Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. Nos.

64821-23 January 29, 1993 UNIVERSITY OF PANGASINAN FACULTY UNION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and UNIVERSITY OF PANGASINAN, respondents. Tanopo & Serafica for petitioner. Hermogenes S. Decano for private respondents. ROMERO, J.: In the instant petition for mandamus and certiorari, petitioner union seeks to enjoin the respondent National Labor Relations Commission (NLRC) to resolve, or direct the Labor Arbiter to hear and decide, the merits of three of petitioner's unresolved complaints, and to annul and set aside the resolution of the NLRC affirming the decision of the Executive Labor Arbiter dismissing the petitioner's complaints for violation of certain labor standards laws but requiring respondent university to integrate the cost of living allowance into the basic pay of the covered employees and reminding it to pay its employees at intervals not exceeding sixteen (16) days. The uncontroverted facts show that on various dates, petitioner filed the following complaints against the University of Pangasinan (University for brevity) before the Arbitration Branch of the NLRC in Dagupan City: 1. October 14, 1980: for nonpayment of benefits under P.D. No. 1713 and emergency cost of living allowance (ecola) to part-time teachers, and for prompt and accurate computation of benefits under P.D. No. 451 and the payment of ecolas; 2. November 7, 1980: for nonpayment of all ecolas to instructors from October 18-31, 1980; 3. November 20, 1980: for nonpayment of ecolas under P.D. Nos. 525, 1123, 1614, 1634, 1678 and 1713 for November 1-15, 1980, and extra loads during typhoons "Nitang" and "Osang" on July 21 and 25, 1980, respectively; 4. April 13, 1981: for violation of P.D. No. 1751 and nonpayment of extra loads on February 12-13, 1980 (Anniversary celebration); 5. April 27, 1981: for nonpayment of all ecolas for April 1-15, 1981 to faculty members who were also members of the union; 6. May 21, 1981: for violation of Wage Order No. 1 and delayed payment of salaries; and 7. June 17, 1981: for nonpayment of salary differentials for summer under P.D. No. 451. 1 The Regional Director in San Fernando, La Union certified six (6) of these complaints to Labor Arbiter Pedro Fernandez of the Dagupan City District Office of the then Ministry of Labor and Employment for compulsory arbitration. 2 According to the petitioner, it was made to understand by Fernandez that the seventh complaint should also be discussed in its position paper. Accordingly, petitioner filed a position paper discussing the merits of all the seven complaints. On the other hand, the University limited its discussion to only four: the complaints filed on April 13, 1981, April 27, 1981, May 21, 1981 and June 17, 1981. Petitioner was of the view that Executive Labor Arbiter Sotero L. Tumang adopted the stand of the University on the four complaints and accordingly dismissed them in his decision of January 25, 1982. 3 Observing that in its position paper, the petitioner included matters which were "beyond the scope of the issues alleged in the complaints," said Labor Arbiter discussed the four complaints individually. On the April 13, 1981 complaint, he ruled that because at the time P.D. No. 1123 took effect on May 1, 1977, the University had not increased its tuition fees, there was of "nothing to integrate." 4 However, from June 16, 1979 when the University increased its tuition fees, it was obligated to cause the integration of the across-the-board increase of P60.00 in emergency allowance into the basic pay as mandated by P.D. Nos. 1123 and 1751. On the alleged nonpayment of extra loads handled by the employees on February 12 and 13, 1981 when classes were suspended, Tumang stated that Consuelo Abad, the petitioner's president, had no cause to complain because her salary was fully paid and that, since there were "no complainants for the alleged nonpayment of extra loads for two days," the issue had become academic. With respect to the April 27, 1981 complaint, Tumang said that since the salary paid to Consuelo Abad and other faculty members for the April 1-15, 1981 period had been earned "as part of their salary for the ten-month period," she was no longer entitled to an emergency cost of living allowance. He added that "payment of emergency cost of living allowance is based on actual work performed except when they (employees) are on leave with pay." Hence, because classes ended in March 1981, the teachers who did not report for work could not be considered on leave with pay and, therefore, they were not entitled to an emergency cost of living allowance. As regards the May 21, 1981 complaint alleging violation of Wage Order No. 1, Tumang found that the University had actually implemented the additional living allowance of P2.00 a day required therein. On the alleged delay in the payment of salaries of the employees, he rationalized that delays could not be avoided but he reminded the University to pay its employees on time. The June 17, 1981 complaint was also resolved in favor of the University. Stating that P.D. No. 451 which mandates salary increases is dependent on enrollment and allowable deductions, Tumang ruled that, again, Consuelo Abad had no cause to complain as she had been paid out of the allowable 12.74% for distribution which was a "substantial compliance with P.D. No. 451." 5 The dispositive portion of the decision states: IN THE LIGHT OF THE FOREGOING CONSIDERATION, the above-entitled cases are dismissed for lack of merit. Respondent however, is required to integrate the allowance of P60.00 under P.D. 1123 into the basic pay of the covered employees if the same has not as yet been complied with. Respondent is also reminded to pay the employees at intervals not exceeding sixteen (16) days pursuant to Article 102 of the Labor Code. SO ORDERED. The petitioner appealed the said decision to the NLRC. In its resolution of June 20, 1993, the NLRC affirmed the decision of Executive Labor Article Tumang. Hence, the instant petition for mandamus and certiorari with the following prayer:

WHEREFORE, the foregoing premises considered, it is respectfully prayed that this petition be given due course and that judgment issue: 1. Declaring petitioner as possessed with capacity to represent its members in the complaints it filed thru its president, Miss Consuelo Abad, against private respondent, and the complaints are pertaining to the members who are entitled under the law to the claims sought herein, not to Miss Abad alone; 2. Annulling and setting aside the appealed resolution insofar as the issues of nonpayment of Ecola for April 115, 1981 and nonpayment of salary differentials for summer of 1981 under P.D. No. 451 are concerned; 3. Ordering private respondent to pay covered members of petitioner their Ecola for April 1-15, 1981 and their salary differentials for summer of 1981 pursuant to the mandate of P.D. 451; 4. Enjoining public respondent to resolve on the merits the issues of nonpayment of extra loads of February 1213, 1980 and violation of Wage Order No. 1 which were properly brought on appeal to said office; 5. Enjoining public respondent to resolve on the merits the issues or grievances alleged in the complaints filed on October 14, November 7 and November 20, all in 1980, which were not resolved by the labor arbiter but nonetheless appealed to public respondents, or 6. Enjoining public respondent to order or direct the labor arbiter to resolve on the merits the said issues or grievances alleged in the complaints mentioned in the next preceding paragraph; 7. Attorney's fee in such amount as this Honorable Tribunal may deem just and reasonable in the premises; 8. Ordering private respondent to pay costs of suit, including this appeal. Petitioner further prays for safeguards and/or measures to insure the correct computation of the amount of claims herein sought due to each covered member of petitioner, and for such other reliefs just and equitable in the premises. 6 We shall first deal with the propriety of the special civil action of mandamus. In this regard, petitioner contends that the NLRC should have, in the exercise of its appellate jurisdiction, resolved the issues raised in the three (3) complaints filed on October 14, November 7 and November 20, 1980 or, in the alternative, ordered the Labor Arbiter to hear and decide the aforementioned three (3) complaints, it having the power of supervision over Labor Arbiters. Sec. 3, Rule 65 of the Rules of Court provides: Sec. 3. Petition for Mandamus. When any tribunal, corporation, board, or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another from the use and enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law, the person aggrieved thereby may file a verified petition in the proper court alleging the facts with certainty and praying that judgment be rendered commanding the defendant, immediately or at some other specified time, to do the act required to be done to protect the rights of the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the defendant. As succinctly provided in this section, anyone who wishes to avail of the remedy of mandamus must state in a verified petition "the facts with certainty." On account of this requirement, mandamus is never issued in doubtful cases and showing of a clear and certain right on the part of the petitioner is required. 7 Indeed, while the labor arbiter is duty bound to resolve all complaints referred to him for arbitration and, therefore, he may be compelled bymandamus to decide them (although not in any particular way or in favor of anyone), 8 we find that the peculiar circumstances in this case do not merit the issuance of the writ of mandamus. Petitioner admits that only six of the complaints were certified to Labor Arbiter Fernandez for compulsory arbitration. It failed, however, to allege why this was the case or whether it had exerted any effort to include the remaining complaint in the certification. What it stresses is the alleged assurance of Labor Arbiter Fernandez that the seventh complaint may be discussed in its position paper. It turned out, however, that, according to the unrebutted allegation of the Solicitor General, Labor Arbiter Fernandez inhibited himself from handling the cases referred to him as he was teaching at the University. Hence, Labor Arbiter Fernandez forwarded the complaints to the Assistant Director for Arbitration in Regional Office No. 1 in San Fernando, La Union for appropriate action. He should have forwarded all of the complaints to the said Assistant Director, but it appears that Fernandez turned over only four of them. In turn, the Assistant Director referred only complaints Nos. 5, 6 and 7, which had been docketed as RBI-C-24-81, LS-42-81 and LS-43-81, to Executive Labor Arbiter Sotero L. Tumang for compulsory arbitration. However, while only these three docket numbers appear on the caption of the decision, the same actually resolved four complaints, as earlier mentioned. 9 From these facts, one may infer that there must have been a mishandling of the complaints and/or the records of the cases. However, the petitioner failed to substantiate by evidence such negligence on the part of the public respondents as to warrant the issuance of a writ of mandamus. 10 Its officials even neglected the simple act of verifying from the MOLE office in Dagupan City whether the records of all the cases filed had been forwarded to the proper official who should resolve them. 11 Infact, nowhere in its pleadings 12 is there an allegation to that effect. On the contrary, the petitioner took Fernandez' words seriously and allowed the proceedings to reach its inevitable conclusion. When it received a copy of the decision, the petitioner should have taken note of Executive Labor Arbiter Tumang's observation therein that it had discussed matters "beyond the scope of the issues alleged in the complaints." In its memorandum of appeal, it should have prayed for the inclusion of the three complaints inasmuch as in labor cases, an appeal may be treated as a motion for reconsideration or vice-versa. 13 The fact that three complaints had been omitted did not escape the attention of the NLRC which stated in its resolution that "since those cases were not consolidated it is now too late to consolidate them" with the four decided cases.14 We agree with the NLRC that the said complaints should proceed separately as long as their resolution would not conflict with the resolved cases. 15 It should be added that under Art. 217(b) of the Labor Code, the NLRC has "exclusive appellate jurisdiction over all cases decided by the Labor Arbiters." Needless to say, the NLRC could not have acted on matters outside of the cases appealed to it. Petitioner's contention that the cases filed by Consuelo Abad as its president should affect, not only herself, but all the other union members similarly situated as she was, is well taken. The uncontroverted allegation of the petitioner is that it is the holder of Registration Certificate No. 9865-C, having been registered with the then Ministry of Labor and Employment on February 16, 1978. As such, petitioner possessed the legal personality to sue and be sued under its registered name. 16 Corollarily, its president, Consuelo Abad, correctly filed the complaints even if some of them involved rights and interest purely or exclusively appertaining to

individual employees, it appearing that she signed the complaints "for and in behalf of the University of Pangasinan Faculty Union." 17 The University's contention that petitioner had no legal personality to institute and prosecute money claims must, therefore, fail. To quote then Associate Justice Teehankee in Heirs of Teodelo M. Cruz v. CIR, 18 "[w]hat should be borne in mind is that the interest of the individual worker can be better protected on the whole by a strong union aware of its moral and legal obligations to represent the rank and file faithfully and secure for them the best wages and working terms and conditions. . . . Although this was stated within the context of collective bargaining, it applies equally well to cases, such as the present wherein the union, through its president, presented its individual members' grievances through proper proceedings. While the complaints might not have disclosed the identities of the individual employees claiming monetary benefits, 19 such technical defect should not be taken against the claimants, especially because the University appears to have failed to demand a bill of particulars during the proceedings before the Labor Arbiter. On the merits of the petition, the NLRC did not abuse its discretion in resolving the appeal from the decision of Executive Labor Arbiter Tumang except for the disallowance of the emergency cost of living allowance to members of the petitioner. The Rules Implementing P.D. No. 1713 which took effect on August 18, 1980 provide: Sec. 6. Allowances of full-time and part-time employees. Employees shall be paid in full the monthly allowance on the basis of the scales provided in Section 3 hereof, regardless of the number of their regular working days if they incur no absences during the month. If they incur absences without pay, the amounts corresponding to the absences may be deducted from the monthly allowance provided that in determining the equivalent daily allowance of such deduction, the applicable monthly allowance shall be divided by thirty (30) days. xxx xxx xxx (Emphasis supplied). This Section, which is a virtual reproduction of Section 12 of the old Rules Implementing P.D. No. 1123, has been interpreted by this Court as requiring that the full amount of the cost of living allowance mandated by law should be given monthly to each employee if the latter has worked continuously for each month, regardless of the number of the regular working days. 20 But more apropos is the ruling of this Court in University of Pangasinan Faculty Union v. University of Pangasinan and NLRC, 21 a case involving the same parties as in the instant petition and dealing with a complaint filed by the petitioner on December 18, 1981 seeking, among others, the payment of emergency cost of living allowances for November 7 to December 5, 1981, a semestral break. The Court held therein: . . . The "No work, no pay" principle does not apply in the instant case. The petitioner's members received their regular salaries during this period. It is clear from the . . . law that it contemplates a "no work" situation where the employees voluntarily absent themselves. Petitioners, in the case at bar, certainly do not, ad voluntatem absent themselves during semestral breaks. Rather, they are constrained to take mandatory leave from work. For this, they cannot be faulted nor can they be begrudged that which is due them under the law. To a certain extent, the private respondent can specify dates when no classes would be held. Surely, it was not the intention of the framers of the law to allow employers to withhold employee benefits by the simple expedient of unilaterally imposing "no work" days and consequently avoiding compliance with the mandate of the law for those days. As interpreted and emphasized in the same case, the law granting emergency cost of living allowances was designed to augment the income of the employees to enable them to cope with the rising cost of living and inflation. Clearly, it was enacted in pursuance of the State's duty to protect labor and to alleviate the plight of the workers. To uphold private respondent's interpretation of the law would be running counter to the intent of the law and the Constitution. WHEREFORE, the petition for mandamus is hereby DISMISSED. The decision of the NLRC is AFFIRMED subject to the MODIFICATION that private respondent University of Pangasinan shall pay its regular and fulltime teachers and employees emergency cost of living allowance for the period April 1-15, 1981. Costs against private respondent. SO ORDERED. [G.R. No. 131235. November 16, 1999] UST FACULTY UNION (USTFU), GIL Y. GAMILLA, CORAZON QUI, NORMA CALAGUAS, IRMA POTENCIANO, LUZ DE GUZMAN, REMEDIOS GARCIA, RENE ARNEJO, EDITHA OCAMPO, CESAR REYES, CELSO NIERRA, GLICERIA BALDRES, MA. LOURDES MEDINA, HIDELITA GABO, MAFEL YSRAEL, LAURA ABARA, NATIVIDAD SANTOS, FERDINAND LIMOS, CARMELITA ESPINA, ZENAIDA FAMORCA, PHILIP AGUINALDO, BENEDICTA ALAVA and LEONCIO CASAL, petitioners vs. Dir. BENEDICTO ERNESTO R. BITONIO JR. of the Bureau of Labor Relations, MedArbiter TOMAS F. FALCONITIN of The National Capital Region, Department of Labor and Employment (DOLE), EDUARDO J. MARIO JR., MA. MELVYN ALAMIS, NORMA COLLANTES, URBANO ALABAGIA, RONALDO ASUNCION, ZENAIDA BURGOS, ANTHONY CURA, FULVIO M. GUERRERO, MYRNA HILARIO, TERESITA MEER, FERNANDO PEDROSA, NILDA REDOBLADO, RENE SISON, EVELYN TIROL and ROSIE ALCANTARA, respondents. DECISION PANGANIBAN, J.: There is a right way to do the right thing at the right time for the right reasons,[1] and in the present case, in the right forum by the right parties. While grievances against union leaders constitute legitimate complaints deserving appropriate redress, action thereon should be made in the proper forum at the proper time and after observance of proper procedures. Similarly, the election of union officers should be conducted in accordance with the provisions of the unions constitution and bylaws, as well as the Philippine Constitution and the Labor Code. Specifically, while all legitimate faculty members of the University of Santo Tomas (UST) belonging to a collective bargaining unit may take part in a duly convened certification election, only bona fide members of the UST Faculty Union (USTFU) may participate and vote in a legally called election for union officers. Mob hysteria, however well-intentioned, is not a substitute for the rule of law.
The Case

The Petition for Certiorari before us assails the August 15, 1997 Resolution [2] of Director Benedicto Ernesto R. Bitonio Jr. of the Bureau of Labor Relations (BLR) in BLR Case No. A-8-49-97, which affirmed the February 11, 1997 Decision of Med-Arbiter Tomas F. Falconitin. The med-arbiters Decision disposed as follows:

WHEREFORE, premises considered, judgment is hereby rendered declaring the election of USTFU offic ers conducted on October 4, 1996 and its election results as null and void ab initio. Accordingly, respondents Gil Gamilla, et al are hereby ordered to cease and desist from acting and performing the duties and functions of the legitimate officers of [the] University of Santo Tomas Faculty Union (USTFU) pursuant to [the] unions constitution and by-laws (CBL). The Temporary Restraining Order (TRO ) issued by this Office on December 11, 1996 in connection with the instant petition, i s hereby made and declared permanent.[3] Likewise challenged is the October 30, 1997 Resolution[4]of Director Bitonio, which denied petitioners Motion for Reconsideration.
The Facts

The factual antecedents of the case are summarized in the assailed Resolution as follows: Petitioners-appellees [herein Private Respondents] Marino, et. al. (appellees) are duly elected officers of the UST Faculty Union (USTFU). The union has a subsisting five-year Collective Bargaining Agreement with its employer, the University of Santo Tomas (UST). The CBA was registered with the Industrial Relations Division, DOLE-NCR, on 20 February 1995. It is set to expire on 31 May 1998. On 21 September 1996, appellee Collantes, in her capacity as Secretary General of USTFU, posted a notice addressed to all US TFU members announcing a general assembly to be held on 05 October 1996. Among others, the general assembly was called to elect USTFUs next set of officers. Through the notice, the members were also informed of the constitution of a Committee on Elections (COMELEC) to oversee the elections. (Annex B, petition) On 01 October 1996, some of herein appellants filed a separate petition with the Med -Arbiter, DOLE-NCR, directed against herein appellees and the members of the COMELEC. Docketed as Case No. NCR-OD-M-9610-001, the petition alleged that the COMELEC was not constituted in accordance with USTFUs constitution and by-laws (CBL) and that no rules had been issued to govern the conduct of the 05 October 1996 election. On 02 October 1996, the secretary general of UST, upon the request of the various UST faculty club presidents (See paragraph VI, Respondents Comment and Motion to Dismiss), issued notices allowing all faculty members to hold a convocation on 04 October 1996 (See Ann ex C Petition; Annexes 4 to 10, Appeal). Denominated as [a] general faculty assembly, the convocation was supposed to discuss the state of the unratified UST-USTFU CBA and status and election of USTFU officers (Annex 11, Appeal) On 04 October 1996, the med-arbiter in Case No. NCR-OD-M-9610-001 issued a temporary restraining order against herein appellees enjoining them from conducting the election scheduled on 05 October 1996. Also on 04 October 1996, and as earlier announced by the UST secretary general, the general faculty assembly was held as sch eduled. The general assembly was attended by members of the USTFU and, as admitted by the appellants, also by 'non-USTFU members [who] are members in good standing of the UST Academic Community Collective Bargaining Unit' (See paragraph XI, Respondents Comment and Motion to Dismiss). On this occasion, appellants were elected as USTFUs new set of officers by acclamation and clapping of hands (See paragraphs 40 to 50, Annex '12', Appeal). The election of the appellants came about upon a motion of one Atty. Lopez, admittedly n ot a member of USTFU, that the USTFU CBL and 'the rules of the election be suspended and that the election be held [on] that day' (See --paragraph 39, Idem.) On 11 October 1996, appellees filed the instant petition seeking injunctive reliefs and the nulli fication of the results of the 04 October 1996 election. Appellees alleged that the holding of the same violated the temporary restraining order issued in Case No. NCR-OD-M-9610001. Accusing appellants of usurpation, appellees characterized the election as spurious for being violative of USTFUs CBL, specifically because the general assembly resulting in the election of appellants was not called by the Board of Officers of the USTFU; there was no compliance with the ten-day notice rule required by Section 1, Article VIII of the CBL; the supposed elections were conducted without a COMELEC being constituted by the Board of Officers in accordance with Section 1, Article IX of the CBL; the elections were not by secret balloting as required by Section 1, Article V and Section 6, Article IX of the CBL, and, the general assembly was convened by faculty members some of whom were not members of USTFU, so much so that non-USTFU members were allowed to vote in violation of Section 1, Article V of the CBL. On 24 October 1996, appellees filed another urgent ex-parte motion for a temporary restraining order, this time alleging that appellants had served the former a notice to vacate the union office. For their part, appellants moved to dismiss the original petition and the subsequent motion on jurisdictional grounds. Both the petition and the motion were captioned to be for Prohibition, Injunction with Prayer for Preliminary Injunction and Temporary Restraining Order. According to the appellants, the med-arbiter has no jurisdiction over petitions for prohibition, 'including the ancillary remedies of restraining order and/or preliminary injunction, which are merely incidental to the main petition for PROHIBITION' (Paragraph XVIII3, Respondents Comment and Motion to Dismiss). Appellants also averred that they now constituted the new set of union officers having been elected in accordance with law after the term of office of appellees had expired. They further maintained that appellees scheduling of the 5 October 1996 elections was illegal because no rules and regulations governing the elections were promulgated as required by USTFUs CBL and that one of the members of the COMELEC was not a registered member of USTFU. Appellants likewise noted that the elections called by the appellees should have been postponed to allow the promulgation of rules and regulations and to 'insure a free, clean, honest and orderly elections and to afford at the same time the greater majority of the general membership to participate' (See paragraph V, Idem). Finally, appellants contended that the holding of the general faculty assembly on 04 October 1996 was under the control of the Council of College/Faculty Club Presidents in cooperation with the USTFU Reformist Alliance and that they received the Temporary Restraining Order issued in Case No. NCR-OD-M-9610-001 only on 07 October 1996 and were not aware of the same on 04 October 1996. On 03 December 1996, appellants and UST allegedly entered into another CBA cov ering the period from 01 June 1996 to 31 May 2001 (Annex 11, appellants Rejoinder to the Reply and Opposition). Consequently, appellees again moved for the issuance of a temporary restraining order to prevent appellants from making furt her representations that [they] had entered into a new agreement with UST. Appellees also reiterated their earlier stand that appellants were usurping the formers duties and functions and should be stopped from continuing such acts. On 11 December 1996, over appellants insistence that the issue of jurisdiction should first be resolved, the med-arbiter issued a temporary restraining order directing the respondents to cease and desist from performing any and all acts pertaining to the duties and functions of the officers and directors of USTFU. In the meantime, appellants claimed that the new CBA was purportedly ratified by an overwhelming majority of USTs academic community on 12 December 1996 (Annexes 1 to 10, Idem). For this reason, appellants moved for the dismissal of what it denominated as appellees petition for prohibition on the ground that this had become moot and academic.[5] Petitioners appealed the med-arbiters Decision to the labor secretary,[6] who transmitted the records of the case to the Bureau of Labor Relations which, under Department Order No. 9, was authorized to resolve appeals of intra-union cases, consistent with the last paragraph of Article 241 of the Labor Code.[7]

The Assailed Ruling

Agreeing with the med-arbiter that the USTFU officers purported election held on October 4, 1994 was void for having been conducted in violation of the unions Constitution and Bylaws (CBL), Public Respondent Bitonio rejected petitioners contention that it wa s a legitimate exercise of their right to self-organization. He ruled that the CBL, which constituted the covenant between the union and its members, could not be suspended during the October 4, 1996 general assembly of all faculty members, since that assembly had not been convened or authorized by the USTFU. Director Bitonio likewise held that the October 4, 1996 election could not be legitimized by the recognition of the newly elected set of officers by UST or by the alleged ratification of the new CBA by the general membership of the USTFU. Ruled Respondent Bitonio: "This submission is flawed. The issue at hand is not collective bargaining representation but union leadership, a matter that should concern only the members of USTFU. As pointed out by the appellees, the privilege of determining who the union officers will be belongs exclusively to the members of the union. Said privilege is exercised in an election proceeding in accordance with the union's CBL and applicable law. To accept appellants' claim to legitimacy on the foregoing grounds is to invest in appellants the position, duties, responsibilities, rights and privileges of USTFU officers without the benefit of a lawful electoral exercise as defined in USTFU's CBL and Article 241(c) of the Labor Code. Not to mention the fact that labor laws prohibit the employer from interfering with the employees in the latter' exercise of their right to self-organization. To allow appellants to become USTFU officers on the strength of management's recognition of them is to concede to the employer the power of determining who should be USTFU's leaders. This is a clear case of interference in the exercise by USTFU members of their right to self-organization.[8] Hence, this Petition.[9]
The Issues

The main issue in this case is whether the public respondent committed grave abuse of discretion in refusing to recognize the officers elected during the October 4, 1996 general assembly. Specifically, petitioners in their Memorandum urge the Court to resolve the following questions:[10] (1) Whether the Collective Bargaining Unit of all the faculty members in that General Faculty Assembly had the right in that General Faculty Assembly to suspend the provisions of the Constitution and By-Laws of the USTFU regarding the elections of officers of the union[.] (2) Whether the suspension of the provisions of the Constitution and By-Laws of the USTFU in that General Faculty Assembly is valid pursuant to the constitutional right of the Collective Bargaining Unit to engage in peaceful concerted activities for the purpose of ousting the corrupt regime of the private respondents[.] (3) Whether the overwhelming ratification of the Collective Bargaining Agreement executed by the petitioners in behalf of the USTFU with the University of Santo Tomas has rendered moot and academic the issue as to the validity of the suspension of the Constitution and By-Laws and the elections of October 4, 1996 in the General Faculty Assembly[.]
The Courts Ruling

The petition is not meritorious. Petitioners fail to convince this Court that Director Bitonio gravely abused his discretion in affirming the med-arbiter and in refusing to recognize the binding effect of the October 4, 1996 general assembly called by the UST administration.
First Issue: Right to Self-Organization and Union Membership

At the outset, the Court stresses that National Federation of Labor (NFL) v. Laguesma[11] has held that challenges against rulings of the labor secretary and those acting on his behalf, like the director of labor relations, shall be acted upon by the Court of Appeals, which has concurrent jurisdiction with this Court over petitions for certiorari. However, inasmuch as the memoranda in the instant case have been filed prior to the promulgation and finality of our Decision in NFL, we deem it proper to resolve the present controversy directly, instead of remanding it to the Court of Appeals. Having disposed of the foregoing procedural matter, we now tackle the issues in the present case seriatim. Self-organization is a fundamental right guaranteed by the Philippine Constitution and the Labor Code. Employees have the right to form, join or assist labor organizations for the purpose of collective bargaining or for their mutual aid and protection. [12] Whether employed for a definite period or not, any employee shall be considered as such, beginning on his first day of service, for purposes of membership in a labor union.[13] Corollary to this right is the prerogative not to join, affiliate with or assist a labor union.[14] Therefore, to become a union member, an employee must, as a rule, not only signify the intent to become one, but also take some positive steps to realize that intent. The procedure for union membership is usually embodied in the unions constitution and bylaws. [15] An employee who becomes a union member acquires the rights and the concomitant obligations that go with this new status and becomes bound by the unions rules and regulations. When a man joins a labor union (or almost any other democratically controlled group), necessarily a portion o f his individual freedom is surrendered for the benefit of all members. He accepts the will of the majority of the members in order that he may derive the advantages to be gained from the concerted action of all. Just as the enactments of the legislature bind all of us, to the constitution and by-laws of the union (unless contrary to good morals or public policy, or otherwise illegal), which are duly enacted through democratic processes, bind all of the members. If a member of a union dislikes the provisions of the by-laws, he may seek to have them amended or may withdraw from the union; otherwise, he must abide by them. It is not the function of courts to decide the wisdom or propriety of legitimate by-laws of a trade union. On joining a labor union, the constitution and by-laws become a part of the members contract of membership under which he agrees to become bound by the constitution and governing rules of the union so far as it is not inconsistent with controlling principles of law. The constitution and by-laws of an unincorporated trade union express the terms of a contract, which define the privileges and rights secured to, and duties assumed by, those who have become members. The agreement of a member on joining a union to abide by its laws and comply with the will of the lawfully constituted majority does not require a member to submit to the determination of the union any question involving his personal rights.[16] Petitioners claim that the numerous anomalies allegedly committed by the private respondents during the latters incumbency i mpelled the October 4, 1996 election of the new set of USTFU officers. They assert that such exercise was pursuant to their right to self-organization. Petitioners frustration over the performance of private respondents, as well as their fears of a fraudulent election to be held under the latters supervision, could not justify the method they chose to impose th eir will on the union. Director Bitonio aptly elucidated:[17] The constitutional right to self-organization is better understood in the context of ILO Convention No. 87 (Freedom of Association and Protection of Right to Organize), to which the Philippines is signatory. Article 3 of the Convention provides that workers organizations shall have the right to draw up their constitution and rules and to elect their representatives in full freedom, free from any interference from public authorities. The freedom conferred by the provision is expansive; the responsibility imposed on union members to respect the constitution and rules they themselves draw up equally so. The point to be stressed is that the unions CBL is the fundamental law that governs the relationship between and among the members of the union. It is where the rights, duties and obligations, powers, functions and authority of the officers as

well as the members are defined. It is the organic law that determines the validity of acts done by any officer or member of the union. Without respect for the CBL, a union as a democratic institution degenerates into nothing more than a group of individuals g overned by mob rule.
Union Election vs. Certification Election

A union election is held pursuant to the unions constitution and bylaws, and the right to vote in it is enjoyed only by unio n members. A union election should be distinguished from a certification election, which is the process of determining, through secret ballot, the sole and exclusive bargaining agent of the employees in the appropriate bargaining unit, for purposes of collective bargaining. [18] Specifically, the purpose of a certification election is to ascertain whether or not a majority of the employees wish to be represented by a labor organization and, in the affirmative case, by which particular labor organization.[19] In a certification election, all employees belonging to the appropriate bargaining unit can vote. [20] Therefore, a union member who likewise belongs to the appropriate bargaining unit is entitled to vote in said election. However, the reverse is not always true; an employee belonging to the appropriate bargaining unit but who is not a member of the union cannot vote in the union election, unless otherwise authorized by the constitution and bylaws of the union. Verily, union affairs and elections cannot be decided in a non-union activity. In both elections, there are procedures to be followed. Thus, the October 4, 1996 election cannot properly be called a union election, because the procedure laid down in the USTFUs CBL for the election of officers was not followed. It could not have been a certification election either, because representation was not the issue, and the proper procedure for such election was not followed. The participation of nonunion members in the election aggravated its irregularity.
Second Issue: USTFUs Constitution and ByLaws Violated

The importance of a unions constitution and bylaws cannot be overemphasized. They embody a covenant between a union and its members and constitute the fundamental law governing the members right s and obligations.[21] As such, the unions constitution and bylaws should be upheld, as long as they are not contrary to law, good morals or public policy. We agree with the finding of Director Bitonio and Med-Arbiter Falconitin that the October 4, 1996 election was tainted with irregularities because of the following reasons. First, the October 4, 1996 assembly was not called by the USTFU. It was merely a convocation of faculty clubs, as indicated in the memorandum sent to allfaculty members by Fr. Rodel Aligan, OP, the secretary general of the University of Santo Tomas. [22] It was not convened in accordance with the provision on general membership meetings as found in the USTFUs CBL, which reads: ARTICLE VIII-MEETINGS OF THE UNION Section 1. The Union shall hold regular general membership meetings at least once every three (3) months. Notices of the meeting shall be sent out by the Secretary-General at least ten (10) days prior to such meetings by posting in conspicuous places, preferably inside Company premises, said notices. The date, time and place for the meetings shall be determined by the Board of Officers. [23] Unquestionably, the assembly was not a union meeting. It was in fact a gathering that was called and participated in by management and non-union members. By no legal fiat was such assembly transformed into a union activity by the participation of some union members. Second, there was no commission on elections to oversee the election, as mandated by Sections 1 and 2 of Article IX of the USTFUs CBL, which provide: ARTICLE IX - UNION ELECTION Section 1. There shall be a Committee on Election (COMELEC) to be created by the Board of Officers at least thirty (30) days before any regular or special election. The functions of the COMELEC include the following: a) Adopt and promulgate rules and regulations that will ensure a free, clean, honest and orderly election, whether regular or special; b) Pass upon qualifications of candidates; c) Rule on any question or protest regarding the conduct of the election subject to the procedure that may be promulgated by the Board of Officers; and d) Proclaim duly elected officers. Section 2. The COMELEC shall be composed of a chairman and two members all of whom shall be appointed by the Board of Officers. xxx xxx xxx[24] Third, the purported election was not done by secret balloting, in violation of Section 6, Article IX of the USTFUs CBL, as well as Article 241 (c) of the Labor Code. The foregoing infirmities considered, we cannot attribute grave abuse of discretion to Director Bitonios finding and conclusion. In Rodriguez v. Director, Bureau of Labor Relations,[25] we invalidated the local union elections held at the wrong date without prior notice to members and conducted without regard for duly prescribed ground rules. We held that the proceedings were rendered void by the lack of due process -- undue haste, lack of adequate safeguards to ensure integrity of the voting, and the absence of the notice of the dates of balloting.
Third Issue: Suspension of USTFUs CBL

Petitioners contend that the October 4, 1996 assembly suspended the unions CBL. They aver that the suspension and the election that followed were in accordance with their constituent and residual powers as members of the collective bargaining unit to choos e their representatives for purposes of collective bargaining. Again they cite the numerous anomalies allegedly committed by the private respondents as USTFU officers. This argument does not persuade. First, as has been discussed, the general faculty assembly was not the proper forum to conduct the election of USTFU officers. Not all who attended the assembly were members of the union; some, apparently, were even disqualified from becoming union members, since they represented management. Thus, Director Bitonio correctly observed: Further, appellants cannot be heard to say that the CBL was effectively suspended during the 04 October 1996 general assembly. A union CBL is a covenant between the union and its members and among members (Johnson and Johnson Labor Union-FFW, et al. v. Director of Labor Relations, 170 SCRA 469). Where ILO Convention No. 87 speaks of a unions full freedom to draw up its constitution and rules, it includes freedom from interference by persons who are not members of the union. The democratic principle that governance is a matter for the governed to decide upon applies to the labor movement which, by law and constitutional mandate, must be assiduously insulated against intrusions coming from both the employer and complete strangers if the 'protection to labor clause' of the constitution is to be guaranteed. By appellants own evidence, the general faculty assembly of 04 October 1996 was not a meeting of USTFU. It was attended by members and non-members alike, and therefore was not a forum appropriate for transacting union matters. The person who moved for the suspension of USTFUs CBL was not a member of USTFU. Allowing a non-union member to initiate the suspension of a unions CBL, and non -union members to participate in a union election on the premise that the unions CBL had been suspended in the meantime, is incompatible with the freedom of association and protection of the right to organize.

If there are members of the so-called academic community collective bargaining unit who are not USTFU members but who would nevertheless want to have a hand in USTFUs affairs, the appropriate procedure would have been for them to become members of USTFU first. The procedure for membership is very clearly spelled out in Article IV of USTFUs CBL. Having become members, they could then draw guidance from Ang Malayang Manggagawa Ng Ang Tibay v. Ang Tibay, 103 Phil. 669. Therein the Supreme Court held that if a member of the union dislikes the provisions of the by-laws he may seek to have them amended or may withdraw from the union; otherwise he must abide by them. Under Article XVII of USTFUs CBL, there is also a specific provision for constitutional amendments. What is clear therefore is that USTFUs CBL provides for orderly procedures and remedies which appellants could have ea sily availed [themselves] of instead of resorting to an exercise of their so-called residual power'.[26] Second, the grievances of the petitioners could have been brought up and resolved in accordance with the procedure laid down by the unions CBL[27]and by the Labor Code.[28] They contend that their sense of desperation and helplessness led to the October 4, 1996 election. However, we cannot agree with the method they used to rectify years of inaction on their part and thereby ease bottled-up frustrations, as such method was in total disregard of the USTFUs CBL and of due process. The end never justifies the means. We agree with the solicitor generals observation that the act of suspending the constitution when the questioned election was held is an implied admission that the election held on that date [October 4, 1996] could not be considered valid under the existing USTFU constitution xxx.[29] The ratification of the new CBA executed between the petitioners and the University of Santo Tomas management did not validate the void October 4, 1996 election. Ratified were the terms of the new CBA, not the issue of union leadership -- a matter that should be decided only by union members in the proper forum at the proper time and after observance of proper procedures.
Epilogue

In dismissing this Petition, we are not passing upon the merits of the mismanagement allegations imputed by the petitioners to the private respondents; these are not at issue in the present case. Petitioners can bring their grievances and resolve their differences with private respondents in timely and appropriate proceedings. Courts will not tolerate the unfair treatment of union members by their own leaders. When the latter abuse and violate the rights of the former, they shall be dealt with accordingly in the proper forum after the observance of due process. WHEREFORE, the Petition is hereby DISMISSED and the assailed Resolutions AFFIRMED. Costs against petitioners. SO ORDERED. Victoriano vs Elizalde Political Law Primacy of the Constitution over Contractual Rights Victoriano, an Iglesia ni Cristo member, has been an employee of the Elizalde Rope Factory since 1958. He was also a member of the EPWU. Under the CBA between ERF and EPWU, a close shop agreement is being enforced which means that employment in the factory relies on the membership in the EPWU; that in order to retain employment in the said factory one must be a member of the said Union. In 1962, Victoriano tendered his resignation from EPWU claiming that as per RA 3350 he is an exemption to the close shop agreement by virtue of his being a member of the INC because apparently in the INC, one is forbidden from being a member of any labor union. It was only in 1974 that his resignation from the Union was acted upon by EPWU which notified ERF about it. ERF then moved to terminate Victoriano due to his non-membership from the EPWU. EPWU and ERF reiterated that he is not exempt from the close shop agreement because RA 3350 is unconstitutional and that said law violates the EPWUs and ERFs legal/contractual rights. ISSUE: Whether or not RA 3350 is unconstitutional. HELD: The right to religion prevails over contractual or legal rights. As such, an INC member may refuse to join a labor union and despite the fact that there is a close shop agreement in the factory where he was employed, his employment could not be validly terminated for his non-membership in the majority therein. Further, the right to join a union includes the right not to join a union. The law is not unconstitutional. It recognizes both the rights of unions and employers to enforce terms of contracts and at the same time it recognizes the workers right to join or not to join union. But the RA recognizes as well the primacy of a constitutional right over a contractual right. FIRST DIVISION G.R. No. 93468 December 29, 1994 NATIONAL ASSOCIATION OF TRADE UNIONS (NATU)-REPUBLIC PLANTERS BANK SUPERVISORS CHAPTER, Petitioner, v. HON. RUBEN D. TORRES, SECRETARY OF LABOR AND EMPLOYMENT and REPUBLIC PLANTERS BANK, Respondents. Filemon G. Tercero for petitioner.chanrobles virtual law library The Government Corporate Counsel for Republic Planters Bank. BELLOSILLO, J.: NATIONAL ASSOCIATION OF TRADE UNIONS (NATU)-REPUBLIC PLANTERS BANK SUPERVISORS CHAPTER seeks nullification of the decision of public respondent Secretary of Labor dated 23 March 1990, which modified the order of Med-Arbiter Manases T. Cruz dated 17 August 1989 as well as his order dated 20 April 1990 denying reconsideration.chanroblesvirtualawlibrarychanrobles virtual law library On 17 March 1989, NATU filed a petition for certification election to determine the exclusive bargaining representative of respondent Bank's employees occupying supervisory positions. On 24 April 1989, the Bank moved to dismiss the petition on the ground that the supposed supervisory employees were actually managerial and/or confidential employees thus ineligible to join, assist or form a union, and that the petition lacked the 20% signatory requirement under the Labor Code.chanroblesvirtualawlibrarychanrobles virtual law library On 17 August 1989, Med-Arbiter Manases T. Cruz granted the petition thus WHEREFORE, . . . let a certification election be ordered conducted among all the regular employees of the Republic Planters Bank occupying supervisory positions or the equivalent within 20 days from receipt of a copy of this Order.

The choice shall be: (1) National Association of Trade Unions (NATU)-Republic Planters Bank Supervisors Chapter; and (2) No Union.chanroblesvirtualawlibrarychanrobles virtual law library The payroll three months prior to the filing of this petition shall be utilized in determining the list of eligible voters . . . . 1chanrobles virtual law library Respondent Bank appealed the order to the Secretary of Labor on the main ground that several of the employees sought to be included in the certification election, particularly the Department Managers, Branch Managers/OICs, Cashiers and Controllers were managerial and/or confidential employees and thus ineligible to join, assist or form a union. It presented annexes detailing the job description and duties of the positions in question and affidavits of certain employees. It also invoked provisions of the General Banking Act and the Central Bank Act to show the duties and responsibilities of the bank and its branches.chanroblesvirtualawlibrarychanrobles virtual law library On 23 March 1990, public respondent issued a decision partially granting the appeal, which is now being challenged before us WHEREFORE, . . . the appeal is hereby partially granted. Accordingly, the Order dated 17 August 1989 is modified to the extent that Department Managers, Assistant Managers, Branch Managers, Cashiers and Controllers are declared managerial employees. Perforce, they cannot join the union of supervisors such as Division Chiefs, Accounts Officers, Staff Assistants and OIC's (sic) unless the latter are regular managerial employees . . . . 2chanrobles virtual law library NATU filed a motion for reconsideration but the same was denied on 20 April 1990. 3Hence this recourse assailing public respondent for rendering the decision of 23 March 1990 and the order of 20 April 1990 both with grave abuse of discretion.chanroblesvirtualawlibrarychanrobles virtual law library The crucial issue presented for our resolution is whether the Department Managers, Assistant Managers, Branch Managers/OICs, Cashiers and Controllers of respondent Bank are managerial and/or confidential employees hence ineligible to join or assist the union of petitioner.chanroblesvirtualawlibrarychanrobles virtual law library NATU submits that an analysis of the decision of public respondent readily yields certain flaws that result in erroneous conclusions. Firstly, a branch does not enjoy relative autonomy precisely because it is treated as one unit with the head office and has to comply with uniform policies and guidelines set by the bank itself. It would be absurd if each branch of a particular bank would be adopting and implementing different policies covering multifarious banking transactions. Moreover, respondent Bank's own evidence clearly shows that policies and guidelines covering the various branches are set by the head office. Secondly, there is absolutely no evidence showing that bank policies are laid down through the collective action of the Branch Manager, the Cashier and the Controller. Thirdly, the organizational setup where the Branch Manager exercises control over branch operations, the Controller controls the Accounting Division, and the Cashier controls the Cash Division, is nothing but a proper delineation of duties and responsibilities. This delineation is a Central Bank prescribed internal control measure intended to objectively establish responsibilities among the officers to easily pinpoint culpability in case of error. The "dual control" and "joint custody" aspects mentioned in the decision of public respondent are likewise internal control measures prescribed by the Central Bank.chanroblesvirtualawlibrarychanrobles virtual law library Neither is there evidence showing that subject employees are vested with powers or prerogatives to hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees. The bare allegations in the affidavits of respondent Bank's Executive Assistant to the President 4 and the Senior Manager of the Human Resource Management Department 5 that those powers and prerogatives are inherent in subject positions are self-serving. Their claim cannot be made to prevail upon the actual duties and responsibilities of subject employees.chanroblesvirtualawlibrarychanrobles virtual law library The other evidence of respondent Bank which purports to show that subject employees exercise managerial functions even belies such claim. Insofar as Department Managers and Assistant Managers are concerned, there is absolutely no reason mentioned in the decision why they are managerial employees. Not even respondent Bank in its appeal questioned the inclusion of Assistant Managers among the qualified petitioning employees. Public respondent has deviated from the real issue in this case, which is, the determination of whether subject employees are managerial employees within the contemplation of the Labor Code, as amended by RA 6715; instead, he merely concentrated on the nature, conduct and management of banks conformably with the General Banking Act and the Central Bank Act.chanroblesvirtualawlibrarychanrobles virtual law library Petitioner concludes that subject employees are not managerial employees but supervisors. Even assuming that they are confidential employees, there is no legal prohibition against confidential employees who are not performing managerial functions to form and join a union.chanroblesvirtualawlibrarychanrobles virtual law library On the other hand, respondent Bank maintains that the Department Managers, Branch Managers, Cashiers and Controllers are inherently possessed of the powers enumerated in Art. 212, par. (m), of the Labor Code. It relies heavily on the affidavits of its Executive Assistant to the President and Senior Manager of the Human Resource Department. The Branch Managers, Cashiers and Controllers are vested not only with policy-making powers necessary to run the affairs of the branch, given the independence and relative autonomy which it enjoys in the pursuit of its goals and objectives, but also with the concomitant disciplinary authority over the employees.chanroblesvirtualawlibrarychanrobles virtual law library The Solicitor General argues that NATU loses sight of the fact that by virtue of the appeal of respondent Bank, the whole case is thrown open for consideration by public respondent. Even errors not assigned in the appeal, such as the exclusion by the Med-Arbiter of Assistant Managers from the managerial employees category, is within his discretion to consider as it is closely related to the errors properly assigned. The fact that Department Managers are managerial employees is borne out by the evidence of petitioner itself. Furthermore, while it assails public respondent's finding that subject employees are managerial employees, petitioner never questioned the fact that

said officers also occupy confidential positions and thus remain prohibited from forming or joining any labor organization.chanroblesvirtualawlibrarychanrobles virtual law library Respondent Bank has no legal personality to move for the dismissal of the petition for certification election on the ground that its supervisory employees are in reality managerial employees. An employer has no standing to question the process since this is the sole concern of the workers. The only exception is where the employer itself has to file the petition pursuant to Art. 258 of the Labor Code because of a request to bargain collectively. 6chanrobles virtual law library Public respondent, invoking RA 6715 and the inherent functions of Department Managers, Assistant Managers, Branch Managers, Cashiers and Controllers, held that these officers properly fall within the definition of managerial employees. The ratiocination in his Decision of 23 March 1990 7 is that Republic Act No. 6715, otherwise known as the Herrera-Veloso Law, restored the right of supervisors to form their own unions while maintaining the proscription on the right to self-organization of managerial employees. Accordingly, the Labor Code, as amended, distinguishes managerial, supervisory and rank-and-file employees thus: Art. 212 (m) - Managerial employee is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions, if the exercise of such managerial authority is not routinary in nature but requires the use of independent judgment. All employees not falling within any of the above definitions are considered rank-and-file employees (emphasis supplied). At first glance, pursuant to the above-definitions and based on their job descriptions as guideposts, there would seem to be no difficulty in distinguishing a managerial employee from that of a supervisor, or from that of a mere rank-and-file employee. Yet, this task takes on a different dimension when applied to banks, particularly the branches thereof. This is so because unlike ordinary corporations, a bank's organizational operation is governed and regulated by the General Banking Act and the Central Bank Act, both special laws . . . .chanroblesvirtualawlibrarychanrobles virtual law library As pointed out by the respondent, in the banking industry, a branch is the microcosm of a banking institution, uniquely autonomous and self-governing.chanroblesvirtualawlibrarychanrobles virtual law library This relative autonomy of a branch finds legal basis in Section 27 of the General Banking Act, as amended, thus: . . . . The bank shall be responsible for all business conducted in such branches to the same extent and in the same manner as though such business had all been conducted in the head office. For the purpose of this Act, a bank and its branches shall be treated as a unit (emphasis supplied). Conformably with the above, bank policies are laid down and/or executed through the collective action of the Branch Manager, Cashier and Controller at the branch level. The Branch Manager exercises over-all control and supervision over branch operation being on the top of the branch's pyramid structure. However, both the controller and the cashier who are called in banking parlance as "Financial Managers" due to their fiscal functions are given such a share and sphere of responsibility in the operations of the bank. The cashier controls and supervises the cash division while the controller that of the Accounting Division. Likewise, their assigned task is of great significance, without which a bank or branch for that matter cannot operate or function.chanroblesvirtualawlibrarychanrobles virtual law library Through the collective action of these three branch officers operational transactions are carried out like: The two (2)-signature requirement of the manager, on one hand, and that of the controller or cashier on the other hand as required in bank's issuances and releases. This is the so-called "dual control" through check-and-balance as prescribed by the Central Bank, per Section 1166.6, Book I, Manual of Regulations for Banks and Financial Intermediaries. Another is in the joint custody of the branch's cash in vault, accountable forms, collaterals, documents of title, deposit, ledgers and others, among the branch manager and at least two (2) officers of the branch as required under Section 1166.6 of the Manual of Regulations for Banks and Other Financial Intermediaries.chanroblesvirtualawlibrarychanrobles virtual law library This structural set-up creates a triad of managerial authority among the branch manager, cashier and controller . Hence, no officer of the bank ". . . have (sic) complete authority and responsibility for handling all phases of any transaction from beginning to end without some control or balance from some other part of the organization" (Section 1166.3, Division of Duties and Responsibilities,Ibid). This aspect in the banking system which calls for the division of duties and responsibilities is a clear manifestation of managerial power and authority . No operational transaction at branch level is carried out by the singular act of the Branch Manager but rather through the collective act of the Branch Manager, Cashier/Controller (emphasis supplied).chanroblesvirtualawlibrarychanrobles virtual law library Noteworthy is the "on call client" set up in banks. Under this scheme, the branch manager is tasked with the responsibility of business development and marketing of the bank's services which place him on client call. During such usual physical absences from the branch, the cashier assumes the reins of branch control and administration. On those occasions, the "dual control system" is clearly manifest in the transactions and operations of the branch bank as it will then require the necessary joint action of the controller and the cashier. The grave abuse of discretion committed by public respondent is at once apparent. Art. 212, par. (m), of the Labor Code is explicit. A managerial employee is (a) one who is vested with powers or prerogatives to lay down and execute management policies, or to hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees; or (b) one who is vested with both powers or prerogatives. A supervisory employee is different from a managerial employee in the sense that the supervisory employee, in the interest of the employer, effectively

recommends such managerial actions, if the exercise of such managerial authority is not routinary in nature but requires the use of independent judgment.chanroblesvirtualawlibrarychanrobles virtual law library Ranged against these definitions and after a thorough examination of the evidence submitted by both parties, we arrive at a contrary conclusion. Branch Managers, Cashiers and Controllers of respondent Bank are not managerial employees but supervisory employees. The finding of public respondent that bank policies are laid down and/or executed through the collective action of these employees is simply erroneous. His discussion on the division of their duties and responsibilities does not logically lead to the conclusion that they are managerial employees, as the term is defined in Art. 212, par. (m).chanroblesvirtualawlibrarychanrobles virtual law library Among the general duties and responsibilities of a Branch Manager is "[t]o discharge his duties and authority with a high sense of responsibility and integrity and shall at all times be guided by prudence like a good father of the family, and sound judgment in accordance with and within the limitations of the policy/policies promulgated by the Board of Directors and implemented by the Management until suspended, superseded, revoked or modified" (par. 5, emphasis supplied). 8 Similarly, the job summary of a Controller states: "Supervises the Accounting Unit of the branch; sees to the compliance by the Branch with established procedures, policies, rules and regulations of the Bank and external supervising authorities; sees to the strict implementation of control procedures (emphasis supplied). 9 The job description of a Cashier does not mention any authority on his part to lay down policies, either. 10 On the basis of the foregoing evidence, it is clear that subject employees do not participate in policymaking but are given approved and established policies to execute and standard practices to observe, 11leaving little or no discretion at all whether to implement said policies or not. 12 It is the nature of the employee's functions, and not the nomenclature or title given to his job, which determines whether he has rank-and-file, supervisory or managerial status.13chanrobles virtual law library Moreover, the bare statement in the affidavit of the Executive Assistant to the President of respondent Bank that the Branch Managers, Cashiers and Controllers "formulate and implement the plans, policies and marketing strategies of the branch towards the successful accomplishment of its profit targets and objectives," 14 is contradicted by the following evidence submitted by respondent Bank itself: (a) Memorandum issued by respondent Bank's Assistant Vice President to all Regional Managers and Branch Managers giving them temporary discretionary authority to grant additional interest over the prescribed board rates for both short-term and long-term CTDs subject, however, to specific limitations and guidelines set forth in the same memorandum; 15 (b) Memorandum issued by respondent Bank's Executive Vice President to all Regional Managers and Branch Officers regarding the policy and guidelines on drawing against uncollected deposits (DAUD); 16 (c) Memorandum issued by respondent Bank's President to all Field Offices regarding the guidelines on domestic bills purchased (DBP); 17 andchanrobles virtual law library (d) Memorandum issued by the same officer to all Branch Managers regarding lending authority at the branch level and the terms and conditions thereof. 18chanrobles virtual law library As a consequence, the affidavit of the Executive Assistant cannot be given any weight at all.chanroblesvirtualawlibrarychanrobles virtual law library Neither do the Branch Managers, Cashiers and Controllers have the power to hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees. The Senior Manager of the Human Resource Management Department of respondent Bank, in her affidavit, stated that "the power to hire, fire, suspend, transfer, assign or otherwise impose discipline among subordinates within their respective jurisdictions is lodged with the heads of the various departments, the branch managers and officers-in-charge, the branch cashiers and the branch controllers. Inherent as it is in the aforementioned positions, the authority to hire, fire, suspend, transfer, assign or otherwise discipline employees within their respective domains was deemed unnecessary to be incorporated in their individual job descriptions; By way of illustration, on August 24, 1989, Mr. Renato A. Tuates, the Officer-in-Charge/Branch Cashier of the Bank's Dumaguete Branch, placed under preventive suspension and thereafter terminated the teller of the same branch . . . . Likewise, on February 22, 1989, Mr. Francis D. Robite, Sr., the Officer-in-Charge of International Department, assigned the cable assistant of the International Department as the concurrent FCDU Accountable Forms Custodian." 19chanrobles virtual law library However, a close scrutiny of the memorandum of Mr. Tuates reveals that he does not have said managerial power because as plainly stated therein, it was issued "upon instruction from Head Office." 20 With regard to the memorandum of Mr. Robite, Sr., it appears that the power he exercised was merely in an isolated instance, taking into account the other evidence submitted by respondent Bank itself showing lack of said power by other Branch Managers/OICs: (a) Memorandum from the Branch Manager for the AVP-Manpower Management Department expressing the opinion that a certain employee, due to habitual absenteeism and tardiness, must be penalized in accordance with respondent Bank's Code of Discipline; andchanrobles virtual law library (b) Memorandum from a Branch OIC for the Assistant Vice President recommending a certain employee's promotional adjustment to the present position he occupies. Clearly, those officials or employees possess only recommendatory powers subject to evaluation, review and final action by higher officials. Therefore, the foregoing affidavit cannot bolster the stand of respondent Bank.chanroblesvirtualawlibrarychanrobles virtual law library The positions of Department Managers and Assistant Managers were also declared by public respondent as managerial, without providing any basis therefor. Petitioner asserts that the position of Assistant Manager was not

even included in the appeal filed by respondent Bank. While we agree with the Office of the Solicitor General that it is within the discretion of public respondent to consider an unassigned issue that is closely related to an issue properly assigned, still, public respondent's error lies in the fact that his finding has no leg to stand on. Anyway, inasmuch as the entire records are before us, now is the opportunity to discuss this issue.chanroblesvirtualawlibrarychanrobles virtual law library We analyzed the evidence submitted by respondent Bank in support of its claim that Department Managers are managerial employees 21 and concluded that they are not. Like Branch Managers, Cashiers and Controllers, Department Managers do not possess the power to lay down policies nor to hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees. They occupy supervisory positions, charged with the duty among others to "recommend proposals to improve and streamline operations." 22 With respect to Assistant Managers, there is absolutely no evidence submitted to substantiate public respondent's finding that they are managerial employees; understandably so, because this position is not included in the appeal of respondent Bank.chanroblesvirtualawlibrarychanrobles virtual law library As regards the other claim of respondent Bank that Branch Managers/OICs, Cashiers and Controllers are confidential employees, having control, custody and/or access to confidential matters, e.g., the branch's cash position, statements of financial condition, vault combination, cash codes for telegraphic transfers, demand drafts and other negotiable instruments, 23 pursuant to Sec. 1166.4 of the Central Bank Manual regarding joint custody, 24 this claim is not even disputed by petitioner. A confidential employee is one entrusted with confidence on delicate matters, or with the custody, handling, or care and protection of the employer's property. 25 While Art. 245 of the Labor Code singles out managerial employees as ineligible to join, assist or form any labor organization, under the doctrine of necessary implication, confidential employees are similarly disqualified. This doctrine states that what is implied in a statute is as much a part thereof as that which is expressed, as elucidated in several cases 26 the latest of which is Chua v. Civil Service Commission 27 where we said: No statute can be enacted that can provide all the details involved in its application. There is always an omission that may not meet a particular situation. What is thought, at the time of enactment, to be an all-embracing legislation may be inadequate to provide for the unfolding events of the future. So-called gaps in the law develop as the law is enforced. One of the rules of statutory construction used to fill in the gap is the doctrine of necessary implication . . . . Every statute is understood, by implication, to contain all such provisions as may be necessary to effectuate its object and purpose, or to make effective rights, powers, privileges or jurisdiction which it grants, including all such collateral and subsidiary consequences as may be fairly and logically inferred from its terms. Ex necessitate legis . . . . In applying the doctrine of necessary implication, we took into consideration the rationale behind the disqualification of managerial employees expressed in Bulletin Publishing Corporation v. Sanchez, 28 thus: ". . . if these managerial employees would belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of evident conflict of interests. The Union can also become company-dominated with the presence of managerial employees in Union membership." Stated differently, in the collective bargaining process, managerial employees are supposed to be on the side of the employer, to act as its representatives, and to see to it that its interests are well protected. The employer is not assured of such protection if these employees themselves are union members. Collective bargaining in such a situation can become one-sided. 29 It is the same reason that impelled this Court to consider the position of confidential employees as included in the disqualification found in Art. 245 as if the disqualification of confidential employees were written in the provision. If confidential employees could unionize in order to bargain for advantages for themselves, then they could be governed by their own motives rather than the interest of the employers. Moreover, unionization of confidential employees for the purpose of collective bargaining would mean the extension of the law to persons or individuals who are supposed to act "in the interest of" the employers. 30 It is not farfetched that in the course of collective bargaining, they might jeopardize that interest which they are duty-bound to protect. Along the same line of reasoning we held in Golden Farms, Inc. v. Ferrer-Calleja 31 reiterated in Philips Industrial Development, Inc. v. NLRC, 32 that "confidential employees such as accounting personnel, radio and telegraph operators who, having access to confidential information, may become the source of undue advantage. Said employee(s) may act as spy or spies of either party to a collective bargaining agreement."chanrobles virtual law library In fine, only the Branch Managers/OICs, Cashiers and Controllers of respondent Bank, being confidential employees, are disqualified from joining or assisting petitioner Union, or joining, assisting or forming any other labor organization. But this ruling should be understood to apply only to the present case based on the evidence of the parties, as well as to those similarly situated. It should not be understood in any way to apply to banks in general.chanroblesvirtualawlibrarychanrobles virtual law library WHEREFORE, the petition is partially GRANTED. The decision of public respondent Secretary of Labor dated 23 March 1990 and his order dated 20 April 1990 are MODIFIED, hereby declaring that only the Branch Managers/OICs, Cashiers and Controllers of respondent Republic Planters Bank are ineligible to join or assist petitioner National Association of Trade Unions (NATU)-Republic Planters Bank Supervisors Chapter, or join, assist or form any other labor organization.chanroblesvirtualawlibrarychanrobles virtual law library SO ORDERED. Davide, Jr., Quiason and Kapunan, JJ., concur. SMC Supervisors and Exempt Union vs Hon Laguesma G.R. No. 110399 August 15, 1997

SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION vs. HONORABLE BIENVENIDO E. LAGUESMA FACTS: Petitioner union filed before the Department of Labor and Employment (DOLE) a Petition for Direct Certification or Certification Election among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis. Med-Arbiter Danilo L. Reynante issued an Order for the conduct of certification election among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis as one bargaining unit. Respondent San Miguel Corporation opposed arguing that the Med-Arbiters committed an error in grouping together all three separate plants into one bargaining unit, and in including supervisory levels 3 and above whose positions are confidential in nature. The public respondent citing the doctrine enunciated in Philips Industrial Development, Inc. v. NLRC issued an order excluding the employees under supervisory levels 3 and 4 and the so-called exempt employees from the proposed bargaining unit and ruled out their participation in the certification election. ISSUES: 1. Whether Supervisory employees 3 and 4 and the exempt employees of the company are considered confidential employees, hence ineligible from joining a union. 2. If they are not confidential employees, do the employees of the three plants constitute an appropriate single bargaining unit? HELD: 1. NO. Supervisory employees 3 and 4 and the exempt employees of the company do not fall within the term confidential employees who may be prohibited from joining a union. Confidential employees are those who (1) assist or act in a confidential capacity, (2) to persons who formulate, determine, and effectuate management policies in the field of labor relations. The two criteria are cumulative, and both must be met if an employee is to be considered a confidential employee that is, the confidential relationship must exist between the employee and his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations. An important element of the confidential employee rule is the employees need to use labor relations information. Thus, in determining the confidentiality of certain employees, a key question frequently considered is the employees necessary access to confidential labor relations information. In the case at bar, supervisors 3 and above may not be considered confidential employees merely because they handle confiden tial data as such must first be strictly classified as pertaining to labor relations for them to fall under said restrictions. The information they handle are properly classifiable as technical and internal business operations data which, to our mind, has no relevance to negotiations and settlement of grievances wherein the interests of a union and the management are invariably adversarial. Since the employees are not classifiable under the confidential type, this Court rules that they may appropriately form a bargaining unit for purposes of collective bargaining. Furthermore, even assuming that they are confidential employees, jurisprudence has established that there is no legal prohibition against confidential employees who are not performing managerial functions to form and join a union. 2. YES. An appropriate bargaining unit may be defined as a group of employees of a given employer, comprised of all

or less than all of the entire body of employees, which the collective interest of all the employees, consistent with equity to

the employer, indicate to be best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law. A unit to be appropriate must effect a grouping of employees who have substantial, mutual interests in wages, hours, working conditions and other subjects of collective bargaining. It is readily seen that the employees in the instant case have community or mutuality of interests, which is the standard i n determining the proper constituency of a collective bargaining unit. It is undisputed that they all belong to the Magnolia Poultry Division of San Miguel Corporation. This means that, although they belong to three different plants, they perform work of the same nature, receive the same wages and compensation, and most importantly, share a common stake in concerted activities. In light of these considerations, the Solicitor General has opined that separate bargaining units in the three different plants of the division will fragmentize the employees of the said division, thus greatly diminishing their bargaining leverage. Any concerted activity held against the private respondent for a labor grievance in one bargaining unit will, in all probability, not create much impact on the operations of the private respondent. The two other plants still in operation can well step up their production and make up for the slack caused by the bargaining unit engaged in the concerted activity. This situation will clearly frustrate the provisions of the Labor Code and the mandate of the Constitution. THIRD DIVISION [G.R. No. 96663. August 10, 1999] PEPSI - COLA PRODUCTS PHILIPPINES, INC., petitioner, vs. HONORABLE SECRETARY OF LABOR, MED - ARBITER NAPOLEON V. FERNANDO & PEPSI - COLA SUPERVISORY EMPLOYEES ORGANIZATION - UOEF, respondents. [G.R. No. 103300. August 10, 1999] PEPSI COLA PRODUCTS PHILIPPINES, petitioner, vs. OFFICE OF THE SECRETARY DEPARTMENT OF LABOR AND HON. CELENIO N. DAING, in his capacity as Med-Arbiter Labor Regional Office No. X, Cagayan de Oro City, CAGAYAN DE ORO PEPSI COLA SUPERVISORS UNION (UOEF), respondents. DECISION PURISIMA, J.: These are petitions for certiorari relating to three (3) cases filed with the Med-Arbiter, to wit: MED ARB ROX Case No. R100-9101-RU002 for Certification Election filed by Pepsi Cola Supervisors Union-UOEF (Union), MED ARB Case No. R1000-9102-RU-008, Re: Petition to Set Aside, Cancel and/ or Revoke the Charter Affiliation of the Union, and MED-ARB ROX Case No. R1000-9104-RU-012, for Cancellation of Registration Certificate No. 11492-LC in favor of the Union.
G. R. No. 96663

The facts that matter can be culled as follows: Sometime in June 1990, the Pepsi-Cola Employees Organization-UOEF (Union) filed a petition for certification election with the MedArbiter seeking to be the exclusive bargaining agent of supervisors of Pepsi-Cola Philippines, Inc. (PEPSI). On July 12, 1990, the Med-Arbiter granted the Petition, with the explicit statement that it was an affiliate of Union de Obreros Estivadores de Filipinas (federation) together with two (2) rank and file unions, Pepsi-Cola Labor Unity (PCLU) and Pepsi-Cola Employees Union of the Philippines (PEUP). On July 23, 1990, PEPSI filed with the Bureau of Labor Relations a petition to Set Aside, Cancel and/or Revoke Charter Affiliation of the Union, entitled PCPPI v. PCEU-UOEF and docketed as Case No. 725-90, on the grounds that (a) the members of the Union were managers and (b) a supervisors union can not affiliate with a federation whose members include the rank and file union of the same compan y. On August 29,1990, PEPSI presented a motion to re-open the case since it was not furnished with a copy of the Petition for Certification Election. On September 4, 1990, PEPSI submitted its position paper to the BLR in Case No. 725-90. On September 21, 1990, PEPSI received summons to appear at the pre-trial conference set on September 25, 1990 but which the hearing officer rescheduled on October 21, 1990. On October 12, 1990, PEPSI filed a Notice of Appeal and Memorandum of Appeal with the Secretary of Labor, questioning the setting of the certification election on the said date and five (5) days after. It also presented an urgent Ex-Parte Motion to Suspend the Certification Election, which motion was granted on October 18, 1990. On November 12, 1990, the Secretary of Labor denied the appeal and Motion for Reconsideration. Even as the Petition to Cancel, Revoke and Suspend Union Charter Certificate was pending before the BLR, PEPSI found its way to this Court via the present petition for certiorari. On February 6, 1991, the Court granted the prayer for temporary restraining order and/or preliminary injunction. The pivot of inquiry here is: whether or not a supervisors union can affiliate with the same Federation of which two (2) ran k and file unions are likewise members, without violating Article 245 of the Labor Code (PD 442), as amended, by Republic Act 6715, which provides: Art. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees.- Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own. In its Comment dated March 19, 1991, the Federation argued that: The pertinent portion of Article 245 of the Labor Code states that. 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 organization of their own.

This provision of law does not prohibit a local union composed of supervisory employees from being affiliated to a federation which has local unions with rank-and-file members as affiliates. xxx xxx xxx xxx the Petition to Cancel, Revoke or Set Aside the Charter Certificate of the private respondent is anchored on the alleged ground that certain managerial employees are included as members thereof. The grounds for the cancellation of the registration certificate of a labor organization are provided in Section 7 of Rule II, Book V of the Omnibus Rules Implementing the Labor Code, and the inclusion of managerial employees is not one of the grounds. xxx (in this case, the private respondent herein) remains to be a legitimate labor organization.[1] On April 8, 1991, the Secretary of Labor and Employment, through the Office of the Solicitor General, sent in a Comment, alleging inter alia, that: xxx under Article 259 of the New Labor Code, only orders of the Med -Arbiter can be appealed through the Secretary of Labor and only on the ground that the rules and regulations for the conduct of the certification election have been violated. The Order of the Representation Officer is interlocutory and not appealable. xxx xxx until and unless there is a final order cancelling its certificate of registration or charter certificate, a labor organization remains to be a legitimate labor organization entitled to exercise all the rights and duties accorded to it by the Labor Code including the right to be certified as a bargaining representative. xxx xxx Public respondent cannot be deemed to have committed grave abuse of discretion with respect to an issue that was never presented before it for resolution. xxx Article 245 of the New Labor Code does not preclude the supervisors union and the rank -and-file union from being affiliated with the same federation. xxx xxx xxx A federation of local union is not the labor organization referred to in Article 245 but only becomes entitled to all the rights enjoyed by the labor organization (at the company level) when it has complied with the registration requirements found in Articles 234 and 237. Hence, what is prohibited by Article 245 is membership of supervisory employees in a labor union (at the company level) of the rank and file. xxx xxx In other words, the affiliation of the supervisory employees union with the same federation with which the rank and file emp loyees union is affiliated did not make the supervisory employees members of the rank and file employees union and vice versa. [2] xxx PEPSI, in its Reply dated May 7, 1991, asserted: It is our humble contention that a final determination of the Petition to Set -Aside, Cancel, Revoke Charter Union Affiliation should first be disposed of before granting the Petition for the Conduct of Certification Election. To allow the conduct of the certification election to proceed would make any decision arrived at by the Bureau of Labor Relations useless inasmuch as the same would necessarily be rendered moot and academic.[3] On June 7, 1991, petitioner again filed a Supplemental Reply stressing: It is likewise stressed that officials of both the PCLU and PEUP are top ranking officers of UOEF, the federation of supervisors union, to wit: POSITION IN RANK AND FILE POSITION IN FEDERATION UNION 1. Rogelio de la Cruz PCLU -President General Vice President 2. Felix Gatela PEUP - President General Treasurer 3. Carlito Epino PCLU Board Member Educational Research Director xxx xxx xxx The respondent supervisory union could do indirectly what it could not do directly as the simple expedient of affiliating with UOEF would negate the manifest intent and letter of the law that supervisory employees can only join, assist or form separate labor organizations of their own and cannot be eligible for membership in a labor organization of the rank and file employees. [4] On August 6, 1991, the Secretary of Labor and Employment filed a Rejoinder, claiming thus: xxx an employer has no legal standing to question the validity of a certification election. xxx For this reason, the Supreme Court has consistently held that, as a rule, a certification election is the sole and exclusive concern of the employees and that the employer is definitely an intruder or a mere bystander (Consolidated Farms vs. Noriel, L-47752, July 31, 1978, 84 SCRA 469; Filipino Metals Corporation vs. Ople, L- 43861, September 4, 1981, 107 SCRA 211; Trade Unions of the Philippines and Allied Services (TUPAS) vs. Trajano No. L-61153, January 17, 1983, 120 SCRA 64]. xxx xxx xxx In Adamson & Adamson, Inc. vs. CIR No. L-35120, January 31, 1984, 127 SCRA 268, the Supreme Court (then dealing with the interpretation of Section 3 of the Industrial Peace Act, from which Section 245 of the Labor Code was derived) grappled with the issue in the case at bar. It held that, There is nothing in the provisions of the Industrial Peace Act which provides that a duly registered local union affiliating with a national union or federation loses its legal personality, or its independence. xxx xxx xxx However, there is absolutely nothing in the Labor Code that prohibits a federation from representing or exercising influence over its affiliates. On the contrary, this is precisely the reason why federations are formed and are allowed by law to exist. [5] On November 8, 1991, the Union also filed a Rejoinder. On December 9, 1991, the Court resolved to DISMISS the case for failure to sufficiently show that the questioned judgment is tainted with grave abuse of discretion. In a Resolution dated March 2, 1992, the Second Division of the Court resolved to grant the motion for reconsideration interposed on January 28, 1992.
G.R. No. 103300

What are assailed in this case is Med-Arbiter Order dated May 23, 1991 and the Decision and Order of the Secretary of Labor and Employment, dated October 4, 1991 and December 12, 1991, respectively. The decretal portion of the Med-Arbiter Order under attack, reads: WHEREFORE, premises considered, an order is hereby issued: 1. Dismissing MED ARB ROX CASE NO. R1000-919104-RU-012 and R1000-9102-RU-008 for lack of merit; and

2. Ordering the conduct of a Certification Election to be participated by and among the supervisory workers of the respondent company, PepsiCola Products Philippines, Inc. at its plant at Tin-ao, Cagayan de Oro City, including all the satellite warehouse within the territorial coverage and control of the Cagayan de Oro Pepsi-Cola Plant. The choices are as follows: 1. Cagayan de Oro Pepsi-Cola Supervisors Union (U.O.E.P.) 2. No union The parties are directed to attend a pre-election conference on June 10, 1991, 2:30 p.m. at the Regional Office to determine the qualification of the voters and to thresh out the mechanics of the election. Respondent/employer is directed to submit five (5) copies of the names of the rank and file workers taken from the payroll on October 1-31, 1991, alphabetically arranged (sic) indicating their names and positions and dates of employment and to bring the aforementioned payroll during the pre-election conference for verification purposes.[6] xxx The supervisory employees of the Union are: POSITION 1. Felipe Valdehueza Route Manager 2. Gerberto Vertudazo C & C Manager 3. Paul Mendoza Sales Service Department Manager 4. Gilberto Emano, Jr. Route Manager 5. Jaime Huliganga Chief Checker 6. Elias Edgama, Sr. Accounting Manager 7. Romanico Ramos Route Manager 8. Raul Yacapin Route Manager 9. Jovenal Albaque Route Manager 10. Fulvio Narciso Route Manager 11. Apolinario Opiniano Route Manager 12. Alfredo Panas Route Manager 13. Simplicio Nelie Route Manager 14. Arthur Rodriguez Route Manager 15. Marco Ilano Warehouse Operations Manager and 16. Deodoro Ramos Maintenance Manager On June 6, 1991, PEPSI appealed the said Order to the Secretary of Labor and Employment on the ground of grave abuse of discretion, docketed as Case No. OS-A-232-91. On October 4, 1991, the Secretary modified the appealed decision, ruling thus: WHEREFORE, the Order of the Med-Arbiter dated 23 May 1991 is hereby modified to the effect that MED ARB ROX Case No. R1000-9104RU-012 and R1000-9102-RU-008 are hereby referred to the Office of the Regional Director which has jurisdiction over these cases. The call for certification election among the supervisory workers of the Pepsi-Cola Products Philippines, Inc. at its plant at Tin-ao, Cagayan de Oro City is hereby sustained.[7] On October 19, 1991, PEPSI presented a motion for reconsideration of the aforesaid Order but the same was denied on December 12, 1991. Meanwhile, the BLR issued Registration Certificate No. 11492-LC in favor of the Union. Dissatisfied therewith, PEPSI brought the instant petition forcertiorari, contending that: PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION IN RULING THAT PRIVATE RESPONDENTS OFFICERS AND MEMBERS ARE NOT MANAGERIAL EMPLOYEES; PRIVATE RESPONDENT IS PROHIBITED FROM AFFILIATING ITSELF WITH A FEDERATION ALREADY AFFILIATED WITH THE RANK AND FILE UNION; PUBLIC RESPONDENT COMMITTED GRAVE OF (SIC) ABUSE OF DISCRETION IN RULING THAT THE INSTITUTION OF A PETITION FOR CANCELLATION OF UNION REGISTRATION DOES NOT CONSTITUTE A PREJUDICIAL QUESTION TO A PETITION CERTIFICATION ELECTION.[8] The petitions must fail for want of merit. At the outset, it must be stressed that on September 1, 1992, there was a Resolution of the Union withdrawing from the Federation, to wit: BE IT RESOLVED, as it is hereby RESOLVED, that this UNION WITHDRAW, as it hereby WITHDRAWS its affiliatio n from the Union de Obreros Estivadores de Filipinas, and at the same time, give our thanks to the said federation for its help and guidance rendered to this Union in the past.[9] The issue in G.R. No. 96663, whether or not the supervisors union can be affiliated with a Federation with two (2) rank and file unions directly under the supervision of the former, has thus become moot and academic in view of the Unions wit hdrawal from the federation. In a long line of cases (Narciso Nakpil, et. al., vs. Hon. Crisanto Aragon, et. al.,, G. R. No. L - 24087, January 22, 1980, 95 SCRA 85; Toribio v. Bidin, et. al., G.R. No. L-37960, February 28, 1980, 96 SCRA 361; Gumaua v. Espino, G.R. No. L- 36188 - 37586 February 29, 1980, 96 SCRA 402), the Court dismissed the petition for being moot and academic. In the case of F. C. Fisher v. Yangco Steamship Co., March 31, 1915, the Court held: It is unnecessary, however to indulge in academic discussion of a moot question. xxx xxx The action would have been dismissed at any time on a showing of the facts as they were . The question left for the court was a moot one. Its Resolution would have been useless. Its judgment would have been impossible of execution xxx. However, in the case of University of San Agustin, Inc., et al. vs. Court of Appeals, et al., the court resolved the case, ru ling that even if a case were moot and academic, a statement of the governing principle is appropriate in the resolution of dismissal for the guidance not only of the parties but of others similarly situated. xxx[10] In Atlas Lithographic Services, Inc. v. Laguesma, 205 SCRA 12, [1992] decided by the Third Division with J. Gutierrez, Jr., as ponente and JJ. Feliciano, Bidin, Romero and now Chief Justice Davide, Jr., as members it was ratiocinated: xxx xxx xxx Thus, if the intent of the law is to avoid a situation where supervisors would merge with the rank-and-file or where the supervisors labor organization would represent conflicting interests, then a local supervisors union should not be allowed to affiliate with the national federation of union of rank-and-file employees where that federation actively participates in union activity in the company. xxx xxx xxx

The prohibition against a supervisors union joining a local union of rank and file is replete with jurisprudence. The Court emphasizes that the limitation is not confined to a case of supervisors wanting to join a rank -and-file union. The prohibition extends to a supervisors local union applying for membership in a national federation the members of which include local unions of rank and file employees. The intent of the law is clear especially where, as in this case at bar, the supervisors will be co-mingling with those employees whom they directly supervise in their own bargaining unit. Anent the issue of whether or not the Petition to cancel/revoke registration is a prejudicial question to the petition for certification election, the following ruling in the case of Association of the Court of Appeals Employees (ACAE) vs. Hon. Pura Ferrer-Calleja, in her capacity as Director, Bureau of Labor Relations et. Al., 203 ACRA 597, 598, [1991], is in point, to wit: xxx It is a well-settled rule that a certification proceedings is not a litigation in the sense that the term is ordinarily understoo d, but an investigation of a non-adversarial and fact finding character. (Associated Labor Unions (ALU) v. Ferrer -Calleja, 179 SCRA 127 [1989]; Philippine Telegraph and Telephone Corporation v. NLRC, 183 SCRA 451 [1990]. Thus, the technical rules of evidence do not apply if the decision to grant it proceeds from an examination of the sufficiency of the petition as well as a careful look into the arguments contained in the position papers and other documents. At any rate, the Court applies the established rule correctly followed by the public respondent that an order to hold a certification election is proper despite the pendency of the petition for cancellation of the registration certificate of the respondent union. The rationale for this is that at the time the respondent union filed its petition, it still had the legal personality to perform such act absent an order directing the cancellation. xxx xxx xxx As regards the issue of whether or not confidential employees can join the labor union of the rank and file, what was held in the case of National Association of Trade Unions (NATU) - Republic Planters Bank Supervisors Chapter vs. Hon. R. D. Torres, et. al., G.R. No. 93468, December 29, 1994, applies to this case. Citing Bulletin Publishing Corporation vs. Sanchez, 144 SCRA 628,635, Golden Farms vs. NLRC, 175 SCRA 471, and Pier 8 Arrastre and Stevedoring Services, Inc. vs. Hon. Nieves Roldan-Confessor et al., G.R. No. 110854, February 14, 1995, the Court ruled: xxx A confidential employee is one entrusted with confidence on delicate matters, or with the custody, handling, or care and protection of the employers property. While Art. 245 of the Labor Code singles out managerial employee as ineligible to join, assist or form any labor organization, under the doctrine of necessary implication, confidential employees are similarly disqualified. This doctrine states that what is implied in a statute is as much a part thereof as that which is expressed, as elucidated in several case; the latest of which is Chua v. Civil Service Commission where we said: No statute can be enacted that can provide all the details involved in its application. There is always an omission that may not meet a particular situation. What is thought, at the time of the enactment, to be an all embracing legislation maybe inadequate to provide for the unfolding events of the future. So-called gaps in the law develop as the law is enforced. One of the rules of statutory construction used to fill in the gap is the doctrine of necessary implication xxx, Every statute is understood, by implication, to contain all such provisions as may be necessary to effectuate its object and purpose, or to make effective rights, powers, privileges or jurisdiction which it grants, including all such collateral and subsidiary consequences as may be fairly and logically inferred from its terms. Ex necessitate legis xxx In applying the doctrine of necessary implication, we took into consideration the rationale behind the disqualification of managerial employees expressed in Bulletin Publishing Corporation v. Sanchez, thus xxx if these managerial employees would belong to or be affili ated with a Union, the latter might not be assured of their loyalty to the Union in view of evident conflict of interests. The Union can also become company dominated with the presence of managerial employees in Union membership. Stated differently, in the collective bargaining pr ocess, managerial employees are supposed to be on the side of the employer, to act as its representatives, and to see to it that its interest are well protected. The employer is not assured of such protection if these employees themselves are union members. Collective bargaining in such a situation can become one-sided. It is the same reason that impelled this Court to consider the position of confidential employees as included in the disqualification found in Art. 245 as if the disqualification of confidential employees were written in the provision. If confidential employees could unionize in order to bargain for advantages for themselves, then they could be governed by their own motives rather than the interest of the employers. Moreover, unionization of confidential employees for the purpose of collective bargaining would mean the extension of the law to persons or individuals who are supposed to act in the interest of the employers. It is not farfetched that in the course of collective bargaining, they might jeopardize that interest which they are duty bound to protect. Along the same line of reasoning we held in Golden Farms, Inc. vs. Ferrer-Calleja reiterated in Philips Industrial Development, Inc., NLRC, that confidential employees such as accounting personnel, radio and telegraph operators who, having access to confidential information, may become the source of undue advantage. Said employee(s) may act as spy or spies of either party to a collective bargaining agreement. The Court finds merit in the submission of the OSG that Route Managers, Chief Checkers and Warehouse Operations Managers are supervisors while Credit & Collection Managers and Accounting Managers are highly confidential employees. Designation should be reconciled with the actual job description of subject employees. A careful scrutiny of their job description indicates that they dont lay down company policies. Theirs is not a final determination of the company policies since they have to report to their respective superior. 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 v. 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 title given to the job which determin es whether the employee has rank and file or managerial status, or whether he is a supervisory employee. WHEREFORE, the petitions under consideration are DISMISSED but subject Decision, dated October 4, 1991, of the Secretary of Labor and Employment is MODIFIED in that Credit and Collection Managers and Accounting Managers are highly confidential employees not eligible for membership in a supervisors union. No pronouncement as to costs. SO ORDERED. Melo, (Chairman), Vitug, and Gonzaga-Reyes, JJ., concur. Panganiban, J., in the result. Philips Industrial Development, Inc. vs NLRCFacts:- PIDI is a domestic corporation engaged in the manufacturing and marketing of electronic products.Since 1971, it had a total of 6 collective bargaining agreements with private respondent PhilipsEmployees Organization-FFW (PEOFFW), a registered labor union and the certified bargaining agent of all rank and file employees of PIDI.- In the first CBA, the supervisors (referred to in RA 875), confidential employees, security guards,temporary employees and sales representatives were excluded in the bargaining unit. In the second to thefifth, the sales force, confidential employees and heads of small units, together with the managerialemployees, temporary employees and security personnel were excluded from the bargaining unit. Theconfidential employees are

the division secretaries of light/telecom/data and consumer electronics,marketing managers, secretaries of the corporate planning and business manager, fiscal and financialsystem manager and audit and EDP manager, and the staff of both the General Management and thePersonnel Department.- In the sixth CBA, it was agreed that the subject of inclusion or exclusion of service engineers, sales personnel and confidential employees in the coverage of the bargaining unit would be submitted for arbitration. The parties failed to agree on a voluntary arbitrator and the Bureau of Labor Relationsendorsed the petition to the Executive Labor Arbiter of the NCR for compulsory arbitration.- March 1998, Labor Arbiter: A referendum will be conducted to determine the will of the serviceengineers and sales representatives as to their inclusion or exclusion in the bargaining unit. It was alsodeclared that the Division Secretaries and all staff of general management, personnel and industrialrelations department, secretaries of audit, EDP, financial system are confidential employees are deemedexcluded in the bargaining unit.- PEO-FFW appealed to the NLRC; NLRC declared PIDI's Service Engineers, Sales Force, divisionsecretaries, all Staff of General Management, Personnel and Industrial Relations Department, Secretariesof Audit, EDP and Financial Systems are included within the rank and file bargaining unit, citing theImplementing Rules of E.O 111 and Article 245 of the Labor Code (all workers, except managerialemployees and security personnel, are qualified to join or be a part of the bargaining unit)Issue:-Whether service engineers, sales representatives and confidential employees of petitioner are qualified to be part of the existing bargaining unit- Whether the "Globe Doctrine" should be appliedHeld: NLRC decision is set aside while the decision of the Executive Labor Arbiter is reinstated. Confidentialemployees are excluded from the bargaining unit while a referendum will be conducted to determine thewill of the service engineers and sales representatives as to their inclusion or exclusion from the bargaining unit, but those who are holding supervisory positions or functions are ineligible to join a labor organization of the rank and file employees but may join, assist or form a separate labor organization of their own.Ratio:The exclusion of confidential employees:The rationale behind the ineligibility of managerial employees to form, assist or join a labor union equally applies to confidential employees. With the presence of managerial employees in a union,the union can become company-dominated as their loyalty cannot be assured. In Golden Farms vs Calleja,the Court states that confidential employees, who have access to confidential information, may becomethe source of undue advantage. As regards to the sales representatives and service engineers, according to the OSG, there is no doubt thatthey are entitled to form a union as they are not disqualified by law from doing so.Globe Doctrine:Globe Doctrine states that in determining the proper bargaining unit, the express will or desire of the employees shall be considered, they should be allowed to determine for themselves what union to joinor form. The best way is through a referendum, as decreed by the Executive Labor Arbiter. However, inthis case, since the only issue is the employees' inclusion in or exclusion from the bargaining unit inquestion, the Globe Doctrine has no application in this case. The doctrine applies only in instance of evenly balanced claims by competitive groups for the right to be established as the bargaining unit. (manyunions 'competing' to be the bargaining representative?) ALHAMBRA CIGAR vs SEC 24 SCRA 269 Business Organization Corporation Law Corporate Lifespan On January 15, 1912, Alhambra Cigar & Cigarette Manufacturing Company, Inc. was incorporated. Its lifespan was for 50 years so on January 15, 1962, it expired. Thereafter, its Board authorized its liquidation. Under the prevailing law, Alhambra has 3 years to liquidate. In 1963, while Alhambra was liquidating, Republic Act 3531 was enacted. It amended Section 18 of the Corporation Law; it empowered domestic private corporations to extend their corporate life beyond the period fixed by the articles of incorporation for a term not to exceed fifty years in any one instance. Previous to Republic Act 3531, the maximum non-extendible term of such corporations was fifty years. Alhambra now amended its articles of incorporation to extend its lifespan for another 50 years. The Securities and Exchange Commission (SEC) denied the amended articles of incorporation. ISSUE: Whether or not a corporation under liquidation may still amend its articles of incorporation to extend its lifespan. HELD: No. Alhambra cannot avail of the new law because it has already expired at the time of its passage. When a corporation is liquidating pursuant to the statutory period of three years to liquidate, it is only allowed to continue for the purpose of final closure of its business and no other purposes. In fact, within that period, t he corporation is enjoined from continuing the business for which it was established. Hence, Alhambras board cannot validly amend its articles of incorporation to extend its lifespan. Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 94716 November 15, 1991 ASSOCIATION OF COURT OF APPEALS EMPLOYEES (ACAE), petitioner, vs. HON. PURA FERRER-CALLEJA, in her capacity as Director, Bureau of Labor Relations, and UNION OF CONCERNED EMPLOYEES OF THE COURT OF APPEALS (UCECA), respondents. GUTIERREZ, JR., J.:p We are asked in this petition to ascertain the power, if any, of the Department of Labor and Employment (DOLE), more specifically the Bureau of Labor Relations (BLR), to supervise the activities of government employees; in this case, unions of judiciary personnel who serve in the Court of Appeals. The question of power is quite significant. Hitherto, the BLR has concentrated on labor relations in the private sector. Its enforcement machinery and the mass of law and jurisprudence governing its functions are entirely geared to the handling of the peculiar problems arising in private employment. In this case, the BLR has tasked itself to intervene not only in a quarrel between

two groups of government employees but more important, in a quarrel between employees working for an independent branch of government, the Judiciary. The two issues raised in this petition are: (1) whether or not the respondent Bureau of Labor Relations acted with grave abuse of discretion when it granted the petition for certification election to determine the certified bargaining agent to represent the rank-andfile employees of the Court of Appeals; and (2) whether or not a petition for cancellation of registration of the union requesting for a certification election is a bar to the resolution of a prior petition for certification election. The antecedent facts of the case are as follows: On April 4, 1990, the respondent Union of Concerned Employees of the Court of Appeals (UCECA), a registered union filed a petition for accreditation and/or certification election with the Bureau of Labor Relations (docketed as BLR Case No. 4-11-90) alleging that the petitioner, Association of Court of Appeals Employees (ACAE) which is the incumbent bargaining representative, no longer enjoys the support of the majority of the rank-and-file employees. The UCECA alleged that there was a mass resignation of ACAE members on April 14, 1989. On May 10, 1990, the ACAE filed its Comment and/or Opposition. It stated that the listing by the ACAE of its membership at three hundred three (303) employees was a product of fraud. It charged the UCECA with misrepresentation, forgery and perjury in attaching to its (UCECA) petition, a copy of the names of members some of which were twice listed, written without consent or unsigned, and some of the signatures of which were forged. In addition, the petitioner alleged that some of the UCECA members, upon learning of the fraudulent act, resigned from the union. In its reply, the UCECA stated that its registry book was not smeared with fraud and claimed that any mistakes were only clerical errors. On June 18, 1990, petitioner ACAE filed a Petition for Cancellation of Certificate of Registration of the UCECA in BLR Case No. 619-90 on the ground of fraud and misrepresentation by UCECA in obtaining its Registration Certificate No. 159 and in preparing its Registry Book of members. On June 28, 1990, the ACAE moved for deferment of the resolution of the case of BLR 4-11-90 pending the case of BLR 6-19-90. On July 16, 1990, the UCECA filed a motion to dismiss BLR 6-19-90 for being dilatory, to which ACAE replied that the maxim of res ipsa loquitur should be applied as the "fraudulent documents submitted by UCECA speak for themselves." On July 30, 1990, the Bureau of Labor Relationsruled that BLR 6-19-90 (cancellation proceedings) is not a bar to the holding of a certification election. It granted the UCECA's prayer for a certification election. The BLR found that UCECA was supported by three hundred three (303) or forty (40%) percent of the seven hundred sixty two (762) rank-and-file employees of the court. ACAE's motion for reconsideration was denied. On August 21, 1990, the respondent Bureau conducted a pre-election conference. Feeling that it was being stampeded into participating in a certification election, ACAE filed this petition for certiorari and prohibition. We issued a temporary restraining order effective August 29, 1990. The first question that arises is the jurisdiction of the Bureau of Labor Relations to handle disputes among associations of employees working for the judiciary. There is no question that government employees may organize provided the purposes behind such organization are legitimate. No less than the Bill of Rights specifically identifies government employees as having the right of self-organization. It provides: xxx xxx xxx Sec. 8. The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged. (Article III, 1987 Constitution) In the provisions governing the Civil Service Commission, we find: Sec. 2. (1) The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations with original charters. xxx xxx xxx Sec. 2. (5) The right to self-organization shall not be denied to government employees. xxx xxx xxx (Article IX-B, Section 2 (1) and (5), Constitution) The article on Social Justice and Human Rights adds: Sec. 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. (Article XIII, Section 3, 1st and 2nd paragraphs) xxx xxx xxx The issue of what governs and who supervises unions of government employees is of more than passing concern especially when those who organize and hope to engage in certain forms of concerted action are court employees. Government personnel find themselves in an equivocal and ambivalent position. They have a right but it is not clear to what extent they may exercise it. Congress has not legislated as yet on the complicated problems arising from unionism in government as distinguished from unionism in the private sector. Obviously, the same rules do not and cannot apply under the present state of the law. A major re-ordering of government, notably its civil service laws and budgetary and fiscal procedures would result if Congress, in enacting the laws required by the constitutional provisions, gives exactly the same rights and privileges to all workers in the public and private sectors. At present, the terms and conditions of employment in the government service are governed by law, not by the relative strengths of management and labor as they hammer out mutually acceptable terms across the collective bargaining table. Paradoxically, all the representatives of "labor" and "management" in government areemployees. At the same time, everybody forms part of the "owner" of the enterprise, the sovereign people. The qualifications and eligibilities of civil servants, their appointment and promotion, standardization of salaries, disciplinary actions, fringe benefits, and retirement gratuities, among others, are governed by statutes, rules, and established principles which are the products of decades of experience, not to mention borrowings from civil service systems abroad.

The provisions of civil service law on the terms and conditions of employment including the regulation of labor-management relations in the government sector, unless Congress decides to amend or repeal them, form part of the response to any requests or demands of organized groups of government personnel. Any understanding between the top officials of a government agency and the union which represents the rank-and-file is subordinate to the law governing the particular issue or situation. We emphasize the above because in ascertaining what agency should supervise certification elections in the public sector, we limit the determination strictly to the question before us the holding of certification elections. Jurisdiction over questions which may arise after the certified bargaining representative flexes its muscles and engages in concerted action will have to await the filing of more appropriate cases and, hopefully, the enactment of applicable legislation. The Constitution provides that the rights of all workers to self-organization, collective bargaining, and peaceful concerted activities, including the right to strike, are guaranteed provided these are in accordance with law. There is reference to the need for a law governing the procedures incident to self-organization. What is the law which governs certification elections in the Court of Appeals? The Solicitor General argues that the applicable law is Executive Order No. 180 issued on June 1, 1987 entitled "Providing Guidelines for the Exercise of the Right to Organize of Government Employees; Creating a Public Sector Labor-Management Council; and for Other Purposes." The pertinent provisions of Executive Order No. 180 are: SECTION 7. Government employees' organizations shall register with the Civil Service Commission and the Department of Labor and Employment. The application shall be filed with the Bureau of Labor Relations of the Department which shall process the same in accordance with the provisions of the Labor Code of the Philippines as amended. Applications may also be filed with the Regional Offices of the Department of Labor and Employment which shall immediately transmit the said applications to the Bureau of Labor Relations within three (3) days from receipt thereof. xxx xxx xxx SECTION 8. Upon approval of the application, a registration certification shall be issued to the organization recognizing it as a legitimate employees' organization with the right to represent its members and undertake activities to further and defend its interest. The corresponding certificates of registration shall be jointly approved by the Chairman of the Civil Service Commission and Secretary of Labor and Employment. xxx xxx xxx SECTION 10. The duly registered employees' organization having the support of the majority of the employees in the appropriate organizational unit shall be designated as the sole and exclusive representative of the employees. SECTION 11. A duly registered employees' organization shall be accorded voluntary recognition upon a showing that no other employees' organization is registered or is seeking registration, based on records of the Bureau of Labor Relations, and that the said organization has the majority support of the rank-and-file employees in the organizational unit. SECTION 12. Where there are two or more duly registered employees' organizations in the appropriate organizational unit, the Bureau of Labor Relations shall, upon petition, order the conduct of a certification election and shall certify the winner as the exclusive representative of the rank-and-file employees in said organization unit. (Rollo, pp. 235-237) It is obvious that Executive Order No. 180 is at best a stop gap measure for a limited purpose. Certain provisions and procedures in the Labor Code were engrafted into a decree governing the entirely novel situation of unionism in the governmental sector. Enacted a little over one month and a half before Congress reconvened after the revolutionary government was replaced by the present government, it unfortunately lacks a legislative record, parliamentary debates, and the insights that only the elected representatives of all the people can bring to bear in the regulation of a complicated and sensitive relationship. The petitioner questions the validity of Executive Order No. 180 but limits its challenge to an alleged violation of the separation of powers doctrine. The argument is self-defeating because, followed to its logical conclusion, only this Court would have the power to supervise certification elections in the Court of Appeals. The task is not for us and we certainly have no intention to undertake it. It is the function of this Court, and we will not hesitate to exercise the power, to regulate all activities of Judges and court personnel, the Supreme Court included, to the end that the independence, effectiveness, and integrity of the judiciary as mandated by the Constitution are not impaired or compromised. It is axiomatic, for example, that any demands of court employees for higher compensation or improved facilities must be viewed in the context of the fiscal autonomy guaranteed by the Constitution to the Judiciary. (Constitution, Article VIII, Section 3). Neither DOLE, the Civil Service Commission (CSC), nor any other agency would have jurisdiction to adjudicate such claims. And since unresolved legal questions commenced elsewhere are ultimately decided by us, the final decision on all such questions would still be with this Court. All this does not mean that the separation of powers doctrine requires us to supervise the details of self-organization activities in the courts. In the same way that CSC validly conducts competitive examinations to grant requisite eligibilities to court employees, we see no constitutional objection to DOLE handling the certification process in the Court of Appeals, considering its expertise, machinery, and experience in this particular activity. Executive Order No. 180 requires organizations of government employees to register with both CSC and DOLE. This ambivalence notwithstanding, the CSC has no facilities, personnel, or experience in the conduct of certification elections. The BLR has to do the job. Executive Order No. 180 states that certificates of registration of the legitimate employee representatives must be jointly approved by the CSC Chairman and the DOLE Secretary. Executive Order No. 180 is not too helpful in determining whose opinion shall prevail if the CSC Chairman and the DOLE Secretary arrive at different conclusions. At any rate, we shall deal with that problem when it occurs. Insofar as power to call for and supervise the conduct of certification elections is concerned, we rule against the petitioner. One final point on the petitioner's objection to the jurisdiction of the BLR. ACAE cannot persuasively challenge the validity of Executive Order No. 180 because its very personality to bring this suit is premised on its having organized under the same executive order. The first paragraph of the petition reads: 1. Petitioner ASSOCIATION OF COURT OF APPEALS EMPLOYEES, ACAE for brevity, is an association of government employees duly organized and existing under and by virtue of Executive Order No. 180, duly

accredited as the exclusive representative of the rank-and-file employees of the Court of Appeals, with office address at the Court of Appeals Compound, M. Orosa Street, Ermita, Manila. (Rollo, p. 2) The petitioner argues that the respondent UCECA failed to prove that it no longer enjoys the support of the rank-and-file employees. ACAE claims that it has 395 members. It states that if the fraudulently entered names numbering 88 are all deducted from the 303 listed names for UCECA, there would actually be 215 members only left. Even assuming, therefore, that the petitioning union has satisfied the required percentage of signatures (20%) according to section of Rule VI, Rules and Regulations to Govern the Exercise of the Right of Government Employees to Self-Organization, no election can be had if the incumbent bargaining representative still has the clear majority. It is precisely because the respondent union has been questioning the majority status of the petitioner that a petition for certification election was filed. Nowhere in the rules is there a further requirement for a petitioning union to prove the lack of a majority status of the incumbent representative or who among its listed members are not actually affiliated with it. What is merely required for a petition for certification election to be granted is the filing of a verified petition which is supported by the signatures of at least twenty (20%) percent of the covered employees. It is also essential that it is not filed within one (1) year from the date a declaration of a previous final certification election result was issued. The BLR has satisfied itself that the private respondent has faithfully complied with the bare requirements for the petition. It is a wellsettled rule that "a certification proceeding is not a litigation in the sense that the term is ordinarily understood, but an investigation of a non-adversarial and fact finding character." (Associated Labor Unions (ALU) v. Ferrer-Calleja, 179 SCRA 127 [1989]; Philippine Telegraph and Telephone Corporation v. NLRC, 183 SCRA 451 [1990]) Thus, the technical rules of evidence do not apply if the decision to grant it proceeds from an examination of the sufficiency of the petition as well as a careful look into the arguments contained in position papers and other documents. The public respondent has found the petition to be sufficient in form and substance there being compliance with the twenty (20%) percent support signatures. The factual findings of the Bureau of Labor Relations on this matter appear to be supported by substantial evidence and we, accordingly, accord them great weight and respect. They shall not be disturbed by the Court in the absence of proof of reversible error. (See Philippine Airlines Employees' Association (PALEA) v. Ferrer-Calleja, 162 SCRA 426 [1988]; Airtime Specialists, Inc. v. Ferrer-Calleja, 180 SCRA 749 [1989]) On the basis of its findings, it was only proper for the public respondent to order the holding of a certification election which is mandatorily required by Section 12, Executive Order No.180: Section 12. Where there are two or more duly registered employees' organizations in the appropriate organizational unit, the Bureau of Labor Relations shall, upon petition, order the conduct of a certification election and shall certify the winner as the exclusive representative of the rank-and-file employees in said organizational unit." (Underscoring Supplied) Even assuming there were fraudulently included names or signatures, respondent UCECA would still have complied with the twenty (20%) percent requirement. The remaining membership, i.e. 215, alleged by petitioner ACAE constitutes twenty eight (28%) percent of the rank-and-file court employees. The result of the certification election shall determine who between the petitioner and the private respondent is telling the truth. As we have ruled in Philippine Airlines Employees' Association (PALEA) v. Ferrer-Calleja, (supra): Whenever there is doubt as to whether a particular union represents the majority of the rank-and-file employees, in the absence of a legal impediment, the holding of a certification election is the most dramatic method of determining the employee's choice of their bargaining representative. It is the appropriate means whereby controversies and disputes on representation may be laid to rest, by the unequivocal vote of the employees themselves. (At page 431) The petitioner likewise argues that the certification proceedings should be suspended pending its petition for the cancellation of union registration of the UCECA. The records show that UCECA was registered with the Civil Service Commission on March 16, 1990. (Rollo, p. 45) When the said union was organized, some of its members allegedly used to be members of the ACAE who tendered mass resignations on August 14, 1989 and on September 29, 1989. (Rollo, pp. 27-35) On January 30, 1990, the officers of ACAE, in Board Resolution No. 8 resolved that the resignations tendered were irregular and must be accomplished individually. (Rollo, p. 55) Thereafter, for some reasons, some of the listed members in the Registry Book of the UCECA wrote individual letters to UCECA in April, 1990 either questioning the inclusion of their names or tendering their resignations. On June 18, 1990, the petitioner herein filed its petition to cancel the union registration of UCECA. The act of the petitioner in charging commissions of fraud and misrepresentation against UCECA only after realizing the rising membership of the latter and the subsequent petition for certification election raises grave suspicions as to whether or not it wants to subvert the right of the employees to determine the proper exclusive representative or agent now that they are given two unions from which to choose. Assuming for the sake of argument that the petitioner ACAE had lawful grounds to challenge the existence of the UCECA, it should have done so, soon after the date it had notice or knowledge of the registration of the latter to protect its own interests and not at a later time when its bargaining position was already at the risk of being lost. At any rate, the Court applies the established rule correctly followed by the public respondent that an order to hold a certification election is proper despite the pendency of the petition for cancellation of the registration certificate of the respondent union. The rationale for this is that at the time the respondent union filed its petition, it still had the legal personality to perform such act absent an order directing a cancellation. It is the policy of the State in protecting the rights of labor to ensure and maintain industrial peace. For this reason, all employees of an appropriate bargaining unit shall be given an opportunity to organize and to determine which labor organization should be their exclusive bargaining representative. Hence, a petition for certification election filed by an interested labor organization shall be dealt with accordingly, with a view to attaining this objective. This is especially true when it involves the ultimate respect for and protection of the rights of government employees. In granting to employees in the civil service the right to organize, a procedure has been enacted to allow them to select what union shall be the recognized representative for all those in one agency, i.e., a certification election. (Sections 5, 6 and 12; Executive Order No. 180; Sections 3 and 4, Rule V and Rule VI, Rules and Regulations to Govern the Exercise of the Government Employees to Self-Organization) The freedom of choice given to workers is a constitutional right. Therefore, the holding of a certification election, being a statutory policy, should not be circumvented. (Associated Trade Unions-ATU v. Noriel, 89 SCRA 264 [1979]; Philippine Airlines Employees' Association (PALEA) v. Ferrer-Calleja, supra; Airtime Specialists, Inc. v. Ferrer-Calleja, supra)

WHEREFORE, the petitioner having failed to show grave abuse of discretion committed by the public respondent, the petition is hereby DISMISSED. The assailed orders of the public respondent are AFFIRMED. The Temporary Restraining Order issued on August 29, 1990 is LIFTED. SO ORDERED. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 95237-38 September 13, 1991 DAVAO CITY WATER DISTRICT, CAGAYAN DE ORO CITY WATER DISTRICT, METRO CEBU WATER DISTRICT, ZAMBOANGA CITY WATER DISTRICT, LEYTE METRO WATER DISTRICT, BUTUAN CITY WATER DISTRICT, CAMARINES NORTE WATER DISTRICT, LAGUNA WATER DISTRICT, DUMAGUETE CITY WATER DISTRICT, LA UNION WATER DISTRICT, BAYBAY WATER DISTRICT, METRO LINGAYEN WATER DISTRICT, URDANETA WATER DISTRICT, COTABATO CITY WATER DISTRICT, MARAWI WATER DISTRICT, TAGUM WATER DISTRICT, DIGOS WATER DISTRICT, BISLIG WATER DISTRICT, and MECAUAYAN WATER DISTRICT,petitioners, vs. CIVIL SERVICE COMMISSION, and COMMISSION ON AUDIT, respondents. Rodolfo S. De Jesus for petitioners. Evalyn H. Itaas-Fetalino, Rogelio C. Limare and Daisy B. Garcia-Tingzon for CSC. MEDIALDEA, J.:p Whether or not the Local Water Districts formed and created pursuant to the provisions of Presidential Decree No. 198, as amended, are government-owned or controlled corporations with original charter falling under the Civil Service Law and/or covered by the visitorial power of the Commission on Audit is the issue which the petitioners entreat this Court, en banc, to shed light on. Petitioners are among the more than five hundred (500) water districts existing throughout the country formed pursuant to the provisions of Presidential Decree No. 198, as amended by Presidential Decrees Nos. 768 and 1479, otherwise known as the "Provincial Water Utilities Act of 1973." Presidential Decree No. 198 was issued by the then President Ferdinand E. Marcos by virtue of his legislative power under Proclamation No. 1081. It authorized the different local legislative bodies to form and create their respective water districts through a resolution they will pass subject to the guidelines, rules and regulations therein laid down. The decree further created and formed the "Local Water Utilities Administration" (LWUA), a national agency attached to the National Economic and Development Authority (NEDA), and granted with regulatory power necessary to optimize public service from water utilities operations. The respondents, on the other hand, are the Civil Service Commission (CSC) and the Commission on Audit (COA), both government agencies and represented in this case by the Solicitor General. On April 17, 1989, this Court ruled in the case of Tanjay Water District v. Gabaton, et al. (G.R. No. 63742, 172 SCRA 253): Significantly, Article IX (B), Section 2(1) of the 1987 Constitution provides that the Civil Service embraces all branches, subdivisions, instrumentalities, and agencies of the government, including government-owned and controlled corporations with original charters. Inasmuch as PD No. 198, as amended, is the original charter of the petitioner, Tanjay Water District, and respondent Tarlac Water District and all water districts in the country, they come under the coverage of the Civil Service Law, rules and regulations. (Sec. 35, Art. VIII and Sec. 37, Art. IX of PD No. 807). As an offshoot of the immediately cited ruling, the CSC. issued Resolution No. 90-575, the dispositive portion of which reads: NOW THEREFORE, in view of all the foregoing, the Commission resolved, as it hereby resolves to rule that Local Water Districts, being quasi-public corporations created by law to perform public services and supply public wants, the matter of hiring and firing of its officers and employees should be governed by the Civil Service Law, rules and regulations. Henceforth, all appointments of personnel of the different local water districts in the country shall be submitted to the Commission for appropriate action. (Rollo. p. 22). However, on May 16, 1990, in G.R. No. 85760, entitled "Metro Iloilo Water District v. National Labor Relations Commission, et al.," the Third Division of this Court ruled in a minute resolution: xxx xxx xxx Considering that PD 198 is a general legislation empowering and/or authorizing government agencies and entities to create water districts, said PD 198 cannot be considered as the charter itself creating the Water District. Public respondent NLRC did not commit any grave abuse of discretion in holding that the operative act, that created the Metro Iloilo Water District was the resolution of the Sangguniang Panglunsod of Iloilo City. Hence, the employees of Water Districts are not covered by Civil Service Laws as the latter do (sic) not have original charters. In adherence to the just cited ruling, the CSC suspended the implementation of Resolution No. 90-575 by issuing Resolution No. 90770 which reads: xxx xxx xxx NOW, THEREFORE, in view of all the foregoing, the Commission resolved to rule, as it hereby rules, that the implementation of CSC. Resolution No. 575 dated June 27, 1990 be deferred in the meantime pending clarification from the Supreme Court are regards its conflicting decisions in the cases of Tanjay Water District v. Gabaton and Metro Iloilo Water District v. National Labor Relations Commission. (p. 26, Rollo) In the meanwhile, there exists a divergence of opinions between COA on one hand, and the (LWUA), on the other hand, with respect to the authority of COA to audit the different water districts. COA opined that the audit of the water districts is simply an act of discharging the visitorial power vested in them by law (letter of COA to LWUA dated August 13, 1985, pp. 29-30, Rollo).

On the other hand, LWUA maintained that only those water districts with subsidies from the government fall within the COA's jurisdiction and only to the extent of the amount of such subsidies, pursuant to the provision of the Government Auditing Code of the Phils. It is to be observed that just like the question of whether the employees of the water districts falls under the coverage of the Civil Service Law, the conflict between the water districts and the COA is also dependent on the final determination of whether or not water districts are government-owned or controlled corporations with original charter. The reason behind this is Sec. 2(1), Article IXD of the 1987 constitution which reads: Sec. 2(1) The Commission on Audit shall have the power, authority, and duty to examine, audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining to the Government, or any of its subdivisions, agencies or instrumentalities, including government-owned or controlled corporations with original charters , and on a post audit basis. (emphasis supplied) Petitioners' main argument is that they are private corporations without original charter, hence they are outside the jurisdiction of respondents CSC and COA. Reliance is made on the Metro Iloilo case which declared petitioners as quasi-public corporations created by virtue of PD 198, a general legislation which cannot be considered as the charter itself creating the water districts. Holding on to this ruling, petitioners contend that they are private corporations which are only regarded as quasi-public or semipublic because they serve public interest and convenience and that since PD 198 is a general legislation, the operative act which created a water district is not the said decree but the resolution of the sanggunian concerned. After a fair consideration of the parties' arguments coupled with a careful study of the applicable laws as well as the constitutional provisions involved, We rule against the petitioners and reiterate Our ruling in Tanjay case declaring water districts governmentowned or controlled corporations with original charter. As early as Baguio Water District v. Trajano, et al., (G.R. No. 65428, February 20, 1984, 127 SCRA 730), We already ruled that a water district is a corporation created pursuant to a special law P.D. No. 198, as amended, and as such its officers and employees are covered by the Civil Service Law. In another case (Hagonoy Water District v. NLRC, G.R. No. 81490, August 31, 1988, 165 SCRA 272), We ruled once again that local water districts are quasi-public corporations whose employees belong to the Civil Service. The Court's pronoucement in this case, as extensively quoted in the Tanjay case, supra, partly reads: "The only question here is whether or not local water districts are governmkent owned or controlled corporations whose employees are subject to the provisions of the Civil Service Law. The Labor Arbiter asserted jurisdiction over the alleged illegal dismissal of private respondent Villanueva by relying on Section 25 of Presidential decree No. 198, known as the Provincial Water Utilities Act of 1973" which went onto effect in 25 May 1973, and which provides as follows: Exemption from Civil Service. The district and its employees, being engaged in a proprietary function, are hereby exempt from the provisions of the Civil Service Law. Collective Bargaining shall be available only to personnel below supervisory levels:Provided, however, That the total of all salaries, wages emoluments, benefits or other compensation paid to all employees in any month shall not exceed fifty percent (50%) of average net monthy revenue. Said net revenue representing income from water sales and sewerage service charges, less pro-rata share of debt service and expenses for fuel or energy for pumping during the preceding fiscal year. The Labor Arbiter failed to take into accout the provisions of Presidential Decree No. 1479, which went into effect on 11 June 1978, P.D. No. 1479, wiped away Section 25 of PD 198 quoted above, and Section 26 of PD 198 was renumbered as Section 25 in the following manner: Section 26 of the same decree PD 198 is hereby amended to read as Section 25 as follows: Section 25. Authorization. The district may exercise all the powers which are expressly granted by this Title or which are necessarily implied from or incidental to the powers and purposes herein stated. For the purpose of carrying out the objectives of this Act, a district is hereby granted the power of eminent domain, the exercise thereof shall, however, be subject to review by the Administration. Thus, Section 25 of PD 198 exempting the employees of water districts from the application of the Civil Service Law was removed from the statute books: xxx xxx xxx We grant the petition for the following reasons: 1. Section 25 of PD No. 198 was repealed by Section 3 of PD No. 1479; Section 26 of PD No. 198 was amended ro read as Sec. 25 by Sec. 4 of PD No. 1479. The amendatory decree took effect on June 11, 1978. xxx xxx xxx 3. The BWD is a corporation created pursuant to a special law PD No. 198, as amended. As such its officers and employees are part of the Civil Service (Sec. 1, Art. XII-B, [1973] Constitution; PD No. 868). Ascertained from a consideration of the whole statute, PD 198 is a special law applicable only to the different water districts created pursuant thereto. In all its essential terms, it is obvious that it pertains to a special purpose which is intended to meet a particular set of conditions and cirmcumstances. The fact that said decree generally applies to all water districts throughout the country does not change the fact that PD 198 is a special law. Accordingly, this Court's resolution in Metro Iloilo case declaring PD 198 as a general legislation is hereby abandoned. By "government-owned or controlled corporation with original charter," We mean government owned or controlled corporation created by a special law and not under the Corporation Code of the Philippines. Thus, in the case of Lumanta v. NLRC (G.R. No. 82819, February 8, 1989, 170 SCRA 79, 82), We held: The Court, in National Service Corporation (NASECO) v. National Labor Relations Commission, G.R. No 69870, promulgated on 29 November 1988, quoting extensively from the deliberations of 1986 Constitutional Commission in respect of the intent and meaning of the new phrase "with original character," in effect held that government-owned and controlled corporations with original charter refer to corporations chartered by special law as distinguished from corporations organized under our general incorporation statute the

Corporations Code. In NASECO, the company involved had been organized under the general incorporation statute and was a sbusidiary of the National Investment Development Corporation (NIDC) which in turn was a subsidiary of the Philippine National Bank, a bank chartered by a special statute. Thus, government-owned or controlled corporations like NASECO are effectively, excluded from the scope of the Civil Service. (emphasis supplied) From the foregoing pronouncement, it is clear that what has been excluded from the coverage of the CSC are those corporations created pursuant to the Corporation Code. Significantly, petitioners are not created under the said code, but on the contrary, they were created pursuant to a special law and are governed primarily by its provision. No consideration may thus be given to petitioners' contention that the operative act which created the water districts are the resolutions of the respective local sanggunians and that consequently, PD 198, as amended, cannot be considered as their charter. It is to be noted that PD 198, as amended is the source of authorization and power to form and maintain a district. Section 6 of said decree provides: Sec. 6. Formation of District. This Act is the source of authorization and power to form and maintain a district. Once formed, a district is subject to the provisions of this Act and not under the jurisdiction of any political subdivision, . . . . Moreover, it must be observed that PD 198, contains all the essential terms necessary to constitute a charter creating a juridical person. For example, Section 6(a) provides for the name that will be used by a water district, thus: Sec. 6. . . . To form a district, the legislative body of any city, municipality or province shall enact a resolution containing the following: a) The name of the local water district, which shall include the name of the city, municipality, or province, or region thereof, served by said system, followed by the words "Water District." It also prescribes for the numbers and qualifications of the members of the Board of Directors: Sec. 8. Number and Qualification. The Board of Directors of a district shall be composed of five citizens of the Philippines who are of voting age and residents within the district. One member shall be a representative of civic-oriented service clubs, one member of representative of professional associations, one member a representative of business, commercial or financial organizations, one member a representative of educational institutions and one member a representative of women's organization. No public official shall serve as director. Provided, however, that if the district has availed of the financial assistance of the Administration, the Administration may appoint any of its personnel to sit in the board of directors with all the rights and privileges appertaining to a regular member for such period as the indebtedness remains unpaid in which case the board shall be composed of six members; (as amended by PDs Nos. 768 and 1479). the manner of their appointment and nominations; Sec. 9. Appointment. Board members shall be appointed by the appointing authority. Said appointments shall be made from a list of nominees, if any, submitted pursuant to Section 10. If no nominations are submitted, the appointing authority shall appoint any qualified person of the category to the vacant position; Sec.10. Nominations. On or before October 1 of each even numbered year, the secretary of the district shall contact each known organization, association, or institution being represented by the director whose term will expire on December 31 and solicit nominations from these organizations to fill the position for the ensuing term. One nomination may be submitted in writing by each such organization to the Secretary of the district on or before November 1 of such year: This list of nominees shall be transmitted by the Secretary of the district to the office of the appointing authority on or before November 15 of such year and he shall make his appointment from the list submitted on or before December 15. In the event the appointing authority fails to make his appointments on or before December 15, selection shall be made from said list of nominees by majority vote of the seated directors of the district constituting a quorum. Initial nominations for all five seats of the board shall be solicited by the legislative body or bodies at the time of adoption of the resolution forming the district. Thirty days thereafter, a list of nominees shall be submitted to the provincial governor in the event the resolution forming the district is by a provincial board, or the mayor of the city or municipality in the event the resolution forming the adoption of the district is by the city or municipal board of councilors, who shall select the initial directors therefrom within 15 days after receipt of such nominations; their terms of office: Sec. 11. Term of Office. Of the five initial directors of each newly formed district, two shall be appointed for a maximum term of two years, two for a maximum term of four years, and one for a maximum term of six years. Terms of office of all directors in a given district shall be such that the term of at least one director, but not more then two, shall expire on December 31 of each even-numbered year. Regular terms of office after the initial terms shall be for six years commencing on January 1 of odd-numbered years. Directors may be removed for cause only, subject to review and approval of the Administration; (as amended by PD 768). the manner of filling up vacancies: Sec. 12. Vacancies. In the event of a vacancy in the board of directors occurring more than six months before expiration of any director's term, the remaining directors shall within 30 days, serve notice to or request the secretary of the district for nominations and within 30 days, thereafter a list of nominees shall be submitted to the appointing authority for his appointment of a replacement director from the list of nominees. In the absence of such nominations, the appointing authority shall make such appointment. If within 30 days after submission to him of a list of nominees the appointing authority fails to make an appointment, the vacancy shall be filled from such list by a majority vote of the remaining members of the Board of Directors constituting a quorum. Vacancies occurring within the last six months of an unexpired term shall also be filled by the Board in the above manner. The director thus appointed shall serve the unexpired term only; (as amended by PD 768). and the compensation and personal liability of the members of the Board of Directors: Sec. 13. Compensation. Each director shall receive a per diem, to be determined by the board, for each meeting of the board actually attended by him, but no director shag receive per diems in any given month in

excess of the equivalent of the total per diems of four meetings in any given month. No director shall receive other compensation for services to the district. Any per diem in excess of P50.00 shall be subject to approval of the Administration (as amended by PD 768). Sec. 14. Personal Liability. No director may be held to be personally liable for any action of the district. Noteworthy, the above quoted provisions of PD 198, as amended, are similar to those which are actually contained in other corporate charters. The conclusion is inescapable that the said decree is in truth and in fact the charter of the different water districts for it clearly defines the latter's primary purpose and its basic organizational set-up. In other words, PD 198, as amended, is the very law which gives a water district juridical personality. While it is true that a resolution of a local sanggunian is still necessary for the final creation of a district, this Court is of the opinion that said resolution cannot be considered as its charter, the same being intended only to implement the provisions of said decree. In passing a resolution forming a water district, the local sanggunian is entrusted with no authority or discretion to grant a charter for the creation of a private corporation. It is merely given the authority for the formation of a water district, on a local option basis, to be exercised under and in pursuance of PD 198. More than the aforequoted provisions, what is of important interest in the case at bar is Section 3, par. (b) of the same decree which reads: Sec. 3(b). Appointing authority. The person empowered to appoint the members of the Board of Directors of a local water district, depending upon the geographic coverage and population make-up of the particular district. In the event that more than seventy-five percent of the total active water service connections of a local water districts are within the boundary of any city or municipality, the appointing authority shall be the mayor of that city or municipality, as the case may be; otherwise, the appointing authority shall be the governor of the province within which the district is located: Provided, That if the existing waterworks system in the city or municipality established as a water district under this Decree is operated and managed by the province, initial appointment shall be extended by the governor of the province. Subsequent appointments shall be as specified herein. If portions of more than one province are included within the boundary of the district, and the appointing authority is to be the governors then the power to appoint shall rotate between the governors involved with the initial appointments made by the governor in whose province the greatest number of service connections exists (as amended by PD 768). The above-quoted section definitely sets to naught petitioners' contention that they are private corporations. It is clear therefrom that the power to appoint the members who will comprise the Board of Directors belongs to the local executives of the local subdivision units where such districts are located. In contrast, the members of the Board of Directors or trustees of a private corporation are elected from among the members and stockholders thereof. It would not be amiss to emphasize at this point that a private corporation is created for the private purpose, benefit, aim and end of its members or stockholders. Necessarily, said members or stockholders should be given a free hand to choose those who will compose the governing body of their corporation. But this is not the case here and this clearly indicates that petitioners are definitely not private corporations. The foregoing disquisition notwithstanding, We are, however, not unaware of the serious repercussion this may bring to the thousands of water districts' employees throughout the country who stand to be affected because they do not have the necessary civil service eligibilities. As these employees are equally protected by the constitutional guarantee to security of tenure, We find it necessary to rule for the protection of such right which cannot be impaired by a subsequent ruling of this Court. Thus, those employees who have already acquired their permanent employment status at the time of the promulgation of this decision cannot be removed by the mere reason that they lack the necessary civil service eligibilities. ACCORDINGLY, the petition is hereby DISMISSED. Petitioners are declared "government-owned or controlled corporations with original charter" which fall under the jurisdiction of the public respondents CSC and COA. SO ORDERED. ORDER NO. 180 June 1, 1987 PROVIDING GUIDELINES FOR THE EXERCISE OF THE RIGHT TO ORGANIZE OF GOVERNMENT EMPLOYEES, CREATING A PUBLIC SECTOR LABOR-MANAGEMENT COUNCIL, AND FOR OTHER PURPOSES In accordance with the provisions of the 1987 Constitution, I, CORAZON C. AQUINO, President of the Philippines, do hereby order: I. Coverage Sec. 1. This Executive Order applies to all employees of all branches, subdivisions, instrumentalities, and agencies, of the Government, including government-owned or controlled corporations with original charters. For this purpose, employees, covered by this Executive Order shall be referred to as "government employees". Sec. 2. All government employees can form, join or assist employees' organizations of their own choosing for the furtherance and protection of their interests. They can also form, in conjunction with appropriate government authorities, labor-management committees, works councils and other forms of workers' participation schemes to achieve the same objectives. Sec. 3. High-level employees whose functions are normally considered as policy-making or managerial or whose duties are of a highly confidential nature shall not be eligible to join the organization of rank-and-file government employees. Sec. 4. The Executive Order shall not apply to the members of the Armed Forces of the Philippines, including police officers, policemen, firemen and jail guards. II. Protection of the Right to Organize Sec. 5. Government employees shall not be discriminated against in respect of their employment by reason of their membership in employees' organizations or participation in the normal activities of their organization. Their employment shall not be subject to the condition that they shall not join or shall relinquish their membership in the employees' organizations. Sec. 6. Government authorities shall not interfere in the establishment, functioning or administration of government employees' organizations through acts designed to place such organizations under the control of government authority. III. Registration of Employees' Organization Sec. 7. Government employees' organizations shall register with the Civil Service Commission and the Department of Labor and Employment. The application shall be filed with the Bureau of Labor Relations of the Department which shall process the same in accordance with the provisions of the Labor Code of the Philippines, as amended. Applications may also be filed with the Regional Offices of the Department of Labor and Employment which shall immediately transmit the said applications to the Bureau of Labor Relations within three (3) days from receipt thereof.

Sec. 8. Upon approval of the application, a registration certificate be issued to the organization recognizing it as a legitimate employees' organization with the right to represent its members and undertake activities to further and defend its interest. The corresponding certificates of registration shall be jointly approved by the Chairman of the Civil Service Commission and Secretary of Labor and Employment. IV. Sole and Exclusive Employees' Representatives Sec. 9. The appropriate organizational unit shall be the employers unit consisting of rank-and-file employees unless circumstances otherwise require. Sec. 10. The duly registered employees' organization having the support of the majority of the employees in the appropriate organizational unit shall be designated as the sole and exclusive representative of the employees. Sec. 11. A duly registered employees' organization shall be accorded voluntary recognition upon a showing that no other employees' organization is registered or is seeking registration, based on records of the Bureau of Labor Relations, and that the said organizations has the majority support of the rank-and-file employees in the organizational unit. Sec. 12. Where there are two or more duly registered employees' organizations in the appropriate organizational unit, the Bureau of Labor Relations shall, upon petition, order the conduct of a certification election and shall certify the winner as the exclusive representative of the rank-and-file employees in said organization unit. D. Terms and Conditions of Employment in Government Services Sec. 13. Terms and conditions of employment or improvements thereof, except those that are fixed by law, may be the subject of negotiations between duly recognized employees' organizations and appropriate government authorities. VI. Peaceful Concerted Activities and Strikes Sec. 14. The Civil Service laws and rules governing concerted activities and strikes in the government service shall be observed, subject to any legislation that may be enacted by Congress. VII. Public Sector Labor-Management Council Sec. 15. A Public Sector Labor Management Council, hereinafter referred to as the Council, is hereby constituted to be composed of the following: 1) Chairman, Civil Service Commission Chairman 2) Secretary, Department of Labor and Employment Vice Chairman 3) Secretary, Department of Finance Member 4) Secretary, Department of Justice Member 5) Secretary, Department of Budget and Management Member The Council shall implement and administer the provisions of this Executive Order. For this purpose, the Council shall promulgate the necessary rules and regulations to implement this Executive Order. VIII. Settlement of Disputes Sec. 16. The Civil Service and labor laws and procedures, whenever applicable, shall be followed in the resolution of complaints, grievances and cases involving government employees. In case any dispute remains unresolved after exhausting all the available remedies under existing laws and procedures, the parties may jointly refer the dispute to the Council, for appropriate action. IX. Effectivity Sec. 17. This Executive Order shall take effect immediately. Done in the City of Manila, this 1st day of June, in the year of Our Lord, nineteen hundred and eighty-seven.