Article 243

SECOND DIVISION

G.R. No. 211145, October 14, 2015

SAMAHAN NG MANGGAGAWA SA HANJIN SHIPYARD REP. BY ITS

PRESIDENT, ALFIE ALIPIO, Petitioner, v. BUREAU OF LABOR RELATIONS,
HANJIN HEAVY INDUSTRIES AND CONSTRUCTION CO., LTD. (HHIC-
PHIL.), Respondents.

DECISION

MENDOZA, J.:

The right to self-organization is not limited to unionism. Workers may also form or
join an association for mutual aid and protection and for other legitimate purposes.

This is a petition for review on certiorari seeking to reverse and set aside the July 4,
2013 Decision1 and the January 28, 2014 Resolution2 of the Court of Appeals (CA)
in CA-G.R. SP No. 123397, which reversed the November 28, 2011 Resolution3 of
the Bureau of Labor Relations (BLR) and reinstated the April 20, 2010 Decision4 of
the Department of Labor and Employment (DOLE) Regional Director, cancelling
the registration of Samahan ng Manggagawa sa Hanjin Shipyard (Samahan) as a
worker's association under Article 243 (now Article 249) of the Labor Code.

The Facts

On February 16, 2010, Samahan, through its authorized representative, Alfie F.

Alipio, filed an application for registration5 of its name "Samahan ng Mga
Manggagawa sa Hanjin Shipyard" with the DOLE. Attached to the application were
the list of names of the association's officers and members, signatures of the
attendees of the February 7, 2010 meeting, copies of their Constitution and By-laws.
The application stated that the association had a total of 120 members.

On February 26, 2010, the DOLE Regional Office No. 3, City of San Fernando,
Pampanga (DOLE-Pampanga), issued the corresponding certificate of
registration6 in favor of Samahan.

On March 15, 2010, respondent Hanjin Heavy Industries and Construction Co., Ltd.
Philippines (Hanjin), with offices at Greenbeach 1, Renondo Peninsula, Sitio
Agustin, Barangay Cawag, Subic Bay Freeport Zone, filed a petition7 with DOLE-
Pampanga praying for the cancellation of registration of Samahan's association on
the ground that its members did not fall under any of the types of workers
enumerated in the second sentence of Article 243 (now 249).

Hanjin opined that only ambulant, intermittent, itinerant, rural workers, self-
employed, and those without definite employers may form a workers' association. It
further posited that one third (1/3) of the members of the association had definite
employers and the continued existence and registration of the association would
prejudice the company's goodwill.

On March 18, 2010, Hanjin filed a supplemental petition,8 adding the alternative
ground that Samahan committed a misrepresentation in connection with the list of
members and/or voters who took part in the ratification of their constitution and by-
laws in its application for registration. Hanjin claimed that Samahan made it
appear that its members were all qualified to become members of the workers'
association.

On March 26, 2010, DOLE-Pampanga called for a conference, wherein Samahan

requested for a 10-day period to file a responsive pleading. No pleading, however,
was submitted. Instead, Samahan filed a motion to dismiss on April 14, 2010.9

The Ruling of the DOLE Regional Director

On April 20, 2010, DOLE Regional Director Ernesto Bihis ruled in favor of Hanjin.
He found that the preamble, as stated in the Constitution and By-Laws of
Samahan, was an admission on its part that all of its members were employees of
Hanjin, to wit:
KAMI, ang mga Manggagawa sa HANJIN Shipyard (SAMAHAN) ay naglalayong
na isulong ang pagpapabuti ng kondisyon sa paggawa at katiyakan sa hanapbuhay
sa pamamagitan ng patuloy na pagpapaunlad ng kasanayan ng para sa mga kasapi
nito. Naniniwala na sa pamamagitan ng aming mga angking lakas, kaalaman at
kasanayan ay anting maitataguyod at makapag-aambag sa kaunlaran ng isang
lipunan. Na mararating at makakamit ang antas ng pagkilala, pagdakila at
pagpapahalaga sa mga tulad naming mga manggagawa.

x x x10
The same claim was made by Samahan in its motion to dismiss, but it failed to
adduce evidence that the remaining 63 members were also employees of Hanjin. Its
admission bolstered Hanjin's claim that Samahan committed misrepresentation in
its application for registration as it made an express representation that all of its
members were employees of the former. Having a definite employer, these 57
members should have formed a labor union for collective bargaining.11 The
dispositive portion of the decision of the Dole Regional Director, reads:
WHEREFORE, premises considered, the petition is hereby GRANTED.
Consequently, the Certificate of Registration as Legitimate Workers Association
(LWA) issued to the SAMAHAN NG MGA MANGGAGAWA SA HANJIN
SHIPYARD (SAMAHAN) with Registration Numbers R0300-1002-WA-009 dated
February 26, 2010 is hereby CANCELLED, and said association is dropped from the
roster of labor organizations of this Office.

SO DECIDED.12
The Ruling of the Bureau of Labor Relations

Aggrieved, Samahan filed an appeal13 before the BLR, arguing that Hanjin had no
right to petition for the cancellation of its registration. Samahan pointed out that
the words "Hanjin Shipyard," as used in its application for registration, referred to
a workplace and not as employer or company. It explained that when a shipyard
was put up in Subic, Zambales, it became known as Hanjin Shipyard. Further, the
remaining 63 members signed the Sama-Samang Pagpapatunay which stated that
they were either working or had worked at Hanjin. Thus, the alleged
misrepresentation committed by Samahan had no leg to stand on.14

In its Comment to the Appeal,15 Hanjin averred that it was a party-in-interest. It

reiterated that Samahan committed misrepresentation in its application for
registration before DOLE Pampanga. While Samahan insisted that the remaining
63 members were either working, or had at least worked in Hanjin, only 10 attested
to such fact, thus, leaving its 53 members without any workplace to claim.

On September 6, 2010, the BLR granted Samahan's appeal and reversed the ruling
of the Regional Director. It stated that the law clearly afforded the right to self-
organization to all workers including those without definite employers.16 As an
expression of the right to self-organization, industrial, commercial and self-
employed workers could form a workers' association if they so desired but subject to
the limitation that it was only for mutual aid and protection.17 Nowhere could it be
found that to form a workers' association was prohibited or that the exercise of a
workers' right to self-organization was limited to collective bargaining.18

The BLR was of the opinion that there was no misrepresentation on the part of
Samahan. The phrase, "KAMI, ang mga Manggagawa sa Hanjin Shipyard" if
translated, would be: "We, the workers at Hanjin Shipyard." The use of the
preposition "at" instead of "of " would indicate that "Hanjin Shipyard" was intended
to describe a place.19 Should Hanjin feel that the use of its name had affected the
goodwill of the company, the remedy was not to seek the cancellation of the
association's registration. At most, the use by Samahan of the name "Hanjin
Shipyard" would only warrant a change in the name of the association.20 Thus, the
dispositive portion of the BLR decision reads:
WHEREFORE, the appeal is hereby GRANTED. The Order of DOLE Region III
Director Ernesto C. Bihis dated 20 April 2010 is REVERSED and SET ASIDE.
Accordingly, Samahan ng mga Manggagawa sa Hanjin Shipyard shall remain in the
roster of legitimate workers' association.21
On October 14, 2010, Hanjin filed its motion for reconsideration.22

In its Resolution,23 dated November 28, 2011, the BLR affirmed its September 6,
2010 Decision, but directed Samahan to remove the words "Hanjin Shipyard" from
its name. The BLR explained that the Labor Code had no provision on the use of
trade or business name in the naming of a worker's association, such matters being
governed by the Corporation Code. According to the BLR, the most equitable relief
that would strike a balance between the contending interests of Samahan and
Hanjin was to direct Samahan to drop the name "Hanjin Shipyard" without
delisting it from the roster of legitimate labor organizations. The fallo reads:
WHEREFORE, premises considered, our Decision dated 6 September 2010 is
hereby AFFIRMED with a DIRECTIVE for SAMAHAN to remove "HANJIN
SHIPYARD" from its name.

SO RESOLVED.24
Unsatisfied, Samahan filed a petition for certiorari25 under Rule 65 before the CA,
docketed as CA-G.R. SP No. 123397.

In its March 21, 2012 Resolution,26 the CA dismissed the petition because of
Samahan's failure to file a motion for reconsideration of the assailed November 28,
2011 Resolution.

On April 17, 2012, Samahan filed its motion for reconsideration27 and on July 18,
2012, Hanjin filed its comment28 to oppose the same. On October 22, 2012, the CA
issued a resolution granting Samahan's motion for reconsideration and reinstating
the petition. Hanjin was directed to file a comment five (5) days from receipt of
notice.29

On December 12, 2012, Hanjin filed its comment on the petition,30 arguing that to
require Samahan to change its name was not tantamount to interfering with the
workers' right to self-organization.31 Thus, it prayed, among others, for the
dismissal of the petition for Samahan's failure to file the required motion for
reconsideration.32

On January 17, 2013, Samahan filed its reply.33

On March 22, 2013, Hanjin filed its memorandum.34

The Ruling of the Court of Appeals

On July 4, 2013, the CA rendered its decision, holding that the registration of
Samahan as a legitimate workers' association was contrary to the provisions of
Article 243 of the Labor Code.35 It stressed that only 57 out of the 120 members
were actually working in Hanjin while the phrase in the preamble of Samahan's
Constitution and By-laws, "KAMI, ang mga Manggagawa sa Hanjin Shipyard"
created an impression that all its members were employees of HHIC. Such
unqualified manifestation which was used in its application for registration, was a
clear proof of misrepresentation which warranted the cancellation of Samahan's
registration.

It also stated that the members of Samahan could not register it as a legitimate
worker's association because the place where Hanjin's industry was located was not
a rural area. Neither was there any evidence to show that the members of the
association were ambulant, intermittent or itinerant workers.36

At any rate, the CA was of the view that dropping the words "Hanjin Shipyard"
from the association name would not prejudice or impair its right to self-
organization because it could adopt other appropriate names. The dispositive
portion reads:
WHEREFORE, the petition is DISMISSED and the BLR's directive, ordering that
the words "Hanjin Shipyard" be removed from petitioner association's name, is
AFFIRMED. The Decision dated April 20, 2010 of the DOLE Regional Director in
Case No. R0300-1003-CP-001, which ordered the cancellation of petitioner
association's registration is REINSTATED.

SO ORDERED.37
Hence, this petition, raising the following
ISSUES

I. THE COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT

SAMAHAN CANNOT FORM A WORKERS' ASSOCIATION OF EMPLOYEES IN
HANJIN AND INSTEAD SHOULD HAVE FORMED A UNION, HENCE THEIR
REGISTRATION AS A WORKERS' ASSOCIATION SHOULD BE CANCELLED.

II. THE COURT OF APPEALS SERIOUSLY ERRED IN ORDERING THE

REMOVAL/DELETION OF THE WORD "HANJIN" IN THE NAME OF THE
UNION BY REASON OF THE COMPANY'S PROPERTY RIGHT OVER THE
COMPANY NAME "HANJIN."38
Samahan argues that the right to form a workers' association is not exclusive to
intermittent, ambulant and itinerant workers. While the Labor Code allows the
workers "to form, join or assist labor organizations of their own choosing" for the
purpose of collective bargaining, it does not prohibit them from forming a labor
organization simply for purposes of mutual aid and protection. All members of
Samahan have one common place of work, Hanjin Shipyard. Thus, there is no
reason why they cannot use "Hanjin Shipyard" in their name.39

Hanjin counters that Samahan failed to adduce sufficient basis that all its members
were employees of Hanjin or its legitimate contractors, and that the use of the name
"Hanjin Shipyard" would create an impression that all its members were employess
of HHIC.40

Samahan reiterates its stand that workers with a definite employer can organize
any association for purposes of mutual aid and protection. Inherent in the workers'
right to self-organization is its right to name its own organization. Samahan
referred "Hanjin Shipyard" as their common place of work. Therefore, they may
adopt the same in their association's name.41

The Court's Ruling

The petition is partly meritorious.

Right to self-organization includes right to form a union, workers' association and

labor management councils

More often than not, the right to self-organization connotes unionism. Workers,
however, can also form and join a workers' association as well as labor-management
councils (LMC). Expressed in the highest law of the land is the right of all workers
to self-organization. Section 3, Article XIII of the 1987 Constitution states:
Section 3. The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of
employment opportunities for all. It shall guarantee the rights of all workers to self-
organization,

collective bargaining and negotiations, and peaceful concerted activities, including

the right to strike in accordance with law. xxx

[Emphasis Supplied]
And Section 8, Article III of the 1987 Constitution also states:
Section 8. The right of the people, including those employed in the public and
private sectors, to form unions, associations, or societies for purposes not contrary to
law shall not be abridged.
In relation thereto, Article 3 of the Labor Code provides:
Article 3. Declaration of basic policy. The State shall 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. The State shall
assure the rights of workers to self-organization, collective bargaining, security of
tenure, and just and humane conditions of work.

[Emphasis Supplied]
As Article 246 (now 252) of the Labor Code provides, the right to self-organization
includes the right to form, join or assist labor organizations for the purpose of
collective bargaining through representatives of their own choosing and to engage in
lawful concerted activities for the same purpose for their mutual aid and protection.
This is in line with the policy of the State to foster the free and voluntary
organization of a strong and united labor movement as well as to make sure that
workers participate in policy and decision-making processes affecting their rights,
duties and welfare.42

The right to form a union or association or to self-organization comprehends two

notions, to wit: (a) the liberty or freedom, that is, the absence of restraint which
guarantees that the employee may act for himself without being prevented by law;
and (b) the power, by virtue of which an employee may, as he pleases, join or refrain
from joining an association.43

In view of the revered right of every worker to self-organization, the law expressly
allows and even encourages the formation of labor organizations. A labor
organization is defined 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."44 A labor organization has two
broad rights: (1) to bargain collectively and (2) to deal with the employer concerning
terms and conditions of employment. To bargain collectively is a right given to a
union once it registers itself with the DOLE. Dealing with the employer, on the
other hand, is a generic description of interaction between employer and employees
concerning grievances, wages, work hours and other terms and conditions of
employment, even if the employees' group is not registered with the DOLE.45

A union refers to any labor organization in the private sector organized for collective
bargaining and for other legitimate purpose,46 while a workers' association is an
organization of workers formed for the mutual aid and protection of its members or
for any legitimate purpose other than collective bargaining.47

Many associations or groups of employees, or even combinations of only several

persons, may qualify as a labor organization yet fall short of constituting a labor
union. While every labor union is a labor organization, not every labor organization
is a labor union. The difference is one of organization, composition and operation.48

Collective bargaining is just one of the forms of employee participation. Despite so

much interest in and the promotion of collective bargaining, it is incorrect to say
that it is the device and no other, which secures industrial democracy. It is equally
misleading to say that collective bargaining is the end-goal of employee
representation. Rather, the real aim is employee participation in whatever form it
may appear, bargaining or no bargaining, union or no union.49 Any labor
organization which may or may not be a union may deal with the employer. This
explains why a workers' association or organization does not always have to be a
labor union and why employer-employee collective interactions are not always
collective bargaining.50

To further strengthen employee participation, Article 255 (now 261)51 of the Labor
Code mandates that workers shall have the right to participate in policy and
decision-making processes of the establishment where they are employed insofar as
said processes will directly affect their rights, benefits and welfare. For this
purpose, workers and employers may form LMCs.

A cursory reading of the law demonstrates that a common element between

unionism and the formation of LMCs is the existence of an employer-employee
relationship. Where neither party is an employer nor an employee of the other, no
duty to bargain collectively would exist.52 In the same manner, expressed in Article
255 (now 261) is the requirement that such workers be employed in the
establishment before they can participate in policy and decision making processes.

In contrast, the existence of employer-employee relationship is not mandatory in

the formation of workers' association. What the law simply requires is that the
members of the workers' association, at the very least, share the same interest. The
very definition of a workers' association speaks of "mutual aid and protection."

Right to choose whether to form or join a union or workers' association belongs to

workers themselves

In the case at bench, the Court cannot sanction the opinion of the CA that Samahan
should have formed a union for purposes of collective bargaining instead of a
workers' association because the choice belonged to it. The right to form or join a
labor organization necessarily includes the right to refuse or refrain from exercising
the said right. It is self-evident that just as no one should be denied the exercise of a
right granted by law, so also, no one should be compelled to exercise such a
conferred right.53 Also inherent in the right to self-organization is the right to
choose whether to form a union for purposes of collective bargaining or a workers'
association for purposes of providing mutual aid and protection.

The right to self-organization, however, is subject to certain limitations as provided

by law. For instance, the Labor Code specifically disallows managerial employees
from joining, assisting or forming any labor union. Meanwhile, supervisory
employees, while eligible for membership in labor organizations, are proscribed
from joining the collective bargaining unit of the rank and file employees.54 Even
government employees have the right to self-organization. It is not, however,
regarded as existing or available for purposes of collective bargaining, but simply
for the furtherance and protection of their interests.55

Hanjin posits that the members of Samahan have definite employers, hence, they
should have formed a union instead of a workers' association. The Court disagrees.
There is no provision in the Labor Code that states that employees with definite
employers may form, join or assist unions only.

The Court cannot subscribe either to Hanjin's position that Samahan's members
cannot form the association because they are not covered by the second sentence of
Article 243 (now 249), to wit:
Article 243. Coverage and employees' right to self-organization. All persons
employed in commercial, industrial and agricultural enterprises and in religious,
charitable, medical, or educational institutions, whether operating for profit or not,
shall have the right to self-organization and to form, join, or assist labor
organizations of their own choosing for purposes of collective bargaining. Ambulant,
intermittent and itinerant workers, self-employed people, rural workers and those
without any definite employers may form labor organizations for their mutual aid
and protection. (As amended by Batas Pambansa Bilang 70, May 1, 1980)

[Emphasis Supplied]
Further, Article 243 should be read together with Rule 2 of Department Order
(D.O.) No. 40-03, Series of 2003, which provides:
RULE II

COVERAGE OF THE RIGHT TO SELF-ORGANIZATION

Section 1. Policy. - It is the policy of the State to promote the free and responsible
exercise of the right to self-organization through the establishment of a simplified
mechanism for the speedy registration of labor unions and workers associations,
determination of representation status and resolution of inter/intra-union and other
related labor relations disputes. Only legitimate or registered labor unions shall
have the right to represent their members for collective bargaining and other
purposes. Workers' associations shall have the right to represent their members for
purposes other than collective bargaining.

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.

For purposes of this section, 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.

[Emphases Supplied]
Clearly, there is nothing in the foregoing implementing rules which provides that
workers, with definite employers, cannot form or join a workers' association for
mutual aid and protection. Section 2 thereof even broadens the coverage of workers
who can form or join a workers' association. Thus, the Court agrees with Samahan's
argument that the right to form a workers' association is not exclusive to ambulant,
intermittent and itinerant workers. The option to form or join a union or a workers'
association lies with the workers themselves, and whether they have definite
employers or not.

No misrepresentation on the part of Samahan to warrant cancellation of

registration

In this case, Samahan's registration was cancelled not because its members were
prohibited from forming a workers' association but because they allegedly
committed misrepresentation for using the phrase, "KAMI, ang mga Manggagawa
sa HAN JIN Shipyard."

Misrepresentation, as a ground for the cancellation of registration of a labor

organization, is committed "in connection with the adoption, or ratification of the
constitution and by-laws or amendments thereto, the minutes of ratification, the list
of members who took part in the ratification of the constitution and by-laws or
amendments thereto, and those in connection with the election of officers, minutes
of the election of officers, and the list of voters, xxx."56
In Takata Corporation v. Bureau of Relations,57 the DOLE Regional Director
granted the petition for the cancellation of certificate of registration of Samahang
Lakas Manggagawa sa Takata (Salamat) after finding that the employees who
attended the organizational meeting fell short of the 20% union registration
requirement. The BLR, however, reversed the ruling of the DOLE Regional
Director, stating that petitioner Takata Corporation (Takata) failed to prove
deliberate and malicious misrepresentation on the part of respondent Salamat.
Although Takata claimed that in the list of members, there was an employee whose
name appeared twice and another was merely a project employee, such facts were
not considered misrepresentations in the absence of showing that the respondent
deliberately did so for the purpose of increasing their union membership. The Court
ruled in favor of Salamat.

In S.S. Ventures International v. S.S. Ventures Labor Union,58 the petition for
cancellation of certificate of registration was denied. The Court wrote:
If the union's application is infected by falsification and like serious irregularities,
especially those appearing on the face of the application and its attachments, a
union should be denied recognition as a legitimate labor organization. Prescinding
from these considerations, the issuance to the Union of Certificate of Registration
No. RO300-00-02-UR-0003 necessarily implies that its application for registration
and the supporting documents thereof are prima facie free from any vitiating
irregularities. Another factor which militates against the veracity of the allegations
in the Sinumpaang Petisyon is the lack of particularities on how, when and where
respondent union perpetrated the alleged fraud on each member. Such details are
crucial for in the proceedings for cancellation of union registration on the ground of
fraud or misrepresentation, what needs to be established is that the specific act or
omission of the union deprived the complaining employees-members of their right to
choose.

[Emphases Supplied]
Based on the foregoing, the Court concludes that misrepresentation, to be a ground
for the cancellation of the certificate of registration, must be done maliciously and
deliberately. Further, the mistakes appearing in the application or attachments
must be grave or refer to significant matters. The details as to how the alleged
fraud was committed must also be indubitably shown.

The records of this case reveal no deliberate or malicious intent to commit

misrepresentation on the part of Samahan. The use of such words "KAMI, ang mga
Manggagawa sa HANJIN Shipyard" in the preamble of the constitution and by-laws
did not constitute misrepresentation so as to warrant the cancellation of Samahan's
certificate of registration. Hanjin failed to indicate how this phrase constitutes a
malicious and deliberate misrepresentation. Neither was there any showing that
the alleged misrepresentation was serious in character. Misrepresentation is a
devious charge that cannot simply be entertained by mere surmises and
conjectures.

Even granting arguendo that Samahan's members misrepresented themselves as

employees or workers of Hanjin, said misrepresentation does not relate to the
adoption or ratification of its constitution and by-laws or to the election of its
officers.

Removal of the word "Hanjin Shipyard" from the association's name, however, does
not infringe on Samahan's right to self-organization

Nevertheless, the Court agrees with the BLR that "Hanjin Shipyard" must be
removed in the name of the association. A legitimate workers' association refers to
an association of workers organized for mutual aid and protection of its members or
for any legitimate purpose other than collective bargaining registered with the
DOLE.59 Having been granted a certificate of registration, Samahan's association is
now recognized by law as a legitimate workers' association.

According to Samahan, inherent in the workers' right to self-organization is its

right to name its own organization. It seems to equate the dropping of words
"Hanjin Shipyard" from its name as a restraint in its exercise of the right to self-
organization. Hanjin, on the other hand, invokes that "Hanjin Shipyard" is a
registered trade name and, thus, it is within their right to prohibit its use.

As there is no provision under our labor laws which speak of the use of name by a
workers' association, the Court refers to the Corporation Code, which governs the
names of juridical persons. Section 18 thereof provides:
No corporate name may be allowed by the Securities and Exchange Commission if
the proposed name is identical or deceptively or confusingly similar to that of any
existing corporation or to any other name already protected by law or is patently
deceptive, confusing or contrary to existing laws. When a change in the corporate
name is approved, the Commission shall issue an amended certificate of
incorporation under the amended name.

[Emphases Supplied]
The policy underlying the prohibition in Section 18 against the registration of a
corporate name which is "identical or deceptively or confusingly similar" to that of
any existing corporation or which is "patently deceptive" or "patently confusing" or
"contrary to existing laws," is the avoidance of fraud upon the public which would
have occasion to deal with the entity concerned, the evasion of legal obligations and
duties, and the reduction of difficulties of administration and supervision over
corporations.60

For the same reason, it would be misleading for the members of Samahan to use
"Hanjin Shipyard" in its name as it could give the wrong impression that all of its
members are employed by Hanjin.

Further, Section 9, Rule IV of D.O. No. 40-03, Series of 2003 explicitly states:
The change of name of a labor organization shall not affect its legal personality. All
the rights and obligations of a labor organization under its old name shall continue
to be exercised by the labor organization under its new name.
Thus, in the directive of the BLR removing the words "Hanjin Shipyard," no
abridgement of Samahan's right to self-organization was committed.

WHEREFORE, the petition is PARTIALLY GRANTED. The July 4, 2013 Decision

and the January 28, 2014 Resolution of the Court of Appeals are
hereby REVERSED and SET ASIDE. The September 6, 2010 Resolution of the
Bureau of Labor Relations, as modified by its November 28, 2011 Resolution,
is REINSTATED.

SO ORDERED.chanroblesvirtuallawlibrary

Article 245
FIRST DIVISION

[G.R. No. 169717, March 16 : 2011]

SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF

UNIONS IN THE PHILIPPINES FOR EMPOWERMENT AND REFORMS (SMCC-
SUPER), ZACARRIAS JERRY VICTORIO - UNION PRESIDENT,
PETITIONER,VS. CHARTER CHEMICAL AND COATING CORPORATION,
RESPONDENT.

DECISION

DEL CASTILLO, J.:

The right to file a petition for certification election is accorded to a labor

organization provided that it complies with the requirements of law for proper
registration. 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. We apply these principles to this case.

This Petition for Review on Certiorari seeks to reverse and set aside the Court of
Appeal's March 15, 2005 Decision[1] in CA-G.R. SP No. 58203, which annulled and
set aside the January 13, 2000 Decision[2] of the Department of Labor and
Employment (DOLE) in OS-A-6-53-99 (NCR-OD-M-9902-019) and the September
16, 2005 Resolution[3] denying petitioner union's motion for reconsideration.

Factual Antecedents

On February 19, 1999, Samahang Manggagawa sa Charter Chemical Solidarity of

Unions in the Philippines for Empowerment and Reforms (petitioner union) 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, National Capital Region.

On April 14, 1999, respondent company filed an Answer with Motion to

Dismiss[4] 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.[5]

Med-Arbiter's Ruling

On April 30, 1999, Med-Arbiter Tomas F. Falconitin issued a Decision[6] dismissing

the petition for certification election. The Med-Arbiter ruled that petitioner union is
not a legitimate labor organization because the Charter Certificate, "Sama-samang
Pahayag ng Pagsapi at Authorization," and "Listahan ng mga Dumalo sa
Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas"
were not executed under oath and certified by the union secretary and attested to
by the union president as required by Section 235 of the Labor Code[7] in relation to
Section 1, Rule VI of Department Order (D.O.) No. 9, series of 1997. The union
registration was, thus, fatally defective.

The Med-Arbiter further held that the list of membership of petitioner union
consisted of 12 batchman, mill operator and leadman who performed supervisory
functions. Under Article 245 of the Labor Code, said supervisory employees are
prohibited from joining petitioner union which seeks to represent the rank-and-file
employees of respondent company.

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.

Department of Labor and Employment's Ruling

On July 16, 1999, the 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. Although the DOLE ruled,
contrary to the findings of the Med-Arbiter, that the charter certificate need not be
verified and that there was no independent evidence presented to establish
respondent company's claim that some members of petitioner union were holding
supervisory positions, the DOLE sustained the dismissal of the petition for
certification after it took judicial notice that another union, i.e., Pinag-isang
Lakas Manggagawa sa Charter Chemical and Coating Corporation, previously filed
a petition for certification election on January 16, 1998. The Decision granting the
said petition became final and executory on September 16, 1998 and was remanded
for immediate implementation. Under Section 7, Rule XI of D.O. No. 9, series of
1997, a motion for intervention involving a certification election in an unorganized
establishment should be filed prior to the finality of the decision calling for a
certification election. Considering that petitioner union filed its petition only on
February 14, 1999, the same was filed out of time.

On motion for reconsideration, however, the DOLE reversed its earlier ruling. In its
January 13, 2000 Decision, the 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, viz:

WHEREFORE, the motion for reconsideration is hereby GRANTED and the

decision of this Office dated 16 July 1999 is MODIFIED to allow the certification
election among the regular rank-and-file employees of Charter Chemical and
Coating Corporation with the following choices:

1. Samahang Manggagawa sa Charter Chemical-Solidarity of Unions in the

Philippines for Empowerment and Reform (SMCC-SUPER); and

2. No Union.

Let the records of this case be remanded to the Regional Office of origin for the
immediate conduct of a certification election, subject to the usual pre-election
conference.

SO DECIDED.[9]

Court of Appeal's Ruling

On March 15, 2005, the CA promulgated the assailed Decision, viz:

WHEREFORE, the petition is hereby GRANTED. The assailed Decision and

Resolution dated January 13, 2000 and February 17, 2000 are hereby
[ANNULLED] and SET ASIDE.
SO ORDERED.[10]

In nullifying the decision of the DOLE, the appellate court gave credence to the
findings of the Med-Arbiter that petitioner union failed to comply with the
documentation requirements under the Labor Code. It, likewise, upheld the Med-
Arbiter's finding that petitioner union consisted of both rank-and-file and
supervisory employees. Moreover, the CA held that the issues as to the legitimacy
of petitioner union may be attacked collaterally in a petition for certification
election and the infirmity in the membership of petitioner union cannot be remedied
through the exclusion-inclusion proceedings in a pre-election conference pursuant to
the ruling in Toyota Motor Philippines v. Toyota Motor Philippines Corporation
Labor Union.[11] Thus, considering that petitioner union is not a legitimate labor
organization, it has no legal right to file a petition for certification election.

Issues

Whether x x x the Honorable Court of Appeals committed grave abuse of discretion

tantamount to lack of jurisdiction in granting the respondent [company's] petition
for certiorari (CA G.R. No. SP No. 58203) in spite of the fact that the issues subject
of the respondent company['s] petition was already settled with finality and barred
from being re-litigated.

II

Whether x x x the Honorable Court of Appeals committed grave abuse of discretion

tantamount to lack of jurisdiction in holding that the alleged mixture of rank-and-
file and supervisory employee[s] of petitioner [union's] membership is [a] ground for
the cancellation of petitioner [union's] legal personality and dismissal of [the]
petition for certification election.

III

Whether x x x the Honorable Court of Appeals committed grave abuse of discretion

tantamount to lack of jurisdiction in holding that the alleged failure to certify under
oath the local charter certificate issued by its mother federation and list of the
union membership attending the organizational meeting [is a ground] for the
cancellation of petitioner [union's] legal personality as a labor organization and for
the dismissal of the petition for certification election.[12]

Petitioner Union's Arguments

Petitioner union claims that the litigation of the issue as to its legal personality to
file the subject petition for certification election is barred by the July 16, 1999
Decision of the DOLE. In this decision, the DOLE ruled that petitioner union
complied with all the documentation requirements and that there was no
independent evidence presented to prove an illegal mixture of supervisory and rank-
and-file employees in petitioner union. After the promulgation of this Decision,
respondent company did not move for reconsideration, thus, this issue must be
deemed settled.

Petitioner union further argues that the lack of verification of its charter certificate
and the alleged illegal composition of its membership are not grounds for the
dismissal of a petition for certification election under Section 11, Rule XI of D.O. No.
9, series of 1997, as amended, nor are they grounds for the cancellation of a union's
registration under Section 3, Rule VIII of said issuance. It contends that what is
required to be certified under oath by the local union's secretary or treasurer and
attested to by the local union's president are limited to the union's constitution and
by-laws, statement of the set of officers, and the books of accounts.

Finally, the legal personality of petitioner union cannot be collaterally attacked but
may be questioned only in an independent petition for cancellation pursuant to
Section 5, Rule V, Book IV of the Rules to Implement the Labor Code and the
doctrine enunciated in Tagaytay Highlands International Golf Club Incoprorated v.
Tagaytay Highlands Empoyees Union-PTGWO.[13]

Respondent Company's Arguments

Respondent company asserts that it cannot be precluded from challenging the July
16, 1999 Decision of the DOLE. The said decision did not attain finality because the
DOLE subsequently reversed its earlier ruling and, from this decision, respondent
company timely filed its motion for reconsideration.

On the issue of lack of verification of the charter certificate, respondent company

notes that Article 235 of the Labor Code and Section 1, Rule VI of the Implementing
Rules of Book V, as amended by D.O. No. 9, series of 1997, expressly requires that
the charter certificate be certified under oath.

It also contends that petitioner union is not a legitimate labor organization because
its composition is a mixture of supervisory and rank-and-file employees in violation
of Article 245 of the Labor Code. Respondent company maintains that the ruling
in Toyota Motor Philippines vs. Toyota Motor Philippines Labor Union[14] continues
to be good case law. Thus, the illegal composition of petitioner union nullifies its
legal personality to file the subject petition for certification election and its legal
personality may be collaterally attacked in the proceedings for a petition for
certification election as was done here.
 Our Ruling

The petition is meritorious.

The issue as to the legal personality of

petitioner union is not barred by the
July 16, 1999 Decision of the DOLE.

A review of the records indicates that the issue as to petitioner union's legal
personality has been timely and consistently raised by respondent company before
the Med-Arbiter, DOLE, CA and now this Court. In its July 16, 1999 Decision, the
DOLE found that petitioner union complied with the documentation requirements
of the Labor Code and that the evidence was insufficient to establish that there was
an illegal mixture of supervisory and rank-and-file employees in its membership.
Nonetheless, the petition for certification election was dismissed on the ground that
another union had previously filed a petition for certification
election seeking to represent the same bargaining unit in respondent company.

Upon motion for reconsideration by petitioner union on January 13, 2000, the
DOLE reversed its previous ruling. It upheld the right of petitioner union to file the
subject petition for certification election because its previous decision was based on
a mistaken appreciation of facts.[15] From this adverse decision, respondent
company timely moved for reconsideration by reiterating its previous arguments
before the Med-Arbiter that petitioner union has no legal personality to file the
subject petition for certification election.

The July 16, 1999 Decision of the DOLE, therefore, never attained finality because
the parties timely moved for reconsideration. The issue then as to the legal
personality of petitioner union to file the certification election was properly raised
before the DOLE, the appellate court and now this Court.

The charter certificate need not be

certified under oath by the local union's
secretary or treasurer and attested to
by its president.

Preliminarily, we must note that Congress enacted Republic Act (R.A.) No.
9481[16] which took effect on June 14, 2007.[17] This law introduced substantial
amendments to the Labor Code. However, since the operative facts in this case
occurred in 1999, we shall decide the issues under the pertinent legal provisions
then in force (i.e., R.A. No. 6715,[18] amending Book V of the Labor Code, and the
rules and regulations[19] implementing R.A. No. 6715, as amended by D.O. No. 9,[20]

series of 1997) pursuant to our ruling in Republic v. Kawashima Textile Mfg.,

Philippines, Inc.[21]

In the main, the CA ruled that petitioner union failed to comply with the requisite
documents for registration under Article 235 of the Labor Code and its
implementing rules. It agreed with the Med-Arbiter that the Charter
Certificate, Sama-samang Pahayag ng Pagsapi at Authorization, and Listahan ng
mga Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa
Saligang Batas were not executed under oath. Thus, petitioner union cannot be
accorded the status of a legitimate labor organization.

We disagree.

The then prevailing Section 1, Rule VI of the Implementing Rules of Book V, as

amended by D.O. No. 9, series of 1997, provides:

Section 1. Chartering and creation of a local chapter -- A duly registered federation

or national union may directly create a local/chapter by submitting to the Regional
Office or to the Bureau two (2) copies of the following:

(a) A charter certificate issued by the federation or national union indicating the
creation or establishment of the local/chapter;

(b) The names of the local/chapter's officers, their addresses, and the principal
office of the local/chapter; and

(c) The local/chapter's constitution and by-laws provided that where the
local/chapter's constitution and by-laws [are] the same as [those] of the federation or
national union, this fact shall be indicated accordingly.

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

As readily seen, the Sama-samang Pahayag ng Pagsapi at Authorization

and Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at
Nagratipika sa Saligang Batas are not among the documents that need to be
submitted to the Regional Office or Bureau of Labor Relations in order to register a
labor organization. As to the charter certificate, the above-quoted rule indicates that
it should be executed under oath. Petitioner union concedes and the records confirm
that its charter certificate was not executed under oath. However, in San Miguel
Corporation (Mandaue Packaging Products Plants) v. Mandaue Packing Products
Plants-San Miguel Corporation Monthlies Rank-and-File Union-FFW (MPPP-
SMPP-SMAMRFU-FFW),[22] which was decided under the auspices of D.O. No. 9,
Series of 1997, we ruled -
In San Miguel Foods-Cebu B-Meg Feed Plant v. Hon. Laguesma, 331 Phil. 356
(1996), the Court ruled that it was not necessary for the charter certificate to be
certified and attested by the local/chapter officers. Id. While this ruling was based
on the interpretation of the previous Implementing Rules provisions which were
supplanted by the 1997 amendments, we believe that the same doctrine obtains in
this case. Considering that the charter certificate is prepared and issued by the
national union and not the local/chapter, it does not make sense to have the
local/chapter's officers x x x certify or attest to a document which they had no hand
in the preparation of.[23] (Emphasis supplied)

In accordance with this ruling, petitioner union's charter certificate need not be
executed under oath. Consequently, it validly acquired the status of a legitimate
labor organization upon submission of (1) its charter certificate,[24] (2) the names of
its officers, their addresses, and its principal office,[25] and (3) its constitution and
by-laws[26]-- the last two requirements having been executed under oath by the
proper union officials as borne out by the records.

The mixture of rank-and-file and supervisory

employees in petitioner union does not
nullify its legal personality as a legitimate
labor organization.

The CA found that petitioner union has for its membership both rank-and-file and
supervisory employees. However, petitioner union sought to represent the
bargaining unit consisting of rank-and-file employees. Under Article 245[27] of the
Labor Code, supervisory employees are not eligible for membership in a labor
organization of rank-and-file employees. Thus, the appellate court ruled that
petitioner union cannot be considered a legitimate labor organization pursuant
to Toyota Motor Philippines v. Toyota Motor Philippines Corporation Labor
Union[28] (hereinafter Toyota).

Preliminarily, we note that petitioner union questions the factual findings of the
Med-Arbiter, as upheld by the appellate court, that 12 of its members, consisting of
batchman, mill operator and leadman, are supervisory employees. However,
petitioner union failed to present any rebuttal evidence in the proceedings below
after respondent company submitted in evidence the job descriptions[29] of the
aforesaid employees. The job descriptions indicate that the aforesaid employees
exercise recommendatory managerial actions which are not merely routinary but
require the use of independent judgment, hence, falling within the definition of
supervisory employees under Article 212(m)[30] of the Labor Code. For this reason,
we are constrained to agree with the Med-Arbiter, as upheld by the appellate court,
that petitioner union consisted of both rank-and-file and supervisory employees.

Nonetheless, the inclusion of the aforesaid supervisory employees in petitioner

union does not divest it of its status as a legitimate labor organization. The
appellate court's reliance on Toyota is misplaced in view of this Court's subsequent
ruling in Republic v. Kawashima Textile Mfg., Philippines,
Inc.[31] (hereinafter Kawashima). In Kawashima, we explained at length how and
why the Toyota doctrine no longer holds sway under the altered state of the law and
rules applicable to this case, viz:

R.A. No. 6715 omitted specifying the exact effect any violation of the prohibition [on
the co-mingling of supervisory and rank-and-file employees] would bring about on
the legitimacy of a labor organization.

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

"Sec. 1. Who may join unions. - x x x Supervisory employees and security guards
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;
Provided, that those supervisory employees who are included in an existing rank-
and-file bargaining unit, upon the effectivity of Republic Act No. 6715, shall remain
in that unit x x x. (Emphasis supplied)

and Rule V (Representation Cases and Internal-Union Conflicts) of the Omnibus

Rules, viz:

"Sec. 1. Where to file. - A petition for certification election may be filed with the
Regional Office which has jurisdiction over the principal office of the employer. The
petition shall be in writing and under oath.

Sec. 2. Who may file. - Any legitimate labor organization or the employer, when
requested to bargain collectively, may file the petition.

The petition, when filed by a legitimate labor organization, shall contain, among
others:

xxxx

(c) description of the bargaining unit which shall be the employer unit unless
circumstances otherwise require; and provided further, that the appropriate
bargaining unit of the rank-and-file employees shall not include supervisory
employees and/or security guards. (Emphasis supplied)

By that provision, any questioned mingling will prevent an otherwise legitimate

and duly registered labor organization from exercising its right to file a petition for
certification election.

Thus, when the issue of the effect of mingling was brought to the fore in Toyota, the
Court, citing Article 245 of the Labor Code, as amended by R.A. No. 6715, held:

"Clearly, 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.

xxxx

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." (Emphasis supplied)

In Dunlop, in which the labor organization that filed a petition for certification
election was one for supervisory employees, but in which the membership included
rank-and-file employees, the Court reiterated that such labor organization had no
legal right to file a certification election to represent a bargaining unit composed of
supervisors for as long as it counted rank-and-file employees among its members.

It should be emphasized that the petitions for certification election involved

in Toyota and Dunlop were filed on November 26, 1992 and September 15, 1995,
respectively; hence, the 1989 Rules was applied in both cases.

But then, on June 21, 1997, the 1989 Amended Omnibus Rules was further
amended by Department Order No. 9, series of 1997 (1997 Amended Omnibus
Rules). Specifically, the requirement under Sec. 2(c) of the 1989 Amended Omnibus
Rules - that the petition for certification election indicate that the bargaining unit of
rank-and-file employees has not been mingled with supervisory employees - was
removed. Instead, what the 1997 Amended Omnibus Rules requires is a plain
description of the bargaining unit, thus:
 Rule XI
Certification Elections

xxxx

Sec. 4. Forms and contents of petition. - The petition shall be in writing and under
oath and shall contain, among others, the following: x x x (c) The description of the
bargaining unit.

In Pagpalain Haulers, Inc. v. Trajano, the Court had occasion to uphold the validity
of the 1997 Amended Omnibus Rules, although the specific provision involved
therein was only Sec. 1, Rule VI, to wit:

"Section. 1. Chartering and creation of a local/chapter.- A duly registered federation

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

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

which does not require that, for its creation and registration, a local or chapter
submit a list of its members.

Then came Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay Highlands
Employees Union-PGTWO in which the core issue was whether mingling affects the
legitimacy of a labor organization and its right to file a petition for certification
election. This time, given the altered legal milieu, the Court abandoned the view
in Toyota and Dunlop and reverted to its pronouncement in Lopez that 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.

In San Miguel Corp. (Mandaue Packaging Products Plants) v. Mandaue Packing

Products Plants-San Miguel Packaging Products-San Miguel Corp. Monthlies Rank-
and-File Union-FFW, the Court explained that since the 1997 Amended Omnibus
Rules does not require a local or chapter to provide a list of its members, it would be
improper for the DOLE to deny recognition to said local or chapter on account of any
question pertaining to its individual members.

More to the point is Air Philippines Corporation v. Bureau of Labor Relations, which
involved a petition for cancellation of union registration filed by the employer in
1999 against a rank-and-file labor organization on the ground of mixed
membership: the Court therein reiterated its ruling in Tagaytay Highlands that the
inclusion in a union of disqualified employees is not among the grounds for
cancellation, unless such inclusion is due to misrepresentation, false statement or
fraud under the circumstances enumerated in Sections (a) and (c) of Article 239 of
the Labor Code.

All said, while the latest issuance is R.A. No. 9481, the 1997 Amended Omnibus
Rules, as interpreted by the Court in Tagaytay Highlands, San Miguel and Air
Philippines, had already set the tone for it. Toyota and Dunlop no longer hold sway
in the present altered state of the law and the rules.[32] [Underline supplied]

The applicable law and rules in the instant case are the same as those
in Kawashima because the present petition for certification election was filed in
1999 when D.O. No. 9, series of 1997, was still in effect. Hence, Kawashima applies
with equal force here. As a result, petitioner union was not divested of its status as
a legitimate labor organization even if some of its members were supervisory
employees; it had the right to file the subject petition for certification election.

The legal personality of petitioner union

cannot be collaterally attacked by respondent
company in the certification election proceedings.

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

Except when it is requested to bargain collectively, an employer is a mere bystander

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

The amendments to the Labor Code and its implementing rules have buttressed
that policy even more.[33]

WHEREFORE, the petition is GRANTED. The March 15, 2005 Decision and
September 16, 2005 Resolution of the Court of Appeals in CA-G.R. SP No. 58203
are REVERSED and SET ASIDE. The January 13, 2000 Decision of the
Department of Labor and Employment in OS-A-6-53-99 (NCR-OD-M-9902-019)
is REINSTATED.

No pronouncement as to costs.

SO ORDERED.

FIRST DIVISION

[G.R. NO. 164561 : August 30, 2006]

CATHAY PACIFIC STEEL CORPORATION, BENJAMIN CHUA JR., VIRGILIO

AGERO, and LEONARDO VISORRO, JR., Petitioners, v. HON. COURT OF
APPEALS, CAPASCO UNION OF SUPERVISORY EMPLOYEES (CUSE) and
ENRIQUE TAMONDONG III, Respondents.

DECISION

CHICO-NAZARIO, J.:

This is a special civil action for Certiorari under Rule 65 of the Rules of Court
seeking to annul and set aside, on the ground of grave abuse of discretion
amounting to lack or excess of jurisdiction, (1) the Decision 1 of the Court of Appeals
in CA-G.R. SP No. 57179 dated 28 October 2003 which annulled the Decision 2 of
the National Labor Relations Commission (NLRC) in NLRC Case No. 017822-99
dated 25 August 1999, thereby, reinstating the Decision 3 of Acting Executive Labor
Arbiter Pedro C. Ramos dated 7 August 1998; and (2) the Resolution 4 of the same
court, dated 3 June 2004, which denied the petitioners' Motion for Reconsideration.

Herein petitioners are Cathay Pacific Steel Corporation (CAPASCO), a domestic

corporation engaged in the business of manufacturing steel products; Benjamin
Chua, Jr. (now deceased), the former CAPASCO President; Virgilio Agerro,
CAPASCO's Vice-President; and Leonardo Visorro, Jr., CAPASCO's Administrative-
Personnel Manager. Herein private respondents are Enrique Tamondong III, the
Personnel Superintendent of CAPASCO who was previously assigned at the
petitioners' Cainta Plant, and CAPASCO Union of Supervisory Employees (CUSE),
a duly registered union of CAPASCO.

The facts of the case are as follows:

Four former employees of CAPASCO originally filed this labor case before the
NLRC, namely: Fidel Lacambra, Armando Dayson, Reynaldo Vacalares, and
Enrique Tamondong III. However, in the course of the proceedings, Fidel
Lacambra 5 and Armando Dayson 6 executed a Release and Quitclaim, thus,
waiving and abandoning any and all claims that they may have against petitioner
CAPASCO. On 3 November 1999, Reynaldo Vacalares also signed a
Quitclaim/Release/Waiver.7 Hence, this Petition shall focus solely on issues
affecting private respondent Tamondong.

Petitioner CAPASCO, hired private respondent Tamondong as Assistant to the

Personnel Manager for its Cainta Plant on 16 February 1990. Thereafter, he was
promoted to the position of Personnel/Administrative Officer, and later to that of
Personnel Superintendent. Sometime in June 1996, the supervisory personnel of
CAPASCO launched a move to organize a union among their ranks, later known as
private respondent CUSE. Private respondent Tamondong actively involved himself
in the formation of the union and was even elected as one of its officers after its
creation. Consequently, petitioner CAPASCO sent a memo 8 dated 3 February 1997,
to private respondent Tamondong requiring him to explain and to discontinue from
his union activities, with a warning that a continuance thereof shall adversely affect
his employment in the company. Private respondent Tamondong ignored said
warning and made a reply letter 9 on 5 February 1997, invoking his right as a
supervisory employee to join and organize a labor union. In view of that, on 6
February 1997, petitioner CAPASCO through a memo 10 terminated the
employment of private respondent Tamondong on the ground of loss of trust and
confidence, citing his union activities as acts constituting serious disloyalty to the
company.

Private respondent Tamondong challenged his dismissal for being illegal and as an
act involving unfair labor practice by filing a Complaint for Illegal Dismissal and
Unfair Labor Practice before the NLRC, Regional Arbitration Branch IV. According
to him, there was no just cause for his dismissal and it was anchored solely on his
involvement and active participation in the organization of the union of supervisory
personnel in CAPASCO. Though private respondent Tamondong admitted his active
role in the formation of a union composed of supervisory personnel in the company,
he claimed that such was not a valid ground to terminate his employment because
it was a legitimate exercise of his constitutionally guaranteed right to self-
organization.

In contrast, petitioner CAPASCO contended that by virtue of private respondent

Tamondong's position as Personnel Superintendent and the functions actually
performed by him in the company, he was considered as a managerial employee,
thus, under the law he was prohibited from joining a union as well as from being
elected as one of its officers. Accordingly, petitioners maintained their argument
that the dismissal of private respondent Tamondong was perfectly valid based on
loss of trust and confidence because of the latter's active participation in the affairs
of the union.

On 7 August 1998, Acting Executive Labor Arbiter Pedro C. Ramos rendered a

Decision in favor of private respondent Tamondong, decreeing as follows:

WHEREFORE, premises considered, judgment is hereby rendered finding

[petitioner CAPASCO] guilty of unfair labor practice and illegal dismissal.
Concomitantly, [petitioner CAPASCO] is hereby ordered:

1. To cease and desist from further committing acts of unfair labor practice, as
charged;

2. To reinstate [private respondent Tamondong] to his former position without loss

of seniority rights and other privileges and his full backwages inclusive of
allowances, and to his other benefits or their monetary equivalent, computed from
the time his compensation was withheld from him up to the time of his actual
reinstatement, and herein partially computed as follows:

a) P167,076.00 - backwages from February 7, 1997 to August 7, 1998;

b) P18,564.00 - 13th month pay for 1997 and 1998;

c) P4,284.00 - Holiday pay for 12 days;

d) P3,570.00 - Service Incentive Leave for 1997 and 1998.

P 193,494.00 - Total partial backwages and benefits.11

Aggrieved, petitioners appealed the afore-quoted Decision to the NLRC. On 25

August 1999, the NLRC rendered its Decision modifying the Decision of the Acting
Executive Labor Arbiter Pedro C. Ramos, thus:

WHEREFORE, premises all considered, the decision appealed from is hereby

MODIFIED:

a) Dismissing the Complaint for Illegal Dismissal filed by [private respondent

Tamondong] for utter lack of merit;

b) Dismissing the Complaint for Unfair Labor Practice for lack of factual basis;
c) Deleting the awards to [private respondent Tamondong] of backwages, moral and
exemplary damages, and attorney's fees;

d) Affirming the awards to [private respondent Tamondong], representing 13th

month pay for 1997 and 1998, holiday pay for 12 days, and service incentive leave
for 1997 totaling P26,418.00; andcralawlibrary

e) Ordering the payment of backwages to [private respondent Tamondong] reckoned

from 16 September 1998 up to the date of this Decision.12

Petitioners filed a Motion for Clarification and Partial Reconsideration, while,

private respondent Tamondong filed a Motion for Reconsideration of the said NLRC
Decision, but the NLRC affirmed its original Decision in its Resolution 13 dated 25
November 1999.

Dissatisfied with the above-mentioned Decision of the NLRC, private respondents

Tamondong and CUSE filed a Petition for Certiorari under Rule 65 of the Rules of
Court before the Court of Appeals, alleging grave abuse of discretion on the part of
the NLRC. Then, the Court of Appeals in its Decision dated 28 October 2003,
granted the said Petition. The dispositive of which states that:

WHEREFORE, premises considered, the instant Petition for Certiorari is

GRANTED and the herein assailed Decision dated August 25, 1999 of the NLRC,
Third Division is ANNULLED and SET ASIDE. Accordingly, the Decision dated
August 7, 1998 of NLRC, RAB IV Acting Executive Labor Arbiter Pedro C. Ramos,
insofar as [private respondent Tamondong] is concerned is hereby REINSTATED.14

Consequently, petitioners filed a Motion for Reconsideration of the aforesaid

Decision of the Court of Appeals. Nonetheless, the Court of Appeals denied the said
Motion for Reconsideration for want of convincing and compelling reason to warrant
a reversal of its judgment.

Hence, this present Petition for Certiorari under Rule 65 of the 1997 Rules of Civil
Procedure.

In the Memorandum 15 filed by petitioners, they aver that private respondent

Tamondong as Personnel Superintendent of CAPASCO was performing functions of
a managerial employee because he was the one laying down major management
policies on personnel relations such as: issuing memos on company rules and
regulations, imposing disciplinary sanctions such as warnings and suspensions, and
executing the same with full power and discretion. They claim that no further
approval or review is necessary for private respondent Tamondong to execute these
functions, and the notations "NOTED BY" of petitioner Agerro, the Vice-President
of petitioner CAPASCO, on the aforesaid memos are nothing but mere notice that
petitioner Agerro was aware of such company actions performed by private
respondent Tamondong. Additionally, private respondent Tamondong was not only
a managerial employee but also a confidential employee having knowledge of
confidential information involving company policies on personnel relations. Hence,
the Court of Appeals acted with grave abuse of discretion amounting to lack or
excess of jurisdiction when it held that private respondent Tamondong was not a
managerial employee but a mere supervisory employee, therefore, making him
eligible to participate in the union activities of private respondent CUSE.

Petitioners further argue that they are not guilty of illegal dismissal and unfair
labor practice because private respondent Tamondong was validly dismissed and
the reason for preventing him to join a labor union was the nature of his position
and functions as Personnel Superintendent, which position was incompatible and in
conflict with his union activities. Consequently, it was grave abuse of discretion on
the part of the Court of Appeals to rule that petitioner CAPASCO was guilty of
illegal dismissal and unfair labor practice.

Lastly, petitioners maintain that the Court of Appeals gravely abused its discretion
when it reinstated the Decision of Executive Labor Arbiter Pedro C. Ramos holding
CAPASCO liable for backwages, 13th month pay, service incentive leave, moral
damages, exemplary damages, and attorney's fees.

On the other hand, private respondents, assert that the assailed Decision being a
final disposition of the Court of Appeals is appealable to this Court by a Petition for
Review on Certiorari under Rule 45 of the Rules of Court and not under Rule 65
thereof. They also claim that petitioners new ground that private respondent
Tamondong was a confidential employee of CAPASCO, thus, prohibited from
participating in union activities, is not a valid ground to be raised in this Petition
for Certiorari seeking the reversal of the assailed Decision and Resolution of the
Court of Appeals.

Now, given the foregoing arguments raise by both parties, the threshold issue that
must first be resolved is whether or not the Petition for Certiorari under Rule 65 of
the 1997 Rules of Civil Procedure is the proper remedy for the petitioners, to
warrant the reversal of the Decision and Resolution of the Court of Appeals dated
28 October 2003 and 3 June 2004, respectively.

The petition must fail.

The special civil action for Certiorari is intended for the correction of errors of
jurisdiction only or grave abuse of discretion amounting to lack or excess of
jurisdiction. Its principal office is only to keep the inferior court within the
parameters of its jurisdiction or to prevent it from committing such a grave abuse of
discretion amounting to lack or excess of jurisdiction.16
The essential requisites for a Petition for Certiorari under Rule 65 are: (1) the writ
is directed against a tribunal, a board, or an officer exercising judicial or quasi-
judicial function; (2) such tribunal, board, or officer has acted without or in excess of
jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction; and (3) there is no appeal or any plain, speedy, and adequate remedy in
the ordinary course of law.17 Excess of jurisdiction as distinguished from absence of
jurisdiction means that an act, though within the general power of a tribunal, board
or officer is not authorized, and invalid with respect to the particular proceeding,
because the conditions which alone authorize the exercise of the general power in
respect of it are wanting.18 Without jurisdiction means lack or want of legal power,
right or authority to hear and determine a cause or causes, considered either in
general or with reference to a particular matter. It means lack of power to exercise
authority.19 Grave abuse of discretion implies such capricious and whimsical
exercise of judgment as is equivalent to lack of jurisdiction or, in other words, where
the power is exercised in an arbitrary manner by reason of passion, prejudice, or
personal hostility, and it must be so patent or gross as to amount to an evasion of a
positive duty or to a virtual refusal to perform the duty enjoined or to act at all in
contemplation of law.20

In the case before this Court, petitioners fail to meet the third requisite for the
proper invocation of Petition for Certiorari under Rule 65, to wit: that there is no
appeal or any plain, speedy, and adequate remedy in the ordinary course of law.
They simply alleged that the Court of Appeals gravely abuse its discretion which
amount to lack or excess of jurisdiction in rendering the assailed Decision and
Resolution. They did not bother to explain why an appeal cannot possibly cure the
errors committed by the appellate court. It must be noted that the questioned
Decision of the Court of Appeals was already a disposition on the merits; this Court
has no remaining issues to resolve, hence, the proper remedy available to the
petitioners is to file Petition for Review under Rule 45 not under Rule 65.

Additionally, the general rule is that a writ of certiorari will not issue where the
remedy of appeal is available to the aggrieved party. The remedies of appeal in the
ordinary course of law and that of certiorari under Rule 65 of the Revised Rules of
Court are mutually exclusive and not alternative or cumulative.21 Time and again
this Court reminded members of the bench and bar that the special civil action
of Certiorari cannot be used as a substitute for a lost appeal 22 where the latter
remedy is available. Such a remedy will not be a cure for failure to timely file a
Petition for Review on Certiorari under Rule 45. Nor can it be availed of as a
substitute for the lost remedy of an ordinary appeal, especially if such loss or lapse
was occasioned by one's own negligence or error in the choice of remedies.23

In the case at bar, petitioners received on 9 June 2004 the Resolution of the Court of
Appeals dated 3 June 2004 denying their Motion for Reconsideration. Upon receipt
of the said Resolution, they had 15 days or until 24 June 2004 within which to file
an appeal by way of Petition for Review under Rule 45, but instead of doing so, they
just allowed the 15 day period to lapse, and then on the 61st day from receipt of the
Resolution denying their Motion for Reconsideration, they filed this Petition
for Certiorari under Rule 65 alleging grave abuse of discretion on the part of the
appellate court. Admittedly, this Court, in accordance with the liberal spirit
pervading the Rules of Court and in the interest of justice, has the discretion to
treat a Petition for Certiorari as a Petition for Review on Certiorari under Rule 45,
especially if filed within the reglementary period for filing a Petition for
Review.24 However, in the present case, this Court finds no compelling reason to
justify a liberal application of the rules, as this Court did in the case of Delsan
Transport Lines, Inc. v. Court of Appeals.25 In the said case, this Court treated the
Petition for Certiorari filed by the petitioner therein as having been filed under
Rule 45 because said Petition was filed within the 15-day reglementary period for
filing a Petition for Review on Certiorari. Petitioner's counsel therein received the
Court of Appeals Resolution denying their Motion for Reconsideration on 26 October
1993 and filed the Petition for Certiorari on 8 November 1993, which was within the
15-day reglementary period for filing a Petition for Review on Certiorari. It cannot
therefore be claimed that the Petition was used, as a substitute for appeal after that
remedy has been lost through the fault of the petitioner.26 Conversely, such was not
the situation in the present case. Hence, this Court finds no reason to justify a
liberal application of the rules.

Accordingly, where the issue or question involves or affects the wisdom or legal
soundness of the decision, and not the jurisdiction of the court to render said
decision, the same is beyond the province of a petition for certiorari .27 It is obvious
in this case that the arguments raised by the petitioners delved into the wisdom or
legal soundness of the Decision of the Court of Appeals, therefore, the proper
remedy is a Petition for Review on Certiorari under Rule 45. Consequently, it is
incumbent upon this Court to dismiss this Petition.

In any event, granting arguendo, that the present petition is proper, still it is
dismissible. The Court of Appeals cannot be said to have acted with grave abuse of
discretion amounting to lack or excess of jurisdiction in annulling the Decision of
the NLRC because the findings of the Court of Appeals that private respondent
Tamondong was indeed a supervisory employee and not a managerial employee,
thus, eligible to join or participate in the union activities of private respondent
CUSE, were supported by evidence on record. In the Decision of the Court of
Appeals dated 28 October 2003, it made reference to the Memorandum 28 dated 12
September 1996, which required private respondent Tamondong to observe fixed
daily working hours from 8:00 am to 12:00 noon and from 1:00 pm to 5:00 pm. This
imposition upon private respondent Tamondong, according to the Court of Appeals,
is very uncharacteristic of a managerial employee. To support such a conclusion, the
Court of Appeals cited the case of Engineering Equipment, Inc. v. NLRC 29 where
this Court held that one of the essential characteristics 30 of an employee holding a
managerial rank is that he is not subjected to the rigid observance of regular office
hours or maximum hours of work.

Moreover, the Court of Appeals also held that upon careful examination of the
documents submitted before it, it found out that:

[Private respondent] Tamondong may have possessed enormous powers and was
performing important functions that goes with the position of Personnel
Superintendent, nevertheless, there was no clear showing that he is at liberty, by
using his own discretion and disposition, to lay down and execute major business
and operational policies for and in behalf of CAPASCO. [Petitioner] CAPASCO
miserably failed to establish that [private respondent] Tamondong was authorized
to act in the interest of the company using his independent judgment. x x x. Withal,
[private respondent] Tamondong may have been exercising certain important
powers, such as control and supervision over erring rank-and-file employees,
however, x x x he does not possess the power to hire, transfer, terminate, or
discipline erring employees of the company. At the most, the record merely showed
that [private respondent] Tamondong informed and warned rank-and-file employees
with respect to their violations of CAPASCO's rules and regulations. x x x. [Also,
the functions performed by private respondent such as] issuance of warning 31 to
employees with irregular attendance and unauthorized leave of absences and
requiring employees to explain regarding charges of abandonment of work, are
normally performed by a mere supervisor, and not by a manager.32

Accordingly, Article 212(m) of the Labor Code, as amended, differentiates

supervisory employees from managerial employees, to wit: 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; whereas,
managerial employees are those who are 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. Thus, from the foregoing provision
of the Labor Code, it can be clearly inferred that private respondent Tamondong
was just a supervisory employee. Private respondent Tamondong did not perform
any of the functions of a managerial employee as stated in the definition given to it
by the Code. Hence, the Labor Code 33 provisions regarding disqualification of a
managerial employee from joining, assisting or forming any labor organization does
not apply to herein private respondent Tamondong. Being a supervisory employee of
CAPASCO, he cannot be prohibited from joining or participating in the union
activities of private respondent CUSE, and in making such a conclusion, the Court
of Appeals did not act whimsically, capriciously or in a despotic manner, rather, it
was guided by the evidence submitted before it. Thus, given the foregoing findings
of the Court of Appeals that private respondent is a supervisory employee, it is
indeed an unfair labor practice 34 on the part of petitioner CAPASCO to dismiss him
on account of his union activities, thereby curtailing his constitutionally guaranteed
right to self-organization.35

With regard to the allegation that private respondent Tamondong was not only a
managerial employee but also a confidential employee, the same cannot be validly
raised in this Petition for Certiorari. It is settled that an issue which was not raised
in the trial court cannot be raised for the first time on appeal. This principle applies
to a special civil action for certiorari under Rule 65.36 In addition, petitioners failed
to adduced evidence which will prove that, indeed, private respondent was also a
confidential employee.

WHEREFORE, premises considered, the instant Petition is DISMISSED. The

Decision and Resolution of the Court of Appeals dated 28 October 2003 and 3 June
2004, respectively, in CA-G.R. SP No. 57179, which annulled the Decision of the
NLRC in NLRC Case No. 017822-99 dated 25 August 1999, thereby, reinstating the
Decision of Acting Executive Labor Arbiter Pedro C. Ramos dated 7 August 1998, is
hereby AFFIRMED. With costs against petitioners.

SO ORDERED.

G.R. No. 207971

ASIAN INSTITUTE OF MANAGEMENT, Petitioner,

vs.
ASIAN INSTITUTE OF MANAGEMENT FACULTY ASSOCIATION, Respondent.

DECISION

DEL CASTILLO, J.:

This Petition for Review on Certiorari1assails the January 8, 2013 Decision2 of the
Court of Appeals (CA) which dismissed the Petition for Certiorari3in CA-G.R. SP
No. 114122, and its subsequent June 27, 2013 Resolution 4 denying herein
petitioner's Motion for Reconsideration. 5

Factual Antecedents

Petitioner Asian Institute of Management (AIM) is a duly registered non-stock, non-

profit educational institution. Respondent Asian Institute of Management Faculty
Association (AFA) is a labor organization composed of members of the AIM faculty,
duly registered under Certificate of Registration No. NCR-UR-12-4076-2004.

On May 16, 2007, respondent filed a petition for certification election6 seeking to
represent a bargaining unit in AIM consisting of forty (40) faculty members. The
case was docketed as DOLE Case No. NCR-OD-M-0705-007. Petitioner opposed the
petition, claiming that respondent's members are neither rank-and-file nor
supervisory, but rather, managerial employees.7

On July 11, 2007, petitioner filed a petition for cancellation of respondent's

certificate of registration8 - docketed as DOLE Case No. NCROD-0707-001-LRD - on
the grounds of misrepresentation in registration and that respondent is composed of
managerial employees who are prohibited from organizing as a union.

On August 30, 2007, the Med-Arbiter in DOLE Case No. NCR-OD-M-0705-007

issued an Order9 denying the petition for certification election on the ground that
AIM' s faculty members are managerial employees. This Order was appealed by
respondent before the Secretary of the Department of Labor and Employment
(DOLE), 10 who reversed foe same via a February 20, 2009 Decision 11 and May 4,
2009 Resolution, 12 decreeing thus:

WHEREFORE, the appeal filed by the Asian Institute of Management Faculty

Association (AIMFA) is GRANTED. The Order dated 30 August 2007 of DOLE-NCR
Mediator-Arbiter Michael T. Parado is hereby REVERSED and SET ASIDE.

Accordingly, let the entire records of the case be remanded to DOLEN CR for the
conduct of a certification election among the faculty members of the Asian Institute
of Management (AIM), with the following choices:

1. ASIAN INSTITUTE OF MANAGEMENT FACULTY ASSOCIATION (AIMFA);

and

2. No Union.

SO ORDERED.13

Meanwhile, in DOLE Case No. NCR-OD-0707-001-LRD, an Order14 dated February

16, 2009 was issued by DOLE-NCR Regional Director Raymundo G. Agravante
granting AIM's petition for cancellation of respondent's certificate of registration
and ordering its delisting from the roster of legitimate labor organizations. 1bis
Order was appealed by respondent before the Bureau labor Relations15 (BLR),
which, in a December 29, 2009 Decision,16 reversed the same and ordered
respondent's retention in the roster of legitimate labor organizations. The BLR held
that the grounds relied upon in the petition for cancellation are not among the
grounds authorized under Article 239 of the Labor Code, 17 and that respondent's
members are not managerial employees. Petitioner moved to reconsider, but was
rebuffed in a March 18, 2010 Resolution. 18

CA-G.R. SP No.109487 and G.R. No.197089

Petitioner filed a Petition for Certiorari before the CA, questioning the DOLE
Secretary's February 20, 2009 Decision and May 4, 2009 Resolution relative to
DOLE Case No. NCR-OD-M-0705-007, or respondent's petition for certification
election. Docketed as CA-G.R. SP No. 109487, the petition is based on the
arguments that 1) the bargaining unit within AIM sought to be represented is
composed of managerial employees who are not eligible to join, assist, or form any
labor organization, and 2) respondent is not a legitimate labor organization that
may conduct a certification election.

On October 22, 2010, the CA rendered its Decision19 containing the following
pronouncement:

AIM insists that the members of its tenure-track faculty are managerial employees,
and therefore, ineligible to join, assist or form a labor organization. It ascribes grave
abuse of discretion on SOLE20 for its rash conclusion that the members of said
tenure-track faculty are not managerial employees solely because the faculty's
actions are still subject to evaluation, review or final approval by the board of
trustees ("BOT'). AIM argues that the BOT does not manage the day-to-day affairs,
nor the making and implementing of policies of the Institute, as such functions are
vested with the tenure-track faculty.

We agree.

Article 212(m) of the Labor Code defines managerial employees as:

'ART. 212. Definitions. – x x x

(m) 'Managerial employee' is one who is vested with powers or prerogatives to lay
down and execute management policies and/or to hire, transfer, suspend, lay-off,
recall, discharge, assign or 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.'

There are, therefore, two (2) kinds of managerial employees under Art. 212(m) of
the Labor Code. Those who 'lay down x x x management policies', such as the Board
of Trustees, and those who 'execute management policies and/or hire, transfer,
suspend, lay-off, recall, discharge, assign or discipline employees'.

xxxx

On its face, the SOLE's opinion is already erroneous because in claiming that the
'test of 'supervisory' or 'managerial status' depends on whether a person possesses
authority to act in the interest of his employer in the matter specified in Article
212(m) of the Labor Code and Section l(m) of its Implementing Rules', he obviously
was referring to the old definition of a managerial employee. Such is evident in his
use of 'supervisory or managerial status', and reference to 'Section l(m) of its
Implementing Rules'. For presently, as aforequoted in Article 212(m) of the Labor
Code and as amended by Republic Act 6715 which took effect on March 21, 1989, a
managerial employee is already different from a supervisory employee. x x x

xxxx

In further opining that a managerial employee is one whose 'authority is not merely
routinary or clerical in nature but requires the use of independent judgment', a
description which fits now a supervisory employee under Section l(t), Rule I, Book
V of the Omnibus Rules Implementing the Labor Code, it then follows that the
SOLE was not aware of the change in the law and thus gravely abused its discretion
amounting to lack of jurisdiction in concluding that AIM's 'tenure-track' faculty
are not managerial employees.

SOLE further committed grave abuse of discretion when it concluded that said
tenure-track faculty members are not managerial employees on the basis of a
'footnote' in AIM's Policy Manual, which provides that 'the policy[-] making
authority of the faculty members is merely recommendatory in nature considering
that the faculty standards they formulate are still subject to evaluation, review or
final approval by the [AIM]'s Board of Trustees'. x x x

xxxx

Clearly, AIM's tenure-track faculty do not merely recommend faculty

standards.1âwphi1 They 'determine all faculty standards', and are thus managerial
employees. The standards' being subjected to the approval of the Board of Trustees
would not make AIM's tenure-track faculty non-managerial because as earlier
mentioned, managerial employees are now of two categories: (1) those who 'lay
down policies', such as the members of the Board of Trustees, and (2) those
who 'execute management policies (etc.)’, such as AIM's tenure-track faculty.

xxxx

It was also grave abuse of discretion on the part of the SOLE when he opined that
AIM' s tenure-track faculty members are not managerial employees, relying on an
impression that they were subjected to rigid observance of regular hours of work as
professors. x x x

xxxx
More importantly, it behooves the SOLE to deny AFA's appeal in light of the
February 16, 2009 Order of Regional Director Agravante delisting AFA from the
roster of legitimate labor organizations. For, only legitimate labor organizations are
given the right to be certified as sole and exclusive bargaining agent in an
establishment.

xxxx

Here, the SOLE committed grave abuse of discretion by giving due course to AFA's
petition for certification election, despite the fact that: (1) AFA's members are
managerial employees; and (2) AFA is not a legitimate labor organization. 'These
facts rendered AFA ineligible, and without any right to file a petition for
certification election, the object of which is to determine the sole and exclusive
bargaining representative of qualified AIM employees.

WHEREFORE, the instant petition is GRANTED. The assailed Decision dated

February 20, 2009 and Resolution dated May 4, 2009 are hereby REVERSED and
SET ASIDE. The Order dated August 30, 2007 of Mediator-Arbiter Parado is
hereby REINSTATED.

SO ORDERED.21 (Emphasis in the original)

Respondent sought reconsideration, but was denied. It thus instituted a Petition for
Review on Certiorari before this Court on July 4, 2011. The Petition, docketed as
G.R. No. 197089, remains pending to date.

The Assailed Ruling of the Court of Appeals

Meanwhile, relative to DOLE Case No. NCR-OD-0707-001-LRD or petitioner AIM's

petition for cancellation of respondent's certificate of registration, petitioner filed on
May 24, 20 l 0 a Petition for Certiorari22before the CA, questioning the BLR's
December 29, 2009 decision and March 18, 2010 resolution. The petition, docketed
as CA-G.R. SP No. 114122, alleged that the BLR committed grave abuse of
discretion in granting respondent's appeal and affirming its certificate of
registration notwithstanding that its members are managerial employees who may
not join, assist, or form a labor union or organization.

On January 8, 2013, the CA rendered the assailed Decision, stating as follows:

The petition lacks merit

xxxx

It is therefore incumbent upon the Institute to prove that the BLR committed grave
abuse of discretion in issuing the questioned Decision.1âwphi1 Towards this end,
AIM must lay the basis by showing that any of the grounds provided under Article
239 of the Labor Code, exists, to wit:

Article 239. Grounds for cancellation of union registration. - The following may
constitute grounds for cancellation of union registration:

(a) Misrepresentation, false statement or fraud in connection with the adoption or

ratification of the constitution and by-laws or amendments thereto, the minutes of
ratification, and the list of members who took part in the ratification;

(b) Misrepresentation, false statements or fraud in connection with the election of

officers, minutes of the election of officers, and the list of voters;

(c) Voluntary dissolution by the members.

Article 238 of the Labor Code provides that the enumeration of the grounds for
cancellation of union registration, is exclusive; in other words, no other grow1ds for
cancellation is acceptable, except for the three (3) grounds stated in Article 239. The
scope of the grounds for cancellation has been explained-

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.

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 respondent's 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
andmisrepresentation must be grave and compelling enough to

vitiate the consent of a majority of union members.23

In this regard, it has also been held that:

Another factor which militates against the veracity of the allegations in

the Sinumpaang Petisyon is the lack of particularities on how, when and where
respondent union perpetrated the alleged fraud on each member. Such details are
crucial for, in the proceedings for cancellation of union registration on the ground of
fraud or misrepresentation, what needs to be established is that the specific act or
omission of the union deprived the complaining employees-members of their right to
choose.24

A cursory reading of the Petition shows that AIM did NOT allege any specific act of
fraud or misrepresentation committed by AFA. What is clear is that the Institute
seeks the cancellation of the registration of AFA based on Article 245 of the Labor
Code on the ineligibility of managerial employees to form or join labor unions.
Unfortunately for the petitioner, even assuming that there is a violation of Article
245, such violation will not result in the cancellation of the certificate of registration
of a labor organization.

It should be stressed that a Decision had already been issued by the DOLE in the
Certification Election case; and the Decision ordered the conduct of a certification
election among the faculty members of the Institute, basing its directive on the
finding that the members of AFA were not managerial employees and are therefore
eligible to form, assist and join a labor union. As a matter of fact, the certification
election had already been held on October 16, 2009, albeit the results have not yet
been resolved as inclusion/exclusion proceedings are still pending before the DOLE.
The remedy available to the Institute is not the instant Petition, but to question the
status of the individual union members of the AFA in the inclusion/exclusion
proceedings pursuant to Article 245-A of the Labor Code, which reads:

Article 245-A. Effect of inclusion as members of employees outside the bargaining

unit. - The inclusion as union members of employees outside the bargaining unit
shall not be a ground for the cancellation of the registration of the union. Said
employees are automatically deemed removed from the list of membership of said
union.

Petitioner insists that Article 245-A is not applicable to this case as all AF A
members are managerial employees. We are not persuaded.

The determination of whether any or all of the members of AFA should be

considered as managerial employees is better left to the DOLE because,

It has also been established that in the determination of whether or not certain
employees are managerial employees, this Court accords due respect and therefore
sustains the findings of fact made by quasi-judicial agencies which are supported by
substantial evidence considering their expertise in their respective fields.25

From the discussion, it is manifestly clear that the petitioner foiled to prove that the
BLR committed grave abuse of discretion; consequently, the Petition must fail.

WHEREFORE, the Petition is hereby DENIED. The Decision and Resolution of

public respondent Bureau of Labor Relations in BLR-A-C-19-3-6-09 (NCR-OD-0707-
001) are hereby AFFIRMED.
SO ORDERED.26 (Emphasis in the original)

Petitioner filed its Motion for Reconsideration, which was denied by the CA via its
June 27, 2013 Resolution. Hence, the instant Petition.

In a November 10, 2014 Resolution,27 the Court resolved to give due course to the
Petition.

Issue

Petitioner claims that the CA seriously erred in affirming the dispositions of the
BLR and thus validating the respondent's certificate of registration
notwithstanding the fact that its members are all managerial employees who are
disqualified from joining, assisting, or forming a labor organization.

Petitioner's Arguments

Praying that the assailed CA dispositions be set aside and that the DOLE-NCR
Regional Director's February 16, 2009 Order granting AIM's petition for
cancellation of respondent's certificate of registration and ordering its delisting from
the roster of legitimate labor organizations be reinstated instead, petitioner
maintains in its Petition and Reply28 that respondent's members are all managerial
employees; that the CA erred in declaring that even if respondent's members are all
managerial employees, this alone is not a ground for cancellation of its certificate of
registration; that precisely, the finding in DOLE Case No. NCR-ODM- 0705-007,
which the CA affirmed in CA-G.R. SP No. 109487, is that respondent's members are
managerial employees; that respondent's declaration that its members are eligible
to join, assist, or form a labor organization is an act of misrepresentation, given the
finding in CA-G.R. SP No. 109487 that they are managerial employees; and that the
grounds for cancellation of union registration enumerated in Article 239 of the
Labor Code are not exclusive.

Respondent's Arguments

In its Comment,29 respondent maintains that the CA was right to treat petitioner’s
case for cancellation of its union registration with circumspection; that petitioner's
ground for filing the petition for cancellation is not recognized under Article 239;
that petitioner's accusation of misrepresentation is unsubstantiated, and is being
raised for the first time at this stage; that its members are not managerial
employees; and that petitioner's opposition to respondent's attempts at self-
organization constitutes harassment, oppression, and violates the latter's rights
under the Labor Code and the Constitution.

Our Ruling
In Holy Child Catholic School v. Hon. Sto. Tomas,30this Court declared that "[i]n
case of alleged inclusion of disqualified employees in a union, the proper procedure
for an employer like petitioner is to directly file a petition for cancellation of the
union's certificate of registration due to misrepresentation, false statement or fraud
under the circumstances enumerated in Article 239 of the Labor Code, as amended."

On the basis of the ruling in the above-cited case, it can be said that petitioner was
correct in filing a petition for cancellation of respondent's certificate of registration.
Petitioner's sole ground for seeking cancellation of respondent's certificate of
registration - that its members are managerial employees and for this reason, its
registration is thus a patent nullity for being an absolute violation of Article 245 of
the Labor Code which declares that managerial employees are ineligible to join any
labor organization --- is, in a sense, an accusation that respondent is guilty of
misrepresentation for registering under the claim that its members are not
managerial employees.

However, the issue of whether respondent's members are managerial employees is

still pending resolution by way of petition for review on certiorari in G.R. No.
197089, which is the culmination of all proceedings in DOLE Case No. NCR-OD-M-
0705-007 -- where the issue relative to the nature of respondent's membership was
first raised by petitioner itself and is there fiercely contested. The resolution of this
issue cannot be pre-empted; until it is determined with finality in G.R. No. l 97089,
the petition for cancellation of respondent's certificate of registration on the grounds
alleged by petitioner cannot be resolved. As a matter of courtesy and in order to
avoid conflicting decisions, We must await the resolution of the petition in G.R. No.
197089.

x x x If a particular point or question is in issue in the second action, and the

judgment will depend on the determination of that particular point or question, a
former judgment between the same parties or their privies will be final and
conclusive in the second if that same point or question was in issue and adjudicated
in the first suit. x x x Identity of cause of action is not required, but merely identity
of issues.31 (Citation omitted)

WHEREFORE, considering that the outcome of this case depends on the resolution
of the issue relative to the nature of respondent's membership pending in G.R. No.
197089, this case is ordered CONSOLIDATED with G.R. No. 197089.

SO ORDERED.