1. GR No 84433 June 2, 1992 Alexander Reyes et al vs Cresencio B. Trajano The officer-in-charge of the Bureau of Labor Relations (Hon.

Cresenciano Trajano) sustained the denial by the Med Arbiter of the right to vote of one hundred forty-one (141) members of the "Iglesia ni Kristo" (INK), all employed in the same company, at a certification election at which two (2) labor organizations were contesting the right to be the exclusive representative of the employees in the bargaining unit. That denial is assailed as having been done with grave abuse of discretion in the special civil action of certiorari at bar, commenced by the INK members adversely affected thereby. The certification election was authorized to be conducted by the Bureau of Labor Relations among the employees of Tri-Union Industries Corporation on October 20, 1987. The competing unions were TriUnion Employees Union-Organized Labor Association in Line Industries and Agriculture (TUEUOLALIA), and Trade Union of the Philippines and Allied Services (TUPAS). Of the 348 workers initially deemed to be qualified voters, only 240 actually took part in the election, conducted under the provision of the Bureau of Labor Relations. Among the 240 employees who cast their votes were 141 members of the INK. The ballots provided for three (3) choices. They provided for votes to be cast, of course, for either of the two (2) contending labor organizations, (a) TUPAS and (b) TUEU-OLALIA; and, conformably with established rule and practice, 1 for (c) a third choice: "NO UNION." The final tally of the votes showed the following results: TUPAS 1 TUEU-OLALIA 95 NO UNION 1 SPOILED 1 CHALLENGED 141 The challenged votes were those cast by the 141 INK members. They were segregated and excluded from the final count in virtue of an agreement between the competing unions, reached at the pre-election conference, that the INK members should not be allowed to vote "because they are not members of any union and refused to participate in the previous certification elections." The INK employees promptly made known their protest to the exclusion of their votes. They filed f a petition to cancel the election alleging that it "was not fair" and the result thereof did "not reflect the true sentiments of the majority of the employees." TUEU-OLALIA opposed the petition. It contended that the petitioners "do not have legal personality to protest the results of the election," because "they are not members of either contending unit, but . . . of the INK" which prohibits its followers, on religious grounds, from joining or forming any labor organization. . . ." The Med-Arbiter saw no merit in the INK employees 1 petition. By Order dated December 21, 1987, he certified the TUEU-OLALIA as the sole and exclusive bargaining agent of the rank-and-file employees. In that Order he decided the fact that "religious belief was (being) utilized to render meaningless the rights of the non-members of the Iglesia ni Kristo to exercise the rights to be represented by a labor organization as the bargaining agent," and declared the petitioners as "not possessed of any legal personality to institute this present cause of action" since they were not parties to the petition for certification election.

The petitioners brought the matter up on appeal to the Bureau of Labor Relations. There they argued that the Med-Arbiter had "practically disenfranchised petitioners who had an overwhelming majority," and "the TUEU-OLALIA certified union cannot be legally said to have been the result of a valid election where at least fifty-one percent of all eligible voters in the appropriate bargaining unit shall have cast their votes." Assistant Labor Secretary Cresenciano B. Trajano, then Officer-in-Charge of the Bureau of Labor Relations, denied the appeal in his Decision of July 22, 1988. He opined that the petitioners are "bereft of legal personality to protest their alleged disenfrachisement" since they "are not constituted into a duly organized labor union, hence, not one of the unions which vied for certification as sole and exclusive bargaining representative." He also pointed out that the petitioners "did not participate in previous certification elections in the company for the reason that their religious beliefs do not allow them to form, join or assist labor organizations." It is this Decision of July 22, 1988 that the petitioners would have this Court annul and set aside in the present special civil action of certiorari. The Solicitor General having expressed concurrence with the position taken by the petitioners, public respondent NLRC was consequently required to file, and did thereafter file, its own comment on the petition. In that comment it insists that "if the workers who are members of the Iglesia ni Kristo in the exercise of their religious belief opted not to join any labor organization as a consequence of which they themselves can not have a bargaining representative, then the right to be representative by a bargaining agent should not be denied to other members of the bargaining unit." Guaranteed to all employees or workers is the "right to self-organization and to form, join, or assist labor organizations of their own choosing for purposes of collective bargaining." This is made plain by no less than three provisions of the Labor Code of the Philippines. 2 Article 243 of the Code provides as follows: 3 ART. 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 or 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. Article 248 (a) declares it to be an unfair labor practice for an employer, among others, to "interfere with, restrain or coerce employees in the exercise of their right to self-organization." Similarly, Article 249 (a) makes it an unfair labor practice for a labor organization to "restrain or coerce employees in the exercise of their rights to self-organization . . . " The same legal proposition is set out in the Omnibus Rules Implementing the Labor Code, as amended, as might be expected Section 1, Rule II (Registration of Unions), Book V (Labor Relations) of the Omnibus Rules provides as follows; 4 Sec. 1. Who may join unions; exception. All persons employed in commercial, industrial and agricultural enterprises, including employees of government corporations established under the Corporation Code as well as employees of religious, medical or educational institutions, whether operating for profit or not, except managerial employees, shall have the right to self-organization and to form, join or assist labor organizations for purposes of collective bargaining. Ambulant, intermittent and without any definite employers people, rural workers and those

without any definite employers may form labor organizations for their mutual aid and protection. xxx xxx xxx The right of self-organization includes the right to organize or affiliate with a labor union or determine which of two or more unions in an establishment to join, and to engage in concerted activities with co-workers for purposes of collective bargaining through representatives of their own choosing, or for their mutual aid and protection, i.e., the protection, promotion, or enhancement of their rights and interests. 5 Logically, the right NOT to join, affiliate with, or assist any union, and to disaffiliate or resign from a labor organization, is subsumed in the right to join, affiliate with, or assist any union, and to maintain membership therein. The right to form or join a labor organization necessarily includes the right to refuse or refrain from exercising 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. The fact that a person has opted to acquire membership in a labor union does not preclude his subsequently opting to renounce such membership. 6 As early as 1974 this Court had occasion to expatiate on these self-evident propositions in Victoriano v. Elizalde Rope Workers' Union, et al., 7 viz.: . . .What the Constitution and Industrial Peace Act recognize and guarantee is the "right" to form or join associations. Notwithstanding the different theories propounded by the different schools of jurisprudence regarding the nature and contents of a "right," it can be safely said that whatever theory one subscribes to, a right comprehends at least two broad notions, namely: first, liberty or freedom, i.e., the absence of legal restraint, whereby an employee may act for himself being prevented by law; second, power, whereby an employee may, as he pleases, join or refrain from joining an association. It is therefore the employee who should decide for himself whether he should join or not an association; and should he choose to join; and even after he has joined, he still retains the liberty and the power to leave and cancel his membership with said organization at any time (Pagkakaisa Samahang Manggagawa ng San Miguel Brewery vs. Enriquez, et al., 108 Phil. 1010, 1019). It is clear, therefore, that the right to join a union includes the right to abstain from joining any union (Abo, et al. vs. PHILAME [KG] Employees Union, et al., L-19912, January 20, 1965, 13 SCRA 120, 123, quoting Rothenberg, Labor Relations). Inasmuch as what both the Constitution and the Industrial Peace Act have recognized, the guaranteed to the employee, is the "right" to join associations of his choice, it would be absurd to say that the law also imposes, in the same breath, upon the employee the duty to join associations. The law does not enjoin an employee to sign up with any association. The right to refuse to join or be represented by any labor organization is recognized not only by law but also in the rules drawn up for implementation thereof. The original Rules on Certification promulgated by the defunct Court of Industrial Relations required that the ballots to be used at a certification election to determine which of two or more competing labor unions would represent the employees in the appropriate bargaining unit should contain, aside from the names of each union, an alternative choice of the employee voting, to the effect that he desires not to which of two or more competing labor unions would represent the employees in the appropriate bargaining unit should contain, aside from the names of each union, an alternative choice of the employee voting, to the effect that he desires not to be represented by any union. 8 And where only one union was involved,

the ballots were required to state the question "Do you desire to be represented by said union?" as regards which the employees voting would mark an appropriate square, one indicating the answer, "Yes" the other, "No." To be sure, the present implementing rules no longer explicitly impose the requirement that the ballots at a certification election include a choice for "NO UNION" Section 8 (rule VI, Book V of the Omnibus Rules) entitled"Marketing and canvassing of votes," pertinently provides that: . . . (a) The voter must write a cross (X) or a check (/) in the square opposite the union of his choice. If only one union is involved, the voter shall make his cross or check in the square indicating "YES" or "NO." xxx xxx xxx Withal, neither the quoted provision nor any other in the Omnibus Implementing Rules expressly bars the inclusion of the choice of "NO UNION" in the ballots. Indeed it is doubtful if the employee's alternative right NOT to form, join or assist any labor organization or withdraw or resign from one may be validly eliminated and he be consequently coerced to vote for one or another of the competing unions and be represented by one of them. Besides, the statement in the quoted provision that "(i)f only one union is involved, the voter shall make his cross or check in the square indicating "YES" or "NO," is quite clear acknowledgment of the alternative possibility that the "NO" votes may outnumber the "YES" votes indicating that the majority of the employees in the company do not wish to be represented by any union in which case, no union can represent the employees in collective bargaining. And whether the prevailing "NO" votes are inspired by considerations of religious belief or discipline or not is beside the point, and may not be inquired into at all. The purpose of a certification election is precisely the ascertainment of the wishes of the majority of the employees in the appropriate bargaining unit: to be or not to be represented by a labor organization, and in the affirmative case, by which particular labor organization. If the results of the election should disclose that the majority of the workers do not wish to be represented by any union, then their wishes must be respected, and no union may properly be certified as the exclusive representative of the workers in the bargaining unit in dealing with the employer regarding wages, hours and other terms and conditions of employment. The minority employees who wish to have a union represent them in collective bargaining can do nothing but wait for another suitable occasion to petition for a certification election and hope that the results will be different. They may not and should not be permitted, however, to impose their will on the majority who do not desire to have a union certified as the exclusive workers' benefit in the bargaining unit upon the plea that they, the minority workers, are being denied the right of self-organization and collective bargaining. As repeatedly stated, the right of self-organization embraces not only the right to form, join or assist labor organizations, but the concomitant, converse right NOT to form, join or assist any labor union. That the INK employees, as employees in the same bargaining unit in the true sense of the term, do have the right of self-organization, is also in truth beyond question, as well as the fact that when they voted that the employees in their bargaining unit should be represented by "NO UNION," they were simply exercising that right of self-organization, albeit in its negative aspect. The respondents' argument that the petitioners are disqualified to vote because they "are not constituted into a duly organized labor union" "but members of the INK which prohibits its followers, on religious grounds, from joining or forming any labor organization" and "hence, not one of the unions which vied for certification as sole and exclusive bargaining representative," is specious. Neither law, administrative rule nor jurisprudence requires that only employees affiliated with any labor organization may take part in a certification election. On the contrary, the plainly

discernible intendment of the law is to grant the right to vote to all bona fide employees in the bargaining unit, whether they are members of a labor organization or not. As held in Airtime Specialists, Inc. v. Ferrer-Calleja: 9 In a certification election all rank-and-file employees in the appropriate bargaining unit are entitled to vote. This principle is clearly stated in Art. 255 of the Labor Code which states that the "labor organization designated or selected by the majority of the employees in an appropriate bargaining unit shall be the exclusive representative of the employees in such unit for the purpose of collective bargaining." Collective bargaining covers all aspects of the employment relation and the resultant CBA negotiated by the certified union binds all employees in the bargaining unit. Hence, all rank-and-file employees, probationary or permanent, have a substantial interest in the selection of the bargaining representative. The Code makes no distinction as to their employment for certification election. The law refers to "all" the employees in the bargaining unit. All they need to be eligible to support the petition is to belong to the "bargaining unit". Neither does the contention that petitioners should be denied the right to vote because they "did not participate in previous certification elections in the company for the reason that their religious beliefs do not allow them to form, join or assist labor organizations," persuade acceptance. No law, administrative rule or precedent prescribes forfeiture of the right to vote by reason of neglect to exercise the right in past certification elections. In denying the petitioners' right to vote upon these egregiously fallacious grounds, the public respondents exercised their discretion whimsically, capriciously and oppressively and gravely abused the same. WHEREFORE, the petition for certiorari is GRANTED; the Decision of the then Officer-in-Charge of the Bureau of Labor Relations dated December 21, 1987 (affirming the Order of the Med-Arbiter dated July 22, 1988) is ANNULLED and SET ASIDE; and the petitioners are DECLARED to have legally exercised their right to vote, and their ballots should be canvassed and, if validly and properly made out, counted and tallied for the choices written therein. Costs against private respondents. SO ORDERED. 2. GR No 80612-16 December 29, 1989 Airtime Specialists Inc et al vs Hon. Director of Labor Relations Pura Ferrer-Calleja This certiorari proceeding was filed by petitioners to assail the orders of respondent Med-Arbiter Manases T. Cruz and Director of Labor Relations Pura Ferrer-Calleja ordering a certification election. The pertinent background facts are as follows: Respondent Samahan ng mga Manggagawa sa Asia-FFW Chapter (SAMA-ASIA, for short) filed with the National Capital Region, Ministry of Labor and Employment, on May 22, 1986, two separate petitions for direct certification and/or certification election on behalf of the regular rank-and-file employees of the petitioners Airtime Specialists and Absolute Sound, Inc. The other respondent Pinagbuklod ng Manggagawa sa Ataco-FFW Chapter (PMA for short) also filed with the same office, on the same day, similar separate petitions in behalf of the regular rank and file employees of petitioners Country Wealth Development, Ad Planner and Marketing Counsellors and Atlas Resources. All these five cases were consolidated.

Petitioners filed their position paper with motion to dismiss on the following grounds-disaffiliation of the rank and file employees, ineligibility of some signatories because they had less than one (1) year of service resulting in the non-compliance with the 30% requirement. On March 9, 1987, the Med-Arbiter issued an Order the dispositive portion of which reads WHEREFORE, premises considered, a certification election is hereby ordered conducted among the rank and file employees of the Airtime Specialists, Inc.; Absolute Sound, Inc.; Commonwealth Development Corporation; Ad Planners & Mktg. Corp.; and Atlas Resources & Management Group, within 20 days from receipt of this Order. The parties are: 1. Samahan ng mga Manggagawa sa Asia (SAMA-ASIA) FFW Chapter & Pinagbuklod ng mga Manggagawa sa Ataco (PMA-FFW); and 2. No union. Pre-election conference shall be conducted to thresh out the details of the election. SO ORDERED. (p. 25, Rollo) Petitioners' motion for reconsideration having been denied, they filed the instant petition for "Certiorari and Prohibition with Preliminary Injunction" with a Prayer for the issuance of a temporary restraining order enjoining public respondents from conducting any further proceedings in the said five cases. The petition was given due course and the parties were required to submit simultaneously their respective memoranda. In assailing the aforesaid Order of public respondents, petitioners alleged that I. Public respondents (Director Calleja and Med-Arbiter Cruz) gravely erred in considering employees with less than one year of service, and even probationaries as qualified participants in a certification election process; in direct violation of the ruling of this Honorable Court in the Tarnate vs. Noriel case; II. Public respondents gravely erred in not considering proven disaffiliation and resignations from a petitioning union worse, from the company, and valid termination for cause from the service as material consideration to support a petition for certification and/or election. III. Public respondent Director Calleja gravely misinterpreted the ruling of this Honorable Court in the case of Albano vs. Noriel, 85 SCRA 499, even as she held that, notwithstanding the absence of the statutory consent requirement of 30% (now 20%), the Bureau of Labor Relations can in every such case still order a certification election, giving the wrong impression that such exercise of discretion is absolute. (pp. 12-15, Rollo)

Thus, petitioners argue that the public respondents committed grave abuse of discretion when they considered (a) employees with less than one year of service and even (b) probationary employees as qualified participants in the certification election process. They contend that "by the very fact that such (probationary)-employees have not earned regular status, they are not of the bargaining unit". (Reply, p. 21). Petitioners maintain that this, "directly violates" the ruling of this Court in Tarnate vs. Noriel, (100 SCRA 93) where it held that "at least one year of service is required for an employee to enjoy the benefits of membership in any labor union." Petitioners' contentions are untenable. It is Our holding in the case of B.F. Goodrich Phils., Inc. vs. B.F. Goodrich Confidential & Salaried Employees Union-NATU (49 SCRA 532) that the objectives of the Industrial Peace Act would be sooner attained if at the earliest opportunity the employees, all of them, in an appropriate bargaining unit be pooled to determine which labor organization should be its exclusive representative. This Court had made it clear that We should give discretion to the Court of Industrial Relations, or in this case, the Bureau of Labor Relations in deciding whether or not to grant a petition for certification election considering the facts and circumstances of which it has intimate knowledge. Moreover, a perusal of Art. 258 of the Labor Code as amended by Presidential Decree No. 442 reveals that compliance with the 30% requirement (now 20%) makes it mandatory upon the Bureau of Labor Relations to order the holding of a certification election in order to determine the exclusive-bargaining agent of the employees. Stated otherwise, it means that with such, the Bureau is left without any discretion but to order the holding of certification election. Parenthetically, where the petition is supported by less than 30% (now 20%) the Bureau of Labor Relations has discretion whether or not to order the holding of certification election depending on the circumstances of the case. Thus, it is Our holding in LVN Pictures vs. Musicians Guild, et al. (1 SCRA 132) that in connection with certification election, the Court of Industrial Relations enjoys a wide discretion in determining the procedure necessary to insure a fair and free choice of bargaining representatives by employees, and having exercised its sound discretion, this Court cannot interfere. (Arguelles v. Young, 153 SCRA 690). In a certification election all rank-and-file employees in the appropriate bargaining unit are entitled to vote. This principle is clearly stated in Art. 255 of the Labor Code which states that the "labor organization designated or selected by the majority of the employees in an appropriate bargaining unit shall be the exclusive representative of the employees in such unit for the purpose of collective bargaining." Collective bargaining covers all aspects of the employment relation and the resultant CBA negotiated by the certified union binds all employees in the bargaining unit. Hence, all rank-and-file employees, probationary or permanent, have a substantial interest in the selection of the bargaining representative. The Code makes no distinction as to their employment status as basis for eligibility in supporting the petition for certification election. The law refers to "all" the employees in the bargaining unit. All they need to be eligible to support the petition is to belong to the "bargaining unit.". The case of Tarnate vs. Noriel relied upon by petitioners has no application in certification election. That case involves the right of probationary employee to vote in the election of union officers. Petitioner argue at length that more than a majority of the signatories to the petitions for certification election "have disaffiliated from the two private respondent unions (PMA-FFW and SAMA-ASIA-FFW) and have joined another union (ADLO)." Petitioners then contend that, with the mass disaffiliation the petition for certification would fall short of the 20% consent requirement of the Labor Code. Even assuming the fact of such disaffiliation and even assuming further that the 20% requirement is not reached, this will not defeat the petition for certification election. On the contrary, it becomes more imperative to conduct one. The alleged disaffiliation from the petitioning unions (PMA-FFW and SAMA-ASIA-FFW) in favor of the ADLO-KMU raised a genuine representation issue which can best be

tested in a certification election. In VICMICO Industrial Workers Association (VWA) vs. The Honorable Carmelo Noriel, et al. (131 SCRA 569) this Court ruled upon the same argument. Thus: On the issue that more than 600 bona fide rank and file members of VIWA had disaffiliated with respondents NFSW, this Court had occasion to state what should be followed in case of withdrawal or retraction of signatures. In National Mines and Allied Workers Union vs. Luna, 83 SCRA 607, it was held that the " best forum for determining whether there were indeed retractions from some of the laborers is the certification election itself wherein the workers can freely express their choice in a secret ballot ... To hold otherwise would be violative of the liberal approach constantly followed by this Court in matters of certification elections. In the same vein, in George and Peter Lines, Inc. vs. ALU, et al., 134 SCRA 82, where it was alleged that 80% of the membership of the Union had withdrawn but the union claimed that the withdrawals were involuntary, the Court held that "the best forum to determine if there was indeed undue pressure exerted upon the employees to retract their membership is in the certification election itself." The employees have the constitutional right to choose the labor organization which they desire to join. The exercise of such right would be rendered nugatory and ineffectual if they would be denied the opportunity to choose in a certification election, which is not a litigation, but a mere investigation of a non-adversary character, the bargaining unit to represent them (NAMAWUMIF vs. Estrella, 87 SCRA 84). The holding of a certification election is a statutory policy that should not be circumvented (ATU vs. Noriel, 89 SCRA 264). WHEREFORE, the petition is DISMISSED, the assailed orders of public respondents are AFFIRMED. SO ORDERED. 3. GR No. 92391 July 3, 1992 Phil. Fruits & Vegetable Industries Inc vs. Hon. Ruben Torres This petition for review on certiorari with prayer for the issuance of a temporary restraining order and/or preliminary injunction assails the following: (1) The Resolution dated December 12, 1989 of public respondent Secretary of Labor 1 affirming on appeal the Order dated March 7, 1989 issued by Med-Arbiter Danilo T. Basa, and certifying private respondent Trade Union of the Philippines and Allied Services (or TUPAS) as the sole and exclusive bargaining agent of all regular rank-and-file and seasonal workers at Philippine Fruits and Vegetable Industries, Inc. (or PFVII), petitioner herein; and (2) The Order dated February 8, 1990 issued by public respondent Secretary of Labor petitioner's Urgent Motion for Reconsideration.
2

denying

Petitioner PFVII contends the questioned resolution and order are null and void as they are contrary to law and have been issued with grave abuse of discretion, and having no other plain, speedy and adequate remedy in the ordinary course of law, it filed with this Court the petition now at hand. The facts of the case are well-stated in the Comment filed by the Solicitor General, and are thus reproduced hereunder, as follows:

On October 13, 1988, Med-Arbiter Basa issued an Order granting the petition for Certification election filed by the Trade Union of the Philippines and Allied Services (TUPAS). Said order directed the holding of a certification election among the regular and seasonal workers of the Philippine Fruits and Vegetables, Inc. (p. 42, NLRC, Records). After a series of pre-election conferences, all issues relative to the conduct of the certification election were threshed out except that which pertains to the voting qualifications of the hundred ninety four (194) workers enumerated in the lists of qualified voters submitted by TUPAS. After a late submission by the parties of their respective position papers, MedArbiter Basa issued an Order dated December 9, 1988 allowing 184 of the 194 questioned workers to vote, subject to challenge, in the certification election to be held on December 16, 1989. Copies of said Order were furnished the parties (p. 118, NLRC, Records) and on December 12, 1988 the notice of certification election was duly posted. One hundred sixty eight (168) of the questioned workers actually voted on election day. In the scheduled certification election, petitioner objected to the proceeding, through a Manifestation (p. 262, NLRC, Records) filed with the Representation Officer before the close of the election proceedings. Said Manifestation pertinently reads: The posting of the list of eligible voters authorized to participate in the certification election was short of the five (5) days provided by law considering that it was posted only on December 12, 1988 and the election was held today, December 16, 1988 is only four days prior to the scheduled certification election. By agreement of petitioner and TUPAS, workers whose names were inadvertently omitted in the list of qualified voters were allowed to vote, subject to challenge (p. 263, NLRC, Records). Thirty eight of them voted on election day. Initial tally of the election results excluding the challenged votes showed the following: Total No. of the Votes 291 Yes No Spoiled Challenged Total No. of Votes Cast 123 votes votes (Regular) 40 38 7 38

Spoiled Total 38

Added to the initial election results of December 16, 1988, the canvass of results showed: Yes No Spoiled Total 123 60 52 11

Based on the foregoing results, the yes votes failed to obtain the majority of the votes cast in said certification election, hence, the necessity of opening the 168 challenged votes to determine the true will of the employees. On January 20, 1989, petitioner filed a position paper arguing against the opening of said votes mainly because said voters are not regular employees nor seasonal workers for having allegedly rendered work for less than 180 days. Trade Union of the Philippines and Allied Services (TUPAS), on the other hand, argued that the employment status of said employees has been resolved when Labor Arbiter Ricardo N. Martinez, in his Decision dated November 26, 1988 rendered in NLRC Case No. Sub-Rab-01-09-7-0087-88, declared that said employees were illegally dismissed. In an Order dated February 2, 1989 (pp. 278-280, NLRC, Records) Med-Arbiter Basa ordered the opening of said 168 challenged votes upon his observation that said employees were illegally dismissed in accordance with the foregoing Decision of Labor Arbiter Martinez. As canvassed, the results showed Yes No Spoiled Total 168 votes votes 165 0 3

On February 23, 1989, petitioner formally filed a Protest (pp. 284-287, NLRC, Records) claiming that the required five day posting of notice was not allegedly complied with and that the list of qualified voters so posted failed to include fifty five regular workers agreed upon by the parties as qualified to vote. The Protest further alleged that voters who were ineligible to vote were allowed to vote. Med-Arbiter Basa, in his Order dated March 7, 1989, dismissed said Protest which Order was affirmed on appeal in the Resolution dated December 12, 1989 of then Secretary of Labor, Franklin Drillon. Petitioner's Motion for Reconsideration was denied for lack of merit in public respondent's Order dated February 28, 1990.

On January 6, 1989, Management and TUPAS agreed to have the 36 challenged votes of the regular rank-and-file employees opened and a canvass thereof showed: Yes No votes votes 20 14

(pp. 84-88, Rollo) 3 The instant petition has, for its Assignment of Errors, the following: (1) The Honorable Secretary of Labor and Employment acted with grave abuse of discretion amounting to lack of jurisdiction and committed manifest error in upholding the certification of TUPAS as the sole bargaining agent mainly on an erroneous ruling that the protest against the canvassing of the votes cast by 168 dismissed workers was filed beyond the reglementary period. (2) The Honorable Secretary of Labor committed an abuse of discretion in completely disregarding the issue as to whether or not non-regular seasonal workers who have long been separated from employment prior to the filing of the petition for certification election would be allowed to vote and participate in a certification election. 4 The Court finds no merit in the petition. For it is to be noted that the formal protest of petitioner PFVII was filed beyond the reglementary period. A close reading of Sections 3 and 4, Rule VI, Book V of the Implementing Rules of the Labor Code, which read as follows: Sec. 3. Representation officer may rule on any-on-the-spot questions. The Representation officer may rule on any on-the-spot question arising from the conduct of the election. The interested party may however, file a protest with the representation officer before the close of the proceedings. Protests not so raised are deemed waived. Such protest shall be contained in the minutes of the proceedings. (Emphasis supplied) Sec. 4. Protest to be decided in twenty (20) working days. Where the protest is formalized before the med-arbiter with five (5) days after the close of the election proceedings, the med-arbiter shall decide the same within twenty (20) working days from the date of formalization. If not formalized within the prescribed period, the protest shall be deemed dropped. The decision may be appealed to the Bureau in the same manner and on the same grounds as provided under Rule V. (Emphasis supplied) would readily yield, as a matter of procedure, the following requirements in order that a protest filed thereunder would prosper, to wit: (1) The protest must be filed with the representation officer and made of record in the minutes of the proceedings before the close of election proceedings, and (2) The protest must be formalized before the Med-Arbiter within five (5) days after the close of the election proceedings. The records before Us quite clearly disclose the fact that petitioner, after filing a manifestation of protest on December 16, 1988, election day, only formalized the same on February 20, 1989, or more than two months after the close of election proceedings (i.e., December 16, 1988). We are not

persuaded by petitioner's arguments that election proceedings include not only casting of votes but necessarily includes canvassing and appreciation of votes cast and considering that the canvassing and appreciation of all the votes cast were terminated only on February 16, 1989, it was only then that the election proceedings are deemed closed, and thus, when the formal protest was filed on February 20, 1989, the five-day period within which to file the formal protest still subsisted and its protest was therefore formalized within the reglementary period. 5 As explained correctly by the Solicitor General, the phrase "close of election proceedings" as used in Sections 3 and 4 of the pertinent Implementing Rules refers to that period from the closing of the polls to the counting and tabulation of the votes as it could not have been the intention of the Implementing Rules to include in the term "close of the election proceedings" the period for the final determination of the challenged votes and the canvass thereof, as in the case at bar which may take a very long period. 6 Thus, if a protest can be formalized within five days after a final determination and canvass of the challenged votes have been made, it would result in an undue delay in the affirmation of the employees' expressed choice of a bargaining representative. 7 Petitioner would likewise bring into issue the fact that the notice of certification election was posted only on December 12, 1988 or four days before the scheduled elections on December 16, 1988, instead of the five-day period as required under Section 1 of Rule VI, Book V of the Implementing Rules. But it is not disputed that a substantial number, or 291 of 322 qualified voters, of the employees concerned were informed, thru the notices thus posted, of the elections to be held on December 16, 1988, and that such employees had in fact voted accordingly on election day. Viewed thus in the light of the substantial participation in the elections by voter-employees, and further in the light of the all-too settled rule that in interpreting the Constitution's protection to labor and social justice provisions and the labor laws and rules and regulations implementing the constitutional mandate, the Supreme Court adopts the liberal approach which favors the exercise of labor rights, 8 We find the lack of one day in the posting of notices insignificant, and hence, not a compelling reason at all in nullifying the elections. As regards the second assignment of error, the public respondent Secretary of Labor did not completely disregard the issue as to the voting rights of the alleged separated employees for precisely, he affirmed on appeal the findings of the Med-Arbiter when he ruled The election results indicate that TUPAS obtained majority of the valid votes cast in the election 60 plus 165, or a total of 225 votes out of a possible total of 291. WHEREFORE, premises considered, the appeal is hereby denied and the MedArbiter's order dated 7 March 1989 affirmed. Petitioner TUPAS is hereby certified as the sole and exclusive bargaining agent of all regular rank-and-file and seasonal workers at Philippine Fruits and Vegetable Industries, Inc. 9 (p. 26, Rollo) At any rate, it is now well-settled that employees who have been improperly laid off but who have a present, unabandoned right to or expectation of re-employment, are eligible to vote in certification elections. 10 Thus, and to repeat, if the dismissal is under question, as in the case now at bar whereby a case of illegal dismissal and/or unfair labor practice was filed, the employees concerned could still qualify to vote in the elections. 11 And finally, the Court would wish to stress once more the rule which it has consistently pronounced in many earlier cases that a certification election is the sole concern of the workers and the employer is regarded as nothing more than a bystander with no right to interfere at all in the election. The only exception here is where the employer has to file a petition for certification election pursuant to Article

258 of the Labor Code because it is requested to bargain collectively. Thus, upon the score alone of the "Bystander Rule", the instant petition would have been dismissed outright. WHEREFORE, the petition filed by Philippine Fruits and Vegetable Industries, Inc. (PFVII) in hereby DISMISSED for lack of merit. SO ORDERED. 4. GR No. 142000 January 22, 2003 Tagaytay Highlands International Golf Club Inc vs. Tagaytay Highlands Employees UnionPGTWO Before this Court on certiorari under Rule 45 is the petition of the Tagaytay Highlands International Golf Club Incorporated (THIGCI) assailing the February 15, 2002 decision of the Court of Appeals denying its petition to annul the Department of Labor and Employment (DOLE) Resolutions of November 12, 1998 and December 29, 1998. On October 16, 1997, the Tagaytay Highlands Employees Union (THEU)Philippine Transport and General Workers Organization (PTGWO), Local Chapter No. 776, a legitimate labor organization said to represent majority of the rank-and-file employees of THIGCI, filed a petition for certification election before the DOLE Mediation-Arbitration Unit, Regional Branch No. IV. THIGCI, in its Comment1 filed on November 27, 1997, opposed THEUs petition for certification election on the ground that the list of union members submitted by it was defective and fatally flawed as it included the names and signatures of supervisors, resigned, terminated and absent without leave (AWOL) employees, as well as employees of The Country Club, Inc., a corporation distinct and separate from THIGCI; and that out of the 192 signatories to the petition, only 71 were actual rankand-file employees of THIGCI. THIGCI thus submitted a list of the names of its 71 actual rank-and-file employees which it annexed2 to its Comment to the petition for certification election. And it therein incorporated the following tabulation3 showing the number of signatories to said petition whose membership in the union was being questioned as disqualified and the reasons for disqualification: # Signatures 13 6 2 53 14 6 3 1 4 16 of

Names with first names only

THIGCI also alleged that some of the signatures in the list of union members were secured through fraudulent and deceitful means, and submitted copies of the handwritten denial and withdrawal of some of its employees from participating in the petition.4Replying to THIGCIs Comment, THEU asserted that it had complied with all the requirements for valid affiliation and inclusion in the roster of legitimate labor organizations pursuant to DOLE Department Order No. 9, series of 1997,5 on account of which it was duly granted a Certification of Affiliation by DOLE on October 10, 1997;6 and that Section 5, Rule V of said Department Order provides that the legitimacy of its registration cannot be subject to collateral attack, and for as long as there is no final order of cancellation, it continues to enjoy the rights accorded to a legitimate organization. THEU thus concluded in its Reply7 that under the circumstances, the Med-Arbiter should, pursuant to Article 257 of the Labor Code and Section 11, Rule XI of DOLE Department Order No. 09, automatically order the conduct of a certification election. By Order of January 28, 1998, 8 DOLE Med-Arbiter Anastacio Bactin ordered the holding of a certification election among the rank-and-file employees of THIGCI in this wise, quoted verbatim: We evaluated carefully this instant petition and we are of the opinion that it is complete in form and substance. In addition thereto, the accompanying documents show that indeed petitioner union is a legitimate labor federation and its local/chapter was duly reported to this Office as one of its affiliate local/chapter. Its due reporting through the submission of all the requirements for registration of a local/chapter is a clear showing that it was already included in the roster of legitimate labor organizations in this Office pursuant to Department Order No. 9 Series of 1997 with all the legal right and personality to institute this instant petition. Pursuant therefore to the provisions of Article 257 of the Labor Code, as amended, and its Implementing Rules as amended by Department Order No. 9, since the respondents establishment is unorganized, the holding of a certification election is mandatory for it was clearly established that petitioner is a legitimate labor organization. Giving due course to this petition is therefore proper and appropriate.9 (Emphasis supplied) Passing on THIGCIs allegation that some of the union members are supervisory, resigned and AWOL employees or employees of a separate and distinct corporation, the Med-Arbiter held that the same should be properly raised in the exclusion-inclusion proceedings at the pre-election conference. As for the allegation that some of the signatures were secured through fraudulent and deceitful means, he held that it should be coursed through an independent petition for cancellation of union registration which is within the jurisdiction of the DOLE Regional Director. In any event, the Med-Arbiter held that THIGCI failed to submit the job descriptions of the questioned employees and other supporting documents to bolster its claim that they are disqualified from joining THEU. THIGCI appealed to the Office of the DOLE Secretary which, by Resolution of June 4, 1998, set aside the said Med-Arbiters Order and accordingly dismissed the petition for certification election on the ground that there is a "clear absence of community or mutuality of interests," it finding that THEU sought to represent two separate bargaining units (supervisory employees and rank-and-file employees) as well as employees of two separate and distinct corporate entities. Upon Motion for Reconsideration by THEU, DOLE Undersecretary Rosalinda Dimalipis-Baldoz, by authority of the DOLE Secretary, issued DOLE Resolution of November 12, 199810 setting aside the June 4, 1998 Resolution dismissing the petition for certification election. In the November 12, 1998

Reasons for Disqualification Supervisors of THIGCI Resigned employees of THIGCI AWOL employees of THIGCI Rank-and-file employees of The Country Club at Tagaytay Highlands, Inc. Supervisors of The Country Club at Tagaytay Highlands, Inc. Resigned employees of The Country Club at Tagaytay Highlands, Inc. Terminated employees of The Country Club at Tagaytay Highlands, Inc. AWOL employees of The Country Club at Tagaytay Highlands, Inc. Signatures that cannot be deciphered Names in list that were erased

Resolution, Undersecretary Dimapilis-Baldoz held that since THEU is a local chapter, the twenty percent (20%) membership requirement is not necessary for it to acquire legitimate status, hence, "the alleged retraction and withdrawal of support by 45 of the 70 remaining rank-and-file members . . . cannot negate the legitimacy it has already acquired before the petition;" that rather than disregard the legitimate status already conferred on THEU by the Bureau of Labor Relations, the names of alleged disqualified supervisory employees and employees of the Country Club, Inc., a separate and distinct corporation, should simply be removed from the THEUs roster of membership; and that regarding the participation of alleged resigned and AWOL employees and those whose signatures are illegible, the issue can be resolved during the inclusion-exclusion proceedings at the pre-election stage. The records of the case were thus ordered remanded to the Office of the Med-Arbiter for the conduct of certification election. THIGCIs Motion for Reconsideration of the November 12, 1998 Resolution having been denied by the DOLE Undersecretary by Resolution of December 29, 1998,11 it filed a petition for certiorari before this Court which, by Resolution of April 14, 1999,12 referred it to the Court of Appeals in line with its pronouncement in National Federation of Labor (NFL) v. Hon. Bienvenido E. Laguesma, et al.,13 and in strict observance of the hierarchy of courts, as emphasized in the case of St. Martin Funeral Home v. National Labor Relations Commission.14 By Decision of February 15, 2000,15 the Court of Appeals denied THIGCIs Petition for Certiorari and affirmed the DOLE Resolution dated November 12, 1998. It held that while a petition for certification election is an exception to the innocent bystander rule, hence, the employer may pray for the dismissal of such petition on the basis of lack of mutuality of interests of the members of the union as well as lack of employer-employee relationship following this Courts ruling in Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union et al .16 and Dunlop Slazenger [Phils.] v. Hon. Secretary of Labor and Employment et al,17 petitioner failed to adduce substantial evidence to support its allegations. Hence, the present petition for certiorari, raising the following "ISSUES/ASSIGNMENT OF ERRORS: THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE RESOLUTION DATED 12 NOVEMER 1998 HOLDING THAT SUPERVISORY EMPLOYEES AND NON-EMPLOYEES COULD SIMPLY BE REMOVED FROM APPELLEES ROSTER OF RANK-AND-FILE MEMBERSHIP INSTEAD OF RESOLVING THE LEGITIMACY OF RESPONDENT UNI ONS STATUS THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE RESOLUTION DATED 12 NOVEMBER 1998 HOLDING THAT THE DISQUALIFIED EMPLOYEES STATUS COULD READILY BE RESOLVED DURING THE INCLUSION AND EXCLUSION PROCEEDINGS THE COURT OF APPEALS GRIEVOUSLY ERRED IN NOT HOLDING THAT THE ALLEGATIONS OF PETITIONER HAD BEEN DULY PROVEN BY FAILURE OF RESPONDENT UNION TO DENY THE SAME AND BY THE SHEER WEIGHT OF EVIDENCE INTRODUCED BY PETITIONER AND CONTAINED IN THE RECORDS OF THE CASE"18 The statutory authority for the exclusion of supervisory employees in a rank-and-file union, and viceversa, is Article 245 of the Labor Code, to wit:

Article 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees. Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own. While above-quoted Article 245 expressly prohibits supervisory employees from joining a rank-andfile union, it does not provide what would be the effect if a rank-and-file union counts supervisory employees among its members, or vice-versa. Citing Toyota19 which held that "a labor organization composed of both rank-and-file and supervisory employees is no labor organization at all," and the subsequent case of Progressive Development Corp. Pizza Hut v. Ledesma20 which held that: "The Labor Code requires that in organized and unorganized establishments, a petition for certification election must be filed by a legitimate labor organization. The acquisition of rights by any union or labor organization, particularly the right to file a petition for certification election, first and foremost, dependson whether or not the labor organization has attained the status of a legitimate labor organization. In the case before us, the Med-Arbiter summarily disregarded the petitioners prayer that the former look into the legitimacy of the respondent Union by a sweeping declaration that the union was in the possession of a charter certificate so that for all intents and purposes, Sumasaklaw sa Manggagawa sa Pizza Hut (was) a legitimate organization,"21 (Underscoring and emphasis supplied), petitioner contends that, quoting Toyota, "[i]t becomes necessary . . ., 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."22 Continuing, petitioner argues that without resolving the status of THEU, the DOLE Undersecretary "conveniently deferred the resolution on the serious infirmity in the membership of [THEU] and ordered the holding of the certification election" which is frowned upon as the following ruling of this Court shows: We also do not agree with the ruling of the respondent Secretary of Labor that the infirmity in the membership of the respondent union can be remedied in "the pre-election conference thru the exclusion-inclusion proceedings wherein those employees who are occupying rank-and-file positions will be excluded from the list of eligible voters." Public respondent gravely misappreciated the basic antipathy between the interest of supervisors and the interest of rank-and-file employees. Due to the irreconcilability of their interest we held in Toyota Motor Philippines v. Toyota Motors Philippines Corporation Labor Union,viz: x x x "Clearly, based on this provision [Article 245], 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 posses 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." (Emphasis by petitioner) (Dunlop Slazenger (Phils.), v. Secretary of Labor, 300 SCRA 120 [1998]; Underscoring and emphasis supplied by petitioner.) The petition fails. After a certificate of registration is issued to a union, its legal personality cannot be subject to collateral attack. It may be questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V, Book IV of the "Rules to Implement the Labor Code" (Implementing Rules) which section reads: Sec. 5. Effect of registration. The labor organization or workers association shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration. Such legal personality cannot thereafter be subject to collateral attack, but may be questioned only in an independent petition for cancellation in accordance with these Rules. (Emphasis supplied) The grounds for cancellation of union registration are provided for under Article 239 of the Labor Code, as follows: Art. 239. Grounds for cancellation of union registration. The following shall constitute grounds for cancellation of union registration: (a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification; (b) Failure to submit the documents mentioned in the preceding paragraph within thirty (30) days from adoption or ratification of the constitution and by-laws or amendments thereto; (c) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, the list of voters, or failure to subject these documents together with the list of the newly elected/appointed officers and their postal addresses within thirty (30) days from election; (d) Failure to submit the annual financial report to the Bureau within thirty (30) days after the losing of every fiscal year and misrepresentation, false entries or fraud in the preparation of the financial report itself; (e) Acting as a labor contractor or engaging in the "cabo" system, or otherwise engaging in any activity prohibited by law; (f) Entering into collective bargaining agreements which provide terms and conditions of employment below minimum standards established by law; (g) Asking for or accepting attorneys fees or negotiation fees from employers;

(h) Other than for mandatory activities under this Code, checking off special assessments or any other fees without duly signed individual written authorizations of the members; (i) Failure to submit list of individual members to the Bureau once a year or whenever required by the Bureau; and (j) Failure to comply with the requirements under Articles 237 and 238, (Emphasis supplied), while the procedure for cancellation of registration is provided for in Rule VIII, Book V of the Implementing Rules. The inclusion in a union of disqualified employees is not among the grounds for cancellation, unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated in Sections (a) and (c) of Article 239 of above-quoted Article 239 of the Labor Code. THEU, having been validly issued a certificate of registration, should be considered to have already acquired juridical personality which may not be assailed collaterally. As for petitioners allegation that some of the signatures in the petition for certification election were obtained through fraud, false statement and misrepresentation, the proper procedure is, as reflected above, for it to file a petition for cancellation of the certificate of registration, and not to intervene in a petition for certification election. Regarding the alleged withdrawal of union members from participating in the certification election, this Courts following ruling is instructive: "[T]he best forum for determining whether there were indeed retractions from some of the laborers is in thecertification election itself wherein the workers can freely express their choice in a secret ballot. Suffice it to say that the will of the rank-and-file employees should in every possible instance be determined by secret ballot rather than by administrative or quasi-judicial inquiry. Such representation and certification election cases are not to be taken as contentious litigations for suits but as mere investigations of a non-adversary, fact-finding character as to which of the competing unions represents the genuine choice of the workers to be their sole and exclusive collective bargaining representative with their employer."23 As for the lack of mutuality of interest argument of petitioner, it, at all events, does not lie given, as found by the court a quo, its failure to present substantial evidence that the assailed employees are actually occupying supervisory positions. While petitioner submitted a list of its employees with their corresponding job titles and ranks, 24 there is nothing mentioned about the supervisors respective duties, powers and prer ogatives that would show that they can effectively recommend managerial actions which require the use of independent judgment.25 As this Court put it in Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor:26 Designation should be reconciled with the actual job description of subject employees x x x The mere fact that an employee is designated manager does not necessarily make him one. Otherwise, there would be an absurd situation where one can be given the title just to be

deprived of the right to be a member of a union. In the case of National Steel Corporation vs. Laguesma (G. R. No. 103743, January 29, 1996), it was stressed that: What is essential is the nature of the employees function and not the nomenclature or titlegiven to the job which determines whether the employee has rank-and-file or managerial status or whether he is a supervisory employee. (Emphasis supplied).27 WHEREFORE, the petition is hereby DENIED. Let the records of the case be remanded to the office of origin, the Mediation-Arbitration Unit, Regional Branch No. IV, for the immediate conduct of a certification election subject to the usual pre-election conference. SO ORDERED. 5. GR No. 106518 March 11, 1999 ABS-CBN Supervisors Union Members vs. ABS-CBN Broadcast Corporation et al At bar is a special civil action for Certiorari[1] seeking the reversal of the Order[2] dated July 31, 1992 of public respondent Department of Labor and Employment Undersecretary Bienvenido E. Laguesma[3] in Case No. NCR OD M 90 07 - 037. From the records on hand, it can be gathered, that: On December 7, 1989, the ABS-CBN Supervisors Emloyees Union (the Union), represented by respondent Union Officers, and ABS-CBN Broadcasting Corporation (the Company) signed and concluded a Collective Bargaining Agreement with the following check-off provision, to wit: Article XII The [C]ompany agrees to advance to the Union a sum equivalent to 10% of the sum total of all the salary increases and signing bonuses granted to the Supervisors under this collective Bargaining Agreement and upon signing hereof to cover the Unions incidental expenses, including attorneys fees and representation expenses for its organization and (sic) preparation and conduct hereof, and such advance shall be deducted from the benefits granted herein as they accrue. On September 19, 1990, Petitioners[4] filed with the Bureau of Labor Relations, DOLE-NCR, Quezon City, a Complaint against the Union Officers[5] and ABS-CBN Broadcasting corporation, praying that (1) the special assessment of ten percent (10%) of the sum total of all salary increases and signing bonuses granted by respondent Company to the members of the Union be declared illegal for failure to comply with the labor Code, as amended, particularly Article 241, paragraphs (g), (n), and (o); and in utter violation of the Constitution and By-Laws of the ABS-CBN Supervisors Employees Union; (2)respondent Company be ordered to suspend further deductions from petitioners salaries for their shares thereof. In their Answers, respondent Union Officers and Company prayed for the dismissal of the Complaint for lack of merit. They argued that the check-off provision is in accordance with law as majority of the Union members individually executed a written authorization giving the Union officers and the Company a blanket authority to deduct subject amount. On January 21, 1991, Med-Arbiter Rasidali C. Abdula issued the following Order:[6] WHEREFORE, premises considered, judgment is hereby rendered: a) declaring the special assessment of 10% of the sum total of CBA benefits as illegal;

b) ordering respondents union officers to refund to the complainants and other union members the amount of five Hundred Thousand Pesos (P500,000.00) advanced by the respondent Company as part of the 10% sum total of CBA benefits without unnecessary delay; c) ordering the respondent company to stop and desist from further making advances and deductions from the union members salaries their share in the advances already made to the union; d) ordering the respondent Company to remit directly to the complainants and other union members the amount already deducted from the union members salaries as part of their share in the advances already made to the union and which it had kept in trust during the pendency of this case; and e) directing the respondents union officers and respondent Company to submit report on the compliance thereof. SO ORDERED. On appeal, respondent DOLE Undersecretary Bienvenido E. Laguesma handed down a Decision[7] on July 1, 1991, disposing as follows: WHEREFORE, the appeals are hereby denied, the Order of the Med-Arbiter is affirmed en toto. On July 5, 1991, the aforesaid Decision was received by the respondent Union Officers and respondent Company. On July 13, 1991, they filed their Motion for Reconsideration stating, inter alia that the questioned ten percent (10%) special assessment is valid pursuant to the ruling in Bank of the Philippine Islands Employee Union ALU vs. NLRC.[8] On July 31, 1992, Undersecretary B.E. Laguesma issued an Order [9]; resolving, thus: "WHEREFORE, the Decision dated 01 July 1991 is hereby SET ASIDE. In lieu thereof, a new one is hereby entered DISMISSING the Complaint/Petition for lack of merit." Hence, the present petition seeking to annul and set aside the above-cited Order of public respondent Undersecretary B.E. Laguesma, for being allegedly tainted with grave abuse of discretion amounting to lack of jurisdiction. Did the public respondent act with grave abuse of discretion in issuing the challenged Order reversing his own Decision of July 1, 1991? Such is the sole issue posited,which we resolve in the negative. The petition is unmeritorious. Petitioners claim[10] that the Decision of the Secretary of Labor and Employment dated July 1, 1991, affirming in toto the Order of Med-Arbiter Rasidali Abdullah dated January 31, 1991, cannot be a subject of a motion for reconsideration because it is final and unappealable pursuant to Section 8, Rule VIII, Book V of the Omnibus Rule Implementing the Labor Code. It is further argued that the only remedy of the respondent Union Officers' is to file a petition for certiorari with this Court. Section 8, Rule VIII, Book V of the Omnibus Rules Implementing the Labor Code, provides: "The Secretary shall have fifteen (15) calendar days within which to decide the appeal from receipt of the records of the case. The decision of the Secretary shall be final and inappealable." [Underscoring supplied]. (Comment, p. 101)

The aforecited provision cannot be construed to mean that the Decision of the public respondent cannot be reconsidered since the same is reviewable by writ of certiorari under Rule 65 of the Rules of Court. As a rule, the law requires a motion for reconsideration to enable the public respondent to correct his mistakes, if any. In Pearl S. Buck Foundation, Inc., vs. NLRC,[11] this Court held: "Hence, the only way by which a labor case may reach the Supreme Court is through a petition for certiorari under Rule 65 of the Rules of Court alleging lack or excess of jurisdiction or grave abuse of discretion. Such petition may be filed within a reasonable time from receipt of the resolution denying the motion for reconsideration of the NLRC decision." [Underscoring; supplied]. Clearly, before a petition for certiorari under Rule 65 of the Rules of Court may be availed of, the filing of a motion for reconsideration is a condition sine qua non to afford an opportunity for the correction of the error or mistake complained of. So also, considering that a decision of the Secretary of Labor is subject to judicial review only through a special civil action of certiorari and, as a rule, cannot be resorted to without the aggrieved party having exhausted administrative remedies through a motion for reconsideration, the aggrieved party, must be allowed to move for a reconsideration of the same so that he can bring a special civil action forcertiorari before the Supreme Court.[12] Furthermore, it appears that the petitioners filed with the public respondent a Motion for Early Resolution[13] dated June 24, 1992. Averring that private respondents' Motion for Reconsideration did not contain substantial factual or legal grounds for the reversal of subject decision. Consequently, petitioners are now estopped from raising the issue sought for resolution. In Alfredo Marquez vs. Secretary of Labor,[14] the Court said: "xxx The active participation of the party against whom the action was brought, coupled with his failure to object to the jurisdiction of the court or quasi-judicial body where the action is pending, is tantamount to an invocation of that jurisdiction and a willingness to abide by the resolution of the case and will bar said party from later on impugning the court or body's jurisdiction." What is more, it was only when the public respondents issued the Order adverse to them that the petitioners raised the question for the first time before this Court. Obviously, it is a patent afterthought which must be abhorred. Petitioners also argued that the check-off provision in question is illegal because it was never submitted for consideration and approval to "all the members at a general membership meeting called for the purpose"; and further alleged that the formalities mandated by Art. 241, paragraphs (n) and (o) of the Labor Code, as amended, were not complied with. "A check-off is a process or device whereby the employer, on agreement with the Union, recognized as the proper bargaining representative, or on prior authorization from its employees, deducts union dues or agency fees from the latter's wages and remits them directly to the union."[15] Its desirability in a labor organization is quite evident. It is assured thereby of continuous funding. As this Court has acknowledged, the system of check-off is primarily for the benefit of the Union and only indirectly, for the individual employees. The legal basis of check-off is found in statutes or in contracts.[16] The statutory limitations on check-offs are found in Article 241, Chapter II, Title IV, Book Five of the Labor Code, which reads: "Rights and conditions of membership in a labor organization. - The following are the rights and conditions of membership in a labor organization: xxx

(g) No officer, agent, member of a labor organization shall collect any fees, dues, or other contributions in its behalf or make any disbursement of its money or funds unless he is duly authorized pursuant to its constitution and by-laws. xxx (n) No special assessment or other extraordinary fees may be levied upon the members of a labor organization unless authorized by a written resolution of a majority of all the members of a general membership meeting duly called for the purpose. The secretary of the organization shall record the minutes of the meeting including the list of all members present, the votes cast, the purpose of the special assessment or fees and the recipient of such assessment or fees. The record shall be attested to by the president. (o) Other than for mandatory activities under the Code, no special assessments, attorney's fees, negotiation fees or any other extraordinary fees may be checked off from any amount due to an employee with an individual written authorization duly signed by the employee. The authorization should specifically state the amount, purpose and beneficiary of the deductions. [Underscoring; supplied] Article 241 of the Labor Code, as amended, must be read in relation to Article 222, paragraph (b) of the same law, which states: "No attorney's fees, negotiation fees or similar charges of any kind arising from collective bargaining negotiations or conclusion of the collective agreement shall be imposed on any individual member of the contracting union: Provided, however, that attorney's fees may be charged against union funds in an amount to be agreed upon by the parties. Any contract, agreement or arrangement of any sort to the contrary shall be null and void." [Underscoring; supplied] And this court elucidated the object and import of the said provision of law in Bank of Philippine Islands Employees Union - Association Labor Union (BPIEU-ALU) vs. National Labor Relations Commission:[17] "The Court reads the afore-cited provision (Article 222 [b] of the Labor Code) as prohibiting the payment of attorney's fees only when it is effected through forced contributions from the workers from theirown funds as distinguished from the union funds. xxx" Noticeably, Article 241 speaks of three (3) requisites that must be complied with in order that the special assessment for Union's incidental expenses, attorney's fees and representation expenses, as stipulated in Article XII of the CBA, be valid and upheld namely: 1) authorization by a written resolution of the majority of all the members at the general membership meeting duly called for the purpose; (2)secretary's record of the minutes of the meeting; and (3) individual written authorization for check-off duly signed by the employee concerned. After a thorough review of the records on hand, we find that the three (3) requisites for the validity of the ten percent (10%) special assessment for Union's incidental expenses, attorney's fees and representation expenses were met. It can be gleaned that on July 14, 1989, the ABS-CBN Supervisors Employee Union held its general meeting, whereat it was agreed that a ten percent (10%) special assessment from the total economic package due to every member would be checked-off to cover expenses for negotiation, other miscellaneous expenses and attorney's fees. The minutes of the said meeting were recorded by the Union's Secretary, Ma. Carminda M. Munoz, and noted by its President, Herbert Rivera.[18]

On May 24, 1991, said Union held its General Membership Meeting, wherein majority of the members agreed that "in as much as the Union had already paid Atty. P. Pascual the amount ofP500,000.00, the same must be shared by all the members until this is fully liquidated." [19] Eighty-five (85) members of the same Union executed individual written authorizations for check-off, thus: "Towards that end, I hereby authorize the Management and/or Cashier of ABS-CBN BROADCASTING CORPORATION to deduct from my salary the sum of P30.00 per month as my regular union dues and said Management and/or Cashier are further authorize (sic) to deduct a sum equivalent to 10% of all and whatever benefits that will become due to me under the COLLECTIVE BARGAINING AGREEMENT (CBA) that may be agreed upon by the UNION and MANAGEMENT and to apply the said sum to the advance that Management will make to our Union for incidental expenses such as attorney's fees, representations and other miscellaneous expenses pursuant to Article XII of the proposed CBA."[20] Records do not indicate that the aforesaid check-off authorizations were executed by the eightyfive (85) Union members under the influence of force or compulsion. There is then, the presumption that such check-off authorizations were executed voluntarily by the signatories thereto. Petitioners contention that the amount to be deducted is uncertain[21] is not persuasive because the check-off authorization clearly stated that the sum to be deducted is equivalent to ten percent (10%) of all and whatever benefits may accrue under the CBA. In other words, although the amount is not fixed, it is determinable. Petitioners further contend that Article 241 (n) of the Labor Code, as amended, on special assessments, contemplates a general meeting after the conclusion of the collective bargaining agreement. Subject Article does not state that the general membership meeting should be called after the conclusion of a collective bargaining agreement. Even granting ex gratia argumenti that the general meeting should be held after the conclusion of the CBA, such requirement was complied with since the May 24, 1991 General Membership Meeting was held after the conclusion of the Collective Bargaining Agreement, which was signed and concluded on December 7, 1989. Considering that the three requisites afforesaid for the validity of a special assessment were observed or met, we uphold the validity of the ten percent (10%) special assessment authorized in Article XII of the CBA. We also concur in the finding by public respondent that the Bank of the Philippine Islands Employees Union ALU vs. NLRC[22] is apposite in this case. In BPIEU-ALU, the petitioners, impugned the Order of the NLRC, holding that the validity of the five percent (5%) special assessment for attorneys fees is contrary to Article 222, paragraph (b) of the Labor Code, as amended. The court ratiocinated, thus: The Court reads the aforecited provision as prohibiting the payment of attorney s fees only when it is effected through forced contributions from the workers from their own funds a distinguished fromthe union funds. The purpose of the provision is to prevent imposition on the workers of the duty to individually contribute their respective shares in the fee to be paid the attorney for his services on behalf of the union in its negotiations with the management. xxx [Underscoring supplied] However, the public respondent overlooked the fact that in the said case, the deduction of the stipulated five percent (5%) of the total economic benefits under the new collective bargaining agreement was applied only to workers who gave their individual signed authorizations. The Court explained:

xxx And significantly, the authorized deduction affected only the workers who adopted and signed the resolution and who were the only ones from whose benefits the deductions were made by BPI. No similar deductions were taken from the other workers who did not sign the resolution and so were not bound by it. [Underscoring; supplied] While the court also finds merit in the finding by the public respondents that Palacol vs. FerrerCalleja[23] is inapropos in the case under scrutiny, it does not subscribe to public respondents reasoning that Palacol should not be retroactively applied to the present case in the interest of justice, equity and fairplay.[24] The inapplicability of Palacol lies in the fact that it has a different factual milieu from the present case. In Palacol, the check-off authorization was declared invalid because majority of the Union members had withdrawn their individual authorizations, to wit: Paragraph (o) on the other hand requires an individual written authorization duly signed by every employee in order that special assessment maybe validly check-off. Even assuming that the special assessment was validly levied pursuant to paragraph (n), and granting that individual written authorizations were obtained by the Union, nevertheless there can be no valid check-off considering that the majority of the Union members had already withdrawn their individual authorizations. A withdrawal of individual authorization is equivalent to no authorization at all. xxx [Underscoring; supplied] In this case, the majority of the Union members gave their individual written check-off authorizations for the ten percent (10%) special assessment. And they have never withdraw their individual written authorizations for check-off. There is thus cogent reason to uphold the assailed Order, it appearing from the records of the case that twenty (20)[25] of the forty-two (42) petitioners executed as Compromise Agreement[26] ratifying the controversial check-off provision in the CBA. Premises studiedly considered, we are of the irresistable conclusion and, so find, that the ruling in BPIEU-ALU vs. NLRC that (1) the prohibition against attorneys fees in Article 222, paragraph (b ) of the Labor Code applies only when the payment of attorneys fees is effected through forced contributions from the workers; and (2) that no deductions must be taken from the workers who did not sign the check-off authorization, applies to the case under consideration. WHEREFORE, the assailed Order, dated July 31, 1992, of DOLE Undersecretary B.E. Laguesma is AFFIRMED except that no deductions shall be taken from the workers who did not give their individual written check-off authorization. No pronouncement as to costs. SO ORDERED. 6. GR No. L-55674 July 25, 1983 La Suerte Cigar & Cigarette Factory vs. Director of the Bureau of Labor Relations et al GUERRERO, J.: In the determination of the basic issue raised in the case at bar involving the status of some 14 members of private respondent local union whether they are employees of petitioner company in which case they should be included in the 30% jurisdictional requirement necessary to support the petition for certification election, or independent contractors and hence, excluded therefrom, Our rulings in Mafinco Trading Corp. vs. Ople, 70 SCRA 139, where We reiterated the "control test" earlier laid down in Investment Planning Corp. vs. Social Security System, 21 SCRA 924, and in Social Security System vs. Hon. Court of Appeals and Shriro (Phils.) Inc., 37 SCRA 579 are authoritative and controlling.

In the Mafinco case, the Court, through Justice Aquino, said: In a petition for certiorari, the issue of whether respondents are employees or independent contractors should be resolved mainly in the light of their peddling contracts. Pro hac vice the issue of whether Repomanta and Moralde were employees of Mafinco or were independent contractors should be resolved mainly in the light of their peddling contracts. A different approach would lead this Court astray into the field of factual controversy where its legal pronouncements would not rest on solid grounds. A contract whereby one engages to purchase and sell soft drinks on trucks supplied by the manufacturer but providing that other party (peddler) shall have the right to employ his own workers, shall post a bond to protect the manufacturer against losses, shall be responsible for damages caused to third persons, shall obtain the necessary licenses and permits and bear the expenses incurred in the sale of the soft drinks is not a contract of employment.-We hold that under their peddling contracts Repomanta and Moralde were not employees of Mafinco but were independent contractors as found by the NLRC and its factfinder and by the committee appointed by the Secretary of Labor to look into the status of Cosmos and Mafinco peddlers. They were distributors of Cosmos soft drinks with their own capital and employees. Ordinarily, an employee or a mere peddler does not execute a formal contract of employment. He is simply hired and he works under the direction and control of the employer. Repomanta and Moralde voluntarily executed with Mafinco formal peddling contracts which indicate the manner in - which they would se Cosmos soft drinks. That circumstance signifies that they were acting as independent businessmen. They were free to sign or not to sign that contract. If they did not want to sell Cosmos products under the conditions defined in that contract, they were free to reject it. But having signed it, they were bound by its stipulations and the consequences thereof under existing labor laws. One such stipulation is the right of the parties to terminate the contract upon 5 days' prior notice. Whether the termination in this case was an unwarranted dismissal of an employee, as contended by Repomanta and Moralde, is a point that cannot be resolved without submission of evidence. Using the contract itself as the sole criterion, the termination should perforce be characterized as simply the exercise of a right freely stipulated upon by the parties. Tests for determining the existence of employer-employee relationship.-In determining the existence of employer-employee relationship, the following elements are generally considered, namely: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employees' conduct-although the latter is the most important element. Factors to determine existence of independent contract relationship. An independent contractor is one who exercises independent employment and contracts to do a piece of work according to his own methods and without being subject to control of his employer except as to the result of the work. 'Among the factors to be considered are whether the contractor is carrying on an independent business; whether the work is part of the employer's general business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of the work to another; the power to terminate the relationship; the existence of a contract for the performance of a specified piece of work; the control and supervision of the work; the employer's powers and duties

with respect to the hiring, firing, and payment of the contractor's servants; the control of the premises; the duty to supply the premises, tools, appliances, material and labor, and the mode, manner, and terms of payment.' In the Shriro case, We held that the common law rule of determining the existence of employeremployee relationship, principally the "control test", applies in its jurisdiction. Where the element of control is absent; where a person who works for another does so more or less at his own pleasure and is not subject to definite hours or conditions of work, and in turn is compensated according to the result of his efforts and not the amount thereof, relationship of employer and employee does not exist. And supplementing the above jurisprudence is Our ruling in Social Security System vs. The Hon. Court of Appeals, Manila Jockey Club, Inc., Phil. Racing Club, 30 SCRA 210 wherein the Supreme Court, speaking through then Associate Justice, now Chief Justice Fernando, held: The question of when there is employer-employee relationship for purposes of the Social Security Act has been settled in this jurisdiction in the case of Investment Planning Corp. vs. Social Security System, 21 SCRA 924 which applied the so-called control test, that is, whether the employer controls or has reserved the right to control the employee not only as to the result of the work to be done but also as to the means and methods by which the same is to be accomplished. In other words, where the element of control is absent; whether a person who works for another does so more or less at his own pleasure and is not subject to definite hours or conditions of work, and in turn is compensated according to the result of his efforts and not the amount thereof, we should not find that the relationship of employer and employee exists. This decision rejected the economic facts of the relation test. The instant petition for certiorari seeks to reverse the resolution of the Director of the Bureau of Labor Relations dated January 15, 1980 ordering that a certification election be conducted among the sales personnel of La Suerte Cigar and Cigarette Factory, as well as his resolution dated November 18, 1980 denying the motion for reconsideration and directing that a certification election be conducted immediately. The said resolutions reversed and set aside the order of dismissal dated August 29, 1979 of the Med-Arbiter. The antecedent facts show that on April 7, 1979, the La Suerte Cigar and Cigarette Factory Provincial (Luzon) and Metro Manila Sales Force Association (herein referred to as the local union) applied for and was granted chapter status by the National Association of Trade Unions (hereinafter referred to as NATU). On April 16, 1979, some thirty-one (31) local union members signed a joint letter withdrawing their membership from NATU. Nonetheless, on April 18, 1979, the local union and NATU filed a petition for direct certification or certification election which alleged among others, that forty-eight of the sixty sales personnel of the Company were members of the local union; that the petition is supported by no less than 75% of the sales force; that there is no existing recognized labor union in the Company representing the said sales personnel; that there is likewise no existing collecting bargaining agreement; and that there had been no certification election in the last twelve months preceding the filing of the petition. The Company then filed a motion to dismiss the petition on June 13, 1979 on the ground that it is not supported by at least 30% of the members of the proposed bargaining unit because (a) of the alleged forty-eight (48) members of the local union, thirty-one (31) had withdrawn prior to the filing of the

petition; and (b) fourteen (14) of the alleged members of the union were not employees of the Company but were independent contractors. NATU and the local union opposed the Company's motion to dismiss alleging that the fourteen dealers are actually employees of the Company because they are subject to its control and supervision. On August 29, 1979, the Med-Arbiter issued an order dismissing the petition for lack of merit as the fourteen dealers who joined the union should not be counted in determining the 30% consent requirement because they are not employees but independent contractors and the withdrawal of the 31 salesmen from the union prior to the filing of the petition for certification election was uncontroverted by the parties. Thereafter, on September 24, 1979, the local union on its own signed only by the local union President, filed a motion for reconsideration and/or appeal from the order of dismissal on the following grounds: (a) the findings of facts of the med-arbiter as it appears on the order are contrary to facts and (b) in finding that no employer-employee relationship exists between the alleged dealers and respondent firm, the med-arbiter decided in a manner not in accord with the factual circumstances attendant to the relationship. Acting on the motion for reconsideration/appeal, the Director of the Bureau of Labor Relations, in Resolution dated January 15, 1980, reversed and set aside the order of dismissal, holding that withdrawal of the 31 signatories to the petition two days prior to the filing of the instant petition not establish the fact that the same was executed freely and voluntarily and that the records replete with company documents showing that the alleged dealers are in fact employees of company. the the did are the

reversed by the Executive Council; and that the twelve signatories did not constitute a majority of the sixty (60) members of the Executive Council. The local union made its reply to the counter-manifestation stating that the power to expel an affiliate exclusively belonged to the National Executive Council of NATU, under Section 2, Article V of the NATU Constitution and By-Laws; that such power could only be wielded after due investigation and hearing; that disaffiliation is effected only by voluntary act of the local union, which is not the case here, because it is the President and legal counsel who are trying to expel the union. Simultaneously with said reply, the local union filed an opposition to Atty. Lontok's motion to dismisswithdraw petition, stating that Atty. Lontok had no more personality to file the same inasmuch as he had previously withdrawn as counsel in his manifestation dated May 7, 1980, and the local union has accepted the same in its counter-manifestation dated May 16, 1980; that expulsion requires twothirds vote of the members of the National Executive Council, as well as investigation and hearing; that engaging another lawyer is not a ground for expulsion of an affiliate; and that the local union was compelled to hire another lawyer because up to the last day of the reglementary period, Atty. Lontok still had not filed an appeal from the decision of the Med-Arbiter. On November 18, 1980, the Director of the Bureau of Labor Relations promulgated a resolution denying the Company's motion for reconsideration and directing that the certification election be conducted immediately. Hence, this petition. In the apparently simple task of determining whether the Director of the Bureau of Labor Relations committed grave abuse of discretion amounting to lack of jurisdiction in ordering the direct certification election, three difficult issues must be resolved, namely: I. Whether or not the 14 dealers are employees or independent contractors. II. Whether or not the withdrawal of 31 union members from the NATU affected the petition for certification election insofar as the thirty per cent requirement is concerned. III. Whether or not the withdrawal of the petition for certification election by the NATU, through its President and legal counsel, was valid and effective. A basic factor underlying the exercise of rights under the Labor Code is status of employment. The question of whether employer-employee relationship exists is a primordial consideration before extending labor benefits under the workmen's compensation, social security, medicare, termination pay and labor relations law. It is important in the determination of who shall be included in a proposed bargaining unit because it is the sine qua non, the fundamental and essential condition that a bargaining unit be composed of employees. Failure to establish this juridical relationship between the union members and the employer affects the legality of the union itself. It means the ineligibility of the union members to present a petition for certification election as well as to vote therein. Corollarily, when a petition for certification election is supported by 48 signatories in a bargaining unit composed of 60 salesmen, but 14 of the 48 lacks employee status, the petition is vitiated thereby. Herein lies the importance of resolving the status of the dealers in this case. It is the contention of the company that the dealers in the sale of its tobacco products are independent contractors. On the other hand, the Union contends that such dealers are actually employees entitled to the coverage and benefits of labor relations laws.

The Company then filed a motion to set aside the resolution dated January 15, 1980 of the Director of the Bureau of Labor Relations, contending that the appeal was never perfected or is jurisdictionally defective, copy of the motion for reconsideration/appeal not having been served upon the Company, and that the Resolution was based solely on the distorted and self-serving allegations of the union. The local union opposed the Company's motion for reconsideration and submitted a memorandum on April 22, 1980 in amplification of its opposition. At this juncture, the legal counsel of NATU filed a manifestation on May 15, 1980 stating that the act of the local union of engaging another lawyer to handle the case amounts to disaffiliation, for which reason said legal counsel was withdrawing from the case. The local union counter manifested that the local union had not been officially notified of its expulsion from the NATU; that there was no valid ground for its expulsion; that the National Executive Council of NATU had not approved such expulsion; and that it had no objection to the withdrawal of Atty. Marcelino Lontok, Jr. as its counsel. Then came a motion of NATU through its President and legal counsel withdrawing as petitioner and contending that since the local union was no longer affiliated with it, it was no longer interested in the case. Twelve members of the National Executive Council then came in and manifested that they constitute a majority of the Executive Board of NATU and affirmed that the local union was still an affiliate of NATU. There followed a counter-manifestation of Atty. Marcelino Lontok, Jr. on August 27, 1980 stating that six signatories to the aforesaid manifestation had no authority to make the said foregoing statement as they had resigned from the Executive Board en masse; that the acts of the President may not be

According to the petitioner, to effectively market its products, the Company maintains a network of dealers all over the country. These arrangements are covered by a dealership agreement signed between the Company and a dealer in a particular area or territory. And attached to the petition is a representative copy of the said dealership agreement which We quote below: DEALERSHIP AGREEMENT KNOW ALL MEN BY THESE PRESENTS: This DEALERSHIP AGREEMENT, executed at Pasay City, Philippines, this 8 day of March 1977, entered into by JOSE TEN SIU KEE, JR., of legal age, married and a resident of 178-E San Ramon Street, Iloilo City, hereinafter referred to as DEALER, and TELENGTAN BROTHERS & SONS, INC., doing business under the style of "LA SUERTE CIGAR & CIGARETTE FACTORY", hereinafter referred to as FACTORY, bears witness that: WHEREAS, JOSE TAN SIU KEE, JR. of 178-E San Ramon Street, Iloilo City, had applied to be a DEALER of the FACTORY for the territories of ILOILO and/or such other territories that the FACTORY may designate from time to time; and WHEREAS, the FACTORY had accepted the application of JOSE TAN SIU KEE, JR., and therefore, appointed him as one of its dealers in ILOILO and/or such other territories that the FACTORY may designate from time to time, who is willing and able to do so as such for the main purpose of extensively selling the products of the FACTORY in the said territories, under the following express terms and conditions, to wit: 1. That the DEALER shall handle for sale and distribution of cigarette products of the factory covering the territories of ILOILO and/or such other territories that the FACTORY may designate from time to time, in accordance with existing laws and regulations of the government, without however, incurring any expenses in doing so, without the previous written consent of the FACTORY being first had and obtained; 2. That for the purpose of selling the cigarettes or products of the FACTORY, the DEALER shall send his orders to the FACTORY plant in Paraaque, Metro Manila, either in cash or on credit; Provided, however, that in cases of credit order the DEALER can only get or order the supply of cigarettes up to the amount of not more than FIFTY THOUSAND PESOS (P50,000.00) only at any given time during the existence of this Contract, unless allowed by the FACTORY to get more; 3. That the FACTORY shall supply the DEALER with a truck or panel delivery and all expenses shall be borne by the FACTORY; driver shall be borne by the DEALER; 4. That the DEALER shall not receive any commission from the FACTORY but the latter shall give the DEALER a discount for all sales either on consignment or in cash, and said discount shall be decided by the FACTORY from time to time; 5. That the FACTORY shall not be liable for any violation of any law, which the DEALER may commit, and that the DEALER alone shall be responsible for any violation;

6. The geographical area (hereinafter referred to as "Territory") covered by this Agreement in which the DEALER shall undertake the responsibilities provided herein is ILOILO. It is, however, agreed and understood that the FACTORY may from time to time, upon written notice thereof THE DEALER, change or subdivide the Territory as the business exigencies, and the policy of the FACTORY with respect thereto will dictate. 7. The DEALER agrees that during the term of this Agreement: (a) He will diligently, loyally and faithfully serve the FACTORY as its DEALER and diligently canvass for buyers of the FACTORY's Products in the Territory; (b) He shall not sell or distribute goods of a similar nature or such as would compete and interfere with the sale of the Products of the FACTORY in the Territory, either on his account or on behalf of any other person whatsoever; (c) Furnish to the FACTORY every three (3) months a list of the buyers/customers in the Territory, specifying the names and address of such customers as well as their individual daily supply/stock requirements; (d) He will faithfully and religiously abide by the FACTORY policy, rules and regulations, particularly with respect to the pricing of all Products to be sold and distributed by him; (e) He will keep account of all his dealings hereunder and promptly liquidate his account with the FACTORY with respect to the Products sold by him in the Territory; (f) He will not engage in any activity which will in any manner prejudice either the business or name of the FACTORY, such as, but not limited to, "black- marketing" operations; (g) He will not withdraw cigarettes if the maximum volume allotted to him by the FACTORY has been exceeded; (8) That the DEALER shall sell the Products of the FACTORY at a price to be agreed upon between both parties; (9) That the DEALER shall hereby bind and obligate himself to furnish the FACTORY, within a week from the date of this Contract with Surety or Cash Bond in the amount of not less than FIFTY THOUSAND PESOS (P 50,000.00). The surety bond should be issued by one or several bonding companies acceptable to and approved by the FACTORY to guarantee and secure complete and faithful performance of the DEALER and his obligations herein enumerated, particularly the payment of his financial obligations with the FACTORY. The bond may be increased as required by the FACTORY;

10. In the event that the DEALER should become incapacitated to discharge his undertakings and responsibilities under this Agreement, for any reason whatsoever, the FACTORY may designated, for the duration of such incapacity, a substitute to handle the sale and distribution of the Products in the Territory; 11. The FACTORY reserves its right to determine, from time to time, the amount of credit granted or to be granted to the DEALER with respect to the Products to be sold and distributed in the Territory; 12. This Agreement may be cancelled and/or terminated by the FACTORY should the DEALER violate its undertaking under this Agreement especially with respect to Paragraph 7(f) hereof. It is understood, however, that the failure of the FACTORY to enforce at any time or for any period of time, any right, power or remedy accruing to the FACTORY upon default by the DEALER of his undertakings under this Agreement shall not impair any such right, power or remedy or to be construed to be a waver or an acquiescence in such default; nor shall the action of the FACTORY in respect of any default, or any acquiescence by it in any default, affect or impair any right, power or remedy of the FACTORY in respect of any other default. 13. That either party may terminate this Contract without cause by giving to the other party fifteen (15) days notice in writing but without prejudice to any right or claim which as of that date may have accrued to either of the parties hereunder, however, in the event of breach of this Contract, the FACTORY may terminate this Contract without notice to the DEALER. 14. That it is hereby finally stipulated and agreed that in case of litigation arising out of or in connection with this Contract, the Municipal Court of Paraaque or the Court of First Instance cf Rizal, as the case may be, shall be the competent court wherein to file such action or actions. 15. That this Contract shall supersede any Contract which the DEALER may have with the FACTORY. IN WITNESS WHEREOF, these presents are signed at Pasay City, Philippines on this 8 day of March 1977. TELENGTAN BROTHERS & SONS, INC. (La Suerte Cigar & Cigarette Factory) FACTORY By: (SGD.) LIM HAN ENG (SGD.) JOSE TAN SIU KEE, JR. Assistant Manager Dealer Sales Department TAN 5976-397-9

SIGNED IN THE PRESENCE OF: (SGD.) ILLEGIBLE (SGD.) ILLEGIBLE" (Acknowledgment omitted) The records embody standard copies of the Dealership Supplementary Agreement which We also quote hereunder: DEALERSHIP SUPPLEMENTARY AGREEMENT KNOW ALL MEN BY THESE PRESENTS: This Supplementary Agreement, made and entered into this 14th day of February, 1975 in Pasay City, Philippines, by and between: TELENGTAN BROTHERS & SONS, INC., a corporation duly organized and existing under the laws of the Philippines and doing business under the business name and style of "LA SUERTE CIGAR & CIGARETTE FACTORY", with principal place of business at Km. 14 South Super Highway, Paranaque, Rizal, represented in this act by its duly authorizedManager, Mr. ROBERT UY, hereinafter referred to as COMPANY; and MR. PURISIMO EMBING of legal age, married, Filipino and with postal address at 3047 Lawaan, UP II, Paranaque, Rizal hereinafter referred to as DEALER, WITNESSETH: That For and in consideration of the mutual covenants and agreements made herein, by one to the other, the COMPANY and the DEALER, by these presents, enter into this Supplementary Agreement whereby the COMPANY will avail of the services of the DEALER to handle the sale and distribution of its cigarette products, consisting of MARLBORO REGULAR, MARLBORO KING SIZE, MARLBORO 100'S; PHILIP MORRIS REGULAR, PHILIP MORRIS FILTER KING, PHILIP MORRIS 100'S MENTHOL, PHILIP MORRIS 100'S REGULAR; ALPINE 100'S; MR. SLIM 100'S REGULAR, MR. SLIM 100'S MENTHOL, subject to the following terms and conditions: 1. The COMPANY hereby constitutes and appoints the DEALER as its authorized dealer for the sale and distribution of the COMPANY's products as enumerated above, (hereinafter referred to as "Products") and the DEALER hereby accepts such appointment, all upon the terms and conditions herein contained. 2. The geographical area (hereinafter referred to as "Territory") covered by this Agreement in which the DEALER shall undertake the responsibilities provided herein is GREATER MANILA AND SUBURBS. It is, however, agreed and understood that the

COMPANY may from time to time, upon written notice thereof to the DEALER, change or subdivide the Territory as the business exigencies, and the policy of the COMPANY with respect thereto will dictate. 3. The DEALER agrees that during the term of this Agreement: (a) He will diligently, loyally and faithfully serve the COMPANY as its DEALER and diligently canvass for buyers of the COMPANY's Products in the Territory; (b) He shall not sell or distribute goods of a similar nature or such as would compete and interfere with the sale or the Products of the COMPANY in the Territory, either on this account or on behalf of any other person whatsoever; (c) Furnish to the COMPANY every three (3) months a list of the buyers/customers in the Territory, specifying the names and address of such customers as well as their individual daily supply/stock requirements; (d) He will faithfully and religiously abide by the COMPANY policy, rules and regulations, particularly with respect to the pricing of all Products to be sold and distributed by him; (e) He will keep account of all his dealings hereunder and promptly liquidate his account with the COMPANY with respect to the Products sold by him in the Territory; (f) He will not engage in any activity which will in any manner prejudice either the business or name of the COMPANY, such as, but not limited to, "Black marketing" operations; (g) He will not withdraw cigarettes if the maximum volume allotted to him by the COMPANY has been exceeded; 5. The DEALER shall put up a bond, or additional bond, with the COMPANY in such amount or amounts, as in the judgment of the COMPANY, will be satisfactory. It is agreed that the COMPANY can apply against said bond or additional bond, such damages as may be suffered by the COMPANY by reason of breach on the part of the DEALER of any of the latter's undertakings under this Agreement. 6. In the event that the DEALER should become incapacitated to discharge his undertakings and responsibilities under this Agreement, for any reason whatsoever, the COMPANY may designate for the duration of such incapacity, a substitute to handle the sale and distribution of the Products in the Territory; 7. The COMPANY reserves its right to determine, from time to time, the amount of credit granted or to be granted to the DEALER with respect to the Products to be sold and distributed in the Territory.

8. This Agreement may be cancelled and/or terminated by the COMPANY should the DEALER violate its undertaking under this Agreement especially with respect to Paragraph 4(f) hereof. It is understood. however, that the failure of the COMPANY to enforce at any time or for any period of time, any right, power or remedy accruing to the COMPANY upon default by the DEALER of his undertakings under this Agreement shall not impair any such right, power or remedy or be construed to be a waiver or an acquiescence in such default; nor shall the action of the COMPANY in respect of any default, or any acquiescence by it in any default, affect or impair any right, power or remedy of the COMPANY in respect of any other default. (9) In the appropriate cases, this Agreement shall constitute as a supplement, revision or modification of any agreement between the company and the DEALER now existing. However, should there be a conflict between the provisions of this Agreement and any such existing agreement between the COMPANY and the DEALER, this Agreement shall prevail. IN WITNESS WHEREOF, the parties hereto have caused these presents to be signed at the place and on the date hereinabove written. TELENGTAN BROTHERS & SONS, INC. (La Suerte Cigar & Cigarette Factory) By: (SGD.) ROBERT UY (SGD.) PURISIMO EMBING Manager DEALER (Signature of Witnesses & Acknowledgment Omitted) Following the rule in the Mafinco case that in a petition for certiorari, the issue of whether respondents are employees or independent contractors should be resolved mainly in the light of their peddling contracts, so must We likewise resolve the status of the 14 members of the local union involved herein mainly on their dealership agreements for verily, "a different approach would lead this Court astray into the field of factual controversy where its legal pronouncements would not rest on solid grounds." We must stress the Supreme Court is not a trier of facts. Accordingly, after considering the terms and stipulations of the Dealership Contracts which are clear and leave no doubt upon the intention of the contracting parties in establishing the relationship between the dealers on one hand and the company on the other as that of buyer and seller, We find that the status thereby created is one of independent contractorship, pursuant to the first rule in the interpretation of contracts that the literal meaning of the stipulations shall control. (Article 1370, New Civil Code) From the plain language of the Dealership Agreement, We find that the same is premised with the prefatory statement "the factory has accepted the application of (name of applicant) and therefore has appointed him as one of its dealers." Its terms and conditions include the following: that the dealer shall handle the products in accordance with existing laws and regulations of the government (par. ); that the dealer shall send his orders to the factory plant in cash in any amount or on credit up

to the amount of not more than P10,000.00 only at any given time (par. 2); that the factory shall supply the dealer with a truck or a panel delivery and all expenses for repairs shall be borne by the factory (par. 3); and that the dealer shall not receive any commission but shall be given a discount for all sales and said discount shall be decided by the factory from time to time (par. 4). It also provides that the dealer alone shall be responsible for any violation of any law (par. 5); that the dealer shall be assigned to a particular territory which the factory may decide from time to time (par. 6); that the dealer shall sell the products at the price to be agreed upon between the parties (par. 7); and that the dealer shall post a surety bond of not less than P10,000.00 to guarantee and secure complete and faithful performance (par. 8). Either party may terminate the contract without cause by giving 15 days notice in writing; however, in the event of breach or failure to comply with any of the conditions, the factory may terminate or rescind the contract immediately (par. 9 and 10). The Dealership Supplementary Agreement reiterates that the Company "hereby constitute and appoints the DEALER as its authorized dealer for the sale and distribution of the COMPANY products" and "the DEALER hereby accepts such appointment" (par. 1). It also provides that the geographical area in which the dealer shall undertake his responsibilities is Greater Manila and Suburbs. However, the Company may change or subdivide the territory as the business exigencies and the policy of the Company will dictate (par. 2). Under said supplementary agreement, the dealer undertakes to: (a) diligently canvass for buyers of the Company's products; (b) refrain from selling or distributing goods of similar nature; (c) furnish the Company every 3 months a list of buyers/customers, specifying their addresses and individual daily supply; (d) abide by the Company policy, particularly with respect to pricing; (e) keep account of all his dealings and promptly liquidate his accounts; (f) refrain from engaging in any activity which will prejudice the Company from withdrawing cigarettes beyond the maximum volume allotted to him (par. 3.) In case of incapacity of the dealer, the Company may designate a substitute (par. 6). The Company also reserves the right to determine, from time to time, the amount of credit granted or to be granted to the dealer (par. 7). It is likewise immediately noticeable that no such words as "to hire and employ" are present. The Dealership Agreement uses the words "the factory has accepted the application of (name of applicant) and therefore has appointed him as one of its dealers"; whereas the Dealership Supplementary Agreement is prefaced with the statement: "For and in consideration of the mutual covenants and agreements made herein, by one to the other, the COMPANY and the DEALER by these presents, enter into this Supplementary Agreement whereby the COMPANY will avail of the services of the DEALER to handle the sale and distribution of the cigarette products". Nothing in the terms and conditions likewise reveals that the dealers were engaged as employees. Again, on the basis of the clear terms of the dealership agreements, no mention is made of the wages of the dealers. In fact, it specifies that the dealer shall not receive any commission from the factory but the latter shall give the dealer a discount for all sales either on consignment or in cash (par. 4). Considering the matter of wages, the term "wages" as defined in Section 2 of the Minimum Wage Law (Rep. Act No. 602) as amended, is as follows:

(g) 'Wage' paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, commission basis, or other method of calculating the same, which is payable by an employer under a written or unwritten contract of employment for work done or to be done or for services rendered or to be rendered, and includes the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to the employee ... Section 10(k) of the same law also provides: (k) Notification of wage conditions. It shall be the duty of every employer to notify his employees at the time of hiring of the wage conditions under which they are employed, which shall include the following(1) The rate of wages payable; (2) The method of calculation of wages; (3) The periodicity of wage payment; the day, the hour and place of payment; and (4) Any change with respect to any of the foregoing items." then, par. (h) of Sec. 10 of said law provides that such "wages" must be paid to them periodically at least once every two weeks or twice a month. Considering the foregoing, the dealer's discount lacks the foregoing characteristics of the term "wage". Since it varies from month to month depending on the volume of the sales, it lacks the characteristic of periodicity in the manner and procedure contemplated in the Minimum Wage Law. Respondents, in effect, admit the clarity of the terms and conditions of the agreements which covenant that the relationship between the dealers and the Company is one of buyer and seller of La Suerte products, and therefore, one of an independent contractorship when they claimed that the dealership arrangement as established under the Dealership Agreement and the Dealership Supplementary Agreement is essentially a legal cover, cloak or disguise to hide the continuing Employer-Employee relationship established prior to 1964. (Respondents' Joint Memorandum, p. 34). Precisely, there was need to change the contract of employment because of the change of relationship, from an employee to that of an independent dealer or contractor. The employees were free to enter into the new status, to sign or not to sign the new agreement. As in the Mafinco case, the respondents therein as in the instant case, were free to reject the terms of the dealership but having signed it, they were bound by its stipulations and the consequences thereof under existing labor laws. The fact that the 14 local union members voluntarily executed with La Suerte formal dealership agreements which indicate the distribution and sale of La Suerte cigarettes signifies that they were acting as independent businessmen. We ruled earlier that the terms and stipulations of the dealership agreement leave no room for doubt that the parties entered into a transaction for the distribution and sale of La Suerte products whereby the distributor/sever or dealer assumes the status of an independent contractor. We note that the applicant who is appointed dealer "is willing and able to do as such for the main purpose of extensively selling the products of the FACTORY in the said territories under certain expressed terms and conditions" among them: "1. That the DEALER shall handle for saleand distribution cigarette

products of the factory ..."; "2. That for the purpose of selling cigarettes or products of the factory, the dealer shall send his order to the factory plant in Paraaque, Metro Manila either in cash or on credit ..."; "4. That the dealer shall not receive any commission from the factory but the latter shall give the dealer a discount for all sales either on consignment or in cash ..."; "7. (b) He shall not sell or distribute goods of a similar nature or such as would compete and interfere with the sale of the products of the factory in the territory, either on his account or on behalf of any other person whatsoever ..."; "8. That the dealer shall sell the products of the factory at a price to be agreed upon between both parties." It is not disputed that under the dealership agreement, the dealer purchases and sells the cigarettes manufactured by the company under and for his own account. The dealer places his order for the purchase of cigarettes to be sold by him in a particular territory by filling up an Issuance Slip. The Issuance Slip is approved by the Sales Manager and after the sale is approved, a Sales Invoice is then issued to the dealer. On the basis of the approved Issuance Slip and the Sales Invoice, the dealer secures the delivery of his order from the warehouse of the company and upon delivery of the cigarettes from the warehouse, the dealer has the 'obligation to pay whether the cigarettes are disposed or not. The dealer on his own account sells the cigarettes in any manner he deems best without constraint as to time. The dealers do not devote their full time in selling company products. They are likewise engaged in other livelihood and businesses while selling cigarettes manufactured by the company. The sales to the dealers are either on cash or credit basis. Where it is on cash basis, the amount is paid immediately upon the delivery of the products from the company's warehouse. If it is on credit, the dealer would usually settle his account within one week from the time the credit is extended to him. Upon payment of the purchase price, a company official receipt is issued to him. Private respondents contend that there are essential differences between the dealership agreement and that in actual practice and operation, then proceeded to point them in the attempt to prove the control of La Suerte over the sales effort of the dealers. They also contend that the dealership agreement, as stated earlier, is essentially a legal cover, a cloak or disguise to hide the continuing employer-employee relationship established prior to 1964. We reject both contentions as being without merit. In the first place, We cannot accept nor consider evidence varying the terms of the agreement other than the contents of the writing itself pursuant to Section 7, Rule 130 of the Revised Rules of Court, which provides that: Section 7. Evidence of written agreements. When the terms of an agreement have been reduced to writing, it is to be considered as containing all such terms, and, therefore, there can be, between the parties and their successors in interest, no evidence of the terms of the agreement other than the contents of the writing except in the following cases: (a) Where a mistake or imperfection of the writing, or its failure to express the true intent and agreement of the parties, or the validity of the agreement is put in issue by the pleadings. (b) When there is an intrinsic ambiguity in the writing. The term 'agreement' includes wills.

If there are changes by reason of actual practice and operation, certiorari is not the proper proceeding or remedy therefor. In the second place, petitioner's claim that respondent local union relies heavily on evidence dehors the record or extraneous evidence found in cases other than the one at bar, as the testimony in the Limarez case, NCR Case AB-3-4960-80 cited extensively (pp. 63, 64, 65-66, 66-67, 68-69, 70-72, 73-76, 77-83, 84-85, 86-87, 89, 90-94, 97-98, 107, Comment of Local Union) and that practically all the appendages to the Comment of Local Union constituting the main bulk thereof (Annexes 1 to 52) were evidence introduced in other cases and not in the case at bar, is meritorious. We reject said evidence dehors the record and the appendages raised for the first time on appeal as extrinsic, beyond the scope of this review. Private respondents contend that under the dealership agreement, the totality of the powers expressly reserved to the company, respecting essential aspects or facets of the sales operation of the dealers, clearly establish company control over the manner and details of performance. And they cite the following: "(1) The dealer shall be assigned to a particular territory which the factory shall decide from time to time (par. 6); (2) The dealer shall handle for sale and distribution cigarette products of the company. . . without however incurring any expense in doing so, without previous written consent of the factory being first had and obtained (par. 1); (3) In cases of credit order, the dealer can only get or order the supply of cigarettes up to the amount of not more than P 10,000.00 only at any given time during the existence of this contract, unless allowed by the factory to get more (par. 2); (4) The company shall give the dealer a discount for all sales . . . and said discount shall be decided by the factory from time to time (par. 4); (5) It is however agreed and understood that the company may, from time to time, upon written notice thereof to the dealer, change or divide the territory as the business exigencies and policy of the factory with respect thereto will dictate (par. 2, Annex 10); (6) Each dealer will faithfully and religiously abide by the company policy, rules and regulations, particularly with respect to pricing of all products to be sold and distributed by him (par. 3, sub-par. (d), Annex 10); (7) The dealer shall put up a bond or additional bond with the company in such amounts as in the judgment of the company may be satisfactory (par. 5, Annex 10); (8) In the event that the dealer should become incapacitated for any reason whatsoever, the factory may designate for the duration of said incapacity a substitute to handle the sale and distribution of the products in the territory (par. 6, Annex 10); (9) The company reserves the right to determine, from time to time, the amount of credit granted or to be granted the dealer (par. 7, Annex 10); (10) This agreement may be cancelled and/or terminated by the company should the dealer violate its undertaking under this Agreement, especially par. 7(f) hereof (par. 8, Annex 10); (11) That either party may terminate this contract without cause by giving to the other party 15 days notice in writing (par. 9, Annex 9); and (12) In the event of breach of this contract, the company may terminate this contract without notice to the dealer (proviso in par. 9, Annex 9). " 1 Disputing private respondents' above contention that the company exercises company control over the manner and details of the sales operation of the dealers and not merely over the result of the work of each dealer, petitioner maintains that: 1. The allocation of a definite territory to be assigned to a dealer or distributor is standard practice in dealership agreements, whether international or domestic. Allocation of area responsibility and territorial and customer restrictions are common features of dealership agreements. Thus, a company may be appointed exclusive distributor or dealer of a product in the Philippines, the Asian region or in the Far East in the same way that some Philippine manufacturers appoint exclusive dealers for the United States or Canada; 2. In the Shriro case, the expenses for handling and delivery of the goods to the customers are all for the account of the company (See Social Security System vs. Hon. Court of Appeals & Shriro (Phil.)

Inc., 37 SCRA 579) and there, the Supreme Court did not consider the facts as indicia of an employment relation; 3. In limiting a credit order for cigarettes up to the amount of P 10,000.00 only at any given time during the existence of the contract, unless allowed by the factory to get more, the company merely controls the result of the work of the dealer. The credit order is limited because in a dealership contract, the transaction is one of buy and sell and once an order is made, specially a credit order, the risk of loss is passed on to the dealer; 4. In the Mafinco case, the peddlers are given also a discount and the Supreme Court held that the peddling contract is not a contract of employment but signifies an independent contractor relationship. 5. The change or division of the territory to which a dealer is assigned as the business exigencies and policy of the factory with respect thereto will dictate from time to time is no indicia of company control over the means and methods for in the Mafinco case the peddlers are also assigned definite area routes or zones. 6. That the dealers shall abide with the company policies and rules, particularly in pricing of products is a standard practice in dealership agreements and more so in franchising agreements. The fact that a person has to conform with standards of conduct set by the company does not declassify such a person as an independent contractor so long as he can determine his own day to day activities. In independent contracts, there is always the element of control as to what shall be done as distinguished from how it should be done. 7. The posting of a surety bond under par. 8 of the Dealers Agreement is similar to the giving of a cash bond under par. 7, Peddlers Contract in the Mafinco case wherein it is ruled that the Peddlers Contract involved therein is not an employment agreement. 8. The right to designate a substitute dealer in the event of the incapacity of the regular dealer is no indication of an employer-employee relationship. It is just business prudence to provide for substitute dealers in case of the regular dealer's incapacity. 9. That the company may determine from time to time the amount of credit granted or to be granted the dealer is more a control over the result rather than the means as in Shriro case where the company even reserves the right to approve or reject a sales order, whether on cash or on credit basis. 10. The power to cancel or terminate should the dealer violate its undertaking under the agreement on the basis of the company's opinion that the dealer must engage in any activity which will in any manner prejudice either the business or name of the factory is a standard practice in dealership agreements. We agree with the petitioner. We hold further that the terms and conditions for the termination of the contract are the usual and common stipulations in independent contractorship agreements. In any event, the contention that the totality of the powers expressly reserved to the company establish company control over the manner and details of performance is merely speculative and conjectural. There are indeed striking similarities between the Peddler's Contract in the Mafinco case and the Dealer's Agreement and Supplementary Dealer's Agreement in the case at bar. Thus:

1. Use of company facilities La Suerte provides dealers with truck or panel delivery (par. 3, Dealer's Agreement) whereas in Mafinco, the company also provides peddler with delivery truck (par. 1, Peddling Contract); 2. Salary of drivers Dealer in this La Suerte case pays salary of driver (par. 3, Dealer's Agreement). In Mafinco, the salary of drivers is for peddler's account (par. 2, Peddling Contract); 3. Expenses of operation and maintenance La Suerte pays for expenses and repair pertaining to the truck or panel delivery (par. 3, Dealership Agreement). In Mafinco, the company furnishes gasoline and oil to run trucks and bear costs of maintenance and repair (par. 4, Peddling Contract); 4. Profit Margin In instant La Suerte case, no commission given. Company gives a sales discount (par. 4, Dealership Agreement). In Mafinco, no commission is also given. Peddler given a sales discount (par. 6, Peddler's Contract); 5. Collateral Dealer in La Suerte gives a surety bond (par. 8, Dealer's Agreement). In Mafinco, peddler gives a cash bond (par. 7), Peddler's Contract); 6. Payment Dealer required to promptly liquidate account (par. 3, (e), Supplementary Dealer's Contract). In Mafinco, peddler liquidates everyday at the end of each day, otherwise his cash bond shall answer for unliquidated account (par. 8, Peddler's Contract); 7. Termination In La Suerte case, no fixed period but either party may terminate after 15 days written notice (par. 9, Dealer's Contract). In Mafinco, the contract is for one year but either party may terminate earlier upon 5-day written notice (par. 9, Peddler's Contract); 8. Government licenses Dealers secure own municipal license and Mayor's permit (Annexes 23 to 24, Comment of Local Union). In Mafinco, peddler secure own licenses to peddle (Committee Report, 70 SCRA 157); 9. Working hours Dealers have to get quotas daily but no fixed time. In Mafinco, peddlers get their trucks in the morning and have to report daily (Report of Committee, 70 SCRA 154-156). No fixed time; 10. Territory Dealer assigned a particular territory (par. 6, Dealer's Agreement). In Mafinco, peddlers have a fixed territory in Manila, see whereas clause of Peddler's Contract, subject to prearranged routes, areas and zones agreed upon by Peddler's Association (Committee Report, 70 SCRA 156); 11. Supervision Supervisors also for market analysis in La Suerte case. In Mafinco, Liaison Officer or Supervisors for market analysis (Committee Report, 70 SCRA 156); 12. Basic Agreement In the instant La Suerte case, the dealer is "appointed" (not hired as in employment contract) "to handle" products without commission but with sales discount through sales invoices which state "sold to" dealer (Annex B, Petition; Annex D, Petition). Payments duly receipted (Annex E, Petition). In Mafinco, the peddler is "desirous of buying and selling" (70 SCRA 143). On the second issue-whether or not the withdrawal of 31 union members from NATU affected the petition for certification election insofar as the 30% requirement is concerned, We reserve the Order of the respondent Director of the Bureau of Labor Relations, it appearing undisputably that the 31

union members had withdrawn their support to the petition before the filing of said petition. It would be otherwise if the withdrawal was made after the filing of the petition for it would then be presumed that the withdrawal was not free and voluntary. The presumption would arise that the withdrawal was procured through duress, coercion or for valuable consideration. In other words, the distinction must be that withdrawals made before the filing of the petition are presumed voluntary unless there is convincing proof to the contrary, whereas withdrawals made after the filing of the petition are deemed involuntary. The reason for such distinction is that if the withdrawal or retraction is made before the filing of the petition, the names of employees supporting the petition are supposed to be held secret to the opposite party. Logically, any such withdrawal or retraction shows voluntariness in the absence of proof to the contrary. Moreover, it becomes apparent that such employees had not given consent to the filing of the petition, hence the subscription requirement has not been met. When the withdrawal or retraction is made after the petition is filed, the employees who are supporting the petition become known to the opposite party since their names are attached to the petition at the time of filing. Therefore, it would not be unexpected that the opposite party would use foul means for the subject employees to withdrawal their support. In recapitulation, We hold and rule that the 14 members of respondent local union are dealers or independent contractors. They are not employees of petitioner company. With the withdrawal by 31 members of their support to the petition prior to or before the filing thereof, making a total of 45, the remainder of 3 out of the 48 alleged to have supported the petition can hardly be said to represent the union. Hence, the dismissal of the petition by the Med-Arbiter was correct and justified. Respondent Director committed grave abuse of discretion in reversing the order of the Med- Arbiter. With the above pronouncements, the resolution of the third issue raised herein is unnecessary. WHEREFORE, IN VIEW OF ALL THE FOREGOING, the Resolution dated January 15, 1980 of respondent Director of the Bureau of Labor Relations and the Resolution dated November 18,1980 are hereby REVERSED and SET ASIDE, and the petition for certification election is ordered dismissed. No costs. SO ORDERED.