1
2.3. Members of a cooperative
[G.R. No. 79025. December 29, 1989.]
BENGUET ELECTRIC COOPERATIVE, INC., Petitioner, v.
HON. PURA FERRER-CALLEJA, Director of the Bureau of
Labor Relations, and BENECO EMPLOYEES LABOR
UNION, Respondents.
Facts: Beneco Worker’s Labor Union-Association of
Democratic Labor Organizations (hereinafter referred to as
BWLU-ADLO) filed a petition for direct certification as the sole
and exclusive bargaining representative of all the rank and file
employees of Benguet Electric Cooperative, Inc (hereinafter
referred to as BENECO).
An opposition to the petition was filed by the Beneco
Employees Labor Union (hereinafter referred to as BELU)
contending that it was certified as the sole and exclusive
bargaining representative of the subject workers pursuant to
an order issued by the med-arbiter.
The med-arbiter issued an order giving due course to the
petition for certification election. However, the med-arbiter
limited the election among the rank and file employees of
petitioner who are non members thereof and without any
involvement in the actual ownership of the cooperative. Based
on the evidence during the hearing the med-arbiter found that
there are thirty-seven (37) employees who are not members
and without any involvement in the actual ownership of the
cooperative.
The ordered certification election was held on October 1, 1986.
Prior to the conduct thereof BENECO’s counsel verbally
manifested that "the cooperative is protesting that employees
who are members-consumers are being allowed to vote when .
. . they are not eligible to be members of any labor union for
purposes of collective bargaining; much less, to vote in this
certification election.". Petitioner submitted a certification
showing that only four (4) employees are not members of
BENECO and insisted that only these employees are eligible
to vote in the certification election. Canvass of the votes
showed that BELU garnered forty-nine (49) of the eighty-three
(83) "valid" votes cast.
BENECO formalized its verbal manifestation by filing a
Protest. Finding, among others, that the issue as to whether or
not member-consumers who are employees of BENECO could
form, assist or join a labor union has been answered in the
affirmative by the Supreme Court in G.R. No. 74209, the med-
arbiter dismissed the protest on February 17, 1987. On June
23, 1987, Bureau of Labor Relations (BLR) director Pura
Ferrer-Calleja affirmed the med-arbiter’s order and certified
BELU as the sole and exclusive bargaining agent of all the
rank and file employees of BENECO.
Petitioner BENECO asserts that the certification election held
on October 1, 1986 was null and void since members-
employees of petitioner cooperative who are not eligible to
form and join a labor union for purposes of collective
bargaining were allowed to vote therein.chan
Issue: Whether or not the election held by BELU was valid?
Held: NO. The SC has already settled that the right to
collective bargaining is not available to an employee of a
cooperative who at the same time is a member and co-owner
thereof. With respect, however, to employees who are neither
members nor co-owners of the cooperative they are entitled to
exercise the rights to self-organization, collective bargaining
and negotiation as mandated by the 1987 Constitution and
applicable statutes.
Respondent union further claims that if nominal ownership in a
cooperative is "enough to take away the constitutional
protections afforded to labor, then there would be no hindrance
for employers to grant, on a scheme of generous profit sharing,
stock bonuses to their employees and thereafter claim that
since their employees are not stockholders [of the corporation],
albeit in a minimal and involuntary manner, they are now also
co-owners and thus disqualified to form unions." To allow this,
BELU argues, would be "to allow the floodgates of destruction
to be opened upon the rights of labor which the Constitution
endeavors to protect and which welfare it promises to
promote."
The above contention of respondent union is based on the
erroneous presumption that membership in a cooperative is
the same as ownership of stocks in ordinary corporations.
While cooperatives may exercise some of the rights and
privileges given to ordinary corporations provided under
existing laws, such cooperatives enjoy other privileges not
granted to the latter [See Sections 4, 5, 6, and 8, Pres. Decree
No. 175; Cooperative Rural Bank of Davao City v. Ferrer-
Calleja, supra]. Similarly, members of cooperatives have rights
and obligations different from those of stockholders of ordinary
corporations. It was precisely because of the special nature of
cooperatives, that the Court held in the Davao City case that
members-employees thereof cannot form or join a labor union
for purposes of collective bargaining. The Court held that:
A cooperative . . . is by its nature different from an ordinary
business concern being run either by persons, partnerships, or
corporations. Its owners and/or members are the ones who run
and operate the business while the others are its employees.
As above stated, irrespective of the number of shares owned
by each member they are entitled to cast one vote each in
deciding upon the affairs of the cooperative. Their share capital
earn limited interest. They enjoy special privileges as —
exemption from income tax and sales taxes, preferential light
to supply their products to State agencies and even exemption
from the minimum wage laws.
An employee therefore of such a cooperative who is a member
and co-owner thereof cannot invoke the right to collective
bargaining for certainly an owner cannot bargain with himself
or his co-owners.
Republic of the Philippines represented by SSS vs.
AsiaPro Cooperative, G.R. No. 172101
Facts: Respondent Asiapro Cooperative is composed of
owners-members with primary objectives of providing them
savings and credit facilities and livelihood services. In
discharge of said objectives, Asiapro entered into several
service contracts with Stanfilco. Sometime later, the
cooperative owners-members requested Stanfilco’s help in
registering them with SSS and remitting their contributions. P
Petitioner SSS informed Asiapro that being actually a
manpower contractor supplying employees to Stanfilco, it must
be the one to register itself with SSS as an employer and remit
the contributions. Respondent continuously ignoring the
demand of SSS the latter filed before the SSC. Asiapro alleges
that there exists no employer-employee relationship between it
and its owners-members. SSC ruled in favor of SSS. On
appeal, CA reversed the decision
Issue: Whether or not an EE-ER relationship may exist
between the cooperative and the owner-member?
Held: YES. It is settled that the contracting parties may
establish such stipulations, clauses, terms and conditions as
they want, and their agreement would have the force of law
between them. However, the agreed terms and conditions
must not be contrary to law, morals, customs, public policy or
public order. The Service Contract provision in question must
be struck down for being contrary to law and public policy
since it is apparently being used by the respondent
cooperative merely to circumvent the compulsory coverage of
its employees, who are also its owners-members, by the Social
Security Law.
This Court is not unmindful of the pronouncement it made in
Cooperative Rural Bank of Davao City, Inc. v. Ferrer-Calleja
wherein it held that:
A cooperative, therefore, is by its nature different from an
ordinary business concern, being run either by persons,
partnerships, or corporations. Its owners and/or members are
the ones who run and operate the business while the others
are its employees x x x.
An employee therefore of such a cooperative who is a member
and co-owner thereof cannot invoke the right to collective
bargaining for certainly an owner cannot bargain with himself
or his co-owners. In the opinion of August 14, 1981 of the
Solicitor General he correctly opined that employees of
cooperatives who are themselves members of the cooperative
have no right to form or join labor organizations for purposes of
collective bargaining for being themselves co-owners of the
cooperative.
However, in so far as it involves cooperatives with employees
who are not members or co-owners thereof, certainly such
employees are entitled to exercise the rights of all workers to
organization, collective bargaining, negotiations and others as
are enshrined in the Constitution and existing laws of the
country.
The situation in the aforesaid case is very much different from
the present case. The declaration made by the Court in the
aforesaid case was made in the context of whether an
employee who is also an owner-member of a cooperative can
exercise the right to bargain collectively with the employer who
is the cooperative wherein he is an owner-member. Obviously,
an owner-member cannot bargain collectively with the
cooperative of which he is also the owner because an owner

cannot bargain with himself. In the instant case, there is no
issue regarding an owner-members right to bargain collectively
with the cooperative. The question involved here is whether an
employer-employee relationship can exist between the
cooperative and an owner-member. In fact, a closer look at
Cooperative Rural Bank of Davao City, Inc. will show that it
actually recognized that an owner-member of a cooperative
can be its own employee.
It bears stressing, too, that a cooperative acquires juridical
personality upon its registration with the Cooperative
Development Authority.It has its Board of Directors, which
directs and supervises its business; meaning, its Board of
Directors is the one in charge in the conduct and management
of its affairs. With that, a cooperative can be likened to a
corporation with a personality separate and distinct from its
owners-members. Consequently, an owner-member of a
cooperative can be an employee of the latter and an employer-
employee relationship can exist between them.
In the present case, it is not disputed that the respondent
cooperative had registered itself with the Cooperative
Development Authority, as evidenced by its Certificate of
Registration No. 0-623-2460.[40] In its by-laws, its Board of
Directors directs, controls, and supervises the business and
manages the property of the respondent cooperative. Clearly
then, the management of the affairs of the respondent
cooperative is vested in its Board of Directors and not in its
owners-members as a whole. Therefore, it is completely logical
that the respondent cooperative, as a juridical person
represented by its Board of Directors, can enter into an
employment with its owners-members.
In sum, having declared that there is an employer-employee
relationship between the respondent cooperative and its
owners-member, we conclude that the petitioner SSC has
jurisdiction over the petition-complaint filed before it by the
petitioner SSS. This being our conclusion, it is no longer
necessary to discuss the issue of whether the respondent
cooperative was estopped from assailing the jurisdiction of the
petitioner SSC when it filed its Answer with Motion to Dismiss.
2.4. Managerial employees, Art. 245 cf. Art. 212 [m], Labor
Code
Dept. Order No. 9, Rule !I, Sec. 2; Dept Order 40, R1 S1(hh)
Higher standards required of managers:
G.R. No. 157376 October 2, 2007
CORAZON C. SIM, petitioners,
vs. NATIONAL LABOR RELATIONS COMMISSION and
EQUITABLE PCI-BANK, respondents*.
DECISION
AUSTRIA-MARTINEZ, J.:
FACTS: Corazon Sim (petitioner) filed a case for illegal
dismissal with the Labor Arbiter, alleging that she was initially
employed by Equitable PCI-Bank (respondent) in 1990 as
Italian Remittance Marketing Consultant to the Frankfurt
Representative Office. Eventually, she was promoted to
Manager position, until September 1999, when she received a
letter from Remegio David -- the Senior Officer, European
Head of PCIBank, and Managing Director of PCIB- Europe --
informing her that she was being dismissed due to loss of trust
and confidence based on alleged mismanagement and
misappropriation of funds.
Petitioner does not deny having withdrawn the amount of
P3,000,000.00 lire from the bank's account. What petitioner
submits is that she used said amount for the Radio Pilipinas sa
Roma radio program of the company. Respondent, however,
countered that at the time she withdrew said amount, the radio
program was already off the air.
ISSUE: Was the dismissal valid?
YES. Respondent is a managerial employee. Thus, loss of
trust and confidence is a valid ground for her dismissal. The
mere existence of a basis for believing that a managerial
employee has breached the trust of the employer would suffice
for his/her dismissal.
[w]hen an employee accepts a promotion to a managerial
position or to an office requiring full trust and confidence, she
gives up some of the rigid guaranties available to ordinary
workers. Infractions which if committed by others would be
overlooked or condoned or penalties mitigated may be visited
with more severe disciplinary action. A company's resort to
acts of self-defense would be more easily justified.
On the issue of jurisdiction
The Labor Arbiter has jurisdiction over the case. Article 217 of
the Labor Code provides for the jurisdiction of the Labor Arbiter
and the National Labor Relations Commission, viz.:
ART. 217. Jurisdiction of Labor Arbiters and the Commission.
– (a) Except as otherwise provided under this Code the Labor
Arbiters shall have original and exclusive jurisdiction to hear
and decide, within thirty (30) calendar days after the
submission of the case by the parties for decision without
extension, even in the absence of stenographic notes, the
following cases involving all workers, whether agricultural or
non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases
that workers may file involving wage, rates of pay, hours of
work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code,
including questions involving the legality of strikes and
lockouts; and
6. Except claims for Employees Compensation, Social
Security, Medicare and maternity benefits, all other claims,
arising from employer-employee relations, including those of
persons in domestic or household service, involving an amount
of exceeding five thousand pesos (P5,000.00) regardless of
whether accompanied with a claim for reinstatement.
(b) The commission shall have exclusive appellate jurisdiction
over all cases decided by Labor Arbiters.
2
Moreover, Section 10 of Republic Act (R.A.) No. 8042, or the
Migrant Workers and Overseas Filipinos Act of 1995, provides:
SECTION 10. Money Claims. — Notwithstanding any provision
of law to the contrary, the Labor Arbiters of the National Labor
Relations Commission (NLRC) shall have the original and
exclusive jurisdiction to hear and decide, within ninety (90)
calendar days after the filing of the complaint, the claims
arising out of an employer-employee relationship or by virtue of
any law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary and
other forms of damages.
Also, Section 62 of the Omnibus Rules and Regulations
Implementing R.A. No. 804219 provides that the Labor Arbiters
of the NLRC shall have the original and exclusive jurisdiction to
hear and decide all claims arising out of employer-employee
relationship or by virtue of any law or contract involving Filipino
workers for overseas deployment including claims for actual,
moral, exemplary and other forms of damages, subject to the
rules and procedures of the NLRC.
Under these provisions, it is clear that labor arbiters have
original and exclusive jurisdiction over claims arising from
employer-employee relations, including termination disputes
involving all workers, among whom are overseas Filipino
workers.20 In Philippine National Bank v. Cabansag, the Court
pronounced:
x x x Whether employed locally or overseas, all Filipino
workers enjoy the protective mantle of Philippine labor and
social legislation, contract stipulations to the contrary
notwithstanding. This pronouncement is in keeping with the
basic public policy of the State to afford protection to labor,
promote full employment, ensure equal work opportunities
regardless of sex, race or creed, and regulate the relations
between workers and employers. For the State assures the
basic rights of all workers to self-organization, collective
bargaining, security of tenure, and just and humane conditions
of work [Article 3 of the Labor Code of the Philippines; See
also Section 18, Article II and Section 3, Article XIII, 1987
Constitution]. This ruling is likewise rendered imperative by
Article 17 of the Civil Code which states that laws "which have
for their object public order, public policy and good customs
shall not be rendered ineffective by laws or judgments
promulgated, or by determination or conventions agreed upon
in a foreign country." (Emphasis supplied)
Is a prior motion for reconsideration indispensable for the filing
of a petition for certiorari under Rule 65 of the Rules of Court
with the CA?
Yes. Under Rule 65, the remedy of filing a special civil action
for certiorari is available only when there is no appeal; or any
plain, speedy, and adequate remedy in the ordinary course of
law. A "plain" and "adequate remedy" is a motion for
reconsideration of the assailed order or resolution, the filing of
which is an indispensable condition to the filing of a special
civil action for certiorari. This is to give the lower court the
opportunity to correct itself.
There are, of course, exceptions to the foregoing rule, to wit:

(a) where the order is a patent nullity, as where the court a
quo has no jurisdiction;
(b) where the questions raised in the certiorari proceedings
have been duly raised and passed upon by the lower court, or
are the same as those raised and passed upon in the lower
court;
(c) where there is an urgent necessity for the resolution of the
question and any further delay would prejudice the interests of
the Government or of the petitioner or the subject matter of the
action is perishable;
(d) where, under the circumstances, a motion for
reconsideration would be useless;
(e) where petitioner was deprived of due process and there is
extreme urgency for relief;
(f) where, in a criminal case, relief from an order of arrest is
urgent and the granting of such relief by the trial court is
improbable;
(g) where the proceedings in the lower court are a nullity for
lack of due process;
(h) where the proceeding was ex parte or in which the
petitioner had no opportunity to object; and
(i) where the issue raised is one purely of law or public interest
is involved.
Petitioner, however, failed to qualify her case as among the
few exceptions. In fact, the Court notes that the petition filed
before the CA failed to allege any reason why a motion for
reconsideration was dispensed with by petitioner. It was only in
her motion for reconsideration of the CA's resolution of
dismissal and in the petition filed in this case that petitioner
justified her non-filing of a motion for reconsideration.
G.R. No. 88957 June 25, 1992
PHILIPS INDUSTRIAL DEVELOPMENT, INC., petitioner,
vs. NATIONAL LABOR RELATIONS COMMISSION and
PHILIPS EMPLOYEES ORGANIZATION (FFW),
respondents.
DAVIDE, JR., J.:
FACTS: PIDI is a domestic corporation engaged in the
manufacturing and marketing of electronic products. Since
1971, it had a total of 6 collective bargaining agreements with
private respondent Philips Employees Organization-FFW
(PEO-FFW), a registered labor union and the certified
bargaining agent of all rank and file employees of PIDI.
In the first CBA, the supervisors (referred to in RA 875),
confidential employees, security guards, temporary employees
and sales representatives were excluded in the bargaining
unit. In the second to the fifth, the sales force, confidential
employees and heads of small units, together with the
managerial employees, temporary employees and security
personnel were excluded from the bargaining unit. The
confidential employees are the division secretaries of
light/telecom/data and consumer electronics, marketing
managers, secretaries of the corporate planning and business
manager, fiscal and financial system manager and audit and
EDP manager, and the staff of both the General Management
and the Personnel Department.
In the sixth CBA, it was agreed that the subject of inclusion or
exclusion of service engineers, sales personnel and
confidential employees in the coverage of the bargaining unit
would be submitted for arbitration. The parties failed to agree
on a voluntary arbitrator and the Bureau of Labor Relations
endorsed the petition to the Executive Labor Arbiter of the
NCR for compulsory arbitration.
On March 17, 1998 rendered a decision that a referendum will
be conducted to determine the will of the service engineers
and sales representatives as to their inclusion or exclusion in
the bargaining unit. It was also declared that the Division
Secretaries and all staff of general management, personnel
and industrial relations department, secretaries of audit, EDP,
financial system are confidential employees are deemed
excluded in the bargaining unit.
PEO-FFW appealed to the NLRC however, NLRC declared
PIDI's Service Engineers, Sales Force, division secretaries, all
Staff of General Management, Personnel and Industrial
Relations Department, Secretaries of Audit, EDP and Financial
Systems are included within the rank and file bargaining unit,
citing the Implementing Rules of E.O 111 and Article 245 of the
Labor Code (all workers, except managerial employees and
security personnel, are qualified to join or be a part of the
bargaining unit)
ISSUES:
1. Whether service engineers, sales representatives and
confidential employees of petitioner are qualified to be part of
the existing bargaining unit
2. Whether the "Globe Doctrine" should be applied
HELD:
1. No. Confidential employees are excluded from the
bargaining unit while a referendum will be conducted to
determine the will of the service engineers and sales
representatives as to their inclusion or exclusion from the
bargaining unit, but those who are holding supervisory
positions or functions are ineligible to join a labor organization
of the rank and file employees but may join, assist or form a
separate labor organization of their own.
The rationale behind the ineligibility of managerial employees
to form, assist or join a labor union equally applies to
confidential employees. With the presence of managerial
employees in a union, the union can become company-
dominated as their loyalty cannot be assured.
In Golden Farms vs Calleja, the Court states that confidential
employees, who have access to confidential information, may
become the source of undue advantage. As regards to the
sales representatives and service engineers, according to the
OSG, there is no doubt that they are entitled to form a union as
they are not disqualified by law from doing so.
2. No. Globe Doctrine states that in determining the proper
bargaining unit, the express will or desire of the employees
shall be considered, they should be allowed to determine for
themselves what union to join or form. The best way is through
a referendum, as decreed by the Executive Labor Arbiter.
3
In the present case, since the only issue is the employees'
inclusion in or exclusion from the bargaining unit in question,
the Globe Doctrine has no application in this case. The
doctrine applies only in instance of evenly balanced claims by
competitive groups for the right to be established as the
bargaining unit.
G.R. No. 102130. July 26, 1994.*
GOLDEN FARMS, INC., petitioner,
vs. THE HONORABLE SECRETARY OF LABOR and THE
PROGRESSIVE FEDERATION OF LABOR, respondents.
FACTS: Petitioner Golden Farms, Inc., is a corporation
engaged in the production and marketing of bananas for
export. On February 27, 1992, private respondent Progressive
Federation of Labor (PFL) filed a petition before the Med-
Arbiter praying for the holding of a certification election among
the monthly paid office and technical rank-and-file employees
of petitioner Golden Farms.
Petitioner moved to dismiss claiming that PFL failed to show
that it organized a chapter within the petitioner establishment,
that there was already an existing CBA between the rank and
file employees represented by NFL and petitioner, and that the
employees represented by PFL are disqualified by the courts.
PFL countered that the monthly-paid office workers and
technical employees should be allowed because they were
expressly excluded from the coverage of the CBA between
Petitioner and NFL. Petitioner argued that the subject
employees should have joined the existing CBA if they are not
managerial employees. On April 18,1991, the Med-Arbiter
ordered the conduct of the certification elections. Petitioner
appealed to the Secretary of Labor which the LabSec denies
the appeal for lack of merit.
ISSUE: WON the Monthly Paid rank and file employee can
constitute a bargaining unit separate from the existing
bargaining units of its daily-paid rank and file employees
RULING: Yes, the Monthly Paid office and technical rank and
file employee of the petitioner enjoy constitutional rights to self
organization and collective bargaining.
A “bargaining unit” has been defined as a group of employees
of a given employer, comprised of all or less than all of the
entire body of employees, which the collective interest of all
the employees, consistent with equity to the employer, indicate
to be the best suited to serve the reciprocal rights and duties of
the parties under the collective bargaining provisions of the
law.
The duties of the monthly paid employees primarily
administrative and clerical which is of different nature from
daily paid employees whose main work is the cultivation of
bananas.
To be sure, the said monthly paid rank-and-file employees
have even been excluded from the bargaining unit of the daily
paid rank-and-file employees. This dissimilarity of interests
warrants the formation of a separate and distinct bargaining

unit for the monthly paid rank-and-file employees of the
petitioner.
To rule otherwise would deny this distinct class of employees
the right to self-organization for purposes of collective
bargaining. Without the shield of an organization, it will also
expose them to the exploitations of management.
In the case of UP vs Ferrer-Calleja, the SC sanctioned the
formation of 2 separate bargaining units within the
establishment.
Article 212, paragraph (m) of the Labor Code, as amended,
defines a managerial employee as follows: “‘Managerial
employee’ is one who is vested with power or prerogatives to
lay down and execute management policies and/or to hire,
transfer, suspend, lay-off, recall, discharge, assign or discipline
employees. Supervisory employees are those who, in the
interest of the employer, effectively recommend such
managerial actions if the exercise of such authority is not
merely routinary or clerical in nature but requires the use of
independent judgment. All employees not falling within any of
the above definitions are considered rank-and-file employees
for purposes of this Book.”
Given this definition, the monthly paid office and technical
employees, accountants, and cashiers of the petitioner are not
managerial employees for they do not participate in policy-
making but are given cut out policies to execute and standard
practices to observe. In the main, the discharge of their duties
does not involve the use of independent judgment.
Golden Farms, Inc. vs. Honorable Pura Ferrer-Calleja, op. cit.,
does not pose any obstacle in holding a certification election
among petitioner’s monthly paid rank-and-file employees. The
issue brought to fore in that case was totally different, i.e.,
whether or not petitioner’s confidential employees, considering
the nature of their work, should be included in the bargaining
unit of the daily paid rank-and-file employees. In the case at
bench, the monthly paid rank-and-file employees of petitioner
are being separated as a bargaining unit from its daily paid
rank-and-file employees, on the ground that they have different
interest to protect. The principle of res judicata is, therefore,
inapplicable.
Finally, the SC note that it was Petitioner company that filed
the motion to dismiss the petition for election violating the
general rule that the employer has no standing to question a
certification election since this is the so that the employer has
no standing to question a certification election since this is the
sole concerns of the workers (Bystander Rule).
G.R. No. 116194. February 2, 2000
SUGBUANON RURAL BANK, INC., Petitioner,
v. HON. UNDERSECRETARY BIENVENIDO E. LAGUESMA,
DEPARTMENT OF LABOR AND EMPLOYMENT, MED-
ARBITER ACHILLES MANIT, DEPARTMENT OF LABOR
AND EMPLOYMENT, REGIONAL OFFICE NO. 7, CEBU
CITY, AND SUGBUANON RURAL BANK, INC. -
ASSOCIATION OF PROFESSIONAL, SUPERVISORY,
OFFICE, AND TECHNICAL EMPLOYEES UNION-TRADE
UNIONS CONGRESS OF THE PHILIPPINES,Respondents.
FACTS: Petitioner Sugbuanon Rural Bank, Inc., (SRBI, for
brevity) is a duly-registered banking institution with principal
office in Cebu City and a branch in Mandaue City. Private
respondent SRBI-Association of Professional, Supervisory,
Office, and Technical Employees Union (APSOTEU) is a
legitimate labor organization affiliated with the Trade Unions
Congress of the Philippines (TUCP). On October 26, 1993, the
union filed a petition for certification election of the supervisory
employees of SRBI. On October 28, 1993, the Med-Arbiter
gave due course to the petition.
On November 12, 1993, SRBI filed a motion to dismiss the
union's petition. It sought to prevent the holding of a
certification election on two grounds: First, that the members of
APSOTEU-TUCP were in fact managerial or confidential
employees. Thus, following the doctrine in Philips Industrial
Development Corporation v. National Labor Relations
Commission,[1] they were disqualified from forming,ining, or
assisting any labor organization. Second, the Association of
Labor Unions-Trade Unions Congress of the Philippines or
ALU-TUCP was representing the union. Since ALU- TUCP
also sought to represent the rank-and-file employees of SRBI,
there was a violation of the principle of separation of unions
enunciated in Atlas Lithographic Services, Inc. v. Laguesma.
The union filed its opposition to the motion to dismiss on
December 1, 1993. It argued that its members were not
managerial employees but merely supervisory employees. The
union pointed out that Article 245 of the Labor Code expressly
allowed supervisory employees to form, in, or assist their own
unions.
On December 9, 1993, the Med-Arbiter denied petitioner's
motion to dismiss. SRBI appealed the Med-Arbiter's decision
to the Secretary of Labor and Employment. The appeal was
denied for lack of merit. The certification election was ordered.
SRBI appealed the order of denial to the DOLE Secretary on
December 16, 1993. On December 22, 1993, petitioner
proceeded to file a petition with the DOLE Regional Office
seeking the cancellation of the respondent union's registration.
On April 22, 1994, respondent DOLE Undersecretary denied
SRBI's appeal for lack of merit. He ruled that APSOTEU-
TUCP was a legitimate labor organization. He also held that
until and unless a final order is issued canceling APSOTEU-
TUCP's registration certificate, it had the legal right to
represent its members for collective bargaining purposes. The
Med- Arbiter scheduled the holding of certification elections on
August 12, 1994.
ISSUE:
(1) Whether or not the members of the respondent union are
managerial employees and/or highly-placed confidential
employees, hence prohibited by law from joining labor
organizations and engaging in union activities?
(2) Whether or not the Med-Arbiter may validly order the
holding of a certification election upon the filing of a petition for
certification election by a registered union, despite the
petitioner’ appeal pending before the DOLE Secretary against
the issuance of the union’s registration?
4
RULING:
(1) Article 212(m) of the Labor Code defines the terms
“managerial employee” and “supervisory employees” as
follows:
“Art. 212. Definitions—
xxx
(m) ‘Managerial employee’ one who is vested with powers or
prerogatives to lay down and execute management policies
and/or hire, transfer, suspend, lay-off, recall, discharge, assign
or discipline employees. Supervisory employees are those
who, in the interest of the employer, effectively recommend
such managerial actions if the exercise of such authority is not
merely routinary or clerical in nature but requires the use of
independent judgment. All employees not falling within any of
the above definitions are considered rank-and-file employees
for purposes of this Book (Italic supplied).”
In the present case, however, petitioner failed to show that the
employees in question were vested with similar powers. At
best they only had recommendatory powers subject to
evaluation, review, and final decision by the bank’s
management. The job description forms submitted by
petitioner clearly show that the union members in question
may not transfer, suspend, lay-off, recall, discharge, assign, or
discipline employees. Moreover, the forms also do not show
that the Cashiers, Accountants, and Acting Chiefs of the Loans
Department formulate and execute management policies
which are normally expected of management officers.
(2) Yes. One of the rights of a legitimate labor organization
under Article 242(b) of the Labor Code is the right to be
certified as the exclusive representative of all employees in an
appropriate bargaining unit for purposes of collective
bargaining. Having complied with the requirements of Art. 234,
it is our view that respondent union is a legitimate labor union.
Article 257 of the Labor Code mandates that a certification
election shall automatically be conducted by the Med-Arbiter
upon the filing of a petition by a legitimate labor organization.
Nothing is said therein that prohibits such automatic conduct of
the certification election if the management appeals on the
issue of the validity of the union’s registration. On this score,
petitioner’s appeal was correctly dismissed.
The law frowns on a union where the membership is
composed of both supervisors and rank-and-file employees,
for fear that conflicts of interest may arise in the areas of
discipline, collective bargaining, and strikes.19 However, in the
present case, none of the members of the respondent union
came from the rank-and-file employees of the bank.
Taking into account the circumstances in this case, it is our
view that respondent Undersecretary committed no reversible
error nor grave abuse of discretion when he found the order of
the Med-Arbiter scheduling a certification election in order. The
list of employees eligible to vote in said certification election
was also found in order, for none was specifically disqualified
from membership.
CONFIDENTIAL EMPLOYEES
Confidential employees are those who

(1) assist or act in a confidential capacity, in regard
(2) to persons who formulate, determine, and effectuate
management policies [specifically 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 superior officer; and that officer must handle the
prescribed responsibilities relating to labor relations.
Article 245 of the Labor Code does not directly prohibit
confidential employees from engaging in union activities.
However, under the doctrine of necessary implication, the
disqualification of managerial employees equally applies to
confidential employees. The confidential-employee rule
justifies exclusion of confidential employees because in the
normal course of their duties they become aware of
management policies relating to labor relations. It must be
stressed, however, that when the employee does not have
access to confidential labor relations information, there is no
legal prohibition against confidential employees from forming,
assisting, or joining a union.
G.R. No. 162025, August 3, 2010
Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery,
petitioner
v. Asia Brewery, Inc., respondent
FACTS: Respondent Asia Brewery, Inc. (ABI) is engaged in
the manufacture, sale and distribution of beer, shandy, bottled
water and glass products. ABI entered into a Collective
Bargaining Agreement (CBA), effective for five (5) years with
Bisig at Lakas ng mga Manggagawa sa Asia-Independent
(BLMA), the exclusive bargaining representative of ABI’s rank -
and-file employees. Under the CBA, 12 jobs were defined to
be excluded from the bargaining agreement.
Asia Brewery entered into a Collective Bargaining Agreement
with BLMA, the exclusive bargaining representative of Asia
Brewery rank-and-file employees. Those employees explicitly
excluded in the CBA are, among others, confidential and
executive secretaries and purchasing and quality control staff.
A dispute arose when Asia Brewery management stopped
deducting union dues from 81 employees, believing that their
membership in the union violated the CBA. These employees
were Sampling Inspectors, Machine Gauge Technician, both
part of the Quality Control Staff, checkers assigned to different
departments, and secretaries and clerks directly under the
respective division managers.
BLMA claimed that ABI’s actions restrained the employees’
right to self -organization and brought the matter to the
grievance machinery. As the parties failed to amicably settle
the controversy, BLMA lodged a complaint before the National
Conciliation and Mediation Board (NCMB). The parties
eventually agreed to submit the case for arbitration to resolve
the issue of "whether or not there is restraint to employees in
the exercise of their right to self-organization."
Voluntary Arbitrator (VA) ruled in favor of BLMA. Accordingly,
the subject employees were declared eligible for inclusion
within the bargaining unit represented by BLMA. On appeal by
ABI to the CA, it reversed the VA, ruling that the 81 employees
are excluded from and are not eligible for inclusion in the
bargaining unit as defined in Section 2, Article I of the CBA; the
81 employees cannot validly become members of respondent
and/or if already members, that their membership is violative of
the CBA and that they should disaffiliate from respondent; and
petitioner has not committed any act that restrained or tended
to restrain its employees in the exercise of their right to self-
organization.
In the meantime, a certification election was held on August
10, 2002 wherein petitioner Tunay na Pagkakaisa ng
Manggagawa sa Asia (TPMA) won. As the incumbent
bargaining representative of ABI’s rank-and-file employees
claiming interest in the outcome of the case, petitioner filed
with the CA an omnibus motion for reconsideration of the
decision and intervention, with attached petition signed by the
union officers. Both motions were denied by the CA.
ISSUE: Whether or not the 81 employees may be validly
excluded from the bargaining unit?
HELD: No. Confidential employees are defined as those who
(1) assist or act in a confidential capacity, (2) to persons who
formulate, determine, and effectuate management policies in
the field of labor relations. The two (2) criteria are cumulative,
and both must be met if an employee is to be considered a
confidential employee that is, the confidential relationship must
exist between the employee and his supervisor, and the
supervisor must handle the prescribed responsibilities relating
to labor relations.The exclusion from bargaining units of
employees who, in the normal course of their duties, become
aware of management policies relating to labor relations is a
principal objective sought to be accomplished by the
"confidential employee rule."
There is no showing in this case that the secretaries/clerks and
checkers assisted or acted in a confidential capacity to
managerial employees and obtained confidential information
relating to labor relations policies.And even assuming that they
had exposure to internal business operations of the company,
respondent claimed, this is not per se ground for their
exclusion in the bargaining unit of the daily-paid rank-and-file
employees.
WHEREFORE, the petition is GRANTED. The Decision dated
November 22, 2002 and Resolution dated January 28, 2004 of
the Court of Appeals in CA-G.R. SP No. 55578 are hereby
REVERSED and SET ASIDE. The checkers and
secretaries/clerks of respondent company are hereby declared
rank-and-file employees who are eligible to join the Union of
the rank-and-file employees.
[G.R. No. 109002. April 12, 2000]
DELA SALLE UNIVERSITY, petitioner,
vs. DELA SALLE UNIVERSITY EMPLOYEES
ASSOCIATION (DLSUEA) and BUENAVENTURA
MAGSALIN, respondents.
FACTS: On December 1986, De La Salle University and De La
Salle University Employees Association entered into a
5
collective bargaining agreement with a life span of 3 years, that
is, from December 23, 1986-December 22, 1989. During the
freedom period, or 60 days before the expiration of the said
collective bargaining agreement, the
Union initiated negotiations with the University for a new
collective bargaining agreement, which however, turned out to
be unsuccessful, hence the Union filed a Notice of Strike with
the National Conciliation and Mediation Board, National Capital
Region. After several conciliation- mediation meetings, 5 out of
the 11 issues raised in the Notice of Strike were resolved by
the parties. A partial collective bargaining agreement was
executed by the parties. On March 18, 1991, the parties
entered into a
Submission Agreement identifying the 6 unresolved issues.
The parties appointed Buenaventura Magsalin as voluntary
arbitrator. The Voluntary Arbitrator is constrained to respect
the original intention of the parties, the same being not
contrary to law, morals or public policy. Subsequently, both
parties filed their respective motions for reconsideration which,
however, were not entertained by the voluntary arbitrator.
On March 5, 1993, the University filed with the Second Division
of this Court a petition for certiorari with temporary restraining
order and/or preliminary injunction assailing the decision of the
voluntary arbitrator, as having been rendered “in excess of
jurisdiction and/or grave abuse of discretion.”
Likewise, the Union also filed a petition for certiorari with the
First Division. Upon motion by the Solicitor General, both
petitions were consolidated and transferred to the Second
Division. The Solicitor General came to the conclusion
sufficient evidence to justify the Union’s proposal to consider
the University and the CSB as only one entity because the
latter is but a mere integral part of the university.
Hence, this petition.
ISSUE: Whether or not the computer operators assigned at the
University’s Computer Services Center and the University’s
discipline officers may be considered as confidential
employees and should therefore be excluded from the
bargaining unit which is composed of rank and file employees
of the University
HELD: No. The Court agrees with the Solicitor General that
the express exclusion of the computer operators and discipline
officers from the bargaining unit of rank-and-file employees in
the 1986 collective bargaining agreement does not bar any re-
negotiation for the future inclusion of the said employees in the
bargaining unit. During the freedom period, the parties may not
only renew the existing collective bargaining agreement but
may also propose and discuss modifications or amendments
thereto. With regard to the alleged confidential nature of the
said employees functions, after a careful consideration of the
pleadings filed before this Court, we rule that the said
computer operators and discipline officers are not confidential
employees. As carefully examined by the Solicitor General, the
service record of a computer operator reveals that his duties
are basically clerical and non-confidential in nature.[
As to the discipline officers, we agree with the voluntary
arbitrator that based on the nature of their duties, they are not

confidential employees and should therefore be included in the
bargaining unit of rank-and-file employees.
The Court also affirms the findings of the voluntary arbitrator
that the employees of the College of St. Benilde should be
excluded from the bargaining unit of the rank-and-file
employees of Dela Salle University, because the two
educational institutions have their own separate juridical
personality and no sufficient evidence was shown to justify the
piercing of the veil of corporate fiction.
SAN MIGUEL CORPORATION SUPERVISORS AND
EXEMPT UNION AND ERNESTO L. PONCE, President vs.
HONORABLE BIENVENIDO E. LAGUESMA IN HIS
CAPACITY AS UNDERSECRETARY OF LABOR AND
EMPLOYMENT, HONORABLE DANILO L. REYNANTE IN
HIS CAPACITY AS MED-ARBITER AND SAN MIGUEL
CORPORATION.; [G.R. No. 110399. August 15, 1997];
ROMERO, J.:
Case digested by: Vina Cagampang
Doctrine:
In determining the confidentiality of certain employees, a key
question frequently considered is the employee’s necessary
access to confidential labor relations information.
An employee may not be excluded from appropriate bargaining
unit merely because he has access to confidential information
concerning employer’s internal business operations and which
is not related to the field of labor relations.
Facts: Petitioner San Miguel Corporation Supervisors and
Exempt Union (Union) filed before the DOLE a Petition for
District Certification or Certification Election among the
supervisors and exempt employees of the SMC Magnolia
Poultry Products Plants of Cabuyao, San Fernando and Otis.
Respondent San Miguel Corporation opposed pointing out,
among others that Supervisory employees 3 and 4 and the
exempt employees come within the meaning of the term
confidential employees primarily because they handle
confidential data or documents. However, it was also pointed
out that the confidential information handled by questioned
employees relate to product formulation, product standards
and product specification which by no means relate to labor
relations.
Issue: Whether Supervisory employees 3 and 4 and the
exempt employees of the company are considered confidential
employees thus not eligible to join a union?
Ruling: No. They are not considered confidential employees
and are thus eligible to join a union
There is no question that the said employees, supervisors and
the exempt employees, are not vested with the powers and
prerogatives to lay down and execute management policies
and/or to hire, transfer, suspend, layoff, recall, discharge or
dismiss employees. They are, therefore, not qualified to be
classified as managerial employees who, under Article 245 of
the Labor Code, are not eligible to join, assist or form any labor
organization. In the very same provision, they are not allowed
membership in a labor organization of the rank-and-file
employees but may join, assist or form separate labor
organizations of their own. The only question that need be
addressed is whether these employees are properly classified
as confidential employees or not.
Confidential employees are those who:
Assist or act in a confidential capacity,
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 employees
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. The
broad rationale behind this rule is that employees should not
be placed in a position involving a potential conflict of interests.
Management should not be required to handle labor relations
matters through employees who are represented by the union
with the company is required to deal and who in the normal
performance of their duties may obtain advance information of
the company’s position with regard to contract negotiations,
the disposition of grievances, or other labor relations matters.
Granting arguendo that an employee has access to
confidential labor relations information but such is merely
incidental to his duties and knowledge thereof is not necessary
in the performance of such duties, said access does not render
the employee a confidential employee. If access to confidential
labor relations information is to be a factor in the determination
of an employee’s confidential status, such information must
relate to the employers labor relations policies employee of a
labor union, or of a management association, must have
access to confidential labor information with respect to his
employer, the union, or the association, to be regarded a
confidential employee, and knowledge of labor relations
information pertaining to the companies with which the union
deals, or which the association represents, will not clause an
employee to be excluded from the bargaining unit representing
employees of the union or association. Access to information
which is regarded by the employer to be confidential from the
business standpoint, such as financial information or technical
trade secrets, will not render an employee a confidential
employee.
In the case at bar, supervisors 3 and above may not be
considered confidential employees merely because they
handle confidential data as such must first be strictly classified
as pertaining to labor relations for them to fall under said
restrictions. The information they handle are properly
classifiable as technical and internal business operations data
which, to our mind, has no relevance to negotiations and
settlement of grievances wherein the interests of a union and
the management are invariably adversarial. Since the
employees are not classifiable under the confidential type, this
Court rules that they may appropriately form a bargaining unit
for purposes of collective bargaining. Furthermore, even
6
assuming that they are confidential employees, jurisprudence
has established that there is no legal prohibition against
confidential employees who are not performing managerial
functions to form and join a union.
2.6. Employees of International Organizations or Specialized
Agencies which are registered with the United Nations and
enjoys diplomatic immunity
Contra:
DEUTSCHE GESELLSCHAFT FÜR TECHNISCHE
ZUSAMMENARBEIT, also known as GERMAN AGENCY FOR
TECHNICAL COOPERATION, (GTZ) HANS PETER
PAULENZ and ANNE NICOLAY vs HON. COURT OF
APPEALS, HON. ARIEL CADIENTE SANTOS, Labor Arbiter
of the Arbitration Branch, National Labor Relations
Commission, and BERNADETTE CARMELLA MAGTAAS,
CAROLINA DIONCO, CHRISTOPHER RAMOS, MELVIN
DELA PAZ, RANDY TAMAYO and EDGARDO RAMILLO;
G.R. No. 152318; April 16, 2009; TINGA, J.:
Case Digested by: Vina Cagampang
G. R. No. 96566, January 06, 1992
ATLAS LITHOGRAPHIC SERVICES, INC., PETITIONER, VS.
UNDERSECRETARY BIENVENIDO E. LAGUESMA
(DEPARTMENT OF LABOR AND EMPLOYMENT) AND
ATLAS LITHOGRAPHIC SERVICES, INC. SUPERVISORY,
ADMINISTRATIVE, PERSONNEL, PRODUCTION,
ACCOUNTING AND CONFIDENTIAL EMPLOYEES-
ASSOCIATION-KAISAHAN NG MANGGAGAWANG
PILIPINO (KAMPIL-KATIPUNAN), RESPONDENTS.
FACTS: The supervisory, administrative personnel,
production, accounting and confidential employees of the
petitioner Atlas Lithographic Services, Inc. (ALSI) affiliated with
private respondent Kaisahan ng Manggagawang Pilipino, a
national labor organization. The local union adopted the name
Atlas Lithographic Services, Inc. Supervisory, Administrative,
Personnel, Production, Accounting and Confidential
Employees Association or ALSI-SAPPACEA-KAMPIL in short
and which we shall hereafter refer to as the ‘supervisors’
union.
Shortly thereafter, private respondent Kampil--Katipunan filed
on behalf of the ‘supervisors’ union a petition for certification
election so that it could be the sole and exclusive bargaining
agent of the supervisory employees.
The petitioners opposed the private respondent's petition
claiming that under Article 245 of the Labor Code the private
respondent cannot represent the supervisory employees for
collective bargaining purposes because the private respondent
also represents the rank-and-file employees’ union.
Med-Arbiter issued an order in favor of the private respondent
The petitioner argues that KAMPIL-KATIPUNAN already
represents its rank-and-file employees and, therefore, to allow
the supervisors of those employees to affiliate with the private
respondent is tantamount to allowing the circumvention of the

principle of the separation of unions under Article 245 of the
Labor Code.
The public respondent, on the other hand, contends that
despite affiliation with a national federation, the local union
does not lose its personality which is separate, and distinct
from the national federation.
ISSUE: Whether or not, under Article 245 of the
Labor Code, a local union of supervisory employees may be
allowed to affiliate with a national federation of labor
organizations of rank-and-file employees.
RULING: NO.
A revision of the Labor Code brought about the enactment of
Rep. Act No. 6715 9 in which employees were reclassified into
three groups, namely: (1) the managerial employees; (2)
supervisors, and (3) the rank--and-file employees. Under the
present law, the category of supervisory employees is once
again recognized. Hence, Art. 212(m) states:
"(m) xxx Supervisory employees are those who, in the interest
of the employer, effectively recommend such managerial
actions if the exercise of such authority is not merely routinary
or clerical in nature but requires the use of independent
judgment. xxx"
The rationale for the amendment is the government's
recognition of the right of supervisors to organize with the
qualification that they shall not join or assist in the organization
of rank-and-file employees. The interests of supervisors on the
one hand, and the rank-and-file employees on the other, are
separate and distinct. The functions of supervisors, being
recommendatory in nature are more identified with the
interests of the employer. The performance of those functions
may, thus, run counter to the interests of the rank-and-file.
The peculiar role of supervisors is such that while they are not
managers, when they recommend action implementing
management policy or ask for the discipline or dismissal of
subordinates, they identify with the interests of the employer
and may act contrary to the interests of the rank-and-file.
A conflict of interest may arise in the areas of discipline,
collective bargaining and strikes.
Members of the supervisory union might refuse to carry out
disciplinary measures against their co-member rank-and-file
employees.
In the area of bargaining, their interests cannot be considered
identical. The needs of one are different from those of the
other. Moreover, in the event of a strike, the national federation
might influence the supervisors’ union to conduct a sympathy
strike on the sole basis of affiliation.
The contemplation of the law in Sec. 3 of the Industrial Peace
Act is to prohibit supervisors from joining a labor organization
of employees under their supervision, Sec. 3 of the Industrial
Peace Act provides:
"Sec. 3 - Employees’ Right to Self-Organization. Employees
shall have the right to self-organization and to form, join or
assist labor organizations of their own choosing for the
purpose of collective bargaining through representatives of
their own choosing and to engage in concerted activities for
the purpose of collective bargaining and other mutual aid or
protection. Individuals employed as supervisors shall not be
eligible for membership in a labor organization of employees
under their supervision but may form separate organizations of
their own.
Meanwhile, Article 245 of the Labor Code as amended by Rep.
Act No. 6715 provides:
"Art. 245. Ineligibility of managerial employees to join any labor
organization; right of supervisory employees. - Managerial
employees are not eligible to join, assist or form any labor
organization. Supervisory employees shall not be eligible for
membership in a labor organization of the rank-and-file
employees but may join, assist or form separate labor
organizations of their own.
The limitation is not confined to a case of supervisors wanting
to join a rank-and-file local union. The prohibition extends to a
supervisors’ local union applying for membership in a national
federation the members of which include local unions of rank-
and-file employees. The intent of the law is clear especially
where, as in the case at bar, the supervisors will be co-
mingling with those employees whom they directly supervise in
their own bargaining unit.
The respondent contends that the law prohibits the employer
from interfering with the employees’ right to self-organization.
There is no question about this intendment of the law. There is,
however, in the present case, no violation of such a guarantee
to the employee. Supervisors are not prohibited from forming
their own union. What the law prohibits is their membership in
a labor organization of rank-and-file employees (Art. 245,
Labor Code) or their joining a national federation of rank-and-
file employees that includes the very local union which they are
not allowed to directly join.
G.R. No. 88957, June 25, 1992
PHILIPS INDUSTRIAL DEVELOPMENT, INC., PETITIONER,
VS. NATIONAL LABOR RELATIONS COMMISSION AND
PHILIPS EMPLOYEES ORGANIZATION (FFW),
RESPONDENTS.
FACTS: Philips Industrial Development, Inc. (PIDI)
had a total of six (6) collective bargaining agreements (CBAs)
with private respondent Philips Employees Organization-FFW
(PEO-FFW), a registered labor union and the certified
bargaining agent of all the rank and file employees of PIDI.
In the first CBA, the supervisors referred to in R.A. No. 875,
confidential employees, security guards, temporary employees
and sales representatives were excluded from the bargaining
unit.
In the second to the fifth CBAs, the sales force, confidential
employees and heads of small units, together with the
managerial employees, temporary employees and security
personnel, were specifically excluded from the bargaining unit.
In the sixth CBA, it was agreed upon that the subject of
inclusion or exclusion of service engineers, sales personnel
7
and confidential employees in the coverage of the bargaining
unit would be submitted for arbitration. Pursuant thereto, PEO-
FFW filed a petition before the Bureau of Labor Relations
(BLR) praying for an order "directing the parties to select a
voluntary arbitrator in accordance with its rules and
regulations."
Labor Arbiter ordered the respondent to conduct a referendum
to determine the will of the service engineers, sales
representatives as to their inclusion or exclusion in the
bargaining unit.
However, the NLRC set aside the decision of the labor arbiter.
NLRC declared that respondent company's Service Engineers,
Sales Force, division secretaries, all Staff of General
Management, Personnel and Industrial Relations Department,
Secretaries of Audit, EDP and Financial Systems are included
within the rank and file bargaining unit.
ISSUE: whether the NLRC committed grave abuse
of discretion in holding that service engineers, sales
representatives and confidential employees (division
secretaries, staff of general management, personnel and
industrial relations department, secretaries of audit, EDP and
financial system) are qualified to be included in the existing
bargaining unit.
RULING: YES. Respondent NLRC committed
grave abuse of discretion in reversing the decision of the
Executive Labor Arbiter and in decreeing that PIDI's "Service
Engineers, Sales Force, division secretaries, all Staff of
General Management, Personnel and Industrial Relations
Department, Secretaries of Audit, EDP and Financial Systems
are included within the rank and file bargaining unit."
In the first place, all these employees, with the exception of the
service engineers and the sales force personnel, are
confidential employees. Their classification as such is not
seriously disputed by PEO-FFW; the five (5) previous CBAs
between PIDI and PEO-FFW explicitly considered them as
confidential employees. By the very nature of their functions,
they assist and act in a confidential capacity to, or have access
to confidential matters of, persons who exercise managerial
functions in the field of labor relations. As such, the rationale
behind the ineligibility of managerial employees to form, assist
or join a labor union equally applies to them.
The rationale for this inhibition has been stated to be, because
if these managerial employees would belong to or be affiliated
with a Union, the latter might not be assured of their loyalty to
the Union in view of evident conflict of interests. The Union can
also become company-dominated with the presence of
managerial employees in Union membership.
As regards the service engineers and the sales
representatives, two (2) points which respondent NLRC
likewise arbitrarily and erroneously ruled upon, need to be
discussed. Firstly, in holding that they are included in the
bargaining unit for the rank and file employees of PIDI, the
NLRC practically forced them to become members of PEO-
FFW or to be subject to its sphere of influence, it being the
certified bargaining agent for the subject bargaining unit. This
violates, obstructs, impairs and impedes the service engineers'

and the sales representatives' constitutional right to form
unions or associations and to self-organization.
The decision then of the Executive Labor Arbiter in merely
directing the holding of a referendum "to determine the will of
the service engineers, sales representatives as to their
inclusion or exclusion in (sic) the bargaining unit” is the most
appropriate procedure that conforms with their right to form,
assist or join a labor union or organization. However, since this
decision was rendered before the effectivity of R.A. No. 6715,
it must now be stressed that its future application to the private
parties in this case should, insofar as service engineers and
sales representatives holding supervisory positions or
functions are concerned, take into account the present Article
245 of the Labor Code which, as amended by R.A. No. 6715,
now reads:
"ARTICLE 245. Ineligibility of manageri-al employees to join
any labor organization; right of supervisory employees. --
-Managerial employees are not eligible to join, assist or form
any labor organization. Supervisory employees shall not be
eligible for membership in a labor organization ofthe rank-and-
file employees but may join, assist or form separate labor
organizations of their own."
NOTE:
NLRC committed a palpable error by ruling that under the law,
all workers, except managerial employees and security
personnel, are qualified to join a union, or form part of a
bargaining unit.
At the time the case was filed in 1987, security personnel were
no longer disqualified from joining or forming a union.
Section 6 of E.O No. 111, enacted on 24 December 1986,
repealed the original provisions of Article 245 of the Labor
Code, reading as follows:
"ARTICLE 245. Ineligibility of security personnel to join any
labor organization. -- -Security guards and other personnel
employed for the protection and security of the person,
properties and premises of the employer shall not be eligible
for membership in any labor organization."
and substituted it with the following provision:
"ARTICLE 245. Right of employees in the public service. --"
By virtue of such repeal and substitution, security guards
became eligible for membership in any labor organization.
San Miguel Corp [Mandaue PPP] vs. Mandaue Packing
Products Plants - San Miguel Corporation Monthlies and
Rank and File Union- FFW, 467 SCRA 107 12005) VIENNA
Chartered Local, defined under DO No. 40, RI S1(i)
Department Order No. 40 has eased the requirements by
which a local/chapter may acquire legal personality.
Interestingly, Department Order No. 40 no longer uses the
term local/chapter, utilizing instead chartered local, which is
defined as a labor organization in the private sector operating
at the enterprise level that acquired legal personality through
the issuance of a charter certificate by a duly registered
federation or national union, and reported to the Regional
Office. Clearly under the present rules, the first step to be
undertaken in the creation of a chartered local is the issuance
of a charter certificate by the duly registered federation or
national union. Said federation or national union is then
obligated to report to the Regional Office the creation of such
chartered local, attaching thereto the charter certificate it had
earlier issued.
FACTS: Respondent, identifying itself as an affiliate of
Federation of Free Workers (FFW), filed a petition for
certification election with the DOLE Regional Office seeking to
be certified and to represent the permanent rank-and-file
monthly paid employees of San Miguel Corp.(SMC) Attached
to the petition are:
Charter Certificate issued by FFW certifying them as duly
certified local or chapter of FFW;
Copy of their constitution;
List of officers and addresses;
Certifying signifying that they were organized and no amount
had been collected;and
List of rank-and-file monthly paid employees of the Mandaue
Packaging Products Plants and Glass Plants.
San Miguel filed a motion to dismiss the petition for certification
election on the sole ground that respondent is not listed or
included in the roster of legitimate labor organizations based
on the certification issued by the Officer-In-Charge, Regional
Director of the DOLE.
Then respondent submitted to the Bureau of Labor Relations
the same documents earlier attached to its petition for
certification in compliance with the requirements for the
creation of a local/chapter and for them to be listed in the
roster of legitimate labor organizations. Later, the Chief of
Labor Relations of DOLE Regional Office issued a Certificate
of Creation of Local/Chapter No. ITD. I-ARFBT-058/98,
certifying that espondent has acquired legal personality as a
labor organization/workers association, it having submitted all
the required documents.
Opting not to file a comment on the Motion to Dismiss,
respondent instead filed a Position Paper wherein it asserted
that it had complied with all the necessary requirements for the
conduct of a certification election, and that the ground relied
upon in the Motion to Dismiss was a mere technicality.
In turn, San Miguel filed a Comment, wherein it reiterated that
respondent was not a legitimate labor organization at the time
of the filing of the petition and contended that two of
respondents officers, namely Vice-President Emannuel L.
Rosell and Secretary Bathan, were actually supervisory
employees in violation of Art. 245 of the Labor Code which
provides that supervisory employees shall not be eligible for
membership in a labor org of the rank-and-file employees.
San Miguel filed a petition to cancel the union registration but
was denied and such denial was affirmed by the CA.
In the meantime, DOLE Regional Office issued an Order
dismissing the petition for certification election filed by
respondent union since during the date of filing, respondent did
not have legal personality to file said petition. However on
appeal, this decision was reversed and set aside.
8
ISSUE: Does the respondent has the legal personality to file a
petition for certification election?
RULING: YES.
Acquisition by Respondent of Legal Personality
In this case, the federation in question, the FFW, did not
submit any of these documentary requirements to the Regional
Office or Bureau. It did however issue a charter certificate to
the putative local/chapter (herein respondent). Respondent
then submitted the charter certificate along with the other
documentary requirements to the Regional Office, but not for
the specific purpose of creating the local/chapter, but for filing
the petition for certification election.
It could be properly said that at the exact moment respondent
was filing the petition for certification, it did not yet possess any
legal personality, since the requisites for acquisition of legal
personality under Section 3, Rule VI of Department Order No.
9 had not yet been complied with. It could also be discerned
that the intention of the Labor Code and its Implementing
Rules that only those labor organizations that have acquired
legal personality are capacitated to file petitions for certification
elections. Such is the general rule.
Yet there are peculiar circumstances in this case that allow the
Court to rule that respondent acquired the requisite legal
personality at the same time it filed the petition for certification
election. In doing so, the Court acknowledges that the strict
letter of the procedural rule was not complied with. However,
labor laws are generally construed liberally in favor of labor,
especially if doing so affirms the constitutionally guaranteed
right to self-organization.
True enough, there was no attempt made by the national
federation, or the local/chapter for that matter, to submit the
enumerated documentary requirements to the Regional Office
or Bureau for the specific purpose of creating the local/chapter.
However, these same documents were submitted by the
local/chapter to the Regional Office as attachments to its
petition for certification election. Under Section 3, Rule VI of
Department Order No. 9, it is the submission of these same
documents to the Regional Office or Bureau that operates to
vest legal personality on the local/chapter.
In this case, such is evidenced by the Charter Certificate dated
9 June 1998, issued by FFW, and attached to the petition for
certification election. The Charter Certificate expressly states
that respondent has been issued the said certificate to operate
as a local or chapter of the [FFW]. The Charter Certificate
expressly acknowledges FFWs intent to establish respondent
as of 9 June 1998.[44] This being the case, we consider it
permissible for respondent to have submitted the required
documents itself to the Regional Office, and proper that
respondents legal personality be deemed existent as of 15
June 1998, the date the complete documents were submitted.
Statutory Provisions for Registration Of Local/Chapter of
Federation or National Union
The Labor Code defines a labor organization as any union or
association of employees which exists in whole or in part for

the purpose of collective bargaining or of dealing with
employers concerning terms and conditions of employment,
and a legitimate labor organization as any labor organization
duly registered with the DOLE, including any branch or local
thereof. Only legitimate labor organizations may file a petition
for certification election.
Article 234 of the Labor Code enumerates the requirements for
registration of an applicant labor organization, association, or
group of unions or workers in order that such entity could
acquire legal personality and entitlement to the rights and
privileges granted by law to legitimate labor organizations.
However, the Labor Code itself does not lay down the
procedure for the registration of a local or chapter of a labor
organization. Such has been traditionally provided instead in
the Implementing Rules, particularly in Book V thereof.
However, since the instant petition for certification was filed in
1998, the Implementing Rules, as amended by Department
Order No. 9, should govern the resolution of this petition.
A less stringent procedure obtains in the registration of a local
or chapter than that of a labor organization. Undoubtedly, the
intent of the law in imposing lesser requirements in the case of
a branch or local of a registered federation or national union is
to encourage the affiliation of a local union with a federation or
national union in order to increase the local union's bargaining
powers respecting terms and conditions of labor.
Department Order No. 40, now in effect, has eased the
requirements by which a local/chapter may acquire legal
personality. Interestingly, Department Order No. 40 no longer
uses the term local/chapter, utilizing instead chartered local,
which is defined as a labor organization in the private sector
operating at the enterprise level that acquired legal personality
through the issuance of a charter certificate by a duly
registered federation or national union, and reported to the
Regional Office. Clearly under the present rules, the first step
to be undertaken in the creation of a chartered local is the
issuance of a charter certificate by the duly registered
federation or national union. Said federation or national union
is then obligated to report to the Regional Office the creation of
such chartered local, attaching thereto the charter certificate it
had earlier issued.
But as stated earlier, it is Department Order No. 9 that governs
in this case. Section 1, Rule VI thereof prescribes the
documentary requirements for the creation of a local/chapter.
Section 3, Rule VI of Department Order No. 9 provides when
the local/chapter acquires legal personality.
Section 3. Acquisition of legal personality by local chapter. A
local/chapter constituted in accordance with Section 1 of this
Rule shall acquire legal personality from the date of filing of the
complete documents enumerated therein. Upon compliance
with all the documentary requirements, the Regional Office or
Bureau shall issue in favor of the local/chapter a certificate
indicating that it is included in the roster of legitimate labor
organizations.
It is evident based on this rule that the local/chapter acquires
legal personality from the date of the filing of the complete
documentary requirements, and not from the issuance of a
certification to such effect by the Regional Office or Bureau.
Apart from promoting a policy of affiliation of local unions with
national unions,[30] there is a practical reason for sanctioning
a less onerous procedure for the registration of a local/chapter,
as compared to the national union. The local/chapter relies in
part on the legal personality of the federation or national union,
which in turn, had already undergone evaluation and approval
from the Bureau of Legal Relations or Regional Office.
to register the local/chapter is merely ministerial
Parenthetically, under the present Implementing Rules as
amended by Department Order No. 40, it appears that the
local/chapter (or now, chartered local) acquires legal
personality upon the issuance of the charter certificate by the
duly registered federation or national union.[37] This might
signify that the creation of the chartered local is within the sole
discretion of the federation or national union and thus beyond
the review or interference of the Bureau of Labor Relations or
its Regional Offices. However, Department Order No. 40 also
requires that the federation or national union report the
creation of the chartered local to the Regional Office.
ISSUE: 2.) W/N the inclusion of the two alleged supervisory
employees in appellee unions membership amounts to fraud,
misrepresentation, or false statement within the meaning of
Article 239(a) and (c) of the Labor Code.
RULING: NO. Resolution of the DOLE dated 29 December
1998 provides that all employees not falling within the
definition of managerial or supervisory employee are
considered rank-and-file employees. It is also well-settled that
the actual functions of an employee, not merely his job title,
are determinative in classifying such employee as managerial,
supervisory or rank and file.
In the case of Emmanuel Rossell, appellants evidence shows
that he undertakes the filling out of evaluation reports on the
performance of mechanics, which in turn are used as basis for
reclassification. Given a ready and standard form to
accomplish, coupled with the nature of the evaluation, it would
appear that his functions are more routinary than
recommendatory and hardly leave room for independent
judgment. In the case of Noel Bathan, appellants evidence
does not show his job title although it shows that his
recommendations on disciplinary actions appear to have
carried some weight on higher management. On this limited
point, he may qualify as a supervisory employee within the
meaning of the law. This may, however, be outweighed by his
other functions which are not specified in the evidence.
Assuming that Bathan is a supervisory employee, this does not
prove the existence of fraud, false statement or
misrepresentation. Because good faith is presumed in all
representations, an essential element of fraud, false statement
and misrepresentation in order for these to be actionable is
intent to mislead by the party making the representation. In this
case, there is no proof to show that Bathan, or appellee union
for that matter, intended to mislead anyone.
Samahang Manggagawa Sa Charter Chemical Soidanily of
Unions in the Philippines for Empowerment and Reforms
9
(SMCC SUPER) vs. Charter Chemical and Coating Corp.
GR No. 169717, 16 March 2011 VIENNA
FACTS: Samahang Manggagawa sa Charter Chemical
Solidarity filed a petition for certification election among the
regular rank-and-file employees of Charter Chemical and
Coating Corporation (respondent company) with the Mediation
Arbitration Unit of the DOLE. Respondent company filed an
Answer with Motion to Dismiss on the ground that petitioner
union is not a legitimate labor organization because of (1)
failure to comply with the documentation requirements set by
law, and (2) the inclusion of supervisory employees within
petitioner union.
Med-Arbiter dismissed the petition for certification election
because the Charter Certificate 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
The union registration was, thus, fatally defective.
As a result, not being a legitimate labor organization, petitioner
union has no right to file a petition for certification election for
the purpose of collective bargaining.
DOLE initially issued a Decision[8] in favor of respondent
company dismissing petitioner union's appeal on the ground
that the latter's petition for certification election was filed out of
time.
DOLE found that a review of the records indicates that no
certification election was previously conducted in respondent
company. On the contrary, the prior... certification election filed
by Pinag-isang Lakas Manggagawa sa Charter Chemical and
Coating Corporation was, likewise, denied by the Med-Arbiter
and, on appeal, was dismissed by the DOLE for being filed out
of time. Hence, there was no obstacle to the grant of...
petitioner union's petition for certification election.
ISSUE:
W/N the 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:
NO. The charter certificate need not be certified under oath by
the local union's secretary or treasurer and attested to by its
president.
The Court ruled that it was not necessary for the charter
certificate to be certified and attested by the local/chapter
officers.
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 while 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.
The legal personality of petitioner union cannot be collaterally
attacked by respondent... company in the certification election
proceedings.
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.
Principles:
The inclusion of supervisory employees in a labor organization
seeking to represent the bargaining unit of rank-and-file
employees does not divest it of its status as a legitimate labor
organization.
The legal personality of petitioner union cannot be collaterally
attacked by respondent... company in the certification election
proceedings.
Discrepancies in number of members stated in
application, whether a ground for cancellation on account
of fraud
Mariwasa Siam Ceramics vs. Secretary of Labor
G.R. No. 183317
21 December 2009
FACTS: Respondent Samahan Ng Mga Manggagawa Sa
Mariwasa Siam Ceramics, Inc. (SMMSC-Independent) was
issued a Certificate of Registration as a legitimate labor
organization by the Department of Labor and Employment
(DOLE), Region IV-A. Petitioner Mariwasa Siam Ceramics, Inc.
filed a Petition for Cancellation of Union Registration against
respondent, claiming that the latter violated Article 234 of the
Labor Code for not complying with the 20% requirement, and
that it committed massive fraud and misrepresentation in
violation of Article 239 of the same code. Mariwasa insists that
SMMSC failed to comply with the 20% union membership
requirement for its registration as a legitimate labor
organization because of the disaffiliation from the total number
of union members of 102 employees who executed affidavits
recanting their union membership.
The Regional Director of DOLE IV-A issued an
Order granting the petition, revoking the registration of
SMMSC, and delisting it from the roster of active labor unions.
Aggrieved, respondent appealed to the Bureau of Labor
Relations (BLR).
The BLR granted respondent’s appeal, reversing and setting
aside the decision of DOLE RD, retains in the roster of
legitimate labor organizations.
The Court of Appeals (CA) through a Petition for Certiorari; but
the CA denied the petition for lack of merit.
ISSUE: Whether or not the discrepancies in number of
members stated in application is a ground for cancellation on
account of fraud.
RULING: NO. Article 234 of the Labor Code merely requires a
20% minimum membership during the application for union
registration. It does not mandate that a union must maintain
the 20% minimum membership requirement all throughout its
existence.
Basing on the affidavits executed by the affiants, it was
obviously were written and prepared in advance, and the pro
forma affidavits were ready to be filled out with the employees
names and signatures.
In appreciating affidavits of recantation such as these, our
ruling in La Suerte Cigar and Cigarette Factory v. Director of
the Bureau of Labor Relations[11] is enlightening, viz.
On the second issue whether or not the withdrawal of 31
union members from NATU affected the petition for
certification election insofar as the 30% requirement is
concerned, We reserve the Order of the respondent Director of
the Bureau of Labor Relations, it appearing undisputably that
the 31 union members had withdrawn their support to the
petition before the filing of said petition. It would be otherwise if
the withdrawal was made after the filing of the petition for it
would then be presumed that the withdrawal was not free and
voluntary. The presumption would arise that the withdrawal
was procured through duress, coercion or for valuable
consideration. In other words, the distinction must be that
withdrawals made before the filing of the petition are presumed
voluntary unless there is convincing proof to the contrary,
whereas withdrawals made after the filing of the petition are
deemed involuntary.
The reason for such distinction is that if the withdrawal or
retraction is made before the filing of the petition, the names of
employees supporting the petition are supposed to be held
secret to the opposite party. Logically, any such withdrawal or
retraction shows voluntariness in the absence of proof to the
contrary. Moreover, it becomes apparent that such employees
had not given consent to the filing of the petition, hence the
subscription requirement has not been met.
10
When the withdrawal or retraction is made after the petition is
filed, the employees who are supporting the petition become
known to the opposite party since their names are attached to
the petition at the time of filing. Therefore, it would not be
unexpected that the opposite party would use foul means for
the subject employees to withdraw their support.
In the instant case, the affidavits of recantation were executed
after the identities of the union members became public, i.e.,
after the union filed a petition for certification election on May
23, 2005, since the names of the members were attached to
the petition. The purported withdrawal of support for the
registration of the union was made after the documents were
submitted to the DOLE, Region IV-A. The logical conclusion,
therefore, following jurisprudence, is that the employees were
not totally free from the employers pressure, and so the
voluntariness of the employees execution of the affidavits
becomes suspect.
-- RETRACTION --
A retraction does not necessarily negate an earlier declaration.
For this reason, retractions are looked upon with disfavor and
do not automatically exclude the original statement or
declaration based solely on the recantation. It is imperative
that a determination be first made as to which between the
original and the new statements should be given weight or
accorded belief, applying the general rules on evidence. In this
case, inasmuch as they remain bare allegations, the purported
recantations should not be upheld.
Nevertheless, even assuming the veracity of the affidavits of
recantation, the legitimacy of respondent as a labor
organization must be affirmed. While it is true that the
withdrawal of support may be considered as a resignation from
the union, the fact remains that at the time of the unions
application for registration, the affiants were members of
respondent and they comprised more than the required 20%
membership for purposes of registration as a labor union.
Article 234 of the Labor Code merely requires a 20% minimum
membership during the application for union registration. It
does not mandate that a union must maintain the 20%
minimum membership requirement all throughout its existence.
Respondent asserts that it had a total of 173 union members at
the time it applied for registration. Two names were repeated
in respondents list and had to be deducted, but the total would
still be 171 union members. Further, out of the four names
alleged to be no longer connected with petitioner, only two
names should be deleted from the list since Diana Motilla and
T.W. Amutan resigned from petitioner only on May 10, 2005
and May 17, 2005, respectively, or after respondents
registration had already been granted. Thus, the total union
membership at the time of registration was 169. Since the total
number of rank-and-file employees at that time was 528, 169
employees would be equivalent to 32% of the total rank-and-
file workers complement, still very much above the minimum
required by law.
The bare fact that two signatures appeared twice on the list of
those who participated in the organizational meeting would not,
to our mind, provide a valid reason to cancel respondents
certificate of registration. The cancellation of a union’s

registration doubtless has an impairing dimension on the right
of labor to self-organization. For fraud and misrepresentation
to be grounds for cancellation of union registration under the
Labor Code, the nature of the fraud and misrepresentation
must be grave and compelling enough to vitiate the consent of
a majority of union members.
In this case, the SC agrees with the BLR and the CA that
respondent could not have possibly committed
misrepresentation, fraud, or false statements. The alleged
failure of respondent to indicate with mathematical precision
the total number of employees in the bargaining unit is of no
moment, especially as it was able to comply with the 20%
minimum membership requirement. Even if the total number of
rank-and-file employees of petitioner is 528, while respondent
declared that it should only be 455, it still cannot be denied that
the latter would have more than complied with the registration
requirement.
-----------------------------------
ART. 234. REQUIREMENTS OF REGISTRATION
Any applicant labor organization, association or group of
unions or workers shall acquire legal personality and shall be
entitled to the rights and privileges granted by law to legitimate
labor organizations upon issuance of the certificate of
registration based on the following requirements:
xxxx
(c) 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. (Emphasis supplied.)
ART. 239. GROUNDS FOR CANCELLATION OF UNION
REGISTRATION
The following shall constitute grounds for cancellation of union
registration:
(a) Misrepresentation, false statement or fraud in connection
with the adoption or ratification of the constitution and by-laws
or amendments thereto, the minutes of ratification, and the list
of members who took part in the ratification;
xxxx
(c) Misrepresentation, false statements or fraud in connection
with the election of officers, minutes of the election of officers,
the list of voters, or failure to submit these documents together
with the list of the newly-elected/appointed officers and their
postal addresses within thirty (30) days from election.
(Emphasis supplied.)
Eagle Ridge Golf and Country Club vs. Court of Appeals
and Eagle Ridge Employees Union [EREU], G.R. No.
173989, 18 March 2010
FACTS: Petitioner Eagle Ridge is a corporation engaged in the
business of maintaining golf courses. It had, at the end of CY
2005, around 112 rank-and-file employees. The instant case is
an off-shot of the desire of a number of these employees to
organize themselves as a legitimate labor union and their
employers opposition to their aspiration.
On December 19, 2005, EREU formally applied for
registration[9] and filed BLR Reg. Form No. I-LO, s. 1998
before the Department of Labor and Employment (DOLE)
Regional Office IV (RO IV). In time, DOLE RO IV granted the
application and issued EREU Registration Certificate (Reg.
Cert.) No. RO400-200512-UR-003.
The EREU then filed a petition for certification election in Eagle
Ridge Golf & Country Club, docketed as Case No. RO400-
0601-RU-002. Eagle Ridge opposed this petition,[11] followed
by its filing of a petition for the cancellation of Reg. Cert. No.
RO400-200512-UR-003. Docketed as RO400-0602-AU-003,
Eagle Ridges petition ascribed misrepresentation, false
statement, or fraud to EREU in connection with the adoption of
its constitution and by-laws, the numerical composition of the
Union, and the election of its officers.
Going into specifics, Eagle Ridge alleged that the EREU
declared in its application for registration having 30 members,
when the minutes of its December 6, 2005 organizational
meeting showed it only had 26 members. The
misrepresentation was exacerbated by the discrepancy
between the certification issued by the Union secretary and
president that 25 members actually ratified the constitution and
by-laws on December 6, 2005 and the fact that 26 members
affixed their signatures on the documents, making one
signature a forgery.
Finally, Eagle Ridge contended that five employees who
attended the organizational meeting had manifested the desire
to withdraw from the union. The five executed individual
affidavits or Sinumpaang Salaysay on February 15, 2006,
attesting that they arrived late at said meeting which they
claimed to be drinking spree; that they did not know that the
documents they signed on that occasion pertained to the
organization of a union; and that they now wanted to be
excluded from the Union. The withdrawal of the five, Eagle
Ridge maintained, effectively reduced the union membership
to 20 or 21, either of which is below the mandatory minimum
20% membership requirement under Art. 234(c) of the Labor
Code. Reckoned from 112 rank-and-file employees of Eagle
Ridge, the required number would be 22 or 23 employees.
DOLE REGIONAL DIRECTOR granted the petition to cancel
CERTIFICATE and EREU being delisted from the roster of
legitimate labor organizations.Union appealed to the Bureau of
Labor Relations where it granted its petition.The CA later
denied, in its second assailed resolution, Eagle Ridges motion
for reconsideration, albeit the latter had submitted a certificate
to show that its legal counsel has been authorized, per a board
resolution, to represent the corporation.
ISSUE:Whether or not the discrepancies in number of
members stated in application is a ground for cancellation on
account of fraud.
RULING No..A scrutiny of the records fails to show any
misrepresentation, false statement, or fraud The Union has
sufficiently explained the discrepancy between the number of
those who attended the organizational meeting showing 26
employees and the list of union members showing 30. The
difference is due to the additional four members admitted two
days after the organizational meeting as attested to by their
duly accomplished Union Membership forms. Consequently,
the total number of union members, as of December 8, 2005,
11
was 30, which was truthfully indicated in its application for
registration on December 19, 2005.
As aptly found by the BLR Director, the Union already had 30
members when it applied for registration, for the admission of
new members is neither prohibited by law nor was it concealed
in its application for registration. Eagle Ridges contention is
flawed when it equated the requirements under Art. 234(b) and
(c) of the Labor Code. Par. (b) clearly required the submission
of the minutes of the organizational meetings and the list of
workers who participated in the meetings, while par. (c) merely
required the list of names of all the union members comprising
at least 20% of the bargaining unit. The fact that EREU had 30
members when it applied for registration on December 19,
2005 while only 26 actually participated in the organizational
meeting is borne by the records.
WHEREFORE petition is denied.
Failure to submit annual financial report; no longer a ground for
union cancellation
The Heritage Hotel Manila vs. National Union of Workers in the
Hotel, Restaurant and Allied industries Heritage Hotel Manila
Supervisors Chapter (NUWHRAİN-HHMSC)
GR No. 178296
12 January 2011
FACTS:
ISSUE:
RULING:
Rural Bank of Alaminos Employees Union vs. NLRC
Facts: The Petition stems from three cases originally instituted
before Sub-Regional Arbitration Branch No. 1 of the National
Labor Relations Commission in Dagupan City.
The first case, NLRC Case No. 01-03-7-0049-89, was
commenced by the herein petitioner, Ismael Tamayo, Sr.,
against Rural Bank of Alaminos, Inc. (RBAI) for illegal
dismissal and damages.
The second case, docketed as NLRC Case No.01-04-7-0059-
89, was filed by the herein private respondent, Rural Bank of
Alaminos, Inc., against the Rural Bank of Alaminos Employees
Union for unfair labor practice, declaration of illegality of strike
and damages.
While the third case, docketed as NLRC Case No. 01-06-0097-
89, was filed by the Employees Union against the Bank,
charging the latter with unfair labor practice and damages.
Issue: WON filing a petition for cancellation of the Union’s
registration is ULP?
Held: A “lock-out” means the temporary refusal of an employer
to furnish work as a result of an industrial or labor dispute. As
correctly found by the NLRC, in the case under consideration
evidence of illegal lock-out is wanting such that there can be
no conclusive determination by the NLRC as to the charge.
Petitioners failed to present sufficient proof to support the

allegation of illegal lock-out. No evidence was adduced by the
Union to show that the Bank really refused them employment
during the pendency of the strike. As to the allegation that the
Bank was interfering with and restraining the employees in the
exercise of their right to self-organization, suffice it to state that
filing a petition for cancellation of the Union’s registration is
not per se an act of unfair labor practice. It must be shown by
substantial evidence that the filing of the petition for
cancellation of union registration by the employer was aimed to
oppress the Union.
SAN MIGUEL CORP EMPLOYEES UNION VS SAN MIGUEL
PACKING EMPLOYEES UNION . G.R. No. 171153
QUICKIE SUMMARY: SM Packing Employees Union is a
LOCAL or CHAPTER of PDMP which seeks to be an
INDEPENDENT LABOR ORGANIZATION. For its registration
AS A CHAPTER, the applicable law to them is the D.O. No. 9
which no longer requires the submission of the names of at
least 20% of all its employees in the bargaining unit. San Mig
Corp Union claims that SM Packing failed to meet the
requirements set forth by Art 234 of the Labor Code which
mandates the submission of the 20% names and that the
Implementing Rules of D.O. No. 9 is violative of Art 234 of the
Labor Code because it provides a less stringent rule (which
does not require the submission of the 20% names). SC ruled
that the requirements for the registration of an INDEPENDENT
LABOR UNION and the requirements for the creation of a
LOCAL or CHAPTER are different. Since SM Packing seeks to
be a legitimate labor organization, D.O No. 9 is not the one
applicable, but Art 234 of the Labor Code.
FACTS: Petitioner is the incumbent bargaining agent for the
bargaining unit comprised of the regular monthly-paid rank and
file employees of the three divisions of San Miguel Corporation
namely San Miguel Corporate Staff Unit (SMCSU), San Miguel
Brewing Philippines (SMBP), and the San Miguel Packaging
Products (SMPP)
Respondent is registered as a chapter of Pambansang Diwa
ng Manggagawang Pilipino. Thereafter, respondent filed three
separate petitions for certification election to represent SMPP,
SMCSU, and SMBP. All three petitions were dismissed, on the
ground that the separate petitions fragmented a single
bargaining unit.
Petitioner filed with the DOLE-NCR a petition seeking the
cancellation of respondent’s registration and its dropping from
the rolls of legitimate labor organizations. Petitioner accused
respondent of committing fraud and falsification, and non-
compliance with registration requirements in obtaining its
certificate of registration. It raised allegations that respondent
violated Articles 239(a), (b) and (c) and 234(c) of the Labor
Code.
DOLE-NCR Regional Director Maximo B. Lim found that
respondent did not comply with the 20% membership
requirement and, thus, ordered the cancellation of its certificate
of registration and removal from the rolls of legitimate labor
organizations
Bureau of Labor Relations: Reversed DOLE NCR and
declared that SM Packing Employees shall hereby remain in
the roster of legitimate labor organizations. CA affirmed BLR
Petitioner’s contention: Petitioner posits that respondent is
required to submit a list of members comprising at least 20% of
the employees in the bargaining unit before it may acquire
legitimacy, citing Article 234(c) of the Labor Code. Petitioner
also insists that the 20% requirement for registration of
respondent must be based not on the number of employees of
a single division, but in all three divisions of the company in all
the offices and plants of SMC since they are all part of one
bargaining unit. Petitioner thus maintains that respondent, in
any case, failed to meet this 20% membership requirement
since it based its membership on the number of employees of
a single division only, namely, the SMPP.
ISSUE: W/N SM Packing Employees met the requirements
and thus, must remain a legitimate labor organization
RULING: NO, SM Packing Employees failed to meet the
requirement. Hence, they cannot be declared as a legitimate
labor organization
RATIO: A perusal of the records reveals that respondent is
registered with the BLR as a local or chapter of PDMP. The
applicable Implementing Rules (Department Order No. 9)
enunciates a two-fold procedure for the creation of a chapter or
a local. The first involves the affiliation of an independent union
with a federation or national union or industry union. The
second, finding application in the instant petition, involves the
direct creation of a local or a chapter through the process of
chartering. The Implementing Rules stipulate that a local or
chapter may be directly created by a federation or national
union.
Petitioner insists that Section 3 of the Implementing Rules, as
amended by Department Order No. 9, violated Article 234 of
the Labor Code when it provided for less stringent
requirements for the creation of a chapter or local. Article 234
of the Labor Code provides that an independent labor
organization acquires legitimacy only upon its registration with
the BLR: xxx 3) 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; xxx
It is emphasized that the foregoing pertains to the registration
of an independent labor organization, association or group of
unions or workers.
However, the creation of a branch, local or chapter is treated
differently. This Court, in the landmark case of Progressive
Development Corporation.
Registration of a Union not subject to a collateral attack.
petitioner postulates that respondent was not validly and
legitimately created, for PDMP cannot create a local or chapter
as it is not a legitimate labor organization, it being a trade
union center.
Petitioners argument creates a predicament as it hinges on the
legitimacy of PDMP as a labor organization. Firstly, this line of
reasoning attempts to predicate that a trade union center is not
12
a legitimate labor organization. In the process, the legitimacy
of PDMP is being impugned, albeit indirectly. Secondly, the
same contention premises that a trade union center cannot
directly create a local or chapter through the process of
chartering.
Anent the foregoing, as has been held in a long line of cases,
the legal personality of a legitimate labor organization, such as
PDMP, cannot be subject to a collateral attack. The law is very
clear on this matter. Article 212 (h) of the Labor Code, as
amended, defines a legitimate labor organization[37] as any
labor organization duly registered with the DOLE, and includes
any branch or local thereof.[38] On the other hand, a trade
union center is any group of registered national unions or
federations organized for the mutual aid and protection of its
members; for assisting such members in collective bargaining;
or for participating in the formulation of social and employment
policies, standards, and programs, and is duly registered with
the DOLE in accordance with Rule III, Section 2 of the
Implementing Rules.[39]
The Implementing Rules stipulate that a labor organization
shall be deemed registered and vested with legal personality
on the date of issuance of its certificate of registration. Once a
certificate of registration is issued to a union, its legal
personality cannot be subject to collateral attack.[40] It may be
questioned only in an independent petition for cancellation in
accordance with Section 5 of Rule V, Book V of the
Implementing Rules. The aforementioned provision is
enunciated in the following:
Sec. 5. Effect of registration. The labor organization or workers
association shall be deemed registered and vested with legal
personality on the date of issuance of its certificate of
registration. Such legal personality cannot thereafter be
subject to collateral attack, but may be questioned only in an
independent petition for cancellation in accordance with these
Rules.
PDMP was registered as a trade union center and issued
Registration Certificate No. FED-11558-LC by the BLR on 14
February 1991. Until the certificate of registration of PDMP is
cancelled, its legal personality as a legitimate labor
organization subsists. Once a union acquires legitimate status
as a labor organization, it continues to be recognized as such
until its certificate of registration is cancelled or revoked in an
independent action for cancellation.[41] It bears to emphasize
that what is being directly challenged is the personality of
respondent as a legitimate labor organization and not that of
PDMP. This being a collateral attack, this Court is without
jurisdiction to entertain questions indirectly impugning the
legitimacy of PDMP.
Corollarily, PDMP is granted all the rights and privileges
appurtenant to a legitimate labor organization,[42] and
continues to be recognized as such until its certificate of
registration is successfully impugned and thereafter cancelled
or revoked in an independent action for cancellation.
In sum, although PDMP as a trade union center is a legitimate
labor organization, it has no power to directly create a local or
chapter. Thus, SMPPEU-PDMP cannot be created under the
more lenient requirements for chartering, but must have
complied with the more stringent rules for creation and

registration of an independent union, including the 20%
membership requirement.
3.5. Reportorial requirements
TAKATA (PHILIPPINES) CORPORATION, Petitioner,
vs. BUREAU OF LABOR RELATIONS and SAMAHANG
LAKAS MANGGAGAWA NG TAKATA
(SALAMAT),Respondents.
G.R. No. 196276
June 4, 2014
FACTS: Petitioner Takata Corporation filed with the
Department of Labor and Employment (DOLE) Regional Office
a Petition for Cancellation of the Certificate of Union
Registration of Respondent Samahang Lakas Manggagawa ng
Takata (SALAMAT) on the ground that the latter is guilty of
misrepresentation, false statement and fraud with respect to
the number of those who participated in the organizational
meeting, the adoption and ratification of its Constitution and
By-Laws, and in the election of its officers.
TAKATA contended that in the organizational meeting of
SALAMAT, the latter failed to comply with the 20% minimum
membership requirement having only 68 attendees of the 396
regular rank- and-file employees which SALAMAT sought to
represent; that the document "Pangalan ng mga Kasapi ng
Unyon" bore no signatures of the alleged 119 union members;
employees were not given sufficient information on the
documents they signed; the document "Sama-Samang
Pahayag ng Pagsapi" was not submitted at the time of the
filing of respondent's application for union registration; that the
119 union members were actually only 117; and, that the total
number of petitioner's employees as of May 1, 2009 was 470,
and not 396 as respondent claimed.
SALAMAT denied the charge and claimed that the 119 union
members were more than the 20% requirement for union
registration; the document "Sama-Samang Pahayag ng
Pagsapi sa Unyon" which it presented in its petition for
certification election supported their claim of 119 members;
that Takata was estopped from assailing its legal personality
as it agreed to a certification election and actively participated
in the pre-election conference of the certification election
proceedings; that the union members were informed of the
contents of the documents they signed and that the 68
attendees to the organizational meeting constituted more than
50% of the total union membership, hence, a quorum existed
for the conduct of the said meeting.
DOLE Regional Director issued a Decision granting the petition
for cancellation of respondent's certificate of registration and
SALAMAT is delisted from the roll of legitimate labor
organization. The Regional Director found that Salamat was
short of the union registration requirement; that the attendance
sheet which contained the signatures and names of the union
members totalling to 68 contradicted the list of names stated in
the document denominated as "Pangalan ng mga Kasaping
Unyon." The document "Sama-Samang Pahayag ng Pagsapi"
was not attached to the application for registration as it was
only submitted in the petition for certification election filed by
respondent at a later date. The Regional Director also found
that the proceedings in the cancellation of registration and
certification elections are two different and entirely separate
and independent proceedings which were not dependent on
each other.
On appeal, the Bureau of Labor Relations rendered its
Decision reversing the Order of the Regional Director. The
BLR found that the list of employees who participated in the
organizational meeting was a separate and distinct
requirement from the list of the names of members comprising
at least 20% of the employees in the bargaining unit; and that
there was no requirement for signatures opposite the names of
the union members; and there was no evidence showing that
the employees assailed their inclusion in the list of union
members.
On appeal, the CA denied the petition and affirmed the
decision of the BLR.
ISSUE: Whether or not SALAMAT’s registration is misleading
that it obtained the minimum required number of employees for
purposes of organization and registration.
RULING: Art. 234 of the Labor Code provides:
ART. 234. Requirements of Registration. - A federation,
national union or industry or trade union center or an
independent union shall acquire legal personality and shall be
entitled to the rights and privileges granted by law to legitimate
labor organizations upon issuance of the certificate of
registration based on the following requirements:
(a) Fifty pesos (₱50.00)registration fee;
(b) The names of its officers, their addresses, the principal
address of the labor organization, the minutes of the
organizational meetings and the list of the workers who
participated in such meetings;
(c) In case the applicant is an independent union, the names of
all its members comprising at least twenty percent (20%) of all
the employees in the bargaining unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more
years, copies of its annual financial reports; and
(e) Four copies of the constitution and by-laws of the applicant
union, minutes of its adoption or ratification, and the list of the
members who participated in it."
It does not appear in Article 234 (b) of the Labor Code that the
attendees in the organizational meeting must comprise 20% of
the employees in the bargaining unit. In fact, even the
Implementing Rules and Regulations of the Labor Code does
not so provide. It is only under Article 234 (c) that requires the
names of all its members comprising at least twenty percent
(20%) of all the employees in the bargaining unit where it
seeks to operate. Clearly, the 20% minimum requirement
pertains to the employees’ membership in the union and not to
the list of workers who participated in the organizational
meeting.
Indeed, Article 234 (b) and (c) provide for separate
requirements, which must be submitted for the union's
registration, and which respondent did submit. Here, the total
number of employees in the bargaining unit was 396, and 20%
13
of which was about 79. Respondent submitted a document
entitled "Pangalan ng Mga Kasapi ng Unyon" showing the
names of 119 employees as union members, thus respondent
sufficiently complied even beyond the 20% minimum
membership requirement. Respondent also submitted the
attendance sheet of the organizational meeting which
contained the names and signatures of the 68 union members
who attended the meeting. Considering that there are 119
union members which are more than 20% of all the employees
of the bargaining unit, and since the law does not provide for
the required number of members to attend the organizational
meeting, the 68 attendees which comprised at least the
majority of the 119 union members would already constitute a
quorum for the meeting to proceed and to validly ratify the
Constitution and By-laws of the union. There is, therefore, no
basis for petitioner to contend that grounds exist for the
cancellation of respondent's union registration. For fraud and
misrepresentation to be grounds for cancellation of union
registration under Article 239 of the Labor Code, the nature of
the fraud and misrepresentation must be grave and compelling
enough to vitiate the consent of a majority of union members.
In Mariwasa Siam Ceramics v. Secretary of the Department of
Labor and Employment,24 we said:
For the purpose of de-certifying a union such as respondent, it
must be shown that there was misrepresentation, false
statement or fraud in connection with the adoption or
ratification of the constitution and by-laws or amendments
thereto, the minutes of ratification; or, in connection with the
election of officers, the minutes of the election of officers, the
list of voters, or failure to submit these documents together
with the list of the newly elected-appointed officers and their
postal addresses to the BLR.
In this case, the SC agree with the BLR and the CA that
respondent could not have possibly committed
misrepresentation, fraud, or false statements. It cannot be
denied that SALAMAT would have more than complied with
the registration requirement.
Inclusion of supervisory employees in the R&F union is
NOT a ground to impugn the legitimacy of the union.
G.R. NO. 167141, MAR. 13, 2009
SAMAHAN NG MGA MANGGAGAWA SA SAMMA-LAKAS
SA INDUSTRIYA NG KAPATIRANG HALIGI NG ALYANSA
(SAMMA-LIKHA) VS. SAMMA CORP.
FACTS: Petitioner Samahan ng mga Manggagawa sa
Samma– Lakas sa Industriya ng Kapatirang Haligi ng Alyansa
(SAMMA-LIKHA) filed a petition for certification election on
July 24, 2001 in the Department of Labor and Employment
(DOLE), Regional Office IV. It claimed that: (1) it was a local
chapter of the LIKHA Federation, a legitimate labor
organization registered with the DOLE; (2) it sought to
represent all the rank-and-file employees of respondent
Samma Corporation; (3) there was no other legitimate labor
organization representing these rank-and-file employees; (4)
respondent was not a party to any collective bargaining
agreement and (5) no certification or consent election had
been conducted within the employer unit for the last 12 months
prior to the filing of the petition.

Respondent moved for the dismissal of the petition arguing
that (1) LIKHA Federation failed to establish its legal
personality; (2) petitioner failed to prove its existence as a local
chapter; (3) it failed to attach the certificate of non-forum
shopping and (4) it had a prohibited mixture of supervisory and
rank-and-file employees.
In an order dated November 12, 2002, med-arbiter Arturo V.
Cosuco ordered the dismissal of the petition on the following
grounds: (1) lack of legal personality for failure to attach the
certificate of registration purporting to show its legal
personality; (2) prohibited mixture of rank-and-file and
supervisory employees and (3) failure to submit a certificate of
non-forum shopping.
Petitioner then file a motion for reconsideration. The Regional
Director of DOLE forwarded the case to the Secretary of
Labor. During the pendency of the case, Samma Corp. filed
petition for cancellation of petitioners union registration in the
DOLE Regional Office. The Secretary of Labor then reversed
the order of med-arbiter ruling that the legal personality of a
union cannot be collaterally attacked but may only be
questioned in an independent petition for cancellation of
registration.Thus, he directed the holding of a certification
election among the rank-and-file employees of respondent,
subject to the usual pre-election conference and inclusion-
exclusion proceedings.
Meanwhile, Director of DOLE revoked the charter certificate of
SAMMA-LIKHA as local chapter of LIKHA Federation on the
ground of prohibited mixture of supervisory and rank-and-file
employees and non-compliance with the attestation clause
under paragraph 2 of Article 235 of the Labor Code.
CA reversed the decision and it found that petitioner had no
legal standing to file the petition for certification election
because its members were a mixture of supervisory and rank-
and-file employees.
ISSUE: Whether or not the alleged mixture of rank-and-file and
supervisory employees 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.
HELD: No, the mixture of rank-and-file and supervisory
employees in petitioner union does not nullify its legal
personality as a legitimate labor organization.
LIKHA was granted legal personality as a federation with
certificates of registration issued in their favor, they are clothed
with legal personality as legitimate labor organizations.
Such legal personality cannot thereafter be subject to collateral
attack, but may be questioned only in an independent petition
for cancellation of certificate of registration. Unless petitioners
union registration is cancelled in independent proceedings, it
shall continue to have all the rights of a legitimate labor
organization, including the right to petition for certification
election.
As mentioned, respondent filed a petition for cancellation of the
registration of petitioner. In a resolution, petitioners charter
certificate was revoked by the DOLE but petitioner later on
moved for the reconsideration of this resolution. Neither of the
parties alleged that this resolution revoking petitioners charter
certificate had attained finality. However, in this petition,
petitioner prayed that its charter certificate be reinstated in the
roster of active legitimate labor organizations. The proceedings
on a petition for cancellation of registration are independent of
those of a petition for certification election. This case originated
from the latter. If it is shown that petitioners legal personality
had already been revoked or cancelled with finality in
accordance with the rules, then it is no longer a legitimate
labor organization with the right to petition for a certification
election.
Lastly, respondent, as employer, had been the one opposing
the holding of a certification election among its rank-and-file
employees. This should not be the case. We have already
declared that, in certification elections, the employer is a
bystander; it has no right or material interest to assail the
certification election
Compare with requirements under new law, Republic Act
No. 9481, Secs. 4-5, amending Articles 238 and 239 of
Labor Code; also Article 238-A, LC
Pendency of a petition for cancellation of union
registration will not preclude Collective bargaining
G.R. NO. 169754 FEB. 23, 2011
LEGEND INTERNATIONAL RESORTS LTD., VS. KILUSANG
MANGGAGAWA NG LEGENDA
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 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.
Ruling of the Med-Arbiter: 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
14
among those who attended its organizational meeting were
either at work or elsewhere.
Ruling of the Office of the Secretary of DOLE: 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. Such motion
was denied and ruled that 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.
Ruling of the Court of Appeals: held that the issue on the
legitimacy of KML as a labor organization has already been
settled with finality. The decision upholding the legitimacy had
long become final and executory for failure of Legend to
appeal. KML being a legitimate labor organization, it could
properly file a petition for certification election. Legend filed a
motion for reconsideration but still it was denied.
Hence this petition. Petitioner argues that the cancellation of
KMLs certificate of registration should retroact to the time of its
issuance. It thus claims that the petition for certification
election and all of KML’s activities should be nullified because
it has no legal personality to file the same, much less demand
collective bargaining with LEGEND.
ISSUE: Whether the cancellation of KML’s certificate of
registration should retroact to the time of its issuance
HELD: The cancellation of KML’s certificate of registration
should not retroact to the time of its issuance.
In Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor,
we already ruled that: Anent the issue of whether or not the
Petition to cancel/revoke registration is a prejudicial question to
the petition for certification election, the following ruling in the
case of Association of the Court of Appeals Employees
(ACAE) v. Hon. Pura Ferrer-Calleja, is in point, to wit:
At any rate, the Court applies the established rule correctly
followed by the public respondent that an order to hold a
certification election is proper despite the pendency of the
petition for cancellation of the registration certificate of the
respondent union. The rationale for this is that at the time the
respondent union filed its petition, it still had the legal
personality to perform such act absent an order directing the
cancellation.
In Capitol Medical Center, Inc. v. Hon. Trajano, we also held
that the pendency of a petition for cancellation of union
registration does not preclude collective bargaining. Citing the
Secretary of Labor, we held viz:
That there is a pending cancellation proceedings against the
respondent Union is not a bar to set in motion the mechanics
of collective bargaining. If a certification election may still be

ordered despite the pendency of a petition to cancel the unions
registration certificate x x x more so should the collective
bargaining process continue despite its pendency.
G.R. No. 87332 August 13, 1990
EDUARDO CRUZ, MOISES MACASO, ROY GALLINERA,
PERCIVAL CRUZ, BUBBY VALERIO, ROY PAMITTAN,
MANOLO ORBETA & MARIANO VILLA, petitioners,
vs. THE HON. PURA FERRER-CALLEJA, in her capacity as
Director of the Bureau of Labor Relations, & ROLANDO G.
OCAMPO, ET AL., * respondents.
GRIÑO-AQUINO, J.:
ABEU – Allied Bank Employees Union
NUBE – National Union of Bank Employees
FACTS: In 1984, the Allied Bank Employees Union (ABEU)
elected its officers, whose term of office would expire on
February 10, 1987. Before the expiration of the old CBA
between the ABEU and Allied Bank on June 30, 1984, the
ABEU negotiated for a new CBA. However, because the Union
and the Bank could not agree on major economic proposals, a
bargaining deadlock ensued.
On January 31, 1985, Minister Ople issued an Order resolving
the deadlock issues in the collective bargaining and in effect
drew up a new CBA for the parties. The 3-year term of the new
CBA would expire on January 31, 1988. On March 19, 1985, a
referendum was conducted by the ABEU to ratify the 1985-
1988. A majority voted for ratification.
The Med-Arbiter issued an order directing the Union to call a
general membership meeting where the manner of conducting
the election could be discussed before fixing the date of the
election. Petitioners filed a MR of the order of the Med-Arbiter.
The Interim Board appointed a Comelec which issued a
resolution setting the election of officers on February 10, 1988.
A TRO was issued enjoining petitioners, including the Union's
Comelec, from proceeding with the election on February 10,
1988. However, despite the TRO, the Union held the election
on February 10, 1988 as scheduled. Petitioners were declared
the winners in the election.
On March 2, 1989, the public respondent, Director Pura Calleja
of the BLR, issued a resolution declaring the election
conducted in ABEU on February 10, 1988 null and void.
Petitioners said that the respondent, Pura Ferrer-Calleja,
Director of the Bureau of Labor Relations, gravely abused her
discretion in nullifying the resolution of the Board of
Administrators of the Allied Bank Employees Union which
extended for one year the term of office of the union officers
which should have expired on February 10, 1987 and
postponed to February 10, 1988 the holding of the election.
ISSUE: Whether or not the public respondent erred in
declaring null and void the election held on February 10, 1988
Labor Relations; CBA; Public respondent did not abuse her
discretion in annulling the election of officers; Reasons.-
RULING: NO. There is no merit in the petitioners' contention
that the public respondent gravely abused her discretion in
annulling the February 10, 1988 election of officers. The public
respondent correctly noted that in ordering the postponement
of the election for one year (in effect extending their term of
office for one year), the ABEU Interim Board "overstepped its
bounds" for it was constituted and authorized only "to sign for
and in behalf of the union the CBA with the Bank and
administer the CBA and the operation of the union."
ISSUE #2: Whether or not the extension of the CBA was valid
– YES Labor Relations; CBA; Moot and Academic; Validity of
the one-year extension of CBA has become moot and
academic; Holding of the referendum and the extension were
valid and binding on the parties.-
The second issue regarding the validity of the one-year
extension of the CBA has become moot and academic. The
public respondent's view that the one-year extension was also
null and void is not quite correct for the extension was
approved by the Union in a referendum which was properly
supervised by the Department of Labor. It was accepted by the
Bank which gave a "signing bonus" to the employees who
voted for it. Since the holding of the referendum was within the
authority of the Interim Board to "administer the CBA and
operate the union," and the extension was acceptable to both
of the parties to the agreement, and did not violate any law, it
is valid and binding on them.
G.R. No. 85333 February 26, 1990
PALACOL vs.CALLEJA
FACTS: On October 12, 1987, the respondent Manila CCBPI
Sales Force Union (hereinafter referred to as the Union), as
the collectivebargaining agent of all regular salesmen, regular
helpers, and relief helpers of the Manila Plant and Metro
Manila Sales Office of the respondent Coca-Cola Bottlers
(Philippines), Inc. (hereinafter referred to as the Company)
concluded a new collective bargaining agreement with the
latter. Among the compensation benefits granted to the
employees was a general salary increase to be given in lump-
sum including re-computation of actual commissions earned
based on the new rates of increase.
On the same day, the president of the Union submitted to the
Company the ratification by the union members of the new
CBA and authorization for the Company to deduct union dues
equivalent to P10.00 every payday or P20.00 every month
and, in addition, 10% by way of special assessment, from the
CBA lump-sum pay granted to the union members. As
embodied in the Board Resolution of the Union dated
September 29, 1987, the purpose of the special assessment
sought to be levied is "to put up a cooperative and credit union;
purchase vehicles and other items needed for the benefit of
the officers and the general membership; and for the payment
for services rendered by union officers, consultants and others.
"This "Authorization and CBA Ratification" was obtained by the
Union through a secret referendum held in separate local
membership meetings on various dates.
The total membership of the Union was about 800. Of this
number, 672 members originally authorized the10% special
assessment, while 173 opposed the same. Subsequently
however, 170 members of the Union submitted documents to
15
the Company stating that although they have ratified the new
CBA, they are withdrawing or deauthorizing the deduction of
any amount from their CBA lump sum. Later, 185 other union
members submitted similar documents expressing the same
intent. These members, numbering 355 in all (170 + 185)
,added to the original oppositors of 173, turned the tide in favor
of deauthorization for the special assessment, with a total of
528 objectors and a remainder of 272 supporters.
Petitioners assailed the 10% special assessment as a violation
of Article 241(o) in relation to Article 222(b) of the Labor Code.
The Union however contended that the deductions not only
have the popular indorsement and approval of the general
membership, but likewise complied with the legal requirements
of Article 241(n).
Med-Arbiter ruled in favor of the petitioners directing the
Company to remit the amount it had kept in trust directly to the
rank-and-file personnel.
On appeal to the Bureau of Labor Relations, however, the
respondent Director reversed the order of the Med-Arbiter
upholding the claim of the Union that the special assessment is
authorized under Article 241 (n) and that the Union has
complied with the requirements therein.
ISSUE : Whether or not the 10% special assessment
deduction by the respondent labor union was made in
accordance with the requirements provided by law.
RULING : NO.
The deduction of the 10% special assessment by the Union
was not made in accordance with the requirements provided
by law.
Xxx …the failure of the Union to comply strictly with the
requirements set out by the law invalidates the questioned
special assessment. Substantial compliance is not enough in
view of the fact that the special assessment will diminish the
compensation of the union members. Their express consent is
required, and this consent must be obtained in accordance
with the steps outlined by law, which must be followed to the
letter. No shortcuts are allowed.
The applicable provisions are clear. The Union itself admits
that both paragraphs (n) and (o) of Article 241 apply.
Paragraph (n) refers to "levy" while paragraph (o) refers to
"check-off" of a special assessment. Both provisions must be
complied with. Under paragraph (n), the Union must submit to
the Company a written resolution of a majority of all the
members at a general membership meeting duly called for the
purpose. In addition, the secretary of the organization must
record the minutes of the meeting which, in turn, must include,
among others, the list of all the members present as well as
the votes cast.
As earlier outlined by petitioners, the Union obviously failed to
comply with the requirements of paragraph (n). It held local
membership meetings on separate occasions, on different
dates and at various venues, contrary to the express
requirement that there must be a general membership
meeting. The contention of the Union that "the local
membership meetings are precisely the very general meetings

required by law" 10 is untenable because the law would not
have specified a general membership meeting had the
legislative intent been to allow local meetings in lieu of the
latter.
It submitted only minutes of the local membership meetings
when what is required is a written resolution adopted at the
general meeting. Worse still, the minutes of three of those local
meetings held were recorded by a union director and not by
the union secretary. The minutes submitted to the Company
contained no list of the members present and no record of the
votes cast. Since it is quite evident that the Union did not
comply with the law at every turn, the only conclusion that may
be made therefrom is that there was no valid levy of the
special assessment pursuant to paragraph (n) of Article 241 of
the Labor Code.
Paragraph (o) on the other hand requires an individual written
authorization duly signed by every employee in order that a
special assessment may be validly checked-off. Even
assuming that the special assessment was validly levied
pursuant to paragraph (n), and granting that individual written
authorizations were obtained by the Union, nevertheless there
can be no valid check-off considering that the majority of the
union members had already withdrawn their individual
authorizations. A withdrawal of individual authorizations is
equivalent to no authorization at all. Hence, the ruling in
Galvadores that "no check-offs from any amounts due
employees may be effected without an individual written
authorization signed by the employees ... " is applicable.
The Union points out, however, that said deauthorizations are
not valid for being collective in form, as they are "mere
bunches of randomly procured signatures, under loose sheets
of paper." 11 The contention deserves no merit for the simple
reason that the documents containing the deauthorizations
have the signatures of the union members. The Court finds
these retractions to be valid. There is nothing in the law which
requires that the deauthorization must be in individual form
4.3 Attorney's fees
GABRIEL v. SECRETARY OF LABOR
G.R. No. 115949
March 16, 2000
Quisumbing, J.
Note:
Ø Petitioners - comprise the Executive Board of the Solid
Bank Union, the duly recognized collective bargaining agent of
Solid Bank Corporation.
Ø Private respondents - members of said union.
Ø Check- off is when the employer, on agreement with the
Union, or on prior authorization from employees, deducts union
dues or agency fees from the latter’s wages and remits them
directly to the union. It assures continuous funding for the labor
organization. As this Court has acknowledged, the system of
check-off is primarily for the benefit of the union and only
indirectly for the individual employees.
Ø The pertinent legal provisions on check-offs are found in
Article 222 (b) and Article 241 (o) of the Labor Code.
Article 222 (b) states:
“No attorneys fees, negotiation fees or similar charges of any
kind arising from any collective bargaining negotiations or
conclusions of the collective agreement shall be imposed on
any individual member of the contracting union: Provided,
however, that attorneys fees may be charged against union
funds in an amount to be agreed upon by the parties. Any
contract, agreement or arrangement of any sort to the contrary
shall be null and void."
Article 241 (o) provides:
"Other than for mandatory activities under the Code, no special
assessment, attorneys fees, negotiation fees or any other
extraordinary fees may be checked off from any amount due to
an employee without an individual written authorization duly
signed by the employee. The authorization should specifically
state the amount, purpose and beneficiary of the deduction."
Facts: The union’s Executive Board decided to retain the
service of Atty. Ignacio P. Lacsina as union counsel in
connection with the negotiations for a new Collective
Bargaining Agreement. A general membership meeting was
conducted for the purpose wherein majority of all union
members approved and signed a resolution to engage the
services of Atty. Lacsina.
As approved, the resolution provided that ten percent (10%) of
the total economic benefits be given to Atty. Lacsina as
attorney’s fees. And an authorization for Solid Bank
Corporation to check-off said attorney’s fees from the first lump
sum payment of benefits to the employees under the new CBA
and to turn over said amount to Atty. Lacsina.
Private respondents instituted a complaint before the
Department of Labor and Employment for illegal deduction of
attorney’s fees alleging that it was never submitted for
approval at a general membership meeting and that it failed to
meet the formalities mandated by the Labor Code.
Petitioners, on the other hand, argue that the General
Membership Resolution authorizing the bank to check-off
attorney’s fee from the first lump sum payment of the benefits
to the employees under the new CBA satisfies the legal
requirements for such assessment.
Issue: Whether there was an illegal deduction of benefits for
the purpose of attorney’s fees of the union counsel?
Held: Yes. Article 241 has three (3) requisites for the validity of
the special assessment for union’s incidental expenses,
attorney’s fees and representation expenses. These are: 1)
authorization by a written resolution of the majority of all the
members at the general membership meeting called for the
purpose; (2) secretary’s record of the minutes of the meeting;
and (3) individual written authorization for check off duly signed
by the employees concerned.
16
In this case, the General Membership Resolution of the Solid
Bank Union did not satisfy the requirements laid down by law
and jurisprudence for the validity of the ten percent (10%)
special assessment for union’s incidental expenses, attorney’s
fees and representation expenses. There were no individual
written check off authorizations by the employees concerned
and so the assessment cannot be legally deducted by their
employer.
Article 222 (b) of the Labor Code as prohibiting the payment of
attorney’s fees only when it is effected through forced
contributions from workers from their own funds as
distinguished from the union funds. The purpose of the
provision is to prevent imposition on the workers of the duty to
individually contribute their respective shares in the fee to be
paid the attorney for his services on behalf of the union in its
negotiations with management.
The obligation to pay the attorney’s fees belongs to the union
not to the workers as their direct responsibility. Neither the
lawyer nor the union itself may require the individual worker to
assume the obligation to pay attorney’s fees from their own
pockets. Any agreement to the contrary shall be null and void
ab initio.
5. Right to Disaffiliate from Mother Union
VOLKSCHEL LABOR UNION v. BUREAU OF LABOR
RELATIONS
G.R. No. L-45824
June 19, 1985
Cuevas, J.
Facts: Petitioner was once affiliated with the Associated Labor
Union for Metal Workers (ALUMETAL). On August 1, 1975,
both unions, Volkschel Labor Union and ALUMETAL jointly
entered into a collective bargaining agreement with respondent
companies.
On March 10, 1976, a majority of petitioner's
members(Volkschel Labor Union) decided to disaffiliate from
respondent federation (ALUMETAL) in order to operate on its
own as an independent labor group pursuant to Article 241
(formerly Article 240) of the Labor Code of the Philippines.
Confronted with the predicament of whether or not to continue
deducting from employees' wages and remitting union dues to
respondent, respondent companies sought the legal opinion of
the respondent Bureau as regards the controversy between
the two unions.
Med-Arbiter rendered a Resolution which in effect found the
disaffiliation legal but at the same time gave the opinion that,
petitioner's members should continue paying their dues to
ALUMETAL.
From the said Resolution, both petitioner and respondent
ALUMETAL appealed to the Director of respondent Bureau.
Petitioner's contended that the Med-Arbiter's opinion to the
effect that petitioner's members remained obligated to pay
dues to respondent ALUMETAL was inconsistent with the
dispositive finding that petitioner's disaffiliation from

ALUMETAL was valid. ALUMETAL, on the other hand,
assailed the Resolution in question asserting that the
disaffiliation should have been declared contrary to law.
Issue:
(1) Whether petitioner union's disaffiliation from respondent
federation valid?
(2) Whether respondent companies have the right to effect
union dues collections despite revocation by the employees of
the check-off authorization?
Held:
(1) Yes, the right of a local union to disaffiliate from its mother
union is well-settled. In previous cases, it has been repeatedly
held that a local union, being a separate and voluntary
association, is free to serve the interest of all its members
including the freedom to disaffiliate when circumstances
warrant. This right is consistent with the Constitutional
guarantee of freedom of association (Article IV, Section 7,
Philippine Constitution).
In the case at bar, it would go against the spirit of the labor law
to restrict petitioner's right to self-organization due to the
existence of the CBA. A disaffiliation does not disturb the
enforceability and administration of a collective agreement; it
does not occasion a change of administrators of the contract
nor even an amendment of the provisions thereof.
(2) No. Under Section 3, Article I, of the CBA, the obligation of
the respondent companies to deduct and remit dues to
ALUMETAL is conditioned on the individual check-off
authorization of petitioner's members. In other words,
ALUMETAL is entitled to receive the dues from respondent
companies as long as petitioner union is affiliated with it and
respondent companies are authorized by their employees
(members of petitioner union) to deduct union dues. Without
said affiliation, the employer has no link to the mother union.
The obligation of an employee to pay union dues is
coterminous with his affiliation or membership. The employees'
check-off authorization, even if declared irrevocable, is good
only as long as they remain members of the union concerned.
A contract between an employer and the parent organization
as bargaining agent for the employees is terminated by the
disaffiliation of the local of which the employees are members.
Respondent companies therefore were wrong in continuing the
check-off in favor of respondent federation since they were
duly notified of the disaffiliation and of petitioner's members
having already rescinded their check-off authorization.
Philippine Skylanders Inc. vs. NLRC
G.R No. 127374
January 31, 2002
Bellosillo, J.:
Facts: The Philippine Skylanders Employees Association(
PSEA), a local labor union affiliated with the Philippine
Association of Free Labor Union (PAFLU) September won in
the certification election conducted among the rank and file
employees of Philippine Skylanders, Inc. (PSI). Its rival Union
PSEA-WATU protested the result before the Secretary of
Labor. Several months later, pending settlement of the
controversy PSEA sent PAFLU a notice of disaffiliation citing
as reason PAFLU’s supposed deliberate and habitual
dereliction of duty towards its members. Attached was a copy
of the resolution adopted and signed by the officers and
members of PSEA authorizing their local union to disaffiliate
from its mother federation. PSEA affiliated itself to the National
Congress of Workers, changed its name to PSEA-NCW and
maintain the continuity within their organization by allowing the
former officers of PSEA-PAFLU to continue occupying their
positions as elected officers in the newly forged PSEA-NCW.
They entered into a CBA with PSI which was registered with
the DOLE.
PAFLU Secretary General Serafin Ayroso wrote
Mariles C. Romulo requesting a copy of PSI's audited financial
statement. Ayroso explained that with the dismissal of PSEA-
WATUs election protest the time was ripe for the parties to
enter into a collective bargaining agreement. PSI through its
personnel manager Francisco Dakila denied the request citing
as reason PSEA's disaffiliation from PAFLU and its
subsequent affiliation with NCW. Agitated by PSI's recognition
of PSEA-NCW, PAFLU through Serafin Ayroso filed a
complaint for unfair labor practice against PSI, its president
Mariles Romulo and personnel manager Francisco Dakila.
PAFLU alleged that aside from PSIs refusal to bargain
collectively with its workers, the company through its president
and personnel manager was also liable for interfering with its
employees' union activities. Two (2) days later or on 6 October
1994 Ayroso filed another complaint in behalf of PAFLU for
unfair labor practice against Francisco Dakila. Through Ayroso
PAFLU claimed that Dakila was present in PSEA's
organizational meeting thereby confirming his illicit
participation in union activities. Ayroso added that the
members of the local union had unwittingly fallen into the
manipulative machinations of PSI and were lured into
endorsing a collective bargaining agreement which was
detrimental to their interests. The two (2) complaints were
thereafter consolidated. PAFLU amended its complaint by
including the elected officers of PSEA-PAFLU as additional
party respondents.PAFLU averred that the local officers of
PSEA-PAFLU were equally guilty of unfair labor practice since
they brazenly allowed themselves to be manipulated and
influenced by petitioner Francisco Dakila.
PSI, its president Mariles C. Romulo, and its
personnel manager Dakila moved for the dismissal of the
complaint on the ground that the issue of disaffiliation was an
inter-union conflict which lay beyond the jurisdiction of the
Labor Arbiter. On the other hand, PSEA-NCW took the cudgels
for its officers who were being sued in their capacities as
former officers of PSEA-PAFLU and asserted that since PSEA
was no longer affiliated with PAFLU, Ayroso or PAFLU for that
matter had no personality to file the instant complaint. In
support of this assertion, PSEA-NCW submitted in evidence a
Katunayan signed by 111 out of 120 rank and file employees
of PSI disauthorizing Ayroso or PAFLU from instituting any
action in their behalf. The Labor Arbiter declared PSEA's
disaffiliation from PAFLU invalid and was upheld by the NLRC
Issue: WON PSEA has the right to disaffiliate from Mother
Union.
17
Held: Yes. The issue of disaffiliation is an inter-union conflict
the jurisdiction of which properly lies with the Bureau of Labor
Relations and not with the Labor arbiter. The right of a local
union to disaffiliate from its mother federation is not a novel
thesis brought by case law. In the landmark case of Liberty
Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc. we
upheld the right of local unions to separate from their mother
federation on the ground that as separate and voluntary
associations, local unions do not owe their creation and
existence to the national federation to which they are affiliated
but, instead, to the will of their members. The sole essence of
affiliation is to increase, by collective action, the common
bargaining power of local unions for the effective enhancement
and protection of their interests. Admittedly, there are times
when without succor and support local unions may find it hard,
unaided by other support groups, to secure justice for them.
Yet the local unions remain the basic units of association, free
to serve their own interests subject to the restraints imposed
by the constitution and by-laws of the national federation, and
free also to renounce the affiliation upon the terms laid down in
the agreement which brought such affiliation into existence.
The impropriety of the questioned Decisions becomes clearly
apparent. There is nothing shown in the records nor is it
claimed by PAFLU that the local union was expressly
forbidden to disaffiliate from the federation nor were there any
conditions imposed for a valid breakaway. As such, the
pendency of an election protest involving both the mother
federation and the local union did not constitute a bar to a valid
disaffiliation. Neither was it disputed by PAFLU that 111
signatories out of the 120 members of the local union, or an
equivalent of 92.5% of the total union membership supported
the claim of disaffiliation and had in fact disauthorized PAFLU
from instituting any complaint in their behalf. Surely, this is not
a case where one (1) or two (2) members of the local union
decided to disaffiliate from the mother federation, but it is a
case where almost all local union members decided to
disaffiliate. It was entirely reasonable then for PSI to enter into
a collective bargaining agreement with PSEA-NCW. As PSEA
had validly severed itself from PAFLU, there would be no
restrictions which could validly hinder it from subsequently
affiliating with NCW and entering into a collective bargaining
agreement in behalf of its members.
The mere act of disaffiliation did not divest PSEA of its own
personality; neither did it give PAFLU the license to act
independently of the local union. Recreant to its mission,
PAFLU cannot simply ignore the demands of the local chapter
and decide for its welfare. PAFLU might have forgotten that as
an agent it could only act in representation of and in
accordance with the interests of the local union. The complaint
then for unfair labor practice lodged by PAFLU against PSI,
PSEA and their respective officers, having been filed by a
party which has no legal personality to institute the complaint,
should have been dismissed at the first instance for failure to
state a cause of action. Policy considerations dictate that in
weighing the claims of a local union as against those of a
national federation, those of the former must be preferred.
Parenthetically though, the desires of the mother federation to
protect its locals are not altogether to be shunned. It will
however be to err greatly against the Constitution if the desires
of the federation would be favored over those of its members.
That, at any rate, is the policy of the law. For if it were

otherwise, instead of protection, there would be disregard and
neglect of the lowly workingmen.
Cirtek Employees Labor Union –FFW vs Cirtek Electronics
G.R. N. 190515
June 6, 2011
Carpio- Morales, J.:
Facts: This resolves the motion for reconsideration and
supplemental motion for reconsideration filed by respondent,
Cirtek Electronics, Inc., of the Court’s Decision dated
November 15, 2010.
Respondent-movant maintains that the Secretary of Labor
cannot insist on a ruling beyond the compromise agreement
entered into by the parties; and that, as early as February 5,
2010, petitioner Union had already filed with the Department of
Labor and Employment (DOLE) a resolution of disaffiliation
from the Federation of Free Workers resulting in the latter’s
lack of personality to represent the workers in the present
case.
Issue: WON there is a valid disaffiliation.
Held: The issue of disaffiliation is an intra-union dispute which
must be resolved in a different forum in an action at the
instance of either or both the FFW and the Union or a rival
labor organization, not the employer.
An intra-union dispute refers to any conflict between and
among union members, including grievances arising from any
violation of the rights and conditions of membership, violation
of or disagreement over any provision of the unions
constitution and by-laws, or disputes arising from chartering or
disaffiliation of the union. Sections 1 and 2, Rule XI of
Department Order No. 40-03, Series of 2003 of the DOLE
enumerate the following circumstances as inter/intra-union
disputes.
Indeed, as respondent-movant itself argues, 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. Verily, Anglo-KMU v. Samahan Ng Mga
Manggagawang Nagkakaisa Sa Manila Bay Spinning Mills At
J.P. Coats[11] enlightens:
A local labor union is a separate and distinct unit primarily
designed to secure and maintain an equality of bargaining
power between the employer and their employee-members. A
local union does not owe its existence to the federation with
which it is affiliated. It is a separate and distinct voluntary
association owing its creation to the will of its members. The
mere act of affiliation does not divest the local union of its own
personality, neither does it give the mother federation the
license to act independently of the local union. It only gives rise
to a contract of agency where the former acts in representation
of the latter.
Whether then, as respondent claims, FFW went against the
will and wishes of its principal (the member-employees) by
pursuing the case despite the signing of the MOA, is not for the
Court, nor for respondent to determine, but for the Union and
FFW to resolve on their own pursuant to their principal-agent
relationship. MR is denied
3. Certification election and procedure
Art. 256-257, LC, B5 R5 S1-9, IRR; Dept. Order No. 40
[2003], Rule 8 aND 9
Rep Act No. 9481 (25 May 2007], secs. 10 and 11
3.1 Definition and nature of CE B5 R1S1(x], IRR, DO 9, RI,
S(dd) ;D0 40, R1 S1 (d)
Excl. bargaining representative: DOLE Dept. Order 40
[20031, R1 SI ®
G.R. No. 181531 July 31, 2009
NATIONAL UNION OF WORKERS IN HOTELS,
RESTAURANTS AND ALLIED INDUSTRIES- MANILA
PAVILION HOTEL CHAPTER, Petitioner, vs. SECRETARY
OF LABOR AND EMPLOYMENT, BUREAU OF LABOR
RELATIONS, HOLIDAY INN MANILA PAVILION HOTEL
LABOR UNION AND ACESITE PHILIPPINES HOTEL
CORPORATION, Respondents.
CARPIO MORALES, J.:
FACTS: A certification election was conducted on June 16,
2006 among the rank-and-file employees of respondent
Holiday Inn Manila Pavilion Hotel (the Hotel) with the following
results:
EMPLOYEES IN VOTERS’ LIST =353
TOTAL VOTES CAST =346
NUWHRAIN-MPHC =151
HIMPHLU =169
NO UNION =1
SPOILED =3
SEGREGATED =22
In view of the significant number of segregated votes,
contending unions, petitioner, NUHWHRAIN-MPHC, and
respondent Holiday Inn Manila Pavillion Hotel Labor Union
(HIMPHLU), referred the case back to Med-Arbiter Ma.
Simonette Calabocal to decide which among those votes
would be opened and tallied. Eleven (11) votes were initially
segregated because they were cast by dismissed employees,
albeit the legality of their dismissal was still pending before the
Court of Appeals. Six other votes were segregated because
the employees who cast them were already occupying
supervisory positions at the time of the election. Still five other
votes were segregated on the ground that they were cast by
probationary employees and, pursuant to the existing
Collective Bargaining Agreement (CBA), such employees
cannot vote. It bears noting early on, however, that the vote of
one Jose Gatbonton (Gatbonton), a probationary employee,
was counted.
By Order of August 22, 2006, Med-Arbiter Calabocal ruled for
the opening of 17 out of the 22 segregated votes, specially
those cast by the 11 dismissed employees and those cast by
the six supposedly supervisory employees of the Hotel.
Petitioner, which garnered 151 votes, appealed to the
Secretary of Labor and Employment (SOLE), arguing that the
votes of the probationary employees should have been opened
considering that probationary employee Gatbonton’s vote was
18
tallied. And petitioner averred that respondent HIMPHLU,
which garnered 169 votes, should not be immediately certified
as the bargaining agent, as the opening of the 17 segregated
ballots would push the number of valid votes cast to 338 (151
+ 169 + 1 + 17), hence, the 169 votes which HIMPHLU
garnered would be one vote short of the majority which would
then become 169.
Secretary of Labor and Employment (SOLE) Ruling: affirmed
the Med-Arbiter’s Order. It held that pursuant to Section 5,
Rule IX of the Omnibus Rules Implementing the Labor Code
on exclusion and inclusion of voters in a certification election,
the probationary employees cannot vote, as at the time the
Med-Arbiter issued on August 9, 2005 the Order granting the
petition for the conduct of the certification election, the six
probationary employees were not yet hired, hence, they could
not vote.
The SOLE further held that, with respect to the votes cast by
the 11 dismissed employees, they could be considered since
their dismissal was still pending appeal.
As to the votes cast by the six alleged supervisory employees,
the SOLE held that their votes should be counted since their
promotion took effect months after the issuance of the above-
said August 9, 2005 Order of the Med-Arbiter, hence, they
were still considered as rank-and-file.
Respecting Gatbonton’s vote, the SOLE ruled that the same
could be the basis to include the votes of the other
probationary employees, as the records show that during the
pre-election conferences, there was no disagreement as to his
inclusion in the voters’ list, and neither was it timely challenged
when he voted on election day, hence, the Election Officer
could not then segregate his vote.
CA Ruling: affirmed the ruling of the SOLE. It held that,
contrary to petitioner’s assertion, the ruling in Airtime
Specialist, Inc. v. Ferrer Calleja stating that in a certification
election, all rank-and-file employees in the appropriate
bargaining unit, whether probationary or permanent, are
entitled to vote, is inapplicable to the case at bar. For, the
appellate court continued, the six probationary employees
were not yet employed by the Hotel at the time the August 9,
2005 Order granting the certification election was issued. It
thus held that Airtime Specialist applies only to situations
wherein the probationary employees were already employed
as of the date of filing of the petition for certification election.
Respecting Gatbonton’s vote, the appellate court upheld the
SOLE’s finding that since it was not properly challenged, its
inclusion could no longer be questioned, nor could it be made
the basis to include the votes of the six probationary
employees.
ISSUE:
1. Whether or not employees on probationary status at the
time of the certification elections should be allowed to vote.
2. Whether or not HIMPHLU was able to obtain required
majority for it to be certified as the exclusive bargaining agent.

HELD:
1. Yes. The inclusion of Gatbonton’s vote was proper
not because it was not questioned but because probationary
employees have the right to vote in a certification election. The
votes of the six other probationary employees should thus also
have been counted. As Airtime Specialists, Inc. v. Ferrer-
Calleja holds:
In a certification election, all rank and file employees in the
appropriate bargaining unit, whether probationary or
permanent are entitled to vote. This principle is clearly stated
in Art. 255 of the Labor Code which states that the "labor
organization designated or selected by the majority of the
employees in an appropriate bargaining unit shall be the
exclusive representative of the employees in such unit for
purposes of collective bargaining." Collective bargaining
covers all aspects of the employment relation and the resultant
CBA negotiated by the certified union binds all employees in
the bargaining unit. Hence, all rank and file employees,
probationary or permanent, have a substantial interest in the
selection of the bargaining representative. The Code makes no
distinction as to their employment status as basis for eligibility
in supporting the petition for certification election. The law
refers to "all" the employees in the bargaining unit. All they
need to be eligible to support the petition is to belong to the
"bargaining unit." (Emphasis supplied)
For purposes of this section (Rule II, Sec. 2 of Department
Order No. 40-03, series of 2003, which amended Rule XI of
the Omnibus Rules Implementing the Labor Code), any
employee, whether employed for a definite period or not, shall
beginning on the first day of his/her service, be eligible for
membership in any labor organization.
All other workers, including ambulant, intermittent and other
workers, the self-employed, rural workers and those without
any definite employers may form labor organizations for their
mutual aid and protection and other legitimate purposes except
collective bargaining. (Emphasis supplied)
The provision in the CBA disqualifying probationary employees
from voting cannot override the Constitutionally-protected right
of workers to self-organization, as well as the provisions of the
Labor Code and its Implementing Rules on certification
elections and jurisprudence thereon.
A law is read into, and forms part of, a contract. Provisions in a
contract are valid only if they are not contrary to law, morals,
good customs, public order or public policy.
2. No. It is well-settled that under the so-called "double
majority rule," for there to be a valid certification election,
majority of the bargaining unit must have voted AND the
winning union must have garnered majority of the valid votes
cast.
Prescinding from the Court’s ruling that all the probationary
employees’ votes should be deemed valid votes while that of
the supervisory employees should be excluded, it follows that
the number of valid votes cast would increase – from 321 to
337. Under Art. 256 of the Labor Code, the union obtaining the
majority of the valid votes cast by the eligible voters shall be
certified as the sole and exclusive bargaining agent of all the
workers in the appropriate bargaining unit. This majority is 50%
+ 1. Hence, 50% of 337 is 168.5 + 1 or at least 170.
HIMPHLU obtained 169 while petitioner received 151 votes.
Clearly, HIMPHLU was not able to obtain a majority vote. The
position of both the SOLE and the appellate court that the
opening of the 17 segregated ballots will not materially affect
the outcome of the certification election as for, so they
contend, even if such member were all in favor of petitioner,
still, HIMPHLU would win, is thus untenable.
It bears reiteration that the true importance of ascertaining the
number of valid votes cast is for it to serve as basis for
computing the required majority, and not just to determine
which union won the elections. The opening of the segregated
but valid votes has thus become material.
To be sure, the conduct of a certification election has a two-
fold objective: to determine the appropriate bargaining unit and
to ascertain the majority representation of the bargaining
representative, if the employees desire to be represented at all
by anyone. It is not simply the determination of who between
two or more contending unions won, but whether it effectively
ascertains the will of the members of the bargaining unit as to
whether they want to be represented and which union they
want to represent them.
Having declared that no choice in the certification election
conducted obtained the required majority, it follows that a run-
off election must be held to determine which between
HIMPHLU and petitioner should represent the rank-and-file
employees.
G.R. No. 183317 December 21, 2009
MARIWASA SIAM CERAMICS, INC., Petitioner, vs. THE
SECRETARY OF THE DEPARTMENT OF LABOR AND
EMPLOYMENT, CHIEF OF THE BUREAU OF LABOR
RELATIONS, DEPARTMENT OF LABOR AND
EMPLOYMENT, REGIONAL DIRECTOR OF DOLE
REGIONAL OFFICE NUMBER IV-A & SAMAHAN NG MGA
MANGGAGAWA SA MARIWASA SIAM CERAMICS, INC.
(SMMSC-INDEPENDENT), Respondents.
NACHURA, J.:
FACTS: On May 4, 2005, respondent Samahan Ng Mga
Manggagawa Sa Mariwasa Siam Ceramics, Inc. (SMMSC-
Independent) was issued a Certificate of Registration4 as a
legitimate labor organization by the Department of Labor and
Employment (DOLE), Region IV-A.
On June 14, 2005, petitioner Mariwasa Siam Ceramics, Inc.
filed a Petition for Cancellation of Union Registration against
respondent, claiming that the latter violated Article 2345 of the
Labor Code for not complying with the 20% requirement, and
that it committed massive fraud and misrepresentation in
violation of Article 2396 of the same code.
On August 26, 2005, the Regional Director of DOLE IV-A
issued an Order granting the petition, revoking the registration
of respondent, and delisting it from the roster of active labor
unions.
19
Bureau of Labor Relations (BLR) Ruling: the appeal by
Samahan ng Manggagawa sa Mariwasa Siam Ceramics, Inc.
(SMMSC-Independent) is hereby GRANTED, and the Decision
dated 26 August 2005 by DOLE-Region-IV-A Director Maximo
B. Lim is hereby REVERSED and SET ASIDE. Samahan ng
Manggagawa sa Mariwasa Siam Ceramics, Inc. (SMMSC-
Independent) remains in the roster of legitimate labor
organizations.
Petitioner filed a Motion for Reconsideration but the BLR
denied it in a Resolution9 dated February 2, 2007.
Petitioner sought recourse with the Court of Appeals (CA)
through a Petition for Certiorari; but the CA denied the petition
for lack of merit.
ISSUE:
1. Was there failure to comply with the 20% union
membership requirement
2. Did the withdrawal of 31 union members affect the petition
for certification election insofar as the 30% requirement is
concerned.
HELD:
1. No. While it is true that the withdrawal of support may be
considered as a resignation from the union, the fact remains
that at the time of the union’s application for registration, the
affiants were members of respondent and they comprised
more than the required 20% membership for purposes of
registration as a labor union. Article 234 of the Labor Code
merely requires a 20% minimum membership during the
application for union registration. It does not mandate that a
union must maintain the 20% minimum membership
requirement all throughout its existence.
2. It appears undisputedly that the 31 union members had
withdrawn their support to the petition before the filing of said
petition. It would be otherwise if the withdrawal was made after
the filing of the petition for it would then be presumed that the
withdrawal was not free and voluntary. The presumption would
arise that the withdrawal was procured through duress,
coercion or for valuable consideration. In other words, the
distinction must be that withdrawals made before the filing of
the petition are presumed voluntary unless there is convincing
proof to the contrary, whereas withdrawals made after the filing
of the petition are deemed involuntary.
The cancellation of a union’s registration doubtless has an
impairing dimension on the right of labor to self-organization.
For fraud and misrepresentation to be grounds for cancellation
of union registration under the Labor Code, the nature of the
fraud and misrepresentation must be grave and compelling
enough to vitiate the consent of a majority of union members.
3.2.1. Challenging the petition for CE
[G.R. No. 121084. February 19, 1997]
TOYOTA MOTOR PHILIPPINES CORPORATION, petitioner,
vs. TOYOTA MOTOR PHILIPPINES CORPORATION
LABOR UNION AND THE SECRETARY OF LABOR AND
EMPLOYMENT, respondents.

Facts: Toyota Motor Philippines Corporation Labor Union
(TMPCLU) filed a petition for certification election with the
Department of Labor, National Capital Region, for all rank-and-
file employees of the Toyota Motor Corporation.
Petitioner corporation, seeking the denial of the issuance of an
Order directing the holding of a certification election, anchored
its claim on two grounds: first, that the respondent union, being
"in the process of registration" had no legal personality to file
the same as it was not a legitimate labor organization as of the
date of the filing of the petition; and second, that the union was
composed of both rank-and-file and supervisory employees in
violation of law.
Attached to the position paper was a list of union members and
their respective job classifications, indicating that many of the
signatories to the petition for certification election occupied
supervisory positions and were not in fact rank-and-file
employees
Med-Arbiter: The Med-Arbiter, Paterno D. Adap, dismissed
respondent union's petition for certification election for lack of
merit.
Office of Secretary of Labor: On appeal, the Office of the
Secretary of Labor, in a Resolution, set aside the Med-Arbiter's
Order, and directed the holding of a certification election
among the regular rank-and-file employees of Toyota Motor
Corporation.
Hence this special civil action for certiorari under Rule 65 of
the Revised Rules of Court, where petitioner contends that
"the Secretary of Labor and Employment committed grave
abuse of discretion amounting to lack or excess of jurisdiction
in reversing, contrary to law and facts the findings of the Med-
Arbiters to the effect that: 1) the inclusion of the prohibited mix
of rank-and file and supervisory employees in the roster of
members and officers of the union cannot be cured by a simple
inclusion-exclusion proceeding; and that 2) the respondent
union had no legal standing at the time of the filing of its
petition for certification election.
Issue: Whether or not private respondent union can hold the
certificate election?
Held: NO. The respondent union cannot hold a certification
election because it is a union composed of both rank-and-file
and supervisory employees in violation of the Labor Code.
The purpose of every certification election is to determine the
exclusive representative of employees in an appropriate
bargaining unit for the purpose of collective bargaining. A
certification election for the collective bargaining process is
one of the fairest and most effective ways of determining which
labor organization can truly represent the working force.[16] In
determining the labor organization which represents the
interests of the workforce, those interests must be, as far as
reasonably possible, homogeneous, so as to genuinely reach
the concerns of the individual members of a labor organization.
The Labor Code has made it a clear statutory policy to prevent
supervisory employees from joining labor organizations
consisting of rank-and-file employees as the concerns which
involve members of either group are normally disparate and
contradictory. Article 245 provides:
ART. 245 Ineligibility of managerial employees to join any labor
organization; right of supervisory employees. -- Managerial
Employees are not eligible to join, assist or form any labor
organization. Supervisory employees shall not be eligible for
membership in a labor organization of the rank-and-file
employees but may join, assist or form separate labor
organizations of their own.
Based on this provision, a labor organization composed of both
rank-and-file and supervisory employees is no labor
organization at all. It cannot, for any guise or purpose, be a
legitimate labor organization. Not being one, an organization
which carries a mixture of rank-and-file and supervisory
employees cannot possess any of the rights of a legitimate
labor organization, including the right to file a petition for
certification election for the purpose of collective bargaining. It
becomes necessary, therefore, anterior to the granting of an
order allowing a certification election, to inquire into the
composition of any labor organization whenever the status of
the labor organization is challenged on the basis of Article 245
of the Labor Code.
It is the petitioner's contention that forty-two (42) of the
respondent union's members, including three of its officers,
occupy supervisory positions. In its position paper dated
February 22, 1993, petitioner identified fourteen (14) union
members occupying the position of Junior Group Chief II and
twenty-seven (27) members in level five positions.
Under the job description for level five employees, such
personnel all engineers having a number of personnel under
them, not only oversee production of new models but also
determine manpower requirements, thereby influencing
important hiring decisions at the highest levels. This
determination is neither routine nor clerical but involves the
independent assessment of factors affecting production, which
in turn affect decisions to hire or transfer workers. The use of
independent judgment in making the decision to hire, fire or
transfer in the identification of manpower requirements would
be greatly impaired if the employee's loyalties are torn
between the interests of the union and the interests of
management. A supervisory employee occupying a level five
position would therefore find it difficult to objectively identify the
exact manpower requirements dictated by production
demands.
This is precisely what the Labor Code, in requiring separate
unions among rank-and-file employees on one hand, and
supervisory employees on the other, seeks to avoid. The
rationale behind the Code's exclusion of supervisors from
unions of rank-and-file employees is that such employees,
while in the performance of supervisory functions, become the
alter ego of management in the making and the implementing
of key decisions at the sub-managerial level. Certainly, it would
be difficult to find unity or mutuality of interests in a bargaining
unit consisting of a mixture of rank-and-file and supervisory
20
employees. And this is so because the fundamental test of a
bargaining unit's acceptability is whether or not such a unit will
best advance to all employees within the unit the proper
exercise of their collective bargaining rights. The Code itself
has recognized this, in preventing supervisory employees from
joining unions of rank-and-file employees.
In the case at bar, as respondent union's membership list
contains the names of at least twenty-seven (27) supervisory
employees in Level Five positions, the union could not, prior to
purging itself of its supervisory employee members, attain the
status of a legitimate labor organization. Not being one, it
cannot possess the requisite personality to file a petition for
certification election.
[G.R. No. 142000. January 22, 2003]
TAGAYTAY HIGHLANDS INTERNATIONAL GOLF CLUB
INCORPORATED, petitioner, vs. TAGAYTAY HIGHLANDS
EMPLOYEES UNION-PGTWO, respondent.
Facts: The Tagaytay Highlands Employees Union (THEU)
Philippine Transport and General Workers Organization
(PTGWO), a legitimate labor organization said to represent
majority of the rank-and-file employees of THIGCI, filed a
petition for certification election before the DOLE Mediation-
Arbitration Unit.
THIGCI opposed THEUs petition for certification election on
the ground that the list of union members submitted by it was
defective and fatally flawed as it included the names and
signatures of supervisors, resigned, terminated and absent
without leave (AWOL) employees, as well as employees of
The Country Club, Inc., a corporation distinct and separate
from THIGCI; and that out of the 192 signatories to the petition,
only 71 were actual rank-and-file employees of THIGCI.
THIGCI also alleged that some of the signatures in the list of
union members were secured through fraudulent and deceitful
means, and submitted copies of the handwritten denial and
withdrawal of some of its employees from participating in the
petition.
Med-Arbiter: Ruled against THIGCI, and in favor of union.
DOLE Med-Arbiter Anastacio Bactin ordered the holding of a
certification election among the rank-and-file employees of
THIGCI. As for the allegation that some of the signatures were
secured through fraudulent and deceitful means, he held that it
should be coursed through an independent petition for
cancellation of union registration which is within the jurisdiction
of the DOLE Regional Director. In any event, the Med-Arbiter
held that THIGCI failed to submit the job descriptions of the
questioned employees and other supporting documents to
bolster its claim that they are disqualified from joining THEU.
DOLE Secretary: THIGCI appealed to the Office of the DOLE
Secretary which, by Resolution, set aside the said Med-
Arbiters Order and accordingly dismissed the petition for
certification election on the ground that there is a clear
absence of community or mutuality of interests, it finding that
THEU sought to represent two separate bargaining units
(supervisory employees and rank-and-file employees) as well
as employees of two separate and distinct corporate entities.

Upon motion for reconsideration by respondent Union,
however, the previous resolution in favor of THIGCI was
reversed and the records of the case were thus ordered
remanded to the Office of the Med-Arbiter for the conduct of
certification election.
CA: The Court of Appeals denied THIGCIs Petition for
Certiorari and affirmed the assailed DOLE resolution. Hence
this petition.
Issue:
Held: The petition fails. After a certificate of registration is
issued to a union, its legal personality cannot be subject to
collateral attack. It may be questioned only in an independent
petition for cancellation in accordance with Section 5 of Rule V,
Book IV of the Rules to Implement the Labor Code
(Implementing Rules) which section reads:
Sec. 5. Effect of registration. The labor organization or workers
association shall be deemed registered and vested with legal
personality on the date of issuance of its certificate of
registration. Such legal personality cannot thereafter be
subject to collateral attack, but may be questioned only in an
independent petition for cancellation in accordance with these
Rules. (Emphasis supplied)
The grounds for cancellation of union registration are provided
for under Article 239 of the Labor Code, as follows:
Art. 239. Grounds for cancellation of union registration. The
following shall constitute grounds for cancellation of union
registration:
(a) Misrepresentation, false statement or fraud in connection
with the adoption or ratification of the constitution and by-laws
or amendments thereto, the minutes of ratification, and the list
of members who took part in the ratification;
Xxx
(c) Misrepresentation, false statements or fraud in connection
with the election of officers, minutes of the election of officers,
the list of voters, or failure to subject these documents together
with the list of the newly elected/appointed officers and their
postal addresses within thirty (30) days from election;
Xxx
The inclusion in a union of disqualified employees is not
among the grounds for cancellation, unless such inclusion is
due to misrepresentation, false statement or fraud under the
circumstances enumerated in Sections (a) and (c) of Article
239 of above-quoted Article 239 of the Labor Code.
THEU, having been validly issued a certificate of registration,
should be considered to have already acquired juridical
personality which may not be assailed collaterally.
3.3.2. If organized establishment
- Rep. Act No. 9481 sec 8, amending Art. 256, LC
a) No duly registered CBA - at any time
b) With duly registered CBA
1) Contract bar rule - only during freedom period
Art. 32, LC, B5 R5 S4, IRR)
FVC Labor Union-PTGWO vs SANAMA-FVC-SIGLO
G.R. No. 176249, November 27, 2009
FACTS: On December 22, 1997, the petitioner FVCLU-
PTGWO – the recognized bargaining agent of the rank-and-file
employees of the FVC Philippines, Incorporated – signed a
five-year collective bargaining agreement with the company.
The five-year CBA period was from February 1, 1998 to
January 30, 2003.
At the end of the 3rd year of the five-year term and pursuant to
the CBA, FVCLU-PTGWO and the company entered into the
renegotiation of the CBA and modified, among other
provisions, the CBA’s duration. Article XXV, Section 2 of the
renegotiated CBA provides that “this re-negotiation agreement
shall take effect beginning February 1, 2001 and until May 31,
2003” thus extending the original five-year period of the CBA
by four (4) months.
On January 21, 2003, nine (9) days before the January 30,
2003 expiration of the originally-agreed five-year CBA term
(and four [4] months and nine [9] days away from the
expiration of the amended CBA period), the respondent Sama-
Samang Nagkakaisang Manggagawa sa FVC-Solidarity of
Independent and General Labor Organizations (SANAMA-
SIGLO) filed before the Department of Labor and Employment
(DOLE) a petition for certification election for the same rank-
and-file unit covered by the FVCLU-PTGWO CBA. FVCLU-
PTGWO moved to dismiss the petition on the ground that the
certification election petition was filed outside the freedom
period or outside of the sixty (60) days before the expiration of
the CBA on May 31, 2003.
ISSUE: Was the certification election filed within the freedom
period?
HELD: Yes. While the parties may agree to extend the CBA’s
original five-year term together with all other CBA provisions,
any such amendment or term in excess of five years will not
carry with it a change in the union’s exclusive collective
bargaining status. By express provision of Article 253-A, the
exclusive bargaining status cannot go beyond five years and
the representation status is a legal matter not for the workplace
parties to agree upon. In other words, despite an agreement
for a CBA with a life of more than five years, either as an
original provision or by amendment, the bargaining union’s
exclusive bargaining status is effective only for five years and
can be challenged within sixty (60) days prior to the expiration
of the CBA’s first five years.
In the present case, the CBA was originally signed for a period
of five years, i.e., from February 1, 1998 to January 30, 2003,
with a provision for the renegotiation of the CBA’s other
provisions at the end of the 3rd year of the five-year CBA term.
Thus, prior to January 30, 2001 the workplace parties sat down
for renegotiation but instead of confining themselves to the
economic and non-economic CBA provisions, also extended
21
the life of the CBA for another four months, i.e., from the
original expiry date on January 30, 2003 to May 30, 2003.
This negotiated extension of the CBA term has no legal effect
on the FVCLU-PTGWO’s exclusive bargaining representation
status which remained effective only for five years ending on
the original expiry date of January 30, 2003. Thus, sixty days
prior to this date, or starting December 2, 2002, SANAMA-
SIGLO could properly file a petition for certification election. Its
petition, filed on January 21, 2003 or nine (9) days before the
expiration of the CBA and of FVCLU-PTGWO’s exclusive
bargaining status, was seasonably filed.
5.2. Qualification of voters: inclusion-exclusion
proceedings
May probationary employees vote in the certification
elections, if the CBA provision explicitly excludes them in
the vote?
National Union of Workers in Hotels, Restaurants and
Allied Industries – Manila Pavilion Hotel Chapter v.
Secretary of Labor
G.R. No. 181531, July 31, 2009
FACTS: A certification election was conducted on June 2006
among the rank-and-file employees of Holiday Inn. Petitioner
and another union (HIMPHLU) refer the case back to Med
Arbiter to decide which among those votes be opened and
tallied. 22 votes were segregated because; (1) eleven were
cast by dismissed employees, albeit the legality of their
dismissal is still pending before CA, (2) six were cast by those
already occupying supervisory positions; and (3) five were cast
by probationary employees, and pursuant to the CBA, such
employees cannot vote.
Petitioner, which garnered 151 votes, appealed to the
Secretary of Labor and Employment (SOLE), arguing that the
votes of the probationary employees should have been opened
considering that probationary employee Gatbontons vote was
tallied. And petitioner averred that respondent HIMPHLU,
which garnered 169 votes, should not be immediately certified
as the bargaining agent, as the opening of the 17 segregated
ballots would push the number of valid votes cast to 338 (151
+ 169 + 1 + 17), hence, the 169 votes which HIMPHLU
garnered would be one vote short of the majority which would
then become 169.
By the assailed Resolution of January 22, 2007, the Secretary
of Labor and Employment (SOLE), through then Acting
Secretary Luzviminda Padilla, affirmed the Med-Arbiters Order.
It held that pursuant to Section 5, Rule IX of the Omnibus
Rules Implementing the Labor Code on exclusion and
inclusion of voters in a certification election, the probationary
employees cannot vote, as at the time the Med-Arbiter issued
on August 9, 2005 the Order granting the petition for the
conduct of the certification election, the six probationary
employees were not yet hired, hence, they could not vote.
The Med Arbiter ruled to open the votes cast by dismissed
and by those holding supervisory employees. The union
appealed to SOLE, arguing that the vote of probationary

employees should likewise be opened and tallied. The SOLE
affirmed the decision of Med Arbiter. On appeal, CA affirmed
the ruling of SOLE. Hence, this petition.
ISSUE: Whether employees on probationary status at the time
of the certification election should be allowed to vote.
HELD: YES. The inclusion of Gatbonton’s vote was proper not
because it was not questioned but because probationary
employees have the right to vote in a certification election.
The votes of the six other probationary employees
should thus also have been counted. As Airtime Specialists,
Inc. v. FErrer-Colleja, 180 SCRA 749, holds:
In a certification election, all rank and file employees in the
appropriate bargaining unit, whether probationary or
permanent are entitled to vote. This principle is clearly stated
in Art. 255 of the Labor Code which states that the labor
organization designated or selected by the majority of the
employees in an appropriate bargaining unit shall be the
exclusive representative of the employees in such unit for
purposes of collective bargaining. Collective bargaining covers
all aspects of the employment relation and the resultant CBA
negotiated by the certified union binds all employees in the
bargaining unit. Hence, all rank and file employees,
probationary or permanent, have a substantial interest in the
selection of the bargaining representative. The Code makes no
distinction as to their employment status as basis for eligibility
in supporting the petition for certification election. The law
refers to all the employees in the bargaining unit. All they need
to be eligible to support the petition is to belong to the
bargaining unit. (Emphasis supplied)
Rule II, Sec. 2 of Department Order No. 40-03, series of 2003,
which amended Rule XI of the Omnibus Rules Implementing
the Labor Code, provides:
Rule II
Section 2. Who may join labor unions and workers'
associations. - All persons employed in commercial, industrial
and agricultural enterprises, including employees of
government owned or controlled corporations without original
charters established under the Corporation Code, as well as
employees of religious, charitable, medical or educational
institutions whether operating for profit or not, shall have the
right to self-organization and to form, join or assist labor unions
for purposes of collective bargaining: provided, however, that
supervisory employees shall not be eligible for membership in
a labor union of the rank-and-file employees but may form, join
or assist separate labor unions of their own. Managerial
employees shall not be eligible to form, join or assist any labor
unions for purposes of collective bargaining. Alien employees
with valid working permits issued by the Department may
exercise the right to self-organization and join or assist labor
unions for purposes of collective bargaining if they are
nationals of a country which grants the same or similar rights
to Filipino workers, as certified by the Department of Foreign
Affairs.
22
For purposes of this section, any employee, whether employed bargaining. Collective bargaining, refers to the negotiated
for a definite period or not, shall beginning on the first day of contract between a legitimate labor organization and the
his/her service, be eligible for membership in any labor employer concerning wages, hours of work and all other terms
organization. and conditions of employment in a bargaining unit.
All other workers, including ambulant, intermittent and other
workers, the self-employed, rural workers and those without
any definite employers may form labor organizations for their
mutual aid and protection and other legitimate purposes except
collective bargaining. (Emphasis supplied)
The provision in the CBA disqualifying probationary employees
from voting cannot override the Constitutionally-protected right
of workers to self-organization, as well as the provisions of the
Labor Code and its Implementing Rules on certification
elections and jurisprudence thereon.
A law is read into, and forms part of, a contract. Provisions in a
contract are valid only if they are not contrary to law, morals,
good customs, public order or public policy.
In light of the immediately-quoted provisions, and prescinding
from the principle that all employees are, from the first day of
their employment, eligible for membership in a labor
organization, it is evident that the period of reckoning in
determining who shall be included in the list of eligible voters
is, in cases where a timely appeal has been filed from the
Order of the Med-Arbiter, the date when the Order of the
Secretary of Labor and Employment, whether affirming or
denying the appeal, becomes final and executory.
The filing of an appeal to the SOLE from the Med-Arbiters
Order stays its execution, in accordance with Sec. 21, and
rationally, the Med-Arbiter cannot direct the employer to furnish
him/her with the list of eligible voters pending the resolution of
the appeal.
During the pendency of the appeal, the employer may hire
additional employees. To exclude the employees hired after
the issuance of the Med-Arbiters Order but before the appeal
has been resolved would violate the guarantee that every
employee has the right to be part of a labor organization from
the first day of their service.
In the present case, records show that the probationary
employees, including Gatbonton, were included in the list of
employees in the bargaining unit submitted by the Hotel on
May 25, 2006 in compliance with the directive of the Med-
Arbiter after the appeal and subsequent motion for
reconsideration have been denied by the SOLE, rendering the
Med-Arbiters August 22, 2005 Order final and executory 10
days after the March 22, 2007 Resolution (denying the motion
for reconsideration of the January 22 Order denying the
appeal), and rightly so. Because, for purposes of self-
organization, those employees are, in light of the discussion
above, deemed eligible to vote.
WHAT IS A CERTIFICATION ELECTION?
A certification election is the process of determining the sole
and exclusive bargaining agent of the employees in an
appropriate bargaining unit for purposes of collective