13. LEGEND INTERNATIONAL RESORTS LTD. vs.

KILUSANG MANGAGAWA NG LEGENDA

[G.R. No. 169754, February 13, 2011]

Facts:
June 6, 2001, KML filed with the Med-Arbitration Unit of the DOLE, San Fernando, Pampanga, a petition for
certification election. KML alleged that it is a legitimate labor organization of the rank and file employees of Legend.
It was issued its Certification of Registration by DOLE on May 18, 2001.

Legend moved to dismiss the petition on the grounds that it is not a legitimate labor organization because
its membership is a mixture of rank and file employees and supervisory employees. KML also committed acts of
fraud and misrepresentation when it made it appear that certain employees attended its general membership
meeting on April 5, 2001 when in reality some of them were either at work, have already resigned, or were abroad.

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

Med Arbiter judgment September 20, 2001: dismissed KML‘s petition for certification election. Since its
membership included supervisory employees, it was not a legitimate labor organization. KML was also guilty of
fraud and misrepresentation; 70 employees who were claimed to be among those who attended its organizational
meeting were either at work or elsewhere.

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

Legend filed a Motion for Reconsideration. It also alleged that it filed a petition for cancellation of union
registration of KML which was granted by the DOLE Regional Office, November 7, 2001. MFR was denied in a
resolution dated August 20, 2002: a final order of cancellation is required before a petition for certification of election
may be dismissed on the ground of lack of legal personality, and that the November 7, 2001 decision was reversed
by the BLR March 26, 2002.
CA: held that the issue on the legitimacy of KML as a labor organization has already been settled with
finality. The March 26, 2002 decision upholding the legitimacy had long become final and executor for failure of
Legend to appeal.KML being a legitimate labor org, it could properly file a petition for certification election. Legend
filed MFR stating that it has appealed to the CA the March 26, 2002 decision and is still pending. CA denied MFR.

Issues:

1. Whether Legend has timely appealed the March 26, 2002 decision (re: cancellation of union registration)
2. Whether the cancellation of KML‘s certificate of registration should retroact to the time of its issuance (it
was cancelled in the November 7, 2001 decision)
3. Whether the legitimacy of the legal personality of KML can be collaterally attacked in a petition for
certification election

Ruling:
1. Yes. The March 26, 2002 decision has not yet attained finality considering that it has timely appealed to
the CA and which at that time is still pending resolution. Legend timely filed on Sept 6, 2002 a petition for certiorari
before the CA assailing the March 26, 2002 decision.
 On June 30, 2005, CA reversed the March 26, 2002 decision of the BLR and reinstated the November 7, 2001
decision cancelling the certificate of registration of KML. KML‘s MRF was denied. KML filed a petition for certiorari
before the SC which was denied. KML moved for reconsideration but it was denied with finality. The decision to
cancel KML‘s certificate of registration became final and executory and entry of judgment was made on July 18,
2006.

2. No. According to ACA vs Calleja, a certification proceeding is not a litigation in the sense that the term is
ordinarily understood, but an investigation of a non-adversarial and fact-finding character. An order to hold a
certificationelection is proper despite the pendency of the petition for cancellation of the registration certificate of
the respondent union. The rationale is that at the time the union filed the petition, it still had the legal personality
to perform such act absent an order directing the cancellation.

There is no basis for Legend‘s assertion that the cancellation of KML‘s certificate of registration should
retroact to the time of its issuance or that it effectively nullified all of KML‘s activities, including its filing of the
petition for certification election and its demand to collectively bargain.

3. NO. The legitimacy of the legal personality of KML cannot be collaterally attacked in a petition for
certification election proceeding. Such legal personality may not be subject to a collateral attack but only through
a separate action instituted particularly for the purpose of assailing it.

SC affirmed the May 22, 2002 decision (KML‘s legitimacy cannot be attacked collaterally, presence of
supervisory employees does not render it illegal) and the August 20, 2002 resolution (a final order of cancellation is
required before a petition for certification election may be dismissed on the ground of lack of personality, reversed
March 26, 2002 decision).

14. SAMAHANG MANGGAGAWA SA CHARTER SOLIDARITY OF UNIONS IN THE PHILIPPINES FOR

EMPOWERMENT AND REFORMS, ET AL vs. CHARTER CHEMICAL AND COATING CORP.
[G.R. No. 169717, March 16, 2011]

Facts:

Petitioner union filed a petition for certification election among the regular rank-and-file employees of the
respondent company witht eh Mediation Arbitration Union of the DOLE-NCR.
Respondent filed a Motion to Dismiss on the ground that petitioner union is not a legitimate labor organization
because of failure to comply with the documentation requirements set by law, and the inclusions of supervisory
employees within petitioner union.

Med-Arbiter: Dismissed the petition for certification election because petitioner union is not a legitimate
labor organization. The charter certificate and "Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga Sumang-
ayon at Nagratipika sa Saligang Batas" were not executed under oath and certified by the union secretary and
attested to by the union president as required by Section 235 of the Labor Code. It also held that the list of
membership of petitioner union consisted of members who performed supervisory functions. Under Article 245 of
the Labor Code, said supervisory employees are prohibited from joining petitioner union which seeks to represent
the rank-and-file employees of respondent company.

DOLE: Granted petitioner union‘s petition for certification election.

Court of Appeals: Nullified the decision of the DOLE. The appellate court gave credence to the findings of
the Med-Arbiter that petitioner union failed to comply with the documentation requirements under the Labor Code.
It, likewise, upheld the Med-Arbiter's finding that petitioner union consisted of both rank-and-file and supervisory
employees. Moreover, the CA held that the issues as to the legitimacy of petitioner union may be attacked
collaterally in a petition for certification election and the infirmity in the membership of petitioner union cannot be
remedied through the exclusion-inclusion proceedings in a pre-election conference pursuant to the ruling inToyota
Motor Philippines v. Toyota Motor Philippines Corporation Labor Union. Thus, considering that petitioner union is
not a legitimate labor organization, it has no legal right to file a petition for certification election.

Issues:
1. Whether the alleged mixture of rank-and-file and supervisory employee[s] of petitioner [union's] membership is
[a] ground for the cancellation of petitioner [union's] legal personality and dismissal of [the] petition for certification
election.
2. Whether the alleged failure to certify under oath the local charter certificate issued by its mother federation and
list of the union membership attending the organizational meeting [is a ground] for the cancellation of petitioner
[union's] legal personality as a labor organization and for the dismissal of the petition for certification election.
Ruling:

The petition is meritorious.

The charter certificate need not be certified under oath by the local union's secretary or treasurer and
attested to by its president.

The then prevailing Section 1, Rule VI of the Implementing Rules of Book V, as amended by D.O. No. 9,
series of 1997, provides:

Section 1. Chartering and creation of a local chapter -- A duly registered federation or national
union may directly create a local/chapter by submitting to the Regional Office or to the Bureau two (2)
copies of the following:
(a) A charter certificate issued by the federation or national union indicating the creation or
establishment of the local/chapter;
(b) The names of the local/chapter's officers, their addresses, and the principal office of the
local/chapter; and
(c) The local/chapter's constitution and by-laws provided that where the local/chapter's constitution
and by-laws [are] the same as [those] of the federation or national union, this fact shall be indicated
accordingly.

All the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of
the local/chapter and attested to by its President.

As readily seen, the Sama-samang Pahayag ng Pagsapi at Authorization and Listahan ng mga Dumalo sa
Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas are not among the documents that
need to be submitted to the Regional Office or Bureau of Labor Relations in order to register a labor organization.
As to the charter certificate, the above-quoted rule indicates that it should be executed under oath. Petitioner union
concedes and the records confirm that its charter certificate was not executed under oath. However, in San Miguel
Corporation (Mandaue Packaging Products Plants) v. Mandaue Packing Products Plants-San Miguel Corporation
Monthlies Rank-and-File Union-FFW (MPPP-SMPP-SMAMRFU-FFW),[22]which was decided under the auspices of
D.O. No. 9, Series of 1997, we ruled -

In San Miguel Foods-Cebu B-Meg Feed Plant v. Hon. Laguesma, 331 Phil. 356 (1996), the Court ruled that it
was not necessary for the charter certificate to be certified and attested by the local/chapter officers. Id.While this
ruling was based on the interpretation of the previous Implementing Rules provisions which were supplanted by
the 1997 amendments, we believe that the same doctrine obtains in this case. Considering that the charter certificate
is prepared and issued by the national union and not the local/chapter, it does not make sense to have the
local/chapter's officers x x xcertify or attest to a document which they had no hand in the preparation of.

In accordance with this ruling, petitioner union's charter certificate need not be executed under oath.
Consequently, it validly acquired the status of a legitimate labor organization upon submission of (1) its charter
certificate, (2) the names of its officers, their addresses, and its principal office, and (3) its constitution and by-laws-
- the last two requirements having been executed under oath by the proper union officials as borne out by the
records. The mixture of rank-and-file and supervisory employees in petitioner union does not nullify its legal
personality as a legitimate labor organization.

The CA found that petitioner union has for its membership both rank-and-file and supervisory employees.
However, petitioner union sought to represent the bargaining unit consisting of rank-and-file employees. Under
Article 245 of the Labor Code, supervisory employees are not eligible for membership in a labor organization of
rank-and-file employees.

It was the Rules and Regulations Implementing R.A. No. 6715 (1989 Amended Omnibus Rules) which
supplied the deficiency by introducing the following amendment to Rule II (Registration of Unions):

Sec. 2. Who may file. - Any legitimate labor organization or the employer, when requested to bargain
collectively, may file the petition
The petition, when filed by a legitimate labor organization, shall contain, among others:
x x x x (c) description of the bargaining unit which shall be the employer unit unless circumstances otherwise require;
and provided further, that the appropriate bargaining unit of the rank-and-file employees shall not include
supervisory employees and/or security guards. (Emphasis supplied)

By that provision, any questioned mingling will prevent an otherwise legitimate and duly registered labor
organization from exercising its right to file a petition for certification election.
But the 1989 Amended Omnibus Rules was further amended by Department Order No. 9, series of 1997 (1997
Amended Omnibus Rules). Specifically, the requirement under Sec. 2(c) of the 1989 Amended Omnibus Rules - that
the petition for certification election indicate that the bargaining unit of rank-and-file employees has not been
mingled with supervisory employees - was removed. Instead, what the 1997 Amended Omnibus Rules requires is a
plain description of the bargaining unit.

There is a prohibition against the mingling of supervisory and rank-and-file employees in one labor
organization, the Labor Code does not provide for the effects thereof. Thus, the Court held that after a labor
organization has been registered, it may exercise all the rights and privileges of a legitimate labor organization. Any
mingling between supervisory and rank-and-file employees in its membership cannot affect its legitimacy for that
is not among the grounds for cancellation of its registration, unless such mingling was brought about by
misrepresentation, false statement or fraud under Article 239 of the Labor Code. In San Miguel Corp. (Mandaue
Packaging Products Plants) v. Mandaue Packing Products Plants-San Miguel Packaging Products-San Miguel Corp.

Monthlies Rank-and-File Union-FFW, the Court explained that since the 1997 Amended Omnibus Rules
does not require a local or chapter to provide a list of its members, it would be improper for the DOLE to deny
recognition to said local or chapter on account of any question pertaining to its individual members. More to the
point is Air Philippines Corporation v. Bureau of Labor Relations, which involved a petition for cancellation of union
registration filed by the employer in 1999 against a rank-and-file labor organization on the ground of mixed
membership: the Court therein reiterated its ruling in Tagaytay Highlands that the inclusion in a union of disqualified
employees is not among the grounds for cancellation, unless such inclusion is due to misrepresentation, false
statement or fraud under the circumstances enumerated in Sections (a) and (c) of Article 239 of the Labor Code.
 As a result, petitioner union was not divested of its status as a legitimate labor organization even if some
of its members were supervisory employees; it had the right to file the subject petition for certification election. The
legal personality of petitioner union cannot be collaterally attacked by respondent company in the certification
election proceedings.

Petitioner union correctly argues that its legal personality cannot be collaterally attacked in the certification
election proceedings. As we explained in Kawashima:

Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for
certification election; such proceeding is non-adversarial and merely investigative, for the purpose thereof
is to determine which organization will represent the employees in their collective bargaining with the
employer. The choice of their representative is the exclusive concern of the employees; the employer cannot
have any partisan interest therein; it cannot interfere with, much less oppose, the process by filing a motion
to dismiss or an appeal from it; not even a mere allegation that some employees participating in a petition
for certification election are actually managerial employees will lend an employer legal personality to block
the certification election. The employer's only right in the proceeding is to be notified or informed thereof.

15. SAN MIGUEL FOODS vs. SAN MIGUEL CORP. SUPERVISORS AND EXEMPT UNION
[G.R. No. 146206, August 1, 2011]

Facts:

A certification election was conducted and on the date of the election, petitioner employer filed the
Omnibus Objections and Challenge to Voters, questioning the eligibility to vote by some of its employees on the
grounds that some employees do not belong to the bargaining unit which respondent seeks to represent or that
there is no existence of employer-employee relationship with petitioner.

The ff issues were raised when the case reached the SC:
(1) the inclusion of employees in supervisor levels 3 and 4 and the exempt employees in the proposed
bargaining unit, thereby allowing their participation in the certification election; the application of the
―community or mutuality of interests‖ test; and
(2) the determination of the employees who belong to the category of confidential employees

Ruling:

1ST issue (Certain factors, such as specific line of work, working conditions, location of work, mode of
compensation, and other relevant conditions do not affect or impede their commonality of interest.)

Petitioner‘s contentions are erroneous. In G.R. No. 110399, the Court explained that the employees of San
Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis constitute a single
bargaining unit, which is not contrary to the one-company, one-union policy. An appropriate bargaining unit is
defined as a group of employees of a given employer, comprised of all or less than all of the entire body of
employees, which the collective interest of all the employees, consistent with equity to the employer, indicate to be
best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the
law.

In National Association of Free Trade Unions v. Mainit Lumber Development Company Workers Union –
United Lumber and General Workers of the Phils, the Court, taking into account the ―community or mutuality of
interests‖ test, 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 [Del] Norte of the Mainit Lumber Development
Company. It held that while the existence of a bargaining history is a factor that may be reckoned with in determining
the appropriate bargaining unit, the same is not decisive or conclusive. Other factors must be considered. The test
of grouping is community or mutuality of interest. 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. 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 differences as to the nature of their individual
assignments, but the distinctions are not enough to warrant the formation of a separate bargaining unit.

Thus, applying the ruling to the present case, the Court affirms the finding of the CA that there should be
only one bargaining unit for the employees in Cabuyao, San Fernando, and Otis of Magnolia Poultry Products Plant
involved in ―dressed‖ chicken processing and Magnolia Poultry Farms engaged in ―live‖ chicken operations.
Certain factors, such as specific line of work, working conditions, location of work, mode of compensation, and other
relevant conditions do not affect or impede their commonality of interest. Although they seem separate and distinct
from each other, the specific tasks of each division are actually interrelated and there exists mutuality of interests
which warrants the formation of a single bargaining unit.

Confidential employees are defined as those who (1) assist or act in a confidential capacity, in regard (2) to
persons who formulate, determine, and effectuate management policies in the field of labor relations.[ The two
criteria are cumulative, and both must be met if an employee is to be considered a confidential employee - that is,
the confidential relationship must exist between the employee and his supervisor, and the supervisor must handle
the prescribed responsibilities relating to labor relations. The exclusion from bargaining units of employees who, in
the normal course of their duties, become aware of management policies relating to labor relations is a principal
objective sought to be accomplished by the ―confidential employee rule.‖

2nd Issue (PAYROLL MASTER NOT CONFIDENTIAL, HUMAN RESOURCE ASSISTANT and PERSONNEL
ASSISTANT CONFIDENTIAL!!)

A confidential employee is one entrusted with confidence on delicate, or with the custody, handling or care and
protection of the employer‘s property. Confidential employees, such as accounting personnel, should be excluded
from the bargaining unit, as their access to confidential information may become the source of undue advantage.
However, such fact does not apply to the position of Payroll Master and the whole gamut of employees who, as
perceived by petitioner, has access to salary and compensation data. The CA correctly held that the position of
Payroll Master does not involve dealing with confidential labor relations information in the course of the
performance of his functions. Since the nature of his work does not pertain to company rules and regulations and
confidential labor relations, it follows that he cannot be excluded from the subject bargaining unit.
Corollarily, although Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor
organization to managerial employees, jurisprudence has extended this prohibition to confidential employees or
those who by reason of their positions or nature of work are required to assist or act in a fiduciary manner to
managerial employees and, hence, are likewise privy to sensitive and highly confidential records. Confidential
employees are thus excluded from the rank-and-file bargaining unit. The rationale for their separate category and
disqualification to join any labor organization is similar to the inhibition for managerial employees, because if
allowed to be affiliated with a union, the latter might not be assured of their loyalty in view of evident conflict of
interests and the union can also become company-denominated with the presence of managerial employees in the
union membership. Having access to confidential information, confidential employees may also become the source
of undue advantage. Said employees may act as a spy or spies of either party to a collective bargaining agreement.
In this regard, the CA correctly ruled that the positions of Human Resource Assistant and Personnel Assistant belong
to the category of confidential employees and, hence, are excluded from the bargaining unit, considering their
respective positions and job descriptions. As Human Resource Assistant, the scope of one‘s work necessarily involves
labor relations, recruitment and selection of employees, access to employees' personal files and compensation
package, and human resource management. As regards a Personnel Assistant, one's work includes the recording of
minutes for management during collective bargaining negotiations, assistance to management during grievance
meetings and administrative investigations, and securing legal advice for labor issues from the petitioner‘s team of
lawyers, and implementation of company programs. Therefore, in the discharge of their functions, both gain access
to vital labor relations information which outrightly disqualifies them from union membership.

The proceedings for certification election are quasi-judicial in nature and, therefore, decisions rendered in such
proceedings can attain finality.
It bears stressing that a certification election is the sole concern of the workers; hence, an employer lacks the
personality to dispute the same. The general rule is that an employer has no standing to question the process of
certification election, since this is the sole concern of the workers. Law and policy demand that employers take a
strict, hands-off stance in certification elections. The bargaining representative of employees should be chosen free
from any extraneous influence of management. A labor bargaining representative, to be effective, must owe its
loyalty to the employees alone and to no other. The only exception is where the employer itself has to file the
petition pursuant to Article 258 of the Labor Code because of a request to bargain collectively.

16. BPI VS. BPI EMPLOYEES UNION-DAVAO CHAPTER, GR NO. 164301, OCTOBER 19, 2011
RESOLUTION ON THE MAIN DECISION OF AUG. 18, 2010

Facts:
On March 23, 2000, the Bangko Sentral ng Pilipinas approved the Articles of Merger executed on January
20, 2000 by and between BPI, herein petitioner, and FEBTC. This Article and Plan of Merger was approved by the
Securities and Exchange Commission on April 7, 2000. Pursuant to the Article and Plan of Merger, all the assets and
liabilities of FEBTC were transferred to and absorbed by BPI as the surviving corporation. FEBTC employees, including
those in its different branches across the country, were hired by petitioner as its own employees, with their status
and tenure recognized and salaries and benefits maintained.

Respondent BPI Employees Union-Davao Chapter - Federation of Unions in BPI Unibank (hereinafter the
"Union," for brevity) is the exclusive bargaining agent of BPI’s rank and file employees in Davao City. The former
FEBTC rank-and-file employees in Davao City did not belong to any labor union at the time of the merger. Prior to
the effectivity of the merger, or on March 31, 2000, respondent Union invited said FEBTC employees to a meeting
regarding the Union Shop Clause (Article II, Section 2) of the existing CBA between petitioner BPI and respondent
Union. The parties both advert to certain provisions of the existing CBA, which includes:
Section 2. Union Shop - New employees falling within the bargaining unit as defined in Article I of this Agreement,
who may hereafter be regularly employed by the Bank shall, within thirty (30) days after they become regular
employees, join the Union as a condition of their continued employment. It is understood
that membership in good standing in the Union is a condition of their continued employment with the Bank .

After the meeting called by the Union, some of the former FEBTC employees joined the Union, while others
refused. Later, however, some of those who initially joined retracted their membership. Respondent Union then sent
notices to the former FEBTC employees who refused to join, as well as those who retracted their membership, and
called them to a hearing regarding the matter. When these former FEBTC employees refused to attend the hearing,
the president of the Union requested BPI to implement the Union Shop Clause of the CBA and to terminate their
employment pursuant thereto.

Issue:
Whether or not the former FEBTC employees that were absorbed by petitioner upon the merger between FEBTC
and BPI should be covered by the Union Shop Clause found in the existing CBA between petitioner and respondent
Union.

Ruling:

Yes. They are covered by the Union Shop Clause.

"Union security" is a generic term which is applied to and comprehends "closed shop," "union shop,"
"maintenance of membership" or any other form of agreement which imposes upon employees the obligation to
acquire or retain union membership as a condition affecting employment. There is union shop when all new regular
employees are required to join the union within a certain period for their continued employment. There is
maintenance of membership shop when employees, who are union members as of the effective date of the
agreement, or who thereafter become members, must maintain union membership as a condition for continued
employment until they are promoted or transferred out of the bargaining unit or the agreement is terminated. A
closed-shop, on the other hand, may be defined as an enterprise in which, by agreement between the employer
and his employees or their representatives, no person may be employed in any or certain agreed departments of
the enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member in good
standing of a union entirely comprised of or of which the employees in interest are a part.

In the case of Liberty Flour Mills Employees v. Liberty Flour Mills, Inc., we ruled that: It is the policy of the
State to promote unionism to enable the workers to negotiate with management on the same level and with more
persuasiveness than if they were to individually and independently bargain for the improvement of their respective
conditions. To this end, the Constitution guarantees to them the rights "to self-organization, collective bargaining
and negotiations and peaceful concerted actions including the right to strike in accordance with law." There is no
question that these purposes could be thwarted if every worker were to choose to go his own separate way instead
of joining his co-employees in planning collective action and presenting a united front when they sit down to
bargain with their employers. It is for this reason that the law has sanctioned stipulations for the union shop and
the closed shop as a means of encouraging the workers to join and support the labor union of their own choice as
their representative in the negotiation of their demands and the protection of their interest vis-à-vis the employer.
In other words, the purpose of a union shop or other union security arrangement is to guarantee the
continued existence of the union through enforced membership for the benefit of the workers.

All employees in the bargaining unit covered by a Union Shop Clause in their CBA with management are
subject to its terms. However, under law and jurisprudence, the following kinds of employees are exempted from
its coverage, namely, employees who at the time the union shop agreement takes effect are bona fidemembers of
a religious organization which prohibits its members from joining labor unions on religious grounds; employees
already in the service and already members of a union other than the majority at the time the union shop agreement
took effect; confidential employees who are excluded from the rank and file bargaining unit; and employees
excluded from the union shop by express terms of the agreement. When certain employees are obliged to join a
particular union as a requisite for continued employment, as in the case of Union Security Clauses, this condition is
a valid restriction of the freedom or right not to join any labor organization because it is in favor of unionism. This
Court, on occasion, has even held that a union security clause in a CBA is not a restriction of the right of freedom of
association guaranteed by the Constitution. Moreover, a closed shop agreement is an agreement whereby an
employer binds himself to hire only members of the contracting union who must continue to remain members in
good standing tokeep their jobs. It is "the most prized achievement of unionism." It adds membership and
compulsory dues.By holding out to loyal members a promise of employment in the closed shop, it wields group
solidarity.
 Indeed, the situation of the former FEBTC employees in this case clearly does not fall within the first three
exceptions to the application of the Union Shop Clause discussed earlier. No allegation or evidence of religious
exemption or prior membership in another union or engagement as a confidential employee was presented by
both parties. The sole category therefore in which petitioner may prove its claim is the fourth recognized exception
or whether the former FEBTC employees are excluded by the express terms of the existing CBA between petitioner
and respondent.

As the Union likewise pointed out in its pleadings, there were benefits under the CBA that the former FEBTC
employees did not enjoy with their previous employer. As BPI employees, they will enjoy all these CBA benefits upon
their "absorption." Thus, although in a sense BPI is continuing FEBTC’s employment of these absorbed employees,
BPI’s employment of these absorbed employees was not under exactly the same terms and conditions as stated in
the latter’s employment contracts with FEBTC. This further strengthens the view that BPI and the former FEBTC
employees voluntarily contracted with each other for their employment in the surviving corporation. The rationale
for upholding the validity of union shop clauses in a CBA, even if they impinge upon the individual employee’s right
or freedom of association, is not to protect the union for the union’s sake. Laws and jurisprudence promote unionism
and afford certain protections to the certified bargaining agent in a unionized company because a strong and
effective union presumably benefits all employees in the bargaining unit since such a union would be in a better
position to demand improved benefits and conditions of work from the employer.

In the case at bar, since the former FEBTC employees are deemed covered by the Union Shop Clause, they
are required to join the certified bargaining agent, which supposedly has gathered the support of the majority of
workers within the bargaining unit in the appropriate certification proceeding. Their joining the certified union
would, in fact, be in the best interests of the former FEBTC employees for it unites their interests with the majority
of employees in the bargaining unit. It encourages employee solidarity and affords sufficient protection to the
majority status of the union during the life of the CBA which are the precisely the objectives of union security clauses,
such as the Union Shop Clause involved herein. We are indeed not being called to balance the interests of individual
employees as against the State policy of promoting unionism, since the employees, who were parties in the court
below, no longer contested the adverse Court of Appeals’ decision. Nonetheless, settled jurisprudence has already
swung the balance in favor of unionism, in recognition that ultimately the individual employee will be benefited by
that policy.
In the hierarchy of constitutional values, this Court has repeatedly held that the right to abstain from joining
a labor organization is subordinate to the policy of encouraging unionism as an instrument of social justice.
In sum, this Court finds it reasonable and just to conclude that the Union Shop Clause of the CBA covers the former
FEBTC employees who were hired/employed by BPI during the effectivity of the CBA in a manner which petitioner
describes as "absorption." A contrary appreciation of the facts of this case would, undoubtedly, lead to an
inequitable and very volatile labor situation which this Court has consistently ruled against. In the case of former
FEBTC employees who initially joined the union but later withdrew their membership, there is even greater reason
for the union to request their dismissal from the employer since the CBA also contained a Maintenance of
Membership Clause.

A final point in relation to procedural due process, the Court is not unmindful that the former FEBTC
employees’ refusal to join the union and BPI’s refusal to enforce the Union Shop Clause in this instance may have
been based on the honest belief that the former FEBTC employees were not covered by said clause. In the interest
of fairness, we believe the former FEBTC employees should be given a fresh thirty (30) days from notice of finality
of this decision to join the union before the union demands BPI to terminate their employment under the Union
Shop Clause, assuming said clause has been carried over in the present CBA and there has been no material change
in the situation of the parties.

17. OCTAVIO vs. PHILIPPINE LONG DISTANCE TELEPHONE COMPANY

 [G.R. No. 175492, February 27, 2013]
Facts:
On October 1, 2000, PLDT hired Octavio as Sales System Analyst I on a probationary status. He became a
member of GUTS. When Octavio was regularized on January 1, 2001, he was receiving a monthly basic salary of
P10,000.00. On February 1, 2002, he was promoted to the position of Sales System Analyst 2 and his salary was
increased to P13,730.00. Octavio claimed entitlement to salary increases per the CBAs of 1999-2001 and 2002-2004.
He insisted that when he was regularized as a supervisory employee on January 1, 2001, he became entitled to
receive the 45 across-the-board increase of P2,500.00 as provided for under the CBA of 1999-2001 which took effect
on
January 1, 1999. Then pursuant to the CBA of 2002-2004, he should have received an additional increase of P2,000.00
apart from the merit increase of P3,730.00 which was given him due to his promotion on February 1, 2002. However,
PLDT unilaterally decided to deem as included in the said P3,730.00 the P2,000.00 across-the-board increase for
2002 as stipulated in the CBA of 2002-2004. This, according to Octavio, amounts to diminution of benefits. Moreover,
Octavio averred that the CBA cannot be the subject of further negotiation as it has the force of law between the
parties. Finally, Octavio claimed that PLDT committed an act of unfair labor practice because, while it granted the
claim for salary increase of 18 supervisory employees who were regularized on January 1, 2002 and onwards, it
discriminated against him by refusing to grant him the same salary increase. He thus prayed for an additional award
of damages and attorney's fees.

PLDT countered that the issues advanced by Octavio had already been resolved by the Union-Management
Grievance Committee when it denied his claims through the Committee Resolution. Moreover, the grant of across-
the-board salary increase for those who were regularized starting January 1, 2002 and the exclusion thereto of those
who were regularized on January 1, 2001, do not constitute an act of unfair labor practice as would result in any
discrimination or encourage or discourage membership in a labor organization. In fact, when the Union-
Management Grievance Committee came up with the Committee Resolution, they considered the same as the most
practicable and reasonable solution for both management and union. At any rate, the said Committee Resolution
had already become final and conclusive between the parties for failure of Octavio to elevate the same to the proper
forum. In addition, PLDT claimed that the NLRC has no jurisdiction to hear and decide Octavio's claims. The
committee failed to reach an agreement. Hence, Management position deemed adopted which is read as follows:
xxx
B) Mr. Octavio's salary at the time of his promotion and before the conclusion of the GUTS CBA was
P10,000.00.
C) Upon the effectivity of his promotion on February 1, 2002, his basic monthly salary was adjusted to
P13,730.00, the minimum salary of the new position.
D) In June 2002, the GUTS-CBA was concluded and Mr. Octavio's basic salary was recomputed to include
the P2,000.00 1st year increase retroactive January 2002. The resulting basic salary was P12,000.00.
E) Applying the above-mentioned policy, Mr. Octavio's basic salary was adjusted to the minimum salary of
the new position, which is P13,730.00.
xxx

Aggrieved, Octavio filed before the Arbitration Branch of the NLRC a Complaint for payment of said salary
increases. The Labor Arbiter dismissed the Complaint of Octavio and upheld the Committee Resolution. The CA
declared the Committee Resolution to be binding on Octavio, he being a member of GUTS, and because he failed
to question its validity and enforceability.

Issue:

a. Whether the employer and bargaining representative may amend the provisions of the collective bargaining
agreement without the consent and approval of the employees;
b. If so, whether the said agreement is binding [on] the employees;
c. Whether merit increases may be awarded simultaneously with increases given in the Collective 46 Bargaining
Agreement

Ruling:

The claim of an individual employee for salary increase under the terms of the existing collective bargaining
agreement (CBA) is a matter subject of the grievance machinery, it involving the interpretation and implementation
of the pertinent provisions of the CBA. From the denial of his claim by the Union- Management Grievance
Committee, his recourse pursuant to the CBA was to elevate his grievance to the Board of Arbitrators for final
decision. Here, he instead filed a complaint with the arbitration branch of the NLRC nine months after the resolution
of the Union- Management Grievance Committee. His complaint must therefore fail. By failing to abide with the
procedure prescribed by the CBA, he is deemed to have waived his right to question the resolution of the
Committee. Clearly, he departed from the grievance procedure mandated in the CBA and denied the Board of
Arbitrators the opportunity to pass upon a matter over which it has jurisdiction. That has the effect of making the
Committee’s resolution binding upon him.
Moreover, the Committee’s resolution is not a modification of the CBA. Said resolution is a product of the
grievance procedure outlined in the CBA itself. Finally, the denial of his claim for salary increase did not violate
Article 100 of the Labor Code against diminution of benefits. Even assuming there is diminution of benefits, Article
100 does not prohibit a union from offering and agreeing to reduce wages and benefits of the employees as the
right to free collective bargaining includes the right to suspend it. Bargaining covers a process of finding a
reasonable and acceptable solution to stabilize labor-management relations to promote stable industrial peace.

18. NATIONAL UNION OF BANK EMPLOYEES vs. PHILNABANK EMPLOYEES ASSOCIATION

[G.R. No. 174287, August 12, 2013]
Facts:

Philippine National Bank (PNB) used to be a government-owned and controlled banking institution. Its rank
and file employees, being government personnel, were represented for collective negotiation by the Philnabank
Employees Association (PEMA), a public sector union. In 1996, the Securities and Exchange Commission approved
its changed status as a private corporation. PEMA affiliated with petitioner National Union of Bank Employees
(NUBE), which is a labor federation composed of unions in the banking industry, adopting the name NUBE-PNB
Employees Chapter (NUBE-PEC). Later, NUBE-PEC was certified as the sole and exclusive bargaining agent of the
PNB rank-and-file employees. A collective bargaining agreement (CBA) was subsequently signed between NUBE-
PEC and PNB covering the period of January 1, 1997 to December 31, 2001. Pursuant to Article V on Check-off and
Agency Fees of the CBA, PNB shall deduct the monthly membership fee and other assessments imposed by the
union from the salary of each union member, and agency fee from the salary of the rank- and-file employees within
the bargaining unit who are not union members. Moreover, during the effectivity of the CBA, NUBE, being the
Federation union, agreed that PNB shall remit P15.00 of the P65.00 union dues per month collected by PNB from
every employee, and that PNB shall directly credit the amount to NUBE’s current account with PNB.

Following the expiration of the CBA, the Philnabank Employees Association-FFW (PEMA-FFW) filed on
January 2, 2002 a petition for certification election among the rank-and-file employees of PNB. While the petition
for certification election was still pending, two significant events transpired – the independent union registration of
NUBE- PEC and its disaffiliation with NUBE. Thereafter, the Board of Directors of NUBE-PEC adopted a Resolution
disaffiliating itself from NUBE.

On June 25, 2003, NUBE-PEC filed a Manifestation and Motion before the Med-Arbitration Unit of DOLE,
praying that, in view of its independent registration as a labor union and disaffiliation from NUBE, its name as
appearing in the official ballots of the certification election be changed to "Philnabank Employees Association
(PEMA)" or, in the alternative, both parties be allowed to use the name "PEMA" but with PEMAFFW and NUBE-PEC
be denominated as "PEMA-Bustria Group" and "PEMA-Serrana Group," respectively. On the same date, PEMA sent
a letter to the PNB management informing its disaffiliation from NUBE and requesting to stop, effective immediately,
the check-off of the P15.00 due for NUBE.

Acting thereon, on July 4, 2003, PNB informed NUBE of PEMA’s letter and its decision to continue the
deduction of the P15.00 fees, but stop its remittance to NUBE effective July 2003. PNB also notified NUBE that the
amounts collected would be held in a trust account pending the resolution of the issue on PEMA’s disaffiliation.

Issue:

Whether PEMA validly disaffiliated itself from NUBE, the resolution of which, in turn, inevitably affects the latter’s
right to collect the union dues held in trust by PNB.

Ruling:

We deny the petition.

Whether there was a valid disaffiliation is a factual issue. It is elementary that a question of fact is not
appropriate for a petition for review on certiorari under Rule 45 of the Rules of Court. When supported by substantial
evidence, the findings of fact of the CA are conclusive and binding on the parties and are not reviewable by this
Court subject to exceptions. However, the Court finds no cogent reason to apply these recognized exceptions. The
right of the local union to exercise the right to disaffiliate from its mother union is well settled in this jurisdiction.

A local union has the right to disaffiliate from its mother union or declare its autonomy. A local union, being
a separate and voluntary association, is free to serve the interests of all its members including the freedom to
disaffiliate or declare its autonomy from the federation which it belongs when circumstances warrant, in accordance
with the constitutional guarantee of freedom of association. 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. It only gives rise to a
contract of agency, where the former acts in representation of the latter. Hence, local unions are considered
principals while the federation is deemed to be merely their agent.

As such principals, the unions are entitled to exercise the rights and privileges of a legitimate labor
organization, including the right to seek certification as the sole and exclusive bargaining agent in the appropriate
employer unit.
x x x [A] local union may disaffiliate at any time from its mother federation, absent any showing that the
same is prohibited under its constitution or rule. Such, however, does not result in it losing its legal personality
altogether.

In the case at bar, there is nothing shown in the records nor is it claimed by NUBE that PEMA was expressly
forbidden to disaffiliate from the federation nor were there any conditions imposed for a valid breakaway. This being
so, PEMA is not precluded to disaffiliate from NUBE after acquiring the status of an independent labor organization
duly registered before the DOLE. Also, there is no merit on NUBE’s contention that PEMA’s disaffiliation is invalid
for non-observance of the procedure that union members should make such determination through secret ballot
and after due deliberation, conformably with Article 241 (d) of the Labor Code, as amended.
 Conspicuously, other than citing the opinion of a "recognized labor law authority," NUBE failed to quote a
specific provision of the law or rule mandating that a local union’s disaffiliation from a federation must comply with
Article 241 (d) in order to be valid and effective. Granting, for argument’s sake, that Article 241 (d) is applicable, still,
We uphold PEMA’s disaffiliation from NUBE. First, non-compliance with the procedure on disaffiliation, being
premised on purely technical grounds cannot rise above the employees’ fundamental right to self-organization and
to form and join labor organizations of their own choosing for the purpose of collective bargaining. Second, the
Article nonetheless provides that when the nature of the organization renders such secret ballot impractical, the
union officers may make the decision in behalf of the general membership. In this case, NUBE did not even dare to
contest PEMA’s representation that "PNB employees, from where [PEMA] [derives] its membership, are scattered
from Aparri to Jolo, manning more than 300 branches in various towns and cities of the country," hence, "[to] gather
the general membership of the union in a general membership to vote through secret balloting is virtually
impossible." It is understandable, therefore, why PEMA’s board of directors merely opted to submit for ratification
of the majority their resolution to disaffiliate from NUBE. Third, and most importantly, NUBE did not dispute the
existence of the persons or their due execution of the document showing their unequivocal support for the
disaffiliation of PEMA from NUBE.

Consequently, by PEMA's valid disaffiliation from NUBE, the vinculum that previously bound the two entities
was completely severed. As NUBE was divested of any and all power to act in representation of PEMA, any act
performed by the former that affects the interests and affairs of the latter, including the supposed expulsion of
Serrana et al., is rendered without force and effect. Also, in effect, NUBE loses it right to collect all union dues held
in its trust by PNB. The moment that PEMA separated from and left NUBE and exists as an independent labor
organization with a certificate of registration, the former is no longer obliged to pay dues and assessments to the
latter; naturally, there would be no longer any reason or occasion for PNB to continue making deductions. Without
said affiliation, the employer has no link to the mother union. The obligation of an employee to pay union dues is
coterminous with his affiliation or membership. "The employees' check-off authorization, even if declared
irrevocable, is good only as long as they remain members of the union concerned." A contract between an employer
and the parent organization as bargaining agent for the employees is terminated bv the disaffiliation ofthe local of
which the employees are members.

On the other hand, it was entirely reasonable for PNB to enter into a CBA with PEMA as represented by
Serrana et al. Since PEMA had validly separated itself from NUBE, there would be no restrictions which could validly
hinder it from collectively bargaining with PNB.

19. Takata Phils Corp. vs. Bureau of Labor Relations, et al.,

GR No. 196276, June 4, 2014
SUMMARY:
Takata Corp. filed with DOLE to cancel the certificate of union registration of SALAMAT (Union) due to their
misrepresentation, false statements, and fraud. Takata claims that only 68 of the 119 members attended the
organizational meeting; less than 20% of 369 employees. SC held that 20% requirement does not apply to Art 234
(b) or to those who joined the org. meeting. 20% only applies to 234 (c) or all employees in the bargaining unit. The
“Pangalan ng mga Kasapi ng Unyon” showed 119 names; more than 20% of 396. No proof that members did not
understand what they were signing. The two repeated names is not a valid ground for cancellation because they do
not constitute grave misrepresentation.

FACTS:

July 7, 2009 – Takata Corp filed with DOLE a petition for cancellation of Certificate of Union Registration of
respondent SALAMAT (Union) They alleged that SALAMAT was guilty of misrepresentation, false statements, and
fraud with respect to the number of those who participated in their organizational meeting, the adoption and
ratification of its Constitution and by-laws, and in the election of its officers.

Takata’s contentions:

• In the May 1, 2009 organizational meeting, only 68 signed the attendance sheet out of 396 Rank-and-file
employees.
• “Pangalan ng mga Kasapi ng Unyon” (PKU) bore no signatures of the 119 members and that the employees
were not given sufficient information on the document they signed.
• The document “Sama-Samang Pahayag ng Pagsapi” (SPP) was not submitted at the time of application
for union registration
• 119 members were only 117
• total number of employees as of May 1, 2009 was 470, not 396.

DOLE Director Atty. Ricardo Martinez granted petition for cancellation. He ruled that 68 is less than 20% of
396 hence, short of union registration requirement; the attendance sheet containing the names and signatures of
68 members contradicted list of names in the PKU; and, SPP was not attached to the application for registration;
only submitted in the petition for certification election Bukluran ng Manggagawang Pilipino (BMP) Paralegal Officer
Domingo Mole filed an appeal on behalf of SALAMAT to BLR. Later, the counsel of SALAMAT filed own appeal w/
BLR. Takata opposed on ground of forum shopping. Bureau of Labor Relations reversed DOLE Director and ruled
that Takata failed to prove the deliberate and malicious misrepresentation of number of rank-and-file employees.
List of employees who participated in the organizational meeting is a separate and distinct requirement from list of
names comprising at least 20% of employees in the bargaining unit. Thus, no evidence that employees assailed their
inclusion in the list of union members

ISSUES:
1. Whether or not SALAMAT committed misrepresentation, false statements, or fraud as a ground for cancelling
their registration? NO
2. Whether or not SALAMAT is guilty of forum shopping? NO

HELD:

1. It does not appear in Art 234 (b) that attendees in the organizational meeting must comprise at least
20% of the bargaining unit. Only in Art 234 (c) that requires the names of all its members comprising at
least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate. Clearly,
the 20% minimum requirement pertains to the employees’ membership in the union and not to the list
of workers who participated in the organizational meeting. (b) and (c) provide for separate
requirements. Total number of employees was 396: 20% of which is about 79. The 119 member who
signed the PKU sufficiently complied with the 20% requirement. The 68 members who attended the org
meeting were enough to constitute a quorum to validly ratify their Constitution and its by-laws of the
union. For fraud and misrepresentation to be a ground for cancellation under Art 239, nature must be
grave and compelling enough to vitiate consent of a majority of union members. No proof as to the
lack of information given to those who signed PKU. No member came forward to deny their
membership in SALAMAT. Signing the SPP shows their strengthening of desire to join union. The two
repeated names cannot be considered misrepresentation absent any showing that SALAMAT did so
deliberately to increase union membership. Even if the employees were 470, instead of 396, 117 (without
two repeated names) is still more than 20%.

ART.234. Requirements of Registration - A federation, national union or industry or trade union

center or an independent union shall acquire legal personality and shall be entitled to the rights and
 privileges granted by law to legitimate labor organizations upon issuance of the certificate of
registration based on the following requirements: (a) Fifty pesos (P50.00) registration fee; (b) The names
of its officers, their addresses, and the principal address of the labor organization, the minutes of the
organizational meetings and the list of the workers who participated in such meetings; (c) In case the
applicant is an independent union, the names of all its members comprising at least twenty percent
(20%) of all the employees in the bargaining unit where it seeks to operate; (d) If the applicant union
has been in existence for one or more years, copies of its annual financial reports; and (e) Four copies
of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and the
list of the members who participated in it."

ART. 239. Grounds for Cancellation of Union Registration. -

The following may constitute grounds for cancellation of union registration:
(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the
constitution and by-laws or amendments thereto, the minutes of ratification, and the list of members
who took part in the ratification;
(b) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of
the election of officers, and the list of voters;

2. Re: Atty Mole BMP officer Mole is no longer authorized to file appeal on behalf of Union because his
services were already terminated at that time. Such appeal considered not to have been filed at all.
Hence, there is no forum shopping.

20. University of the Immaculate Concepcion V the Secretary of Labor

GR NO., 178085-86. SEPT 14, 2015

Facts:

This case stemmed from the labor dispute between petitioner University of the Immaculate Conception
(UIC) and respondent UIC Teaching and Non-Teaching Employees Union — FFW (the "Union"). The Union in this
case was the Sole Exclusive Bargaining Agent of the University. The Union filed a notice of strike
on the grounds of bargaining deadlock and unfair labor practice. The UIC demanded the exclusion of secretaries,
registrars, accounting personnel and guidance counselors from the bargaining unit, on account of their being
confidential employees. The UIC gave the affected. The "Respondent Employees" the option to choose between
keeping their positions or resigning from the Union. When they elected to keep both their positions and their union
membership, UIC sent them notices of termination to them, which led into a notice of strike filed by the Union. UIC
cites willful disobedience and "loss of confidence" as the grounds for dismissing the Respondent Employees. In its
termination letters dated, UIC informed the Respondent Employees that because of their continued union
membership notwithstanding the voluntary arbitration decision, "management no longer has any trust and
confidence in you in the delicate, sensitive and confidential position you hold”. Further, in an Arbitration case before
the Labor Arbiter the respondent employees were classified as confidential employees and they were excluded to
join a bargaining unit.

Issue:

Whether or not the termination of the confidential employees on the ground for their willful disobedience
not to join a labor union is a valid ground for dismissal?

Ruling:
 A confidential employee is defined as one entrusted with confidence on delicate matters, or
with the custody, handling, or care and protection of the employer's property. For all intents and
purposes, the terms "confidential employee" and "employee holding a position of trust and confidence" are
synonymous. Fundamentally, the two categories mentioned are simply subcategories of the broader
category of confidential employees.
The essence of the loss of confidence must be based on a willful breach of trust founded on clearly
established facts. Here, it is not disputed that the Respondent Employees refused to resign from the Union,
notwithstanding the decision in the Arbitration Case. Respondent Employees do not claim that they were
coerced into retaining their union membership; in fact, they even insist upon their right to
join the Union. The voluntariness of Respondent Employees' refusal to vacate their union membership — which
constitutes the "willful act" — is therefore unequivocally established.
We hold that the willful act of refusing to leave the Union is sufficient basis for UIC to lose its trust and
confidence on Respondent Employees. There was just cause for dismissing the Respondent Employees. Our
conclusion follows the same reasoning why we finally adopted the doctrine that confidential employees
should be excluded from the bargaining unit and disqualified from joining any union: employees should
not be placed in a position involving a potential conflict of interests. In this regard, If Respondent Employees
could retain their union membership, UIC would not be assured of their loyalty because of the apparent conflict
between the employees' personal interests and their duty as confidential employees. Such a result is likely to
create an atmosphere of distrust between UIC and the confidential employees, and it would be nigh
unreasonable to compel UIC to continue in employment persons whom it no longer trusts to handle delicate
matters.

21. SAMAHAN NG MANGGAGAWA SA HANJIN SHIPYARD rep. by

its President, ALFIE ALIPIO, petitioner, vs. BUREAU OF LABOR
RELATIONS, HANJIN HEAVY INDUSTRIES AND
CONSTRUCTION CO., LTD. (HHIC-PHIL.), respondents.

G.R. No. 211145

October 14, 2015

FACTS:

On February 16, 2010, Samahan, filed an application for registration of its name "Samahan ng mga
Manggagawa sa Hanjin Shipyard" with the DOLE. On February 26, 2010, the corresponding certificate of registration
in favor of the Samahan was issued by the DOLE Regional Office.

On March 15, 2010, respondent Hanjin Heavy Industries and Construction Co., Ltd. Philippines (Hanjin) filed
a petition with DOLE-Pampanga praying for the cancellation of registration of Samahan's association on the ground
that its members did not fall under any of the types of workers enumerated in the second sentence of Article 243
(now 249). Hanjin opined that only ambulant, intermittent, itinerant, rural workers, self-employed, and those without
definite employers may form a workers' association. It further posited that one third (1/3) of the members of the
association had definite employers and the continued existence and registration of the association would prejudice
the company's goodwill.
 On April 20, 2010, DOLE Regional Director ruled in favor of Hanjin. RD found that the preamble, as stated
in the Constitution and By-Laws of Samahan, was an admission on its part that all of its members were employees
of Hanjin. Aggrieved, Samahan filed an appeal before the BLR, arguing that Hanjin had no right to petition for the
cancellation of its registration. Samahan pointed out that the words "Hanjin Shipyard," as used in its application for
registration, referred to a workplace and not as employer or company.

On September 6, 2010, the BLR granted Samahan's appeal and reversed the ruling of the Regional Director.
It stated that the law clearly afforded the right to self-organization to all workers including those without definite
employers. The BLR was of the opinion that there was no misrepresentation on the part of Samahan. The phrase,
"KAMI, ang mga Manggagawa sa Hanjin Shipyard," if translated, would be: "We, the workers at Hanjin Shipyard."
The use of the preposition "at" instead of "of" would indicate that "Hanjin Shipyard" was intended to describe a
place. The BLR also directed Samahan to remove the words "Hanjin Shipyard" from its name. The BLR explained that
the Labor Code had no provision on the use of trade or business name in the naming of a worker's association, such
matters being governed by the Corporation Code.

Unsatisfied, Samahan filed a petition for certiorari under Rule 65 before the CA. The CA rendered its
decision, holding that the registration of Samahan as a legitimate workers' association was contrary to the provisions
of Article 243 of the Labor Code. It also stated that the members of Samahan could not register it as a legitimate
worker's association because the place where Hanjin's industry was located was not a rural area. Neither was there
any evidence to show that the members of the association were ambulant, intermittent or itinerant workers. The CA
was of the view that dropping the words "Hanjin Shipyard" from the association name would not prejudice or impair
its right to self-organization because it could adopt other appropriate names.

Hence, this petition.

ISSUES:

1. Whether or not the Court of Appeals seriously erred in finding that Samahan cannot form a workers’
association of employees in Hanjin and instead should have formed a union, hence their registration as a
workers’ association should be cancelled.

2. Whether or not the Court of Appeals seriously erred in ordering the removal/deletion of the word “Hanjin”
in the name of the union by reason of the company’s property right over the company name “Hanjin”

RULING:

The petition is partly meritorious.

1. The right to self-organization connotes unionism. As Article 246 (now 252) of the Labor Code
provides, the right to self-organization includes the right to form, join or assist labor organizations for the
purpose of collective bargaining through representatives of their own choosing and to engage in lawful
concerted activities for the same purpose for their mutual aid and protection. In view of the revered right
of every worker to self-organization, the law expressly allows and even encourages the formation of labor
organizations.

A union refers to any labor organization in the private sector organized for collective bargaining
and for other legitimate purpose, while a workers' association is an organization of workers formed for the
mutual aid and protection of its members or for any legitimate purpose other than collective bargaining. A
cursory reading of the law demonstrates that a common element between unionism and the formation of
LMCs is the existence of an employer-employee relationship. In contrast, the existence of employer-
 employee relationship is not mandatory in the formation of workers' association. What the law simply
requires is that the members of the workers' association, at the very least, share the same interest. The very
definition of a workers' association speaks of "mutual aid and protection. "Also inherent in the right to self-
organization is the right to choose whether to form a union for purposes of collective bargaining or a
workers' association for purposes of providing mutual aid and protection. The right to self-organization,
however, is subject to certain limitations as provided by law.

Hanjin posits that the members of Samahan have definite employers, hence, they should have
formed a union instead of a workers' association. The Court disagrees. There is no provision in the Labor
Code that states that employees with definite employers may form, join or assist unions only. Clearly, there
is nothing in the foregoing implementing rules which provides that workers, with definite employers, cannot
form or join a workers' association for mutual aid and protection. Section 2 thereof even broadens the
coverage of workers who can form or join a workers' association. Thus, the Court agrees with Samahan's
argument that the right to form a workers' association is not exclusive to ambulant, intermittent and
itinerant workers. The option to form or join a union or a workers' association lies with the workers
themselves, and whether they have definite employers or not.

In this case, Samahan's registration was cancelled not because its members were prohibited from
forming a workers' association but because they allegedly committed misrepresentation for using the
phrase, "KAMI, angmga Manggagawa sa HANJIN Shipyard." Misrepresentation, as a ground for the
cancellation of registration of a labor organization, is committed "in connection with the adoption, or
ratification of the constitution and by-laws or amendments thereto, the minutes of ratification, the list of
members who took part in the ratification of the constitution and by-laws or amendments thereto, and
those in connection with the election of officers, minutes of the election of officers, and the list of voters, .
. . ."

Based on the foregoing, the Court concludes that misrepresentation, to be a ground for the
cancellation of the certificate of registration, must be done maliciously and deliberately. Further, the
mistakes appearing in the application or attachments must be grave or refer to significant matters. The
details as to how the alleged fraud was committed must also be indubitably shown. The records of this case
reveal no deliberate or malicious intent to commit misrepresentation on the part of Samahan. The use of
such words "KAMI, ang mga Manggagawa sa HANJIN Shipyard" in the preamble of the constitution and
by-laws did not constitute misrepresentation so as to warrant the cancellation of Samahan's certificate of
registration. Even granting arguendo that Samahan's members misrepresented themselves as employees
or workers of Hanjin, said misrepresentation does not relate to the adoption or ratification of its constitution
and by-laws or to the election of its officers.

2. Nevertheless, the Court agrees with the BLR that "Hanjin Shipyard"must be removed in the name of
the association. According to Samahan, inherent in the workers' right to self-organization is its right to
name its own organization. Hanjin, on the other hand, invokes that "Hanjin Shipyard" is a registered trade
name and, thus, it is within their right to prohibit its use. As there is no provision under our labor laws which
speak of the use of name by a workers' association, the Court refers to the Corporation Code, which governs
the names of juridical persons. It would be misleading for the members of Samahan to use "Hanjin Shipyard"
in its name as it could give the wrong impression that all of its members are employed by Hanjin. Thus, in
the directive of the BLR removing the words "Hanjin Shipyard," no abridgement of Samahan's right to self-
organization was committed.
 Wherefore, the petition is partially granted July 4, 2013 Decision and the January 28, 2014 Resolution of the
Court of Appeals are hereby reversed and set aside. The September 6, 2010 Resolution of the Bureau of Labor
Relations, as modified by its November 28, 2011 Resolution, is reinstated.

22. HSBC Employees Union VS NLRC

GR NO. 156635, JAN 11, 2016
Facts:

Petitioner Hongkong & Shanghai Banking Corporation Employees Union (Union) was the duly recognized collective
bargaining agent of the rank-and-file employees of respondent Hongkong & Shanghai Banking Corporation (HSBC).
A collective bargaining agreement (CBA) governed the relations between the Union and its members.

On January 18, 1993, HSBC announced its implementation of a job evaluation program (JEP) retroactive to January
1, 1993. The JEP consisted of a job designation per grade level with the accompanying salary scale providing for the
minimum and maximum pay the employee could receive per salary level. By letter dated January 20, 1993,8 the
Union demanded the suspension of the JEP, which it labeled as an unfair labor practice (ULP). In another letter dated
January 22, 1993, the Union informed HSBC that it would exercise its right to concerted action. . On the same day
of January 22, 1993, the Union members started picketing during breaktime while wearing black hats and black
bands on their arms and other appendages.9 In its letter dated January 25, 1993, HSBC responded by insisting that
the JEP was an express recognition of its obligation under the CBA.

The Union's concerted activities persisted for 11 months. The continued concerted actions impelled HSBC to
suspend the negotiations on March 19, 1993,14 and to issue memoranda, warnings and reprimands to remind the
members of the Union to comply with HSBC's Code of Conduct. Due to the sustained concerted actions, HSBC filed
a complaint for ULP in the Arbitration Branch of the National Labor Relations Commission (NLRC).

Issue: WON the strike was illegal and WON it resulted to a proper dismissal of the workers involved.

Held:

The strike was illegal. The right to strike is a constitutional and legal right of all workers because the strike, which
seeks to advance their right to improve the terms and conditions of their employment, is recognized as an effective
weapon of labor in their struggle for a decent existence. However, the right to strike as a means for the attainment
of social justice is never meant to oppress or destroy the employers. Thus, the law prescribes limits on the exercise
of the right to strike.

The procedural requirements for a valid strike are, therefore, the following, to wit: (1) a notice of strike filed with the
DOLE at least 30 days before the intended date thereof, or 15 days in case of ULP; (2) a strike vote approved by the
majority of the total union membership in the bargaining unit concerned, obtained by secret ballot in a meeting
called for that purpose; and (3) a notice of the results of the voting at least seven days before the intended strike
given to the DOLE. These requirements are mandatory, such that non-compliance therewith by the union will render
the strike illegal.According to the CA, the petitioners neither filed the notice of strike with the DOLE, nor observed
the cooling-off period, nor submitted the result of the strike vote. Moreover, although the strike vote was conducted,
the same was done by open, not secret, balloting, in blatant violation of Article 263 and Section 7, Rule XIII of the
Omnibus Rules Implementing the Labor Code.

Further, the court finds that the strike was not done in an orderly and peaceful manner. HSBC's claim that from the
time when the strike was commenced on December 22, 1993 the petitioners had on several instances obstructed
the ingress into and egress from its offices in Makati and in Pasig was not competently disputed, and should thus
be accorded credence in the light of the records. It was undeniable that such acts of the strikers forced HSBC's
officers to resort to unusual means of gaining access into its premises at one point. It must be pointed out that the
Bank has shown by clear and indubitable evidence that most of the respondents have actually violated the
prescription provided for in paragraph (b) of Article 264 on free ingress and egress. The incident depicted in the
video footage of 05 January 1994, which has been viewed several times during the trial and even privately,
demonstrates beyond doubt that the picket was a non-moving, stationary one - nothing less but a barricade. This
office is more than convinced that the respondents, at least on that day, have demonstrated an abnormally high
degree of hatred and anger at the Bank and its officers (including the Bank's chief executive officer who fell to the
ground as a result of the pushing and shoving) leading them to do anything to carry out their resolve not to let
anymore inside the Bank.

The situation during the strike actually went out of hand because of the petitioners' illegal conduct, compelling
HSBC to secure an injunction from the NLRC as well as to file its petition for habeas corpus in the proper court in
the interest of its trapped officers and employees; and at one point to lease an helicopter to extract its employees
and officers from its premises on the eve of Christmas Day of 1993.

Also, We rule out good faith on the part of the petitioners. The petitioners' disregard of the procedural requirements
for conducting a valid strike negated their claim of good faith. For their claim to be upheld, it was not enough for
them to believe that their employer was guilty of ULP, for they must also sufficiently show that the strike was
undertaken with a modicum of obeisance to the restrictions on their exercise of the right to strike prior to and
during its execution as prescribed by the law.

However, the finding of the illegality of the strike does not justify the wholesale termination of the strikers from
their employment. Under Article 264, we need to distinguish between the officers and the members of the union
who participate in an illegal strike. The officers may be deemed terminated from their employment upon a finding
of their knowing participation in the illegal strike, but the members of the union shall suffer the same fate only if
they are shown to have knowingly participated in the commission of illegal acts during the strike. Article 264
expressly requires that the officer must have knowingly participated in the illegal strike.

Note that the verb "participates" is preceded by the adverb "knowingly." This reflects the intent of the legislature to
require "knowledge" as a condition sine qua non before a union officer can be dismissed from employment for
participating in an illegal strike. The provision is worded in such a way as to make it very difficult for employers to
circumvent the law by arbitrarily dismissing employees in the guise of exercising management prerogative. This is
but one aspect of the State's constitutional and statutory mandate to protect the rights of employees to self-
organization.

We declare the illegality of the termination of the employment of the 18 members of the Union for failure of HSBC
to prove that they had committed illegal acts during the strike. We also declare that Daisy Fagutao was unlawfully
dismissed because HSBC did not adduce substantial evidence establishing her presence and her commission of
unlawful acts during the strike.

We clarify that the 18 employees, including Fagutao and Union officer Fermin, were illegally dismissed because of
lack of any valid ground to dismiss them, and for deprivation of procedural due process.

Also, since HSBC was not able to afford petitioners with the ample opportunity to be heard and explain their sides
upon their dismissal, the court finds that HSBC should pay P30,000.00 in nominal damages to each employee
involved.
 23. HIJO RESOURCES CORPORATION, petitioner, vs. EPIFANIO P. MEJARES, REMEGIO C. BALURAN, JR.,
DANTE SAYCON, and CECILIO CUCHARO, represented by NAMABDJERA-HRC, respondents.
GR NO, 208986 Jan 13, 2016

FACTS:

Respondents Epifanio P. Mejares, Remegio C. Baluran, Jr., Dante Saycon, and Cecilio Cucharo
(respondents) were among the complainants, represented by their labor union named (NAMABDJERA-HRC),
who led with the NLRC an illegal dismissal case against petitioner Hijo Resources Corporation (HRC).
Complainants (which include the respondents herein) alleged that petitioner HRC, formerly known as Hijo
Plantation Incorporated (HPI), is the owner of agricultural lands in Madum, Tagum, Davao del Norte,
which were planted primarily with Cavendish bananas. In 2000, HPI was renamed as HRC.

Complainants claimed that they were employed by HPI as farm workers in HPI's plantations
occupying various positions as area harvesters, packing house workers, loaders, or labelers. In 2001,
complainants were absorbed by HRC, but they were working under the contractor-growers: Buenaventura
Tano (Bit Farm); Djerame Pausa (Djevon Farm); and Ramon Q. Laurente (Raquilla Farm). Complainants
asserted that these contractor-growers received compensation from HRC and were under the control of
HRC. They further alleged that the contractor-growers did not have their own capitalization, farm
machineries, and equipment.

On 1 July 2007, complainants formed their union NAMABDJERA-HRC, which was later registered
with the Department of Labor and Employment (DOLE). On 24 August 2007, NAMABDJERA-HRC filed a
petition for certification election before the DOLE.

When HRC learned that complainants formed a union, the three contractorgrowers filed with the
DOLE a notice of cessation of business operations. In September 2007, complainants were terminated from
their employment on the ground of cessation of business operations by the contractor-growers of HRC.
On 19 September 2007, complainants, represented by NAMABDJERA-HRC, led a case for unfair labor
practices, illegal dismissal, and illegal deductions with prayer for moral and exemplary damages and
attorney's fees before the NLRC.

DOLE Med-Arbiter Lito A. Jasa issued an Order, dismissing NAMABDJERA-HRC's petition for
certication election on the ground that there was no employer-employee relationship between
complainants (members of NAMABDJERA-HRC) and HRC. Complainants did not appeal the Order of Med-
Arbiter Jasa but pursued the illegal dismissal case they filed.

On 4 January 2008, HRC led a motion to inhibit Labor Arbiter Maria Christina S. Sagmit and
moved to dismiss the complaint for illegal dismissal. The motion to dismiss was anchored on the
following arguments: (1) Lack of jurisdiction under the principle of res judicata; and (2) The Order of the
Med-Arbiter finding that complainants were not employees of HRC, which complainants did not appeal,
had become final and executory.

LABOR ARBITER’s RULING:

 Labor Arbiter ruled that the decision of the Med-Arbiter in a certication election case, by the
nature of that proceedings, does not foreclose further dispute between the parties as to the existence or
non-existence of employer-employee relationship between them. Thus, the nding of Med-Arbiter Jasa that
no employment relationship exists between HRC and complainants does not bar the Labor Arbiter from
making his own independent finding on the same issue. The non-litigious nature of the proceedings before
the Med-Arbiter does not prevent the Labor Arbiter from hearing and deciding the case. Thus, Labor
Arbiter Sagmit denied the motion to dismiss and ordered the parties to file their position papers.

NLRC:

The NLRC granted the petition of HRC, holding that Labor Arbiter gravely abused her discretion
in denying HRC's motion to dismiss. The NLRC held that the Med-Arbiter Order dismissing the
certication election case on the ground of lack of employer-employee relationship between HRC and
complainants (members of NAMABDJERA-HRC) constitutes res judicata under the concept of conclusiveness
of judgment, and thus, warrants the dismissal of the case. The NLRC ruled that the Med-Arbiter exercises
quasi-judicial power and the Med-Arbiter's decisions and orders have, upon their nality, the force and
effect of a final judgment within the purview of the doctrine of res judicata.

Court of Appeals:

The Court of Appeals held that the certication proceedings before the MedArbiter are non-
adversarial and merely investigative. On the other hand, under Article 217 of the Labor Code, the Labor
Arbiter has original and exclusive jurisdiction over illegal dismissal cases. Although the proceedings before
the Labor Arbiter are also described as non-litigious, the Court of Appeals noted that the Labor Arbiter
is given wide latitude in ascertaining the existence of employment relationship. Thus, unlike the Med-
Arbiter, the Labor Arbiter may conduct claricatory hearings and even avail of ocular inspection to
ascertain facts speedily. Hence, the Court of Appeals concluded that the decision in a certication election
case does not foreclose further dispute as to the existence or non-existence of an employer-employee
relationship between HRC and the complainants.

ISSUES:

Whether the Labor Arbiter, in the illegal dismissal case, is bound by the ruling of the Med-Arbiter
regarding the existence or non-existence of employer-employee relationship between the parties in the
certification election case.

RULING:

No.

The Med-Arbiter's order in this case dismissing the petition for certication, election on the basis
of non-existence of employerpetition for certication, election on the basis of non-existence of
employeremployee relationship was issued after the members of the respondent union employee
relationship was issued after the members of the respondent union were dismissed from their
employment. were dismissed from their employment. The purpose of a petition for certication election is
to determine which organization will represent the employees employees in their collective bargaining with
the employer.The respondent union, without its member-employees, was thus stripped of its personality to
challenge the member-employees, was thus stripped of its personality to challenge the Med-Arbiter's
decision in the certication election case. Thus, the members Med-Arbiter's decision in the certication
election case. Thus, the members of the respondent union were left with no option but to pursue their
illegal of the respondent union were left with no option but to pursue their illegal dismissal case led
before the Labor Arbiter.. To dismiss the illegal dismissal case led before the Labor Arbiter on the basis
of the pronouncement of the MedArbiter in the certication election case that there was no employer-
employee relationship between the parties, which the respondent union could not even appeal to the
DOLE Secretary because of the dismissal of its members, would be tantamount to denying due process
to the complainants in the illegal dismissal case. This, we cannot allow.

24. Ramirez vs Polyson Industries

GR NO. 207898, OCT. 19, 2016

Facts:

Polyson, a duly organized institution received a notice of hearing from the DOLE with regards to a petition for
Certification election filed by Obrero, the Company's union. Polyson, through its counsel and management met with
the officers of Obrero, including the then union president Ramirez. Obrero asked to be voluntarily recognized as
the exclusive bargaining agent of the rankd and file employees of Polyson but was rejected. Furious at the refusal,
Obrero officers threatened the management that it would show its collective strength in the coming days.

Eventually, Polyson receiveda rush order which required several of its employees to render overtime. However, none
of the employees complied with the overtime order resulting in the delay of the order which eventaully caused its
cancellation. Polyson suffered monetary damage from the loss of this order.

Polyson eventually initiated an investigation and found out that several members were pressured by the union to
render overtime work. Polyson eventually sent notices asking the petitioners to explain why no disciplinary action
would be taken against them. They were eventually dismissed for illegal concerted activity.

Issue:

W/N the dismissal of the officers was proper

Held:

Yes. The officers are guilty of instigating their co-employtees to commit slowdown, an inherently and essentially
illegal activity even in the absence of a no-strike clause in a collective bargaining contract, or statute or rule.
Jurisprudence defines a slowdown as "A strike on the installment plan; as a willful reduction in the rate of work by
concerted action of workers for the purpose of restricting the output of the employer. Such a slowdown is generally
condemned as inherently illicit and unjustifiable because while the employees continue to work and remain at their
positions and accept the wages padi to them, they at the same time select what part of their allotted tasks they care
to perform of their own volition or work on their own terms

Furthermore, as regards to officer's liabilities, the second paragraph of article 264 of the labor code provides " any
union officer who knowingly participates in an illegal strike and any worker or union who knowingly participates in
the commission of illegal acts during a strike may be declared to have lost his employment."

25. Erson Ang Lee Doing Business as Super Lamination Services vs. Samahang Manggagawa ng Super
Lamimnation, GR No. 193816, Nov. 21, 2016

Facts:

Petitioner Erson Ang Lee, through Super Lamination, is a duly registered entity principally engaged in the business
of providing lamination services to the general public. Respondent Samahang Manggagawa ng Super Lamination
(Union A) is a legitimate labor organization. Super Lamination is a sole proprietorship under petitioner’s name, while
Express Lamination, Express Coat are duly incorporated entities separately registered with SEC. Union A filed a
petition for Certification Election to represent all the rank and file employees of Super Lamination. On the same
date, Express Lamination Worker’s Union (Union B) also filed a petition for Certification Election to represent the
rank and file employees of Express Lamination. Likewise, Samahan ng Manggagawa ng Express Coat Enterprise
(Union C) did the same.

The three companies represented by the same counsel filed a motion to dismiss the petitions on the same ground-
lack of employer-employee relationship between these establishments and the bargaining units that Unions A, B,
and C seek to represent as well those unions’ respective members. Further, Super Lamination posited that a majority
of the persons who were enumerated in the list of members and officers of Union A were not its employees, but
were employed by either Express Lamination or Express Coat. The latter companies also maintained the same
argument interestingly.

The three petitions for Certification Election of the Unions were denied by DOLE NCR Med-Arbiters citing that there
was no employer-employee relationship between the members of the union and the companies concerned.
However, the DOLE Undersecretary assailed the decision of the med-arbiters. DOLE found that the three companies
were sister companies and had a common Human Resource Department responsible for hiring and disciplining
employees of the companies. The three companies involved constantly rotated their workers, and that the latter’s
identification cards have the same signatory. Thus, they might engage in a work-pooling scheme, in light of which
might be considered as one and the same entity for the purpose of determining the appropriate bargaining unit in
a certification election.

CA affirmed DOLE’s decision and held that DOLE had correctly applied the concept of multi-employer bargaining
in finding that the three companies could be considered as the same entity. The motion for reconsideration filed by
the petitioner was denied by the CA.

Issue:

1. Whether the application of the doctrine of piercing the corporate veil is warranted?
2. Whether the rank and file employees of Super Lamination, Express Lamination, and Express Coat constitute
an appropriate bargaining unit?

Held:

1. This Court has time and again disregarded separate juridical personalities under the doctrine of piercing
the corporate veil. It has done so in cases where a separate legal entity is used to defeat public conscience , justify
wrong, protect fraud, or defend crime, among other grounds. The law will regard it as an association of persons, or
in case of two corporations, merge them into one. This doctrine is pursuant to the fundamental principle that the
corporate fiction should not be used as a subterfuge to commit injustice and circumvent labor laws. It can be
discerned by the facts that the three companies have petitioner as their common employer. We hold that if we allow
petitioner and the two other companies to continue obstructing the holding of the election in the manner, their
employees and their respective unions will never have a chance to choose their bargaining representative. We take
note that all three establishments were unorganized. That is, no union therein was ever duly recognized or certified
as a bargaining representative. Therefore, it is only proper that, in order to safeguard the right of the workers and
Unions A, B, and C to engage in collective bargaining, the corporate veil of Express Lamination and Express Coat
must be pierced. The separate existence of Super Lamination, Express Lamination, and Express Coat must be treated
as one and the same unit for purposes of holding a certification election.

2. Yes. The basic test for determining the appropriate bargaining unit is the application of a standard
whereby a unit is deemed appropriate if it affects a grouping of employees who have substantial, mutual interests
in wages, hours, working conditions, and other subjects of collective bargaining. We have ruled that geographical
location can be completely disregarded if the communal or mutual interests of the employees are not sacrificed. In
the present case, there was communal interest among the rank and file employees of the three companies based
on the finding that they were constantly rotated to all three companies, and that they performed the same or similar
duties whenever rotated.