Labor Dispute Between Unions Over Disaffiliation

G.R. No.
127374 January 31, 2002

PHILIPPINE SKYLANDERS, INC., MARILES C. ROMULO and FRANCISCO DAKILA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER EMERSON TUMANON, PHILIPPINE ASSOCIATION OF
FREE LABOR UNIONS (PAFLU) SEPTEMBER (now UNIFIED PAFLU) and SERAFIN AYROSO, respondents.
x---------------------------------------------------------x
G.R. No. 127431 January 31, 2002
PHILIPPINE SKYLANDERS AND WORKERS ASSOCIATION-NCW, MACARIO CABANIAS, PEPITO RODILLAS, SHARON
CASTILLO, DANILO CARBONEL, MANUEL EDA, ROLANDO FELIX, JOCELYN FRONDA, RICARDO LUMBA, JOSEPH
MARISOL, NERISA MORTEL, TEOFILO QUIRONG, LEONARDO REYES, MANUEL CADIENTE and HERMINIA
RIOSA, petitioners,
vs.
PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU) SEPTEMBER (now UNIFIED PAFLU) and NATIONAL
LABOR RELATIONS COMMISSION, SECOND DIVISION, respondents.
BELLOSILLO, J.:
This is a petition for certiorari1 seeking to set aside the 31 July 1996 Decision 2 of the National Labor Relations
Commission affirming the 30 June 1995 Decision of the Labor Arbiter holding petitioners Philippine Skylanders, Inc.,
Mariles C. Romulo3 and Francisco Dakila as well as the elected officers of the Philippine Skylanders Employees and
Workers Association-PAFLU4 guilty of unfair labor practice and ordering them to pay private respondent Philippine
Association of Free Labor Union (PAFLU) September5 ₱150,000.00 as damages. Petitioners likewise seek the reversal
of the 31 October 1996 Resolution of the NLRC denying their Motion for Reconsideration.
In November 1993 the Philippine Skylanders Employees Association (PSEA), a local labor union affiliated with the
Philippine Association of Free Labor Unions (PAFLU) September (PAFLU), won in the certification election conducted
among the rank and file employees of Philippine Skylanders, Inc. (PSI). Its rival union, Philippine Skylanders
Employees Association-WATU (PSEA-WATU) immediately protested the result of the election before the Secretary of
Labor.
Several months later, pending settlement of the controversy, PSEA sent PAFLU a notice of disaffiliation citing as
reason PAFLU's supposed deliberate and habitual dereliction of duty toward its members. Attached to the notice was
a copy of the resolution adopted and signed by the officers and members of PSEA authorizing their local union to
disaffiliate from its mother federation.
PSEA subsequently affiliated itself with the National Congress of Workers (NCW), changed its name to Philippine
Skylanders Employees Association - National Congress of Workers (PSEA-NCW), and to maintain continuity within the
organization, allowed the former officers of PSEA-PAFLU to continue occupying their positions as elected officers in
the newly-forged PSEA-NCW.
On 17 March 1994 PSEA-NCW entered into a collective bargaining agreement with PSI which was immediately
registered with the Department of Labor and Employment.
Meanwhile, apparently oblivious to PSEA's shift of allegiance, PAFLU Secretary General Serafin Ayroso wrote Mariles
C. Romulo requesting a copy of PSI's audited financial statement. Ayroso explained that with the dismissal of PSEA-
WATU's election protest the time was ripe for the parties to enter into a collective bargaining agreement.
On 30 July 1994 PSI through its personnel manager Francisco Dakila denied the request citing as reason PSEA's
disaffiliation from PAFLU and its subsequent affiliation with NCW.
Agitated by PSI's recognition of PSEA-NCW, PAFLU through Serafin Ayroso filed a complaint for unfair labor practice
against PSI, its president Mariles Romulo and personnel manager Francisco Dakila. PAFLU alleged that aside from
PSI's refusal to bargain collectively with its workers, the company through its president and personnel manager, was
also liable for interfering with its employees' union activities. 6
Two (2) days later or on 6 October 1994 Ayroso filed another complaint in behalf of PAFLU for unfair labor practice
against Francisco Dakila. Through Ayroso PAFLU claimed that Dakila was present in PSEA's organizational meeting
thereby confirming his illicit participation in union activities. Ayroso added that the members of the local union had
unwittingly fallen into the manipulative machinations of PSI and were lured into endorsing a collective bargaining
agreement which was detrimental to their interests. 7 The two (2) complaints were thereafter consolidated.
On 1 February 1995 PAFLU amended its complaint by including the elected officers of PSEA-PAFLU as additional party
respondents. PAFLU averred that the local officers of PSEA-PAFLU, namely Macario Cabanias, Pepito Rodillas, Sharon
Castillo, Danilo Carbonel, Manuel Eda, Rolando Felix, Jocelyn Fronda, Ricardo Lumba, Joseph Mirasol, Nerisa Mortel,
Teofilo Quirong, Leonardo Reyes, Manuel Cadiente, and Herminia Riosa, were equally guilty of unfair labor practice
since they brazenly allowed themselves to be manipulated and influenced by petitioner Francisco Dakila. 8
PSI, its president Mariles C. Romulo, and its personnel manager Dakila moved for the dismissal of the complaint on
the ground that the issue of disaffiliation was an inter-union conflict which lay beyond the jurisdiction of the Labor
Arbiter. On the other hand, PSEA-NCW took the cudgels for its officers who were being sued in their capacities as
former officers of PSEA-PAFLU and asserted that since PSEA was no longer affiliated with PAFLU, Ayroso or PAFLU for
that matter had no personality to file the instant complaint. In support of this assertion, PSEA-NCW submitted in
evidence a Katunayan signed by 111 out of 120 rank and file employees of PSI disauthorizing Ayroso or PAFLU from
instituting any action in their behalf.9
In a Decision rendered on 30 June 1995 the Labor Arbiter declared PSEA's disaffiliation from PAFLU invalid and held
PSI, PSEA-PAFLU and their respective officers guilty of unfair labor practice. The Decision explained that despite PSEA-
PAFLU's status as the sole and exclusive bargaining agent of PSI's rank and file employees, the company knowingly
sanctioned and confederated with Dakila in actively assisting a rival union. This, according to the Labor Arbiter, was a
classic case of interference for which PSI could be held responsible. As PSEA-NCW's personality was not accorded
recognition, its collective bargaining agreement with PSI was struck down for being invalid. Ayroso's legal personality
to file the complaint was sustained on the ratiocination that under the Labor Code no petition questioning the
majority status of the incumbent bargaining agent shall be entertained outside of the sixty (60)-day period
immediately before the expiry date of such five (5)-year term of the collective bargaining agreement that the parties
may enter into. Accordingly, judgment was rendered ordering PSI, PSEA-PAFLU and their officers to pay PAFLU
₱150,000.00 in damages.10
PSI, PSEA and their respective officers appealed to the National Labor Relations Commission (NLRC). But the NLRC
upheld the Decision of the Labor Arbiter and conjectured that since an election protest questioning PSEA-PAFLU's
certification as the sole and exclusive bargaining agent was pending resolution before the Secretary of Labor, PSEA
could not validly separate from PAFLU, join another national federation and subsequently enter into a collective
bargaining agreement with its employer-company. 11
Petitioners separately moved for reconsideration but both motions were denied. Hence, these petitions for certiorari
filed by PSI and PSEA-NCW together with their respective officers pleading for a reversal of the NLRC's Decision which
they claimed to have been rendered in excess of jurisdiction. In due time, both petitions were consolidated.
In these petitions, petitioner PSEA together with its officers argued that by virtue of their disaffiliation PAFLU as a
mere agent had no authority to represent them before any proceedings. They further asserted that being an
independent labor union PSEA may freely serve the interest of all its members and readily disaffiliate from its mother
federation when circumstances so warrant. This right, they averred, was consistent with the constitutional guarantee
of freedom of association.12
For their part, petitioners PSI, Romulo and Dakila alleged that their decision to bargain collectively with PSEA-NCW
was actuated, to a large extent, by PAFLU's behavior. Having heard no objections or protestations from PAFLU relative
to PSEA's disaffiliation, they reckoned that PSEA's subsequent association with NSW was done bona fide.13
The Solicitor General filed a Manifestation in Lieu of Comment recommending that both petitions be granted. In
hisManifestation, the Solicitor General argued against the Labor Arbiter's assumption of jurisdiction citing the
following as reasons: first, there was no employer-employee relationship between complainant Ayroso and PSI over
which the Labor Arbiter could rightfully assert his jurisdiction; second, since the case involved a dispute between
PAFLU as mother federation and PSEA as local union, the controversy fell within the jurisdiction of the Bureau of
Labor Relations; and lastly, the relationship of principal-agent between PAFLU and PSEA had been severed by the
local union through the lawful exercise of its right of disaffiliation. 14
Stripped of non-essentials, the fundamental issue tapers down to the legitimacy of PSEA's disaffiliation. To be more
precise, may PSEA, which is an independent and separate local union, validly disaffiliate from PAFLU pending the
settlement of an election protest questioning its status as the sole and exclusive bargaining agent of PSI's rank and
file employees?
At the outset, let it be noted that the issue of disaffiliation is an inter-union conflict the jurisdiction of which properly
lies with the Bureau of Labor Relations (BLR) and not with the Labor Arbiter. 15 Nonetheless, with due recognition of
this fact, we deem it proper to settle the controversy at this instance since to remand the case to the BLR would only
mean intolerable delay for the parties.
The right of a local union to disaffiliate from its mother federation is not a novel thesis unillumined by case law. In the
landmark case of Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc. 16 we upheld the right of local unions
to separate from their mother federation on the ground that as separate and voluntary associations, local unions do
not owe their creation and existence to the national federation to which they are affiliated but, instead, to the will of
their members. The sole essence of affiliation is to increase, by collective action, the common bargaining power of
local unions for the effective enhancement and protection of their interests. Admittedly, there are times when
without succor and support local unions may find it hard, unaided by other support groups, to secure justice for
themselves.
Yet the local unions remain the basic units of association, free to serve their own interests subject to the restraints
imposed by the constitution and by-laws of the national federation, and free also to renounce the affiliation upon the
terms laid down in the agreement which brought such affiliation into existence.
Such dictum has been punctiliously followed since then. 17
Upon an application of the aforecited principle to the issue at hand, the impropriety of the questioned Decisions
becomes clearly apparent. There is nothing shown in the records nor is it claimed by PAFLU that the local union was
expressly forbidden to disaffiliate from the federation nor were there any conditions imposed for a valid breakaway.
As such, the pendency of an election protest involving both the mother federation and the local union did not
constitute a bar to a valid disaffiliation. Neither was it disputed by PAFLU that 111 signatories out of the 120
members of the local union, or an equivalent of 92.5% of the total union membership supported the claim of
disaffiliation and had in fact disauthorized PAFLU from instituting any complaint in their behalf. Surely, this is not a
case where one (1) or two (2) members of the local union decided to disaffiliate from the mother federation, but it is
a case where almost all local union members decided to disaffiliate.
It was entirely reasonable then for PSI to enter into a collective bargaining agreement with PSEA-NCW. As PSEA had
validly severed itself from PAFLU, there would be no restrictions which could validly hinder it from subsequently
affiliating with NCW and entering into a collective bargaining agreement in behalf of its members.
There is a further consideration that likewise argues for the granting of the petitions. It stands unchallenged that
PAFLU instituted the complaint for unfair labor practice against the wishes of workers whose interests it was
supposedly protecting. The mere act of disaffiliation did not divest PSEA of its own personality; neither did it give
PAFLU the license to act independently of the local union. Recreant to its mission, PAFLU cannot simply ignore the
demands of the local chapter and decide for its welfare. PAFLU might have forgotten that as an agent it could only act
in representation of and in accordance with the interests of the local union. The complaint then for unfair labor
practice lodged by PAFLU against PSI, PSEA and their respective officers, having been filed by a party which has no
legal personality to institute the complaint, should have been dismissed at the first instance for failure to state a
cause of action.
Policy considerations dictate that in weighing the claims of a local union as against those of a national federation,
those of the former must be preferred. Parenthetically though, the desires of the mother federation to protect its
locals are not altogether to be shunned. It will however be to err greatly against the Constitution if the desires of the
federation would be favored over those of its members. That, at any rate, is the policy of the law. For if it were
otherwise, instead of protection, there would be disregard and neglect of the lowly workingmen.
WHEREFORE, the petitions of Philippine Skylanders, Inc. and of Philippine Skylanders and Workers Association-NCW,
together with their respective officers, are GRANTED. The Decision of the National Labor Relations Commission of 31
July 1996 affirming the Decision of the Labor Arbiter of 30 June 1995 holding petitioners Philippine Skylanders and
Workers Association-NCW, Philippine Skylanders, Inc. and their respective officers, guilty of unfair labor practice and
ordering them to pay damages to private respondent Philippine Association of Free Labor Unions (PAFLU) September
(now UNIFIED PAFLU) as well as the Resolution of 31 October 1996 denying reconsideration is REVERSED and SET
ASIDE. No costs.
G.R. No. 141471 September 18, 2000
COLEGIO DE SAN JUAN DE LETRAN, petitioner,
vs.
ASSOCIATION OF EMPLOYEES AND FACULTY OF LETRAN and ELEONOR AMBAS, respondents.
DECISION
KAPUNAN, J.:
This is a petition for review on certiorari seeking the reversal of the Decision of the Court of Appeals, promulgated on
9 August 1999, dismissing the petition filed by Colegio de San Juan de Letran (hereinafter, "petitioner") and affirming
the Order of the Secretary of Labor, dated December 2, 1996, finding the petitioner guilty of unfair labor practice on
two (2) counts.
The facts, as found by the Secretary of Labor and affirmed by the Court of Appeals, are as follows:
"On December 1992, Salvador Abtria, then President of respondent union, Association of Employees and Faculty of
Letran, initiated the renegotiation of its Collective Bargaining Agreement with petitioner Colegio de San Juan de
Letran for the last two (2) years of the CBA's five (5) year lifetime from 1989-1994. On the same year, the union
elected a new set of officers wherein private respondent Eleanor Ambas emerged as the newly elected President
(Secretary of Labor and Employment's Order dated December 2, 1996, p. 12).
Ambas wanted to continue the renegotiation of the CBA but petitioner, through Fr. Edwin Lao, claimed that the CBA
was already prepared for signing by the parties. The parties submitted the disputed CBA to a referendum by the
union members, who eventually rejected the said CBA (Ibid, p. 2).
Petitioner accused the union officers of bargaining in bad faith before the National Labor Relations Commission
(NLRC). Labor Arbiter Edgardo M. Madriaga decided in favor of petitioner. However, the Labor Arbiter's decision was
reversed on appeal before the NLRC (Ibid, p. 2).
On January 1996, the union notified the National Conciliation and Mediation Board (NCMB) of its intention to strike
on the grounds (sic) of petitioner's: non-compliance with the NLRC (1) order to delete the name of Atty. Federico
Leynes as the union's legal counsel; and (2) refusal to bargain (Ibid, p. 1).
On January 18, 1996, the parties agreed to disregard the unsigned CBA and to start negotiation on a new five-year
CBA starting 1994-1999. On February 7, 1996, the union submitted its proposals to petitioner, which notified the
union six days later or on February 13, 1996 that the same had been submitted to its Board of Trustees. In the
meantime, Ambas was informed through a letter dated February 15, 1996 from her superior that her work schedule
was being changed from Monday to Friday to Tuesday to Saturday. Ambas protested and requested management to
submit the issue to a grievance machinery under the old CBA (Ibid, p. 2-3).
Due to petitioner's inaction, the union filed a notice of strike on March 13, 1996. The parties met on March 27, 1996
before the NCMB to discuss the ground rules for the negotiation. On March 29, 1996, the union received petitioner's
letter dismissing Ambas for alleged insubordination. Hence, the union amended its notice of strike to include Ambas'
dismissal. (Ibid, p. 2-3).
On April 20, 1996, both parties again discussed the ground rules for the CBA renegotiation. However, petitioner
stopped the negotiations after it purportedly received information that a new group of employees had filed a petition
for certification election (Ibid, p. 3).
On June 18, 1996, the union finally struck. On July 2, 1996, public respondent the Secretary of Labor and
Employment assumed jurisdiction and ordered all striking employees including the union president to return to work
and for petitioner to accept them back under the same terms and conditions before the actual strike. Petitioner
readmitted the striking members except Ambas. The parties then submitted their pleadings including their position
papers which were filed on July 17, 1996 ( Ibid, pp. 2-3).
On December 2, 1996, public respondent issued an order declaring petitioner guilty of unfair labor practice on two
counts and directing the reinstatement of private respondent Ambas with backwages. Petitioner filed a motion for
reconsideration which was denied in an Order dated May 29, 1997 (Petition, pp. 8-9)." 1
Having been denied its motion for reconsideration, petitioner sought a review of the order of the Secretary of Labor
and Employment before the Court of Appeals. The appellate court dismissed the petition and affirmed the findings of
the Secretary of Labor and Employment. The dispositive portion of the decision of the Court of Appeals sets forth:
WHEREFORE, foregoing premises considered, this Petition is DISMISSED, for being without merit in fact and in law.
With cost to petitioner.
SO ORDERED.2
Hence, petitioner comes to this Court for redress.
Petitioner ascribes the following errors to the Court of Appeals:
I
THE HONORABLE COURT OF APPEALS ERRED AND ACTED WITH GRAVE ABUSE OF DISCRETION IN AFFIRMING
THE RULING OF THE SECRETARY OF LABOR AND EMPLOYMENT WHICH DECLARES PETITIONER LETRAN
GUILTY OF REFUSAL TO BARGAIN (UNFAIR LABOR PRACTICE) FOR SUSPENDING THE COLLECTIVE BARGAINING
NEGOTIATIONS WITH RESPONDENT AEFL, DESPITE THE FACT THAT THE SUSPENSION OF THE NEGOTIATIONS
WAS BROUGHT ABOUT BY THE FILING OF A PETITION FOR CERTIFICATION ELECTION BY A RIVAL UNION WHO
CLAIMED TO COMMAND THE MAJORITY OF THE EMPLOYEES WITHIN THE BARGAINING UNIT.
II
THE HONORABLE COURT OF APPEALS ERRED AND ACTED WITH GRAVE ABUSE OF DISCRETION IN AFFIRMING
THE RULING OF THE SECRETARY OF LABOR AND EMPLOYMENT WHICH DECLARES PETITIONER LETRAN
GUILTY OF UNFAIR LABOR PRACTICE FOR DISMISSING RESPONDENT AMBAS, DESPITE THE FACT THAT HER
DISMISSAL WAS CAUSED BY HER INSUBORDINATE ATTITUDE, SPECIFICALLY, HER REFUSAL TO FOLLOW THE
PRESCRIBED WORK SCHEDULE.3
The twin questions of law before this Court are the following: (1) whether petitioner is guilty of unfair labor practice
by refusing to bargain with the union when it unilaterally suspended the ongoing negotiations for a new Collective
Bargaining Agreement (CBA) upon mere information that a petition for certification has been filed by another
legitimate labor organization? (2) whether the termination of the union president amounts to an interference of the
employees' right to self-organization?
The petition is without merit.
After a thorough review of the records of the case, this Court finds that petitioner has not shown any compelling
reason sufficient to overturn the ruling of the Court of Appeals affirming the findings of the Secretary of Labor and
Employment. It is axiomatic that the findings of fact of the Court of Appeals are conclusive and binding on the
Supreme Court and will not be reviewed or disturbed on appeal. In this case, the petitioner failed to show any
extraordinary circumstance justifying a departure from this established doctrine.
As regards the first issue, Article 252 of the Labor Code defines the meaning of the phrase "duty to bargain
collectively," as follows:
Art. 252. Meaning of duty to bargain collectively. - The duty to bargain collectively means the performance of a
mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an
agreement with respect to wages, hours of work and all other terms and conditions of employment including
proposals for adjusting any grievances or questions arising under such agreement and executing a contract
incorporating such agreements if requested by either party but such duty does not compel any party to agree to a
proposal or to make any concession.
Noteworthy in the above definition is the requirement on both parties of the performance of the mutual obligation
to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement.
Undoubtedly, respondent Association of Employees and Faculty of Letran (AEFL) (hereinafter, "union") lived up to this
requisite when it presented its proposals for the CBA to petitioner on February 7, 1996. On the other hand, petitioner
devised ways and means in order to prevent the negotiation.
Petitioner's utter lack of interest in bargaining with the union is obvious in its failure to make a timely reply to the
proposals presented by the latter. More than a month after the proposals were submitted by the union, petitioner
still had not made any counter-proposals. This inaction on the part of petitioner prompted the union to file its second
notice of strike on March 13, 1996. Petitioner could only offer a feeble explanation that the Board of Trustees had not
yet convened to discuss the matter as its excuse for failing to file its reply. This is a clear violation of Article 250 of the
Labor Code governing the procedure in collective bargaining, to wit:
Art. 250. Procedure in collective bargaining. - The following procedures shall be observed in collective bargaining:
(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a
statement of its proposals. The other party shall make a reply thereto not later than ten (10) calendar days from
receipt of such notice.4
xxx
As we have held in the case of Kiok Loy vs. NLRC,5 the company's refusal to make counter-proposal to the union's
proposed CBA is an indication of its bad faith. Where the employer did not even bother to submit an answer to the
bargaining proposals of the union, there is a clear evasion of the duty to bargain collectively. 6 In the case at bar,
petitioner's actuation show a lack of sincere desire to negotiate rendering it guilty of unfair labor practice.
Moreover, the series of events that transpired after the filing of the first notice of strike in January 1996 show
petitioner's resort to delaying tactics to ensure that negotiation would not push through. Thus, on February 15, 1996,
or barely a few days after the union proposals for the new CBA were submitted, the union president was informed by
her superior that her work schedule was being changed from Mondays to Fridays to Tuesdays to Saturdays. A request
from the union president that the issue be submitted to a grievance machinery was subsequently denied. Thereafter,
the petitioner and the union met on March 27, 1996 to discuss the ground rules for negotiation. However, just two
days later, or on March 29, 1996, petitioner dismissed the union president for alleged insubordination. In its final
attempt to thwart the bargaining process, petitioner suspended the negotiation on the ground that it allegedly
received information that a new group of employees called the Association of Concerned Employees of Colegio
(ACEC) had filed a petition for certification election. Clearly, petitioner tried to evade its duty to bargain collectively.
Petitioner, however, argues that since it has already submitted the union's proposals to the Board of Trustees and
that a series of conferences had already been undertaken to discuss the ground rules for negotiation such should
already be considered as acts indicative of its intention to bargain. As pointed out earlier, the evidence on record
belie the assertions of petitioner.
Petitioner, likewise, claims that the suspension of negotiation was proper since by the filing of the petition for
certification election the issue on majority representation of the employees has arose. According to petitioner, the
authority of the union to negotiate on behalf of the employees was challenged when a rival union filed a petition for
certification election. Citing the case of Lakas Ng Manggagawang Makabayan v. Marcelo Enterprises,7 petitioner
asserts that in view of the pendency of the petition for certification election, it had no duty to bargain collectively
with the union.
We disagree. In order to allow the employer to validly suspend the bargaining process there must be a valid petition
for certification election raising a legitimate representation issue. Hence, the mere filing of a petition for certification
election does not ipso facto justify the suspension of negotiation by the employer. The petition must first comply
with the provisions of the Labor Code and its Implementing Rules. Foremost is that a petition for certification
election must be filed during the sixty-day freedom period. The "Contract Bar Rule" under Section 3, Rule XI, Book V,
of the Omnibus Rules Implementing the Labor Code, provides that: " .… If a collective bargaining agreement has been
duly registered in accordance with Article 231 of the Code, a petition for certification election or a motion for
intervention can only be entertained within sixty (60) days prior to the expiry date of such agreement." The rule is
based on Article 232,8 in relation to Articles 253, 253-A and 256 of the Labor Code. No petition for certification
election for any representation issue may be filed after the lapse of the sixty-day freedom period. The old CBA is
extended until a new one is signed. The rule is that despite the lapse of the formal effectivity of the CBA the law still
considers the same as continuing in force and effect until a new CBA shall have been validly executed. 9 Hence, the
contract bar rule still applies.10 The purpose is to ensure stability in the relationship of the workers and the company
by preventing frequent modifications of any CBA earlier entered into by them in good faith and for the stipulated
original period.11
In the case at bar, the lifetime of the previous CBA was from 1989-1994.1âwphi1 The petition for certification
election by ACEC, allegedly a legitimate labor organization, was filed with the Department of Labor and Employment
(DOLE) only on May 26, 1996. Clearly, the petition was filed outside the sixty-day freedom period. Hence, the filing
thereof was barred by the existence of a valid and existing collective bargaining agreement. Consequently, there is no
legitimate representation issue and, as such, the filing of the petition for certification election did not constitute a bar
to the ongoing negotiation. Reliance, therefore, by petitioner of the ruling in Lakas Ng Manggagawang Makabayan
v. Marcelo Enterprises12 is misplaced since that case involved a legitimate representation issue which is not present in
the case at bar.
Significantly, the same petition for certification election was dismissed by the Secretary of Labor on October 25,
1996.1âwphi1 The dismissal was upheld by this Court in a Resolution, dated April 21, 1997. 13
In view of the above, there is no doubt that petitioner is guilty of unfair labor practice by its stern refusal to bargain
in good faith with respondent union.
Concerning the issue on the validity of the termination of the union president, we hold that the dismissal was
effected in violation of the employees' right to self-organization.
To justify the dismissal, petitioner asserts that the union president was terminated for cause, allegedly for
insubordination for her failure to comply with the new working schedule assigned to her, and pursuant to its
managerial prerogative to discipline and/or dismiss its employees. While we recognize the right of the employer to
terminate the services of an employee for a just or authorized cause, nevertheless, the dismissal of employees must
be made within the parameters of law and pursuant to the tenets of equity and fair play. 14 The employer's right to
terminate the services of an employee for just or authorized cause must be exercised in good faith. 15 More
importantly, it must not amount to interfering with, restraining or coercing employees in the exercise of their right to
self-organization because it would amount to, as in this case, unlawful labor practice under Article 248 of the Labor
Code.
The factual backdrop of the termination of Ms. Ambas leads us to no other conclusion that she was dismissed in
order to strip the union of a leader who would fight for the right of her co-workers at the bargaining table. Ms.
Ambas, at the time of her dismissal, had been working for the petitioner for ten (10) years already. In fact, she was a
recipient of a loyalty award. Moreover, for the past ten (10) years her working schedule was from Monday to Friday.
However, things began to change when she was elected as union president and when she started negotiating for a
new CBA. Thus, it was when she was the union president and during the period of tense and difficult negotiations
when her work schedule was altered from Mondays to Fridays to Tuesdays to Saturdays. When she did not budge,
although her schedule was changed, she was outrightly dismissed for alleged insubordination. 16 We quote with
approval the following findings of the Secretary of Labor on this matter, to wit:
"Assuming arguendo that Ms. Ambas was guilty, such disobedience was not, however, a valid ground to teminate her
employment. The disputed management action was directly connected with Ms. Ambas' determination to change
the complexion of the CBA. As a matter of fact, Ms. Ambas' unflinching position in faithfully and truthfully carrying
out her duties and responsibilities to her Union and its members in getting a fair share of the fruits of their collective
endeavors was the proximate cause for her dismissal, the charge of insubordination being merely a ploy to give a
color of legality to the contemplated management action to dismiss her. Thus, the dismissal of Ms. Ambas was
heavily tainted with and evidently done in bad faith. Manifestly, it was designed to interfere with the members' right
to self-organization.
Admittedly, management has the prerogative to discipline its employees for insubordination. But when the exercise
of such management right tends to interfere with the employees' right to self-organization, it amounts to union-
busting and is therefore a prohibited act. The dismissal of Ms. Ambas was clearly designed to frustrate the Union in
its desire to forge a new CBA with the College that is reflective of the true wishes and aspirations of the Union
members. Her dismissal was merely a subterfuge to get rid of her, which smacks of a pre-conceived plan to oust her
from the premises of the College. It has the effect of busting the Union, stripping it of its strong-willed leadership.
When management refused to treat the charge of insubordination as a grievance within the scope of the Grievance
Machinery, the action of the College in finally dismissing her from the service became arbitrary, capricious and
whimsical, and therefore violated Ms. Ambas' right to due process." 17
In this regard, we find no cogent reason to disturb the findings of the Court of Appeals affirming the findings of the
Secretary of Labor and Employment. The right to self-organization of employees must not be interfered with by the
employer on the pretext of exercising management prerogative of disciplining its employees. In this case, the totality
of conduct of the employer shows an evident attempt to restrain the employees from fully exercising their rights
under the law. This cannot be done under the Labor Code.
WHEREFORE, premises considered, the petition is DENIED for lack of merit.
SO ORDERED.
G.R. No. 101738 April 12, 2000
PAPER INDUSTRIES CORPORATION OF THE PHILIPPINES, petitioner,
vs.
HON. BIENVENIDO E. LAGUESMA, Undersecretary of Labor and Employment, HON. HENRY PABEL, Director of the
Department of Labor and Employment Regional Office No. XI and/or the Representation Officer of the Industrial
Relations Division who will act for and in his behalf, PCOP- BISLIG SUPERVISORY AND TECHNICAL STAFF
EMPLOYEES UNION, ASSOCIATED LABOR UNION and FEDERATION OF FREE WORKERS, respondents.
DE LEON, JR., J.:

Before us is a petition for certiorari seeking to annul the Resolution1 and the Order2 dated April 17, 1991 and August
7, 1991, respectively, of public respondent Bienvenido E. Laguesma, acting then as Undersecretary, now the
Secretary, of the Department of Labor and Employment (DOLE), which reversed the Order dated March 27, 1990 3 of
Med-Arbiter Phibun D. Pura declaring that supervisors and section heads of petitioner under its new organizational
structure are managerial employees and should be excluded from the list of voters for the purpose of a certification
election among supervisory and technical staff employees of petitioner. 4
The facts of the case are the following:
Petitioner Paper Industries Corporation of the Philippines (PICOP) is engaged in the manufacture of paper and timber
products, with principal place of operations at Tabon, Bislig, Surigao del Sur. It has over 9,000 5 employees, 9446 of
whom are supervisory and technical staff employees. More or less 487 of these supervisory and technical staff
employees are signatory members of the private respondent PICOP-Bislig Supervisory and Technical Staff Employees
Union (PBSTSEU).7
On August 9, 1989, PBSTSEU instituted a Petition 8 for Certification Election to determine the sole and exclusive
bargaining agent of the supervisory and technical staff employees of PICOP for collective bargaining agreement (CBA)
purposes.
In a Notice9 dated August 10, 1989, the initial hearing of the petition was set on August 18, 1989 but it was reset to
August 25, 1989, at the instance of PICOP, as it requested a fifteen (15) day period within which to file its comments
and/or position paper. But PICOP failed to file any comment or position paper. Meanwhile, private respondents
Federation of Free Workers (FFW) and Associated Labor Union (ALU) filed their respective petitions for intervention.
On September 14, 1989, Med-Arbiter Arturo L. Gamolo issued an Order 10 granting the petitions for interventions of
the FFW and ALU. Another Order 11 issued on the same day set the holding of a certification election among PICOP's
supervisory and technical staff employees in Tabon, Bislig, Surigao del Sur, with four (4) choices, namely: (1) PBSTSEU;
(2) FFW; (3) ALU; and (4) no union.
On September 21, 1989, PICOP appealed 12 the Order which set the holding of the certification election contending
that the Med-Arbiter committed grave abuse of discretion in deciding the case without giving PICOP the opportunity
to file its comments/answer, and that PBSTSEU had no personality to file the petition for certification election.
After PBSTSEU filed its Comments 13 to petitioner's appeal, the Secretary of the Labor 14 issued a Resolution 15dated
November 17, 1989 which upheld the Med-Arbiter's Order dated September 17, 1989, with modification allowing
the supervising and staff employees in Cebu, Davao and Iligan City to participate in the certification election.
During the pre-election conference on January 18, 1990, PICOP questioned and objected to the inclusion of some
section heads and supervisors in the list of voters whose positions it averred were reclassified as managerial
employees in the light of the reorganization effected by it. 16 Under the Revised Organizational Structure of the PICOP,
the company was divided into four (4) main business groups, namely: Paper Products Business, Timber Products
Business, Forest Resource Business and Support Services Business. A vice- president or assistant vice-president heads
each of these business groups. A division manager heads the divisions comprising each business group. A
department manager heads the departments comprising each division. Section heads and supervisors, now called
section managers and unit managers, head the sections and independent units, respectively, comprising each
department. 17 PICOP advanced the view that considering the alleged present authority of these section managers
and unit managers to hire and fire, they are classified as managerial employees, and hence, ineligible to form or join
any labor organization. 18
Following the submission by the parties of their respective position papers 19 and evidence 20 on this issue, Med-
Arbiter Phibun D. Pura issued an Order 21 dated March 27, 1990, holding that supervisors and section heads of the
petitioner are managerial employees and therefore excluded from the list of voters for purposes of certification
election.
PBSTSEU appealed 22 the Order of the Med-Arbiter to the Office of the Secretary, DOLE. ALU likewise
appealed.23 PICOP submitted evidence militating against the appeal. 24 Public respondent Bienvenido E. Laguesma,
acting as the then Undersecretary of Labor, issued the assailed Order 25 dated April 17, 1991 setting aside the Order
dated March 27, 1990 of the Med-Arbiter and declaring that the subject supervisors and section heads are
supervisory employees eligible to vote in the certification election.
PICOP sought 26 reconsideration of the Order dated April 7, 1991. However, public respondent in his Order 27dated
August 7, 1991 denied PICOP's motion for reconsideration.
Hence, this petition.
PICOP anchors its petition on two (2) grounds, to wit:
I.
THE PUBLIC RESPONDENT HONORABLE BIENVENIDO E. LAGUESMA, UNDERSECRETARY OF LABOR AND
EMPLOYMENT, IN A CAPRICIOUS, ARBITRARY AND WHIMSICAL EXERCISE OF POWER ERRED AND
COMMITTED GRAVE ABUSE OF DISCRETION, TANTAMOUNT TO ACTING WITHOUT OR IN EXCESS OF
JURISDICTION WHEN HE DENIED YOUR PETITIONER'S PLEA TO PRESENT ADDITIONAL EVIDENCE TO PROVE
THAT SOME OF ITS MANAGERIAL EMPLOYEES ARE DISQUALIFIED FROM JOINING OR FORMING A UNION
REPRESENTED BY CO-RESPONDENT PBSTSEU, IN VIEW OF A SUPERVENING EVENT BROUGHT ABOUT BY THE
CHANGES IN THE ORGANIZATIONAL STRUCTURE OF YOUR PETITIONER WHICH WAS FULLY IMPLEMENTED IN
JANUARY 1991 AFTER THE CASE WAS ELEVATED ON APPEAL AND SUBMITTED FOR DECISION.
II.
THE PUBLIC RESPONDENT, HONORABLE BIENVENIDO E. LAGUESMA, ALSO ERRED AND COMMITTED GRAVE
ABUSE OF DISCRETION, TANTAMOUNT TO ARBITRARILY ACTING WITHOUT OR IN EXCESS OF JURISDICTION
WHEN HE TOTALLY DISREGARDED THE DOCUMENTARY EVIDENCE SO FAR SUBMITTED BY YOUR PETITIONER
AND RELIED MAINLY ON THE UNSUBSTANTIATED CLAIM AND MERE ALLEGATIONS OF PRIVATE RESPONDENT,
PBSTSEU, THAT THE REORGANIZATION OF YOUR PETITIONER WAS A SHAM AND CALCULATED MERELY TO
FRUSTRATE THE UNIONIZATION OF YOUR PETITIONER'S SUPERVISORY PERSONNEL; AND SOLELY ON THIS
BASIS, DENIED YOUR PETITIONER'S URGENT MOTION FOR RECONSIDERATION. 28
PICOP's main thesis is that the positions Section Heads and Supervisors, who have been designated as Section
Managers and Unit Managers, as the case may be, were converted to managerial employees under the
decentralization and reorganization program it implemented in 1989. Being managerial employees, with alleged
authority to hire and fire employees, they are ineligible for union membership under Article 245 29 of the Labor Code.
Furthermore, PICOP contends that no malice should be imputed against it for implementing its decentralization
program only after the petition for certification election was filed inasmuch as the same is a valid exercise of its
management prerogative, and that said program has long been in the drawing boards of the company, which was
realized only in 1989 and fully implemented in 1991. PICOP emphatically stresses that it could not have
conceptualized the decentralization program only for the purpose of "thwarting the right of the concerned
employees to self-organization."
The petition, not being meritorious, must fail and the same should be as it is hereby dismissed.
First. In United Pepsi-Cola Supervisory Union (UPSU) v. Laguesma, 30 we had occasion to elucidate on the term
"managerial employees." Managerial employees are ranked as Top Managers, Middle Managers and First Line
Managers. Top and Middle Managers have the authority to devise, implement and control strategic and operational
policies while the task of First-Line Managers is simply to ensure that such policies are carried out by the rank-and-
file employees of an organization. Under this distinction, "managerial employees" therefore fall in two (2) categories,
namely, the "managers" per se composed of Top and Middle Managers, and the "supervisors" composed of First-Line
Managers. 31 Thus, the mere fact that an employee is designated "manager" does not ipso facto make him one.
Designation should be reconciled with the actual job description of the employee, 32 for it is the job description that
determines the nature of employment. 33
In the petition before us, a thorough dissection of the job description 34 of the concerned supervisory employees and
section heads indisputably show that they are not actually managerial but only supervisory employees since they do
not lay down company policies. PICOP's contention that the subject section heads and unit managers exercise the
authority to hire and fire 35 is ambiguous and quite misleading for the reason that any authority they exercise is not
supreme but merely advisory in character. Theirs is not a final determination of the company policies inasmuch as
any action taken by them on matters relative to hiring, promotion, transfer, suspension and termination of employees
is still subject to confirmation and approval by their respective superior. 36 Thus, where such power, which is in effect
recommendatory in character, is subject to evaluation, review and final action by the department heads and other
higher executives of the company, the same, although present, is not effective and not an exercise of independent
judgment as required by law. 37
Second. No denial of due process can be ascribed to public respondent Undersecretary Laguesma for the latter's
denial to allow PICOP to present additional evidence on the implementation of its program inasmuch as in the appeal
before the said public respondent, PICOP even then had already submitted voluminous supporting documents. 38 The
record of the case is replete with position papers and exhibits that dealt with the main thesis it relied upon. What the
law prohibits is the lack of opportunity to be heard. 39 PICOP has long harped on its contentions and these were dealt
upon and resolved in detail by public respondent Laguesma. We see no reason or justification to deviate from his
assailed resolutions for the reason that law and jurisprudence aptly support them.1âwphi1
Finally, considering all the foregoing, the fact that PICOP voiced out its objection to the holding of certification
election, despite numerous opportunities to ventilate the same, only after respondent Undersecretary of Labor
affirmed the holding thereof, simply bolstered the public respondents' conclusion that PICOP raised the issue merely
to prevent and thwart the concerned section heads and supervisory employees from exercising a right granted them
by law. Needless to stress, no obstacle must be placed to the holding of certification elections, for it is a statutory
policy that should not be circumvented. 40
WHEREFORE, the petition is hereby DISMISSED, and the Resolution and Order of public respondent Bienvenido E.
Laguesma dated April 17, 1991 and August 17, 1991, respectively, finding the subject supervisors and section heads
as supervisory employees eligible to vote in the certification election are AFFIRMED. Costs against petitioner.
SO ORDERED.1âwphi1.nêt
G.R. No. 116066 January 24, 2000
NUEVA ECIJA I ELECTRIC COOPERATIVE, INC., (NEECO I) EMPLOYEES ASSOCIATION, PRESIDENT RODOLFO JIMENEZ,
and members, REYNALDO FAJARDO, ERNESTO MARIN, EVER GUEVARRA, PETRONILO BAGUISA, VICTORINO
CARILLO, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, NUEVA ECIJA I ELECTRIC COOPERATIVE, INC., (NEECO I) and PATRICIO
DELA PEÑA, respondents.
QUISUMBING, J.:
Petitioners assail the decision1 of the National Labor Relations Commission in NLRC RAB-III-03-2673-92, which
modified the ruling of the Labor Arbiter, by deleting the award of moral and exemplary damages, as well as attorneys'
fees and costs of litigation.
The facts, as found a quo, are as follows:
Petitioners Reynaldo Fajardo, Ernesto Marin, Ever Guevarra, Petronilo Baguisa, Victorino Carillo, and Erdie
Javate were permanent employees of respondent Nueva Ecija I Electric Cooperative (NEECO I). They were
members of petitioner NEECO I Employees Association, a labor organization established for the mutual aid
and protection of its members. Petitioner Rodolfo Jimenez was the president of the association.
Respondent NEECO I is an electric cooperative under the general supervision and control of the National
Electrification Administration (NEA). The management of NEECO I is vested on the Board of Directors.
Respondent Patricio dela Peña was NEECO's general manager on detail from NEA.
On February 7, 1987, the Board of Directors adopted Policy No. 3-33, which set the guidelines for NEECO I's
retirement benefits. On October 28, 1987, all regular employees were ordered by NEECO I to accomplish
Form 87, which were applications for either retirement, resignation, or separation from service.
On October 5, 1991 and February 28, 1992, the applications of Petronilo Baguisa and Ever Guevarra,
respectively, were approved. They were paid the appropriate separation pay.1âwphi1.nêt
These successive events, followed by the promotion of certain union officers to supervisory rank, caused
apprehension in the labor association. They were considered as harassment threatening the union members,
and circumventing the employees' security of tenure. On February 29, 1992, to strengthen and neutralize
management's arbitrary moves, the union held a "snap election" of officers. 2 Reynaldo Fajardo was elected
Treasurer, while Evaristo Guevarra, Victorino Carillo and Ernesto Marin were elected Public Relations Officers
for Jaen, Gapan A and Gapan B, respectively.
On March 3, 1992, petitioner labor association passed a resolution withdrawing the applications for
retirement of all its members, thus:
Upon popular request of all members and officers of the association their manifestation of
willingness to retire on optional basis is hereby WITHDRAWN by the ASSOCIATION for and in behalf
of all its members, EXCEPT those who are willing to avail their retirement benefits with all their
hearts and mind. To avoid what had happened to EVARISTO GUEVARRA. The union officers and its
members, claimed their right to be protected under the security of tenure clause under the Labor
Code of the Philippines. No employee shall be retired without his/her consent or approval of the
union.
On motion and duly seconded. Approved unanimously. Let copies of the resolution be furnished
NEECO I PS/AGM Patricio S. dela Peña, for his information and appropriate action. 3
On March 4, March 17, and April 7, 1992, petitioners Ernesto Marin, Reynaldo Fajardo and Victorino Carillo
were compulsorily retired by management. They received their separation pay under protest on March 16,
March 18, and April 15, 1992, respectively.
On August 21, 1991, Erdie Javate was terminated from employment allegedly due to misappropriation of
funds and dishonesty. He was not paid separation or retirement benefits.
On March 29, 1992, petitioners and Erdie Javate instituted a complaint for illegal dismissal and damages with
the NLRC Regional Arbitration Branch in San Fernando. They alleged they were purposely singled out for
retirement from a listing of employees who were made to submit retirement forms, even if they were not on
top of the list because they were union officers, past officers or active members of the association. Further,
petitioners claimed that their acceptance of the money offered by NEECO I did not constitute estoppel nor
waiver, since their acceptances were with vehement objections and without prejudice to all their rights
resulting from an illegal dismissal.
Additionally, Javate averred he was framed up and dismissed without due process.
On December 21, 1992, the labor arbiter decided the case as follows:
WHEREFORE, in view of all the foregoing considerations, judgment is hereby rendered, as follows:
1. Declaring respondents NEECO I and PS/AGM Engr. Patricio dela Peña guilty of illegal dismissal and unfair
labor practice act, as charged;
2. Ordering respondents to reinstate individual complainants Reynaldo Fajardo, Ernesto Marin, Ever
Guevarra, Petronilo Baguisa, Victorino Carillo, and Erdie Javate of their former positions under the same
terms and conditions of work obtaining at the time of dismissal, without loss of seniority rights and other
privileges, either physically or in the payroll, at the option of the respondents, with payment of full
backwages, including all benefits and privileges that they should have received if they were not illegally
dismissed, computed as follows:
1. Reynaldo Fajardo —
a.) Backwages as of Dec. 31, 1992 P36,306.55
b.) Bonus 1,000.00
c.) Medical Allowance 1,000.00
d.) Clothing Allowance 750.00
e.) Hospitalization allowance since 1988 2,000.00
Total P41,056.55
=========
2. Ernesto Marin —
b.) Bonus 1,000.00

Total P42,533.60
=========
3. Ever Guevarra —
b.) Bonus 1,000.00
Total P42,533.60
=========
4. Petronilo Baguisa —
b.) Bonus 1,000.00
Total P61,425.40
=========
5. Victorino Carillo —
b.) Bonus 1,000.00

Total P36,912.78
=========
6. Erdie Javate —
b.) Bonus 1,000.00
Total P20,430.00
==========
GRAND TOTAL P244,891.93

==========
3. Ordering respondents to pay complainants moral damages in the amount of P30,000.00 each or in the
total amount of P180,000.00 and exemplary damages in the amount of P120,000.00;
4. Ordering respondents to pay complainants their attorney's fees equivalent to ten (10%) percent of their
monetary claims in the sum of P54,489.20;
5. Ordering respondents to pay complainants their cost of litigation in the amount of P30,000.00
SO ORDERED.4
Thereafter, herein private respondents elevated the case to respondent NLRC. They filed their appeal on December
28, 1992, and posted a surety bond on January 5, 1993, in the amount of two hundred forty-four thousand, eight
hundred ninety one pesos and ninety three centavos (P244,891.93). But herein petitioners filed an omnibus motion
to dismiss on the ground of late appeal, claiming that insufficient bond was filed by NEECO I only on January 5, 1993.
The bond excluded the award of moral and exemplary damages, attorneys' fees and costs of litigation.1âwphi1.nêt
Respondent NLRC denied the motion and instead gave due course to the appeal. On July 16, 1993, the NLRC modified
the decision, as follows:
WHEREFORE, premises considered, the appealed Decision is modified by deleting the awards of moral and
exemplary damages, attorney's fees and cost of litigation. The amounts of retirement benefits received by
the individual complainants are to be applied to the backwages that may be due to the herein complainants.
All other dispositions stand.
SO ORDERED.5
Meanwhile, on March 16, 1993, petitioners were reinstated by NEECO I pending appeal.
On April 22, 1993, Erdie Javate withdrew his complaint and opted to receive his retirement benefits amounting to
forty-two thousand, one hundred fourteen pesos and nine centavos (P42,114.09).
Herein petitioners filed a motion for reconsideration, which the NLRC denied on August 31, 1993. Likewise, herein
private respondents filed a motion for reconsideration but the same was also denied on September 28, 1993.
Petitioners are now before us, via this special civil action under Rule 65 of the Revised Rules of Court, raising three
issues:
I. WHETHER OR NOT THE APPEAL TAKEN BY THE RESPONDENT NEECO I FROM THE DECISION OF NLRC-RAB-III
DOLE TO NLRC THIRD DIVISION, MANILA WAS NOT PERFECTED WITHIN THE TEN (10) CALENDAR DAYS
REGLEMENTARY PERIOD; HENCE THE APPEAL SHOULD NOT BE GIVEN DUE COURSE;
II. WHETHER OR NOT PUBLIC RESPONDENT NLRC ACTED WITHOUT OR IN EXCESS OF JURISDICTION WHEN IT
RESOLVED TO DELETE EN TOTO MORAL DAMAGES, EXEMPLARY DAMAGES, ATTORNEY'S FEES AND COSTS OF
LITIGATION. FACTUAL BASIS OF WHICH WERE ASCERTAINED BY THE HONORABLE LABOR ARBITER BELOW;
III. WHETHER OR NOT THE ORDER TO APPLY AND DEDUCT RECEIVABLE BACKWAGES FROM RECEIVED
BENEFITS MAY BE REASONABLE BUT UNREALISTIC AND ARBITRARY.
Petitioners contend that although respondent NEECO I filed its appeal on December 28, 1992, such appeal was not
completed for failure to file the necessary supersedeas bond, during the period prescribed by law, or until January 4,
1993. Hence, no appeal was perfected.
Indisputable is the legal doctrine that the appeal of a decision involving a monetary award in labor cases may be
perfected "only upon the posting of a cash or surety bond." 6
The Labor Code, as amended by Republic Act No. 6715, clearly provides:
Art. 223. Appeal — Decisions, awards or orders of the Labor Arbiter are final and executory unless appealed
to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions,
awards, of orders. . .
xxx xxx xxx
In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon
the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the
Commission in the amount equivalent to the monetary award in the judgment appealed from.
xxx xxx xxx
Also, the perfection of an appeal within the reglementary period and in the manner prescribed by law is
jurisdictional, and noncompliance with such legal requirement is fatal and effectively renders the judgment final and
executory.7
However, in a number of cases,8 this Court relaxed the rule to resolve controversies on the merits, 9 specifically, when
there are special meritorious circumstances and issues. 10 We relaxed the requirement of posting a supersedeas bond
for the perfection of an appeal, when there was substantial compliance with the rule, so that on balance, we made
technical considerations to give way to equity and justice. 11
In the case before us, the decision of the labor arbiter was issued on December 21, 1992. Private respondents filed
their appeal on December 28, 1992, barely seven days from receipt thereof. The bonding company issued the bond
dated January 4, 1993, the last day for filing an appeal. However, it was forwarded to respondent NLRC only on the
following day, January 5, 1993. Considering these circumstances and the holiday season, we find it equitable to ease
the rules and consider that there was substantial compliance with the requirements of the law.
As to the amount of bond, we note that there had been changes in the Rules promulgated by the NLRC. Previously
the computation of the cash or surety bond to be posted by an employer who wishes to appeal contained in the
original rules was "exclusive of moral and exemplary damages and attorney's fees". 12 It was later deleted sometime in
1991 and 1992, then restored on November 20, 1993. 13
It may be noted that while respondent NLRC in its Resolution No. 11-01-91 dated November 7, 1991 deleted the
phrase "exclusive of moral and exemplary damages as well as attorney's fees" in the determination of the amount of
the bond, it provided a safeguard against the imposition of excessive bonds providing "(T)he Commission may, in
meritorious cases and upon Motion of the Appellant, reduce the amount of the bond." 14
In the case of Cosico, Jr. vs. NLRC, 272 SCRA 583, we ruled:
In the case at bar, the backwages and thirteenth month pay awarded to petitioner amounted only to
P270,000.00, but the moral and exemplary damages, plus 10% attorney's fees, totalled P2,497,000.00. In
other words, the moral and exemplary damages and attorney's fees are almost ten (10) times greater than
the basic monetary judgment. Private respondents posted a supersedeas bond of P270,000.00, obviously, on
the honest belief that the amount was sufficient. At the very least, therefore, there was substantial
compliance with the requirement of appeal bond. For to rule otherwise would negate the interest of justice
and deviate from the mandate of the Labor Code that the rules of procedure should be liberally construed, . .
.
xxx xxx xxx
Since private respondents filed a bond which they honestly believed sufficient for purposes of their appeal
respondent NLRC should have called their attention that the bond was inadequate, which it did not. 15
The unreasonable and excessive amount of bond would be oppressive and unjust and would have the effect of
depriving a party of his right to appeal. Besides, private respondents stress that the petitioners were paid their
retirement benefits16 and that the cooperative has sufficient assets from which the other claims for damages and
attorney's fees may be obtained.
We come next to the issue of the propriety of the award of moral and exemplary damages.
To warrant an award of moral damages, it must be shown that the dismissal of the employee was attended to by bad
faith, or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public
policy.17 The Labor Arbiter ruled that there was unfair labor practice:
As a backdrop, complainants alleged, and this is supported by documentary evidence, that on 7 February
1987, the then NEECO I Board of Directors adopted their own Policy No. 3-33 under Resolution No. 47, series
of 1987 requiring all employees to avail of the retirement benefits. All regular employees, including the
complainants were ordered to file their application for retirement/resignation and/or separation from the
service under NEECO I Form 87. All NEECO I employees have no choice but to manifest their willingness to
retire.
However, the complainants pointed out that the approval of the employees' application for retirement was
not done in succession according to the list, but according to the choice of the respondents, and for which,
complainants were singled out from the list because they were union officers, past officers and active
members of the complainant
Association.18
xxx xxx xxx
Clearly, therefore, complainants have established the fact that they were illegally dismissed by the
respondents and their illegal dismissal was even tainted with unfair labor practice act. . . . 19
Unfair labor practices violate the constitutional rights of workers and employees to self-organization, are inimical to
the legitimate interests of both labor and management, including their right to bargain collectively and otherwise
deal with each other in an atmosphere of freedom and mutual respect; and disrupt industrial peace and hinder the
promotion of healthy and stable labor-management relations. 20 As the conscience of the government, it is the Court's
sworn duty to ensure that none trifles with labor rights. 21
For this reason, we find it proper in this case to impose moral and exemplary damages on private respondent.
However, the damages awarded by the labor arbiter, to our mind, are excessive. In determining the amount of
damages recoverable, the business, social and financial position of the offended parties and the business and
financial position of the offender are taken into account. 22 It is our view that herein private respondents had not fully
acted in good faith. However, we are cognizant that a cooperative promotes the welfare of its own members. The
economic benefits filter to the cooperative members. Either equally or proportionally, they are distributed among
members in correlation with the resources of the association utilized. Cooperatives help promote economic
democracy and support community development. Under these circumstances, we deem it proper to reduce moral
damages to only P10,000.00 payable by private respondent NEECO I to each individual petitioner. We also deem it
sufficient for private respondent NEECO I to pay each individual petitioner P5,000.00 to answer for exemplary
damages, based on the provisions of Articles 2229 and 2232 of the Civil Code. 23
Having been illegally dismissed, individual petitioners are entitled to reinstatement from the time they were illegally
dismissed, until they were reinstated on March 16, 1993. For that period they are likewise entitled to backwages
minus the amount petitioners were forced to receive as "retirement" pay. 24 It must be noted that the backwages
computed by the labor arbiter covered only until December 22, 1992 but did not include backwages from January 1,
1993 to March 15, 1993,25 which should now be computed and included for payment. In the event that the amount
of "retirement" pay received by an individual petitioner exceeds the amount of his backwages, then the excess
should be deemed as advances of salary which should be refundable until fully repaid by him.
WHEREFORE, the petition is PARTIALLY GRANTED. The assailed decision of the NLRC is AFFIRMED with
MODIFICATION. Private respondent Nueva Ecija 1 Electric Cooperative is hereby ORDERED through its executive
officers:
1. to pay individual petitioners their full backwages from the time they were illegally dismissed until the date
of their reinstatement on March 13, 1992, minus the amount they received as "retirement" pay. In the event
that the computed backwages of a concerned petitioner is less than the amount of so-called "retirement"
pay already received, the difference should be treated as advances refundable from his salary until fully
repaid;
2. to pay moral and exemplary damages in the amount of ten thousand (P10,000.00) pesos and five thousand
(P5,000.00) pesos, respectively, to each of the petitioners who were illegally terminated and/or compulsorily
retired;
3. to pay ten (10%) of the total amount due to petitioners as attorney's fees; and
4. to pay the cost of suits.
Respondent NLRC is ORDERED to RECOMPUTE the total monetary benefits awarded and due to the employees
concerned in accordance with the decision and to submit its compliance thereon within thirty (30) days from notice
of this decision, with copies furnished to the parties.
SO ORDERED.
G.R. No. 128192 April 14, 1999
ASSOCIATED LABOR UNIONS (ALU) and PASAR EMPLOYEES ASSOCIATION (PEA-ALU), petitioners,
vs.
SECRETARY LEONARDO A. QUISUMBING, NATIONAL FEDERATION OF UNION (NAFLU), and PHILIPPINE ASSOCIATED
SMELTING AND REFINING CORPORATION (PASAR), respondent.
PURISIMA, J
This is a petition for certiorari under Rule 65 of the Revised Rules of Court seeking to annul the Resolutions, dated
August 20, 1996 and January 3, 1997, respectively, of the Secretary of Labor and Employment in OS-A-3-64-96.
The facts that matter are as follows:
The respondent corporation, Philippine Associated Smelting and Refining Corporation ("PASAR"), and the petitioner,
PASAR Employees Association-ALU ("PEA-ALU"), inked a Collective Bargaining Agreement 1 ("CBA"), on November 21,
1990, with a term ending on November 21, 1995.
On November 7, 1995, the private respondent, National Federation of Labor Unions ("NAFLU"), filed a petition for
certification election 2 with the Med-Arbitration Unit, Region 8, Department of Labor and Employment ("DOLE"),
which petition was granted by Med-Arbiter Rodolfo S. Milado ("Med-Arbiter Milado") in the Order 3 of November 29,
1995, to wit:
Upon agreement of the parties to hold the certification election provided the petitioner shall furnish
the compulsory intervenor its Constitution and By-Laws and other supporting papers, upon issuance
of a certificate of registration by the Industrial Relations Division, this Office, let the certification
election among the one thousand one hundred (1.100) regular rank and file employees/workers of
the respondent/employer be GRANTED.
ACCORDINGLY, the following unions shall participate in the certification election:
1. National Federation of Labor Unions (NAFLU);
2. Pasar Employees Associations Associated Labor Unions — Trade
Unions Congress of the Philippines (PEA-ALU-TUCP); and
3. No Union.
On December 7, 1995, PEA-ALU interposed a Motion to Dismiss 4 for failure of NAFLU to acquire for and in behalf of
its local charter affiliate, (Concerned Organization of PASAR Progressive Employees for Reform, or "COPPER"), a legal
personality as a legitimate labor organization, in connection with the aforesaid order of the Med-Arbiter.
On the same day, COPPER was issued by the DOLE a Certificate of Registration 5 as an independent registered labor
organization under Registration Certificate No. R0800-95-12-UR-50. Private respondent NAFLU then furnished
petitioner PEA-ALU with copies of the Constitution and By-Laws of COPPER-NAFLU through a Compliance with
Manifestation 6 dated December 12, 1995.
In his Order 7 of January 26, 1996, Med-Arbiter Milado acted favorably on the Motion to Dismiss the petition for
certification election, ruling thus:
IN VIEW OF THE FOREGOING, this Office is hereby constrained to issue an Order considering the
Order of this Office dated November 29, 1995 as vacated, cancelled and/or set aside, and dismissing
the instant petition for the reason aforestated.
On February 2, 1996, NAFLU filed a memorandum of appeal with the Secretary of Labor, who, acting thereupon on
August 26, 1996, resolved as follows:
Most importantly, it is clear from the records that herein petitioner attained the status of a legitimate
labor organization (local chapter) when it submitted the required documents on 1 December 1995 of
the Regional Office and as an independently registered union when it was issued by the Department
a registration certificate as independent union on 7 December 1995.
xxx xxx xxx
WHEREFORE, the instant appeal is hereby GRANTED. The Med-Arbiter's Order dated 26 January 1996
is hereby SET ASIDE and his previous Order dated 29 November 1995 ordering the conduct of
certification election STANDS.
On September 21, 1996, PEA-ALU mailed its Motion for Reconsideration 8 of the said Resolution of the respondent
Secretary but the same was denied in the Resolution 9 issued on January 3, 1997.
Petitioner PEA-ALU's Second Motion for Reconsideration, met the same fate. It was also denied.
Undaunted, petitioners have come to this Court for the reversal of the two Resolutions of respondent Secretary of
Labor, aforementioned, raising as issues:
I
WHETHER OR NOT PUBLIC RESPONDENT SECRETARY OF LABOR AND EMPLOYMENT ACTED IN EXCESS
OF JURISDICTION AND WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION
IN HOLDING THAT PRIVATE RESPONDENT NAFLU'S PETITION FOR CERTIFICATION ELECTION WAS
DULY FILED.
II
OF JURISDICTION AND WITH GRAVE ABUSE OF DISCRETION IN THE APPLICATION OF THE "DOCTRINE
OF ESTOPPEL" AGAINST HEREIN PETITIONERS.
III
OF JURISDICTION AND WITH GRAVE ABUSE OF DISCRETION WHEN IT INVOKED AND MISAPPLIED FOR
THE "FIRST TIME" IN THE RESOLUTION OF THE MOTION FOR RECONSIDERATION "NUNC PRO TUNC"
RULING (AS LAID DOWN IN FUR-TUCP VS. LAGUESMA ET AL, G.R. NO. 109251, 26 MAY 1993) WHICH
IS NOT EVEN APPLICABLE TO THE INSTANT CASE.
On March 7, 1997, the Court resolved to "ISSUE the TEMPORARY RESTRAINING ORDER prayed for, enjoining the
public respondent or his authorized representative from proceeding with the certification election scheduled on
March 10, 1997 in OS-A-3-64-96 (ROVIII-11-10-97) . . . .
The issues posed are interrelated and will be discussed jointly.
Pivotal to the issues raised are:
1. The legal existence of COPPER at the time of filing of NAFLU's petition for certification election.
2. The loss by PEA-ALU of its right to question the allowance of the petition for certification election
on the grounds of estoppel and non-appeal.
Petitioners basically adhere to the view that the belated acquisition by NAFLU's affiliate, COPPER, of legal personality
as a legitimate labor organization beyond the freedom period did not cure the factual and legal infirmities of NAFLU's
petition for certification election. Stated differently, petitioners maintain that a petition for certification election may
only be entertained during the freedom period, 10 and must be filed by a duly existing labor organization.
To begin with, petitioner PEA-ALU is estopped from contesting the Order of Med-Arbiter Milado inasmuch as the
holding of the certification election was "by agreement of the parties". It is worthy to note that the Order granting
the petition for certification election, stated:
Upon agreement of the parties to hold the certification election provided the petitioner shall furnish
the compulsory intervenor its Constitution and By-Laws and other supporting papers, upon issuance
of a certificate of registration by the Industrial Relations Division, this Office, let the certification
election among the one thousand one hundred (1,100) regular rank and file employees/workers of
the respondent/employer be GRANTED. (emphasis ours)
In Merrill Lynch Futures, Inc. v. Court of Appeals, 11 this court held that "a party is estopped to cgallenge the
personality of a corporation after having acknowledged the same by entering into a contract with it." In the present
case, petitioners acknowledged the legal existence of NAFLU's affiliate by entering into an agreement with NAFLU.
Petitioners aver that their agreement with NAFLU on the holding of a certification election was with a suspensive
condition which was not complied with. Considering, however, that the private respondent was able to submit the
documents required by the agreement, such compliance retoacted to the day when the agreement was signed 12and
it cured whatever defects the petition was initially tainted with.
The order of Med-Arbiter Milado granting the petition for certification election had become final in view of
petitioner' failure to appeal therefrom. Under Article 259 of the Labor Code, a party has the right to appeal an order
allowing or granting a petition for certification election:
Any party to an election may appeal the order or results of the election as determined by the Med-
Arbiter directly to the Secretary of Labor and Employment on the ground that the rules and
regulations or parts thereof established by the Secretary of Labor and Employment for the conduct
of the election have been violated. Such appeal shall be decided within fifteen (15) calendar days.
But the right of appeal may only be exercised within ten (10) calendar days from receipt of the order by the
appellant, under Section 9, Rule V, Book V of the Omnibus Rules implementing the Labor Code, which states:
The appeal shall be filed within ten (10) calendar days from receipt of the order by the appellant. Any
opposition thereto may be filed within ten (10) calendar days from receipt of the appeal. The
Regional Director shall within five (5) calendar days forward the entire records of the case to the
Office of the Secretary.
Thereunder, the petitioners lost the right of appeal by failing to take such recourse within ten (10) calendar days from
receipt of subject order of Med-Arbiter Milado, which order was issued on November 29, 1995. Instead of appealing
the same, petitioners opted to present their Motion to Dismiss of December 14, 1995. Not having seasonably
appealed the said order of the Med-Arbiter granting the petition for certification election, petitioners cannot now
question the same Order which had already become final.
We discern no error in public respondent Secretary's Resolution denying PEA-ALU's appeal on the ground that:
The fact that herein petitioner federation's local union attains the status of a legitimate labor
organization only after the 60 days freedom period to our mind can not be used as a basis for the
dismissal of the petition. The date of the submission by the petitioner of the required documents to
the appropriate office, it must be stressed, retroacts to the date of the filing of the petition as ruled
by the Supreme Court in the case of Federation of Unions of Rizal (FUR)-TUCP vs. Hon. Bienvenido
Laguesma, et. al., (G.R. No. 109251, May 26, 1993), thus:
The Court also noted that on November 16, 1992, DAMBA submitted all the required
documents to Regional Office No. IV, Bureau of Labor Relations, as provided for by
applicable laws and regulations. We consider that this compliance may be deemed
effective, nunc pro tunc, as of the time DAMBA filed its petition for certification
election.
Thus, when COPPER submitted on December 1, 1995 to DOLE Regional Office No. 8 all the documents required for
the registration of a legitimate labor organization, and the registration was found meritorious on December 7, 1995
with the issuance of its Certificate of Registration, it thereby attained the status of a legitimate labor organization, as
of November 17, 1995, when the petition for certification election was filed by NAFLU. By fiction of law, COPPER was
already a duly registered labor organization when the petition for certification election was filed and therefore,
COPPER could then act as principal of NAFLU, contrary to the submission of petitioners that no "principal-agent"
relationship existed, as no principal actually existed.
All things viewed in proper perspective, the ineluctable conclusion is that subject petition for certification election
was duly filed and properly granted during the freedom period when the holding of a certification election was in
order.
WHEREFORE, the petition is DISMISSED, and the Resolutions, dated August 20, 1996 and January 3, 1997,
respectively, of respondent Secretary of Labor and Employment AFFIRMED. No pronouncement as to
costs.1âwphi1.nêt
SO ORDERED.
G.R. No. 120505 March 25, 1999
ASSOCIATION OF INDEPENDENT UNIONS IN THE PHILIPPINES (AIUP), JOEL DENSING, HENEDINO MIRAFUENTES,
CHRISTOPHER PATENTES, AND ANDRES TEJANA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC), CENAPRO CHEMICAL CORPORATION and/or GO SING CHAN in
his capacity as Managing Director, respondents.
PURISMA, J.:
The Petition for review on Certiorari at bar seeks to reinstate the Decision 1 of the Labor Arbiter insofar as it ordered
the reinstatement and payment of backwages of the four petitioners herein. The said decision was
affirmed 2 in toto by the NLRC. On February 21, 1995, however, upon motion for reconsideration of the respondent
company, the NLRC came out with a Resolution 3 modifying its decision, by deleting therefrom the award of
backwages, ordering payment of separation pay in lieu of reinstatement, and declaring the loss of employment status
of petitioner Joel Densing.
The antecedent facts are as follows:
Joel Densing, Henedino Mirafuentes, Christopher Patentes, and Andres Tejana, the petitioners herein, were casual
employees of respondent CENAPRO Chemicals Corporation. In the said company, the collective bargaining
representative of all rank and file employees was CENAPRO Employees Association (CCEA), with which respondent
company had a collective bargaining agreement (CBA). Their CBA excluded casual employees from membership in the
incumbent union. The casual employees who have rendered at least one to six years of service sought regularization
of their employment. When their demand was denied, they formed themselves into an organization and affiliated
with the Association of Independent unions in the Philippines (AIUP). Thereafter, AIUP filed a petition for certification
election, which petition was opposed by the respondent company. The CCEA anchored its opposition on the contract
bar rule.
On May 4 and July 3 1990, the union filed a notice of strike, minutes of strike vote, and the needed documentation,
with the Department of Labor and Employment. The notice of strike cited as grounds therefor the acts of respondent
company constituting unfair labor practice, more specifically coercion of employees and systematic union busting.
On July 23, 1992, the union proceeded to stage a strike, in the course of which, the union perpetrated illegal acts. The
strikers padlocked the gate of the company. The areas fronting the gate of the company were barricaded and blocked
by union strikers. The strikers also prevented and coerced other non-striking employees from reporting for work.
Because of such illegal activities, the respondent company filed a petition for injunction with the NLRC, which
granted a Temporary Restraining Order (TRO), enjoining the strikers from doing further acts of violence, coercion, or
intimidation and from blocking fee ingress and egress to the company premises.
Subsequently, or on July 25, 1990, to be precise, the respondent company filed a complaint for illegal strike. The day
before, July 24, 1990, petitioners filed a complaint for unfair labor practice and illegal lockout against the respondent
company.
In a consolidated Decision, dated September 10, 1993, the Labor Arbiter declares illegal the strike staged by the
petitioners, and dismissed the charge of illegal lockout and unfair labor practice. The dispositive portion of the Labor
Arbiter's decision was to the following effect:
WHEREFORE, premises considered, judgment is hereby rendered finding the strike illegal and as a
consequence thereto, the officers who participated in the illegal strike namely: Oscar Enicio, Jaime
dela Piedra, Lino Isidro, Ariel Jorda, and Jose Catnubay are declared to have lost their employment
status. CENAPRO is directed however to reinstate the other workers, except Ireneo Sagaral, Artemio
Guinto, Ruben Tulod, Marcelo M. Matura, Gilbert Holdilla, Cesar Buntol, Rey Siarot, Lucio Nuneza,
Jose Basco, Gervacio Baldespinosa, Jr., Cresecente Buntol, Dennis Pepito, Florencio Pepito, Edwin
Ramayrat, Daniel Canete, and Vivencio Sinadjan who executed quitclaims in favor of CENAPRO and
cenapro is being absolved from the charges of illegal lockout and unfair labor practice.
SO ORDERED. 4
In short, five (5) union officers were declared to have lost their employment status, fifteen (15) union members were
not reinstated because they executed quit claims in favor of the respondent company, and six (6) workers, Rosalito
Bantulan, Edward Regner, Joel Densing, Henedino Mirafuentes, Christopher Patentes, and Andres Tejana, ordered to
be reinstated.
On October 8, 1993, the Labor Arbiter issued an Order excluding Rosalito Bantulan and Edward Regner from the list
of those to be reinstated and to be paid backwages. The remaining four (4) workers, Joel Densing, Henedino
Mirafuentes, Christopher Patentes, and Andres Tejana, are the petitioners here.
On October 5, 1993, the respondent company appealed the aforesaid decision insofar as it ordered the
reinstatement of some of the strikers.
On October 7, 1993, the petitioners also appealed the same decision of the Labor Arbiter.
Pending resolution of the said appeals, petitioner AUIP filed with the Labor Arbiter a Motion for Execution of the
Labor Arbiter's Decision directing reinstatement of some of its members. The motion was granted in the Order dated
October 15, 1993.
On December 7, 1993, respondent company presented Manifestation/Motion praying that instead of reinstatement.
it be allowed to pay separation pay petitioners.
On December 16, 1993, petitioners presented a motion for payroll reinstatement, which motion was opposed by the
respondent company, alleging mainly that the circumstances of the case have strained the relationship of the parties
herein, rendering their reinstatement unwise and inappropriate. But such opposition was overruled by the Labor
Arbiter. In his Order of March 23, 1994, the same Labor Arbiter issued a second writ of execution directing actual, if
not payroll reinstatement of the strikers.
On April 6, 1994, respondent company appealed the second order for the reinstatement of the strikers, placing
reliance on the same grounds raised in support of its first appeal.
In its Decision dated August 15, 1994, the NLRC affirmed in toto the Labor Arbiter's decision, dismissed both the
appeal of private respondent and that of petitioners, and reiterated the Labor Arbiter's Order for the reinstatement
of the herein petitioners, Joel Densing, Henedino Mirafuentes, Christopher Patentes, and Andres Tejana. The said
decision disposed and directed as follows:
WHEREFORE, premises considered, these appeals are DISMISSED, and the decision of the Labor
Arbiter is AFFIRMED in its entirety.
Appellant Cenapro Chemical Corporation is hereby ordered to immediately comply with the Labor
Arbiter's Order dated March 23, 1994 and to release the salaries of four (4) appellant-workers
namely Joel Densing, Henedino Mirafuentes, Christopher Patentes, and Andres Tejana from October
15, 1993 and continue paying them up to the time this decision has become final and executory, less
earning earned elsewhere.
SO ORDERED.5
Respondent company moved for reconsideration of that portion of the NLRC's decision ordering the reinstatement of
the said strikers.
Acting thereupon, the NLRC modified its Decision of August 15, 1994, by ordering the payment of separation pay in
lieu of the reinstatement of the petitioners, deleting the award of backwages, and declaring the loss of employment
status of Joel Densing. The dispositive portion of the Amendatory Resolution, ruled thus:
WHEREFORE, the decision of the Commission promulgated on August 15, 1994 is hereby MODIFIED.
In view of reinstatement to complainants Henedino Mirafuentes, Christopher Patentes, and Andres
Tejana, appellant-movant CENAPRO Chemicals corporation is directed to pay them amount
equivalent to one (1) month pay for every year of service and without backwages. As regards Joel
Densing, he is declared to have lost his employment status.
SO ORDERED. 6
Hence, the present petition, theorizing that respondent NLRC acted with grave abuse of discretion amounting to lack
or excess of jurisdiction in:
1) Entertaining the 6 April 1994 (the first appeal dated 5 October 1993) which was based on similar grounds.
2) Reversing its earlier Resolution of the first appeal promulgated 15 August 1994 by way of another contradictory
and baseless ruling promulgated on 21 February 1995.
3) Depriving Henedino Mirafuentes, Christopher Patentes, and Andres Tejana of their right to reinstatement and
backwages; and
4) Depriving Joel Densing of his right to reinstatement or separation pay with backwages.
It is decisively clear that although the grounds invoked in the two appeals were the same, the said appeals were the
same, the said appeals were separate and distinct remedies. Filed on October 5, 1993, the first appeal was from the
decision of Labor Arbiter Nicasio Aninon, dated September 10, 1993, seeking loss of employment status of all the
union members who participated in the illegal strike. The second appeal, dated April 6, 1994, was, in effect, an
opposition to the second writ of execution issued on March 23, 1994. The second writ pertained to the order to
effect immediate actual or payroll reinstatement of the four petitioners herein. The said appeals were acted upon
separately by the NLRC, which did not act with grave abuse of discretion in entertaining such appeals.
When they filed the notice of strike, petitioners cited as their grounds therefor unfair labor practice, specifically
coercion of employees and systematic union busting. But the said grounds wee adjudged as baseless by the Labor
Arbiter. The court quotes with approval the following findings of Labor Arbiter Aninon, to wit:
. . . In fact, in the undated Joint Affidavit of Oscar Enecio, Edgardo Regner, Christopher Patentes,
Edgar Sanchez, Ariel Jorda, Jaime dela Piedra, the workers stated that what they considered as
harassments and insults are those when they were scolded for little mistakes and memoranda for
tardiness. These acts, if really committed cannot be considered as harassment and insults but were
ordinary acts which employers have to do as part of their administrative supervision over their
employees. Moreover, Oscar Enecio's testimony that some of his fellow union members like vice-
president Jaime dela Piedra, Christopher Patentes and Henodino Mirafuentes, were also harass when
they were made to work another eight (8) hours after their tour of duty deserves scant consideration
not only because it is uncorroborated but he could not even give the dates when these workers were
made to work for sixteen (16) hours, how many instances these happened and whether or not the
workers have actually worked. 7
The court discerns no basis for altering the aforesaid findings which have been affirmed by the NLRC.
The court is not persuaded by petitioners' allegation of union busting. The NLRC correctly ruled that the strike staged
by petitioners was in the nature of a union-recognition-strike. A union-recognition-strike, as its legal designation
implies, is calculated to compel the employer to recognize one's union, and not the other contending group, as the
employees' bargaining representative to work out a collective bargaining agreement despite the striking union's
doubtful majority status to merit voluntary recognition and lack of formal certification as the exclusive representative
in the bargaining unit. It is undisputed that at the time the petition for certification election was filed by AUIP,
petitioner union, there was an existing CBA between the respondent company and CCEA, the incumbent bargaining
representative of all rank and file employees. The petition should have not been entertained because of the contract
bar rule. When a collective bargaining agreement has been duly registered in accordance with Article 231 of the
Labor Code, a petition for certification election or motion for intervention may be entertained only within sixty (60)
days prior to the expiry date of the said agreement. 8 Outside the said period, as in the present case, the petition for
certification election or motion for intervention cannot be allowed. Hence, the conclusion that the respondent
company did not commit the alleged union busting.
From the gamut of evidence on hand, it can be gathered that the strike staged by the petitioner union was illegal for
reasons, that:
1) The strikers committed illegal acts in the course of the strike. They formed human barricades to block the road,
prevented the passage of the respondent company's truck, padlocked the company's gate, and prevented co-workers
from entering the company premises. 9
2) And violated the Temporary Restraining Order (TRO) 10 enjoining the union and/or its members from obstructing
the company premises, and ordering the removal therefrom of all the barricades.
A strike is a legitimate weapon in the universal struggle for existence. 11 It is considered as the most effective weapon
in protecting the rights of the employees to improve the terms and conditions of their employment. 12 But to be
valid, a strike must be pursued within legal bounds. The right to strike as a means for the attainment of social justice
is never meant to oppress or destroy the employer. The law provides limits for its exercise. Among such limits are the
prohibited activities under Article 264 of the Labor Code, particularly paragraph (e), which states that no person
engaged in picketing shall:
a) commit any act of violence, coercion, or intimidation or
b) obstruct the free ingress to or egress from the employer's premises for lawful purposes or
c) obstruct public thoroughfares.
Even if the strike is valid because its objective or purpose is lawful, the strike may still be declared invalid where the
means employed are illegal. For instance, the strike was considered illegal as the "strikers formed a human cordon
along the side of the Sta. Ana wharf and blocked all the ways and approaches to the launches and vessels of
Petitioners". 13
It follows therefore that the dismissal of the officers of the striking union was justified and valid. Their dismissal as a
consequence of the illegality of the strike staged by them finds support in Article 264 (a) of the Labor Code, pertinent
portion of which provides: " . . Any union officer who knowingly participates in an illegal strike and any . . union
officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his
employment status. . ."
Union officers are duty bound to guide their members to respect the law. If instead of doing so, the officers urge the
members to violate the law and defy the duly constituted authorities, their dismissal from the service is a just penalty
or sanction for their unlawful acts. The officers' responsibility is greater than that of the members. 14
The court finds merit in the finding by the Labor Arbiter and the NLRC that the respondent company committed no
illegal lockout. Lockout means temporary refusal of the employer to furnish work as a result of an industrial or labor
dispute. 15
As observed by the Labor Arbiter, it was the appellant-workers who voluntarily stopped working because of their
strike. In fact the appellant workers admitted that non-striking workers who wanted to return to work were allowed
to do so. Their being without work could not therefore be attributed to the employer's refusal to give them work but
rather, to the voluntary withdrawal of their services in order to compel the company to recognize their union. 16
The next aspect of the case to consider is the fate of the four petitioners herein. Decisive on the matter is the
pertinent provision of Article 264 (a) of the Labor Code that: ". . any worker . . who knowingly participates in the
commission of illegal acts during a strike may be declared to have lost his employment status. . ." It can be gleaned
unerringly from the aforecited provision of law in point, however, that an ordinary striking employee can not be
terminated for mere participation in an illegal strike. There must be proof that he committed illegal acts during the
strike 17 and the striker who participated in the commission of illegal act must be identified. But proof beyond
reasonable doubt is not required. Substantial evidence available under the attendant circumstances, which may
justify the imposition of the penalty of dismissal, may suffice.
In the landmark case of Ang Tibay vs. CIR, 18 the court ruled "Not only must there be some evidence to support a
finding or conclusion, but the evidence must be "substantial". Substantial evidence is more than a mere scintilla. It
means such relevant evidence that a reasonable mind might accept as sufficient to support a conclusion."
Respondent company contends that sufficient testimonial, documentary and real evidence, including the
photographs supposedly taken by a certain Mr. Ponce, were presented at the arbitration level. It is argued that the
said pictures best show the participation of the strikers in the commission of illegal acts in the course of the strike. In
connection therewith, it is worthy to point out the sole basis of the NLRC for declaring the loss of employment status
of petitioner Joel Densing, to wit:
ATTY. PINTOR:
Q: Now, Mr. Ponce, on page 1 of your affidavit, paragraph 4 thereof, you alleged that:
"While in the gate, I saw several strikers of Cenapro blocked its gate and prevented
the truck from proceeding to its destination." Who were these several workers you
referred to, in this affidavit of yours?
WITNESS:
A. The strikers.
HON. LABOR ARBITER:
Q. Are you referring to the complainants in this case who are now present?
WITNESS:
A. Yes sir, I am referring to AIU members.
HON, LABOR ARBITER:
Make it of record that the witness is referring to the five persons inside the court
namely: Rosalito Bentulan, Ariel Jorda, Ranulfo Cabrestante, Jose Catnubay and Joel
Densing. 19(emphasis supplied)
All things studiedly considered, the court is not convinced that the quantum of proof on record hurdled the
substantiality of evidence test 20 to support a decision, a basic requirement in administrative adjudication. If the said
pictures exhibited before the Labor Arbiter portrayed the herein petitioners performing prohibited acts during the
strike, why were these pictures not exhibited for identification of petitioners? Petitioners could have been identified
in such pictures, if they were reflected therein, in the same manner that the lawyer who examined Mr. Ponce, asked
witness Armamento to identify the Sheriff Mr. Leahmon Tolo, thus:
ATTY. PINTOR:
Q I refer your attention Mr. Armamento to Exhibit "16". There is a person here
wearing a short sleeve barong tagalog. Can you please tell the Honorable office if you
will be able to identify this person?
WITNESS:
A Yes, this is the Sheriff Mr. Leahmon Tolo. 21
The identification of the alleged pictures of the strikers, if properly made, could have been categorized as substantial
evidence, which a reasonable mind may accept as adequate to support a conclusion that Joel Densing participated in
blocking the gate of respondent company.
Verily, the uncorroborated testimony of Mr. Ponce does not suffice to support a declaration of loss of employment
status of Joel Densing. This could be the reason why the Labor Arbiter and the NLRC, in its decision dated August 15,
1994, upheld the reinstatement of Joel Densing.
The contention of petitioners that the factual findings by the Labor Arbiter, as trial officer in the case, deserve much
weight is tenable. The NLRC is bound by the factual findings of the Labor Arbiter as the latter was in a better position
to observe the demeanor and department of the witnesses. "Absent any substantial proof that the trial court's
decision was based on speculation, the same must be accorded full consideration and should not be disturbed on
appeal. 22
Premises studiedly considered, we are of the ineluctable conclusion, and hold, that the NLRC gravely abused its
discretion in declaring the loss of employment status of Joel Densing.
As regards the other petitioners, Henedino Mirafuentes, Christopher Patentes, and Andres Tejana, their
reinstatement is warranted. In its resolution, the NLRC adjudged petitioners as "not entirely faultless" in light of the
following revelation of Mr. Ponce, to wit:
ATTY. PINTOR:
Q. Mr. Ponce, I will refer you to a picture previously marked as our Annex "H".
Showing to you the said picture. In said picture, there are persons who are lying on
the road. Can you please identify who are these persons?
WITNESS:
A. They are the strikers.
ATTY. PINTOR:
Q. Are you referring to the AIU strikers the complainants in this case?
WITNESS:
A. Yes. Sir. 23
For the severest administrative penalty of dismissal to attach, the erring strikers must be duly identified. Simply
referring to them as "strikers", "AIU strikers" "complainants in this case" is not enough to justify their dismissal.
On the issue of reinstatement and payment of salaries, the court also find for petitioners. Telling on the monetary
award is Article 223 of the Labor Code, the pertinent of which reads:
. . . In any event, the decision of the labor arbiter reinstating a dismissed employee shall be
immediately executory, even pending appeal. The employee shall either be admitted back to work
under the same terms and conditions prevailing prior to his dismissal or separation or, at the option
of the employer, merely reinstated in the payroll. The posting of bond shall not stay the execution of
the reinstatement provided therein. . . .
The NLRC Resolution of February 21, 1995 does not state any plausible ground or basis for deleting the award for
backwages. The mere fact that the petitioners were "not entirely faultless" is of no moment. Such finding below does
not adversely affect their entitlement to backwages. As opined by the NLRC in its Decision of August 15, 1994,
affirming in its entirety the conclusion arrived at by the Labor Arbiter "the only option left to the appellant-company
is whether to physically reinstate appellant workers or to reinstate them on the payroll."
The unmeritorious appeal interposed by the respondent company, let alone the failure to execute with dispatch the
award of reinstatement delayed the payroll reinstatement of petitioners. But their long waiting is not completely in
vain, for the court holds that their (petitioners') salaries and backwages must be computed from October 15, 1993
until full payment of their separation pay, without any deduction. This is in consonance with the ruling in the case
of Bustamante vs. NLRC, 24 where payment of full backwages without deductions was ordered. The four petitioners
herein are entitled to reinstatement absent any just ground their dismissal. Considering, however, that more than
eight (8) years have passed since subject strike was staged, an award of separation pay equivalent to one (1) month
pay for every year of service, in lieu of reinstatement, is deemed more practical and appropriate to all the parties
concerned.
WHEREFORE, the petition is GRANTED; the Resolution of NLRC, dated February 21, 1995, is SET ASIDE, and the
Decision of the Labor Arbiter of October 8, 1993 REINSTATED, with the modification that the petitioners, Joel
Densing, Henedino Mirafuentes, Christopher Patentes, and Andres Tejana, be paid full backwages computed from
October 15, 1993 until full payment of their separation pay. The payment of separation pay in lieu of reinstatement,
is hereby authorized. No pronouncement as to costs.
SO ORDERED.
G.R. No. 128067 June 5, 1998
SAMAHAN NG MGA MANGGAGAWA SA FILSYSTEMS (SAMAFIL-NAFLU-KMU), petitioner,
vs.
HON. SECRETARY OF LABOR AND EMPLOYMENT and FILSYSTEMS, INC., respondents.
PUNO, J.:
Assailed under Rule 65 of the Rules of Court are the Resolution and Order 1 of the public respondent, dated
June 28, 1996 and November 18, 1996, respectively, dismissing petitioner's petition for certification
election.
It appears that petitioner Samahan ng mga Manggagawa sa Filsystems (SAMAFIL-NAFLU-KMU) is a
registered labor union with Certificate of Registration No. NCR-UR-10-1575-95 issued by the Department of
Labor and Employment (DOLE) on October 25, 1995. On November 6, 1995, petitioner union filed a
Petition for Certification Election among the rank-and-file employees of private respondent
FILSYSTEMS, Inc. before the DOLE — National Capital Region (NCR). 2Attached as annexes to the petition
are the Certificate of Registration issued by the DOLE, copies of union membership signed by thirty three
(33) rank-and-file employees of respondent company, the Charter Certificate showing its affiliation with
the National Federation of Labor Unions (NAFLU-KMU), the list of union officers, the certification of the
union secretary of the minutes of the general membership meeting, the Books of Accounts and its
Constitution and By-Laws.3
Private respondent opposed the petition. It questioned the status of petitioner as a legitimate labor
organization on the ground of lack of proof that its contract of affiliation with the NAFLU-KMU has been
submitted to the Bureau of Labor Relations (BLR) within thirty (30) days from its execution. 4
In reply, petitioner averred that as a duly registered labor union, it has "all the rights and privileges . . . to
act as representative of its members for the purpose of collective bargaining with employers." 5
On January 12, 1996, Med-Arbiter Paterno D. Adap dismissed the petition for certification election. He
ruled that petitioner, as an affiliate of NAFLU-KMU, has no legal personality on account of its failure to
comply with paragraphs (a), (b) and (e) of Section 3, Rule II of the Implementing Rules of Book V of the
Labor Code,6 viz:
xxx xxx xxx
In matters of affiliation of an independently registered union, the rules provide that the latter shall
be considered an affiliate of a labor federation after submission of the contract or agreement of
affiliation to the Bureau of Labor Relations (BLR) within thirty (30) days after its execution.
Likewise, it mandates the federation or national union concerned to issue a charter certificate
indicating the creation or establishment 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 certificate.
A close examination of the records of the case does not reveal that the federation and the
independent union have executed a contract or agreement of affiliation, nor had it shown that it
has submitted its charter certificate to the Bureau of Labor Relations, within thirty (30) days from
issuance of such charter certificate as amended by the rules.
Petitioner argued that it has complied with all the requirements for certification election pursuant
to the mandate of Sec. 2, Rule V of Book V of the Implementing Rules of the Labor Code; that the
rule cited by respondent is not included in the Rule citing the requirements for certification
election.
We disagree with petitioner's contention. The rule cited by the petitioner, Sec. 2, Rule V, Book V,
sub-paragraphs A, B, C, D, E, F and G, refers to an independently registered labor organization
which has filed a petition for certification election.
In the case at bar, an independently registered union has affiliated with a federation, hence, strict
compliance with the requirements embodied in Sec. 3, paragraphs A, B and E of Rule II, Book V of
the Rules and Regulations implementing the Labor Code should be complied with.
Record discloses that petitioner has not shown to have executed a contract or agreement of
affiliation nor has it established that is has submitted its charter certificate to the Bureau of Labor
Relations (BLR) within thirty (30) days from its execution.
Thus, petitioner in this case having failed to comply with the mandatory requirement, there was
no valid affiliation. Consequently, petitioner has no legal personality because the union failed to
attain the status of legitimacy for failure to comply with the requirements of law.
Petitioner appealed to the Office of the Secretary of Labor and Employment. It reiterated its contention
that as an independently registered union, it has the right to file a petition for certification election
regardless of its failure to prove its affiliation with NAFLU-KMU. 7
On February 26, 1996, private respondent opposed the appeal. It argued that petitioner should have filed
its petition for certification election as an independently registered union and not as a union affiliated with
NAFLU-
KMU.8
Meanwhile or on February 7, 1996, another union, the Filsystems Workers Union (FWU), filed a Petition for
Certification Election in the same bargaining unit. On March 22, 1996, the Med-Arbitration — NCR Branch
granted the petition. The certification election held on April 19, 1996, was won by FWU which garnered
twenty six (26) votes out of the forty six (46) eligible voters. The FWU was certified on April 29, 1996, as
the exclusive bargaining agent of all rank-and-file employees of private respondent. Eventually, FWU and
the private respondent negotiated a CBA.9
On June 11, 1996, the private respondent filed a Motion to Dismiss Appeal of petitioner as it has become
moot and academic. It also invoked Section 3, Rule V of the Implementing Rules of Book V of the Labor
Code stating that "once a union has been certified, no certification election may be held within one (1)
year from the date of issuance of a final certification election [result]." 10
In opposing the Motion to Dismiss Appeal, petitioner contended that its appeal is not moot as the
certification election held on April 19, 1996, was void for violating Section 10, Rule V of the Implementing
Rules of Book V of the Labor Code,11 viz:
Sec. 10. Decision of the Secretary final and inappealable. — The Secretary shall have fifteen (15)
calendar days within which to decide the appeal from receipt of the records of the case. The filing
of the appeal from the decision of the Med-Arbiter stays the holding of any certification election.
The decision of the Secretary shall be final and inappealable.
Petitioner further argued that the CBA executed between the FWU and the private respondent could not
affect its pending representation case following Section 4, Rule V of the Implementing Rules of Book V of
the Labor Code12 which states:
Sec. 4. Effects of early agreements. — The representation case shall not, however, be adversely
affected by a collective bargaining agreement registered before or during the last 60 days of the
subsisting agreement or during the pendency of the representation case.
On June 28, 1996, respondent Secretary dismissed the appeal interposed by petitioner on the ground that
it has been rendered moot by the certification of FWU as the sole and exclusive bargaining agent of the
rank-and-file workers of respondent company. Petitioner's Motion for Reconsideration was denied in an
Order dated November 18, 1996.13
Before this Court, petitioner contends:
I
Public respondent acted with grave abuse of discretion amounting to acting without or in excess of
jurisdiction in holding that the pending appeal in the representation case was rendered moot and
academic by a subsequently enacted collective bargaining agreement in the company.
II
Public respondent committed a serious legal error and gravely abused its discretion in failing to
hold that the legal personality of petitioner as a union having been established by its Certificate of
Registration, the same could not be subjected to collateral attack.
The petition is meritorious.
I
We shall first resolve whether the public respondent committed grave abuse of discretion when he
effectively affirmed the Resolution dated January 12, 1996 of the Med-Arbiter dismissing petitioner's
petition for certification election for failure to prove its affiliation with NAFLU-KMU.
The reasoning of the public respondent and the Med-Arbiter is flawed, proceeding as it does from a wrong
premise. Firstly, it must be underscored that petitioner is an independently registered labor union as
evidenced by a Certificate of Registration issued by the DOLE. As a legitimate labor organization,
petitioner's right to file a petition for certification election on its own is beyond question. 14 Secondly, the
failure of petitioner to prove its affiliation with NAFLU-KMU cannot affect its right to file said petition for
certification election as an independent union. At the most, petitioner's failure will result in an ineffective
affiliation with NAFLU-KMU. Still, however, it can pursue its petition for certification election as an
independent union. In our rulings, we have stressed that despite affiliation, the local union remains the
basic unit free to serve the common interest of all its members and pursue its own interests independently
of the federation.15
In fine, the Med-Arbiter erred in dismissing petitioner's petition for certification election on account of its
non-submission of the charter certificate and the contract of affiliation with the NAFLU-KMU with the BLR.
The public respondent gravely abused his discretion in sustaining the Med-Arbiter's Resolution.
II
We shall now resolve the issue of whether the appeal filed by the petitioner was rendered moot and
academic by the subsequent certification election ordered by the Med-Arbiter, won by FWU and which
culminated in a CBA with private respondent.
Public respondent's ruling is anchored on his finding that there exists no pending representation case since
the petition for certification election filed by the petitioner was dismissed by the Med-Arbiter. According
to the public respondent, the legal effect of the dismissal of the petition was to leave the playing field
open without any legal barrier or prohibition to any petitioner; thus, other legitimate labor organizations
may file an entirely new petition for certification election.
We reject public respondent's ruling. The order of the Med-Arbiter dismissing petitioner's petition for
certification election was seasonably appealed. The appeal stopped the holding of any certification
election. Section 10, Rule V of the Implementing Rules of Book V of the Labor Code is crystal clear and
hardly needs any interpretation.
Accordingly, there was an unresolved representation case at the time the CBA was entered between FWU
and private respondent. Following Section 4, Rule V of the Implementing Rules of Book V of the Labor
Code, such CBA cannot and will not prejudice petitioner's pending representation case or render the same
moot.16 This rule was applied in the case of Associated Labor Unions (ALU-TUCP) v. Trajano 17 where we
held that "[t]here should be no obstacle to the right of the proper time, that is, within sixty (60) days prior
to the expiration of the life of a certified collective bargaining agreement . . ., not even by a collective
agreement submitted during the pendency of the representation case." Likewise, in Associated Labor
Unions (ALU) v.Ferrer-Calleja,18 we held that a prematurely renewed CBA is not a bar to the holding of a
certification election.
Finally, we bewail private respondent's tenacious opposition to petitioner's certification election petition.
Such a stance is not conducive to industrial peace. Time and again, we have emphasized that when a
petition for certification election is filed by a legitimate labor organization, it is good policy for the
employer not to have any participation or partisan interest in the choice of the bargaining representative.
While employers may rightfully be notified or informed of petitions of such nature, they should not,
however, be considered parties thereto with an inalienable right to oppose it. An employer that involves
itself in a certification election lends suspicion to the fact that it wants to create a company union. Thus,
in Consolidated Farms, Inc. II v. Noriel,19 we declared that "[o]n a matter that should be the exclusive
concern of labor, the choice of a collective bargaining representative, the employer is definitely an
intruder. His participation, to say the least, deserves no encouragement. This Court should be the last
agency to lend support to such an attempt at interference with a purely internal affair of labor. . . . [While]
it is true that there may be circumstances where the interest of the employer calls for its being heard on
the matter, . . . sound policy dictates that as much as possible, management is to maintain a strictly hands-
off policy. For it is does not, it may lend itself to the legitimate suspicion that it is partial to one of the
contending unions. That is repugnant to the concept of collective bargaining. That is against the letter and
spirit of welfare legislation intended to protect labor and promote social justice. The judiciary then should
be the last to look with tolerance at such efforts of an employer to take part in the process leading to the
free and untrammeled choice of the exclusive bargaining representative of the workers."
IN VIEW WHEREOF, the instant petition is GRANTED. The assailed Resolution and Order of the public
respondent are set aside. The Bureau of Labor Relations is ORDERED to hold a certification election in
respondent company with petitioner as a contending union. No costs.
SO ORDERED.
G.R. No. 104556 March 19, 1998

NATIONAL FEDERATION OF LABOR (NFL), petitioner,
vs.
THE SECRETARY OF LABOR OF THE REPUBLIC OF THE PHILIPPINES AND HIJO PLANTATION INC., (HPI),respondents.
MENDOZA, J.:
Petitioner NFL (National Federation of Labor) was chosen the bargaining agent of rank-and-file employees of the Hijo
Plantation Inc. (HPI) in Mandaum, Tagum, Davao del Norte at a certification election held on August 20, 1989.
Protests filed by the company and three other unions against the results of the election were denied by the
Department of Labor and Employment in its resolution dated February 14, 1991 but, on motion of the company
(HPI), the DOLE reconsidered its resolution and ordered another certification election to be held. The DOLE
subsequently denied petitioner NFL's motion for reconsideration.
The present petition is for certiorari to set aside orders of the Secretary of Labor and Employment dated August 29,
1991, December 26, 1991 and February 17, 1992, ordering the holding of a new certification election to be
conducted in place of the one held on August 20, 1989 and, for this purpose, reversing its earlier resolution dated
February 14, 1991 dismissing the election protests of private respondent and the unions.
The facts of the case are as follows:
On November 12, 1988, a certification election was conducted among the rank-and-file employees of the Hijo
Plantation, Inc. resulting in the choice of "no union." However, on July 3, 1989, on allegations that the company
intervened in the election, the Director of the Bureau of Labor Relations nullified the results of the certification
election and ordered a new one to be held.
The new election was held on August 20, 1989 under the supervision of the DOLE Regional Office in Davao City with
the following results:
Total Votes cast 1,012
Associated Trade Unions (ATU) 39
RUST KILUSAN 5
National Federation of Labor (NFL) 876
Southern Philippines Federation of Labor 4
SANDIGAN 6
UFW 15
No Union 55
Invalid 13
The Trust Union Society and Trade Workers-KILUSAN (TRUST-Kilusan), the United Lumber and General Workers of the
Philippines (ULGWP), the Hijo Labor Union and the Hijo Plantation, Inc. sought the nullification of the results of the
certification election on the ground that it was conducted despite the pendency of the appeals filed by Hijo Labor
Union and ULGWP from the order, dated August 17, 1989, of the Med-Arbiter denying their motion for intervention.
On the other hand, HPI claimed that it was not informed or properly represented at the pre-election conference. It
alleged that, if it was represented at all in the pre-election conference, its representative acted beyond his authority
and without its knowledge. Private respondent also alleged that the certification election was marred by massive
fraud and irregularities and that out of 1,692 eligible voters, 913, representing 54% of the rank-and-file workers of
private respondent, were not able to vote, resulting in a failure of election.
On January 10, 1990, Acting Labor Secretary Dionisio dela Serna directed the Med-Arbiter, Phibun D. Pura, to
investigate the company's claim that 54% of the rank-and-file workers were not able to vote in the certification
election.
In his Report and Recommendation, dated February 9, 1990, Pura stated:
1. A majority of the rank-and-file workers had been disfranchised in the election of August 20, 1989 because of
confusion caused by the announcement of the company that the election had been postponed in view of the appeals
of ULGWP and Hijo Labor Union (HLU) from the order denying their motions for intervention. In addition, the
election was held on a Sunday which was non-working day in the company.
2. There were irregularities committed in the conduct of the election. It was possible that some people could have
voted for those who did not show up. The election was conducted in an open and hot area. The secrecy of the ballot
had been violated. Management representatives were not around to identify the workers.
3. The total number of votes cast, as duly certified by the representation officer, did not tally with the 41-page listings
submitted to the Med-Arbitration Unit. The list contained 1,008 names which were checked or encircled (indicating
that they had voted) and 784 which were not, (indicating that they did not vote), or a total of 1,792. but according to
the representation officer the total votes cast in the election was 1,012.
Med-Arbiter Pura reported that he interviewed eleven employees who claimed that they were not able to vote and
who were surprised to know that their names had been checked to indicate that they had voted.
But NFL wrote a letter to Labor Secretary Ruben Torres complaining that it had not been informed of the
investigation conducted by Med-Arbiter Pura and so was not heard on its evidence. For this reason, the Med-Arbiter
was directed by the Labor Secretary to hear interested parties.
The Med-Arbiter therefore summoned the unions. TRUST-Kilusan reiterated its petition for the annulment of the
results of the certification election. Hijo Labor Union manifested that it was joining private respondent HPI's appeal,
adopting as its own the documentary evidence presented by the company, showing fraud in the election of August
20, 1989. On the other hand, petitioner NFL reiterated its contention that management had no legal personality to
file an appeal because it was not a party to the election but was only a bystander which did not even extend
assistance in the election. Petitioner denied that private respondent HPI was not represented in the pre-election
conference, because the truth was that a certain Bartolo was present on behalf of the management and he in fact
furnished the DOLE copies of the list of employees, and posted in the company premises notices of the certification
election.
Petitioner NFL insisted that more than majority of the workers voted in the election. It claimed that out of 1,692
qualified voters, 1,012 actually voted and only 680 failed to cast their vote. It charged management with resorting to
all kinds of manipulation to frustrate the election and make the "Non Union" win.
In a resolution dated February 14, 1991, the DOLE upheld the August 20, 1989 certification election. With respect to
claim that election could not be held in view of the pendency of the appeals of the ULGWP and Hijo Labor Union
from the order of the Med-Arbiter denying their motions for intervention, the DOLE said: 1
. . . even before the conduct of the certification election on 12 November 1988 which was nullified, Hijo
Labor Union filed a motion for interventions. The same was however, denied for being filed unseasonably,
and as a result it was not included as one of the choices in the said election. After it has been so disqualified
thru an order which has become final and executory, ALU filed a second motion for intervention when a
second balloting was ordered conducted. Clearly, said second motion is proforma and intended to delay the
proceedings. Being so, its appeal from the order of denial did not stay the election and the Med-Arbiter was
correct and did not violate any rule when he proceeded with the election even with the appeal. In fact, the
Med-Arbiter need not rule on the motion as it has already been disposed of with finality.
The same is true with the motion for intervention of ULGWP. The latter withdrew as a party to the election
on September 1988 and its motion to withdraw was granted by the Med-Arbiter on October motion for
intervention filed before the conduct of a second balloting where the choices has already been pre-
determined.
Let it be stressed that ULGWP and HLU were disqualified to participate in the election through valid orders
that have become final and executory even before the first certification election was conducted.
Consequently, they may not be allowed to disrupt the proceeding through the filing of nuisance motions.
Much less are they possessed of the legal standing to question the results of the second election considering
that they are not parties thereto.
The DOLE gave no weight to the report of the Med-Arbiter that the certification election was marred by massive
fraud and irregularities. Although affidavits were submitted showing that the election was held outside the company
premises and private vehicles were used as makeshift precincts, the DOLE found that this was because respondent
company did not allow the use of its premises for the purpose of holding the election, company guards were
allegedly instructed not to allow parties, voters and DOLE representation officers to enter the company premises, and
notice was posted on the door of the company that the election had been postponed.
Nor was weight given to the findings of the Med-Arbiter that a majority of the rank-and-file workers had been
disfranchised in the August 20, 1989 election and that the secrecy of the ballot had been violated, first, because the
NFL was not given notice of the investigation nor the chance to present its evidence to dispute this finding and,
second, the Med Arbiter's report was not supported by the minutes of the proceedings nor by any record of the
interviews of the 315 workers. Moreover, it was pointed out that the report did not state the names of the persons
investigated, the questions asked and the answers given. The DOLE held that the report was "totally baseless."
The resolution of February 14, 1991 concluded with a reiteration of the rule that the choice of the exclusive
bargaining representative is the sole concern of the workers. It said: "If indeed there were irregularities committed
during the election, the contending unions should have been the first to complain considering that they are the ones
which have interest that should be protected." 2
Accordingly, the Labor Secretary denied the petition to annul the election filed by the ULGWP, TRUST-KILUSAN, HLU
and the HPI and instead certified petitioner NFL as the sole and exclusive bargaining representative of the rank-and-
file employees of private respondent HPI.
However, on motion of HPI, the Secretary of Labor, on August 29, 1991, reversed his resolution of February 14, 1991.
Petitioner NFL filed a motion for reconsideration but its motion was denied in an order, dated December 26, 1991.
Petitioner's second motion for reconsideration was likewise denied in another order dated February 17, 1992. Hence,
this petition.
First. Petitioner contends that certification election is the sole concern of the employees and the employer is a mere
bystander. The only instance wherein the employer may actively participate is when it files a petition for certification
election under Art. 258 of the Labor Code because it is requested to bargain collectively. Petitioner says that this is
not the case here and so the DOLE should not have given due course to private respondent's petition for annulment
of the results of the certification election.
In his resolution of August 29, 1991, the Secretary of Labor said he was reversing his earlier resolution because
"workers of Hijo Plantation, Inc. have deluged this Office with their letter-appeal, either made singly or collectively
expressing their wish to have a new certification election conducted" and that as a result "the firm position we held
regarding the integrity of the electoral exercise had been somewhat eroded by this recent declaration of the workers,
now speaking in their sovereign capacity."
It is clear from this, that what the DOLE Secretary considered in reversing its earlier rulings was not the petition of
the employer but the letter-appeals that the employees sent to his office denouncing the irregularities committed
during the August 20, 1989 certification election. The petition of private respondent was simply the occasion for the
employees to voice their protests against the election. Private respondent HPI attached to its Supplemental Appeal
filed on September 5, 1989 the affidavits and appeals of more or less 784 employees who claimed that they had
been disfranchised, as a result of which they were not able to cast their votes at the August 20, 1989 election. It was
the protests of employees which moved the DOLE to reconsider its previous resolution of February 14, 1991,
upholding the election.
Nor is it improper for private respondent to show interest in the conduct of the election. Private respondent is the
employer. The manner in which the election was held could make the difference between industrial strife and
industrial harmony in the company. What an employer is prohibited from doing is to interfere with the conduct of the
certification election for the purpose of influencing its outcome. But certainly an employer has an abiding interest in
seeing to it that the election is clean, peaceful, orderly and credible.
Second. The petitioner argues that any protest concerning the election should be registered and entered into the
minutes of the election proceedings before it can be considered. In addition, the protest should be formalized by
filing it within five (5) days. Petitioner avers that these requirements are condition precedents in the filing of an
appeal. Without these requisites the appeal cannot prosper. It cites the following provisions of Book V, Rule VI of the
Implementing Rules and Regulations of the Labor Code:
Sec. 3. Representation officer may rule on any on-the-spot question. — The Representation officer may rule
on any on-the-spot question arising from the conduct of the election. The interested party may however, file
a protest with the representation officer before the close of the proceedings.
Protests not so raised are deemed waived. Such protests shall be contained in the minutes of the
proceedings.
Sec. 4. Protest to be decided in twenty (20) working days. — Where the protest is formalized before the med-
arbiter within five (5) days after the close of the election proceedings, the med-arbiter shall decide the same
within twenty (20) working days from the date of its formalization. If not formalized within the prescribed
period, the protest shall be deemed dropped. The decision may be appealed to the Bureau in the same
manner and on the same grounds as provided under Rule V.
In this case, petitioner maintains that private respondent did not make any protest regarding the alleged irregularities
(e.g., massive disfranchisement of employees) during the election. Hence, the appeal and motions for
reconsideration of private respondent HPI should have been dismissed summarily.
The complaint in this case was that a number of employees were not able to cast their votes because they were not
properly notified of the date. They could not therefore have filed their protests within five (5) days. At all events, the
Solicitor General states, that the protests were not filed within five (5) days, is a mere technicality which should not
be allowed to prevail over the workers' welfare. 3 As this Court stressed in LVN Pictures, Inc. v. Phil.Musicians
Guild, 4 it is essential that the employees must be accorded an opportunity to freely and intelligently determine
which labor organization shall act in their behalf. The workers in this case were denied this opportunity. Not only
were a substantial number of them disfranchised, there were, in addition, allegations of fraud and other irregularities
which put in question the integrity of the election. Workers wrote letters and made complaints protesting the
conduct of the election. The Report of Med-Arbiter Pura who investigated these allegations found the allegations of
fraud and irregularities to be true.
In one case this Court invalidated a certification election upon a showing of disfranchisement, lack of secrecy in the
voting and bribery. 5 We hold the same in this case. The workers' right to self-organization as enshrined in both the
Constitution and Labor Code would be rendered nugatory if their right to choose their collective bargaining
representative were denied. Indeed, the policy of the Labor Code favors the holding of a certification election as the
most conclusive way of choosing the labor organization to represent workers in a collective bargaining unit. 6 In case
of doubt, the doubt should be resolved in favor of the holding of a certification election.
Third. Petitioner claims that the contending unions, namely, the Association of Trade Union (ATU), the Union of
Filipino Workers (UFW), as well as the representation officers of the DOLE affirmed the regularity of the conduct of
the election and they are now estopped from questioning the election.
In its comment, ATU-TUCP states,
. . . The representative of the Association of Trade Unions really attest to the fact that we cannot really
identify all the voters who voted on that election except some workers who were our supporters in the
absence of Hijo Plantation representatives. We also attest that the polling precinct were not conducive to
secrecy of the voters since it was conducted outside of the Company premises. The precincts were (sic) the
election was held were located in a passenger waiting shed infront of the canteen across the road; on the
yellow pick-up; at the back of a car; a waiting shed near the Guard House and a waiting shed infront of the
Guard House across the road. Herein private respondents also observed during the election that there were
voters who dictated some voters the phrase "number 3" to those who were casting their votes and those
who were about to vote. Number 3 refers to the National Federation of Labor in the official ballot.
ATU-TUCP explains that it did not file any protest because it expected workers who had been aggrieved by the
conduct of the election would file their protest since it was in their interests that they do so.
Fourth. Petitioner points out that the letter-appeals were written almost two years after the election and they bear
the same dates (May 7 and June 14, 1991); they are not verified; they do not contain details or evidence of intelligent
acts; and they do not explain why the writers failed to vote. Petitioner contends that the letter-appeals were
obtained through duress by the company.
We find the allegations to be without merit. The records shows that as early as August 22 and 30, 1989, employees
already wrote letters/affidavits/
manifestoes alleging irregularities in the elections and disfranchisement of workers. 7 As the Solicitor General says in
his Comment, 8 these affidavits and manifestoes, which were attached as Annexes "A" to "CC" and Annexes "DD" to
"DD-33" to private respondent's Supplemental Petition of September 5, 1989 — just 16 days after the August 20,
1989 election. It is not true therefore that the employees slept on their rights.
As to the claim that letters dated May 7, 1991 and June 14, 1991 bear these same dates because they were prepared
by private respondent HPI and employees were merely asked to sign them, suffice it to say that this is plain
speculation which petitioner has not proven by competent evidence.
As to the letters not being verified, suffice it to say that technical rules of evidence are not binding in labor cases.
The allegation that the letters did not contain evidence of intelligent acts does not have merit. The earlier letters 9of
the workers already gave details of what they had witnessed during the election, namely the open balloting (with no
secrecy), and the use of NFL vehicles for polling precinct. These letters sufficiently give an idea of the irregularities of
the certification election. Similarly, the letters containing the signatures of those who were not able to vote are
sufficient. They indicate that the writers were not able to vote because they thought the election had been
postponed, especially given the fact that the two unions had pending appeals at the time from orders denying them
the right to intervene in the election.
WHEREFORE, the petition for certiorari is DISMISSED and the questioned orders of the Secretary of Labor and
Employment are AFFIRMED.
SO ORDERED.
G.R. No. 107792 March 2, 1998

SAMAHANG MANGGAGAWA SA PERMEX (SMP-PIILU-TUCP), petitioners,
vs.
THE SECRETARY OF LABOR, NATIONAL FEDERATION OF LABOR, PERMEX PRODUCER AND EXPORTER
CORPORATION, respondents.
MENDOZA, J.:
This is a petition for review on certiorari of the decision, dated October 8, 1992 and order dated November 12, 1992,
of Undersecretary of Labor and Employment Bienvenido Laguesma, ordering a certification election to be conducted
among the employees of respondent company.
The facts of the case are as follows. On January 15, 1991, a certification election was conducted among employees of
respondent Permex Producer and Exporter Corporation (hereafter referred to as Permex Producer). The results of the
elections were as follows:
National Federation of Labor (NFL) 235
No Union 466
Spoiled Ballots 18
Marked Ballots 9
Challenged Ballots 7
However, some employees of Permex Producer formed a labor organization known as the Samahang Manggagawa sa
Permex (SMP) which they registered with the Department of Labor and Employment on March 11, 1991. The union
later affiliated with the Philippine Integrated Industries Labor Union (PIILU).
On August 16, 1991, Samahang Manggagawa sa Permex-Philippine Integrated Industries Labor Union (SMP-PIILU),
wrote the respondent company requesting recognition as the sole and exclusive bargaining representative of
employees at the Permex Producer. On October 19, 1991 Permex Producer recognized SMP-PIILU and, on December
1, entered into a collective bargaining agreement with it. The CBA was ratified between December 9 and 10, 1991 by
the majority of the rank and file employees of Permex Producer. On December 13, 1991, it was certified by the DOLE.
On February 25, 1992, respondent NFL filed a petition for certification election, but it was dismissed by Med-Arbiter
Edgar B. Gongalos in an order dated August 20, 1992. Respondent NFL then appealed the order to the Secretary of
Labor and Employment. On October 8, 1992, the Secretary of Labor, through Undersecretary Bienvenido Laguesma,
set aside the order of the Med-Arbiter and ordered a certification election to be conducted among the rank and file
employees at the Permex Producer, with the following choices:
1. National Federation of Labor
2. Samahang Manggagawa sa Permex
3. No union
Petitioner moved for a reconsideration but its motion was denied in an order dated November 12, 1992. Hence, this
petition.
Two arguments are put forth in support of the petition. First, it is contended that petitioner has been recognized by
the majority of the employees at Permex Producer as their sole collective bargaining agent. Petitioner argues that
when a group of employees constituting themselves into an organization and claiming to represent a majority of the
work force requests the employer to bargain collectively, the employer may do one of two things. First, if the
employer is satisfied with the employees' claim the employer may voluntarily recognize the union by merely
bargaining collectively with it. The formal written confirmation is ordinarily stated in the collective bargaining
agreement. Second, if on the other hand, the employer refuses to recognize the union voluntarily, it may petition the
Bureau of Labor Relations to conduct a certification election. If the employer does not submit a petition for
certification election, the union claiming to represent the employees may submit the petition so that it may be
directly certified as the employees' representative or a certification election may be held.
The case of Ilaw at Buklod ng Manggagawa v. Ferrer-Calleja, 1 cited by the Solicitor General in his comment filed in
behalf of the NLRC, is particularly apropos. There, the union also requested voluntary recognition by the company.
Instead of granting the request, the company petitioned for a certification election. The union moved to dismiss on
the ground that it did not ask the company to bargain collectively with it. As its motion was denied, the union
brought the matter to this Court. In sustaining the company's stand, this Court ruled:
. . . Ordinarily, in an unorganized establishment like the Calasiao Beer Region, it is the union that files
a petition for a certification election if there is no certified bargaining agent for the workers in the
establishment. If a union asks the employer to voluntarily recognize it as the bargaining agent of the
employees, as the petitioner did, it in effect asks the employer to certify it as the bargaining
representative of the employees — A CERTIFICATION WHICH THE EMPLOYER HAS NO AUTHORITY TO
GIVE, for it is the employees' prerogative (not the employer's) to determine whether they want a
union to represent them, and, if so, which one it should be. (emphasis supplied)
In accordance with this ruling, Permex Producer should not have given its voluntary recognition to SMP-PIILU-TUCP
when the latter asked for recognition as exclusive collective bargaining agent of the employees of the company. The
company did not have the power to declare the union the exclusive representative of the workers for the purpose of
collective bargaining,
Indeed, petitioner's contention runs counter to the trend towards the holding of certification election. By virtue of
Executive Order No. 111, which became effective on March 4, 1987, the direct certification previously allowed under
the Labor Code had been discontinued as a method of selecting the exclusive bargaining agents of the
workers. 2 Certification election is the most effective and the most democratic way of determining which labor
organization can truly represent the working force in the appropriate bargaining unit of a company. 3
Petitioner argues that of the 763 qualified employees of Permex Producer, 479 supported its application for
registration with the DOLE and that when petitioner signed the CBA with the company, the CBA was ratified by 542
employees. Petitioner contends that such support by the majority of the employees justifies its finding that the CBA
made by it is valid and binding.
But it is not enough that a union has the support of the majority of the employees. It is equally important that
everyone in the bargaining unit be given the opportunity to express himself. 4
This is especially so because, in this case, the recognition given to the union came barely ten (10) months after the
employees had voted "no union" in the certification election conducted in the company. As pointed out by
respondent Secretary of Labor in his decision, there can be no determination of a bargaining representative within a
year of the proclamation of the results of the certification election. 5 Here the results, which showed that 61% of the
employees voted for "no union," were certified only on February 25, 1991 but on December 1, 1991 Permex
Producer already recognized the union and entered into a CBA with it.
There is something dubious about the fact that just ten (10) months after the employees had voted that they did not
want any union to represent them, they would be expressing support for petitioner. The doubt is compounded by the
fact that in sworn affidavits some employees claimed that they had either been coerced or misled into signing a
document which turned out to be in support of petitioner as its collective bargaining agent. Although there were
retractions, we agree with the Solicitor General that retractions of statements by employees adverse to a company
(or its favored union) are oftentimes tainted with coercion and intimidation. For how could one explain the seeming
flip-flopping of position taken by the employees? The figures claimed by petitioner to have been given to it in support
cannot readily be accepted as true.
Second. Petitioner invokes the contract-bar rule. They contend that under Arts. 253, 253-A and 256 of the Labor Code
and Book V, Rule 5, §3 of its Implementing Rules and Regulations, a petition for certification election or motion for
intervention may be entertained only within 60 days prior to the date of expiration of an existing collective
bargaining agreement. The purpose of the rule is to ensure stability in the relationships of the workers and the
management by preventing frequent modifications of any collective bargaining agreement earlier entered into by
them in good faith and for the stipulated original period. Excepted from the contract-bar rule are certain types of
contracts which do not foster industrial stability, such as contracts where the identity of the representative is in
doubt. Any stability derived from such contracts must be subordinated to the employees' freedom of choice because
it does not establish the kind of industrial peace contemplated by the law. 6 Such situation obtains in this case. The
petitioner entered into a CBA with Permex Producer when its status as exclusive bargaining agent of the employees
had not been established yet.
WHEREFORE, the challenged decision and order of the respondent Secretary of Labor are AFFIRMED.
SO ORDERED.
G.R. No. 108033 April 14, 1997
TEOFISTO C. GANCHO-ON, petitioner,
vs.
THE HONORABLE SECRETARY OF LABOR AND EMPLOYMENT AND LAKAS NG NAGKAKAISANG MANGGAGAWA-
PAFLU, respondents.
BELLOSILLO, J.:
On 16 January 1992 respondent Lakas ng Nagkakaisang Manggagawa-PAFLU filed with the Department of Labor and
Employment (DOLE) a petition for certification election in a bid to exclusively represent the truck drivers of Eros
Repair Shop.
Petitioner Teofisto C. Gancho-on, owner of the shop, moved for the dismissal of the petition on the ground of
absence of employer-employee relationship. He contended that the members of respondent Union who would
constitute the proposed bargaining unit were not employees of his shop but of individual owners of the trucks used
in the trucking and hauling business managed by his wife, Herminia. In support thereof he presented certificates of
registration indicating the ownership of four (4) vehicles being driven by the union members. In addition, he
submitted copy of the application to operate business filed with the Mayor's Office together with an application for
renewal of the certificate of registration which described his business as an automotive repair shay.
Respondent Union opposed the motion and asserted that while petitioner may be the registered owner of the shop,
his wife was the manager of the trucking and hauling business under the same name and style as the shop. It offered
in evidence the following documents executed by petitioner's wife herself: (a) an affidavit dated 10 February 1992
alleging among others that she was the manager of Eros Repair Shop which was engaged in the trucking and hauling
of sugar cane and that the truck drivers were paid on commission basis; 1 (b) a letter dated 17 February 1992
addressed to the Assistant Regional Director of the DOLE informing the latter of the violation by one of the truck
drivers of Eros Repair Shop of a memorandum issued to all truck drivers; 2 and, (c) another letter dated 20 February
1992 addressed to the same official seeking advice concerning eleven (11) of her truck drivers who failed to report
for work.3
The Med-Arbiter — Designate concluded from the evidence thus adduced that: (a) the right to control not only the
result of the drivers' work but also the means and method to accomplish their task was being exercised by
petitioner's wife; (b) except for petitioner's business permit and accreditation no other evidence was presented to
support the allegation that Eros Repair Shop was an entity separate and distinct from the trucking and hauling
business; and, (c) most of the trucks were owned by the Gancho-on spouses.
Thus on 13 May 1992 the petition for certification election was given due course with the following options:
respondent union, or no union at all. A representative officer was directed to call the parties to a pre-election
conference to thresh out the mechanics of the election and to conduct and supervise the same within twenty (20)
days from receipt of the order by the parties. 4
Petitioner assailed the order for certification election before respondent Secretary of Labor and Employment, still
insisting on the absence of employer-employee relationship.
On 31 July 1992 the appeal was denied. Respondent Secretary, ordering the pre-election conference preparatory to
the certification election be immediately conducted, 5 declared that: (a) the affidavit of Mrs. Gancho-on in effect was
an admission that Eros Repair Shop was engaged in trucking and hauling services; (b) it was common knowledge in
the business that trucks were leased from various owners; and, (c) in the communications sent by Mrs. Gancho-on to
the DOLE, she used the business name of Eros Repair Shop for her letterhead thus creating the impression that the
Eros Repair Shop was actually the employer. On 14 September 1992 the motion for reconsideration was denied. 6
Petitioner raises the same issue before us. On 11 January 1993 the certification election nevertheless proceeded.
Respondent union thereafter submitted to the Court an original copy of the declaration of the final certification
election results showing that it did not garner a single vote because out of thirty-six (36) drivers, all of the twenty
(20) who cast their votes favored a "no union." 7
This notwithstanding, petitioner argues that it is still necessary for the Court to resolve the issue of employer-
employee relationship not only for the guidance of the bench and bar in general but also because the matter "hangs
like the sword of Damocles over his head."
Petitioner entirely misses the material points which have rendered the present proceeding moot and academic. First,
subject resolution of respondent Secretary as aforestated decreed that the pre-election conference preparatory to
the certification election be immediately conducted. The certification election thereafter became afait accompli.
Second, in a sense salutary to petitioner, the defeat suffered by respondent Union in its bid to be certified as the sole
bargaining agent of the truck drivers made irrelevant the findings of both the Med-Arbiter-Designate and respondent
Secretary that an employer-employee relationship existed. It should be emphasized that the issue of employer-
employee relationship came into being only because petitioner denied its existence in his motion to dismiss the
petition for certification election. Since the certification proceeding before the Med-Arbiter merely provided the
mainspring of this petition the defeat of respondent Union in the election has stripped this case of its raison d'etre.
It is a rule of universal application, almost, that courts of justice constituted to pass upon substantial rights will not
consider questions in which no actual interests are involved; they decline jurisdiction of moot cases. 8 And where the
issue has become moot and academic, there is no justiciable controversy, so that a declaration thereon would be of
no practical-use or value. There is no actual substantial relief to which petitioners would be entitled and which would
be negated by the dismissal of the petition. 9
WHEREFORE, the petition is DISMISSED for being moot and academic.
SO ORDERED.
G.R. No. 118915 February 4, 1997
CAPITOL MEDICAL CENTER OF CONCERNED EMPLOYEES-UNIFIED FILIPINO SERVICE WORKERS, (CMC-ACE-
UFSW), petitioners,
vs.
HON. BIENVENIDO E. LAGUESMA, Undersecretary of the Department of Labor and Employment; CAPITOL MEDICAL
CENTER EMPLOYEES ASSOCIATION-ALLIANCE OF FILIPINO WORKERS AND CAPITOL MEDICAL CENTER
INCORPORATED AND DRA. THELMA CLEMENTE, President, respondents.
HERMOSISIMA, JR., J.:

This petition for certiorari and prohibition seeks to reserves and set aside the Order dated November 18, 1994 of
public respondent Bienvenido E. Laguesma, Undersecretary of the Department of Labor and Employment in Case No.
OS.-A-136-94 1 which dismissed the petition for certification election filed by petitioner for lack of merit and further
directed private respondent hospital to negotiate a collective bargaining agreement with respondent union, Capitol
Medical Center Employees Association-Alliance of Filipino Workers.
The antecedent facts are undisputed.
On February 17, 1992, Med-Arbiter Rasidali C. Abdullah issued an Order which granted respondent union's petition
for certification election among the rank-and-file employees of the Capitol Medical Center. 2 Respondent CMC
appealed the Order to the Office of the Secretary by questioning the legal status of respondent union's affiliation
with the Alliance of Filipino Workers (AFW). To correct any supposed infirmity in its legal status, respondent union
registered itself independently and withdrew the petition which had earlier been granted. Thereafter, it filed another
petition for certification election.
On May 29, 1992, Med-Arbiter Manases T. Cruz issued an order granting the petition for certification
election.3Respondent CMC again appealed to the Office of the Secretary which affirmed 4 the Order of the Med-
Arbiter granting the certification election.
On December 9, 1992, elections were finally held with respondent union garnering 204 votes, 168 in favor of no
union and 8 spoiled ballots out of a total of 380 votes cast. Thereafter, on January 4, 1993, Med-Arbiter Cruz issued
an Order certifying respondent union as the sole and exclusive bargaining representative of the rank and file
employees at CMC. 5
Unsatisfied with the outcome of the elections, respondent CMC again appealed to the Office of the Secretary of
Labor which appeal was denied on February 26, 1993. 6 A subsequent motion for reconsideration filed by respondent
CMC was likewise denied on March 23, 1993. 7
Respondent CMC's basic contention was the supposed pendency of its petition for cancellation of respondent union's
certificate of registration in Case No. NCR-OD-M-92211-028. In the said case, Med-Arbiter Paterno Adap issued an
Order dated February 4, 1993 which declared respondent union's certificate of registration as null and
void.8 However, this order was reversed on appeal by the Officer-in-Charge of the Bureau of Labor Relations in her
Order issued on April 13, 1993. The said Order dismissed the motion for cancellation of the certificate of registration
of respondent union and declared that it was not only a bona fide affiliate or local of a federation (AFW), but a duly
registered union as well. Subsequently, this case reached this Court in Capitol Medical Center, Inc. v. Hon. Perlita
Velasco, G.R. No. 110718, where we issued a Resolution dated December 13, 1993, dismissing the petition of CMC
for failure to sufficiently show that public respondent committed grave abuse of discretion. 9The motion for
reconsideration filed by CMC was likewise denied in our Resolution dated February 2, 1994. 10Thereafter, on March
23, 1994, we issued an entry of judgment certifying that the Resolution dated December 13, 1993 has become final
and executory. 11
Respondent union, after being declared as the certified bargaining agent of the rank-and-file employees of
respondent CMC by Med-Arbiter Cruz, presented economic proposals for the negotiation of a collective bargaining
agreement (CBA). However, respondent CMC contended that CBA negotiations should be suspended in view of the
Order issued on February 4, 1993 by Med-Arbiter Adap declaring the registration of respondent union as null and
void. In spite of the refusal of respondent CMC, respondent union still persisted in its demand for CBA negotiations,
claiming that it has already been declared as the sole and exclusive bargaining agent of the rank-and-file employees
of the hospital.
Due to respondent CMC's refusal to bargain collectively, respondent union filed a notice of strike on March 1, 1993.
After complying with the other legal requirements, respondent union staged a strike on April 15, 1993. On April 16,
1993, the Secretary of Labor assumed jurisdiction over the case and issued an order certifying the same to the
National Labor Relations Commission for compulsory arbitration where the said case is still pending. 12
It is at this juncture that petitioner union, on March 24, 1994, filed a petition for certification election among the
regular rank-and-file employees of the Capitol Medical Center Inc. It alleged in its petition that: 1) three hundred
thirty one (331) out of the four hundred (400) total rank-and-file employees of respondent CMC signed a petition to
conduct a certification election; and 2) that the said employees are withdrawing their authorization for the said
union to represent them as they have joined and formed the union Capitol Medical Center Alliance of Concerned
Employees (CMC-ACE). They also alleged that a certification election can now be conducted as more that 12 months
have lapsed since the last certification election was held. Moreover, no certification election was conducted during
the twelve (12) months prior to the petition, and no collective bargaining agreement has as yet been concluded
between respondent union and respondent CMC despite the lapse of twelve months from the time the said union
was voted as the collective bargaining representative.
On April 12, 1994, respondent union opposed the petition and moved for its dismissal. It contended that it is the
certified bargaining agent of the rank-and-file employees of the Hospital, which was confirmed by the Secretary of
Labor and Employment and by this Court. It also alleged that it was not remiss in asserting its right as the certified
bargaining agent for it continuously demanded the negotiation of a CBA with the hospital despite the latter's
avoidance to bargain collectively. Respondent union was even constrained to strike on April 15, 1993, where the
Secretary of Labor intervened and certified the dispute for compulsory arbitration. Furthermore, it alleged that
majority of the signatories who supported the petition were managerial and confidential employees and not
members of the rank-and-file, and that there was no valid disaffiliation of its members, contrary to petitioner's
allegations.
Petitioner, in its rejoinder, claimed that there is no legal impediment to the conduct of a certification election as more
than twelve (12) months had lapsed since respondent union was certified as the exclusive bargaining agent and no
CBA was as yet concluded. It also claimed that the other issues raised could only be resolved by conducting another
In its surrejoinder, respondent union alleged that the petition to conduct a certification election was improper,
immoral and in manifest disregard of the decisions rendered by the Secretary of Labor and by this Court. It claimed
that CMC employed "legal obstructionism's" in order to let twelve months pass without a CBA having been concluded
between them so as to pave the way for the entry of petitioner union.
On May 12, 1994, Med-Arbiter Brigida Fadrigon, issued an Order granting the petition for certification election
among the rank and file
employees. 13 It ruled that the issue was the majority status of respondent union. Since no certification election was
held within one year from the date of issuance of a final certification election result and there was no bargaining
deadlock between respondent union and the employees that had been submitted to conciliation or had become the
subject of a valid notice of strike or lock out, there is no bar to the holding of a certification election. 14
Respondent union appeared from the said Order, alleging that the Med-Arbiter erred in granting the petition for
certification election and in holding that this case falls under Section 3, Rule V Book V of the Rules Implementing the
Labor Code. 15 It also prayed that the said provision must not be applied strictly in view of the facts in this case.
Petitioner union did not file any opposition to the appeal.
On November 18, 1994, public respondent rendered a Resolution granting the appeal. 16 He ratiocinated that while
the petition was indeed filed after the lapse of one year form the time of declaration of a final certification result, and
that no bargaining deadlock had been submitted for conciliation or arbitration, respondent union was not remiss on
its right to enter into a CBA for it was the CMC which refused to bargain collectively. 17
CMC and petitioner union separately filed motions for reconsideration of the said Order.
CMC contended that in certification election proceedings, the employer cannot be ordered to bargain collectively
with a union since the only issue involved is the determination of the bargaining agent of the employees.
Petitioner union claimed that to completely disregard the will of the 331 rank-and-file employees for a certification
election would result in the denial of their substantial rights and interests. Moreover,it contended that public
respondent's "indictment" that petitioner "capitalize (sic) on the ensuing delay which was caused by the
Hospital, . . ." was unsupported by the facts and the records.
On January 11, 1995, public respondent issued a Resolution which denied the two motions for reconsideration hence
this petition. 18
The pivotal issue in this case is whether or not public respondent committed grave abuse of discretion in dismissing
the petition for certification election, and in directing the hospital to negotiate a collective bargaining agreement
with the said respondent union.
Petitioner alleges that public respondent Undersecretary Laguesma denied it due process when it ruled against the
holding of a certification election. It further claims that the denial of due process can be gleaned from the manner by
which the assailed resolution was written, i.e., instead of the correct name of the mother federation UNIFIED, it was
referred to as UNITED; and that the respondent union's name CMCEA-AFW was referred to as CMCEA-AFLO.
Petitioner maintains that such errors indicate that the assailed resolution was prepared with "indecent haste."
We do not subscribe to petitioner's contention.
The errors pointed to by petitioner can be classified as mere typographical errors which cannot materially alter the
substance and merit of the assailed resolution.
Petitioner cannot merely anchor its position on the aforementioned erroneous' names just to attain a reversal of the
questioned resolution. As correctly observed by the Solicitor General, petitioner is merely "nit-picking vainly trying to
make a monumental issue out of a negligible error of the public respondent." 19
Petitioner also assails public respondents' findings that the former "capitalize (sic) on the ensuing delay which was
caused by the hospital and which resulted in the non-conclusion of a CBA within the certification year.'' 20 It further
argues that the denial of its motion fro a fair hearing was clear case of denial of its right to due process.
Such contention of petitioner deserves scant consideration.
A perusal of the record shows that petitioner failed to file its opposition to oppose the grounds for respondent
union's appeal.
It was given an opportunity to be heard but lost it when it refused to file an appellee's memorandum.
Petitioner insists that the circumstances prescribed in Section 3, Rule V, Book V Of the Rules Implementing the Labor
Code where a certification election should be conducted, viz: (1) that one year had lapsed since the issuance of a
final certification result; and (2) that there is no bargaining deadlock to which the incumbent or certified bargaining
agent is a party has been submitted to conciliation or arbitration, or had become the subject of a valid notice of strike
or lockout, are present in this case. It further claims that since there is no evidence on record that there exists a CBA
deadlock, the law allowing the conduct of a certification election after twelve months must be given effect in the
interest of the right of the workers to freely choose their sole and exclusive bargaining agent.
While it is true that, in the case at bench, one year had lapsed since the time of declaration of a final certification
result, and that there is no collective bargaining deadlock, public respondent did not commit grave abuse of
discretion when it ruled in respondent union's favor since the delay in the forging of the CBA could not be attributed
to the fault of the latter.
A scrutiny of the records will further reveal that after respondent union was certified as the bargaining agent of CMC,
it invited the employer hospital to the bargaining table by submitting its economic proposal for a CBA. However, CMC
refused to negotiate with respondent union and instead challenged the latter's legal personality through a petition
for cancellation of the certificate of registration which eventually reached this Court. The decision affirming the legal
status of respondent union should have left CMC with no other recourse but to bargain collectively; but still it did
not. Respondent union was left with no other recourse but to file a notice of strike against CMC for unfair labor
practice with the National Conciliation and Mediation Board. This eventually led to a strike on April 15, 1993.
Petitioner union on the other hand, after this Court issued an entry of judgment on March 23, 1994, filed the subject
petition for certification election on March 24, 1994, claiming that twelve months had lapsed since the last
Was there a bargaining deadlock between CMC and respondent union, before the filing of petitioner of a petition for
certification election, which had been submitted to conciliation or had become the subject of a valid notice of strike
or lockout?
In the case of Divine Word University of Tacloban v. Secretary of Labor and Employment, 21 we had the occasion to
define what a deadlock is, viz:\
A "deadlock" is . . . the counteraction of things producing entire stoppage; . . . . There is a deadlock
when there is a complete blocking or stoppage resulting from the action of equal and opposed forces
. . . . The word is synonymous with the word impasse, which . . "presupposes reasonable effort at
good faith bargaining which, despite noble intentions, does not conclude in agreement between the
parties."
Although there is no "deadlock" in its strict sense as there is no "counteraction" of forces present in this case nor
"reasonable effort at good faith bargaining," such can be attributed to CMC's fault as the bargaining proposals of
respondent union were never answered by CMC. In fact, what happened in this case is worse than a bargaining
deadlock for CMC employed all legal means to block the certification of respondent union as the bargaining agent of
the rank-and-file; and use it as its leverage for its failure to bargain with respondent union. Thus, we can only
conclude that CMC was unwilling to negotiate and reach an agreement with respondent union. CMC has not at any
instance shown willingness to discuss the economic proposals given by respondent union. 22
As correctly ratiocinated by public respondent, to wit:
For herein petitioner to capitalize on the ensuing delay which was caused by the hospital and which
resulted in the non-conclusion of a CBA within the certification year, would be to negate and render a
mockery of the proceedings undertaken before this Department and to put an unjustified premium
on the failure of the respondent hospital to perform its duty to bargain collectively as mandated in
Article 252 of the Labor Code, as amended, which states".
"Article 252. Meaning of duty to bargain collectively — the duty to bargain
collectively means the performance of a mutual obligation to meet and convene
promptly and expeditiously in good faith for the purpose of negotiating an
agreement with respect to wages, hours of work and all other terms and conditions
of employment including proposals for adjusting any grievance or questions arising
under such agreement and executing a contract incorporating such agreements if
requested by either party but such duty does not compel any party to agree to a
proposal or to make any concession."
The duly certified bargaining agent, CMCEA-AFW, should not be made to further bear the brunt
flowing from the respondent hospital's reluctance and thinly disguised refusal to bargain. 23
If the law proscribes the conduct of a certification election when there is a bargaining deadlock submitted to
conciliation or arbitration, with more reason should it not be conducted if, despite attempts to bring an employer to
the negotiation table by the "no reasonable effort in good faith" on the employer certified bargaining agent, there
was to bargain collectively.
In the case of Kaisahan ng Manggagawang Pilipino vs. Trajano 201 SCRA 453 (1991), penned by Chief Justice Andres
R. Narvasa, the factual milieu of which is similar to this case, this Court allowed the holding of a certification election
and ruled that the one year period known as the "certification year" has long since expired. We also ruled, that:
. . . prior to the filing of the petition for election in this case, there was no such "bargaining deadlock .
. (which) had been submitted to conciliation or arbitration or had become the subject of a valid
notice of strike or lockout." To be sure, there are in the record assertions by NAFLU that its attempts
to bring VIRON to the negotiation table had been unsuccessful because of the latter's recalcitrance,
and unfulfilled promises to bargain collectively; but there is no proof that it had taken tiny action to
legally coerce VIRON to comply with its statutory duty to bargain collectively. It could have charged
VIRON with unfair labor practice; but it did not. It could have gone on a legitimate strike in protest
against VIRON's refusal to bargain collectively and compel it to do so; but it did not. There are
assertions by NAFLU, too, that its attempts to bargain collectively had been delayed by continuing
challenges to the resolution pronouncing it the sole bargaining representative in VIRON; but there is
no adequate substantiation thereof, or of how it did in fact prevent initiation of the bargaining
process between it and VIRON. 24
Although the statements pertinent to this case are merely obiter, still the fact remains that in the Kaisahan case,
NAFLU was counselled by this Court on the steps that it should have undertaken to protect its interest, but which it
failed to do so.
This is what is strikingly different between the Kaisahan case and the case at bench for in the latter case, there was
proof that the certified bargaining agent, respondent union, had taken an action to legally coerce the employer to
comply with its statutory duty to bargain collectively, i.e., charging the employer with unfair labor practice and
conducting a strike in protest against the employer's refusal to bargain. 25 It is only just and equitable that the
circumstances in this case should be considered as similar in nature to a "bargaining deadlock" when no certification
election could be held. This is also to make sure that no floodgates will be opened for the circumvention of the law by
unscrupulous employers to prevent any certified bargaining agent from negotiating a CBA. Thus, Section 3, Rule V,
Book V of the Implement Rules should be interpreted liberally so as to include a circumstance, e.g. where a CBA
could not be concluded due to the failure of one party to willingly perform its duty to bargain collectively.
The order for the hospital to bargain is based on its failure to bargain collectively with respondent union.
WHEREFORE, the Resolution dated November 18, 1994 of public respondent Laguesma is AFFIRMED and the instant
petition is hereby DISMISSED.
SO ORDERED
G.R. No. 111245 January 31, 1997
SAMAHAN NG MANGGAGAWA SA PACIFIC PLASTIC, petitioner,
vs.
HON. BIENVENIDO LAGUESMA, Undersecretary of labor, and MALAYANG NAGKAKAISANG MANGGAGAWA NG
PACIFIC PLASTIC, respondents,
MENDOZA, J.:
This is a special civil action for certiorari to set aside the resolution, dated May 14, 1993, of respondent
Undersecretary of Labor and the order of the Med-Arbiter of January 31, 1993, dismissing the election protest of
petitioner Samahan ng Manggagawa sa Pacific Plastic (SAMAHAN) and upholding the election of respondent
Malayang Nagkakaisang Manggagawa ng Pacific Plastic (MNMPP) as the sole and exclusive bargaining representative
of the rank and file employees at the Pacific Plastic Corporation.
The facts are as follows:
Petitioner SAMAHAN and respondent MNMPP are labor unions of rank and file employees at the Pacific Plastic
Corporation (PPC) in Valenzuela, Metro Manila. On August 24, 1990, MNMPP filed a Petition for Certification
Election, alleging that there were more or less 130 rank and file employees at the PPC whom it was seeking to
represent.1 SAMAHAN countered by seeking the cancellation of MNMPP's union registration. As a result, MNMPP's
petition to be certified as the bargaining agent was dismissed. MNMPP appealed to the Secretary of Labor who, on
March 5, 1991, reversed the decision of the Med-Arbiter and ordered the holding of a certification election among
the rank and file employees of the PPC. The PPC filed a Motion for Reconsideration but its motion was denied.
Accordingly, the representation officer of the Secretary of Labor held a pre-election conference on May 6, 1991,
during which the PPC was required to submit the list of its rank and file employees based on the company payroll
three (3) months prior to the filing of the petition. As respondent company failed to submit the list, it was given a
stern warning by the Department of Labor (DOLE) that should it fail to appear at the next conference on June 3,
1991, the list to be submitted by petitioner MNMPP would be used as basis for determining the eligible voters. 2 But
the PPC again failed to appear at the conference, prompting the Department of Labor Industrial Relations Division
(DOLE-IRD) to issue a final warning.3
Petitioner SAMAHAN also failed to appear at the June 3, 1991 conference. On June 18, 1991, it moved to defer the
conference, alleging that proceedings for the cancellation of union registration of MNMPP were still pending
resolution before the Med-Arbiter which constitute a prejudicial question and that there existed a collective
bargaining agreement between PPC and SAMAHAN which was a bar to the certification election. 4
MNMPP opposed the motion, contending that the cancellation case had already been finally decided by the DOLE
and that the execution of the subject CBA during the pendency of the representation case did not bar the holding of
a certification election.5
On August 23, 1991, the DOLE-IRD summoned respondent company once more, reiterating its warning that should
the company fail to submit the list of its rank and file employees, the list to be submitted by private respondent
MNMPP and petitioner SAMAHAN would be adopted as the list of qualified voters and the company's right to the
exclusion proceedings would be deemed waived. 6
But again PPC did not comply with the DOLE order. Meanwhile, on September 23, 1991, SAMAHAN and MNMPP
agreed to hold the certification election on October 29, 1991 on the basis of the list of employees submitted by
MNMPP, without prejudice to the submission by petitioner SAMAHAN of its own list on October 17, 1991. 7Thereafter,
they agreed to postpone election to await the list of employees requested from the Social Security System. 8
On September 10, 1992, upon motion of MNMPP, the certification election was finally set for October 6, 1992. But
SAMAHAN objected despite its agreement with MNMPP on September 23, 1991 to hold an election using the list
furnished by the SSS.9 It also objected to the participation of a third labor union, Kalipunan ng Manggagawang
Pilipino (KAMAPI) which in the meantime had filed a motion for intervention. Thereafter, SAMAHAN filed a
Manifestation/Motion that it was not participating in the certification election and asked that the certification
election held on the same day be nullified for the following reasons: (1) it did not receive notice of the certification as
required by law; (2) its opposition to KAMAPI's motion to intervene and it is opposition to setting the date of the
certification election had not been resolved; (3) there were discrepancies in the list of voters submitted by the SSS;
and (4) SAMAHAN's President moved to strike out his signature at the back of the official ballot. 10
The certification election was held on October 6, 1992. Over SAMAHAN's objection KAMAPI was allowed to
participate. The following were results of the election: 11
No. of Eligible Voters 98
Malayang Nagkakaisang Manggagawa sa Pacific Plastic 56
Samahan ng Manggagawa sa Pacific Plastic 2
Kalipunan ng Manggagawang Pilipino 0
No. Union 1
No. of Spoiled Ballots cast 3
Total no. of Votes Cast 62
On October 9, 1992, SAMAHAN protested the result of the certification election alleging the same grounds alleged by
it in its Manifestation/Motion of October 6, 1992. On October 15, 1992, MNMPP opposed the petition raising the
following arguments: (1) that the mere filing of a motion for intervention will not suspend the holding of a
certification election under Rule V, §5 of the Omnibus Rules Implementing the Labor Code; (2) that the results of the
election showed that intervenor was resoundingly repudiated by the employees; (3) that it failed to specify the
alleged discrepancies in the list of employees furnished by the SSS; and (4) that matters not raised during the election
are deemed waived pursuant to Rule V, §3 of the Omnibus Rules Implementing the Labor Code. 12
In his order dated January 31, 1993, the Med-Arbiter, Tomas F. Falconitin, dismissed the election protest of
SAMAHAN and upheld the election of MNMPP as the sole and exclusive bargaining agent of all rank and file
employees at the PCC. On March 12, 1993, SAMAHAN appealed to the Secretary of Labor. It argued that its
opposition to KAMAPI's Motion for Intervention should first be resolved before a certification election could be held
and that the contract-bar rule should be applied. In addition, it contended that the use of the SSS list was in violation
of the Omnibus Rules Implementing the Labor Code which prescribe the use of the company payroll as basis for the
voter's list.
On May 14, 1993, Undersecretary Bienvenido Laguesma denied the appeal of SAMAHAN and affirmed the decision of
the Med-Arbiter. SAMAHAN moved for a reconsideration, but its motion was denied on July 29, 1993. Hence, this
petition for certiorari.
Petitioner contends:
1. The certification election held on October 6, 1992 is null and void on the ground that only 62 out of 130 employees
participated in the activity.
2. The SSS lists indicating 98 covered employees cannot be used as substitute for three (3) monthly payrolls (sic)
required for the purpose of determining the qualified voters and the majority vote needed in an election.
3. Hon. Bienvenido Laguesma committed a serious error amounting to lack of jurisdiction in upholding the election of
respondent officer's (sic) despite the absence of majority support which is 65 out of 130 admitted members in the
bargaining unit.
4. Hon. Bienvenido Laguesma had abused his discretion in sustaining the med-arbiter despite the absence of any
legal or factual support when he could otherwise declare failure of an election, thereby constituting his acts to have
been done in excess of his authority amounting to lack of jurisdiction, and therefore his resolution and order issued
pursuant thereof are considered to be null and void. 13
The petition has no merit.
First. The certification election held on October 6, 1992 is valid Art. 256 of the labor Code provides that in order to
have a valid election, at least a majority of all eligible voters in the unit must have cast their votes. The certification
election results show that more than a majority, i.e, 62 out of a total of 98 eligible voters included in the list of
employees obtained from the SSS, cast their votes. Hence, the legal requirement for a valid election was met.
The bone of contention actually concerns the propriety of utilizing the list of employees furnished by the SSS as basis
for determining the total number of eligible voters in the bargaining unit. Petitioner claims that, according to the
Implementing Rules, the basis for the list of eligible voters should have been the payroll three (3) months preceding
the filing of the petition for certification election and that if this was done the 62 votes cast would be short of the
majority because, instead of only 98 employees, as shown in the SSS list, there were actually 130 as alleged in
MNMPP's petition for certification election.
The contention is without merit. As petitioner itself says, the figure 130 is based on the allegation that MNMPP made
in its petition for certification election that it was supported by at least 25% of the members of the bargaining
unit.14 Such statement was a mere approximation of the size of the bargaining unit that the petitioning union seeks to
represent and cannot be used against MNMPP for this reason.
It should ideally be the payroll which should have been used for the purpose of the election. However, the unjustified
refusal of a company to submit the payroll in its custody, despite efforts to make it produce it, compelled resort to
the SSS list as the next best source of information. After all, the SSS list is a public record whose regularity is
presumed. In Port Workers Union of the Philippines (PWUP) v. Undersecretary of Labor and Employment, 15 this
Court underscored the policy of the Labor Code of encouraging the holding of a certification election as the definitive
and certain way of ascertaining the choice of employees as to the labor organization in a collective bargaining unit.
In Trade Unions of the Philippines and Allied Services World Federation of Trade Unions v. Laguesma, 16 we reiterated
this policy thus:
It bears stressing that no obstacle must be placed to the holding of certification elections, for it is a statutory policy
that should not be circumvented. We have held that whenever there is doubt as to whether a particular union
represents the majority of the rank and file employees, in the absence of a legal impediment, the holding of a
certification election is the most democratic method of determining the employees' choice of their bargaining
representative. It is the appropriate means whereby controversies and disputes on representation may be laid to
rest, by the unequivocal vote of the employees themselves. Indeed, it is the keystone of industrial democracy.
Insistence on the application of the Omnibus Implementing Rules could defeat this policy. Worse, it could facilitate
fraud by employers who can easily suppress the payroll to prevent certification elections from being held. This Court
has therefore consistently adhered to the principle announced in U.E. Automotive Employees v. Noriel 17 that where
it concerns the weight to be accorded to the wishes of the majority as expressed in an election conducted fairly and
honestly, certain provisions that may be considered mandatory before the voting takes place become thereafter
merely directory in order that the wishes of the electorate prevail. Considering all the arguments presented above,
we find no substantial reason to nullify the certification election conducted on October 6, 1992 on the basis of a
mere technicality which finds no justification considering the facts of the case nor upon close examination of the true
intent of the law to remove all impediments to the conduct of certification elections.
At all events petitioner must be deemed to have waived the objection based on this ground, considering that this
objection was raised for the first time in petitioner's appeal from the decision of the Med-Arbiter dismissing
petitioner's protest.18 Even then, petitioner's objection to the use of the SSS list was not that this was contrary to the
requirement of the Implementing Rules that the payroll three (3) months prior to the filing of the petition should be
used but rather that the list contained some discrepancy 19 — an allegation which petitioner failed to substantiate.
At the latest, petitioner's objection to the use of the SSS should have been raised during the elections and formalized
in its election protest. We agree with private respondent MNMPP in its Opposition to SAMAHAN's election protest
dated October 15, 1992 that under the Implementing Rules, grounds of protests not raised before the close of the
proceedings and duly formalized within five (5) days after the close of the election proceedings are deemed waived. 20
Second. Petitioner's contention in its Motion for Deferment of Pre-election Conference was that the CBA between it
and the PPC signed during the pendency of the representation proceedings, rendered the certification election moot
and academic. Rule V, Book V of the Omnibus Rules Implementing the Labor Code, §4 provides:
The representation case shall not, however, be adversely affected by a collective bargaining agreement
registered before or during last 60 days of a subsisting agreement or during the pendency of the
representation case.
This rule was applied in the case of ALU-TUCP v. Trajano21 where we held that the representation case will not be
adversely affected by a CBA registered before or during the freedom period or during the pendency of the
representation case. In ALU v. Calleja,22 we also held that a CBA, which was prematurely renewed, is not a bar to the
holding of a certification election. Hence, the CBA entered into between petitioner and PPC during the pendency of
the representation case and after the filing of the petition for certification election on August 24, 1990, cannot
possibly prejudice the certification election nor render it moot.
Third. With respect to petitioner's claim23 that the proceedings for the cancellation of MNMPP's union registration
was a prejudicial question, suffice it to say that as held in Association of Court of Appeals Employees vs. Calleja,24a
certification election can be conducted despite pendency of a petition to cancel the union registration certificate. For
the fact is that at the time the respondent union filed its petition for certification, it still had the legal personality to
perform such act absent an order directing its cancellation.
WHEREFORE, the petition for certiorari is DENIED for lack of merit.
SO ORDERED
G.R. No. 111836 February 1, 1996

PAMBANSANG KAPATIRAN NG MGA ANAK PAWIS SA FORMEY PLASTIC NATIONAL WORKERS
BROTHERHOOD, petitioner,
vs.
SECRETARY OF LABOR, SECRETARY BIENVENIDO LAGUESMA, FORMEY PLASTIC, INC., KALIPUNAN NG
MANGGAGAWANG PILIPINO (KAMAPI) and MED-ARBITER RASIDALI C. ABDULLAH, respondents.
DECISION
BELLOSILLO, J.:
The rank and file workers of Formey Plastic, Inc. (FORMEY), formed a local union known as Pambansang Kapatiran ng
mga Anak Pawis sa Formey Plastic (KAPATIRAN) under the auspices of the National Workers Brotherhood (NWB).
They ratified their Constitution and By-Laws on 4 April 1993.
On 22 April 1993 KAPATIRAN filed a Petition for Certification Election 1 with the Department of Labor and
Employment Med-Arbiter Division alleging that there was no existing and effective Collective Bargaining Agreement
(CBA) between FORMEY and any union; neither was there any recognized union within the company.
FORMEY moved to dismiss the petition 2 while Kalipunan ng Manggagawang Pilipino (KAMAPI) intervened and
likewise moved to dismiss3 on the ground that there was already a duly registered CBA covering the period 1 January
1992 to 31 December 1996 hence the "contract bar rule" 4 would apply. KAPATIRAN opposed both motions to
dismiss 5 with an Addendum 6 thereto claiming that the CBA executed between FORMEY and KAMAPI was
fraudulently registered with the Department of Labor and Employment and that it was defective since what was
certified as bargaining agent was KAMAPI which, as a federation, only served as mere agent of the local union hence
without any legal personality to sign in behalf of the latter.
Med-Arbiter Rasidali C. Abdullah found that a valid and existing CBA between FORMEY and KAMAPI effectively
barred the filing of the petition for certification election. 7
KAPATIRAN appealed 8 imputing grave abuse of discretion to the Med-Arbiter in applying the "contract bar rule" and
in not adopting the case of Progressive Development Corporation v. Secretary, Department of Labor and
Employment, 9 as authority to disregard the CBA between FORMEY and KAMAPI. The Secretary of Labor acting
through Undersecretary Bienvenido E. Laguesma upheld the decision of the Med-Arbiter. 10 The Motion for
Reconsideration having been denied 11 KAPATIRAN now files this Petition for Certiorari 12 charging the Secretary of
Labor with grave abuse of discretion in applying the "contract bar rule" literally and in ruling that the Progressive
Development Corporation 13 case could not be invoked.
Pending resolution of the petition KAMAPI filed an Urgent Motion to Dismiss 14 the instant petition contending that it
had become moot and academic due to the cancellation of NWB's 15 certificate of registration and its delisting from
the roll of labor federations. 16 KAPATIRAN opposed the motion 17 claiming that the cancellation and delisting were not
yet final and executory considering that it had filed a motion for reconsideration 18 with the Bureau of Labor
Relations.
The rule is that findings of facts of quasi-judicial agencies will not be disturbed unless there is a showing of grave
abuse of discretion. We find none in the case at bench. We therefore affirm that there is a validly executed collective
bargaining agreement between FORMEY and KAMAPI.
Art. 253-A of the Labor Code provides that "(n)o petition questioning the majority status of the incumbent bargaining
agent shall be entertained and no certification election shall be conducted by the Department of Labor and
Employment outside of the sixty (60) day period immediately before the date of expiry of such five-year term of the
collective bargaining agreement." Sec. 3, Rule V, Book V of the Omnibus Rules Implementing the Labor Code provides
that ". . . (i)f a collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a
petition for certification election or a motion for intervention can only be entertained within sixty (60) days prior to
the expiry date of such agreement."
The subject agreement was made effective 1 January 1992 and is yet to expire on 31 December 1996. The petition for
certification election having been filed on 22 April 1993 it is therefore clear that said petition must fail since it was
filed before the so-called 60-day freedom' period. KAPATIRAN insists that the CBA was a fake it having been
surreptitiously registered with the Department of Labor and Employment..
The resolution of this issue hinges on the determination of factual matters which certainly is not within the ambit of
the present petition for certiorari. Besides, the contention is without any legal basis at all; it is purely speculative and
bereft of any documentary support. Petitioner itself even admitted the existence of an agreement but argued that its
provisions were not being implemented nor adhered to at all. Suffice it to mention that the filing of the petition for
certification election is not the panacea to this allegedly anomalous situation. Violations of collective bargaining
agreements constitute unfair labor practice as provided for under Art. 248, par. (i), of the Labor Code. In consonance
thereto, Art. 261 equips petitioner with the proper and appropriate recourse
Art. 261. The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive
jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of
the Collective Bargaining Agreement . . . . Accordingly, violations of a Collective Bargaining Agreement, except
those which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved
under the Collective Bargaining Agreement. For purposes of this article, gross violations of Collective
Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the economic provisions
of such agreement.
The CBA entered into between FORMEY and KAMAPI stipulates among others
Article IX GRIEVANCE PROCEDURE
Sec. 1. Any complaint, grievance, difficulty, disagreement or dispute arising out of any section taken (sic) by
the Company and/or by the Union concerning the interpretation of the terms and conditions of the
agreement and/or which may arise regarding (sic) the terms and conditions of employment shall be settled in
the manner provided for under this Article.
Sec. 2. The Company and the Union agree to create and establish a Grievance Committee composed of two
(2) representatives from the Company and two (2) from the Union to receive complaint, grievance or dispute
from the workers and/or from the Company with the view to settle it amicably.
Sec. 3. In case a complaint or grievance has been filed by either the Union or the Company, the grievance
committee shall discuss the same and have (sic) to settle it. If after the meeting of the grievance committee
no satisfactory settlement is reached the matter shall be referred to the top officers of the Union and the
Company for the settlement of the said grievance or dispute.
Sec. 4. Within five (5) days from the time the top officers of the Union and the Company has (sic) failed to
reach an amicable settlement of the grievance or dispute, the same shall be submitted for voluntary
arbitration. The arbitrator or arbitrators shall be chosen by lottery and the union and the Company shall avail
(sic) the list of arbitrators of the Honorable Bureau of Labor Relations.
Sec. 5. The mutually agreed or chosen arbitrator shall proceed to try and hear the case and for (sic) the
reception of evidence and to call witnesses to testify and after the submission of the case by both parties an
award or order shall be issued in accordance with the rules and guidelines promulgated by the Honorable
Department of Labor and Employment based on the pertinent laws and established jurisprudence. The
expenses of the arbitration proceedings shall be borned (sic) equally by the Company and the Union. 19
By filing the petition for certification election it is clear that KAPATIRAN did not avail of the abovementioned
grievance procedure.
It is further argued that the CBA has no binding force since it was entered into by KAMAPI as a federation and not by
the local union. Perusal of the agreement proves the contention flawed. The signatories for KAMAPI consisted of its
national president and of the duly elected officers of the local union. Thus the fact that KAMAPI was particularly
mentioned as the bargaining party without specifying the local union cannot strip it of its authority to participate in
the bargaining process. The local union maintains its separate personality despite affiliation with a larger national
federation. 20
The doctrine laid down in Progressive Development Corporation 21 is a mere clarification of the principle enunciated
in Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc. 22 Both cases have provided that "the mother union
acting for and in behalf of its affiliate ha(s) 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." Nonetheless, the facts and principles laid down in both cases do not
jibe squarely with the case at bench. The controversy in Progressive Development Corporation 23 centered on the
requirements before a local or chapter of a federation may file a petition for certification election and be certified as
the sole and exclusive bargaining agent, while in Liberty Cotton Mills Workers 24 the issue involved was the
disaffiliation of the local union from the federation. The question of whether there was a valid and existing CBA,
which is the question being resolved in the case at bench, was never raised in the two cited cases since it was already
an accepted fact that the CBA was validly executed and existing.
Anent the Urgent Motion to Dismiss 25 filed by KAMAPI on the ground that the instant petition had become moot and
academic due to the cancellation by the Bureau of Labor Relations of NWB's certificate of registration and its
consequent delisting from the roll of labor federations, suffice it to state that at this juncture we cannot .properly
rule on the issue considering that KAMAPI has not proven that the decision of the Bureau of Labor Relations has
become final and executory taking into account KAPATIRAN's filing of a motion for reconsideration with the Bureau.
This notwithstanding, Sec. 9, Rule II, Book V of the Omnibus Rules Implementing the Labor Code requires that an
appeal be filed with the Bureau, or in case of cancellation by the Bureau, with the Secretary of Labor and
Employment whose decision shall become final and no longer subject of appeal.
WHEREFORE, the petition is DENIED. The decision of the Secretary of Labor and Employment dated 15 August 1993
sustaining the order of the Med-Arbiter dated 31 May 1993 is AFFIRMED.
SO ORDERED.
G.R. No. 91987 July 17, 1995

A' PRIME SECURITY SERVICES, INC., petitioner,
vs.
HON. SECRETARY OF LABOR FRANKLIN DRILON and PHILIPPINE FEDERATION OF LABOR (A' PRIME SECURITY
SERVICES, INC. — U.S. EMBASSY CHAPTER) LOCAL — PFL, respondents.
QUIASON, J.:
This petition for certiorari seeks to set aside the Order dated November 24, 1989 of the Secretary of the Department
of Labor and Employment (DOLE) and the Order dated January 16, 1990 of the Acting Secretary of the DOLE in BLR
Case No. A-12-327-88 (NCR-OD-M-10-557-88).
I
On October 3, 1988, respondent union filed before the Bureau of Labor Relations (BLR) a petition for certification
election (BLR Case No. A-12-327-88) among the security guards employed by petitioner and assigned at the U.S.
Embassy.
Petitioner filed a motion to dismiss, contending: (1) that the security guards assigned to the U.S. Embassy were
ineligible to join a labor organization; (2) that even assuming that they were eligible, the mandatory 20% subscription
requirement was not met since only 77 out of the total 872 security guards under its employ joined the petition; and
(3) that respondent union did not represent the proper bargaining unit.
After respondent union had filed its Opposition to the Motion to Dismiss and petitioner its Reply to the Opposition,
the Med-Arbiter dismissed the petition for certification election in an Order dated November 22, 1988. While
upholding the right of the security guards to join a labor organization, the Med-Arbiter ruled that there was a failure
to comply with the mandatory 20% subscription requirement using the whole employer unit as the proper bargaining
unit.
On appeal to the Bureau of Labor Relations (BLR), respondent union argued that its 150 members assigned to the
U.S. Embassy constituted a bargaining unit separate and distinct from the other security guards employed by
petitioner, because these members have to meet certain educational qualifications and receive higher pay.
Unconvinced, BLR Director Pura Ferrer-Calleja issued an Order dated April 27, 1989 holding that there was no
variance in the nature of work of the members of respondent union and the other security guards employed by
petitioner; hence, there was no reason why they must be allowed to form a separate bargaining unit. Despite such
findings, however, BLR Director Ferrer-Calleja granted the appeal, disposing as follows:
WHEREFORE, premises considered, the Appeal is hereby granted and the Order of the Med-Arbiter dated 22
November 1988 is set aside. Accordingly, a new Order is entered, calling for a certification election among all
the security guards in the respondent company with the following choices:
1. Philippine Federation of Labor (A-1) Prime Security Service, Inc. (US Embassy Chapter)
Local Union-PFL; and
2. No Union.
The latest payroll of the company shall be the basis in determining the list of eligible voters (Rollo, p. 34).
The motion for reconsideration filed by respondent union was denied on June 1, 1989 with the warning that "[n]o
further motion of any nature shall hereafter be entertained"(Rollo, p. 35).
Undaunted, respondent union filed a second Motion for Reconsideration before the Office of the DOLE Secretary. The
supervisors/security guards of petitioner filed a Motion to Intervene.
In his Order dated November 24, 1989, Secretary Franklin M. Drilon found that there are "clear recognizable
economic and occupational differences" between the members of respondent union and the other security guard-
employees of petitioner, so that the former should be "allowed to determine among themselves whether or not to
constitute themselves into a separate and distinct collective bargaining unit" (Rollo, p. 22). To allow the security
guards a wide latitude of choice, the motion of A' Prime Security Services/Supervisors/Security Guard to intervene
was granted, to the exclusion of the supervisors. The dispositive portion of the Order reads:
WHEREFORE, the Orders dated April 27, 1989 and June 1, 1989 are hereby MODIFIED in that the certification
election called for be limited to the security guards of the respondent company assigned to the U.S. Embassy
and constituting themselves into a separate bargaining unit, with the following choices:
1. Philippine Federation of Labor (A-1) Prime Security Services Inc. (US Embassy Chapter)
Local Union — PFL;
2. A' Prime Security Services Supervisors/Security Guards;
3. No Union.
The latest payroll of the company shall be the basis in determining the list of eligible voters (Rollo, p. 24).
Petitioner filed a motion for reconsideration, which was denied for lack of merit in the Order dated January 16, 1990
of Acting Secretary Dionisio De La Serna (Rollo, pp. 25-26).
Hence, this petition which raises the sole issue of:
WHETHER PUBLIC RESPONDENT SECRETARY OF LABOR AND EMPLOYMENT ACTED WITH GRAVE ABUSE OF
DISCRETION WHEN HE RULED:
1. THAT THE PROPER BARGAINING UNIT IS NOT THE ENTIRE EMPLOYER UNIT BUT ONLY
LIMITED TO THOSE SECURITY GUARDS AT THE U.S. EMBASSY AND ITS FACILITIES; AND,
2. THAT SAID OFFICE HAS COMPETENT JURISDICTION TO ENTERTAIN PRIVATE RESPONDENT'S
SECOND MOTION FOR RECONSIDERATION (Rollo, p. 7).
We find the issue of jurisdiction decisive of the instant petition. The settled rule is that jurisdiction is determined by
the statute in force at the time of the commencement of the action (Philippine-Singapore Ports Corporation v.
National Labor Relations Commission, 218 SCRA 77 [1993] citing Municipality of Sogod v. Rosa, 201 SCRA 632 [1991])
and that once acquired, it continues until the case is finally terminated (Pamintuan v. Tigalo, 53 Phil. 1 [1929]; Iburan
v. Labes, 87 Phil. 234 [1950]; Philippine Land-Air-Sea Labor Union (PLASLU), Inc. v. CIR, 93 Phil. 747 [1953]).
When respondent union filed on October 3, 1988 its petition for certification election, the law in force was Article
259 of the Labor Code of the Philippines, which provided that appeals from certification election orders issued by the
Med-Arbiter were to be taken to the BLR. Accordingly, the Order dated November 22, 1988 of the Med-Arbiter
dismissing the petition was appealed by respondent union to the BLR.
Pending determination of said appeal, R.A. No. 6715 was passed on March 2, 1989 and took effect on March 21,
1989. Republic Act No. 6715 amended, among others, Article 259 of the Labor Code of the Philippines to read as
follows:
Appeal from certification election orders. — Any party to an election may appeal the order or results of the
election as determined by the Med-Arbiter directly to the Secretary of Labor and Employment [Bureau] on
the ground that the rules and regulations or parts thereof established by the Secretary of Labor and
Employment for the conduct of the election have been violated. Such appeal shall be decided within fifteen
(15) calendar [working] days.
The transfer of jurisdiction, notwithstanding, and consistent with the rule that jurisdiction once acquired continues
until the case is terminated, the BLR continued to exercise its jurisdiction over the appeal, resolving the same in its
Order of April 27, 1989. Respondent union filed its motion for reconsideration before the Bureau, which denied the
same on June 1, 1989 with the warning that no further motion of any nature was to be entertained.
It is evidently in circumvention of that warning that respondent union filed its second motion for reconsideration
before the DOLE Secretary. For while it continued to recognize the Bureau's jurisdiction over their appeal even after
the effectivity of R.A. No. 6715 by filing a motion for reconsideration, it suddenly had a change of mind and decided
that jurisdiction was then lodged with the DOLE Secretary.
We consider this act of respondent union a trifling with the orderly administration of justice. In lodging its second
motion for reconsideration with an office other than that which rendered the order sought to be reconsidered, it not
only evaded the dire consequences of the warning issued by the BLR Director, but also avoided the final and
unappealable character of the orders of BLR as provided in the Labor Code and its Implementing Rules and
Regulations. In effect, respondent union availed itself of a two-tiered review of the Med-Arbiter's ruling, the first by
BLR and the second by the DOLE Secretary, contrary to the intent of speedy adjudication of cases under the Labor
Code.
Indeed, respondent union's second motion for reconsideration was not only a blatant defiance of the warning issued
by the BLR Director, it likewise constituted an act partaking of the nature of forum-shopping. Having obtained an
unfavorable ruling from BLR, respondent union looked for another forum in the hope of obtaining, as it did obtain, a
favorable ruling. There is forum-shopping whenever, as a result of an adverse opinion in one forum, a party seeks a
favorable opinion (other than by appeal or certiorari) in another. The rule prohibiting forum-shopping applies equally
to multiple petitions in the same tribunal or agency (Silahis International Hotel, Inc. v. National Labor Relations
Commission, 225 SCRA 94 [1993]).
Clearly, the DOLE Secretary had no jurisdiction to entertain the appeals of respondent union from the BLR decision.
Accordingly the questioned Orders of the DOLE Secretary and Acting Secretary should be set aside.
WHEREFORE, the petition is GRANTED. The assailed Order dated November 24, 1989 of the DOLE Secretary and
Order dated January 16, 1990 of the DOLE Acting Secretary are ANNULLED and SET ASIDE. The Order dated April 27,
1989 of the Bureau of Labor Relations is REVIVED and REINSTATED. Costs against private respondent.
SO ORDERED.
G.R. No. 118562 July 5, 1996
ALLIANCE OF NATIONALIST AND GENUINE LABOR ORGANIZATION (ANGLO-KMU), petitioner,
vs.
SAMAHAN NG MGA MANGGAGAWANG NAGKAKAISA SA MANILA BAY SPINNING MILLS AT J.P. COATS (SAMANA
BAY), GILBERT SUNGAYANN, FERNANDO MELARPIS, ET AL), respondents.
RESOLUTION
FRANCISCO, J.:p
Petitioner Alliance of Nationalist and Genuine Labor Organization (ANGLO for brevity) is a duly registered labor
organization while respondent union Samahan Ng Mga Manggagawang Nagkakaisa sa Manila Bay Spinning Mills and
J.P. Coats (SAMANA BAY for brevity) is its affiliate. In representation of SAMANA BAY, ANGLO entered and concluded a
Collective Bargaining Agreement (CBA) with Manila Bay Spinning Mills and J.P. Coats Manila Bay, Inc. (hereinafter
referred to as the corporations) on November 1, 1991. On December 4, 1993, the Executive Committee of SAMANA
BAY decided to disaffiliate from ANGLO in view of the latter's dereliction of its duty to promote and advance the
welfare of SAMANA BAY and the alleged cases of corruption involving the federation officers. Said disaffiliation was
unanimously confirmed by the members of SAMANA BAY.
On April 4, 1994, a petition to stop remittance of federation dues to ANGLO was filed by SAMANA BAY with the
Bureau of Labor Relations on the ground that the corporations, despite having been furnished copies of the union
resolution relating to said disaffiliation, refused to honor the same. ANGLO counter-acted by unseating all officers
and board members of SAMANA BAY and appointing, in their stead, a new set of officers who were duly recognized
by the corporations.
In its position paper, ANGLO contended that the disaffiliation was void considering that a collective bargaining
agreement is still existing and the freedom period has not yet set in. The Med-Arbiter resolved that the disaffiliation
was void but upheld the illegality of the ouster of the officers of SAMANA BAY. Both parties filed their respective
appeals with the Department of Labor and Employment. In a resolution dated September 23, 1994, herein public
respondent modified the order and ruled in favor of respondent union, disposing as follows:
WHEREFORE, the appeal of respondent ANGLO is hereby denied for lack of merit while the appeal of
petitioners is hereby granted. Accordingly, the order of the Med-Arbiter is modified by:
1) declaring the disaffiliation of petitioner union from respondent ANGLO as valid;
2) directing respondent Manila Bay Spinning Mills, Inc. and J.P. Coats to stop remitting to ANGLO
federation dues and instead to remit the whole amount of union dues to the treasurer of petitioner
union; and
3) enjoining ANGLO-KMU from interfering in the affairs of petitioner union.
SO ORDERED.1
ANGLO filed a motion for reconsideration but the same was denied for lack of merit. Hence, this petition
forcertiorari under Rule 65.
The petition calls upon us to resolve two issues, to wit:
1) whether the disaffiliation was valid; and
2) whether petitioner can validly oust individual private respondents from their positions.
We rule for the respondents.
For clarity, we shall first consider the issue respecting the validity of the disaffiliation.
Petitioner ANGLO wants to impress on us that the disaffiliation was invalid for two reasons, namely: that the
procedural requirements for a valid disaffiliation were not followed; and that it was made in violation of P.D
1391.
Anent the first ground, we reiterate the rule that all employees enjoy the right to self-organization and to
form and join labor organizations of their own choosing for the purpose of collective bargaining. This is a
fundamental right of labor and derives its existence from the Constitution. In interpreting the protection to
labor and social justice provisions of the Constitution and the labor laws, rules or regulations, we have always
adopted the liberal approach which favors the exercise of labor rights. 2
This Court is not ready to bend this principle to yield to a mere procedural defect, to wit: failure to observe
certain procedural requirements for a valid disaffiliation. Non-compliance with the procedure on
disaffiliation, being premised on purely technical grounds cannot rise above the fundamental right of self-
organization. 3
We quote, with approval, the findings of herein public respondent, that:
. . . the resolution of the general membership ratifying the disaffiliation action initiated by the Board,
substantially satisfies the procedural requirements for disaffiliation. No doubt was raised on the
support of the majority of the union members on the decision to
disaffiliate. 4
This, to our mind, is clearly supported by the evidence. ANGLO's alleged acts inimical to the interests of
respondent union have not been sufficiently rebutted. It is clear under the facts that respondent union's
members have unanimously decided to disaffiliate from the mother federation and ANGLO has nothing to
offer in dispute other than the law prohibiting the disaffiliation outside the freedom period.
In the same wise, We find no ground for ruling against the validity of the disaffiliation in the light of recent
jurisprudential rules.
Although P.D. 1391 provides:
Item No. 6. No petition for certification election, for intervention and disaffiliation shall be
entertained or given due course except within the 60-day freedom period immediately preceeding
the expiration of a collective bargaining agreement,
said law is definitely not without exceptions. Settled is the rule that a local union has the right to disaffiliate
from its mother union when circumstances warrant. 5 Generally, a labor union may disaffiliate from the
mother union to form a local or independent union only during the 60-day freedom period immediately
preceding the expiration of the CBA. However, even before the onset of the freedom period, disaffiliation
may be carried out when there is a shift of allegiance on the part of the majority of the members of the
union. 6
Coming now to the second issue, ANGLO contends that individual private respondents were validly ousted as
they have ceased to be officers of the incumbent union (ANGLO-KMU) at the time of disaffiliation. In order to
fill the vacuum, it was deemed proper to appoint the individual replacements so as not to put in disarray the
organizational structure and to prevent chaos and confusion among the general membership and within the
company.
The contention is bereft of merit. A local labor union is a separate and distinct unit primarily designed to
secure and maintain an equality of bargaining power between the employer and their employee-members. A
local union does not owe its existence to the federation with which it is affiliated. It is a separate and distinct
voluntary association owing its creation to the will of its members. 7 The mere act of affiliation does not
divest the local union of its own personality, neither does it give the mother federation the license to act
independently of the local union. It only gives rise to a contract of agency 8 where the former acts in
representation of the latter.
By SAMANA BAY's disaffiliation from ANGLO, the vinculum that previously bound the two entities was
completely severed. ANGLO was divested of any and all power to act in representation of SAMANA BAY. Thus,
any act performed by ANGLO affecting the interests and affairs of SAMANA BAY, including the ouster of
herein individual private respondent, is rendered without force and effect.
WHEREFORE, premises considered, the petition is hereby DISMISSED.
G.R. No. 102350 June 30, 1994
TRADE UNIONS OF THE PHILIPPINES AND ALLIED SERVICES WORLD FEDERATION OF TRADE UNIONS (TUPAS-
WFTU), petitioners,
vs.
HON. BIENVENIDO E. LAGUESMA, in his capacity as Undersecretary of Labor & Employment and NATIONAL
FEDERATION OF LABOR UNIONS (NAFLU), respondents.
Alfredo L. Bentulan for petitioners.
Bunao, Cadizquilas & Associates for private respondent.
PUNO, J.:
The records reveal that the rank-and-file employees of the Philippine Development and Industrial Corporation (PDIC),
represented by petitioner Trade Unions of the Philippines and Allied Services (TUPAS), entered into a collective
bargaining agreement with said company. The CBA expired on April 31, 1991.
On March 8, 1991, PDIC received a letter from the president of petitioner’s local chapter union. The company was
informed that the union had resolved to disaffiliate from petitioner and affiliate with private respondent National
Federation of Labor Unions (NAFLU). PDIC entertained reservations about the validity of the disaffiliation. It was not
clear whether the union’s board resolution to disaffiliate was ratified by the majority of its members. Furthermore,
PDIC had received reports that some employees were coerced to support the disaffiliation.
On April 24, 1991, within the 60-day freedom period, PDIC and private respondent NAFLU filed separate petitions for
certification election with the Department of Labor and Employment (DOLE), Regional Office No. 3 in San Fernando,
Pampanga. Both petitions prayed for the holding of a certification election between NAFLU and petitioner TUPAS, to
determine the collective bargaining agent of the rank-and-file employees in PDIC’s plant and quarry. The two
petitions were consolidated and docketed as Case No. R033-9104-RU-006, with petitioner TUPAS as compulsory
intervenor.
On May 14, 1991, petitioner TUPAS filed an Urgent Motion To Refer Case To LACC Fraternal Relations Committee,
citing paragraph 1(b) of the LACC (Labor Advisory Consultative Council) Code of Ethics which provides:
1. Non-Union raiding
xxx xxx xxx
b. Where company is organized.
All organized local affiliates or unions of any LACC member must be discouraged
from disaffiliating from their incumbent labor federations/national union affiliation.
However, LACC recognizes the ultimate authority and right of the local unions to
decide for themselves during the freedom period. In the event that said local unions
intend to disaffiliate from any LACC member and to affiliate with another member,
the latter must inform the former about the intention of their said local union and to
settle the matter by themselves. If not so settled, the matter will be brought to the
attention of the Fraternal Relations Committee of the LACC for final determination or
settlement. 1
Said Code of Ethics was adopted and signed by four base organizations, namely: Kilusang Mayo Uno (KMU), to which
private respondent NAFLU is affiliated; Federation of Free Workers (FFW); Lakas ng Manggagawa Labor Center
(LMLC); and Philippine World Federation of Trade Unions (WFTU) Affiliates, which includes petitioner
TUPAS. 2 Petitioner urged the DOLE to "give its imprimatur and uphold the binding effect of the Code among the
LACC members." 3
Despite the Urgent Motion, Med-Arbiter Antonio R. Cortez, on June 3, 1991, issued an Order with the following
dispositive portion:
ACCORDINGLY, let a certification election be conducted among the regular rank-and-file employees of
the Philippine Development and Industrial Corporation, with the following choices, to wit:
1. National Federation of Labor Unions (NAFLU);
2. Trade Unions of the Philippines Allied Services
(TUPAS); and
3. No Union.
The January 1991 payrolls shall be used as the basis to determine the qualified voters in this election.
A pre-election conference intended to thresh out the mechanics of the aforesaid election will be
called by this Office after ten (10) days from receipt hereof.
SO ORDERED.
The Order was appealed to the Secretary of Labor and Employment, and the case was docketed as OS-MA-A-7-212-
91. On August 15, 1991, the Secretary of Labor and Employment affirmed the Order. Labor Undersecretary Laguesma
held, viz.:
The Code of Ethics being invoked by TUPAS is internal to the Labor Advisory and Consultative Council
(LACC). In other words, it behooves on the signatories to the Code to comply and respect its
provisions. This Office, therefore, can only take cognizance of the Code and recognize its provisions if
the parties thereto fully and mutually respect the same Otherwise, we are left with no other
recourse but to dispose of the instant case on the basis of existing and applicable laws and rules.
It appears that total reliance on the Code of Ethics is misplaced. It must be pointed out that no less
than the aforequoted provision of the Code of Ethics recognizes the "ultimate authority and right of
the local unions to decide for themselves during the freedom period." Necessarily, the Code of Ethics
itself does not sanction any act that would curtail the right of the workers to institute petitions for
certification election during the freedom period, as in the case at bar.
The emphasis given by the Code of Ethics on the right of the local unions to decide for themselves
during the freedom period is in accordance with the provision of the Labor Code which allows
another union to question the majority status of the incumbent bargaining agent within the sixty-day
freedom period. This is embodied in Article 256 of the Labor code, as amended by RA 6715, to wit:
"Art. 256. Representation issue in organized establishments. In organized
establishments, when a verified petition questioning the majority status of the
incumbent bargaining agent is filed before the Department of Labor and
Employment within the sixty-day period before the expiration of a collective
bargaining agreement, the Med-Arbiter shall automatically order an election by
secret ballot when the verified petition is supported by the written consent of at
least twenty-five per cent (25%) of all the employees in the bargaining unit to
ascertain the will of the employees in the appropriate bargaining unit."
It being not disputed that the petition of NAFLU is sufficient in form and in substance, a certification
election is indeed warranted. 4
On October 7, 1991, respondent undersecretary denied petitioner’s motion for reconsideration.
On October 27, 1991, a certification election was conducted among the rank-and-file workers of PDIC at Iba,
Meycauayan, Bulacan. One hundred eighteen (118) of the one hundred thirty-six (136) qualified voters participated
in the elections. Petitioner garnered six (6) votes, while private respondent got one hundred twelve (112). On
November 5, 1991, Med-Arbiter Antonio R. Cortez issued an Order certifying private respondent as the sole and
exclusive bargaining agent of all rank-and-file workers of PDIC. 5
Thus, on November 6, 1991, petitioners filed this original action for Certiorari and Mandamus with Prayer for the
Issuance of Temporary Restraining Order and/or Preliminary Injunction, "seeking to ANNUL the questioned
Resolution dated August 15, 1991, and the Order dated October 7, 1991." 6
On November 18, 1991, we issued a temporary restraining order enjoining respondents from enforcing the impugned
Resolution and Order.
We find no merit in the petition.
Public respondent did not act with grave abuse of discretion amounting to lack or excess of jurisdiction in affirming
the Med-Arbiter’s Order, dated June 3, 1991. The order for the holding of a certification election among the rank-
and-file employees of PDIC finds legal warrant in Art. 256 of the amended Labor Code, as earlier quoted. Under said
provision, the Med-Arbiter shall automatically order a certification election by secret ballot in an organized
establishment such as PDIC, provided the following requisites are met: (1) that a petition questioning the majority
status of the incumbent bargaining agent is filed before the DOLE within the sixty-day freedom period; (2) that such
petition is verified; and (3) that the petition is supported by the written consent of at least twenty-five (25%) per cent
of all employees in the bargaining unit. It is undisputed that all these requirements were met by private respondent
NAFLU in its petition before the DOLE Regional Office No. 3, in San Fernando, Pampanga. Thus, Med-Arbiter Cortez,
acting in accordance with Art. 256 of the Labor Code, as amended, had no recourse but toautomatically order the
holding of a certification election at PDIC.
It bears stressing that no obstacle must be placed to the holding of certification elections, 7 for it is a statutory policy
that should not be circumvented. 8 We have held that whenever there is doubt as to whether a particular union
represents the majority of the rank-and-file employees, in the absence of a legal impediment, the holding of a
certification election is the most democratic method of determining the employees’ choice of their bargaining
representative. It is the appropriate means whereby controversies and disputes on representation may be laid to
rest, by the unequivocal vote of the employees themselves. 9 Indeed, it is the keystone of industrial democracy.
Art. 256 of the Labor Code cannot be supplanted by the Code of Ethics of the LACC. Said Code cannot amend or
repeal a law. And, as correctly observed by the Office of the Solicitor General, it merely provides for a voluntary
mechanism to settle intra-union disputes. It only applies when both parties to the dispute seek the mediation of said
Committee. However, when one of the parties decides to avail of the remedy provided for under Art. 256 of our
Labor Code and files the proper petition with the DOLE, jurisdiction over the dispute is exclusively acquired by and
cannot be wrenched away from the Med-Arbiter. It is familiar learning that jurisdiction is vested by law, and not by
agreement between or among the parties. Moreover, labor disputes involve public interest, and hence any private
agreement on their settlement cannot prevail over what is provided for by our laws.
The court also recognizes the fact that the certification election sought to be stopped by petitioner is now fait
accompli, and the rank-and-file employees of PDIC have articulated their choice as to who shall be their collective
bargaining agent in no uncertain terms. In the certification election legally held before we issued our temporary
restraining order in the case, the PDIC workers voted, 112 to 6 (with 18 qualified voters not participating in the
election), to make private respondent their sole and exclusive bargaining agent. This democratic decision deserves
utmost respect, especially since it was not attended by any legal infirmity. Again, it bears stressing that labor
legislation seeks in the main to protect the interest of the members of the working class. It should never be used to
subvert their will.
IN VIEW WHEREOF, the petition is DISMISSED for lack of merit. The Resolution dated August 15, 1991, and the Order
dated October 7, 1991 of respondent Department of Labor and Employment Undersecretary Bienvenido E. Laguesma
in OS-MA-A-7-212-91 is hereby AFFIRMED IN TOTO.
SO ORDERED.
G.R. No. 100485 September 21, 1994
SAN MIGUEL CORPORATION, petitioner,
vs.
THE HONORABLE BIENVENIDO E. LAGUESMA and NORTH LUZON MAGNOLIA SALES LABOR UNION-
INDEPENDENT, respondents.
Siguion Reyna, Montecillo & Ongsiako for petitioner.
E.N.A. Cruz & Associates for private respondent.
PUNO, J.:
Petitioner San Miguel Corporation (SMC) prays that the Resolution dated March 19, 1991 and the Order dated April
12, 1991 of public respondent Undersecretary Bienvenido E. Laguesma declaring respondent union as the sole and
exclusive bargaining agent of all the Magnolia sales personnel in northern Luzon be set aside for having been issued
in excess of jurisdiction and/or with grave abuse of discretion.
On June 4, 1990, the North Luzon Magnolia Sales Labor Union (respondent union for brevity) filed with the
Department of Labor a petition for certification election among all the regular sales personnel of Magnolia Dairy
Products in the North Luzon Sales Area. 1
Petitioner opposed the petition and questioned the appropriateness of the bargaining unit sought to be represented
by respondent union. It claimed that its bargaining history in its sales offices, plants and warehouses is to have
a separate bargaining unit for each sales office.
The petition was heard on November 9, 1990 with petitioner
being represented by Atty. Alvin C. Batalla of the Siguion Reyna law office. Atty. Batalla withdrew petitioner's
opposition to a certification election and agreed to consider all the sales offices in northern Luzon as one bargaining
unit. At the pre-election conference, the parties agreed inter alia, on the date, time and place of the consent
election. Respondent union won the election held on November 24, 1990. In an Order dated December 3,
1990, 2 Mediator-Arbiter Benalfre J. Galang certified respondent union as the sole and exclusive bargaining agent for
all the regular sales personnel in all the sales offices of Magnolia Dairy Products in the North Luzon Sales Area.
Petitioner appealed to the Secretary of Labor. It claimed that
Atty. Batalla was only authorized to agree to the holding of certification elections subject to the following conditions:
(1) there would only be one general election; (2) in this general election, the individual sales offices shall still
comprise separate bargaining units. 3
In a Resolution dated March 19, 1991, 4 public respondent, by authority of the Secretary of Labor, denied SMC's
appeal and affirmed the Order of the Med- Arbiter.
Hence this petition for certiorari.
Petitioner claims that:
THE HONORABLE UNDERSECRETARY LAGUESMA ACTED WITH GRAVE ABUSE OF DISCRETION WHEN
HE IGNORED AND TOTALLY DISREGARDED PETITIONER'S VALID AND JUSTIFIABLE GROUNDS WHY THE
ERROR MADE IN GOOD FAITH BY PETITIONER'S COUNSEL BE CORRECTED, AND INSTEAD RULED:
A
THAT PRIVATE RESPONDENT IS "THE SOLE AND EXCLUSIVE BARGAINING AGENT FOR
ALL THE REGULAR SALES OFFICES OF MAGNOLIA DAIRY PRODUCTS, NORTH LUZON
SALES AREA", COMPLETELY IGNORING THE ESTABLISHED BARGAINING HISTORY OF
PETITIONER SMC.
B
THAT PETITIONER IS ESTOPPED FROM QUESTIONING THE "AGREEMENT" ENTERED
INTO AT THE HEARING ON
9 NOVEMBER 1990, IN CONTRAVENTION OF THE ESTABLISHED FACTS OF THE CASE
AND THE APPLICABLE LAW ON THE MATTER.
We find no merit in the petition.
The issues for resolution are: (1) whether or not respondent union represents an appropriate bargaining unit, and (2)
whether or not petitioner is bound by its lawyer's act of agreeing to consider the sales personnel in the north Luzon
sales area as one bargaining unit.
Petitioner claims that in issuing the impugned Orders, public respondent disregarded its collective bargaining history
which is to have a separate bargaining unit for each sales office. It insists that its prior collective bargaining history is
the most persuasive criterion in determining the appropriateness of the collective bargaining unit.
There is no merit in the contention.
A bargaining unit is a "group of employees of a given employer, comprised of all or less than all of the entire body of
employees, consistent with equity to the employer, indicate to be the best suited to serve the reciprocal rights and
duties of the parties under the collective bargaining provisions of the law." 5
The fundamental factors in determining the appropriate collective bargaining unit are: (1) the will of the employees
(Globe Doctrine); 6 (2) affinity and unity of the employees' interest, such as substantial similarity of work and duties,
or similarity of compensation and working conditions (Substantial Mutual Interests Rule); (3) prior collective
bargaining history; and (4) similarity of employment status. 7
Contrary to petitioner's assertion, this Court has categorically ruled that the existence of a prior collective bargaining
history is neither decisive nor conclusive in the determination of what constitutes an appropriate bargaining unit. 8
Indeed, the test of grouping is mutuality or commonality of interests. The employees sought to be represented by the
collective bargaining agent must have substantial mutual interests in terms of employment and working conditions as
evinced by the type of work they perform.
In the case at bench, respondent union sought to represent the sales personnel in the various Magnolia sales offices
in northern Luzon. There is similarity of employment status for only the regular sales personnel in the north Luzon
area are covered. They have the same duties and responsibilities and substantially similar compensation and working
conditions. The commonality of interest among he sales personnel in the north Luzon sales area cannot be gainsaid.
In fact, in the certification election held on November 24, 1990, the employees concerned accepted respondent
union as their exclusive bargaining agent. Clearly, they have expressed their desire to be one.
Petitioner cannot insist that each of the sales office of Magnolia should constitute only one bargaining unit. What
greatly militates against this position is the meager number of sales personnel in each of the Magnolia sales office in
northern Luzon. Even the bargaining unit sought to be represented by respondent union in the entire north Luzon
sales area consists only of approximately
fifty-five (55) employees. 9 Surely, it would not be for the best interest of these employees if they would further be
fractionalized. The adage "there is strength in number" is the very rationale underlying the formation of a labor
union.
Anent the second issue, petitioner claims that Atty. Batalla was merely a substitute lawyer for Atty. Christine Ona,
who got stranded in Legaspi City. Atty. Batalla was allegedly unfamiliar with the collective bargaining history of its
establishment. Petitioner claims it should not be bound by the mistake committed by its substitute lawyer.
We are not persuaded. As discussed earlier, the collective bargaining history of a company is not decisive of what
should comprise the collective bargaining unit. Insofar as the alleged "mistake" of the substitute lawyer is concerned,
we find that this mistake was the direct result of the negligence of petitioner's lawyers. It will be noted that Atty. Ona
was under the supervision of two (2) other lawyers, Attys. Jacinto de la Rosa, Jr. and George C. Nograles. There is
nothing in the records to show that these two (2) counsels were likewise unavailable at that time. Instead of
deferring the hearing, petitioner's counsels chose to proceed therewith. Indeed, prudence dictates that, in such case,
the lawyers allegedly actively involved in SMC's labor case should have adequately and sufficiently briefed the
substitute lawyer with respect to the matters involved in the case and the specific limits of his authority.
Unfortunately, this was not done in this case. The negligence of its lawyers binds petitioner. As held by this Court in
the case of Villa Rhecar Bus v. De la Cruz: 10
. . . As a general rule, a client is bound by the mistakes of his counsel. Only when the application of
the general rule would result in serious injustice should an exception thereto be called for.
In the case at bench, petitioner insists that each of the sales offices in northern Luzon should be considered as a
separate bargaining unit for negotiations would be more expeditious. Petitioner obviously chooses to follow the path
of least resistance. It is not, however, the convenience of the employer that constitutes the determinative factor in
forming an appropriate bargaining unit. Equally, if not more important, is the interest of the employees. In choosing
and crafting an appropriate bargaining unit, extreme care should be taken to prevent an employer from having any
undue advantage over the employees' bargaining representative. Our workers are weak enough and it is not our
social policy to further debilitate their bargaining representative.
In sum, we find that no arbitrariness or grave abuse of discretion can be attributed to public respondents certification
of respondent union as the sole and exclusive bargaining agent of all the regular Magnolia sales personnel of the
north Luzon sales area.
WHEREFORE, premises considered, the challenged Resolution and Order of public respondent are hereby
AFFIRMED in toto, there being no showing of grave abuse of discretion or lack of jurisdiction.
SO ORDERED.
G.R. No. 85985 August 13, 1993

PHILIPPINE AIRLINES, INC. (PAL), petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER ISABEL P. ORTIGUERRA and PHILIPPINE AIRLINES
EMPLOYEES ASSOCIATION (PALEA), respondents.
Solon Garcia for petitioner.
Adolpho M. Guerzon for respondent PALEA.
MELO, J.:
In the instant petition for certiorari, the Court is presented the issue of whether or not the formulation of a Code of
Discipline among employees is a shared responsibility of the employer and the employees.
On March 15, 1985, the Philippine Airlines, Inc. (PAL) completely revised its 1966 Code of Discipline. The Code was
circulated among the employees and was immediately implemented, and some employees were forthwith subjected
to the disciplinary measures embodied therein.
Thus, on August 20, 1985, the Philippine Airlines Employees Association (PALEA) filed a complaint before the National
Labor Relations Commission (NLRC) for unfair labor practice (Case No. NCR-7-2051-85) with the following remarks:
"ULP with arbitrary implementation of PAL's Code of Discipline without notice and prior discussion with Union by
Management" (Rollo, p. 41). In its position paper, PALEA contended that PAL, by its unilateral implementation of the
Code, was guilty of unfair labor practice, specifically Paragraphs E and G of Article 249 and Article 253 of the Labor
Code. PALEA alleged that copies of the Code had been circulated in limited numbers; that being penal in nature the
Code must conform with the requirements of sufficient publication, and that the Code was arbitrary, oppressive, and
prejudicial to the rights of the employees. It prayed that implementation of the Code be held in abeyance; that PAL
should discuss the substance of the Code with PALEA; that employees dismissed under the Code be reinstated and
their cases subjected to further hearing; and that PAL be declared guilty of unfair labor practice and be ordered to
pay damages (pp. 7-14, Record.)
PAL filed a motion to dismiss the complaint, asserting its prerogative as an employer to prescibe rules and regulations
regarding employess' conduct in carrying out their duties and functions, and alleging that by implementing the Code,
it had not violated the collective bargaining agreement (CBA) or any provision of the Labor Code. Assailing the
complaint as unsupported by evidence, PAL maintained that Article 253 of the Labor Code cited by PALEA reffered to
the requirements for negotiating a CBA which was inapplicable as indeed the current CBA had been negotiated.
In its reply to PAL's position paper, PALEA maintained that Article 249 (E) of the Labor Code was violated when PAL
unilaterally implemented the Code, and cited provisions of Articles IV and I of Chapter II of the Code as defective for,
respectively, running counter to the construction of penal laws and making punishable any offense within PAL's
contemplation. These provisions are the following:
Sec. 2. Non-exclusivity. — This Code does not contain the entirety of the rules and regulations of the
company. Every employee is bound to comply with all applicable rules, regulations, policies,
procedures and standards, including standards of quality, productivity and behaviour, as issued and
promulgated by the company through its duly authorized officials. Any violations thereof shall be
punishable with a penalty to be determined by the gravity and/or frequency of the offense.
Sec. 7. Cumulative Record. — An employee's record of offenses shall be cumulative. The penalty for
an offense shall be determined on the basis of his past record of offenses of any nature or the
absence thereof. The more habitual an offender has been, the greater shall be the penalty for the
latest offense. Thus, an employee may be dismissed if the number of his past offenses warrants such
penalty in the judgment of management even if each offense considered separately may not warrant
dismissal. Habitual offenders or recidivists have no place in PAL. On the other hand, due regard shall
be given to the length of time between commission of individual offenses to determine whether the
employee's conduct may indicate occasional lapses (which may nevertheless require sterner
disciplinary action) or a pattern of incorrigibility.
Labor Arbiter Isabel P. Ortiguerra handling the case called the parties to a conference but they failed to appear at the
scheduled date. Interpreting such failure as a waiver of the parties' right to present evidence, the labor arbiter
considered the case submitted for decision. On November 7, 1986, a decision was rendered finding no bad faith on
the part of PAL in adopting the Code and ruling that no unfair labor practice had been committed. However, the
arbiter held that PAL was "not totally fault free" considering that while the issuance of rules and regulations
governing the conduct of employees is a "legitimate management prerogative" such rules and regulations must meet
the test of "reasonableness, propriety and fairness." She found Section 1 of the Code aforequoted as "an all
embracing and all encompassing provision that makes punishable any offense one can think of in the company";
while Section 7, likewise quoted above, is "objectionable for it violates the rule against double jeopardy thereby
ushering in two or more punishment for the same misdemeanor." (pp. 38-39, Rollo.)
The labor arbiter also found that PAL "failed to prove that the new Code was amply circulated." Noting that PAL's
assertion that it had furnished all its employees copies of the Code is unsupported by documentary evidence, she
stated that such "failure" on the part of PAL resulted in the imposition of penalties on employees who thought all the
while that the 1966 Code was still being followed. Thus, the arbiter concluded that "(t)he phrase ignorance of the law
excuses no one from compliance . . . finds application only after it has been conclusively shown that the law was
circulated to all the parties concerned and efforts to disseminate information regarding the new law have been
exerted. (p. 39, Rollo.) She thereupon disposed:
WHEREFORE, premises considered, respondent PAL is hereby ordered as follows:
1. Furnish all employees with the new Code of Discipline;
2. Reconsider the cases of employees meted with penalties under the New Code of Discipline and
remand the same for further hearing; and
3. Discuss with PALEA the objectionable provisions specifically tackled in the body of the decision.
All other claims of the complainant union (is) [are] hereby, dismissed for lack of merit.
SO ORDERED. (p. 40, Rollo.)
PAL appealed to the NLRC. On August 19, 1988, the NLRC through Commissioner Encarnacion, with Presiding
Commissioner Bonto-Perez and Commissioner Maglaya concurring, found no evidence of unfair labor practice
committed by PAL and affirmed the dismissal of PALEA's charge. Nonetheless, the NLRC made the following
observations:
Indeed, failure of management to discuss the provisions of a contemplated code of discipline which
shall govern the conduct of its employees would result in the erosion and deterioration of an
otherwise harmonious and smooth relationship between them as did happen in the instant case.
There is no dispute that adoption of rules of conduct or discipline is a prerogative of management
and is imperative and essential if an industry, has to survive in a competitive world. But labor climate
has progressed, too. In the Philippine scene, at no time in our contemporary history is the need for a
cooperative, supportive and smooth relationship between labor and management more keenly felt if
we are to survive economically. Management can no longer exclude labor in the deliberation and
adoption of rules and regulations that will affect them.
The complainant union in this case has the right to feel isolated in the adoption of the New Code of
Discipline. The Code of Discipline involves security of tenure and loss of employment — a property
right! It is time that management realizes that to attain effectiveness in its conduct rules, there
should be candidness and openness by Management and participation by the union, representing its
members. In fact, our Constitution has recognized the principle of "shared responsibility" between
employers and workers and has likewise recognized the right of workers to participate in "policy and
decision-making process affecting their rights . . ." The latter provision was interpreted by the
Constitutional Commissioners to mean participation in "management"' (Record of the Constitutional
Commission, Vol. II).
In a sense, participation by the union in the adoption of the code if conduct could have accelerated
and enhanced their feelings of belonging and would have resulted in cooperation rather than
resistance to the Code. In fact, labor-management cooperation is now "the thing." (pp. 3-4, NLRC
Decision ff. p. 149, Original Record.)
Respondent Commission thereupon disposed:
WHEREFORE, premises considered, we modify the appealed decision in the sense that the New Code
of Discipline should be reviewed and discussed with complainant union, particularly the disputed
provisions [.] (T)hereafter, respondent is directed to furnish each employee with a copy of the
appealed Code of Discipline. The pending cases adverted to in the appealed decision if still in the
arbitral level, should be reconsidered by the respondent Philippine Air Lines. Other dispositions of
the Labor Arbiter are sustained.
SO ORDERED. (p. 5, NLRC Decision.)
PAL then filed the instant petition for certiorari charging public respondents with grave abuse of discretion in: (a)
directing PAL "to share its management prerogative of formulating a Code of Discipline"; (b) engaging in quasi-judicial
legislation in ordering PAL to share said prerogative with the union; (c) deciding beyond the issue of unfair labor
practice, and (d) requiring PAL to reconsider pending cases still in the arbitral level (p. 7, Petition; p. 8,Rollo.)
As stated above, the Principal issue submitted for resolution in the instant petition is whether management may be
compelled to share with the union or its employees its prerogative of formulating a code of discipline.
PAL asserts that when it revised its Code on March 15, 1985, there was no law which mandated the sharing of
responsibility therefor between employer and employee.
Indeed, it was only on March 2, 1989, with the approval of Republic Act No. 6715, amending Article 211 of the Labor
Code, that the law explicitly considered it a State policy "(t)o ensure the participation of workers in decision and
policy-making processes affecting the rights, duties and welfare." However, even in the absence of said clear
provision of law, the exercise of management prerogatives was never considered boundless. Thus, in Cruz vs.
Medina (177 SCRA 565 [1989]) it was held that management's prerogatives must be without abuse of discretion.
In San Miguel Brewery Sales Force Union (PTGWO) vs. Ople (170 SCRA 25 [1989]), we upheld the company's right to
implement a new system of distributing its products, but gave the following caveat:
So long as a company's management prerogatives are exercised in good faith for the advancement of
the employer's interest and not for the purpose of defeating or circumventing the rights of the
employees under special laws or under valid agreements, this Court will uphold them.
(at p. 28.)
All this points to the conclusion that the exercise of managerial prerogatives is not unlimited. It is circumscribed by
limitations found in law, a collective bargaining agreement, or the general principles of fair play and justice
(University of Sto. Tomas vs. NLRC, 190 SCRA 758 [1990]). Moreover, as enunciated in Abbott Laboratories (Phil.), vs.
NLRC (154 713 [1987]), it must be duly established that the prerogative being invoked is clearly a managerial one.
A close scrutiny of the objectionable provisions of the Code reveals that they are not purely business-oriented nor do
they concern the management aspect of the business of the company as in the San Miguel case. The provisions of
the Code clearly have repercusions on the employee's right to security of tenure. The implementation of the
provisions may result in the deprivation of an employee's means of livelihood which, as correctly pointed out by the
NLRC, is a property right (Callanta, vs Carnation Philippines, Inc., 145 SCRA 268 [1986]). In view of these aspects of
the case which border on infringement of constitutional rights, we must uphold the constitutional requirements for
the protection of labor and the promotion of social justice, for these factors, according to Justice Isagani Cruz, tilt
"the scales of justice when there is doubt, in favor of the worker" (Employees Association of the Philippine American
Life Insurance Company vs. NLRC, 199 SCRA 628 [1991] 635).
Verily, a line must be drawn between management prerogatives regarding business operations per se and those
which affect the rights of the employees. In treating the latter, management should see to it that its employees are at
least properly informed of its decisions or modes action. PAL asserts that all its employees have been furnished
copies of the Code. Public respondents found to the contrary, which finding, to say the least is entitled to great
respect.
PAL posits the view that by signing the 1989-1991 collective bargaining agreement, on June 27, 1990, PALEA in effect,
recognized PAL's "exclusive right to make and enforce company rules and regulations to carry out the functions of
management without having to discuss the same with PALEA and much less, obtain the latter'sconformity thereto"
(pp. 11-12, Petitioner's Memorandum; pp 180-181, Rollo.) Petitioner's view is based on the following provision of the
agreement:
The Association recognizes the right of the Company to determine matters of management it policy
and Company operations and to direct its manpower. Management of the Company includes the
right to organize, plan, direct and control operations, to hire, assign employees to work, transfer
employees from one department, to another, to promote, demote, discipline, suspend or discharge
employees for just cause; to lay-off employees for valid and legal causes, to introduce new or
improved methods or facilities or to change existing methods or facilities and the right to make and
enforce Company rules and regulations to carry out the functions of management.
The exercise by management of its prerogative shall be done in a just reasonable, humane and/or
lawful manner.
Such provision in the collective bargaining agreement may not be interpreted as cession of employees' rights to
participate in the deliberation of matters which may affect their rights and the formulation of policies relative
thereto. And one such mater is the formulation of a code of discipline.
Indeed, industrial peace cannot be achieved if the employees are denied their just participation in the discussion of
matters affecting their rights. Thus, even before Article 211 of the labor Code (P.D. 442) was amended by Republic Act
No. 6715, it was already declared a policy of the State, "(d) To promote the enlightenment of workers concerning
their rights and obligations . . . as employees." This was, of course, amplified by Republic Act No 6715 when it
decreed the "participation of workers in decision and policy making processes affecting their rights, duties and
welfare." PAL's position that it cannot be saddled with the "obligation" of sharing management prerogatives as
during the formulation of the Code, Republic Act No. 6715 had not yet been enacted (Petitioner's Memorandum, p.
44; Rollo, p. 212), cannot thus be sustained. While such "obligation" was not yet founded in law when the Code was
formulated, the attainment of a harmonious labor-management relationship and the then already existing state
policy of enlightening workers concerning their rights as employees demand no less than the observance of
transparency in managerial moves affecting employees' rights.
Petitioner's assertion that it needed the implementation of a new Code of Discipline considering the nature of its
business cannot be overemphasized. In fact, its being a local monopoly in the business demands the most stringent
of measures to attain safe travel for its patrons. Nonetheless, whatever disciplinary measures are adopted cannot be
properly implemented in the absence of full cooperation of the employees. Such cooperation cannot be attained if
the employees are restive on account, of their being left out in the determination of cardinal and fundamental
matters affecting their employment.
WHEREFORE, the petition is DISMISSED and the questioned decision AFFIRMED. No special pronouncement is made
as to costs.
SO ORDERED.
G.R. No. 96189 July 14, 1992

UNIVERSITY OF THE PHILIPPINES, petitioner,
vs.
HON. PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, Department of Labor and Employment,
and THE ALL U.P. WORKERS' UNION, represented by its President, Rosario del Rosario,respondent.
NARVASA, C.J.:
In this special civil action of certiorari the University of the Philippines seeks the nullification of the Order dated
October 30, 1990 of Director Pura Ferrer-Calleja of the Bureau of Labor Relations holding that "professors, associate
professors and assistant professors (of the University of the Philippines) are . . rank-and-file employees . . ;"
consequently, they should, together with the so-called non-academic, non-teaching, and all other employees of the
University, be represented by only one labor organization. 1 The University is joined in this undertaking by the
Solicitor General who "has taken a position not contrary to that of petitioner and, in fact, has manifested . . that he is
not opposing the petition . . ." 2
The case 3 was initiated in the Bureau of Labor Relations by a petition filed on March 2, 1990 by a registered labor
union, the "Organization of Non-Academic Personnel of UP" (ONAPUP). 4 Claiming to have a membership of 3,236
members — comprising more than 33% of the 9,617 persons constituting the non-academic personnel of UP-
Diliman, Los Baños, Manila, and Visayas, it sought the holding of a certification election among all said non-academic
employees of the University of the Philippines. At a conference thereafter held on March 22, 1990 in the Bureau, the
University stated that it had no objection to the election.
On April 18, 1990, another registered labor union, the "All UP Workers' Union," 5 filed a comment, as intervenor in
the certification election proceeding. Alleging that its membership covers both academic and non-academic
personnel, and that it aims to unite all UP rank-and-file employees in one union, it declared its assent to the holding
of the election provided the appropriate organizational unit was first clearly defined. It observed in this connection
that the Research, Extension and Professional Staff (REPS), who are academic non-teaching personnel, should not be
deemed part of the organizational unit.
For its part, the University, through its General Counsel, 6 made of record its view that there should be two (2)
unions: one for academic, the other for non-academic or administrative, personnel considering the dichotomy of
interests, conditions and rules governing these employee groups.
Director Calleja ruled on the matter on August 7, 1990. 7 She declared that "the appropriate organizational unit . .
should embrace all the regular rank-and-file employees, teaching and non-teaching, of the University of the
Philippines, including all its branches" and that there was no sufficient evidence "to justify the grouping of the non-
academic or administrative personnel into an organization unit apart and distinct from that of the academic or
teaching personnel." Director Calleja adverted to Section 9 of Executive Order No. 180, viz.:
Sec. 9. The appropriate organizational unit shall be the employer unit consisting of rank-and-file
employees, unless circumstances otherwise require.
and Section 1, Rule IV of the Rules Implementing said EO 180 (as amended by SEC. 2, Resolution of Public
Sector Labor Management Council dated May 14, 1989, viz.:
xxx xxx xxx
For purposes of registration, an appropriate organizational unit may refer to:
xxx xxx xxx
d. State universities or colleges, government-owned or controlled corporations with original charters.
She went on to say that the general intent of EO 180 was "not to fragmentize the employer unit, as "can be
gleaned from the definition of the term "accredited employees' organization," which refers to:
. . a registered organization of the rank-and-file employees as defined in these rules recognized to
negotiate for the employees in an organizational unit headed by an officer with sufficient authority to
bind the agency, such as . . . . . . state colleges and universities.
The Director thus commanded that a certification election be "conducted among rank-and-file employees, teaching
and non-teaching" in all four autonomous campuses of the UP, and that management appear and bring copies of the
corresponding payrolls for January, June, and July, 1990 at the "usual pre-election conference . . ."
At the pre-election conference held on March 22, 1990 at the Labor Organizational Division of the DOLE, 8 the
University sought further clarification of the coverage of the term, "rank-and-file" personnel, asserting that not every
employee could properly be embraced within both teaching and non-teaching categories since there are those
whose positions are in truth managerial and policy-determining, and hence, excluded by law.
At a subsequent hearing (on October 4, 1990), the University filed a Manifestation seeking the exclusion from the
organizational unit of those employees holding supervisory positions among non-academic personnel, and those in
teaching staff with the rank of Assistant Professor or higher, submitting the following as grounds therefor:
1) Certain "high-level employees" with policy-making, managerial, or confidential functions, are ineligible to join
rank-and-file employee organizations under Section 3, EO 180:
Sec. 3. High-level employees whose functions are normally considered as policy-making or
managerial or whose duties are of a highly confidential nature shall not be eligible to join the
organization of rank-and file government employees;
2) In the University hierarchy, not all teaching and non-teaching personnel belong the rank-and file: just as there are
those occupying managerial positions within the non-teaching roster, there is also a dichotomy between various
levels of the teaching or academic staff;
3) Among the non-teaching employees composed of Administrative Staff and Research personnel, only those holding
positions below Grade 18 should be regarded as rank-and-file, considering that those holding higher grade positions,
like Chiefs of Sections, perform supervisory functions including that of effectively recommending termination of
appointments or initiating appointments and promotions; and
4) Not all teaching personnel may be deemed included in the term, "rank-and-file;" only those holding appointments
at the instructor level may be so considered, because those holding appointments from Assistant Professor to
Associate Professor to full Professor take part, as members of the University Council, a policy-making body, in the
initiation of policies and rules with respect to faculty tenure and promotion. 9
The ONAPUP quite categorically made of record its position; that it was not opposing the University's proferred
classification of rank-and file employees. On the other hand, the "All UP Workers' Union" opposed the University's
view, in a Position Paper presented by it under date of October 18, 1990.
Director Calleja subsequently promulgated an Order dated October 30, 1990, resolving the "sole issue" of "whether
or not professors, associate professors and assistant professors are included in the definition of high-level
employee(s)" in light of Rule I, Section (1) of the Implementing Guidelines of Executive Order No. 180, defining "high
level employee" as follows:
1. High Level Employee — is one whose functions are normally considered policy determining,
managerial or one whose duties are highly confidential in nature. A managerial function refers to the
exercise of powers such as:
1. To effectively recommend such managerial actions;
2. To formulate or execute management policies and decisions; or
3. To hire, transfer, suspend, lay-off, recall, dismiss, assign or discipline employees.
The Director adjudged that said teachers are rank-and-file employees "qualified to join unions and vote in
certification elections." According to her —
A careful perusal of the University Code . . shows that the policy-making powers of the Council are
limited to academic matters, namely, prescribing courses of study and rules of discipline, fixing
student admission and graduation requirements, recommending to the Board of Regents the
conferment of degrees, and disciplinary power over students. The policy-determining functions
contemplated in the definition of a high-level employee pertain to managerial, executive, or
organization policies, such as hiring, firing, and disciplining of employees, salaries, teaching/working
hours, other monetary and non-monetary benefits, and other terms and conditions of employment.
They are the usual issues in collective bargaining negotiations so that whoever wields these powers
would be placed in a situation of conflicting interests if he were allowed to join the union of rank-
and-file employees.
The University seasonably moved for reconsideration, seeking to make the following points, to wit:
1) UP professors do "wield the most potent managerial powers: the power to rule on tenure, on the creation of new
programs and new jobs, and conversely, the abolition of old programs and the attendant re-assignment of
employees.
2) To say that the Council is "limited to (acting on) academic matters" is error, since academic decisions "are the most
important decisions made in a University . . (being, as it were) the heart, the core of the University as a workplace.
3) Considering that the law regards as a "high level" employee, one who performs either policy-determining,
managerial, or confidential functions, the Director erred in applying only the "managerial functions" test, ignoring
the "policy-determining functions" test.
4) The Director's interpretation of the law would lead to absurd results, e.g.: "an administrative officer of the College
of Law is a high level employee, while a full Professor who has published several treatises and who has distinguished
himself in argument before the Supreme Court is a mere rank-and-file employee. A dormitory manager is classified as
a high level employee, while a full Professor or Political Science with a Ph. D. and several Honorary doctorates is
classified as rank-and-file." 10
The motion for reconsideration was denied by Director Calleja, by Order dated November 20, 1990.
The University would now have this Court declare void the Director's Order of October 30, 1990 as well as that of
November 20, 1990. 11 A temporary restraining order was issued by the Court, by Resolution dated December 5, 1990
conformably to the University's application therefor.
Two issues arise from these undisputed facts. One is whether or not professors, associate professors and assistant
professors are "high-level employees" "whose functions are normally considered policy determining, managerial or . .
highly confidential in nature." The other is whether or not, they, and other employees performing academic
functions, 12 should comprise a collective bargaining unit distinct and different from that consisting of the non-
academic employees of the University, 13 considering the dichotomy of interests, conditions and rules existing
between them.
As regards the first issue, the Court is satisfied that it has been correctly resolved by the respondent Director of
Bureau Relations. In light of Executive Order No. 180 and its implementing rules, as well as the University's charter
and relevant regulations, the professors, associate professors and assistant professors (hereafter simply referred to as
professors) cannot be considered as exercising such managerial or highly confidential functions as would justify their
being categorized as "high-level employees" of the institution.
The Academic Personnel Committees, through which the professors supposedly exercise managerial functions, were
constituted "in order to foster greater involvement of the faculty and other academic personnel in appointments,
promotions, and other personnel matters that directly affect them." 14 Academic Personnel Committees at the
departmental and college levels were organized "consistent with, and demonstrative of the very idea of consulting
the faculty and other academic personnel on matters directly affecting them" and to allow "flexibility in the
determination of guidelines peculiar to a particular department or college." 15
Personnel actions affecting the faculty and other academic personnel should, however, "be considered under uniform
guidelines and consistent with the Resolution of the Board (of Regents) adopted during its 789th Meeting (11-26-69)
creating the University Academic Personnel Board." 16 Thus, the Departmental Academic Personnel Committee is
given the function of "assist(ing) in the review of the recommendations initiated by the Department Chairman with
regard to recruitment, selection, performance evaluation, tenure and staff development, in accordance with the
general guidelines formulated by the University Academic Personnel Board and the implementing details laid down
by the College Academic Personnel Committee;" 17 while the College Academic Personnel Committee is entrusted
with the following functions: 18
1. Assist the Dean in setting up the details for the implementation of policies, rules, standards or
general guidelines as formulated by the University Academic Personnel Board;
2. Review the recommendation submitted by the DAPCs with regard to recruitment, selection,
performance evaluation, tenure, staff development, and promotion of the faculty and other
academic personnel of the College;
3. Establish departmental priorities in the allocation of available funds for promotion;
4. Act on cases of disagreement between the Chairman and the members of the DAPC particularly on
personnel matters covered by this Order;
5. Act on complaints and/or protests against personnel actions made by the Department Chairman
and/or the DAPC.
The University Academic Personnel Board, on the other hand, performs the following functions: 19
1. Assist the Chancellor in the review of the recommendations of the CAPC'S.
2. Act on cases of disagreement between the Dean and the CAPC.
3. Formulate policies, rules, and standards with respect to the selection, compensation, and
promotion of members of the academic staff.
4. Assist the Chancellor in the review of recommendations on academic promotions and on other
matters affecting faculty status and welfare.
From the foregoing, it is evident that it is the University Academic Personnel Committee, composed of deans, the
assistant for academic affairs and the chief of personnel, which formulates the policies, rules and standards
respecting selection, compensation and promotion of members of the academic staff. The departmental and college
academic personnel committees' functions are purely recommendatory in nature, subject to review and evaluation
by the University Academic Personnel Board. In Franklin Baker Company of the Philippines vs. Trajano,20 this Court
reiterated the principle laid down in National Merchandising Corp. vs. Court of Industrial Relations, 21that the power
to recommend, in order to qualify an employee as a supervisor or managerial employee "must not only
be effective but the exercise of such authority should not be merely of a routinary or clerical nature but should
require the use of independent judgment." Where such recommendatory powers, as in the case at bar, are subject to
evaluation, review and final action by the department heads and other higher executives of the company, the same,
although present, are not effective and not an exercise of independent judgment as required by law.
Significantly, the personnel actions that may be recommended by the departmental and college academic personnel
committees must conform with the general guidelines drawn up by the university personnel academic committee.
This being the case, the members of the departmental and college academic personnel committees are not unlike
the chiefs of divisions and sections of the National Waterworks and Sewerage Authority whom this Court considered
as rank-and-file employees in National Waterworks & Sewerage Authority vs. NWSA Consolidated Unions, 22 because
"given ready policies to execute and standard practices to observe for their execution, . . . they have little freedom of
action, as their main function is merely to carry out the company's orders, plans and policies."
The power or prerogative pertaining to a high-level employee "to effectively recommend such managerial actions, to
formulate or execute management policies or decisions and/or to hire, transfer, suspend, lay-off, recall, dismiss,
assign or discipline employees" 23 is exercised to a certain degree by the university academic personnel
board/committees and ultimately by the Board of Regents in accordance with Section 6 of the University
Charter, 24 thus:
(e) To appoint, on the recommendation of the President of the University, professors, instructors,
lecturers and other employees of the University; to fix their compensation, hours of service, and
such other duties and conditions as it may deem proper; to grant them in its discretion leave of
absence under such regulations as it may promulgate, any other provision of law to the contrary
notwithstanding, and to remove them for cause after investigation and hearing shall have been had.
Another factor that militates against petitioner's espousal of managerial employment status for all its professors
through membership in the departmental and college academic personnel committees is that not all professors are
members thereof. Membership and the number of members in the committees are provided as follows: 25
Sec. 2. Membership in Committees. — Membership in committees may be made either through
appointment, election, or by some other means as may be determined by the faculty and other
academic personnel of a particular department or college.
Sec. 3. Number of Members. — In addition to the Chairman, in the case of a department, and the
Dean in the case of a college, there shall be such number of members representing the faculty and
academic personnel as will afford a fairly representative, deliberative and manageable group that can
handle evaluation of personnel actions.
Neither can membership in the University Council elevate the professors to the status of high-level employees.
Section 6 (f) and 9 of the UP Charter respectively provide: 26
Sec. 6. The Board of Regents shall have the following powers and duties . . . ;
xxx xxx xxx
(f) To approve the courses of study and rules of discipline drawn up by the University Council as
hereinafter provided; . . .
Sec. 9. There shall be a University Council consisting of the President of the University and of all
instructors in the university holding the rank of professor, associate professor, or assistant professor.
The Council shall have the power to prescribe the courses of study and rules of discipline, subject to
the approval of the Board of Regents. It shall fix the requirements for admission to any college of the
university, as well as for graduation and the receiving of a degree. The Council alone shall have the
power to recommend students or others to be recipients of degrees. Through its president or
committees, it shall have disciplinary power over the students within the limits prescribed by the
rules of discipline approved by the Board of Regents. The powers and duties of the President of the
University, in addition to those specifically provided in this Act shall be those usually pertaining to
the office of president of a university.
It is readily apparent that the policy-determining functions of the University Council are subject to review, evaluation
and final approval by the Board of Regents. The Council's power of discipline is likewise circumscribed by the limits
imposed by the Board of Regents. What has been said about the recommendatory powers of the departmental and
college academic personnel committees applies with equal force to the alleged policy-determining functions of the
University Council.
Even assuming arguendo that UP professors discharge policy-determining functions through the University Council,
still such exercise would not qualify them as high-level employees within the context of E.O. 180. As correctly
observed by private respondent, "Executive Order No. 180 is a law concerning public sector unionism. It must
therefore be construed within that context. Within that context, the University of the Philippines represents the
government as an employer. 'Policy-determining' refers to policy-determination in university mattes that affect those
same matters that may be the subject of negotiation between public sector management and labor. The reason why
'policy-determining' has been laid down as a test in segregating rank-and-file from management is to ensure that
those who lay down policies in areas that are still negotiable in public sector collective bargaining do not themselves
become part of those employees who seek to change these policies for their collective welfare." 27
The policy-determining functions of the University Council refer to academic matters, i.e. those governing the
relationship between the University and its students, and not the University as an employer and the professors as
employees. It is thus evident that no conflict of interest results in the professors being members of the University
Council and being classified as rank-and-file employees.
Be that as it may, does it follow, as public respondent would propose, that all rank-and-file employees of the
university are to be organized into a single collective bargaining unit?
A "bargaining unit" has been 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 the best suited to serve the reciprocal rights and duties of the parties under the collective
bargaining provisions of the law. 28
Our labor laws do not however provide the criteria for determining the proper collective bargaining unit. Section 12
of the old law, Republic Act No. 875 otherwise known as the Industrial Peace Act, simply reads as follows: 29
Sec. 12. Exclusive Collective Bargaining Representation for Labor Organizations. — The labor
organization designated or selected for the purpose of collective bargaining by the majority of the
employees in an appropriate collective bargaining unit shall be the exclusive representative of all the
employees in such unit for the purpose of collective bargaining in respect to rates of pay, wages,
hours of employment, or other conditions of employment; Provided, That any individual employee or
group of employees shall have the right at any time to present grievances to their employer.
Although said Section 12 of the Industrial Peace Act was subsequently incorporated into the Labor Code with minor
changes, no guidelines were included in said Code for determination of an appropriate bargaining unit in a given
case. 30 Thus, apart from the single descriptive word "appropriate," no specific guide for determining the proper
collective bargaining unit can be found in the statutes.
Even Executive Order No. 180 already adverted to is not much help. All it says, in its Section 9, is that "(t)he
appropriate organizational unit shall be the employer unit consisting of rank-and-file employees, unless
circumstances otherwise require." Case law fortunately furnishes some guidelines.
When first confronted with the task of determining the proper collective bargaining unit in a particular controversy,
the Court had perforce to rely on American jurisprudence. In Democratic Labor Association vs. Cebu Stevedoring
Company, Inc., decided on February 28, 1958, 31 the Court observed that "the issue of how to determine the proper
collective bargaining unit and what unit would be appropriate to be the collective bargaining
agency" . . . "is novel in this jurisdiction; however, American precedents on the matter abound . . (to which resort
may be had) considering that our present Magna Carta has been patterned after the American law on the subject."
Said the Court:
. . . Under these precedents, there are various factors which must be satisfied and considered in
determining the proper constituency of a bargaining unit. No one particular factor is itself decisive of
the determination. The weight accorded to any particular factor varies in accordance with the
particular question or questions that may arise in a given case. What are these factors? Rothenberg
mentions a good number, but the most pertinent to our case are: (1) will of the employees (Globe
Doctrine); (2) affinity and unit of employees' interest, such as substantial similarity of work and
duties, or similarity of compensation and working conditions; (3) prior collective bargaining history;
and (4) employment status, such as temporary, seasonal probationary employees. . . .
xxx xxx xxx
An enlightening appraisal of the problem of defining an appropriate bargaining unit is given in the
10th Annual Report of the National Labor Relations Board wherein it is emphasized that the factors
which said board may consider and weigh in fixing appropriate units are: the history, extent and type
of organization of employees; the history of their collective bargaining; the history, extent and type
of organization of employees in other plants of the same employer, or other employers in the same
industry; the skill, wages, work, and working conditions of the employees; the desires of the
employees; the eligibility of the employees for membership in the union or unions involved; and the
relationship between the unit or units proposed and the employer's organization, management, and
operation. . . .
. . In said report, it is likewise emphasized that the basic test in determining the appropriate
bargaining unit is that a unit, to be appropriate, must affect a grouping of employees who have
substantial, mutual interests in wages, hours, working conditions and other subjects of collective
bargaining (citing Smith on Labor Laws, 316-317; Francisco, Labor Laws, 162). . . .
The Court further explained that "(t)he test of the grouping is community or mutuality of interests. And this is so
because 'the basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the
combination which will best assure to all employees the exercise of their collective bargaining rights' (Rothenberg on
Labor Relations, 490)." Hence, in that case, the Court upheld the trial court's conclusion that two separate bargaining
units should be formed, one consisting of regular and permanent employees and another consisting of casual
laborers or stevedores.
Since then, the "community or mutuality of interests" test has provided the standard in determining the proper
constituency of a collective bargaining unit. In Alhambra Cigar & Cigarette Manufacturing Company, et al. vs.
Alhambra Employees' Association (PAFLU), 107 Phil. 23, the Court, noting that the employees in the administrative,
sales and dispensary departments of a cigar and cigarette manufacturing firm perform work which have nothing to
do with production and maintenance, unlike those in the raw lead (malalasi), cigar, cigarette, packing (precintera) and
engineering and garage departments, authorized the formation of the former set of employees into a separate
collective bargaining unit. The ruling in the Democratic Labor Association case, supra, was reiterated in Philippine
Land-Air-Sea Labor Unit vs. Court of Industrial Relations, 110 Phil. 176, where casual employees were barred from
joining the union of the permanent and regular employees.
Applying the same "community or mutuality of interests" test, but resulting in the formation of only one collective
bargaining units is the case of National Association of Free Trade Unions vs. Mainit Lumber Development Company
Workers Union-United Lumber and General Workers of the Phils., G.R. No. 79526, December 21, 1990, 192 SCRA 598.
In said case, the Court ordered the formation of a single bargaining unit consisting of the Sawmill Division in Butuan
City and the Logging Division in Zapanta Valley, Kitcharao, Agusan Norte of the Mainit Lumber Development
Company. The Court reasoned:
Certainly, there is a mutuality of interest among the employees of the Sawmill Division and the
Logging Division. Their functions mesh with one another. One group needs the other in the same way
that the company needs them both. There may be difference as to the nature of their individual
assignments but the distinctions are not enough to warrant the formation of a separate bargaining
unit.
In the case at bar, the University employees may, as already suggested, quite easily be categorized into two general
classes: one, the group composed of employees whose functions are non-academic, i.e., janitors, messengers,
typists, clerks, receptionists, carpenters, electricians, grounds-keepers, chauffeurs, mechanics, plumbers; 32 and two,
the group made up of those performing academic functions, i.e., full professors, associate professors, assistant
professors, instructors — who may be judges or government executives — and research, extension and professorial
staff. 33 Not much reflection is needed to perceive that the community or mutuality of interests which justifies the
formation of a single collective bargaining unit is wanting between the academic and non-academic personnel of the
university. It would seem obvious that teachers would find very little in common with the University clerks and other
non-academic employees as regards responsibilities and functions, working conditions, compensation rates, social
life and interests, skills and intellectual pursuits, cultural activities, etc. On the contrary, the dichotomy of interests,
the dissimilarity in the nature of the work and duties as well as in the compensation and working conditions of the
academic and non-academic personnel dictate the separation of these two categories of employees for purposes of
collective bargaining. The formation of two separate bargaining units, the first consisting of the rank-and-file non-
academic personnel, and the second, of the rank-and-file academic employees, is the set-up that will best assure to
all the employees the exercise of their collective bargaining rights. These special circumstances, i.e., the dichotomy of
interests and concerns as well as the dissimilarity in the nature and conditions of work, wages and compensation
between the academic and non-academic personnel, bring the case at bar within the exception contemplated in
Section 9 of Executive Order No. 180. It was grave abuse of discretion on the part of the Labor Relations Director to
have ruled otherwise, ignoring plain and patent realities.
WHEREFORE, the assailed Order of October 30, 1990 is hereby AFFIRMED in so far as it declares the professors,
associate professors and assistant professors of the University of the Philippines as rank-and-file employees. The
Order of August 7, 1990 is MODIFIED in the sense that the non-academic rank-and-file employees of the University of
the Philippines shall constitute a bargaining unit to the exclusion of the academic employees of the institution — i.e.,
full professors, associate professors, assistant professors, instructors, and the research, extension and professorial
staff, who may, if so minded, organize themselves into a separate collective bargaining unit; and that, therefore, only
said non-academic rank-and-file personnel of the University of the Philippines in Diliman, Manila, Los Baños and the
Visayas are to participate in the certification election.
SO ORDERED.
G.R. No. L-67485 April 10, 1992

NATIONAL CONGRESS OF UNIONS IN THE SUGAR INDUSTRY OF THE PHILIPPINES (NACUSIP)-TUCP,petitioner,
vs.
DIR. CRESENCIANO B. TRAJANO, Bureau of Labor Relations, Ministry of Labor and Employment, Manila,
FEDERATION OF UNIONS OF RIZAL (FUR)-TUCP, and CALINOG REFINERY CORPORATION (NASUREFCO),respondents.
MEDIALDEA, J.:
This petition for certiorari seeks to annul and set aside the decision rendered by the respondent Director Cresenciano
B. Trajano of the Bureau of Labor Relations, Ministry of Labor and Employment, dated November 18, 1983 affirming
the order of Med-Arbiter Demetrio Correa dated May 2, 1983 giving due course to the petition for certification
election filed by private respondent Federation of Unions of Rizal (FUR)-TUCP; and the order dated March 21, 1984
denying the motion for reconsideration for lack of merit.
Petitioner National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP)-TUCP is the certified
exclusive bargaining representative of the rank and file workers of Calinog Refinery Corporation. Private respondent
Federation of Unions of Rizal (FUR)-TUCP is a labor organization duly registered with the Department of Labor and
Employment while private respondent Calinog Refineries Employees Union (CREU)-NACUSIP is the certified exclusive
bargaining representative of the rank and file workers of the private respondent Calinog Refinery Corporation by
virtue of the certification election held on March 30, 1981.
On June 21, 1982, petitioner union filed a petition for deadlock in collective bargaining with the Ministry of Labor and
Employment (now Department of Labor and Employment). In order to obviate friction and tension, the parties
agreed to submit the petition for deadlock to compulsory arbitration on July 14, 1982 and was docketed as RAB Case
No. VI-0220-82.
On July 21, 1982, private respondent FUR-TUCP filed with the Regional Office No. VI, MOLE (now DOLE), Iloilo City a
petition for certification election among the rank and file employees of private respondent company, alleging that:
(1) about forty-five percent (45%) of private respondent company's employees had disaffiliated from petitioner union
and joined private respondent union; (2) no election had been held for the past twelve (12) months; and (3) while
petitioner union had been certified as the sole collective bargaining agent, for over a year it failed to conclude a
collective bargaining agreement with private respondent company. Petitioner union filed a motion to intervene in the
petition for certification election filed by private respondent union.
By order dated July 23, 1982, the Acting Med-Arbiter Pacifico V. Militante dismissed the petition for certification
election for lack of merit since the petition is barred by a pending bargaining deadlock.
On August 25, 1982, private respondent union filed an appeal to the Bureau of Labor Relations, Manila.
The Bureau of Labor Relations through respondent Director Cresenciano B. Trajano rendered a decision on
September 30, 1982 setting aside the order of the Acting Med-Arbiter and remanding the case to Regional Office VI,
Iloilo City for hearing and reception of evidence.
On May 2, 1983, Honorable Med-Arbiter Demetrio Correa issued an order in LRD Case No. 4293 giving due course to
the petition of private respondent FUR-TUCP and ordering that an election be held within 20 days from receipt of the
order.
From the order of Med-Arbiter Correa, petitioner interposed an appeal to the Bureau of Labor Relations.
During the pendency of the appeal or on September 10, 1983, a collective bargaining agreement was entered and
executed by the management of the National Sugar Refineries Co., Inc. and petitioner union and was subsequently
ratified by a majority of the rank and file employees. On the basis of the concluded CBA, the Honorable Executive
Labor Arbiter Celerino Grecia II issued an award dated September 12, 1983 adopting the submitted agreement as the
CBA between the parties.
On November 18, 1983, respondent Director Trajano rendered a decision affirming with qualification the order of
Med-Arbiter Correa dated May 2, 1983, the pertinent portions of which provide as follows:
It appears that the Calinog Refinery Employees, Union-NACUSIP-TUCP no longer commands the
support of the majority of the employees. This observation is buttressed by the fact that more than
seventy five percent (75%) of the workers have disaffiliated from the intervenor and joined the ranks
of the petitioner. Thus, intervenor's status as sole and exclusive bargaining representative is now of
doubtful validity.
For the above-mentioned reason, we stand obliged to resort to the most expeditious, practical and
democratic option open to us, that is, the conduct of a certification election. Through this forum, the
true sentiments of the workers as to which labor organization deserves their loyalty can be fairly
ascertained. In any event, it is our view that the 10 September 1983 collective agreement should be
respected by the union that shall prevail in the election not only because it is an arbitration award
but also because substantial benefits are provided thereunder. Otherwise stated, the winning union
shall administer said agreement. In passing, it may be pointed out that CAREFCO has been included
as one of the contending parties in the election. We feel that it is error for the acting Med-Arbiter to
do so considering that the company is a mere bystander in this representation dispute.
WHEREFORE, as above qualified, the Order dated 2 May 1983 is affirmed.
SO DECIDED. (Rollo, pp. 40-41)
From the decision of respondent Director Trajano, petitioner filed a motion for reconsideration dated December 6,
1983.
The respondent Director in his order dated March 21, 1984 denied the motion for reconsideration for lack of merit
and affirmed the Bureau's decision of November 18, 1983.
This Court in a resolution dated December 10, 1984 resolved to grant the urgent motion of petitioner for the
issuance of a restraining order and issued a temporary restraining order enjoining the respondents from conducting
and holding the certification election on December 17, 1984 among the rank and file employees of respondent
company (see Rollo, p. 99).
Petitioner maintains that respondent Director Trajano committed grave abuse of discretion amounting to lack of
jurisdiction when it rendered a decision affirming the order of Med-Arbiter Correa finding that the deadlock is
"nothing but a mere subterfuge to obstruct the exercise of the workers of their legitimate right to self-organization, a
last minute maneuver to deny the workers the exercise of their constitutional rights" (Rollo, p. 28) and ordering a
certification election among the rank and file workers of respondent company.
Furthermore, petitioner stresses that the finding that the contract (deadlock) bar rule has no room for application in
the instant case, runs counter to the provision of Section 3 of the Rules Implementing Batas Pambansa Blg. 130 which
prohibits the filing of a petition for certification election during the pendency of a bargaining deadlock.
In conformity with the petitioner's contentions, the Solicitor General insists that the respondent Director has acted
arbitrarily in issuing the assailed decision and order. In addition, it argues that the CBA concluded on September 10,
1983 has a life span of three (3) years and constitutes a bar to the petition for certification election pursuant to
Section 3 of the Rules Implementing Batas Pambansa Blg. 130.
The pivotal issue therefore, is whether or not a petition for certification election may be filed during the pendency of
a bargaining deadlock submitted to arbitration or conciliation.
After a careful review of the records of this case, the Court finds the petition meritorious and holds that the
respondent Director gravely abused his discretion when he affirmed the order of Med-Arbiter Correa calling for a
certification election among the rank and file workers of private respondent company.
The law on the matter is Section 3, Book V, Rule V of the Omnibus Rules Implementing the Labor Code, to wit:
Sec. 3. When to file. — In the absence of a collective bargaining agreement duly registered in
accordance with Article 231 of the Code, a petition for certification election may be filed at any time.
However, no certification election may be held within one year from the date of issuance of a final
certification election result. Neither may a representation question be entertained if, before the filing
of a petition for certification election, a bargaining deadlock to which an incumbent or certified
bargaining agent is a party had been submitted to conciliation or arbitration or had become the
subject of valid notice or strike or lockout.
If a collective bargaining agreement has been duly registered in accordance with Article 231 of the
Code, a petition for certification election or a motion for intervention can only be entertained within
sixty (60) days prior to the expiry date of such agreement.
The clear mandate of the aforequoted section is that a petition for certification election may be filed at any time, in
the absence of a collective bargaining agreement. Otherwise put, the rule prohibits the filing of a petition for
certification election in the following cases:
(1) during the existence of a collective bargaining agreement except within the freedom period;
(2) within one (1) year from the date of issuance of declaration of a final certification election result; or
(3) during the existence of a bargaining deadlock to which an incumbent or certified bargaining agent is a party and
which had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or
lockout.
The Deadlock Bar Rule simply provides that a petition for certification election can only be entertained if there is no
pending bargaining deadlock submitted to conciliation or arbitration or had become the subject of a valid notice of
strike or lockout. The principal purpose is to ensure stability in the relationship of the workers and the management.
In the case at bar, a bargaining deadlock was already submitted to arbitration when private respondent FUR-TUCP
filed a petition for certification election. The same petition was dismissed for lack of merit by the Acting Med-Arbiter
in an order dated July 23, 1982 on the sole ground that the petition is barred by a pending bargaining deadlock.
However, respondent Director set aside the same order and subsequently affirmed an order giving due course to the
petition for certification election and ordering that an election be held.
The law demands that the petition for certification election should fail in the presence of a then pending bargaining
deadlock.
A director of the Bureau of Labor Relations, by the nature of his functions, acts in a quasi-judicial capacity. We find no
reason why his decision should be beyond this Court's review. Administrative officials, like the director of the Bureau
of Labor Relations are presumed to act in accordance with law but this Court will not hesitate to pass upon their
work where there is a showing of abuse of authority or discretion in their official acts or when their decisions or
orders are tainted with unfairness or arbitrariness.
Noteworthy is the fact that a certification was issued by Executive Labor Arbiter Celerino Grecia II on October 21,
1982 certifying that the petition for deadlock in RAB Case No. VI-0220-82 was forwarded to the Executive Labor
Arbiter for compulsory arbitration (see Rollo, p. 19). The respondent Director erred in finding that the order issued by
the Med-Arbiter dismissing the petition for certification election was irregular and was merely based on information.
All premises considered, the Court is convinced that the assailed decision and order of the respondent Director is
tainted with arbitrariness that would amount to grave abuse of discretion.
ACCORDINGLY, the petition is GRANTED; the decision dated November 18, 1983 and order dated March 21, 1984 of
the respondent Director Cresenciano B. Trajano are hereby nullified and the order of Med-Arbiter Militante dated
July 23, 1982 dismissing the petition for certification election is hereby reinstated.
SO ORDERED.
G.R. No. 89609 January 27, 1992

NATIONAL CONGRESS OF UNIONS IN THE SUGAR INDUSTRY OF THE PHILIPPINES (NACUSIP)-TUCP,petitioner,
vs.
HON. PURA FERRER-CALLEJA, in her capacity as Director of the Bureau of Labor Relations; and the NATIONAL
FEDERATION OF SUGAR WORKERS (NFSW)-FGT-KMU, respondents.
Zoilo V. De la Cruz, Jr., Beethoven R. Buenaventura and Pedro E. Jimenez for petitioner.
Manlapao, Drilon, Ymballa and Chavez for private respondent.
MEDIALDEA, J.:
This is a petition for certiorari seeking the nullification of the resolution issued by the respondent Director of the
Bureau of Labor Relations Pura Ferrer-Calleja dated June 26, 1989 setting aside the order of the Med-Arbiter dated
February 8, 1989 denying the motion to dismiss the petition and directing the conduct of a certification election
among the rank and file employees or workers of the Dacongcogon Sugar and Rice Milling Co. situated at Kabankalan,
Negros Occidental.
The antecedent facts giving rise to the controversy at bar are as follows:
Petitioner National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP-TUCP) is a legitimate
national labor organization duly registered with the Department of Labor and Employment. Respondent Honorable
Pura Ferrer-Calleja is impleaded in her official capacity as the Director of the Bureau of Labor Relations of the
Department of Labor and Employment, while private respondent National Federation of Sugar Workers (NFSW-FGT-
KMU) is a labor organization duly registered with the Department of Labor and Employment.
Dacongcogon Sugar and Rice Milling Co., Inc. (Dacongcogon) based in Kabankalan, Negros Occidental employs about
five hundred (500) workers during milling season and about three hundred (300) on off-milling season.
On November 14, 1984, private respondent NFSW-FGT-KMU and employer Dacongcogon entered into a collective
bargaining agreement (CBA) for a term of three (3) years, which was to expire on November 14, 1987.
When the CBA expired, private respondent NFSW-FGT-KMU and Dacongcogon negotiated for its renewal. The CBA
was extended for another three (3) years with reservation to negotiate for its amendment, particularly on wage
increases, hours of work, and other terms and conditions of employment.
However, a deadlock in negotiation ensued on the matter of wage increases and optional retirement. In order to
obviate friction and tension, the parties agreed on a suspension to provide a cooling-off period to give them time to
evaluate and further study their positions. Hence, a Labor Management Council was set up and convened, with a
representative of the Department of Labor and Employment, acting as chairman, to resolve the issues.
On December 5, 1988, petitioner NACUSIP-TUCP filed a petition for direct certification or certification election among
the rank and file workers of Dacongcogon.
On January 27, 1989, private respondent NFSW-FGT-KMU moved to dismiss the petition on the following grounds, to
wit:
I
The Petition was filed out of time;
II
There is a deadlocked (sic) of CBA negotiation between forced intervenor and respondent-central.
(Rollo, p. 25)
On February 6, 1989, Dacongcogon filed an answer praying that the petition be dismissed.
By an order dated February 8, 1989, the Med-Arbiter denied the motion to dismiss filed by private respondent NFSW-
FGT-KMU and directed the conduct of certification election among the rank and file workers of Dacongcogon, the
dispositive portion of which provides as follows:
WHEREFORE, premises considered, the Motion to Dismiss the present petition is, as it is hereby
DENIED. Let therefore a certification election among the rank and file employees/workers of the
Dacongcogon Sugar and Rice Milling Co., situated at Kabankalan, Neg. Occ., be conducted with the
following choices:
(1) National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP-
TUCP);
(2) National Federation of Sugar Workers (NFSW);
(3) No Union.
The designated Representation Officer is hereby directed to call the parties for a pre-election
conference to thresh out the mechanics of the election and to conduct and supervise the same
within twenty (20) days from receipt by the parties of this Order. The latest payroll shall be used to
determine the list of qualified voters.
SO ORDERED. (Rollo, p. 34)
On February 9, 1989, private respondent filed a motion for reconsideration and/or appeal alleging that the
Honorable Med-Arbiter misapprehended the facts and the law applicable amounting to gross incompetence. Hence,
private respondent prayed that the order of the Med-Arbiter be set aside and the motion to dismiss be reconsidered.
On February 27, 1989, petitioner filed its opposition to the motion for reconsideration praying that the motion for
reconsideration and/or appeal be denied for lack of merit.
On June 26, 1989, respondent Director of the Bureau of Labor Relations rendered a resolution reversing the order of
the Med-Arbiter, to wit:
WHEREFORE, premises considered, the Order of the Med-Arbiter dated 8 February 1989 is hereby
set aside and vacated, and a new one issued dismissing the above-entitled petition for being filed out
of time.
SO ORDERED. (Rollo, p. 46)
Hence, this petition raising four (4) issues, to wit:
I. RESPONDENT HON. PURA FERRER-CALLEJA, IN HER CAPACITY AS DIRECTOR OF THE BUREAU OF
LABOR RELATIONS, COMMITTED GRAVE ABUSE OF DISCRETION IN RENDERING HER RESOLUTION
DATED 26 JUNE 1989 REVERSING THE ORDER DATED FEBRUARY 8, 1989 OF MED-ARBITER FELIZARDO
SERAPIO.
II. THAT THE AFORESAID RESOLUTION DATED 26 JUNE 1989 OF RESPONDENT PURA FERRER-CALLEJA
IS CONTRARY TO LAW AND JURISPRUDENCE.
III. THAT THE AFORESAID RESOLUTION DATED 26 JUNE 1989 OF RESPONDENT DIRECTOR PURA
FERRER-CALLEJA DENIES THE RANK AND FILE EMPLOYEES OF THE DACONGCOGON SUGAR & RICE
MILLING COMPANY, AND THE HEREIN PETITIONER NACUSIP-TUCP, THEIR LEGAL AND
CONSTITUTIONAL RIGHTS.
IV. THAT RESPONDENT DIRECTOR PURA FERRER-CALLEJA, IN RENDERING HER SAID RESOLUTION
DATED 26 JUNE 1989 WAS BIASED AGAINST PETITIONER NACUSIP-TUCP. (Rollo,
p. 2)
The controversy boils down to the sole issue of whether or not a petition for certification election may be filed after
the 60-day freedom period.
Petitioner maintains that respondent Director Calleja committed grave abuse of discretion amounting to excess of
jurisdiction in rendering the resolution dated June 26, 1989 setting aside, vacating and reversing the order dated
February 8, 1989 of Med-Arbiter Serapio, in the following manner:
1) by setting aside and vacating the aforesaid Order dated February 8, 1989 of Med-Arbiter Felizardo
Serapio and in effect dismissing the Petition for Direct or Certification Election of Petitioner NACUSIP-
TUCP (Annex "A" hereof) without strong valid, legal and factual basis;
2) by giving a very strict and limited interpretation of the provisions of Section 6, Rule V, Book V of
the Implementing Rules and Regulations of the Labor Code, as amended, knowing, as she does, that
the Labor Code, being a social legislation, should be liberally interpreted to afford the workers the
opportunity to exercise their legitimate legal and constitutional rights to self-organization and to free
collective bargaining;
3) by issuing her questioned Resolution of June 26, 1989 knowing fully well that upon the effectivity
of Rep. Act No. 6715 on 21 March 1989 she had no longer any appellate powers over decisions of
Med-Arbiters in cases of representation issues or certification elections;
4) by ignoring intentionally the applicable ruling of the Honorable Supreme Court in the case
ofKapisanan ng Mga Manggagawa sa La Suerte-FOITAF vs. Noriel, L-45475, June 20, 1977;
5) by clearly failing to appreciate the significance (sic) of the fact that for more than four (4) years
there has been no certification election involving the rank and file workers of the Company; and,
6) by frustrating the legitimate desire and will of the workers of the Company to determine their sole
and exclusive collective bargaining representative through secret balloting. (Rollo, pp. 9-10)
However, the public respondent through the Solicitor General stresses that the petition for certification election was
filed out of time. The records of the CBA at the Collective Agreements Division (CAD) of the Bureau of Labor Relations
show that the CBA between Dacongcogon and private respondent NFSW-FGT-KMU had expired on November 14,
1987, hence, the petition for certification election was filed too late, that is, a period of more than one (1) year after
the CBA expired.
The public respondent maintains that Section 6 of the Rules Implementing Executive Order No. 111 commands that
the petition for certification election must be filed within the last sixty (60) days of the CBA and further reiterates and
warns that any petition filed outside the 60-day freedom period "shall be dismissed outright." Moreover, Section 3,
Rule V, Book V of the Rules Implementing the Labor Code enjoins the filing of a representation question, if before a
petition for certification election is filed, a bargaining deadlock to which the bargaining agent is a party is submitted
for conciliation or arbitration.
Finally, the public respondent emphasizes that respondent Director has jurisdiction to entertain the motion for
reconsideration interposed by respondent union from the order of the Med-Arbiter directing a certification election.
Public respondent contends that Section 25 of Republic Act No. 6715 is not applicable, "(f)irstly, there is as yet no
rule or regulation established by the Secretary for the conduct of elections among the rank and file of employer
Dacongcogon; (s)econdly, even the mechanics of the election which had to be first laid out, as directed in the Order
dated February 8, 1989 of the Med-Arbiter, was aborted by the appeal therefrom interposed by respondent union;
and (t)hirdly, petitioner is estopped to question the jurisdiction of respondent Director after it filed its opposition to
respondent union's Motion for Reconsideration (Annex
'F,' Petition) and without, as will be seen, in any way assailing such jurisdiction. . . ." (Rollo, p.66)
We find the petition devoid of merit.
A careful perusal of Rule V, Section 6, Book V of the Rules Implementing the Labor Code, as amended by the rules
implementing Executive Order No. 111 provides that:
Sec. 6. Procedure — . . .
In a petition involving an organized establishment or enterprise where the majority status of the
incumbent collective bargaining union is questioned by a legitimate labor organization, the Med-
Arbiter shall immediately order the conduct of a certification election if the petition is filed during
the last sixty (60) days of the collective bargaining agreement. Any petition filed before or after the
sixty-day freedom period shall be dismissed outright.
The sixty-day freedom period based on the original collective bargaining agreement shall not be
affected by any amendment, extension or renewal of the collective bargaining agreement for
purposes of certification election.
xxx xxx xxx
The clear mandate of the aforequoted section is that the petition for certification election filed by the petitioner
NACUSIP-TUCP should be dismissed outright, having been filed outside the 60-day freedom period or a period of
more than one (1) year after the CBA expired.
It is a rule in this jurisdiction that only a certified collective bargaining agreement — i.e., an agreement duly certified
by the BLR may serve as a bar to certification elections. (Philippine Association of Free Labor Unions (PAFLU) v.
Estrella, G.R. No. 45323, February 20, 1989, 170 SCRA 378, 382) It is noteworthy that the Bureau of Labor Relations
duly certified the November 14, 1984 collective bargaining agreement. Hence, the contract-bar rule as embodied in
Section 3, Rule V, Book V of the rules implementing the Labor Code is applicable.
This rule simply provides that a petition for certification election or a motion for intervention can only be entertained
within sixty days prior to the expiry date of an existing collective bargaining agreement. Otherwise put, the rule
prohibits the filing of a petition for certification election during the existence of a collective bargaining agreement
except within the freedom period, as it is called, when the said agreement is about to expire. The purpose, obviously,
is to ensure stability in the relationships of the workers and the management by preventing frequent modifications of
any collective bargaining agreement earlier entered into by them in good faith and for the stipulated original period.
(Associated Labor Unions (ALU-TUCP) v. Trajano, G.R. No. 77539, April 12, 1989, 172 SCRA 49, 57 citing Associated
Trade Unions (ATU v. Trajano, G.R. No. L-75321, 20 June 1988, 162 SCRA 318, 322-323)
Anent the petitioner's contention that since the expiration of the CBA in 1987 private respondent NFSW-FGT-KMU
and Dacongcogon had not concluded a new CBA, We need only to stress what was held in the case of Lopez Sugar
Corporation v. Federation of Free Workers, Philippine Labor Union Association (G.R. No. 75700-01, 30 August 1990,
189 SCRA 179, 191) quoting Article 253 of the Labor Code that "(i)t shall be the duty of both parties to keep
the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the
60-day period and/or until a new agreement is reached by the parties." Despite the lapse of the formal effectivity of
the CBA the law still considers the same as continuing in force and effect until a new CBA shall have been validly
executed. Hence, the contract bar rule still applies.
Besides, it should be emphasized that Dacongcogon, in its answer stated that the CBA was extended for another
three (3) years and that the deadlock was submitted to the Labor Management Council.
All premises considered, the Court is convinced that the respondent Director of the Bureau of Labor Relations did not
commit grave abuse of discretion in reversing the order of the Med-Arbiter.
ACCORDINGLY, the petition is DENIED and the resolution of the respondent Director of the Bureau of Labor Relations
is hereby AFFIRMED.
SO ORDERED.
G.R. No. 96425 February 4, 1992

PROGRESSIVE DEVELOPMENT CORPORATION, petitioner,
vs.
THE HONORABLE SECRETARY, DEPARTMENT OF LABOR AND EMPLOYMENT, MED-ARBITER EDGARDO DELA CRUZ
and PAMBANSANG KILUSAN NG PAGGAWA (KILUSAN)-TUCP, respondents.
Beltran, Bacungan & Candoy for petitioner.
Jimenez & Associates co-counsel for petitioner.
GUTIERREZ, JR., J.:

The controversy in this case centers on the requirements before a local or chapter of a federation may file a petition
for certification election and be certified as the sole and exclusive bargaining agent of the petitioner's employees.
Petitioner Progressive Development Corporation (PDC) filed this petition for certiorari to set aside the following:
1) Resolution dated September 5, 1990, issued by respondent Med-Arbiter Edgardo dela Cruz, directing the holding
of the certification election among the regular rank-and-file employees of PDC:
2) Order dated October 12, 1990, issued by the respondent Secretary of Labor and Employment, denying PDC's
appeal; and
3) Order dated November 12, 1990, also issued by the respondent Secretary, denying the petitioner's Motion for
Reconsideration.
On June 19, 1990, respondent Pambansang Kilusan ng Paggawa (KILUSAN) -TUCP (hereinafter referred to as Kilusan)
filed with the Department of Labor and Employment (DOLE) a petition for certification election among the rank-and-
file employees of the petitioner alleging that it is a legitimate labor federation and its local chapter, Progressive
Development Employees Union, was issued charter certificate No. 90-6-1-153. Kilusan claimed that there was no
existing collective bargaining agreement and that no other legitimate labor organization existed in the bargaining
unit.
Petitioner PDC filed its motion to dismiss dated July 11, 1990 contending that the local union failed to comply with
Rule II Section 3, Book V of the Rules Implementing the Labor Code, as amended, which requires the submission of:
(a) the constitution and by-laws; (b) names, addresses and list of officers and/or members; and (c) books of accounts.
On July 16 , 1990, respondent Kilusan submitted a rejoinder to PDC's motion to dismiss claiming that it had
submitted the necessary documentary requirements for registration, such as the constitution and by-laws of the local
union, and the list of officers/members with their addresses. Kilusan further averred that no books of accounts could
be submitted as the local union was only recently organized.
In its "Supplemental Position Paper" dated September 3, 1990, the petitioner insisted that upon verification with the
Bureau of Labor Relations (BLR), it found that the alleged minutes of the organizational meeting was
unauthenticated, the list of members did not bear the corresponding signatures of the purported members, and the
constitution and by-laws did not bear the signature of the members and was not duly subscribed. It argued that the
private respondent therefore failed to substantially comply with the registration requirements provided by the rules.
Additionally, it prayed that Med-Arbiter Edgardo dela Cruz inhibit himself from handling the case for the reason that
he allegedly had prejudged the same.
In his September 5, 1990 resolution, Med Arbiter dela Cruz held that there was substantial compliance with the
requirements for the formation of the chapter. He further stated that mere issuance of the charter certificate by the
federation was sufficient compliance with the rules. Considering that the establishment was unorganized, he
maintained that a certification election should be conducted to resolve the question of representation.
Treating the motion for reconsideration filed by the PDC as an appeal to the Office of the Secretary, Undersecretary
Laguesma held that the same was merely a "reiteration of the issues already ventilated in the proceedings before the
Med-Arbiter, specifically, the matter involving the formal organization of the chapter." (Rollo, p. 20) PDC's motion for
reconsideration from the aforementioned ruling was likewise denied. Hence, this petition.
In an order dated February 25, 1991, the Court resolved to issue a temporary restraining order enjoining the public
respondents from carrying out the assailed resolution and orders or from proceeding with the certification election.
(Rollo, pp. 37-39)
It is the petitioner's contention that 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 (Rollo, p. 85) Petitioner PDC posits that such local 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. (Rollo, p. 35) PDC points out that the constitution and by-laws and list of officers submitted were not duly
subscribed. Likewise, the petitioner claims that the mere filing of the aforementioned documents is insufficient; that
there must be due recognition or acknowledgment accorded to the local or chapter by BLR through a certificate of
registration or any communication emanating from it. (Rollo, p. 86)
The Solicitor General, in behalf of the public respondent, avers that there was a substantial compliance with the
requirements for the formation of a chapter. Moreover, he invokes Article 257 of the Labor Code which mandates the
automatic conduct by the Med-Arbiter of a certification election in any establishment where there is no certified
bargaining agreement.
The Court has repeatedly stressed that the holding of a certification election is based on a statutory policy that
cannot be circumvented. (Airtime Specialists, Inc. v. Ferrer-Calleja, 180 SCRA 749 [1989]; Belyca Corporation v. Ferrer-
Calleja, 168 SCRA 184 [1988]; George and Peter Lines, Inc. v. Associated Labor Unions, 134 SCRA 82 [1986]). The
workers must be allowed to freely express their choice in a determination where everything is open to their sound
judgment and the possibility of fraud and misrepresentation is eliminated.
But while Article 257 cited by the Solicitor General directs the automatic conduct of a certification election in an
unorganized establishment, it also requires that the petition for certification election must be filed by a legitimate
labor organization. Article 242 enumerates the exclusive rights of a legitimate labor organization among which is the
right to be certified as the exclusive representative of all the employees in an appropriate collective bargaining unit
for purposes of collective bargaining.
Meanwhile, Article 212(h) defines a legitimate labor organization as "any labor organization duly registered with the
DOLE and includes any branch or local thereof." (Emphasis supplied) Rule I, Section 1 (j), Book V of the Implementing
Rules likewise defines a legitimate labor organization as "any labor organization duly registered with the DOLE
and includes any branch, local or affiliate thereof. (Emphasis supplied)
The question that now arises is: when does a branch, local or affiliate of a federation become a legitimate labor
organization?
Ordinarily, a labor organization acquires legitimacy only upon registration with the BLR. Under Article 234
(Requirements of Registration):
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.
And under Article 235 (Action on Application)
The Bureau shall act on all applications for registration within thirty (30) days from filing.
All requisite documents and papers shall be certified under oath by the secretary or the treasurer of
the organization, as the case may be, and attested to by its president.
Moreover, section 4 of Rule II, Book V of the Implementing Rules requires that the application should be signed by at
least twenty percent (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 sixty (60) days of the
agreement.
The respondent Kilusan questions the requirements as too stringent in their application but the purpose of the law in
prescribing these requisites must be underscored. Thus, in Philippine Association of Free Labor Unions v.Secretary of
Labor, 27 SCRA 40 (1969), the Court declared:
The theory to the effect that Section 23 of Republic Act No. 875 unduly curtails the freedom of
assembly and association guaranteed in the Bill of Rights is devoid of factual basis. The registration
prescribed in Paragraph (b) of said section is not a limitation to the right of assembly or association,
which may be exercised with or without said registration. The latter is merely a condition sine qua
nonfor the acquisition of legal personality by the labor organizations, associations or unions and the
possession of the "rights and privileges granted by law to legitimate labor organizations." The
Constitution does not guarantee these rights and the privileges, much less said personality, which are
mere statutory creations, for the possession and exercise of which registration is required to protect
both labor and the public against abuses, fraud or impostors who pose as organizers, although not
truly accredited agents of the union they purport to represent. Such requirement is a valid exercise of
the police power, because the activities in which labor organizations, associations and unions of
workers are engaged affect public interest, which should be protected. Furthermore, the obligation
to submit financial statements, as a condition for the non-cancellation of a certificate of registration,
is a reasonable regulation for the benefit of the members of the organization, considering that the
same generally solicits funds or membership, as well as oftentimes collects, on behalf of its
members, huge amounts of money due to them or to the organization. (Emphasis supplied)
But when an unregistered union becomes a branch, local or chapter of a federation, some of the aforementioned
requirements for registration are no longer required. The provisions governing union affiliation are found in Rule II,
Section 3, Book V of the Implementing Rules, the relevant portions of which are cited below:
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 establishment 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 independently registered unions, federations or national unions shall be observed.
Paragraph (a) refers to the local or chapter of a federation which did not undergo the rudiments of registration while
paragraph (b) refers to an independently registered union which affiliated with a federation. 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 Section 3.
Thus, several requirements that are otherwise required for union registration are omitted, to wit:
(1) The requirement that the application for registration must be signed by at least 20% of the employees in the
appropriate bargaining unit;
2) The submission of officers' addresses, principal address of the labor organization, the minutes of organizational
meetings and the list of the workers who participated in such meetings;
3) The submission of the minutes of the adoption or ratification of the constitution and by the laws and the list of the
members who participated in it.
Undoubtedly, the intent of the law in imposing lesser requirements in the case of the branch or local of a registered
federation or national union is to encourage the affiliation of a local union with the federation or national union in
order to increase the local union's bargaining powers respecting terms and conditions of labor.
The petitioner maintains that the documentary requirements prescribed in Section 3(c), namely: the constitution and
by-laws, set of officers and books of accounts, must follow the requirements of law. Petitioner PDC calls for the
similar application of the requirement for registration in Article 235 that all requisite documents and papers be
certified under oath by the secretary or the treasurer of the organization and attested to by the president.
In the case at bar, the constitution and by-laws and list of officers submitted in the BLR, while attested to by the
chapter's president, were not certified under oath by the secretary. Does such defect warrant the withholding of the
status of legitimacy to the local or chapter?
In the case of union registration, the rationale for requiring that the submitted documents and papers be certified
under oath by the secretary or treasurer, as the case may be, and attested to by president is apparent. The
submission of the required documents (and payment of P50.00 registration fee) becomes the Bureau's basis for
approval of the application for registration. Upon approval, the labor union acquires legal personality and is entitled
to all the rights and privileges granted by law to a legitimate labor organization. The employer naturally needs
assurance that the union it is dealing with is a bona fide organization, one which has not submitted false statements
or misrepresentations to the Bureau. The inclusion of the certification and attestation requirements will in a marked
degree allay these apprehensions of management. Not only is the issuance of any false statement and
misrepresentation a ground for cancellation of registration (see Article 239 (a), (c) and (d)); it is also a ground for a
criminal charge of perjury.
The certification and attestation requirements are preventive measures against the commission of fraud. They
likewise afford a measure of protection to unsuspecting 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.
In the case of the union affiliation with a federation, the documentary requirements are found in Rule II, Section 3(e),
Book V of the Implementing Rules, which we again quote as follows:
(c) The local chapter of a labor federation or national union shall have and maintain a constitution
and by-laws, set of officers and books of accounts. For reporting purposes, the procedure governing
the reporting of independently registered unions, federations or national unions shall be observed.
(Emphasis supplied)
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.
The same rationale for requiring the submission of duly subscribed documents upon union registration exists in the
case of union affiliation. Moreover, there is greater reason to exact compliance with the certification and attestation
requirements because, as previously mentioned, several requirements applicable to independent union registration
are no longer required in the case of formation of a local or chapter. The policy of the law in conferring greater
bargaining power upon labor unions must be balanced with the policy of providing preventive measures against the
commission of fraud.
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
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.
In the case at bar, the failure of the secretary of PDEU-Kilusan to certify the required documents under oath is fatal to
its acquisition of a legitimate status.
We observe that, as borne out by the facts in this case, the formation of a local or chapter becomes a handy tool for
the circumvention of union registration requirements. Absent the institution of safeguards, it becomes a convenient
device for a small group of employees to foist a not-so-desirable federation or union on unsuspecting co-workers and
pare the need for wholehearted voluntariness which is basic to free unionism. The records show that on June 16,
1990, Kilusan met with several employees of the petitioner. Excerpts of the "Minutes of the Organizational/General
Membership Meeting of Progressive Development Employees Union (PDEU) — Kilusan," are quoted below:
The meeting was formally called to order by Bro. Jose V. Parungao, KILUSAN secretary for
organization by explaining to the general membership the importance of joining the union. He
explained to the membership why they should join a union, and briefly explained the ideology of the
Pambansang Kilusan ng Paggawa-TUCP as a democratically based organization and then read the
proposed Constitution and By-Laws, after which said Constitution and By-Laws was duly and
unanimously ratified after some clarification.
Bro. Jose Parungao was also unanimously voted by the group to act as the chairman of the COMELEC
in holding the organizational election of officers of the union.
Bro. Jose Parungao, officially opened the table for nomination of candidates after which the election
of officers followed by secret balloting and the following were the duly elected officers. (Original
Record, p. 25)
The foregoing shows that Kilusan took the initiative and encouraged the formation of a union which automatically
became its chapter. On June 18, 1990, Kilusan issued a charter certificate in favor of PDEU-KILUSAN (Records, page 1).
It can be seen that Kilusan was moving very fast.
On June 19, 1990, or just three days after the organizational meeting, Kilusan filed a petition for certification election
(Records, pages 2 and 3) accompanied by a copy each of the charter certificate, constitution and by-laws and minutes
of the organizational meeting. Had the local union filed an application for registration, the petition for certification
election could not have been immediately filed. The applicant union must firstly comply with the "20% signature"
requirement and all the other requisites enumerated in Article 234. Moreover, since under Article 235 the BLR shall
act on any application for registration within thirty (30) days from its filing, the likelihood is remote that, assuming
the union complied with all the requirements, the application would be approved on the same day it was filed.
We are not saying that the scheme used by the respondents is per se illegal for precisely, the law allows such strategy.
It is not this Court's function to augment the requirements prescribed by law in order to make them wiser or to allow
greater protection to the workers and even their employer. Our only recourse is, as earlier discussed, to exact strict
compliance with what the law provides as requisites for local or chapter formation.
It may likewise be argued that it was Kilusan (the mother union) and not the local union which filed the petition for
certification election and, being a legitimate labor organization, Kilusan has the personality to file such petition.
At this juncture, it is important to clarify the relationship between the mother union and the local union. In the case
of Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., 66 SCRA 512 [1975]), the Court held that the
mother union, acting for and in behalf of its affiliate, had 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 as in this case the petition for certification
election was filed by the federation which is merely an agent, the petition 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.
The Court's conclusion should not be misconstrued as impairing the local union's right to be certified as the
employees' bargaining agent in the petitioner's establishment. We are merely saying that the local union must first
comply with the statutory requirements in order to exercise this right. Big federations and national unions of workers
should take the lead in requiring their locals and chapters to faithfully comply with the law and the rules instead of
merely snapping union after union into their folds in a furious bid with rival federations to get the most number of
members.
WHEREFORE, the petition is GRANTED. The assailed resolution and orders of respondent Med-Arbiter and Secretary
of Labor and Employment, respectively, are hereby SET ASIDE. The temporary restraining order dated February 25,
1991 is made permanent.
SO ORDERED.
G.R. No. 75810 September 9, 1991
KAISAHAN NG MANGGAGAWANG PILIPINO (KAMPIL-KATIPUNAN), petitioner,
vs.
HON. CRESENCIANO B. TRAJANO in his capacity as Director, Bureau of Labor Relations, and VIRON GARMENTS
MFG., CO., INC., respondents.
Esteban M. Mendoza for petitioner.
R E S O LU T I O N
NARVASA, J.:
The propriety of holding a certification election is the issue in the special civil action of certiorari at bar.
By virtue of a Resolution of the Bureau of Labor Relations dated February 27, 1981, the National Federation of Labor
Unions (NAFLU) was declared the exclusive bargaining representative of all rank-and-file employees of Viron
Garments Manufacturing Co., Inc. (VIRON).
More than four years thereafter, or on April 11, 1985, another union, the Kaisahan ng Manggagawang Pilipino
KAMPIL Katipunan filed with the Bureau of Labor Relations a petition for certification election among the employees
of VIRON. The petition allegedly counted with the support of more than thirty percent (30%) of the workers at
VIRON.
NAFLU opposed the petition, as might be expected. The Med-Arbiter however ordered, on June 14, 1985, that a
certification election be held at VIRON as prayed for, after ascertaining that KAMPIL had complied with all the
requirements of law and that since the certification of NAFLU as sole bargaining representative in 1981, no collective
bargaining agreement had been executed between it and VIRON.
NAFLU appealed. It contended that at the time the petition for certification election was filed on April 11, 1985, it
was in process of collective bargaining with VIRON; that there was in fact a deadlock in the negotiations which had
prompted it to file a notice of strike; and that these circumstances constituted a bar to the petition for election in
accordance with Section 3, Rule V, Book V of the Omnibus Rules Implementing the Labor Code, 1 reading as follows:
SEC. 3. When to file. — In the absence of a collective bargaining agreement submitted in accordance with
Article 231 of the Code, a petition for certification election may be filed at any time. However, no certification
election may be held within one year from the date of issuance of declaration of a final certification election
result. Neither may a representation question be entertained if, before the filing of a petition for certification
election, a bargaining deadlock to which an incumbent or certified bargaining agent is a party had been
submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout.
If a collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a
petition for certification election or a motion for intervention can only be entertained within sixty (60) days
prior to the expiry date of such agreement.
Finding merit in a NAFLU's appeal, the Director of Labor Relations rendered a Resolution on April 30, 1986 setting
aside the Med-Arbiter's Order of June 14, 1985 and dismissing KAMPIL's petition for certification election. This
disposition is justified in the Resolution as follows:
... While it may be true that the one-year period (mentioned in Section 3 above quoted) has long run its
course since intervenor NAFLU was certified on February 27, 1981, it could not be said, however, that NAFLU
slept on its right to bargain collectively with the employer. If a closer look was made on the history of labor
management relations in the company, it could be readily seen that the delay in the negotiations for and
conclusion of a collective agreement — the object of the one-year period — could be attributed first, on the
exhaustion of all legal remedies in the representation question twice initiated in the company before the
filing of the present petition and second, to management who had been resisting the representations of
NAFLU in collective bargaining.
The one-year period therefore, should not be applied literally to the present dispute, especially considering
that intervenor had to undergo a strike to bring management to the negotiation table. ...
KAMPIL moved for reconsideration, and when this was denied, instituted in this Court the present certiorari action.
It is evident that the prohibition imposed by law on the holding of a certification election "within one year from the
date of issuance of declaration of a final certification election result' — in this case, from February 27, 1981, the date
of the Resolution declaring NAFLU the exclusive bargaining representative of rank-and-file workers of VIRON — can
have no application to the case at bar. That one-year period-known as the "certification year" during which the
certified union is required to negotiate with the employer, and certification election is prohibited 2 — has long since
expired.
Thus the question for resolution is whether or not KAMPIL's petition for certification election is barred
because,before its filing, a bargaining deadlock between VIRON and NAFLU as the incumbent bargaining agent, had
been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout, in
accordance with Section 3, Rule V, Book V of the Omnibus Rules above quoted.
Again it seems fairly certain that prior to the filing of the petition for election in this case, there was no such
"bargaining deadlock ... (which) had been submitted to conciliation or arbitration or had become the subject of a
valid notice of strike or lockout." To be sure, there are in the record assertions by NAFLU that its attempts to bring
VIRON to the negotiation table had been unsuccessful because of the latter's recalcitrance and unfulfilled promises
to bargain collectively;3 but there is no proof that it had taken any action to legally coerce VIRON to comply with its
statutory duty to bargain collectively. It could have charged VIRON with unfair labor practice; but it did not. It could
have gone on a legitimate strike in protest against VIRON's refusal to bargain collectively and compel it to do so; but
it did not. There are assertions by NAFLU, too, that its attempts to bargain collectively had been delayed by
continuing challenges to the resolution pronouncing it the sole bargaining representative in VIRON; but there is no
adequate substantiation thereof, or of how it did in fact prevent initiation of the bargaining process between it and
VIRON.
The stark, incontrovertible fact is that from February 27, 1981 — when NAFLU was proclaimed the exclusive
bargaining representative of all VIRON employees — to April 11, 1985 — when KAMPIL filed its petition for
certification election or a period of more than four (4) years, no collective bargaining agreement was ever executed,
and no deadlock ever arose from negotiations between NAFLU and VIRON resulting in conciliation proceedings or the
filing of a valid strike notice.
The respondents advert to a strike declared by NAFLU on October 26, 1986 for refusal of VIRON to bargain and for
violation of terms and conditions of employment, which was settled by the parties' agreement, and to another strike
staged on December 6, 1986 in connection with a claim of violation of said agreement, a dispute which has since
been certified for compulsory arbitration by the Secretary of Labor & Employment. 4 Obviously, however, these
activities took place after the initiation of the certification election case by KAMPIL, and it was grave abuse of
discretion to have regarded them as precluding the holding of the certification election thus prayed for.
WHEREFORE, it being apparent that none of the proscriptions to certification election set out in the law exists in the
case at bar, and it was in the premises grave abuse of discretion to have ruled otherwise, the contested Resolution of
the respondent Director of the Bureau of Labor Relations dated April 30, 1986 in BLR Case No. A-7-139-85 (BZEO-CE-
04-004-85) is NULLIFIED AND SET ASIDE. Costs against private respondent.
SO ORDERED.
G.R. No. 85915 January 17, 1990

PAGKAKAISA NG MGA MANGGAGAWA SA TRIUMPH INTERNATIONAL-UNITED LUMBER AND GENERAL WORKERS
OF THE PHILIPPINES (PMTI-ULGWF), petitioner,
vs.
PURA FERRER-CALLEJA, DIRECTOR OF THE BUREAU OF LABOR RELATIONS AND THE CONFEDERATION OF FILIPINO
WORKERS (CFW), PROGRESSIVE EMPLOYEES UNION (PEU-TIPI), respondents.
Godofredo R. Paceño, Jr., for petitioner.
Sycip, Salazar, Hernandez & Gatmaitan for Triumph International Phils. Inc.
Rogelio R. Udarbe for private respondents.
GUTIERREZ, JR., J.:

Once again we uphold the existing law which encourages one union, one company policy in this petition
forcertiorari with prayer for preliminary injunction, The petitioner assails the resolutions of the public respondent
dated August 24, 1988 and October 28, 1988 both ordering the holding of a certification election among certain
monthly-paid employees of Triumph International Philippines, Inc. (Triumph International for brevity).
The petitioner is the recognized collective bargaining agent of the rank-and-file employees of Triumph International
with which the latter has a valid and existing collective bargaining agreement effective up to September 24, 1989.
On November 25, 1987, a petition for certification election was filed by the respondent union with the Department
of Labor and Employment.
On January 30, 1988, a motion to dismiss the petition for certification election was filed by Triumph International on
the grounds that the respondent union cannot lawfully represent managerial employees and that the petition cannot
prosper by virtue of the contract-bar rule. On the same grounds, the petitioner, as intervenor, filed its opposition to
the petition oil February 18, 1988.
On April 13, 1988, the Labor Arbiter issued an order granting the petition for certification election and directing the
holding of a certification election to determine the sole and exclusive bargaining representative of all monthly-paid
administrative, technical, confidential and supervisory employees of Triumph International.
On appeal, the public respondent on August 24, 1988 affirmed the Labor Arbiter's order with certain modifications as
follows:
WHEREFORE, premises considered, the order appealed from is hereby affirmed subject to the modification in
that the subject employees sought to be represented by the petitioner union are given the option whether to
join the existing bargaining unit composed of daily paid rank-and-file employees. If they opt to join, the
pertinent provision of the existing CBA should be amended so as to include them in its coverage. (Rollo, p.
19)
On September 5, 1988, Triumph International filed a motion for reconsideration which was denied by the public
respondent in a resolution dated October 28, 1988.
The sole issue presented by the petitioner in the instant case is whether or not the public respondent gravely abused
its discretion in ordering the immediate holding of a certification election among the workers sought to be
represented by the respondent union.
The petitioner argues that the members of respondent union and managerial employees who are expressly excluded
from joining, assisting or forming any labor organization under Art. 245 of the Labor Code.
In the determination of whether or not the members of respondent union are managerial employees, we accord due
respect and, therefore, sustain the findings of fact made by the public respondent pursuant to the time-honored rule
that findings of fact of quasi-judicial agencies like the Bureau of Labor Relations which are supported by substantial
evidence are binding on us and entitled to great respect considering their expertise in their respective fields.
(see Phil. Airlines Employees Asso. (PALEA) v. Ferrer-Calleja, 162 SCRA 426 [1988]; Producers Bank of the Philippines
v. National Labor Relations Commission, G.R. No. 76001, September 5, 1988; Salvador Lacorte v. Hon. Amado G.
Inciong, et al., G.R. No. 52034, September 27, 1988: Johnson and Johnson Labor Union-FFW et al. v. Director cf. Labor
Relations, G.R. No. 76427, February 21, 1989; Teofila Arica, et al. v. National Labor Relations Commission, et al., G.R.
No. 78210, February 28, 1989; A.M. Oreta & Co. Inc. v. National Labor Relations Commission, G.R. No. 74004, August
10, 1989). According to the Med-Arbiter, while the functions, and we may add, the titles of the personnel sought to
be organized appear on paper to involve an apparent exercise of managerial authority, the fact remains that none of
them discharge said functions. The petitioner has failed to show reversible error insofar as this finding is concerned.
In ruling that the members of respondent union are rank and file and not managerial employees, the public
respondent made the following findings:
. . . (1) They do not have the power to lay down and execute management policies as they are given ready
policies merely to execute and standard practices to observe; 2) they do not have the power to hire, transfer,
suspend, lay-off, recall, discharge, assign or discipline employees but only to recommend for such actions as
the power rests upon the personnel manager; and 3) they do not have the power to effectively recommend
any managerial actions as their recommendations have to pass through the department manager for review,
the personnel manager for attestation and general manager/president for final actions. . . . (At pp. 17-
18, Rollo)
The petitioner further argues that while it has recognized those signatories and employees occupying the positions of
Assistant Manager, Section Chief, Head Supervisor and Supervisor as managerial employees under the existing
collective bargaining agreement, in the event that they are declared as rank-and-file employees in the present case
they are not precluded from joining and they should join the petitioner.
We find the aforesaid contention of the petitioner meritorious in the absence of a showing that there are compelling
reasons such as the denial of the right to join the petitioner which is the certified bargaining unit to the members of
respondent union or that there are substantial distinctions warranting the recognition of a separate group of rank-
and-file employees even as there is an existing bargaining agent for rank and file employees.
In the case of Philtranco Service Enterprises v. Bureau of Labor Relations, et. al., G.R. No. 85343 promulgated on June
28, 1989, we stated that:
The Labor Code recognizes two (2) principal groups of employees, namely, the managerial and the rank and
file groups. Thus, Art. 212 (k) of the Code provides:
xxx xxx xxx
(k) "Managerial employee" is one who is vested with powers or prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees, or to effectively recommend such managerial action. All employees not falling within this
definition are considered rank and file employees for purposes of this Book.
In implementation of the aforequoted provision of the law, Section II of Rule 11, Book V of the Omnibus
Rules implementing the Labor Code did away with existing supervisory unions classifying the members either
as managerial or rank and file employees depending on the work they perform. If they discharge managerial
functions, supervisors are prohibited from forming or joining any labor organization. If they do not perform
managerial work, they may join the rank and file union and if none exists, they may form one such rank and
file organization. This rule was emphasized in the case of Bulletin Publishing Corp. v.Sanchez, (144 SCRA 628
[1986]).
We have explicitly explained in the case of Franklin Barker Company of the Philippines v. Trajano, 157 SCRA 416
[1988] that:
The test of "supervisory" or "managerial status" depends on whether, a person possesses authority to act in
the interest of his employer in the matter specified in Article 212 (K) of the Labor Code and Section 1 (m) of
its Implementing Rules and whether such authority is not merely routinary or clerical in nature, but requires
the use of independent judgment. Thus, where such recommendatory powers as in the case at bar, are
subject to evaluation, review and final action by the department heads and other higher executives of the
company, the same, although present, are not effective and not an exercise of independent judgment as
required by law (National Warehousing Corp., v. CIR, 7 SCRA 602-603 [1963]).
The public respondent, in its factual findings, found that the supervisory employees sought to be represented by the
respondent union are not involved in policy-making and their recommendatory powers are not even instantly
effective since the same are still subject to review by at least three managerial heads (department manager,
personnel manager and general manager) before final action can be taken. Hence, it is evidently settled that the said
employees do not possess a managerial status. The fact that their work designations are either managers or
supervisors is of no moment considering that it is the nature of their functions and not the said nomenclatures or
titles of their jobs which determines their statuses (see Engineering Equipment, Inc. v. National Labor Relations
Commission, 133 SCRA 752 [1984] citing National Waterworks and Sewerage Authority v. NWSA Consolidated
Unions, 11 SCRA 766 [1964]).
Under the old Industrial Peace Act (Republic Act No. 875), the term "supervisors" had the following definition, to wit:
Sec. 2. Definitions — As used in this Act.
xxx xxx xxx
(k) "'Supervisor" means any person having authority in the interest of an employer, to hire, transfer, suspend,
lay-off, recall, discharge, assign, recommend, or discipline, other employees, or responsibly to direct them,
and to adjust their grievances, or effectively to recommend such acts if, in connection with the foregoing, the
exercise of such authority is not of a merely routinary or clerical nature but requires the use of independent
judgment.
Section 3 of the same Act further provides that the supervisors as defined above shall not be eligible for membership
in a labor organization of employees under their supervision but may form separate organizations of their own.
With the enactment of the Labor Code (Presidential Decree No. 442 as amended,), the term "supervisor" was
replaced by "managerial employee." Book V, Art. 212, subparagraph (k) of said Code reads:
(k) "Managerial Employee" is one who is vested with powers or prerogatives to lay down and execute
employees, or to effectively recommend such managerial actions. All employees not falling within this
definition are considered rank and file employees for purposes of this Book.
Art. 245 of the aforementioned Code prohibits managerial employees from joining, assisting or forming any labor
organization. Hence, employees who had then formed supervisory unions were classified either as managerial or
rank-and-file depending on their functions in their respective work assignments. (Bulletin Publishing Corp. v.
Sanchez, supra.)
The recent amendments to the Labor Code contain separate definitions for managerial and supervisory employees.
Section 4 of Republic Act No. 6715 states that:
Section 4, Article 212 of the Labor Code of the Philippines, as amended, is further amended to read as
follows:
xxx xxx xxx
(m) "Managerial Employee" is one who is vested with powers or prerogatives to lay down and execute
employees. Supervisory employees are those who, in the interest of the employer, effectively recommend
such management actions if the exercise of such authority is not merely routinary or clerical in nature but
requires the use of independent judgment. All employees not falling within any of the above definitions are
considered rank and file employees for purposes of this Book.
Section 18 of the same Act retains the provision on the ineligibility of managerial employees to join any labor
organization. However, the right of supervisory employees to form their own union is revived under the said section
which states, in part, to wit:
. . . Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file
employees but may join, assist or form separate labor organizations of their own.
Thus, the right of supervisory employees to organize under the Industrial Peace Act is once more recognized under
the present amendments to the Labor Code. (see Adamson & Adamson Inc., v. The Court of Industrial Relations, 127
SCRA 268 [1984]). In the absence of any grave abuse of discretion on the part of the public respondent as to the
status of the members of the respondent union, we adopt its findings that the employees sought to be represented
by the respondent union are rank-and-file employees.
There is no evidence in the records which sufficiently distinguishes and clearly separates the group of employees
sought to be represented by the private respondents into managerial and supervisory on one hand or supervisory
and rank-and-file on the other. The respondents' pleadings do not show the distinctions in functions and
responsibilities which differentiate the managers from the supervisors and sets apart the rank-and-file from either
the managerial or supervisory groups. As a matter of fact, the formation of a supervisor's union was never before the
Labor Arbiter and the Bureau of Labor Relations and neither is the issue before us. We, therefore, abide by the public
respondent's factual findings in the absence of a showing of grave abuse of discretion.
In the case at bar, there is no dispute that the petitioner is the exclusive bargaining representative of the rank-and-file
employees of Triumph International. A careful examination of the records of this case reveals no evidence that rules
out the commonality of interests among the rank-and-file members of the petitioner and the herein declared rank-
and-file employees who are members of the respondent union. Instead of forming another bargaining unit, the law
requires them to be members of the existing one. The ends of unionism are better served if all the rank-and-file
employees with substantially the same interests and who invoke their right to self-organization are part of a single
unit so that they can deal with their employer with just one and yet potent voice. The employees' bargaining power
with management is strengthened thereby. Hence, the circumstances of this case impel us to disallow the holding of
a certification election among the workers sought to be represented by the respondent union for want of proof that
the right of said workers to self-organization is being suppressed.
Once again we enunciate that the proliferation of unions in an employer unit is discouraged as a matter of policy
unless compelling reasons exist which deny a certain and distinct class of employees the right to self-organization for
purposes of collective bargaining. (see General Rubber & Footwear Corporation v. Bureau of Labor Relations, 155
SCRA 283 [1987]).
Anent the correlative issue of whether or not the contract-bar rule applies to the present case, Rule V, Section 3,
Book V of the Implementing Rules and Regulations of the Labor Code is written in plain and simple terms. It provides
in effect that if a collective bargaining agreement validly exists, a petition for certification election can only be
entertained within sixty (60) days prior to the expiry date of said agreement. Respondent union's petition for
certification election was filed on November 25, 1987. At the time of the filing of the said petition, a valid and
existing CBA was present between petitioner and Triumph International. The CBA was effective up to September 24,
1989. There is no doubt that the respondent union's CBA constituted a bar to the holding of the certification election
as petitioned by the respondent union with public respondent. (see Associated Trade Unions [ATU] v. Trajano, 162
SCRA 318 [1988], Federation of Democratic Trade Union v. Pambansang Kilusan ng Paggawa, 156 SCRA 482 [1987]);
Tanduay Distillery Labor Union v. National Labor Relations Commission, 149 SCRA 470 [1987]). The members of the
respondent union should wait for the proper time.
The CBA in this case expired on September 24, 1989. If a new CBA with the same provisions as the old one has been
executed, its terms should be amended so as to conform to the tenor of this decision.
WHEREFORE, in view of the foregoing, the assailed resolutions of the public respondent dated August 24, 1988 and
October 28, 1988 are hereby SET ASIDE. The restraining order dated January 11, 1989 issued by the Court is made
permanent.
SO ORDERED.
G.R. No. L-77282 May 5, 1989

ASSOCIATED LABOR UNIONS (ALU) petitioner,
vs.
HON. PURA FERRER-CALLEJA, as Director of the Bureau of Labor Relations, Ministry of Labor and Employment;
PHILIPPINE SOCIAL SECURITY LABOR UNION (PSSLU); SOUTHERN PHILIPPINES FEDERATION OF LABOR (SPFL) and
GAW TRADING, INC., respondents.
Romeo S. Occena, Leonard U. Sawal, Edgemelo C. Rosales and Ernesto Carreon for petitioner.
Henrick F. Gingoyon for respondent SPFL.
Wilfredo L. Orcullo for respondent Southern Philippines Federation of Labor.
Miguel A. Enrique, Jr. for respondent GAW Trading, Inc.
REGALADO, J.:
Petitioner Associated Labor Unions (ALU, for brevity) instituted this special civil action for certiorari and prohibition to
overturn the decision of the respondent direcstor 1 dated December 10, 1986, which ordered the holding of a
certification election among the rank-and-file workers of the private respondent GAW Trading, Inc. The averments in
the petition therefor, which succinctly but sufficiently detail the relevant factual antecedents of this proceedings,
justify their being quoted in full, thus:
1. The associated Labor Unions (ALU) thru its regional Vice-Presidents Teofanio C. Nuñez, in a letter
dated May 7, 1986 (ANNEX C) informed GAW Trading, Inc. that majority of the latter's employees
have authorized ALU to be their sole and exclusive bargaining representative, and requested GAW
Trading Inc., in the same Letter for a conference for the execution of an initial Collective Bargaining
Agreement (CBA);
2. GAW Trading Inc. received the Letter of ALU aforesaid on the same day of May 7, 1986 as
acknowledged thereunder and responded (sic) ALU in a letter dated May 12, 1986 (Annex D)
indicating its recognition of ALU as the sole and exclusive bargaining agent for the majority of its
employees and for which it set the time for conference and/or negotiation at 4:00 P.M. on May 12,
1986 at the Pillsbury Office, Aboitiz Building Juan Luna Street, Cebu City;
3. On the following day of May13, 1986, ALU in behalf of the majority of the employees of GAW
Trading Inc. signed and excuted the Collective Bargaining (ANNEX F) ...
4. On May 15, 1986, ALU in behalf of the majority of the employees of GAW Trading Inc. and GAW
Trading Inc. signed and executed the Collective Bargaining Agreements (ANNEX F) . . . .
5. In the meantime, at about 1:00 P.M. of May 9, 1986, the Southern Philippines Federation of Labor
(SPFL) together with Nagkahiusang Mamumuo sa GAW (NAMGAW) undertook a ... Strike ... after it
failed to get the management of GAW Trading Inc. to sit for a conference respecting its demands
presented at 11: A.M. on the same day in an effort to pressure GAW Trading Inc. to make a turnabout
of its standign recognition of ALU as the sole and exclusive bargaining representative of its
employees, as to which strike GAW Trading Inc. filed a petition for Restraining Order/Preliminary
Injunction, dfated June 1, 1986 (Annex H) and which strike Labor Arbiter Bonifacio B. Tumamak held
as illegal in a decision dated August 5, 1986 (ANNEX I);
6. On May 19, 1986, GAW Lumad Labor Union (GALLU-PSSLU) Federation ... filed a Certification
Election petition (ANNEX J), but as found by Med-Arbiter Candido M. Cumba in its (sic) Order dated
Ju ne 11, 1986 (ANNEX K), without having complied (sic) the subscription requirement for which it
was merely considered an intervenor until compliance thereof in the other petition for direct
recogbnition as bargaining agent filed on MAy 28, 1986 by southern Philippines Federation of Labor
(SPFL) as found in the same order (ANNEX K);
7. Int he meantime, the Collective Bargaining Agreement executed by ALU and GAW Trading Inc.
(ANNEX F) was duly filed May 27, 1986 with the Ministry of Labor and Employment in Region VII,
Cebu city;
8. Nevertheless, Med-Arbiter Candido M. Cumba in his order of June 11, 1986 (Annex K) ruled for the
holding of a ceritfication election in all branches of GAW Trading Inc. in Cebu City, as to which ALU
filed a Motion for Reconsideration dated June 19, 1986 (ANNEX L) which was treated as an appeal on
that questioned Order for which reason the entire record of subject certification case was forwarded
for the Director, Bureau of LAbor Relations, Ministry of Labor and Employment, Manila (ANNEX M);
9. Bureau of Labor Relations Director Cresencio B. Trajano, rendered a Decision on August 13, 1986
(Annex B) granting ALU's appeal (Motion for Reconsideration) and set aside the questioned Med-
Arbiter Order of June 11, 1986 (Annex K), on the ground that the CBA has been effective and valid
and the contract bar rule applicable;
10. But the same Decision of Director Crecensio B. Trajano was sought for reconsideratrion both by
Southern Philippines Federation of Labor (SPFL) on August 26, 1986 (ANNEX N), supplemented by the
'SUBMISSION OD ADDITIONAL EVIDENCE' dated September 29, 1986 (ANNEX O), and the Philppine
Social Security Labor Union (PSSLU) on October 2, 1986 (ANNEX P), which were opposed by both
GAW Trading, Inc. on September 2, 1986 (ANNEX Q) and ALU on September 12, 1986 (ANNEX R); 2
The aforesaid decision of then Director Trajano was thereafter reversed by respondent director in her aforecited
decision which is now assailed in this action. A motion for reconsideration of ALU 3 appears to have been disregarded,
hence, its present resort grounded on grave abuse of discretion by public respondent.
Public respondent ordered the holding of a certification election ruling that the "contract bar rule" relied upon by her
predecessor does not apply in the present controversy. According to the decision of said respondent, the collective
bargaining agreement involved herein is defective because it "was not duly submitted in accordance with Section I,
Rule IX, Book V of the Implementing Rules of Batas Pambansa Blg. 130." It was further observed that "(t)here is no
proof tending to show that the CBA has been posted in at least two conspicuous places in the 1 establishment at
least five days before its ratification and that it has been ratified by the majority of the employees in the bargaining
unit."
We find no reversible error in the challenged decision of respondent director. A careful consideration of the facts
culled from the records of this case, especially the allegations of petitioner itself as hereinabove quoted, yields the
conclusion that the collective bargaining agreement in question is indeed defective hence unproductive of the legal
effects attributed to it by the former director in his decision which was subsequently and properly reversed.
We have previously held that the mechanics of collective bargaining are set in motion only when the following
jurisdictional preconditions are present, namely, (1) possession of the status of majority representation by the
employees' representative in accordance with any of the means of selection and/or designation provided for by the
Labor Code; (2) proof of majority representation; and (3) a demand to bargain under Article 251, paragraph (a), of
the New Labor Code. 4 In the present case, the standing of petitioner as an exclusive bargaining representative is
dubious, to say the least. It may be recalled that respondent company, in a letter dated May 12, 1986 and addressed
to petitioner, merely indicated that it was "not against the desire of (its) workers" and required petitioner to present
proof that it was supported by the majority thereof in a meeting to be held on the same date. 5 The only express
recognition of petitioner as said employees' bargaining representative that We see in the records is in the collective
bargaining agreement entered into two days thereafter. 6 Evidently, there was precipitate haste on the part of
respondent company in recognizing petitioner union, which recognition appears to have been based on the self-
serving claim of the latter that it had the support of the majority of the employees in the bargaining unit.
Furthermore, at the time of the supposed recognition, the employer was obviously aware that there were other
unions existing in the unit. As earlier stated, respondent company's letter is dated May 12, 1986 while the two other
unions, Southern Philippine Federation of Labor (hereafter, SPFL and Philippine Social Security Labor Union (PSSLU,
for short), went on strike earlier on May 9, 1986. The unusual promptitude in the recognition of petitioner union by
respondent company as the exclusive bargaining representative of the workers in GAW Trading, Inc. under the fluid
and amorphous circumstances then obtaining, was decidedly unwarranted and improvident.
It bears mention that even in cases where it was the then Minister of Labor himself who directly certified the union
as the bargaining representative, this Court voided such certification where there was a failure to properly determine
with legal certainty whether the union enjoyed a majority representation. In such a case, the holding of a
certification election at a proper time would not necessarily be a mere formality as there was a compelling reason
not to directly and unilaterally certify a union. 7
An additional infirmity of the collective bargaining agreement involved was the failure to post the same in at least
two (2) conspicuous places in the establishment at least five days before its ratification. 8 Petitioners rationalization
was that "(b)ecause of the real existence of the illegal strike staged by SPFL in all the stores of GAW Trading, Inc. it
had become impossible to comply with the posting requirement in so far as the realization of tits purpose is
concerned as there were no impartial members of the unit who could be appraised of the CBA's contents. " 9 This
justification is puerile and unacceptable.
In the first place, the posting of copies of the collective bargaining agreement is the responsibility of the employer
which can easily comply with the requirement through a mere mechanical act. The fact that there were "no impartial
members of the unit" is immaterial. The purpose of the requirement is precisely to inform the employees in the
bargaining unit of the contents of said agreement so that they could intelligently decide whether to accept the same
or not. The assembly of the members of ALU wherein the agreement in question was allegedly explained does not
cure the defect. The contract is intended for all employees and not only for the members of the purpoted
representative alone. It may even be said the the need to inform the non-members of the terms thereof is more
exigent and compelling since, in all likehood, their contact with the persons who are supposed to represent them is
limited. Moreover, to repeat, there was an apparent and suspicious hurry in the formulation and finalization of said
collective bargaining accord. In the sforementioned letter where respondent company required petitioner union to
present proof of its support by the employees, the company already suggested that petitioner ALU at the same time
submit the proposals that it intended to embody in the projected agreement. This was on May 12, 1986, and
prompltly on thre following day the negoltiation panel; furnish respondent company final copies of the desired
agreement whcih, with equal dispatch, was signed on May 15, 1986.
Another potent reason for annulling the disputed collective bargaining is the finding of respondent director that one
hundred eighty-one( 181) of the two hundred eighty-one (281) workers who "ratified" the same now " strongly and
vehemently deny and/or repudiate the alleged negotiations and ratification of the CBA. " 10 Although petitioner
claims that only sev en (7) of the repudiating group of workers belong to the total number who allegedly ratified the
agreement, nevertheless such substantiated contention weighed against the factujal that the controverted contract
will not promote industrial stability . The Court has long since declared that:
... Basic to the contract bar rule is the proposition that the delay of the right to select represen
tatives can be justified only where stability is deemed paramount. Excepted from the contract which
do not foster industrial stability, such as contracts where the identity of the representative is in
doubt. Any stability derived from such contracts must be subordinated to the employees' freedom of
choice because it does nto establish the type of industrial peace contemplated by the law. 11
At this juncture, petitioner should be reminded that the technical rules of rpocedure do not strictly apply in the
adjudication of labor disputes. 12 Consequently, its objection that the evidence with respect to the aforesaid
repudiiation of the supposed collective bargaining agreement cannot be considered for the first time on appeal on
the Bureau of Labor Relations should be disregarded, especially considering the weighty significance thereof.
Both petitioner and private respondent GAW Trading, Inc. allege that the employees of the latter are now enjoying
the benefits of the collective bargaining agreement that both parties had forged. However, We cannot find sufficient
evidence of record to support this contention. The only evidence cited by petitioner is supposed payment of union
fees by said employees, a premise too tenuous to sustain the desired conclusion. Even the actual number of workers
in the respondent company is not clear from the records. Said private respondent claims that it is two hundred
eighty-one (281)13 but petitioner suggests that it is more than that number. The said parties should be aware that this
Court is not an adjudicator of facts. Worse, to borrow a trite but apt phrase, they would heap the Ossa of confusion
upon the Pelion of uncertainty and still expect a definitive ruling on the matter thus confounded.
Additionally, the inapplicability of the contract bar rule is further underscored by the fact that when the disputed
agreement was filed before the Labor Regional Office on May 27, 1986, a petition for certification election had
already been filed on May 19, 1986. Although the petition was not supported by the signatures of thirty percent
(30%) of the workers in the bargaining unit, the same was enough to initiate said certification election.
WHEREFORE, the order of the public respondent for the conduct of a certification election among the rank-and-file
workers of respondent GAW Trading Inc. is AFFIRMED. The temporary restraining order issued in this case pursuant
to the Resolution of March 25, 1987 is hereby lifted.
SO ORDERED.
G.R. No. 76673 June 22, 1988

PHILIPPINE AIRLINES EMPLOYEES' ASSOCIATION (PALEA), petitioner,
vs.
HON. PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, PHILIPPINE AIRLINES NON-MANAGERIAL
EMPLOYEES ASSOCIATION (PANOMEA-FUR), and PHILIPPINE AIRLINES, INC., respondents.
Juanito R. Carlos, Jr. for private respondent PANOMEA-FUR.
Cenon S. Cervantes, Jr. for respondent PAL.
GRIÑO-AQUINO, J.:
Petitioner in this special civil action for certiorari and prohibition, alleges grave abuse of discretion on the part of the
Bureau of Labor Relations in issuing the following orders:
1. NCR Med-Arbiter Edgardo dela Cruz' Resolution dated January 13, 1981;
2. BLR Resolution dated November 27,1981 signed by OIC Romeo Young;
3. BLR Order signed by Director Cresenciano Trajano dated April 4, 1986;
4. BLR Order signed by Director Cresenciano Trajano dated June 26, 1986; and
5. BLR Order dated October 29, 1986 signed by Director Pura Ferrer-Calleja in BLR Case No. A-034-81
(NCR-LRD-M-9-361-80).
Petitioner prays for the issuance of a restraining order enjoining the respondent BLR Director from proceeding with
the certification election in BLR Case No. 034-81 (NCR-LRD-M-9-361-80) and moves to dismiss the petition for
certification election filed by Philippine Airlines Non-Managerial Employees Association (PANOMEA-FUR).
The records show that prior to the effectivity of the Labor Code on November 1, 1974, there were four collective
bargaining agents in the Philippine Airlines, Inc., namely: 1) the Airline Pilots Association of the Philippine (ALPAP),
representing pilots; 2) Flight Attendants and Flight Stewards Association of the Philippines, (FASAP), representing
flight attendants and stewards; 3) Philippine Airlines Supervisors' Association (PALSA), representing ground
supervisory personnel, and 4) petitioner (PALEA) representing ground rank-and-file personnel.
Pursuant to Section II, Rule II of the Labor Code, in relation to Articles 212(k) and 246, Labor Code as amended, the
continued existence of PALSA was rejected, because a supervisory union could not organize as a labor unit separate
from that of the rank-and-file organization. In anticipation of PALSA's dissolution, the Philippine Airlines Personnel
Association (PALPA-Legayada) filed on November 19, 1974 a petition for certification election under BLR Case No.
0013. In this case, the BLR Director ruled on November 24,1975 that "all employees with the positions of division
heads or above shall be considered "managerial employees" and ineligible to vote, and all others shall be declared
rank and file."
On April 27,1977, a certification election was held among: (1) PALPA, (2) PALEA, and (3) No Union. PALEA, as the
winner in that election, was certified by the BLR as the exclusive bargaining agent of all the rank-and-file employee of
the Philippine Airlines, Inc.
PALEA and PAL signed a 3-year collective bargaining agreement effective October 1, 1976 up to September 30, 1979.
Its life was, by agreement of the parties, extended up to September 30, 1980.
Before the expiration of the agreement in September, 1980, the respondent Philippine Airlines Non-Managerial
Employees' Association (PANOMEA-FUR) filed a petition for certification election among the "administrative,
supervisory, licensed mechanics, technical and confidential employees" of PAL, alleging inter alia that "there is no
other union existing in the proposed bargaining unit nor is there a certified collective bargaining agreement which
may be a bar to the petition." PALEA, which had an existing collective bargaining agreement with the Management,
was not mentioned in the petition, nor notified of the filing of the same. Although PAL had filed its position paper in
the said certification election case, the Med-Arbiter issued a resolution on January 13, 1981, granting the petition for
a certification election among the administrative, supervisory, licensed mechanics, technical and confidential
employees of PAL with the following as the contending parties: P (1) PANOMEA-FUR and (2) No Union.
Upon learning of the Med-Arbiters resolution. PALEA appealed to the BLR Director on February 9, 1981 as a
compulsory intervenor. The BLR Officer-in-charge affirmed on November 27, 1981 the Med-Arbiter's resolution
calling for a certification election. PALEA and PAL filed separate motions for reconsideration of the BLR resolution.
Meanwhile, PAL and PALEA concluded a collective bargaining agreement on May 19, 1981, with a three-year life span
from October 1, 1980 to September 30, 1983. It was renewed for another three-year period expiring on September
30, 1986.
While PAL and PALEA's motions for reconsideration were pending resolution by the BLR Director, the licensed
mechanics whom PANOMEA-FUR sought to represent, filed their own petition for certification election on October
16, 1984 under the name of PAL Licensed/Amalgamated Federation of Labor of the Philippines (PALMA-AFL).
PAL and PLEA separately filed an answer/opposition to the petition of PALMA-AFL. PALEA argued that it was the
exclusive bargaining agent of the rank-and-file employees of PAL, including the members of PALMA-AFL who are also
embraced within the CBA that was concluded between PAL and PALEA.
On October 11, 1985, the BLR Director dismissed the petition of the licensed mechanics only (PALMA-AFL), excluding
the administrative, supervisory, technical and confidential employees. He ruled that the existing law did not allow the
creation of a separate bargaining unit for the licensed mechanics at PAL, because they were considered members of
the existing rank-and-file unit represented for collective bargaining purposes by PALEA.
However, on April 4, 1986, the BLR Director ordered the holding of a certification election among the administrative,
supervisory, licensed mechanics, technical and confidential employees of PAL and denied PAL's and PALEA's motions
for reconsideration of the BLR's November 27, 1981 decision.
In his Order of June 26, 1986, BLR Director Cresciano Trajano denied PAL's and PALEA's motions for reconsideration.
However, finding it necessary to conduct pre-election conferences to delineate the proper composition of the
proposed bargaining unit, the BLR on August 15, 1986 temporarily restrained the holding of the certification election.
On October 29, 1986, BLR Director Calleja lifted the restraining order and directed the holding of the said election.
Hence, this petition for certiorari by PALEA, alleging that the BLR Director erred:
1. in ordering a certification election among PAL's administrative, supervisory, licensed mechanics, technical and
confidential employees as a separate bargaining unit distinct from the rank-and-file employees, in violation of specific
provisions of the Labor Code as amended, particularly Article 256 thereof; and
2. in not dismissing the petition for certification election filed by respondent PANOMEA-FUR (NCR-LRD-M-9-361-80)
for having been rendered moot and academic by supervening factors.
Petitioner claims that PALEA is the exclusive bargaining representative of all rank-and-file PAL employees, and that
PANOMEA seeks to dismember or fragmentize the already existing unit so that another one may be created.
Furthermore, petitioner argues that PANOMEA's petition for a certification election is fatally defective, as it is not
supported by the signatures of at least 30% of the bargaining unit composed of 7,000 rank-and-file employees (only
369 signatures were allegedly obtained), contrary to law and national policy.
We are not persuaded that the public respondent gravely abused her discretion in issuing the assailed orders.
The rule is that factual findings of the Bureau of Labor Relations which are supported by substantial evidence are
binding on this Court and must be respected (Asian Design and Manufacturing Corp. vs. Deputy Minister of Labor,
142 SCRA 79). The Bureau of Labor Relations found that the present CBA between PALEA and PAL covers only the
rank and file employees but not the licensed mechanics, administrative, supervisory, technical and confidential
employees of PAL. The petition failed to prove that PANOMEA's petition lacked the support of 30% of the employees.
Employees have a constitutional right to choose their own bargaining representative. The holding of a certification
election is a statutory policy that should not be circumvented (George and Peter Lines, Inc. vs. Association of Labor
Unions [ALU], 134 SCRA 92).
Whenever there is doubt as to whether a particular union represents the majority of the rank-and-file employees, in
the absence of a legal impediment, the holding of a certification election is the most democratic method of
determining the employees' choice of their bargaining representative. It is the appropriate means whereby
controversies and disputes on representation may be laid to rest, by the unequivocal vote of the employees
themselves. In lifting the restraining order which her predecessor had issued, and ordering that the certification
election proceed, respondent Ferrer-Calleja opened the door for the employees to express their choice.
WHEREFORE, the petition is dismissed for lack of merit.
SO ORDERED.
G.R. No. 75321 June 20, 1988

ASSOCIATED TRADE UNIONS (ATU), petitioner,
vs.
HON. CRESENCIO B. TRAJANO, in his capacity as Director of the Bureau of Labor Relations, MOLE, BALIWAG
TRANSIT, INC. and TRADE UNIONS OF THE PHILIPPINES AND ALLIED SERVICES (TUPAS)-WFTU,respondents.
Puerto, Nunez & Associates for petitioner.
Tupaz and Associates for respondent Union.
Jose C. Espinas collaborating counsel for private respondent.
Agapito S. Mendoza for respondent Baliwag Transit, Inc.
The Solicitor General for public respondent.
CRUZ .J,:
The resolution of this case has been simplified because it has been, in Justice Vicente Abad Santos's felicitous phrase,
"overtaken by events."
This case arose when on March 25, 1986, the private respondent union (TUPAS) filed with the Malolos labor office of
the MOLE a petition for certification election at the Baliwag Transit, Inc. among its rank-and-file workers. 1 Despite
opposition from the herein petitioner, Associated Trade Unions (ATU), the petition was granted by the med-arbiter on
May 14, 1986, and a certification election was ordered "to determine the exclusive bargaining agent (of the workers)
for purposes of collective bargaining with respect to (their) terms and conditions of employment." 2 On appeal, this
order was sustained by the respondent Director of Labor Relations in his order dated June 20, 1986, which he
affirmed in his order of July 17, 1986, denying the motion for reconsideration. 3 ATU then came to this Court claiming
that the said orders are tainted with grave abuse of discretion and so should be reversed. On August 20, 1986, we
issued a temporary restraining order that has maintained the status quoamong the parties. 4
In support of its petition, ATU claims that the private respondent's petition for certification election is defective
because (1) at the time it was filed, it did not contain the signatures of 30% of the workers, to signify their consent to
the certification election; and (2) it was not allowed under the contract-bar rule because a new collective bargaining
agreement had been entered into by ATU with the company on April 1, 1986. 5
TUPAS for its part, supported by the Solicitor General, contends that the 30% consent requirement has been
substantially complied with, the workers' signatures having been subsequently submitted and admitted. As for the
contract-bar rule, its position is that the collective bargaining agreement, besides being vitiated by certain procedural
defects, was concluded by ATU with the management only on April 1, 1986 after the filing of the petition for
certification election on March 25, 1986. 6
This initial sparring was followed by a spirited exchange of views among the parties which insofar as the first issue is
concerned has become at best only academic now. The reason is that the 30% consent required under then Section
258 of the Labor Code is no longer in force owing to the amendment of this section by Executive Order No. 111,
which became effective on March 4, 1987.
As revised by the said executive order, the pertinent articles of the Labor Code now read as follows:
Art. 256. Representation issue in organized establishments.— In organized establishments, when a petition
questioning the majority status of the incumbent bargaining agent is filed before the Ministry within the sixty-day
period before the expiration of the collective bargaining agreement, the Med-Arbiter shall automatically order an
election by secret ballot to ascertain the will of the employees in the appropriate bargaining unit. To have a valid
election, at least a majority of all eligible voters in the unit must have cast their votes. The labor union receiving the
majority of the valid votes cast shall be certified as the exclusive bargaining agent of all the workers in the unit. When
an election which provides for three or more choices results in no choice receiving a majority of the valid votes cast,
a runoff election shall be conducted between the choices receiving the two highest number of votes.
Art. 257. Petitions in unorganized establishments.— In any establishment where there is no certified bargaining
agent, the petition for certification election filed by a legitimate labor organization shall be supported by the written
consent of at least twenty (20%) percent of all the employees in the bargaining unit. Upon receipt and verification of
such petition, the Med-Arbiter shall automatically order the conduct of a certification election.
The applicable provision in the case at bar is Article 256 because Baliwag transit, Inc. is an organized establishment.
Under this provision, the petition for certification election need no longer carry the signatures of the 30% of the
workers consenting to such petition as originally required under Article 258. The present rule provides that as long as
the petition contains the matters 7 required in Section 2, Rule 5, Book V of the Implementing Rules and Regulations,
as amended by Section 6, Implementing Rules of E.O. No. 111, the med-arbiter "shall automatically order" an
election by secret ballot "to ascertain the will of the employees in the appropriate bargaining unit." The consent
requirement is now applied only to unorganized establishments under Article 257, and at that, significantly, has been
reduced to only 20%.
The petition must also fail on the second issue which is based on the contract-bar rule under Section 3, Rule 5, Book
V of the Implementing Rules and Regulations. This rule simply provides that a petition for certification election or a
motion for intervention can only be entertained within sixty days prior to the expiry date of an existing collective
bargaining agreement. Otherwise put, the rule prohibits the filing of a petition for certification election during the
existence of a collective bargaining agreement except within the freedom period, as it is called, when the said
agreement is about to expire. The purpose, obviously, is to ensure stability in the relationships of the workers and the
management by preventing frequent modifications of any collective bargaining agreement earlier entered into by
them in good faith and for the stipulated original period.
ATU insists that its collective bargaining agreement concluded by it with Baliwag Transit, Inc, on April 1, 1986, should
bar the certification election sought by TUPAS as this would disturb the said new agreement. Moreover, the
agreement had been ratified on April 3, 1986, by a majority of the workers and is plainly beneficial to them because
of the many generous concessions made by the management. 8
Besides pointing out that its petition for certification election was filed within the freedom period and five days
before the new collective bargaining agreement was concluded by ATU with Baliwag Transit, Inc. TUPAS contends
that the said agreement suffers from certain fatal procedural flaws. Specifically, the CBA was not posted for at least
five days in two conspicuous places in the establishment before ratification, to enable the workers to clearly inform
themselves of its provisions. Moreover, the CBA submitted to the MOLE did not carry the sworn statement of the
union secretary, attested by the union president, that the CBA had been duly posted and ratified, as required by
Section 1, Rule 9, Book V of the Implementing Rules and Regulations. These requirements being mandatory, non-
compliance therewith rendered the said CBA ineffective. 9
The Court will not rule on the merits and/or defects of the new CBA and shall only consider the fact that it was
entered into at a time when the petition for certification election had already been filed by TUPAS and was then
pending resolution. The said CBA cannot be deemed permanent, precluding the commencement of negotiations by
another union with the management. In the meantime however, so as not to deprive the workers of the benefits of
the said agreement, it shall be recognized and given effect on a temporary basis, subject to the results of the
certification election. The agreement may be continued in force if ATU is certified as the exclusive bargaining
representative of the workers or may be rejected and replaced in the event that TUPAS emerges as the winner.
This ruling is consistent with our earlier decisions on interim arrangements of this kind where we declared:
... we are not unmindful that the supplemental collective bargaining contract, entered into in the meanwhile
between management and respondent Union contains provisions beneficial to labor. So as not to prejudice the
workers involved, it must be made clear that until the conclusion of a new collective bargaining contract entered into
by it and whatever labor organization may be chosen after the certification election, the existing labor contract as
thus supplemented should be left undisturbed. Its terms call for strict compliance. This mode of assuring that the
cause of labor suffers no injury from the struggle between contending labor organization follows the doctrine
announced in the recent case of Vassar Industries Employees v. Estrella (L-46562, March 31, 1978). To quote from the
opinion. "In the meanwhile, if as contended by private respondent labor union the interim collective bargaining
agreement which it engineered and entered into on September 26, 1977 has, much more favorable terms for the
workers of private respondent Vassar Industries, then it should continue in full force and effect until the appropriate
bargaining representative is chosen and negotiations for a new collective bargaining agreement thereafter
concluded." 10
It remains for the Court to reiterate that the certification election is the most democratic forum for the articulation
by the workers of their choice of the union that shall act on their behalf in the negotiation of a collective bargaining
agreement with their employer. Exercising their suffrage through the medium of the secret ballot, they can select the
exclusive bargaining representative that, emboldened by their confidence and strengthened by their support shall
fight for their rights at the conference table. That is how union solidarity is achieved and union power is increased in
the free society. Hence, rather than being inhibited and delayed, the certification election should be given every
encouragement under the law, that the will of the workers may be discovered and, through their freely chosen
representatives, pursued and realized.
WHEREFORE, the petition is DENIED. The temporary restraining order of August 20, 1986, is LIFTED. Cost against the
petitioner.
SO ORDERED.
G.R. No. 76185 March 30, 1988

WARREN MANUFACTURING WORKERS UNION (WMWU), petitioner,
vs.
THE BUREAU OF LABOR RELATIONS; PHILIPPINE AGRICULTURAL, COMMERCIAL AND INDUSTRIAL WORKERS UNION
(PACIWU); and SAMAHANG MANGGAGAWA SA WARREN MANUFACTURING CORP.-ALLIANCE OF NATIONALIST AND
GENUINE LABOR ORGANIZATIONS (SMWMC-ANGLO), respondents.
PARAS, J.:
This is a petition for review on certiorari with prayer for a preliminary injunction and/or the issuance of a restraining
order seeking to set aside: (1) Order of the Med-Arbiter dated August 18,1986, the dispositive portion of which
reads:
WHEREFORE, premises considered, a certification election is hereby ordered conducted to determine
the exclusive bargaining representative of all the rank and file employees of Warren Manufacturing
Corporation, within 20 days from receipt of this Order, with the following choices:
1. Philippine Agricultural, Commercial and Industry Workers Union (PACIWU);
2. Warren Mfg. Workers Union;
3. Samahan ng Manggagawa sa Warren Mfg. Corporation petition-ANGLO; and
4. No Union.
The representation Officer is hereby directed to call the parties to a pre- election conference to
thresh out the mechanics for the conduct of the actual election.
SO ORDERED. (Rollo, p. 15).
and (2) the Resolution dated October 7, 1986 of the Officer-in-Charge of the Bureau of Labor dismissing the appeals
of Warren Manufacturing Corporation and herein petitioner (Annex "B", Rollo, pp. 16-18).
This certification case had its inception in an intra-union rivalry between the petitioner and the respondent Philippine
Agricultural, Commercial and Industrial Workers Union (PACIWU for short) since 1985.
The undisputed facts of this case as found by the Med-Arbiter of the Bureau of Labor Relations are as follows:
On June 13,1985, PACIWU filed a petition for certification election, alleging compliance with the
jurisdictional requirements.
On July 7, 1985, respondent thru counsel filed a motion to dismiss the petition on the ground that
there exist a C.BA between the respondent and the Warren Mfg. Union which took effect upon its
signing on July 16, 1985 and to expire on July 31, 1986.
While the petition was under hearing, PACIWU filed a Notice of Strike and on conciliation meeting, a
Return-to-Work Agreement was signed on July 25,1985, stipulating, among others, as follows:
To resolve the issue of union representation at Warren Mfg- Corp. parties have
agreed to the holding of a consent election among the rank and file on August 25,
1985 at the premises of the company to be supervised by MOLE. ...
It is cleanly understood that the certified union in the said projected election shall
respect and administer the existing CBA at the company until its expiry date on July
31, 1986.
On 12 August 1985, an Order was issued by this Office, directing that a consent election be held
among the rank and file workers of the company, with the following contending unions:
1. Philippine Agricultural, Commercial and Industrial Workers Union (PACIWU)
2. Warren Mfg. Workers Union;
3. No Union.
On August 25, 1985, said consent election was held, and yielded the following results:
PACIWU----------------------------94
WMWU----------------------------193
Feeling aggrieved, however, PACIWU filed an Election Protest.
In December, 1985 a Notice of Strike was again filed by the union this time with the Valenzuela
branch office of this Ministry, and after conciliation, the parties finally agreed, among others, to wit:
In consideration of this payment, ... individual complaints and PACIWU hereby agree
and covenant that the following labor complaints/disputes are considered amicably
settled and withdrawn/dismissed, to wit: ...
On the basis of a Joint Motion to Dismiss filed by the parties, the Election Protest filed by the
PACIWU was ordered dismissed. (Rollo, pp. 12-13).
On June 5, 1986, the PACIWU filed a petition for certification election followed by the filing of a petition for the same
purposes by the Samahan ng Manggagawa sa Warren Manufacturing Corporation-Alliance of Nationalist and Genuine
Labor Organizations (Anglo for short) which petitions were both opposed by Warren Manufacturing Corporation on
the grounds that neither petition has 30% support; that both are barred by the one-year no certification election law
and the existence of a duly ratified CBA. The therein respondent, therefore, prayed that the petitions for certification
election be dismissed. (Rollo, pp. 11-12).
As above stated, the Med-Arbiter of the National Capital Region, Ministry of Labor and Employment, ordered on
August 8, 't 986 the holding of a certification election within twenty 20) days from receipt to determine the exclusive
bargaining representative of all the rank and file employees of the Warren se Manufacturing Corporation, with the
above-mentioned choices.
Both Warren Manufacturing Corporation and petitioner herein filed separate motions, treated as appeals by the
Bureau of Labor Relations, which dismissed the same for lack of merit.
This petition was filed solely by the Warren Manufacturing Workers Union, with the company itself opting not to
appeal.
The Second Division of this Court in the resolution of November 3, 1986 without giving due course to the petition,
required the respondents to comment and issued the temporary, restraining order prayed for (Rollo, pp. 18-20).
The comment of the respondent PACIWU was filed on November 27, 1986 (Ibid., pp. 29-32). The public respondent
through the Hon. Solicitor General filed its Comment to the petition on December 10, 1986 (Ibid., pp. 34-43) and
private respondent ANGLO, filed its comment on December 16, 1986 (Ibid., pp. 45- 51). The petitioner with leave of
court filed its reply to comment entitled a rejoinder on January 6,1987 (Ibid., pp. 52-62).
In the resolution of January 26, 1987, the petition was given due course and the parties were required to submit
their respective memoranda (Ibid., p. 76).
Memorandum for public respondent was filed on February 20,1987 (Ibid., p. 82-88). Respondent PACIWU's
memorandum was filed on March 18, 1987 (Ibid., pp. 95-99). SMWMCANGLO'S Memorandum was filed on March
23,1987 (Ibid., pp. 100-1 09) and the petitioner's memorandum was filed on March 31,1987 (Ibid., pp. 110-120).
In its memorandum, petitioner raised the following issues:
A. The holding of a certification election at the bargaining unit is patently premature and illegal.
B. The petition filed by private respondents do not have the statutory 30% support requirement.
C. Petitioner was denied administrative due process when excluded from med-arbitration
proceedings.
The petition is devoid of merit.
A.
Petitioner's contention is anchored on the following grounds:
Section 3, Rule V of the Implementing Rules and Regulations of the Labor Code provides, among others:
... however no certification election may be held within one (1) year from the date of the issuance of
the declaration of a final certification result.
and
Article 257, Title VII, Book V of the Labor Code provides:
No certification election issue shall be entertained by the Bureau in any Collective Bargaining
Agreement existing between the employer and a legitimate labor organization.
Otherwise stated, petitioner invoked the one-year no certification election rule and the principle of the Contract Bar
Rule.
This contention is untenable.
The records show that petitioner admitted that what was held on August 25,1985 at the Company's premises and
which became the root of this controversy, was a consent election and not a certification election (Emphasis
supplied). As correctly distinguished by private respondent, a consent election is an agreed one, its purpose being
merely to determine the issue of majority representation of all the workers in the appropriate collective bargaining
unit while a certification election is aimed at determining the sole and exclusive bargaining agent of all the
employees in an appropriate bargaining unit for the purpose of collective bargaining. From the very nature of
consent election, it is a separate and distinct process and has nothing to do with the import and effect of a
certification election. Neither does it shorten the terms of an existing CBA nor entitle the participants thereof to
immediately renegotiate an existing CBA although it does not preclude the workers from exercising their right to
choose their sole and exclusive bargaining representative after the expiration of the sixty (60) day freedom period. In
fact the Med-Arbiter in the Return to Work Agreement signed by the parties emphasized the following:
To resolve the issue of union representation at Warren Mfg. Corp., parties have agreed to the holding
of a consent election among the rank and file on August 25,1985 at the premises of the company to
be supervised by the Ministry of Labor and Employment .....
It is clearly understood that the certified union in the said projected election shall respect and
administer the existing CBA at the company until its expiry date on July 31, 1986. (Rollo, pp. 46, 48-
49).
It is, therefore, unmistakable that the election thus held on August 25, 1985 was not for the purpose of determining
which labor union should be the bargaining representative in the negotiation for a collective contract, there being an
existing collective bargaining agreement yet to expire on July 31, 1986; but only to determine which labor union shag
administer the said existing contract.
Accordingly, the following provisions of the New Labor Code apply:
ART. 254. Duty to bargain collectively when there exists a collective bargaining agreement.—When
there is a collective bargaining agreement, the duty to bargain collectively shall also mean that
neither party shall terminate or modify the agreement at least sixty (60) days prior to its expiration
date. It shall be the duty of both parties to keep the status quo and to continue in full force and
effect the terms and conditions of the existing agreement during the 60-day period and/or until a
new agreement is reached by the parties.
Corollary to the above, Article 257 of the New Labor Code expressly states that No certification
election issue shall be entertained if a collective agreement which has been submitted in accordance
with Article 231 of this Code exists between the employer and a legitimate labor organization except
within sixty (60) days prior to the expiration of the life of such certified collective bargaining
agreement." (Rollo, pp. 83-84)
Thus, as stated by this Court in General Textiles Allied Workers Association v. the Director of the Bureau of labor
Relations (84 SCRA 430 [19781) "there should be no obstacle to the right of the employees to petition for a
certification election at the proper time. that is, within 60 days prior to the expiration of the three year period ...
Finally, such premature agreement entered into by the petitioner and the Company on June 2, 1986 does not
adversely affect the petition for certification election filed by respondent PACIWU (Rollo, p. 85).
Section 4, Rule V, Book V of the Omnibus Rules Implementing the Labor Code clearly provides:
Section 4. Effect of Early Agreement.—There representation case shall not, however, be adversely
affected by a collective agreement submitted before or during the last sixty days of a subsisting
agreement or during the pendency of the representation case.
Apart from the fact that the above Rule is clear and explicit, leaving no room for construction or interpretation, it is
an elementary rule in administrative law that administrative regulations and policies enacted by administrative
bodies to interpret the law which they are entrusted to enforce, have the force of law and are entitled to great
respect (Espanol v. Philippine Veterans Administration, 137 SCRA 314 [1985)).
As aforestated, the existing collective bargaining agreement was due to expire on July 31, 1 986. The Med-Arbiter
found that a sufficient number of employees signified their consent to the filing of the petition and 107 employees
authorized intervenor to file a motion for intervention. Otherwise stated, he found that the petition and intervention
were supported by more than 30% of the members of the bargaining unit. In the light of these facts, Article 258 of
the Labor Code makes it mandatory for the Bureau of Labor Relations to conduct a certification election (Samahang
Manggagawa ng Pacific Mills, Inc. v. Noriel, et al., 134 SCRA 152 [1985]). In the case of Federation of Free Workers
(Bisig ng Manggagawa sa UTEX v. Noriel etc., et al., 86 SCRA 132 [1978]), this Court was even more specific when it
stated "No administrative agency can ignore the imperative tone of the above article. The language used is one of
command. Once it has been verified that the petition for certification election has the support of at least 30% of the
employees in the bargaining unit, it must be granted, The specific word used can yield no other meaning. It becomes
under the circumstances, "mandatory"..."
The finality of the findings of fact of the Med-Arbiter that the petition and intervention filed in the case at bar were
supported by 30% of the members of the workers is clear and definite.
WHEREFORE, the instant Petition is DISMISSED,
SO ORDERED.
G.R. No. 77395 November 29, 1988
BELYCA CORPORATION, petitioner,
vs.
DIR. PURA FERRER CALLEJA, LABOR RELATIONS, MANILA, MINISTRY OF LABOR AND EMPLOYMENT; MED-ARBITER,
RODOLFO S. MILADO, MINISTRY OF LABOR AND EMPLOYMENT, REGIONAL OFFICE NO. 10 AND ASSOCIATED LABOR
UNION (ALU-TUCP), MINDANAO REGIONAL OFFICE, CAGAYAN DE ORO CITY,respondents.
Soriano and Arana Law Offices for petitioner.
The Solicitor General for public respondent.
Francisco D. Alas for respondent Associated Labor Unions-TUCP.
PARAS, J.:
This is a petition for certiorari and prohibition with preliminary injunction seeking to annul or to set aside the
resolution of the Bureau of Labor Relations dated November 24, 1986 and denying the appeal, and the Bureau's
resolution dated January 13, 1987 denying petitioner's motion for reconsideration.
The dispositive portion of the questioned resolution dated November 24, 1986 (Rollo, p. 4) reads as follows:
WHEREFORE, in view of all the foregoing considerations, the Order is affirmed and the appeal
therefrom denied.
Let, therefore, the pertinent records of the case be remanded to the office of origin for the
immediate conduct of the certification election.
The dispositive portion of the resolution dated January 13, 1987 (Rollo, p. 92) reads, as follows:
WHEREFORE, the Motion for Reconsideration filed by respondent Belyca Corporation (Livestock
Agro-Division) is hereby dismissed for lack of merit and the Bureau's Resolution dated 24 November
1986 is affirmed. Accordingly, let the records of this case be immediately forwarded to the Office of
origin for the holding of the certification elections.
No further motion shall hereafter be entertained.
The antecedents of the case are as follows:
On June 3, 1986, private respondent Associated Labor Union (ALU)-TUCP, a legitimate labor organization duly
registered with the Ministry of Labor and Employment under Registration Certificate No. 783-IP, filed with the
Regional Office No. 10, Ministry of Labor and Employment at Cagayan de Oro City, a petition for direct certification as
the sole and exclusive bargaining agent of all the rank and file employees/workers of Belyca Corporation (Livestock
and Agro-Division), a duly organized, registered and existing corporation engaged in the business of poultry raising,
piggery and planting of agricultural crops such as corn, coffee and various vegetables, employing approximately 205
rank and file employees/workers, the collective bargaining unit sought in the petition, or in case of doubt of the
union's majority representation, for the issuance of an order authorizing the immediate holding of a certification
election (Rollo, p. 18). Although the case was scheduled for hearing at least three times, no amicable settlement was
reached by the parties. During the scheduled hearing of July 31, 1986 they, however, agreed to submit
simultaneously their respective position papers on or before August 11, 1986 (rollo. p. 62).
Petitioner ALU-TUCP, private respondent herein, in its petition and position paper alleged, among others, (1) that
there is no existing collective bargaining agreement between the respondent employer, petitioner herein, and any
other existing legitimate labor unions; (2) that there had neither been a certification election conducted in the
proposed bargaining unit within the last twelve (12) months prior to the filing of the petition nor a contending union
requesting for certification as the. sole and exclusive bargaining representative in the proposed bargaining unit; (3)
that more than a majority of respondent employer's rank-and-file employees/workers in the proposed bargaining
unit or one hundred thirty-eight (138) as of the date of the filing of the petition, have signed membership with the
ALU-TUCP and have expressed their written consent and authorization to the filing of the petition; (4) that in
response to petitioner union's two letters to the proprietor/ General Manager of respondent employer, dated April
21, 1986 and May 8, 1 986, requesting for direct recognition as the sole and exclusive bargaining agent of the rank-
and-file workers, respondent employer has locked out 119 of its rank-and-file employees in the said bargaining unit
and had dismissed earlier the local union president, vice-president and three other active members of the local
unions for which an unfair labor practice case was filed by petitioner union against respondent employer last July 2,
1986 before the NLRC in Cagayan de Oro City (Rollo, pp. 18; 263).<äre||anº•1àw>
Respondent employer, on the other hand, alleged in its position paper, among others, (1) that due to the nature of its
business, very few of its employees are permanent, the overwhelming majority of which are seasonal and casual and
regular employees; (2) that of the total 138 rank-and-file employees who authorized, signed and supported the filing
of the petition (a) 14 were no longer working as of June 3, 1986 (b) 4 resigned after June, 1986 (c) 6 withdrew their
membership from petitioner union (d) 5 were retrenched on June 23, 1986 (e) 12 were dismissed due to malicious
insubordination and destruction of property and (f) 100 simply abandoned their work or stopped working; (3) that
the 128 incumbent employees or workers of the livestock section were merely transferred from the agricultural
section as replacement for those who have either been dismissed, retrenched or resigned; and (4) that the statutory
requirement for holding a certification election has not been complied with by the union (Rollo, p. 26).
The Labor Arbiter granted the certification election sought for by petitioner union in his order dated August 18, 1986
(Rollo, p. 62).
On February 4, 1987, respondent employer Belyca Corporation, appealed the order of the Labor Arbiter to the
Bureau of Labor Relations in Manila (Rollo, p. 67) which denied the appeal (Rollo, p. 80) and the motion for
reconsideration (Rollo, p. 92). Thus, the instant petition received in this Court by mail on February 20, 1987 (Rollo, p.
3).
In the resolution of March 4, 1987, the Second Division of this Court required respondent Union to comment on the
petition and issued a temporary restraining order (,Rollo, p. 95).
Respondent union filed its comment on March 30, 1987 (Rollo, p. 190); public respondents filed its comment on April
8, 1987 (Rollo, p. 218).
On May 4, 1987, the Court resolved to give due course to the petition and to require the parties to submit their
respective memoranda within twenty (20) days from notice (Rollo, p. 225).
The Office of the Solicitor General manifested on June 11, 1987 that it is adopting the comment for public
respondents as its memorandum (Rollo, p. 226); memorandum for respondent ALU was filed on June 30, 1987 (Rollo,
p. 231); and memorandum for petitioner, on July 30, 1987 (Rollo, p. 435).
The issues raised in this petition are:
I
WHETHER OR NOT THE PROPOSED BARGAINING UNIT IS AN APPROPRIATE BARGAINING UNIT.
II
WHETHER OR NOT THE STATUTORY REQUIREMENT OF 30% (NOW 20%) OF THE EMPLOYEES IN THE
PROPOSED BARGAINING UNIT, ASKING FOR A CERTIFICATION ELECTION HAD BEEN STRICTLY
COMPLIED WITH.
In the instant case, respondent ALU seeks direct certification as the sole and exclusive bargaining agent of all the
rank-and-file workers of the livestock and agro division of petitioner BELYCA Corporation (Rollo, p. 232), engaged in
piggery, poultry raising and the planting of agricultural crops such as corn, coffee and various vegetables (Rollo, p.
26). But petitioner contends that the bargaining unit must include all the workers in its integrated business concerns
ranging from piggery, poultry, to supermarts and cinemas so as not to split an otherwise single bargaining unit into
fragmented bargaining units (Rollo, p. 435).<äre||anº•1àw>
The Labor Code does not specifically define what constitutes an appropriate collective bargaining unit. Article 256 of
the Code provides:
Art. 256. Exclusive bargaining representative.—The labor organization designated or
selected by the majority of the employees in an appropriate collective bargaining
unit shall be exclusive representative of the employees in such unit for the purpose
of collective bargaining. However, an individual employee or group of employee shall
have the right at any time to present grievances to their employer.
According to Rothenberg, a proper bargaining unit maybe said to be a group of employees of a given employer,
comprised of all or less than all of the entire body of employees, which the collective interests of all the employees,
consistent with equity to the employer, indicate to be best suited to serve reciprocal rights and duties of the parties
under the collective bargaining provisions of the law (Rothenberg in Labor Relations, p. 482).
This Court has already taken cognizance of the crucial issue of determining the proper constituency of a collective
bargaining unit.
Among the factors considered in Democratic Labor Association v. Cebu Stevedoring Co. Inc. (103 Phil 1103 [1958])
are: "(1) will of employees (Glove Doctrine); (2) affinity and unity of employee's interest, such as substantial similarity
of work and duties or similarity of compensation and working conditions; (3) prior collective bargaining history; and
(4) employment status, such as temporary, seasonal and probationary employees".
Under the circumstances of that case, the Court stressed the importance of the fourth factor and sustained the trial
court's conclusion that two separate bargaining units should be formed in dealing with respondent company, one
consisting of regular and permanent employees and another consisting of casual laborers or stevedores. Otherwise
stated, temporary employees should be treated separately from permanent employees. But more importantly, this
Court laid down the test of proper grouping, which is community and mutuality of interest.
Thus, in a later case, (Alhambra Cigar and Cigarette Manufacturing Co. et al. v. Alhambra Employees' Association 107
Phil. 28 [1960]) where the employment status was not at issue but the nature of work of the employees concerned;
the Court stressed the importance of the second factor otherwise known as the substantial-mutual-interest test and
found no reason to disturb the finding of the lower Court that the employees in the administrative, sales and
dispensary departments perform work which has nothing to do with production and maintenance, unlike those in
the raw leaf, cigar, cigarette and packing and engineering and garage departments and therefore community of
interest which justifies the format or existence as a separate appropriate collective bargaining unit.
Still later in PLASLU v. CIR et al. (110 Phil. 180 [1960]) where the employment status of the employees concerned was
again challenged, the Court reiterating the rulings, both in Democratic Labor Association v. Cebu Stevedoring Co. Inc.
supra and Alhambra Cigar and Cigarette Co. et al. v. Alhambra Employees' Association (supra) held that among the
factors to be considered are: employment status of the employees to be affected, that is the positions and categories
of work to which they belong, and the unity of employees' interest such as substantial similarity of work and duties.
In any event, whether importance is focused on the employment status or the mutuality of interest of the employees
concerned "the basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the
combination which will best assure to all employees the exercise of their collective bargaining rights (Democratic
Labor Association v. Cebu Stevedoring Co. Inc. supra)
Hence, still later following the substantial-mutual interest test, the Court ruled that there is a substantial difference
between the work performed by musicians and that of other persons who participate in the production of a film
which suffice to show that they constitute a proper bargaining unit. (LVN Pictures, Inc. v. Philippine Musicians Guild, 1
SCRA 132 [1961]).
Coming back to the case at bar, it is beyond question that the employees of the livestock and agro division of
petitioner corporation perform work entirely different from those performed by employees in the supermarts and
cinema. Among others, the noted difference are: their working conditions, hours of work, rates of pay, including the
categories of their positions and employment status. As stated by petitioner corporation in its position paper, due to
the nature of the business in which its livestock-agro division is engaged very few of its employees in the division are
permanent, the overwhelming majority of which are seasonal and casual and not regular employees (Rollo, p. 26).
Definitely, they have very little in common with the employees of the supermarts and cinemas. To lump all the
employees of petitioner in its integrated business concerns cannot result in an efficacious bargaining unit comprised
of constituents enjoying a community or mutuality of interest. Undeniably, the rank and file employees of the
livestock-agro division fully constitute a bargaining unit that satisfies both requirements of classification according to
employment status and of the substantial similarity of work and duties which will ultimately assure its members the
exercise of their collective bargaining rights.
II
It is undisputed that petitioner BELYCA Corporation (Livestock and Agro Division) employs more or less two hundred
five (205) rank-and-file employees and workers. It has no existing duly certified collective bargaining agreement with
any legitimate labor organization. There has not been any certification election conducted in the proposed bargaining
unit within the last twelve (12) months prior to the filing of the petition for direct certification and/or certification
election with the Ministry of Labor and Employment, and there is no contending union requesting for certification as
the sole and exclusive bargaining representative in the proposed bargaining unit.
The records show that on the filing of the petition for certification and/or certification election on June 3, 1986; 124
employees or workers which are more than a majority of the rank-and-file employees or workers in the proposed
bargaining unit had signed membership with respondent ALU-TUCP and had expressed their written consent and
authorization to the filing of the petition. Thus, the Labor Arbiter ordered the certification election on August 18,
1986 on a finding that 30% of the statutory requirement under Art. 258 of the Labor Code has been met.
But, petitioner corporation contends that after June 3, 1986 four (4) employees resigned; six (6) subsequently
withdrew their membership; five (5) were retrenched; twelve (12) were dismissed for illegally and unlawfully
barricading the entrance to petitioner's farm; and one hundred (100) simply abandoned their work.
Petitioner's claim was however belied by the Memorandum of its personnel officer to the 119 employees dated July
28, 1986 showing that the employees were on strike, which was confirmed by the finding of the Bureau of Labor
Relations to the effect that they went on strike on July 24, 1986 (Rollo, p. 419). Earlier the local union president,
Warrencio Maputi; the Vice-president, Gilbert Redoblado and three other active members of the union Carmen
Saguing, Roberto Romolo and Iluminada Bonio were dismissed and a complaint for unfair labor practice, illegal
dismissal etc. was filed by the Union in their behalf on July 2, 1986 before the NLRC of Cagayan de Oro City (Rollo, p.
415).<äre||anº•1àw> The complaint was amended on August 20, 1986 for respondent Union to represent
Warrencio Maputi and 137 others against petitioner corporation and Bello Casanova President and General Manager
for unfair labor practice, illegal dismissal, illegal lockout, etc. (Rollo, p. 416).
Under Art. 257 of the Labor Code once the statutory requirement is met, the Director of Labor Relations has no
choice but to call a certification election (Atlas Free Workers Union AFWU PSSLU Local v. Noriel, 104 SCRA 565 [1981];
Vismico Industrial Workers Association (VIWA) v. Noriel, 131 SCRA 569 [1984]) It becomes in the language of the New
Labor Code "Mandatory for the Bureau to conduct a certification election for the purpose of determining the
representative of the employees in the appropriate bargaining unit and certify the winner as the exclusive bargaining
representative of all employees in the unit." (Federacion Obrera de la Industria Tabaquera y Otros Trabajadores de
Filipinas v. Noriel, 72 SCRA 24 [1976]; Kapisanan Ng Mga Manggagawa v. Noriel, 77 SCRA 414 [1977]); more so when
there is no existing collective bargaining agreement. (Samahang Manggagawa Ng Pacific Mills, Inc. v. Noriel, 134 SCRA
152 [1985]); and there has not been a certification election in the company for the past three years (PLUM
Federation of Industrial and Agrarian Workers v. Noriel, 119 SCRA 299 [1982]) as in the instant case.
It is significant to note that 124 employees out of the 205 employees of the Belyca Corporation have expressed their
written consent to the certification election or more than a majority of the rank and file employees and workers;
much more than the required 30% and over and above the present requirement of 20% by Executive Order No. 111
issued on December 24, 1980 and applicable only to unorganized establishments under Art. 257, of the Labor Code,
to which the BELYCA Corporation belong (Ass. Trade Unions (ATU) v. Trajano, G.R. No. 75321, June 20, 1988).) More
than that, any doubt cast on the authenticity of signatures to the petition for holding a certification election cannot
be a bar to its being granted (Filipino Metals Corp. v. Ople 107 SCRA 211 [1981]). Even doubts as to the required 30%
being met warrant holding of the certification election (PLUM Federation of Industrial and Agrarian Workers v. Noriel,
119 SCRA 299 [1982]). In fact, once the required percentage requirement has been reached, the employees'
withdrawal from union membership taking place after the filing of the petition for certification election will not affect
said petition. On the contrary, the presumption arises that the withdrawal was not free but was procured through
duress, coercion or for a valuable consideration (La Suerte Cigar and Cigarette Factory v. Director of the Bureau of
Labor Relations, 123 SCRA 679 [1983]). Hence, the subsequent disaffiliation of the six (6) employees from the union
will not be counted against or deducted from the previous number who had signed up for certification elections
Vismico Industrial Workers Association (VIWA) v. Noriel 131 SCRA 569 [1984]).<äre||anº•1àw> Similarly, until a
decision, final in character, has been issued declaring the strike illegal and the mass dismissal or retrenchment valid,
the strikers cannot be denied participation in the certification election notwithstanding, the vigorous condemnation
of the strike and the fact that the picketing were attended by violence. Under the foregoing circumstances, it does
not necessarily follow that the strikers in question are no longer entitled to participate in the certification election on
the theory that they have automatically lost their jobs. (Barrera v. CIR, 107 SCRA 596 [1981]). For obvious reasons,
the duty of the employer to bargain collectively is nullified if the purpose of the dismissal of the union members is to
defeat the union in the consent requirement for certification election. (Samahang Manggagawa Ng Via Mare v.
Noriel, 98 SCRA 507 [1980]). As stressed by this Court, the holding of a certification election is a statutory policy that
should not be circumvented. (George and Peter Lines Inc. v. Associated Labor Unions (ALU), 134 SCRA 82 [1986]).
Finally, as a general rule, a certification election is the sole concern of the workers. The only exception is where the
employer has to file a petition for certification election pursuant to Art. 259 of the Labor Code because the latter was
requested to bargain collectively. But thereafter the role of the employer in the certification process ceases. The
employer becomes merely a bystander (Trade Union of the Phil. and Allied Services (TUPAS) v. Trajano, 120 SCRA 64
[1983]).
There is no showing that the instant case falls under the above mentioned exception. However, it will be noted that
petitioner corporation from the outset has actively participated and consistently taken the position of adversary in
the petition for direct certification as the sole and exclusive bargaining representative and/or certification election
filed by respondent Associated Labor Unions (ALU)-TUCP to the extent of filing this petition for certiorari in this
Court. Considering that a petition for certification election is not a litigation but a mere investigation of a non-
adversary character to determining the bargaining unit to represent the employees (LVN Pictures, Inc. v. Philippine
Musicians Guild, supra; Bulakena Restaurant & Caterer v. Court of Industrial Relations, 45 SCRA 88 [1972]; George
Peter Lines, Inc. v. Associated Labor Union, 134 SCRA 82 [1986]; Tanduay Distillery Labor Union v. NLRC, 149 SCRA
470 [1987]), and its only purpose is to give the employees true representation in their collective bargaining with an
employer (Confederation of Citizens Labor Unions CCLU v. Noriel, 116 SCRA 694 [1982]), there appears to be no
reason for the employer's objection to the formation of subject union, much less for the filing of the petition for a
PREMISES CONSIDERED, (a) the petition is DISMISSED for lack of merit (b) resolution of the Bureau of Labor Relations
dated Nov. 24, 1986 is AFFIRMED; and the temporary restraining order issued by the Court on March 4, 1987 is
LIFTED permanently.
SO ORDERED.
G.R. No. L-55674 July 25, 1983
LA SUERTE CIGAR AND CIGARETTE FACTORY, petitioner,
vs.
DIRECTOR OF THE BUREAU OF LABOR RELATIONS, THE LA SUERTE CIGAR AND CIGARETTE FACTORY PROVINCIAL
(Luzon) AND METRO MANILA SALES FORCE ASSOCIATION-NATU, and THE NATIONAL ASSOCIATION OF TRADE
UNIONS, respondents.
Angara, Abello, Concepcion, Regala & Cruz Law Office for petitioner.
The Solicitor General for respondents.
Marcelino Lontok, Jr. for respondent NATU.
GUERRERO, J.:
In the determination of the basic issue raised in the case at bar involving the status of some 14 members of private
respondent local union whether they are employees of petitioner company in which case they should be included in
the 30% jurisdictional requirement necessary to support the petition for certification election, or independent
contractors and hence, excluded therefrom, Our rulings in Mafinco Trading Corp. vs. Ople, 70 SCRA 139, where We
reiterated the "control test" earlier laid down in Investment Planning Corp. vs. Social Security System, 21 SCRA 924,
and in Social Security System vs. Hon. Court of Appeals and Shriro (Phils.) Inc., 37 SCRA 579 are authoritative and
controlling.
In the Mafinco case, the Court, through Justice Aquino, said:
In a petition for certiorari, the issue of whether respondents are employees or independent
contractors should be resolved mainly in the light of their peddling contracts. Pro hac vice the issue
of whether Repomanta and Moralde were employees of Mafinco or were independent contractors
should be resolved mainly in the light of their peddling contracts. A different approach would lead
this Court astray into the field of factual controversy where its legal pronouncements would not rest
on solid grounds.
A contract whereby one engages to purchase and sell soft drinks on trucks supplied by the
manufacturer but providing that other party (peddler) shall have the right to employ his own
workers, shall post a bond to protect the manufacturer against losses, shall be responsible for
damages caused to third persons, shall obtain the necessary licenses and permits and bear the
expenses incurred in the sale of the soft drinks is not a contract of employment.-We hold that under
their peddling contracts Repomanta and Moralde were not employees of Mafinco but were
independent contractors as found by the NLRC and its factfinder and by the committee appointed by
the Secretary of Labor to look into the status of Cosmos and Mafinco peddlers. They were
distributors of Cosmos soft drinks with their own capital and employees. Ordinarily, an employee or a
mere peddler does not execute a formal contract of employment. He is simply hired and he works
under the direction and control of the employer. Repomanta and Moralde voluntarily executed with
Mafinco formal peddling contracts which indicate the manner in - which they would se Cosmos soft
drinks. That circumstance signifies that they were acting as independent businessmen. They were
free to sign or not to sign that contract. If they did not want to sell Cosmos products under the
conditions defined in that contract, they were free to reject it. But having signed it, they were bound
by its stipulations and the consequences thereof under existing labor laws. One such stipulation is
the right of the parties to terminate the contract upon 5 days' prior notice. Whether the termination
in this case was an unwarranted dismissal of an employee, as contended by Repomanta and
Moralde, is a point that cannot be resolved without submission of evidence. Using the contract itself
as the sole criterion, the termination should perforce be characterized as simply the exercise of a
right freely stipulated upon by the parties.
Tests for determining the existence of employer-employee relationship.-In determining the existence
of employer-employee relationship, the following elements are generally considered, namely: (1) the
selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal;
and (4) the power to control the employees' conduct-although the latter is the most important
element.
Factors to determine existence of independent contract relationship.— An independent contractor is
one who exercises independent employment and contracts to do a piece of work according to his
own methods and without being subject to control of his employer except as to the result of the
work. 'Among the factors to be considered are whether the contractor is carrying on an independent
business; whether the work is part of the employer's general business; the nature and extent of the
work; the skill required; the term and duration of the relationship; the right to assign the
performance of the work to another; the power to terminate the relationship; the existence of a
contract for the performance of a specified piece of work; the control and supervision of the work;
the employer's powers and duties with respect to the hiring, firing, and payment of the contractor's
servants; the control of the premises; the duty to supply the premises, tools, appliances, material
and labor, and the mode, manner, and terms of payment.'
In the Shriro case, We held that the common law rule of determining the existence of employer-employee
relationship, principally the "control test", applies in its jurisdiction. Where the element of control is absent; where a
person who works for another does so more or less at his own pleasure and is not subject to definite hours or
conditions of work, and in turn is compensated according to the result of his efforts and not the amount thereof,
relationship of employer and employee does not exist.
And supplementing the above jurisprudence is Our ruling in Social Security System vs. The Hon. Court of Appeals,
Manila Jockey Club, Inc., Phil. Racing Club, 30 SCRA 210 wherein the Supreme Court, speaking through then Associate
Justice, now Chief Justice Fernando, held:
The question of when there is employer-employee relationship for purposes of the Social Security
Act has been settled in this jurisdiction in the case of Investment Planning Corp. vs. Social Security
System, 21 SCRA 924 which applied the so-called control test, that is, whether the employer controls
or has reserved the right to control the employee not only as to the result of the work to be done but
also as to the means and methods by which the same is to be accomplished. In other words, where
the element of control is absent; whether a person who works for another does so more or less at his
own pleasure and is not subject to definite hours or conditions of work, and in turn is compensated
according to the result of his efforts and not the amount thereof, we should not find that the
relationship of employer and employee exists. This decision rejected the economic facts of the
relation test.
The instant petition for certiorari seeks to reverse the resolution of the Director of the Bureau of Labor Relations
dated January 15, 1980 ordering that a certification election be conducted among the sales personnel of La Suerte
Cigar and Cigarette Factory, as well as his resolution dated November 18, 1980 denying the motion for
reconsideration and directing that a certification election be conducted immediately. The said resolutions reversed
and set aside the order of dismissal dated August 29, 1979 of the Med-Arbiter.
The antecedent facts show that on April 7, 1979, the La Suerte Cigar and Cigarette Factory Provincial (Luzon) and
Metro Manila Sales Force Association (herein referred to as the local union) applied for and was granted chapter
status by the National Association of Trade Unions (hereinafter referred to as NATU).
On April 16, 1979, some thirty-one (31) local union members signed a joint letter withdrawing their membership
from NATU.
Nonetheless, on April 18, 1979, the local union and NATU filed a petition for direct certification or certification
election which alleged among others, that forty-eight of the sixty sales personnel of the Company were members of
the local union; that the petition is supported by no less than 75% of the sales force; that there is no existing
recognized labor union in the Company representing the said sales personnel; that there is likewise no existing
collecting bargaining agreement; and that there had been no certification election in the last twelve months
preceding the filing of the petition.
The Company then filed a motion to dismiss the petition on June 13, 1979 on the ground that it is not supported by
at least 30% of the members of the proposed bargaining unit because (a) of the alleged forty-eight (48) members of
the local union, thirty-one (31) had withdrawn prior to the filing of the petition; and (b) fourteen (14) of the alleged
members of the union were not employees of the Company but were independent contractors.
NATU and the local union opposed the Company's motion to dismiss alleging that the fourteen dealers are actually
employees of the Company because they are subject to its control and supervision.
On August 29, 1979, the Med-Arbiter issued an order dismissing the petition for lack of merit as the fourteen dealers
who joined the union should not be counted in determining the 30% consent requirement because they are not
employees but independent contractors and the withdrawal of the 31 salesmen from the union prior to the filing of
the petition for certification election was uncontroverted by the parties.
Thereafter, on September 24, 1979, the local union on its own signed only by the local union President, filed a motion
for reconsideration and/or appeal from the order of dismissal on the following grounds: (a) the findings of facts of
the med-arbiter as it appears on the order are contrary to facts and (b) in finding that no employer-employee
relationship exists between the alleged dealers and respondent firm, the med-arbiter decided in a manner not in
accord with the factual circumstances attendant to the relationship.
Acting on the motion for reconsideration/appeal, the Director of the Bureau of Labor Relations, in the Resolution
dated January 15, 1980, reversed and set aside the order of dismissal, holding that the withdrawal of the 31
signatories to the petition two days prior to the filing of the instant petition did not establish the fact that the same
was executed freely and voluntarily and that the records are replete with company documents showing that the
alleged dealers are in fact employees of the company.
The Company then filed a motion to set aside the resolution dated January 15, 1980 of the Director of the Bureau of
Labor Relations, contending that the appeal was never perfected or is jurisdictionally defective, copy of the motion
for reconsideration/appeal not having been served upon the Company, and that the Resolution was based solely on
the distorted and self-serving allegations of the union.
The local union opposed the Company's motion for reconsideration and submitted a memorandum on April 22, 1980
in amplification of its opposition.
At this juncture, the legal counsel of NATU filed a manifestation on May 15, 1980 stating that the act of the local
union of engaging another lawyer to handle the case amounts to disaffiliation, for which reason said legal counsel
was withdrawing from the case. The local union counter manifested that the local union had not been officially
notified of its expulsion from the NATU; that there was no valid ground for its expulsion; that the National Executive
Council of NATU had not approved such expulsion; and that it had no objection to the withdrawal of Atty. Marcelino
Lontok, Jr. as its counsel.
Then came a motion of NATU through its President and legal counsel withdrawing as petitioner and contending that
since the local union was no longer affiliated with it, it was no longer interested in the case. Twelve members of the
National Executive Council then came in and manifested that they constitute a majority of the Executive Board of
NATU and affirmed that the local union was still an affiliate of NATU.
There followed a counter-manifestation of Atty. Marcelino Lontok, Jr. on August 27, 1980 stating that six signatories
to the aforesaid manifestation had no authority to make the said foregoing statement as they had resigned from the
Executive Board en masse; that the acts of the President may not be reversed by the Executive Council; and that the
twelve signatories did not constitute a majority of the sixty (60) members of the Executive Council.
The local union made its reply to the counter-manifestation stating that the power to expel an affiliate exclusively
belonged to the National Executive Council of NATU, under Section 2, Article V of the NATU Constitution and By-Laws;
that such power could only be wielded after due investigation and hearing; that disaffiliation is effected only by
voluntary act of the local union, which is not the case here, because it is the President and legal counsel who are
trying to expel the union.
Simultaneously with said reply, the local union filed an opposition to Atty. Lontok's motion to dismiss-withdraw
petition, stating that Atty. Lontok had no more personality to file the same inasmuch as he had previously withdrawn
as counsel in his manifestation dated May 7, 1980, and the local union has accepted the same in its counter-
manifestation dated May 16, 1980; that expulsion requires two-thirds vote of the members of the National Executive
Council, as well as investigation and hearing; that engaging another lawyer is not a ground for expulsion of an
affiliate; and that the local union was compelled to hire another lawyer because up to the last day of the
reglementary period, Atty. Lontok still had not filed an appeal from the decision of the Med-Arbiter.
On November 18, 1980, the Director of the Bureau of Labor Relations promulgated a resolution denying the
Company's motion for reconsideration and directing that the certification election be conducted immediately. Hence,
this petition.
In the apparently simple task of determining whether the Director of the Bureau of Labor Relations committed grave
abuse of discretion amounting to lack of jurisdiction in ordering the direct certification election, three difficult issues
must be resolved, namely:
I. Whether or not the 14 dealers are employees or independent contractors.
II. Whether or not the withdrawal of 31 union members from the NATU affected the petition for certification election
insofar as the thirty per cent requirement is concerned.
III. Whether or not the withdrawal of the petition for certification election by the NATU, through its President and
legal counsel, was valid and effective.
A basic factor underlying the exercise of rights under the Labor Code is status of employment. The question of
whether employer-employee relationship exists is a primordial consideration before extending labor benefits under
the workmen's compensation, social security, medicare, termination pay and labor relations law. It is important in the
determination of who shall be included in a proposed bargaining unit because it is the sine qua non, the fundamental
and essential condition that a bargaining unit be composed of employees. Failure to establish this juridical
relationship between the union members and the employer affects the legality of the union itself. It means the
ineligibility of the union members to present a petition for certification election as well as to vote therein. Corollarily,
when a petition for certification election is supported by 48 signatories in a bargaining unit composed of 60
salesmen, but 14 of the 48 lacks employee status, the petition is vitiated thereby. Herein lies the importance of
resolving the status of the dealers in this case.
It is the contention of the company that the dealers in the sale of its tobacco products are independent contractors.
On the other hand, the Union contends that such dealers are actually employees entitled to the coverage and
benefits of labor relations laws.
According to the petitioner, to effectively market its products, the Company maintains a network of dealers all over
the country. These arrangements are covered by a dealership agreement signed between the Company and a dealer
in a particular area or territory. And attached to the petition is a representative copy of the said dealership
agreement which We quote below:
DEALERSHIP AGREEMENT
KNOW ALL MEN BY THESE PRESENTS:
This DEALERSHIP AGREEMENT, executed at Pasay City, Philippines, this 8 day of March 1977, entered
into by JOSE TEN SIU KEE, JR., of legal age, married and a resident of 178-E San Ramon Street, Iloilo
City, hereinafter referred to as DEALER, and TELENGTAN BROTHERS & SONS, INC., doing business
under the style of "LA SUERTE CIGAR & CIGARETTE FACTORY", hereinafter referred to as FACTORY,
bears witness that:
WHEREAS, JOSE TAN SIU KEE, JR. of 178-E San Ramon Street, Iloilo City, had applied to be a DEALER
of the FACTORY for the territories of ILOILO and/or such other territories that the FACTORY may
designate from time to time; and
WHEREAS, the FACTORY had accepted the application of JOSE TAN SIU KEE, JR., and therefore,
appointed him as one of its dealers in ILOILO and/or such other territories that the FACTORY may
designate from time to time, who is willing and able to do so as such for the main purpose of
extensively selling the products of the FACTORY in the said territories, under the following express
terms and conditions, to wit:
1. That the DEALER shall handle for sale and distribution of cigarette products of the factory covering
the territories of ILOILO and/or such other territories that the FACTORY may designate from time to
time, in accordance with existing laws and regulations of the government, without however,
incurring any expenses in doing so, without the previous written consent of the FACTORY being first
had and obtained;
2. That for the purpose of selling the cigarettes or products of the FACTORY, the DEALER shall send
his orders to the FACTORY plant in Parañaque, Metro Manila, either in cash or on credit; Provided,
however, that in cases of credit order the DEALER can only get or order the supply of cigarettes up to
the amount of not more than FIFTY THOUSAND PESOS (P50,000.00) only at any given time during the
existence of this Contract, unless allowed by the FACTORY to get more;
3. That the FACTORY shall supply the DEALER with a truck or panel delivery and all expenses shall be
borne by the FACTORY; driver shall be borne by the DEALER;
4. That the DEALER shall not receive any commission from the FACTORY but the latter shall give the
DEALER a discount for all sales either on consignment or in cash, and said discount shall be decided
by the FACTORY from time to time;
5. That the FACTORY shall not be liable for any violation of any law, which the DEALER may commit,
and that the DEALER alone shall be responsible for any violation;
6. The geographical area (hereinafter referred to as "Territory") covered by this Agreement in which
the DEALER shall undertake the responsibilities provided herein is ILOILO. It is, however, agreed and
understood that the FACTORY may from time to time, upon written notice thereof THE DEALER,
change or subdivide the Territory as the business exigencies, and the policy of the FACTORY with
respect thereto will dictate.
7. The DEALER agrees that during the term of this Agreement:
(a) He will diligently, loyally and faithfully serve the FACTORY as its DEALER and
diligently canvass for buyers of the FACTORY's Products in the Territory;
(b) He shall not sell or distribute goods of a similar nature or such as would compete
and interfere with the sale of the Products of the FACTORY in the Territory, either on
his account or on behalf of any other person whatsoever;
(c) Furnish to the FACTORY every three (3) months a list of the buyers/customers in
the Territory, specifying the names and address of such customers as well as their
individual daily supply/stock requirements;
(d) He will faithfully and religiously abide by the FACTORY policy, rules and
regulations, particularly with respect to the pricing of all Products to be sold and
distributed by him;
(e) He will keep account of all his dealings hereunder and promptly liquidate his
account with the FACTORY with respect to the Products sold by him in the Territory;
(f) He will not engage in any activity which will in any manner prejudice either the
business or name of the FACTORY, such as, but not limited to, "black- marketing"
operations;
(g) He will not withdraw cigarettes if the maximum volume allotted to him by the
FACTORY has been exceeded;
(8) That the DEALER shall sell the Products of the FACTORY at a price to be agreed upon between
both parties;
(9) That the DEALER shall hereby bind and obligate himself to furnish the FACTORY, within a week
from the date of this Contract with Surety or Cash Bond in the amount of not less than FIFTY
THOUSAND PESOS (P 50,000.00). The surety bond should be issued by one or several bonding
companies acceptable to and approved by the FACTORY to guarantee and secure complete and
faithful performance of the DEALER and his obligations herein enumerated, particularly the payment
of his financial obligations with the FACTORY. The bond may be increased as required by the
FACTORY;
10. In the event that the DEALER should become incapacitated to discharge his undertakings and
responsibilities under this Agreement, for any reason whatsoever, the FACTORY may designated, for
the duration of such incapacity, a substitute to handle the sale and distribution of the Products in the
Territory;
11. The FACTORY reserves its right to determine, from time to time, the amount of credit granted or
to be granted to the DEALER with respect to the Products to be sold and distributed in the Territory;
12. This Agreement may be cancelled and/or terminated by the FACTORY should the DEALER violate
its undertaking under this Agreement especially with respect to Paragraph 7(f) hereof. It is
understood, however, that the failure of the FACTORY to enforce at any time or for any period of
time, any right, power or remedy accruing to the FACTORY upon default by the DEALER of his
undertakings under this Agreement shall not impair any such right, power or remedy or to be
construed to be a waver or an acquiescence in such default; nor shall the action of the FACTORY in
respect of any default, or any acquiescence by it in any default, affect or impair any right, power or
remedy of the FACTORY in respect of any other default.
13. That either party may terminate this Contract without cause by giving to the other party fifteen
(15) days notice in writing but without prejudice to any right or claim which as of that date may have
accrued to either of the parties hereunder, however, in the event of breach of this Contract, the
FACTORY may terminate this Contract without notice to the DEALER.
14. That it is hereby finally stipulated and agreed that in case of litigation arising out of or in
connection with this Contract, the Municipal Court of Parañaque or the Court of First Instance cf
Rizal, as the case may be, shall be the competent court wherein to file such action or actions.
15. That this Contract shall supersede any Contract which the DEALER may have with the FACTORY.
IN WITNESS WHEREOF, these presents are signed at Pasay City, Philippines on this 8 day of March 1977.
TELENGTAN BROTHERS & SONS, INC.
(La Suerte Cigar & Cigarette Factory)
FACTORY
By:
(SGD.) LIM HAN ENG (SGD.) JOSE TAN SIU KEE, JR.
Assistant Manager Dealer
Sales Department TAN 5976-397-9
SIGNED IN THE PRESENCE OF:
(SGD.) ILLEGIBLE (SGD.) ILLEGIBLE"
(Acknowledgment omitted)
The records embody standard copies of the Dealership Supplementary Agreement which We also quote hereunder:
DEALERSHIP SUPPLEMENTARY AGREEMENT
KNOW ALL MEN BY THESE PRESENTS:
This Supplementary Agreement, made and entered into this 14th day of February, 1975 in Pasay City,
Philippines, by and between:
TELENGTAN BROTHERS & SONS, INC., a corporation duly organized and existing
under the laws of the Philippines and doing business under the business name and
style of "LA SUERTE CIGAR & CIGARETTE FACTORY", with principal place of business
at Km. 14 South Super Highway, Paranaque, Rizal, represented in this act by its duly
authorizedManager, Mr. ROBERT UY, hereinafter referred to as COMPANY;
and
MR. PURISIMO EMBING of legal age, married, Filipino and with postal address at
3047 Lawaan, UP II, Paranaque, Rizal hereinafter referred to as DEALER,
WITNESSETH: That
For and in consideration of the mutual covenants and agreements made herein, by one to the other,
the COMPANY and the DEALER, by these presents, enter into this Supplementary Agreement
whereby the COMPANY will avail of the services of the DEALER to handle the sale and distribution of
its cigarette products, consisting of MARLBORO REGULAR, MARLBORO KING SIZE, MARLBORO 100'S;
PHILIP MORRIS REGULAR, PHILIP MORRIS FILTER KING, PHILIP MORRIS 100'S MENTHOL, PHILIP
MORRIS 100'S REGULAR; ALPINE 100'S; MR. SLIM 100'S REGULAR, MR. SLIM 100'S MENTHOL,
subject to the following terms and conditions:
1. The COMPANY hereby constitutes and appoints the DEALER as its authorized dealer for the sale
and distribution of the COMPANY's products as enumerated above, (hereinafter referred to as
"Products") and the DEALER hereby accepts such appointment, all upon the terms and conditions
herein contained.
2. The geographical area (hereinafter referred to as "Territory") covered by this Agreement in which
the DEALER shall undertake the responsibilities provided herein is GREATER MANILA AND SUBURBS.
It is, however, agreed and understood that the COMPANY may from time to time, upon written
notice thereof to the DEALER, change or subdivide the Territory as the business exigencies, and the
policy of the COMPANY with respect thereto will dictate.
3. The DEALER agrees that during the term of this Agreement:
(a) He will diligently, loyally and faithfully serve the COMPANY as its DEALER and
diligently canvass for buyers of the COMPANY's Products in the Territory;
(b) He shall not sell or distribute goods of a similar nature or such as would compete
and interfere with the sale or the Products of the COMPANY in the Territory, either
on this account or on behalf of any other person whatsoever;
(c) Furnish to the COMPANY every three (3) months a list of the buyers/customers in
the Territory, specifying the names and address of such customers as well as their
individual daily supply/stock requirements;
(d) He will faithfully and religiously abide by the COMPANY policy, rules and
regulations, particularly with respect to the pricing of all Products to be sold and
distributed by him;
(e) He will keep account of all his dealings hereunder and promptly liquidate his
account with the COMPANY with respect to the Products sold by him in the Territory;
(f) He will not engage in any activity which will in any manner prejudice either the
business or name of the COMPANY, such as, but not limited to, "Black marketing"
operations;
(g) He will not withdraw cigarettes if the maximum volume allotted to him by the
COMPANY has been exceeded;
5. The DEALER shall put up a bond, or additional bond, with the COMPANY in such amount or
amounts, as in the judgment of the COMPANY, will be satisfactory. It is agreed that the COMPANY can
apply against said bond or additional bond, such damages as may be suffered by the COMPANY by
reason of breach on the part of the DEALER of any of the latter's undertakings under this Agreement.
6. In the event that the DEALER should become incapacitated to discharge his undertakings and
responsibilities under this Agreement, for any reason whatsoever, the COMPANY may designate for
the duration of such incapacity, a substitute to handle the sale and distribution of the Products in the
Territory;
7. The COMPANY reserves its right to determine, from time to time, the amount of credit granted or
to be granted to the DEALER with respect to the Products to be sold and distributed in the Territory.
8. This Agreement may be cancelled and/or terminated by the COMPANY should the DEALER violate
its undertaking under this Agreement especially with respect to Paragraph 4(f) hereof. It is
understood. however, that the failure of the COMPANY to enforce at any time or for any period of
time, any right, power or remedy accruing to the COMPANY upon default by the DEALER of his
undertakings under this Agreement shall not impair any such right, power or remedy or be construed
to be a waiver or an acquiescence in such default; nor shall the action of the COMPANY in respect of
any default, or any acquiescence by it in any default, affect or impair any right, power or remedy of
the COMPANY in respect of any other default.
(9) In the appropriate cases, this Agreement shall constitute as a supplement, revision or
modification of any agreement between the company and the DEALER now existing. However, should
there be a conflict between the provisions of this Agreement and any such existing agreement
between the COMPANY and the DEALER, this Agreement shall prevail.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be signed at the place and
on the date hereinabove written.
TELENGTAN BROTHERS & SONS, INC.
(La Suerte Cigar & Cigarette Factory)
By:
(SGD.) ROBERT UY (SGD.) PURISIMO EMBING
Manager DEALER
(Signature of Witnesses & Acknowledgment Omitted)
Following the rule in the Mafinco case that in a petition for certiorari, the issue of whether respondents are
employees or independent contractors should be resolved mainly in the light of their peddling contracts, so must We
likewise resolve the status of the 14 members of the local union involved herein mainly on their dealership
agreements for verily, "a different approach would lead this Court astray into the field of factual controversy where
its legal pronouncements would not rest on solid grounds." We must stress the Supreme Court is not a trier of facts.
Accordingly, after considering the terms and stipulations of the Dealership Contracts which are clear and leave no
doubt upon the intention of the contracting parties in establishing the relationship between the dealers on one hand
and the company on the other as that of buyer and seller, We find that the status thereby created is one of
independent contractorship, pursuant to the first rule in the interpretation of contracts that the literal meaning of
the stipulations shall control. (Article 1370, New Civil Code)
From the plain language of the Dealership Agreement, We find that the same is premised with the prefatory
statement "the factory has accepted the application of (name of applicant) and therefore has appointed him as one
of its dealers." Its terms and conditions include the following: that the dealer shall handle the products in accordance
with existing laws and regulations of the government (par. ); that the dealer shall send his orders to the factory plant
in cash in any amount or on credit up to the amount of not more than P10,000.00 only at any given time (par. 2); that
the factory shall supply the dealer with a truck or a panel delivery and all expenses for repairs shall be borne by the
factory (par. 3); and that the dealer shall not receive any commission but shall be given a discount for all sales and
said discount shall be decided by the factory from time to time (par. 4).
It also provides that the dealer alone shall be responsible for any violation of any law (par. 5); that the dealer shall be
assigned to a particular territory which the factory may decide from time to time (par. 6); that the dealer shall sell the
products at the price to be agreed upon between the parties (par. 7); and that the dealer shall post a surety bond of
not less than P10,000.00 to guarantee and secure complete and faithful performance (par. 8).
Either party may terminate the contract without cause by giving 15 days notice in writing; however, in the event of
breach or failure to comply with any of the conditions, the factory may terminate or rescind the contract immediately
(par. 9 and 10).
The Dealership Supplementary Agreement reiterates that the Company "hereby constitute and appoints the DEALER
as its authorized dealer for the sale and distribution of the COMPANY products" and "the DEALER hereby accepts
such appointment" (par. 1). It also provides that the geographical area in which the dealer shall undertake his
responsibilities is Greater Manila and Suburbs. However, the Company may change or subdivide the territory as the
business exigencies and the policy of the Company will dictate (par. 2).
Under said supplementary agreement, the dealer undertakes to: (a) diligently canvass for buyers of the Company's
products; (b) refrain from selling or distributing goods of similar nature; (c) furnish the Company every 3 months a list
of buyers/customers, specifying their addresses and individual daily supply; (d) abide by the Company policy,
particularly with respect to pricing; (e) keep account of all his dealings and promptly liquidate his accounts; (f) refrain
from engaging in any activity which will prejudice the Company from withdrawing cigarettes beyond the maximum
volume allotted to him (par. 3.)
In case of incapacity of the dealer, the Company may designate a substitute (par. 6). The Company also reserves the
right to determine, from time to time, the amount of credit granted or to be granted to the dealer (par. 7).
It is likewise immediately noticeable that no such words as "to hire and employ" are present. The Dealership
Agreement uses the words "the factory has accepted the application of (name of applicant) and therefore has
appointed him as one of its dealers"; whereas the Dealership Supplementary Agreement is prefaced with the
statement: "For and in consideration of the mutual covenants and agreements made herein, by one to the other, the
COMPANY and the DEALER by these presents, enter into this Supplementary Agreement whereby the COMPANY will
avail of the services of the DEALER to handle the sale and distribution of the cigarette products". Nothing in the
terms and conditions likewise reveals that the dealers were engaged as employees.
Again, on the basis of the clear terms of the dealership agreements, no mention is made of the wages of the dealers.
In fact, it specifies that the dealer shall not receive any commission from the factory but the latter shall give the
dealer a discount for all sales either on consignment or in cash (par. 4).
Considering the matter of wages, the term "wages" as defined in Section 2 of the Minimum Wage Law (Rep. Act No.
602) as amended, is as follows:
(g) 'Wage' paid to any employee shall mean the remuneration or earnings, however designated,
capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece,
commission basis, or other method of calculating the same, which is payable by an employer under a
written or unwritten contract of employment for work done or to be done or for services rendered or
to be rendered, and includes the fair and reasonable value, as determined by the Secretary of Labor,
of board, lodging, or other facilities customarily furnished by the employer to the employee ...
Section 10(k) of the same law also provides:
(k) Notification of wage conditions. It shall be the duty of every employer to notify his employees at
the time of hiring of the wage conditions under which they are employed, which shall include the
following-
(1) The rate of wages payable;
(2) The method of calculation of wages;
(3) The periodicity of wage payment; the day, the hour and place of payment; and
(4) Any change with respect to any of the foregoing items."
then, par. (h) of Sec. 10 of said law provides that such "wages" must be paid to them periodically at least once every
two weeks or twice a month. Considering the foregoing, the dealer's discount lacks the foregoing characteristics of
the term "wage". Since it varies from month to month depending on the volume of the sales, it lacks the
characteristic of periodicity in the manner and procedure contemplated in the Minimum Wage Law.
Respondents, in effect, admit the clarity of the terms and conditions of the agreements which covenant that the
relationship between the dealers and the Company is one of buyer and seller of La Suerte products, and therefore,
one of an independent contractorship when they claimed that the dealership arrangement as established under the
Dealership Agreement and the Dealership Supplementary Agreement is essentially a legal cover, cloak or disguise to
hide the continuing Employer-Employee relationship established prior to 1964. (Respondents' Joint Memorandum, p.
34).
Precisely, there was need to change the contract of employment because of the change of relationship, from an
employee to that of an independent dealer or contractor. The employees were free to enter into the new status, to
sign or not to sign the new agreement. As in the Mafinco case, the respondents therein as in the instant case, were
free to reject the terms of the dealership but having signed it, they were bound by its stipulations and the
consequences thereof under existing labor laws. The fact that the 14 local union members voluntarily executed with
La Suerte formal dealership agreements which indicate the distribution and sale of La Suerte cigarettes signifies that
they were acting as independent businessmen.
We ruled earlier that the terms and stipulations of the dealership agreement leave no room for doubt that the
parties entered into a transaction for the distribution and sale of La Suerte products whereby the distributor/sever or
dealer assumes the status of an independent contractor. We note that the applicant who is appointed dealer "is
willing and able to do as such for the main purpose of extensively selling the products of the FACTORY in the said
territories under certain expressed terms and conditions" among them: "1. That the DEALER shall handle for saleand
distribution cigarette products of the factory ..."; "2. That for the purpose of selling cigarettes or products of the
factory, the dealer shall send his order to the factory plant in Parañaque, Metro Manila either in cash or on credit ...";
"4. That the dealer shall not receive any commission from the factory but the latter shall give the dealer a discount
for all sales either on consignment or in cash ..."; "7. (b) He shall not sell or distribute goods of a similar nature or
such as would compete and interfere with the sale of the products of the factory in the territory, either on his
account or on behalf of any other person whatsoever ..."; "8. That the dealer shall sell the products of the factory at a
price to be agreed upon between both parties."
It is not disputed that under the dealership agreement, the dealer purchases and sells the cigarettes manufactured
by the company under and for his own account. The dealer places his order for the purchase of cigarettes to be sold
by him in a particular territory by filling up an Issuance Slip. The Issuance Slip is approved by the Sales Manager and
after the sale is approved, a Sales Invoice is then issued to the dealer. On the basis of the approved Issuance Slip and
the Sales Invoice, the dealer secures the delivery of his order from the warehouse of the company and upon delivery
of the cigarettes from the warehouse, the dealer has the 'obligation to pay whether the cigarettes are disposed or
not. The dealer on his own account sells the cigarettes in any manner he deems best without constraint as to time.
The dealers do not devote their full time in selling company products. They are likewise engaged in other livelihood
and businesses while selling cigarettes manufactured by the company.
The sales to the dealers are either on cash or credit basis. Where it is on cash basis, the amount is paid immediately
upon the delivery of the products from the company's warehouse. If it is on credit, the dealer would usually settle his
account within one week from the time the credit is extended to him. Upon payment of the purchase price, a
company official receipt is issued to him.
Private respondents contend that there are essential differences between the dealership agreement and that in
actual practice and operation, then proceeded to point them in the attempt to prove the control of La Suerte over
the sales effort of the dealers. They also contend that the dealership agreement, as stated earlier, is essentially a legal
cover, a cloak or disguise to hide the continuing employer-employee relationship established prior to 1964.
We reject both contentions as being without merit.
In the first place, We cannot accept nor consider evidence varying the terms of the agreement other than the
contents of the writing itself pursuant to Section 7, Rule 130 of the Revised Rules of Court, which provides that:
Section 7. Evidence of written agreements. —When the terms of an agreement have been reduced to
writing, it is to be considered as containing all such terms, and, therefore, there can be, between the
parties and their successors in interest, no evidence of the terms of the agreement other than the
contents of the writing except in the following cases:
(a) Where a mistake or imperfection of the writing, or its failure to express the true intent and
agreement of the parties, or the validity of the agreement is put in issue by the pleadings.
(b) When there is an intrinsic ambiguity in the writing.
The term 'agreement' includes wills.
If there are changes by reason of actual practice and operation, certiorari is not the proper proceeding or remedy
therefor.
In the second place, petitioner's claim that respondent local union relies heavily on evidence dehors the record or
extraneous evidence found in cases other than the one at bar, as the testimony in the Limarez case, NCR Case AB-3-
4960-80 cited extensively (pp. 63, 64, 65-66, 66-67, 68-69, 70-72, 73-76, 77-83, 84-85, 86-87, 89, 90-94, 97-98, 107,
Comment of Local Union) and that practically all the appendages to the Comment of Local Union constituting the
main bulk thereof (Annexes 1 to 52) were evidence introduced in other cases and not in the case at bar, is
meritorious. We reject said evidence dehors the record and the appendages raised for the first time on appeal as
extrinsic, beyond the scope of this review.
Private respondents contend that under the dealership agreement, the totality of the powers expressly reserved to
the company, respecting essential aspects or facets of the sales operation of the dealers, clearly establish company
control over the manner and details of performance. And they cite the following: "(1) The dealer shall be assigned to
a particular territory which the factory shall decide from time to time (par. 6); (2) The dealer shall handle for sale and
distribution cigarette products of the company. . . without however incurring any expense in doing so, without
previous written consent of the factory being first had and obtained (par. 1); (3) In cases of credit order, the dealer
can only get or order the supply of cigarettes up to the amount of not more than P 10,000.00 only at any given time
during the existence of this contract, unless allowed by the factory to get more (par. 2); (4) The company shall give
the dealer a discount for all sales . . . and said discount shall be decided by the factory from time to time (par. 4); (5)
It is however agreed and understood that the company may, from time to time, upon written notice thereof to the
dealer, change or divide the territory as the business exigencies and policy of the factory with respect thereto will
dictate (par. 2, Annex 10); (6) Each dealer will faithfully and religiously abide by the company policy, rules and
regulations, particularly with respect to pricing of all products to be sold and distributed by him (par. 3, sub-par. (d),
Annex 10); (7) The dealer shall put up a bond or additional bond with the company in such amounts as in the
judgment of the company may be satisfactory (par. 5, Annex 10); (8) In the event that the dealer should become
incapacitated for any reason whatsoever, the factory may designate for the duration of said incapacity a substitute to
handle the sale and distribution of the products in the territory (par. 6, Annex 10); (9) The company reserves the right
to determine, from time to time, the amount of credit granted or to be granted the dealer (par. 7, Annex 10); (10)
This agreement may be cancelled and/or terminated by the company should the dealer violate its undertaking under
this Agreement, especially par. 7(f) hereof (par. 8, Annex 10); (11) That either party may terminate this contract
without cause by giving to the other party 15 days notice in writing (par. 9, Annex 9); and (12) In the event of breach
of this contract, the company may terminate this contract without notice to the dealer (proviso in par. 9, Annex 9). " 1
Disputing private respondents' above contention that the company exercises company control over the manner and
details of the sales operation of the dealers and not merely over the result of the work of each dealer, petitioner
maintains that:
1. The allocation of a definite territory to be assigned to a dealer or distributor is standard practice in dealership
agreements, whether international or domestic. Allocation of area responsibility and territorial and customer
restrictions are common features of dealership agreements. Thus, a company may be appointed exclusive distributor
or dealer of a product in the Philippines, the Asian region or in the Far East in the same way that some Philippine
manufacturers appoint exclusive dealers for the United States or Canada;
2. In the Shriro case, the expenses for handling and delivery of the goods to the customers are all for the account of
the company (See Social Security System vs. Hon. Court of Appeals & Shriro (Phil.) Inc., 37 SCRA 579) and there, the
Supreme Court did not consider the facts as indicia of an employment relation;
3. In limiting a credit order for cigarettes up to the amount of P 10,000.00 only at any given time during the existence
of the contract, unless allowed by the factory to get more, the company merely controls the result of the work of the
dealer. The credit order is limited because in a dealership contract, the transaction is one of buy and sell and once an
order is made, specially a credit order, the risk of loss is passed on to the dealer;
4. In the Mafinco case, the peddlers are given also a discount and the Supreme Court held that the peddling contract
is not a contract of employment but signifies an independent contractor relationship.
5. The change or division of the territory to which a dealer is assigned as the business exigencies and policy of the
factory with respect thereto will dictate from time to time is no indicia of company control over the means and
methods for in the Mafinco case the peddlers are also assigned definite area routes or zones.
6. That the dealers shall abide with the company policies and rules, particularly in pricing of products is a standard
practice in dealership agreements and more so in franchising agreements. The fact that a person has to conform with
standards of conduct set by the company does not declassify such a person as an independent contractor so long as
he can determine his own day to day activities. In independent contracts, there is always the element of control as to
what shall be done as distinguished from how it should be done.
7. The posting of a surety bond under par. 8 of the Dealers Agreement is similar to the giving of a cash bond under
par. 7, Peddlers Contract in the Mafinco case wherein it is ruled that the Peddlers Contract involved therein is not an
employment agreement.
8. The right to designate a substitute dealer in the event of the incapacity of the regular dealer is no indication of an
employer-employee relationship. It is just business prudence to provide for substitute dealers in case of the regular
dealer's incapacity.
9. That the company may determine from time to time the amount of credit granted or to be granted the dealer is
more a control over the result rather than the means as in Shriro case where the company even reserves the right to
approve or reject a sales order, whether on cash or on credit basis.
10. The power to cancel or terminate should the dealer violate its undertaking under the agreement on the basis of
the company's opinion that the dealer must engage in any activity which will in any manner prejudice either the
business or name of the factory is a standard practice in dealership agreements.
We agree with the petitioner. We hold further that the terms and conditions for the termination of the contract are
the usual and common stipulations in independent contractorship agreements. In any event, the contention that the
totality of the powers expressly reserved to the company establish company control over the manner and details of
performance is merely speculative and conjectural.
There are indeed striking similarities between the Peddler's Contract in the Mafinco case and the Dealer's Agreement
and Supplementary Dealer's Agreement in the case at bar. Thus:
1. Use of company facilities — La Suerte provides dealers with truck or panel delivery (par. 3, Dealer's Agreement)
whereas in Mafinco, the company also provides peddler with delivery truck (par. 1, Peddling Contract);
2. Salary of drivers — Dealer in this La Suerte case pays salary of driver (par. 3, Dealer's Agreement). In Mafinco, the
salary of drivers is for peddler's account (par. 2, Peddling Contract);
3. Expenses of operation and maintenance —La Suerte pays for expenses and repair pertaining to the truck or panel
delivery (par. 3, Dealership Agreement). In Mafinco, the company furnishes gasoline and oil to run trucks and bear
costs of maintenance and repair (par. 4, Peddling Contract);
4. Profit Margin — In instant La Suerte case, no commission given. Company gives a sales discount (par. 4, Dealership
Agreement). In Mafinco, no commission is also given. Peddler given a sales discount (par. 6, Peddler's Contract);
5. Collateral — Dealer in La Suerte gives a surety bond (par. 8, Dealer's Agreement). In Mafinco, peddler gives a cash
bond (par. 7), Peddler's Contract);
6. Payment — Dealer required to promptly liquidate account (par. 3, (e), Supplementary Dealer's Contract). In
Mafinco, peddler liquidates everyday at the end of each day, otherwise his cash bond shall answer for unliquidated
account (par. 8, Peddler's Contract);
7. Termination — In La Suerte case, no fixed period but either party may terminate after 15 days written notice (par.
9, Dealer's Contract). In Mafinco, the contract is for one year but either party may terminate earlier upon 5-day
written notice (par. 9, Peddler's Contract);
8. Government licenses — Dealers secure own municipal license and Mayor's permit (Annexes 23 to 24, Comment of
Local Union). In Mafinco, peddler secure own licenses to peddle (Committee Report, 70 SCRA 157);
9. Working hours —Dealers have to get quotas daily but no fixed time. In Mafinco, peddlers get their trucks in the
morning and have to report daily (Report of Committee, 70 SCRA 154-156). No fixed time;
10. Territory —Dealer assigned a particular territory (par. 6, Dealer's Agreement). In Mafinco, peddlers have a fixed
territory in Manila, see whereas clause of Peddler's Contract, subject to prearranged routes, areas and zones agreed
upon by Peddler's Association (Committee Report, 70 SCRA 156);
11. Supervision — Supervisors also for market analysis in La Suerte case. In Mafinco, Liaison Officer or Supervisors for
market analysis (Committee Report, 70 SCRA 156);
12. Basic Agreement —In the instant La Suerte case, the dealer is "appointed" (not hired as in employment contract)
"to handle" products without commission but with sales discount through sales invoices which state "sold to" dealer
(Annex B, Petition; Annex D, Petition). Payments duly receipted (Annex E, Petition). In Mafinco, the peddler is
"desirous of buying and selling" (70 SCRA 143).
On the second issue-whether or not the withdrawal of 31 union members from NATU affected the petition for
certification election insofar as the 30% requirement is concerned, We reserve the Order of the respondent Director
of the Bureau of Labor Relations, it appearing undisputably that the 31 union members had withdrawn their support
to the petition before the filing of said petition. It would be otherwise if the withdrawal was made after the filing of
the petition for it would then be presumed that the withdrawal was not free and voluntary. The presumption would
arise that the withdrawal was procured through duress, coercion or for valuable consideration. In other words, the
distinction must be that withdrawals made before the filing of the petition are presumed voluntary unless there is
convincing proof to the contrary, whereas withdrawals made after the filing of the petition are deemed involuntary.
The reason for such distinction is that if the withdrawal or retraction is made before the filing of the petition, the
names of employees supporting the petition are supposed to be held secret to the opposite party. Logically, any such
withdrawal or retraction shows voluntariness in the absence of proof to the contrary. Moreover, it becomes apparent
that such employees had not given consent to the filing of the petition, hence the subscription requirement has not
been met.
When the withdrawal or retraction is made after the petition is filed, the employees who are supporting the petition
become known to the opposite party since their names are attached to the petition at the time of filing. Therefore, it
would not be unexpected that the opposite party would use foul means for the subject employees to withdrawal
their support.
In recapitulation, We hold and rule that the 14 members of respondent local union are dealers or independent
contractors. They are not employees of petitioner company. With the withdrawal by 31 members of their support to
the petition prior to or before the filing thereof, making a total of 45, the remainder of 3 out of the 48 alleged to have
supported the petition can hardly be said to represent the union. Hence, the dismissal of the petition by the Med-
Arbiter was correct and justified. Respondent Director committed grave abuse of discretion in reversing the order of
the Med- Arbiter.
With the above pronouncements, the resolution of the third issue raised herein is unnecessary.
WHEREFORE, IN VIEW OF ALL THE FOREGOING, the Resolution dated January 15, 1980 of respondent Director of the
Bureau of Labor Relations and the Resolution dated November 18,1980 are hereby REVERSED and SET ASIDE, and the
petition for certification election is ordered dismissed.
No costs.
SO ORDERED.
G.R. No. L-18782 August 29, 1963

BINALBAGAN-ISABELA SUGAR CO., INC., (BISCOM), petitioner,
vs.
PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU), ET AL., respondents.
Salonga, Ordoñez, Sicat & Associates for petitioner.
Cipriano Cid & Associates for respondents.
BAUTISTA ANGELO, J.:
The Binalbagan-Isabela Sugar Co., Inc., BISCOM for short, is a corporation engaged in the manufacture of centrifugal
sugar at Binalbagan, Negros Occidental. Among its employees were Enrique G. Entila and Victoriano Tenazas.
On March 6, 1952, Entila and Tenazas joined the Fraternal Labor Organization (FLO), which is a labor union composed
of employees and laborers of the BISCOM. On May 3, 1957, the BISCOM entered into a two-year collective bargaining
agreement containing a closed shop clause with said union wherein it was stipulated that the agreement may be
extended for a period of one year unless either party notifies the other in writing, not less than 60 days prior to its
expiry date of its intention to terminate the same. The closed shop clause, among others, contains the following
provisions. "Any employee who resigns or for any reason ceases to be a member or a member of good standing of
the UNION, or who, not being a member fails to become member of the UNION, within the aforementioned fifteen
(15) day-period shall be considered as a sufficient cause for dismissal by the COMPANY and for the forfeiture of all
privileges extended by the COMPANY by virtue of this Agreement."
On March 4, 1959, the BISCOM and the aforesaid Union entered into a new collective bargaining agreement
incorporating therein the same closed shop clause which was also made effective for a period of two years from
March 4, 1959, extendible for another period of one year unless either party notifies the other in writing, not less
than 60 days prior to the expiry date, of its intention to terminate the same. This as well as the original collective
bargaining agreement were signed by Entila and Tenazas who agreed to abide by and respect its terms and
conditions.
Notwithstanding their commitment to respect the collective bargaining agreement signed on March 4, 1959, Entila
and Tenazas, in violation of its closed shop provision, joined the Philippine Association of Free Labor Unions (PAFLU),
another labor organization composed of laborer, and employees of the BISCOM, and campaigned among their co-
employees and laborers persuading them to join and affiliate with the latter union, for which reason they were
investigated in connection with union activities. Two hearings were held at which Entila and Tenazas were given an
opportunity to explain their behavior. And having been found guilty of misconduct they were expelled from the
Fraternity Labor Organization. On May 31, 1959, the Fraternal Labor Organization notified the BISCOM of the action
taken against Entila and Tenazas, and, acting in line with the closed shop provision contained in the collective
bargaining agreement, it decreed the dismissal of said employees.
As a result of their dismissal, the two employees, together with the Philippine Association of Free Labor Unions
(PAFLU), with which they were later affiliated, filed a complaint for unfair labor practice against the BISCOM and the
Fraternal Labor Organization (FLO) with the Court of Industrial Relations alleging that because said employees joined
the PAFLU and campaigned actively for membership therein among their co-employees especially those affiliated
with the FLO, they were dismissed from their employment by the BISCOM.
The BISCOM denied the unfair labor practice imputation. It alleged that Entila and Tenazas were dismissed pursuant
to the closed shop provision contained in the collective bargaining agreement executed between the FLO and the
BISCOM, and that on May 31, 1959, the BISCOM was notified by the FLO of the expulsion from the union of said
employees asking for their dismissal, and so it had to accede to the demand in line with the closed shop provision.
The FLO, in turn, also denied the charge and alleged that the expulsion of Entila and Tenazas was effected in
accordance with its constitution and by-laws and because of their failure to respect the closed shop provision
contained in the collective bargaining agreement.
In a decision rendered on March 29, 1961, Presiding Judge Jose S. Bautista, who was assigned to receive the
evidence, found that the unfair labor practice charge was justified and so he decreed that Entila and Tenazas be
reinstated to their former positions with payment of back wages from the time of their dismissal, the Judge stating
that, since it was established that said employees performed the duties of supervisors, it was improper for them to
join the FLO or any other rank and file union even if they may become members of a supervisors' union. And as this
decision was affirmed by the Court of Industrial Relations en banc, the BISCOM interposed the present petition for
review.1äwphï1.ñët
The issues posed by the parties when this case was submitted for decision after the presentation of their evidence
were boiled down by the court a quo as follows: (1) Do Entila and Tenazas come within the scope of supervisory
employees?; (2) Was their suspension and expulsion by the FLO in accordance with due process?; (3) Is the closed
shop provision contained in the collective bargaining agreement concluded on March 3, 1947 valid?; and (4) Was the
dismissal of Entila and Tenazas legal?
Anent the first issue, the parties submitted both testimonial as well as documentary evidence, and after a detailed
and minute analysis thereof, the court a quo found that, Entila and Tenazas performed the duties of foremen or
supervisors. In other words, contrary to the contention of the BISCOM, the court a quo became convinced that the
duties performed by them were essentially those of foremen since they were given the right to recommend or
suggest the disciplinary measures that should be taken against the erring employees. Indeed, the court said: "Within
the purview of the legal definition of supervisor, both (complainants herein) had exercised the inherent powers as
such when they were allowed by the company to make suggestions or recommendations for disciplinary matters on
their men", and this conclusion is supported not only by testimonial evidence but by numerous exhibits.
The company now disputes this filing, but being a question of fact which is supported by substantial evidence, we are
not now justified in inquiring into the matter.
Anent the second issue, the court a quo likewise found that Tenazas, being a member of the Board of Directors of the
FLO, did not undergo am impeachment proceeding as provided in its by-laws relative to the action to be taken against
an officer of the union, while Entila was not given proper hearing even if he was called before a lawyer of the union
for investigation. The court found that during the alleged hearing not a single witness was presented as Entila was
merely questioned investigating the contents of certain affidavits. In fact, the son of Entila who was a law student
asked for postponement of the hearing so that he could prepare the defense of his father, but the request was
denied. This is also a question of fact which we cannot now look into being supported by substantial evidence.
Concerning the collective bargaining agreement involved in the third issue, the company disputes the view taken by
the court a quo that said collective bargaining agreement was illegal because it was entered into with a union which
was not certified by the court as the one chosen by the employees as their collective bargaining unit for, it is
contended, such view ignores the fact that under the law there are four different ways under which a collective
bargaining agreement maybe entered into by an employer and his employees, one of them being when "a majority
of the employees designate the labor organization it may choose to act as its representative for the purpose of
collective bargaining, which it can do without court intervention, and the organization so designated may
immediately conclude a collective bargaining with the employer."
This contention may be correct if a majority of the employees should request the employer to designate certain labor
union as their representative in order that it may conclude with it the necessary collective bargaining agreement, but
this can only take place when there is no dispute as to what union counts in its membership with a majority of its
employees for otherwise there would be need to file in court a petition for certification election, the reason for this
requirement being that a labor union cannot on its own accord and responsibility determine by itself the question of
majority membership. Here this is precisely the question in dispute when the Visayan Free Workers Union, one of the
several unions existing in the BISCOM, filed a petition for certification election in order that the court may determine
the union that has a majority representation, but notwithstanding this petition, which was joined by other legally
existing unions, the BISCOM concluded with the FLO the disputed collective bargaining agreement. Said the court a
quo on this matter.
. . . However, the records show that before the execution of the contract on May 3, 1957, there was already a
pending petition for certification election docketed as Case No. 3-MC-Iloilo which was filed by the Free
Visayan Union on December 8, 1956. Summons was served to the Binalbagan-Isabela Sugar Co., Inc.
(BISCOM) on December 14, 1956 where a return of service was executed by a police officer of the
Municipality of Binalbagan. A motion for intervention under the same case was filed by the Allied Workers
Association on August 15, 1957 and another motion for intervention was filed by the Philippine Association
of Free Labor Unions (PAFLU) on January 27, 1959. Based on these dates, it could be clearly said that there
was already an issue of majority representation in the proper collective bargaining unit before the execution
of the agreement on May 3, 1957. The filing of a petition for certification election raises a doubt as to the
majority representation. Only the Court should resolve this point. The company or any interested union has
no authority to resolve it as in this case, there were other unions apparently existing in the company aside
from the FLO before May 3, 1957. The three or four contending unions were asserting their majority
representation. The written affirmation made by the members of the FLO or their willingness to side with the
FLO for purposes of executing a collective bargaining agreement does not cure nor resolves the question of
majority representations. Nevertheless, the company, despite the absence of any compelling necessity for
dealing only with the FLO, executed a collective bargaining agreement on May 3, 1957. There was no cogent
reason why it hurriedly executed such contract. It may be surmised that the company just relied on the
different signatures of alleged members as the only factors that led to the execution of the contract on May
3, 1957. However, there was no positive proof that all the signatures obtained were genuine and freely given
for such purpose. Precisely, the very reason why court's intervention is mandatory on cases of certification
involving many unions in a particular unit is to assure freedom of choice through democratic proceedings.
The Court frowns at unilateral determination of majority representation in a unit for this leads to either
company domination or preference. In the case at bar, at least four (4) unions claim for majority, hence it is
incumbent for the Court to determine and the company to defer its execution of a contract. The impact of
company's preference with the FLO is revealing at the expense of other unions then existing.
Having reached the conclusion that the collective bargaining agreement in question was concluded not in accordance
with the law, we find no cogent reason for disturbing the decision of the Court of Industrial Relations.
WHEREFORE, the decision appealed from is affirmed, with costs against petitioner.
G.R. No. 73681 June 30, 1988

COLGATE PALMOLIVE PHILIPPINES, Inc., petitioners,
vs.
HON. BLAS F. OPLE, COLGATE PALMOLIVE SALES UNION, respondents.
PARAS, J.:
Before Us is a Petition for certiorari seeking to set aside and annul the Order of respondent Minister of Labor and
Employment (MOLE) directly certifying private respondent as the recognized and duly-authorized collective
bargaining agent for petitioner's sales force and ordering the reinstatement of three employees of petitioner.
Acting on the petition for certiorari with prayer for temporary restraining order, this Court issued a Temporary
Restraining Order enjoining respondents from enforcing and/or carrying out the assailed order.
On March 1, 1985, the respondent Union filed a Notice of Strike with the Bureau of Labor Relations (BLR) on ground
of unfair labor practice consisting of alleged refusal to bargain, dismissal of union officers/members; and coercing
employees to retract their membership with the union and restraining non-union members from joining the union.
After efforts at amicable settlement proved unavailing, the Office of the MOLE, upon petition of petitioner assumed
jurisdiction over the dispute pursuant to Article 264 (g) of the Labor Code, Thereafter the case was captioned AJML-
3-142-85, BLR-3-86-85 "In Re: Assumption of Jurisdiction over the Labor Dispute at Colgate Palmolive Philippines,
Inc." In its position paper, petitioner pointed out that —
(a) There is no legal basis for the charge that the company refused to bargain collectively with the
union considering that the alleged union is not the certified agent of the company salesmen;
(b) The union's status as a legitimate labor organization is still under question because on 6 March
1985, a certain Monchito Rosales informed the BLR that an overwhelming majority of the salesmen
are not in favor of the Notice of Strike allegedly filed by the Union (Annex "C");
(c) Upon verification of the records of the Ministry of Labor and Employment, it appeared that a
petition for cancellation of the registration of the alleged union was filed by Monchito Rosales on
behalf of certain salesmen of the company who are obviously against the formation of the Colgate
Palmolive Sales Labor Union which is supposed to represent them;
(d) The preventive suspensions of salesmen Peregrino Sayson, Salvador Reynante and Cornelio Mejia,
and their eventual dismissal from the employ of the company were carried out pursuant to the
inherent right and prerogative of management to discipline erring employees; that based on the
preliminary investigation conducted by the company, there appeared substantial grounds to believe
that Sayson, Reynante and Mejia violated company rules and regulations necessitating their
suspension pending further investigation of their respective cases;
(e) It was also ascertained that the company sustained damages resulting from the infractions
committed by the three salesmen, and that the final results of the investigation fully convinced the
company of the existence of just causes for the dismissal of the three salesmen;
(f) The formation of the union and the membership therein of Sayson, Reynante and Mejia were not
in any manner connected with the company's decision to dismiss the three; that the fact that their
dismissal came at a time when the alleged union was being formed was purely coincidental;
(g) The union's charge therefore, that the membership in the union and refusal to retract
precipitated their dismissal was totally false and amounted to a malicious imputation of union
busting;
(h) The company never coerced or attempted to coerce employees, much less interferred in the
exercise of their right to self-organization; the company never thwarted nor tried to defeat or
frustrate the employees' right to form their union in pursuit of their collective interest, as long as
that right is exercised within the limits prescribed by law; in fact, there are at present two unions
representing the rank and file employees of the company-the factory workers who are covered by a
CBA which expired on 31 October 1985 (which was renewed on May 31, 1985) and are represented
by Colgate Palmolive Employees Union (PAFLU); whereas, the salaried employees are covered by a
CBA which will expire on 31 May 1986 represented by Philippine Association of Free Labor Union
(PAFLU)-CPPI Office Chapter. (pp. 4-6, Rollo)
The respondent Union, on the other hand, in its position paper, reiterated the issue in its Notice to Strike, alleging
that it was duly registered with the Bureau of Labor Relations under Registry No. 10312-LC with a total membership
of 87 regular salesmen (nationwide) out of 117 regular salesmen presently employed by the company as of
November 30, 1985 and that since the registration of the Union up to the present, more than 2/3 of the total
salesmen employed are already members of the Union, leaving no doubt that the true sentiment of the salesmen
was to form and organize the Colgate-Palmolive Salesmen Union. The Union further alleged that the company is
unreasonably delaying the recognition of the union because when it was informed of the organization of the union,
and when presented with a set of proposals for a collective bargaining agreement, the company took an adversarial
stance by secretly distributing a "survey sheet on union membership" to newly hired salesmen from the Visayas,
Mindanao and Metro Manila areas, purposely avoiding regular salesmen who are now members of the union; that in
the accomplishment of the form, District Sales Managers, and Sales Supervisors coerced salesmen from the Visayas
and Mindanao by requiring them to fill up and/or accomplish said form by checking answers which were adverse to
the union; that with a handful of the survey sheets secured by management through coercion, it now would like to
claim that all salesmen are not in favor of the organization of the union, which acts are clear manifestations of unfair
labor practices.
On August 9,1985, respondent Minister rendered a decision which:
(a) found no merit in the Union's Complaint for unfair labor practice allegedly committed by
petitioner as regards the alleged refusal of petitioner to negotiate with the Union, and the secret
distribution of survey sheets allegedly intended to discourage unionism,
(b) found the three salesmen, Peregrino Sayson, Salvador Reynante & Cornelio Mejia "not without
fault" and that "the company 1 has grounds to dismiss above named salesmen"
and at the same time respondent Minister directly certified the respondent Union as the collective bargaining agent
for the sales force in petitioner company and ordered the reinstatement of the three salesmen to the company on
the ground that the employees were first offenders.
Petitioner filed a Motion for Reconsideration which was denied by respondent Minister in his assailed Order, dated
December 27, 1985. Petitioner now comes to Us with the following:
Assignment of Errors
I
Respondent Minister committed a grave abuse of discretion when he directly certified the Union
solely on the basis of the latter's self-serving assertion that it enjoys the support of the majority of
the sales force in petitioner's company.
II
Respondent Minister committed a grave abuse of discretion when, notwithstanding his very own
finding that there was just cause for the dismissal of the three (3) salesmen, he nevertheless ordered
their reinstatement. (pp. 7-8, Rollo)
Petitioner concedes that respondent Minister has the power to decide a labor dispute in a case assumed by him
under Art. 264 (g) of the Labor Code but this power was exceeded when he certified respondent Union as the
exclusive bargaining agent of the company's salesmen since this is not a representation proceeding as described
under the Labor Code. Moreover the Union did not pray for certification but merely for a finding of unfair labor
practice imputed to petitioner-company.
The petition merits our consideration. The procedure for a representation case is outlined in Arts. 257-260 of the
Labor Code, in relation to the provisions on cancellation of a Union registration under Arts. 239-240 thereof, the main
purpose of which is to aid in ascertaining majority representation. The requirements under the law, specifically Secs.
2, 5, and 6 of Rule V, Book V, of the Rules Implementing the Labor Code are all calculated to ensure that the certified
bargaining representative is the true choice of the employees against all contenders. The Constitutional mandate that
the State shall "assure the rights of the workers to self-organization, collective bargaining, security of tenure and just
and humane conditions of work," should be achieved under a system of law such as the aforementioned provisions
of the pertinent statutes. When an overzealous official by-passes the law on the pretext of retaining a laudable
objective, the intendment or purpose of the law will lose its meaning as the law itself is disregarded. When
respondent Minister directly certified the Union, he in fact disregarded this procedure and its legal requirements.
There was therefore failure to determine with legal certainty whether the Union indeed enjoyed majority
representation. Contrary to the respondent Minister's observation, the holding of a certification election at the
proper time is not necessarily a mere formality as there was a compelling legal reason not to directly and unilaterally
certify a union whose legitimacy is precisely the object of litigation in a pending cancellation case filed by certain
"concerned salesmen," who also claim majority status. Even in a case where a union has filed a petition for
certification elections, the mere fact that no opposition is made does not warrant a direct certification. More so as in
the case at bar, when the records of the suit show that the required proof was not presented in an appropriate
proceeding and that the basis of the direct certification was the Union's mere allegation in its position paper that it
has 87 out of 117 regular salesmen. In other words, respondent Minister merely relied on the self-serving assertion
of the respondent Union that it enjoyed the support of the majority of the salesmen, without subjecting such
assertion to the test of competing claims. As pointed out by petitioner in its petition, what the respondent Minister
achieved in rendering the assailed orders was to make a mockery of the procedure provided under the law for
representation cases because:
(a) He has created havoc by impliedly establishing a procedural short-cut to obtaining a direct
certification-by merely filing a notice of strike.
(b) By creating such a short-cut, he has officially encouraged disrespect for the law.
(c) By directly certifying a Union without sufficient proof of majority representation, he has in effect
arrogated unto himself the right, vested naturally in the employees, to choose their collective
bargaining representative.
(d) He has in effect imposed upon the petitioner the obligation to negotiate with a union whose
majority representation is under serious question. This is highly irregular because while the Union
enjoys the blessing of the Minister, it does not enjoy the blessing of the employees. Petitioner is
therefore under threat of being held liable for refusing to negotiate with a union whose right to
bargaining status has not been legally established. (pp. 9-10, Rollo)
The order of the respondent Minister to reinstate the employees despite a clear finding of guilt on their part is not in
conformity with law. Reinstatement is simply incompatible with a finding of guilt. Where the totality of the evidence
was sufficient to warrant the dismissal of the employees the law warrants their dismissal without making any
distinction between a first offender and a habitual delinquent. Under the law, respondent Minister is duly mandated
to equally protect and respect not only the labor or workers' side but also the management and/or employers' side.
The law, in protecting the rights of the laborer, authorizes neither oppression nor self-destruction of the employer. To
order the reinstatement of the erring employees namely, Mejia, Sayson and Reynante would in effect encourage
unequal protection of the laws as a managerial employee of petitioner company involved in the same incident was
already dismissed and was not ordered to be reinstated. As stated by Us in the case of San Miguel Brewery vs.
National Labor Union, 2 "an employer cannot legally be compelled to continue with the employment of a person who
admittedly was guilty of misfeasance or malfeasance towards his employer, and whose continuance in the service of
the latter is patently inimical to his interest."
In the subject order, respondent Minister cited a cases 3 implying that "the proximity of the dismissal of the
employees to the assumption order created a doubt as to whether their dismissal was really for just cause or due to
their activities." 4
This is of no moment for the following reasons:
(a) Respondent Minister has still maintained in his assailed order that a just cause existed to justify the dismissal of
the employees.
(b) Respondent Minister has not made any finding substantiated by evidence that the employees were dismissed
because of their union activities.
WHEREFORE, judgment is hereby rendered REVERSING and SETTING ASIDE the Order of the respondent Minister,
dated December 27, 1985 for grave abuse of discretion. However, in view of the fact that the dismissed employees
are first offenders, petitioner is hereby ordered to give them separation pay. The temporary restraining order is
hereby made permanent.
SO ORDERED.

Labor Dispute Between Unions Over Disaffiliation

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G.R. No.

127374 January 31, 2002

DE LEON, JR., J.:

a.) Backwages as of Dec. 31, 1992 P36,306.55

b.) Bonus 1,000.00

c.) Medical Allowance 1,000.00

d.) Clothing Allowance 750.00

e.) Hospitalization allowance since 1988 2,000.00

a.) Backwages as of Dec. 31, 1992 P37,783.60

b.) Bonus 1,000.00

d.) Clothing Allowance 750.00

e.) Hospitalization allowance since 1988 2,000.00

a.) Backwages as of Dec. 31, 1992 P37,783.60

b.) Bonus 1,000.00

c.) Medical Allowance 1,000.00

d.) Clothing Allowance 750.00

e.) Hospitalization allowance since 1988 2,000.00

a.) Backwages as of Dec. 31, 1992 P56,675.40

b.) Bonus 1,000.00

c.) Medical Allowance 1,000.00

d.) Clothing Allowance 750.00

e.) Hospitalization allowance since 1988 2,000.00

a.) Backwages as of Dec. 31, 1992 P32,162.78

b.) Bonus 1,000.00

c.) Medical Allowance 1,000.00

d.) Clothing Allowance 750.00

e.) Hospitalization allowance since 1988 2,000.00

a.) Backwages as of Dec. 31, 1992 P15,680.00

b.) Bonus 1,000.00

c.) Medical Allowance 1,000.00

d.) Clothing Allowance 750.00

e.) Hospitalization allowance since 1988 2,000.00

GRAND TOTAL P244,891.93

G.R. No. 104556 March 19, 1998

Total Votes cast 1,012

Associated Trade Unions (ATU) 39

National Federation of Labor (NFL) 876

Southern Philippines Federation of Labor 4

G.R. No. 107792 March 2, 1998

National Federation of Labor (NFL) 235

HERMOSISIMA, JR., J.:

G.R. No. 111836 February 1, 1996

G.R. No. 91987 July 17, 1995

G.R. No. 85985 August 13, 1993

G.R. No. 96189 July 14, 1992

G.R. No. L-67485 April 10, 1992

G.R. No. 89609 January 27, 1992

G.R. No. 96425 February 4, 1992

GUTIERREZ, JR., J.:

G.R. No. 85915 January 17, 1990

GUTIERREZ, JR., J.:

G.R. No. L-77282 May 5, 1989

G.R. No. 76673 June 22, 1988

G.R. No. 75321 June 20, 1988

G.R. No. 76185 March 30, 1988

G.R. No. L-18782 August 29, 1963

G.R. No. 73681 June 30, 1988

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