting en banc, the case
is now before the SC on appeal by certiorari taken by the NAFLU.
ISSUE: WON the dismissal of members of the NAFLU who had failed and refused
to join the Workers' union constitutes an unfair labor practice.
HELD: Yes. The closed-shop agreement applies only to persons to be hired or to
employees who are not yet members of any labor organization. It is inapplicable
to those already in the service who are members of another union.
RATIO: The "closed shop" clause of said agreement states:
That the COMPANY shall establish the policy of "Union Shop," effective October 24,
1957. All workers shall by that date become members of the UNION, except those monthly
salaried employees, and other supervisor-employee (technical men) listed by the Manage-
ment. The COMPANY shall be free to hire new laborers without giving consideration to
their membership or non-membership to the Union. However, all laborers hired must join
the UNION within sixty (60) days of employment, or face discharge, except, those selected
by the Management above. The UNION assumes responsibility of individually signing up
new laborers.
In this connection, it is well settled in this jurisdiction that, in the absence of a
manifest intent to the contrary, "closed shop" provisions in a collective bargain-
ing agreement "apply only to persons to be hired or to employees who are not
yet members of any labor organization" and that said provisions of the agree-
ment are "not applicable to those already in the service at the time of its execu-
tion".
The language of the above quoted "closed shop" clause is not such as to bar neces-
sarily the limitation of its application to new employees or laborers, or, at least, to
those who were not as yet affiliated to any labor organization. The first sentence
of said clause may be construed to refer to laborers or employees admitted after
September 24, but before October 24, 1957. At any rate, if the Company and the

Workers' Union intended by said clause, to authorize the dismissal of persons al-
ready in the service of said Company on or before September 24, 1957, but belong-
ing to another labor organization, and who failed to quit from the latter and join
the Workers' Union on or before October 24, 1957, then such stipulation would be
null and void.
The closed-shop agreement authorized under sec. 4, subsec. a(4) of the Industrial
Peace Act should however, apply only to persons to be hired or to employees who
are not yet members of any labor organization. It is inapplicable to those already
in the service who are members of another union. To hold otherwise, i.e., that the
employees in a company who are members of a minority union may be compelled
to disaffiliate from their union and join the majority or contracting union, would
render nugatory the right of all employees to self-organization and to form, join or
assist labor organizations of their own choosing, a right guaranteed by the Indus-
trial Peace Act (sec. 3, Rep. Act No. 875) as well as by the Constitution (Art. III, sec.
1[6]).
DISPOSITIVE: WHEREFORE, the decision appealed from is hereby reversed,
and another one shall be entered ordering the Company to cease and desist from
further unfair labor practices, to pay the members of the NAFLU who had been
discriminated against the difference between the compensation actually paid to
them and that which they would have received had there been no discrimination,
and to reinstate the employees named above, with back wages from the time of
their dismissal until their actual reinstatement, with all of the rights and privileges
appertaining thereto, as well as to pay the costs.
54. UNITED SEAMEN'S UNION OF THE PHILIPPINES,
vs. DAVAO SHIPOWNERS ASSOCIATION.
August 31, 1967
FACTS:
On August 4, 1959 petitioner United Seamen's Union of the Philippines (USUP)
presented a set of demands to respondent Davao Shipowners Association (Ship-
owners) representing respondent shipping companies, for union recognition, un-
ion security, standardization of wages and other benefits. In its answer, the Ship-
owners invited USUP's attention to the existence of a collective bargaining agree-
ment with the Davao Marine Association (Association), to which all the crewmen
of their launches belonged. Since the Shipowners were bound by said collective
bargaining agreement until the end of that year (1959), it suggested that USUP first
take the necessary steps to be certified as the collective bargaining agent of the
employees before they could negotiate in connection with its proposals.
However, even before receiving the Shipowners' answer to its set of demands,
USUP had filed with Regional Office No. 8 of the Department of Labor of Davao
DIGESTS Labor Day 2 24
City a notice of strike against all the individual shipowners. The Chief of the Labor
Operations Section of the Davao Regional Office requested USUP and the Ship-
owners to a conference with a view to settling the conflict. On August 20, 1959 the
USUP, the Shipowners and the Association reached an agreement and executed
the following covenant:
- USUP to withdraw the notice to strike
- USUP to bind itself that it will respect the contract between the Davao Shipown-
er's Association and the Davao Marine Association until its expiry date
USUP filed with the Court of Industrial Relations a petition for certification elec-
tion. The shipping companies, however, terminated sixty-four(64) employees for
reasons ranging from stoppage of operations due to the death of a partner to busi-
ness losses and reversals.
A strike was declared on December 31, 1959.
ISSUE: Is the strike staged by the members of USUP unjustified and illegal
HELD: The strike was unjustified and illegal
RATIO:
First, it must be noted that USUP filed its Notice of Strike even before it received
the Shipowners' answer to its set of demands. It seems that regardless of whether
the Shipowners would be willing to negotiate with USUP or not, USUP was al-
ready predisposed to go on with the strike. There could only be one reason for
USUP to anticipate the Shipowners' negative stand: USUP was aware of the exist-
ence of a valid collective bargaining agreement between the Shipowners and the
Association which would operate as a legal bar for the Shipowners to entertain
USUP's demands. Knowing as it did that its demands could not be entertained by
the Shipowners, USUP at that early stage could not have had any legitimate excuse
for seeking recognition as the sole collective bargaining agent of the employees.
Second, in open contravention of the August 20 covenant, USUP completely dis-
turbed and impaired the status quoby going on strike pending resolution of its
petition for certification election. That status quo referred expressly "to the normal
and original operating practices of loading, unloading, departures, manning, and
the performance of any and/or all jobs incident to the businesses of the members
of the said Shipowners Association." By striking, USUP had impaired or disturbed
the existing collective bargaining agreement between the Shipowners and the As-
sociation which recognized "the right of the Employer to hire, promote and trans-
fer and for legal cause suspend, lay-off or discharge employees subject to the right
of the union (referring to the Association) to notification and to ask reconsideration
of any action of the Employer in the premises."

Even assuming arguendo that the shipping companies were also bound by the cov-
enant, still the termination of services of the affected employees could not be con-
sidered a violation of the covenant. The dismissals made were predicated on le-
gitimate reasons.
Third, the existence of a collective bargaining agreement should have been suffi-
cient to deter USUP from acts tending to force the issue of union recognition.6 The
employees concerned who after all were bound by the collective bargaining agree-
menttotally disregarded, the procedure laid down therein by immediately going
on strike without coursing their complaints through the grievance committee for
possible settlement
Fourth, even assuming again that the purpose for which the strike was staged was
valid, still the fact remains that the means employed were far from legitimate.
The USUP struck at about 8:00 in the evening of December 31, 1959. Led by Alvaro
Trinidad and other respondents, some 300 strikers formed a human cordon along-
side the Sta. Ana wharf and blocked all ways and approaches to the launches and
vessels of Petitioners. The loading and unloading of some boats of the Petitioners,
then docked at the Sta. Ana wharf, were obstructed by the strikers, not only by the
employment of human fence but also by acts of violence and coercion. At the in-
ception of the strike, some boats were already loaded with perishable commodities
destined for the gulf and coastal towns of Davao, which departure was also ren-
dered impossible due to the impregnability of the human wall placed by the strik-
ers blocking the egress and ingress to the said vessels.
NOTES:
A labor organization is wholesome if it serves its legitimate purpose of promoting
the interests of labor without unnecessary labor disputes. That is why it is given
personality and recognition in concluding collective bargaining agreements. But if
it is made use of as a subterfuge, or as a means to subvert valid commitments, it
defeats its own purpose, for it tends to undermine the harmonious relations be-
tween management and labor. The situation does not deserve any approving sanc-
tion from the Court.
Where, "in carrying out the strike, coercion, force, intimidation, violation with
physical injuries, sabotage and the use of unnecessary and obscene language or
epithets were committed by the top officials and members of the union in an at-
tempt to prevent the other willing laborers to go to work," it was held that "a strike
hold under those circumstances cannot be justified in a regime of law for that
6 VI — GRIEVANCE AND HEARING COMMITTEE
A "Grievance Committee" shall be created, composed of three (3) members of the UNION, one of
whom shall be in the service of the EMPLOYER, the names of whom shall be furnished to the said
employer. All grievance of UNION members in the service of the EMPLOYER shall be coursed through
the aforementioned grievance committee, which shall take up the same with a "Hearing Committee"
composed of three members to be chosen by the EMPLOYER.
DIGESTS Labor Day 2 25
would encourage abuses and terrorism and could subvert the very purpose of the
law which provides for arbitration and peaceful settlement of labor disputes."
55 GUIJARNO v. COURT OF INDUSTRIAL RELATIONS
August 27, 1973
Fernando, J
Luciano, Noel Christian
SUMMARY: ULP cases were filed against the Company and the Union by
employees who were dismissed by virtue of a closed-shop provision. The
CIR found their dismissal justified under said provision. The SC reversed
and held that a closed-shop provision should not be given retro-active effect.
It applies only to persons who are to be hired and who are not yet members
of any labor organization.
DOCTRINE: [On Union Function and Rationale] The union is the means of
assuring that such fundamental objectives would be achieved. It is the in-
strumentality through which an individual laborer who is helpless as
against a powerful employer may, through concerted effort and activity,
achieve the goal of economic well-being. Workers unorganized are weak;
workers organized are strong. Necessarily then, they join labor unions.
FACTS: Three ULP cases for unlawful dismissal were filed against Central Santos
Lopez Co., Inc. (the Company) and United Sugar Workers Union-ILO (the Union).
The Union is the exclusive bargaining agent of the Company. The complainants
here are a number of employees of the Company who were allegedly illegally dis-
missed.
The Union and the Company have an existing CBA. The CBA contains a closed
shop provision. By virtue of the closed-shop provision, the Union sought the dis-
missal of laborers who are no longer members of good standing in the union. As
such, the Company dismissed the complainants in this case.
Any grievance or dispute which cannot be settled by a conference of both grievance and hearing com-
mittees, shall be referred to the Court of Industrial Relations or any other Court of competent jurisdic-
tion for final determination. Pending such determination it is agreed by the parties that no strike, slow
down of work or lockout shall be declared by either the UNION or the EMPLOYER.
 DIGESTS Labor Day 2 26

NOTE: The complainants became employees of the Company PRIOR to the exe- through concerted effort and activity, achieve the goal of
cution of the CBA. economic well-being
DECISION OF THE CIR: The CIR dismissed the complaint and did not order the 2. Workers unorganized are weak; workers organized are
reinstatement of the complainants. It held that the closed-shop provision was strong. Necessarily then, they join labor unions
valid. As such, the complainants were validly dismissed.
C. To further increase the effectiveness of such organizations, a
Hence, this recourse to the SC. closed-shop has been allowed
ISSUE: WON the complainants were validly dismissed. 1. However, it could happen that such a stipulation which as-
sures further weight to a labor union at the bargaining table
HELD: NO. The closed-shop provision should NOT be retroactively applied.
could be utilized against minority groups or individual
I. It is well-settled that a closed-shop provision in a CBA is NOT to be members thereof.
given a retroactive effect so as to preclude its being applied to em-
2. The power in collectivity could be the means of crushing
ployees already in the service.
opposition and stifling the voices of those who dissent
A. Confederated Sons of Labor v. Anakan Lumber Co.:
3. AS SUCH, THE RIGHT TO JOIN OTHERS OF LIKE PER-
1. In order that an employer may be deemed bund, under a SUASION IS VALUABLE
CBA, to dismiss employees for non-union membership, the
DISPOSITIVE: As such, CIR decision should be reversed. Complainants are or-
stipulation to this effect must be so clear and unequivocal
dered reinstated with back pay.
as to leave no room for doubt thereon
B. Freeman Shirt Manuf. Co. Inc. v. CIR
1. Closed-shop agreement authorized under Sec. 4(a)(4) of the
Industrial Peace Act should apply to persons to be hired or
to employees who are NOT yet members of any LO
2. To hold otherwise, the employees in a company who are
members of a minority union may be compelled to disaffil-
iate from their union and join the majority or contracting
union
a. This would render nugatory the right of all employees
to self-organization and to form, join, or assist LOs of
their own choosing
II. [RELEVANT] The Role of the Union
A. The obligation to protect labor is categorically imposed on the
State under the 1935 Constitution.
1. The duty to promote social justice is based on the concept
of insuring the dignity, welfare, security of all people
B. The union is the means of assuring that such fundamental ob-
jectives would be achieved
1. It is the instrumentality through which an individual la-
borer who is helpless as against a powerful employer may,