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1. G.R. Nos.

L-28791-93 August 27, 1973


VALENTIN GUIJARNO, HERMINIGILDO DE JUAN, NICOLAS CASUMPANG, ELEUTERIO
BOBLO, BENITO GUAVEZ, ARSENIO JEMENA, DIMAS BOCBOCILA, NICOLAS ALAMON,
ISMAEL BILLONES, RAYMUNDO ALAMON, SANTIAGO BAÑES, SOFRONIO CONCLARA,
ADRIANO BIÑAS, AURELIO ALAMON, SIMEON BERNIL, RESURRECION DIAZ, FELICIANO
BELGIRA, FEDERICO BOSQUE, and AGOSTO PULMONES, petitioners,
vs.
COURT OF INDUSTRIAL RELATIONS, CENTRAL SANTOS LOPEZ CO., INC. and UNITED
SUGAR WORKERS UNION-ILO respondents.
Pedrito A. Gianzon for petitioners.
Luis H. Garganera for private respondents.

FERNANDO, J.:
The failure of respondent Court of Industrial Relations to order the reinstatement of petitioners to
their employment gave rise to this appeal by way of certiorari. The need for resort to this Court could
have been obviated had there been no such marked inattention to the authoritative principle that a
closed-shop provision of a collective bargaining contract is not to be applied retroactively for, at the
time the decision was rendered on November 2, 1967 and its affirmance by a resolution of
respondent Court en banc on January 22, 1968, such a doctrine was controlling and did call for
application. So it was indicated in the leading case of Confederated Sons of Labor v. Anakan
Lumber and Co.,1 a 1960 decision. As a matter of law then, the stand of petitioners is well-nigh
impregnable. It would follow that their appeal must be sustained and respondent Court must be
reversed.
Three unfair labor practice cases for unlawful dismissal allegedly based on legitimate union activity
were filed against respondent Central Santos Lopez Co., Inc. and respondent United Sugar Workers
Union-ILO, with eight of the present petitioners as complainants in the first,2 six of them in the
second,3 and five, in the third.4 There was a consolidated hearing and a consolidated decision not
only for convenience, but also due to there being hardly any difference as to the nature of the
alleged grievance and the defense of management. There was no question about the expulsion from
respondent labor union of the former. In view of a closed-shop provision in the then existing
collective bargaining contract, respondent Central Santos Lopez Co., Inc. assumed it had to dismiss
them. So it was noted in the decision of the then associate Judge Joaquin M. Salvador of
respondent Court. Thus: "The respondent company, in its answer, alleged that the only reason for
the dismissal of the complainants herein is because their said dismissal was asked by the USWU-
ILO of which union respondent company has a valid and existing collective bargaining contract with
a closed-shop provision to the effect that those laborers who are no longer members of good
standing in the union may be dismissed by the respondent company if their dismissal is sought by
the union; that respondent company has never committed acts of unfair labor practice against its
employees or workers much less against the complainants herein but that it has a solemn obligation
to comply with the terms and conditions of the contract; and that a closed-shop agreement is
sanctioned under this jurisdiction for such kind of agreement is expressly allowed under the
provisions of Republic Act 875 known as the Industrial Peace Act and the dismissal of complainants
is merely an exercise of a right allowed by said law."5 There was no question, however, as to
petitioners having been employed by such respondent Company long before the collective
bargaining contract, the first instance noted being that of Resurrecion Diaz, who was in the service
as far back as 1928;6 Santiago Bañez, as far back as 1929;7 Dimas Bocbocila, as far back as
1933;8 Simeon Bernil, as far back as 1935;9 Aurelio Alamon, as far back as 1936; 10 Valentin
Guijarno, as far back as 1937; 11 Benito Guavez, as far back as 1938; 12 Raymundo Alamon, as far
back as 1939; 13 Eleuterio Boblo, Nicolas Alamon, Sofronio Conclara, Adriano Biñas and Federico
Bosque, as far back as 1947; 14 Herminigildo de Juan and Nicolas Casumpang, as far back as
1948; 15 Agosto Pulmones, as far back as 1949; 16 and Feliciano Belgira, as far back as 1954. 17
In the decision of respondent Court, there was an acknowledgment of the prior existence of such
employment relationship. Nonetheless, the conclusion reached, both by the trial judge and then by
respondent Court en bancwas that the dismissal was justifiable under the closed-shop provision of
the collective bargaining agreement. Hence, this petition for review, which, as noted at the outset, is
impressed with merit.
1. The authoritative doctrine that a closed-shop provision in a collective bargaining agreement is not
to be given a retroactive effect so as to preclude its being applied to employees already in the
service, is traceable, as set forth in the opening paragraph of this opinion, to the leading case
of Confederated Sons of Labor v. Anakan Lumber Co. 18decided in April of 1960. In discussing the
particular stipulation in the contract, it was made clear in the opinion of the then Justice, later Chief
Justice, Concepcion: "In order that an employer may be deemed bound, under a collective
bargaining agreement, to dismiss employees for non-union membership, the stipulation to this effect
must be so clear and unequivocal as to leave no room for doubt thereon. An undertaking of this
nature is so harsh that it must be strictly construed, and doubts must be resolved against the
existence of "closed shop"." 19 Less than a year later, to be more precise, on January 28, 1961,
in Freeman Shirt Manufacturing Co., Inc. v. Court of Industrial Relations, 20 this Court, speaking
through Justice Gutierrez David, went further. Thus: "The closed-shop agreement authorized under
sec. 4, subsec. a(4) of the Industrial Peace Act above quoted should however, apply to persons to
be hired or to employees who are not yet members of any labor organization. It is inapplicable to
those already in the service who are members of another union. To hold otherwise, i. e., that the
employees in a company who are members of a minority union may be compelled to disaffiliate from
their union and join the majority or contracting union, would render nugatory the right of all
employees to self-organization and to form, join or assist labor organizations of their own choosing, a
right guaranteed by the Industrial Peace Act (sec. 3, Rep. Act No. 875) as well as by the Constitution
(Art. III, sec. 1[6])." 21 Thereafter, in Kapisanan Ng Mga Mangagagawa Ng Alak v. Hamilton Distillery
Company, 22 this Court, again speaking through the former, minced no words in characterizing a
stipulation that would allow a dismissal of those already employed as "null and void." 23 In 1967, this
time already elevated to his position as head of the Court, Chief Justice Concepcion in Salunga v.
Court of Industrial Relations 24did stress that while "generally, a state may not compel ordinary
voluntary associations to admit thereto any given individual, because membership therein may be
accorded or withheld as a matter of privilege, the rule is qualified in respect of labor unions holding a
monopoly in the supply of labor, either in a given locality, or as regards a particular employer with
which it has a closed-shop agreement. ... ." 25 He continued: "Consequently, it is well settled that
such unions are not entitled to arbitrarily exclude qualified applicants for membership, and a closed-
shop provision would not justify the employer in discharging, or a union in insisting upon the
discharge of, an employee whom the union thus refuses to admit to membership, without any
reasonable ground therefor. Needless to say, if said unions may be compelled to
admit new members, who have the requisite qualifications, with more reason may the law and the
courts exercise the coercive power when the employee involved is a long standing union member,
who, owing to provocations of union officers, was impelled to tender his resignation, which he
forthwith withdrew or revoked. Surely, he may, at least, invoke the rights of those who seek
admission for the first time, and can not arbitrarily be denied re-admission." 26
Nothing can be clearer therefore than that this Court looks with disfavor on a provision of this
character being utilized as an excuse for the termination of employment. To complete the picture,
mention should be made of Elegance, Inc. v. Court of Industrial Relations, 27 where this Court,
through the present Acting Chief Justice Makalintal, harked back to Freeman Shirt Manufacturing
Co., Inc. v. Court of Industrial Relations 28 to stress the point of non-retroactivity. What should be
immediately apparent, but unfortunately respondent Court seemed to have closed its eyes to it, is
that when the decision was rendered by the trial judge on November 2, 1967 and affirmed with the
Court sitting en banc on January 22, 1968, the controlling doctrine to which deference ought to have
been paid was that petitioners should not have been dismissed.
2. Nor is there anything unusual in this Court's adherence with remarkable consistency to such a
basic doctrine. The obligation was categorically imposed on the State, under the 1935 Constitution,
to "afford protection to labor, especially to working women and minors ... ." 29 That is to carry out the
purpose implicit in one of the five declared principles, namely, the promotion of social justice "to
insure the well-being and economic security of all the people ... ." 30 It is then the individual
employee, as a separate, finite human being, with his problems and his needs, who must be
attended to. He is the beneficiary of the concern thus made manifest by the fundamental law. The
present Constitution is even more explicit on the matter. The principle that the State shall promote
social justice is categorically based on the concept of insuring "the dignity, welfare, and security of all
the people." 31 Insofar as the provision on the State affording protection to labor is concerned, it is
further required to "promote full employment and equality in employment, ensure equal work
opportunities regardless of sex, race, or creed, and regulate the relations between workers and
employers. The State shall assure the rights of workers to self-organization, collective bargaining,
security of tenure, and just and humane conditions of work." 32 Where does that leave a labor union,
it may be asked. Correctly understood, it is nothing but the means of assuring that such fundamental
objectives would be achieved. It is the instrumentality through which an individual laborer who is
helpless as against a powerful employer may, through concerted effort and activity, achieve the goal
of economic well-being. That is the philosophy underlying the Industrial Peace Act. 33 For, rightly
has it been said that workers unorganized are weak; workers organized are strong. Necessarily then,
they join labor unions. To further increase the effectiveness of such organizations, a closed-shop
has been allowed. 34 It could happen, though, that such a stipulation which assures further weight to
a labor union at the bargaining table could be utilized against minority groups or individual members
thereof. There are indications that such a deplorable situation did so manifest itself here.
Respondent Court, it would appear, was not sufficiently alert to such a danger. What is worse, it paid
no heed to the controlling doctrine which is merely a recognition of a basic fact in life, namely, that
power in a collectivity could be the means of crushing opposition and stifling the voices of those who
are in dissent. The right to join others of like persuasion is indeed valuable. An individual by himself
may feel inadequate to meet the exigencies of life or even to express his personality without the right
to association being vitalized. It could happen though that whatever group may be in control of the
organization may simply ignore his most-cherished desires and treat him as if he counts for naught.
The antagonism between him and the group becomes marked. Dissatisfaction if given expression
may be labeled disloyalty. In the labor field, the union under such circumstances may no longer be a
haven of refuge, but indeed as much of a potential foe as management itself. Precisely with the
Anakan doctrine, such an undesirable eventuality has been sought to be minimized, if not entirely
avoided. There is no justification then, both as a matter of precedent and as a matter of principle, for
the decision reached by respondent Court.
3. Now as to the remedy to which petitioners are entitled. Clearly, they should be reinstated with
back pay. In Salunga v. Court of Industrial Relations, 35 reinstatement was ordered but it was the
labor union that was held liable for the back wages. That is a rule dictated by fairness because
management, in this case respondent Central Santos Lopez Company, Inc., would not have taken
the action it did had it not been for the insistence of the labor union seeking to give effect to its
interpretation of a closed-shop provision. As we decided then, so do we now. These words of the
Chief Justice in Salunga carry persuasion: "Just the same, having been denied re-admission into the
Union and having been dismissed from the service owing to an unfair labor practice on the part of
the Union, petitioner is entitled to reinstatement as member of the Union and to his former or
substantially equivalent position in the Company, without prejudice to his seniority and/or rights and
privileges, and with back pay, which back pay shall be borne exclusively by the Union. In the
exercise of its sound judgment and discretion, the lower court may, however, take such measures as
it may deem best, including the power to authorize the Company to make deductions, for petitioner's
benefit, from the sums due to the Union, by way of check off or otherwise, with a view to executing
this decision, and, at the same time effectuating the purposes of the Industrial Peace Act." 36
WHEREFORE, the decision of respondent Court of November 2, 1967 and the resolution of
respondent Court en banc sustaining the same of January 2, 1968 are hereby reversed. Respondent
Central Lopez Co., Inc. is hereby ordered to reinstate petitioners to the positions they occupied prior
to their illegal dismissal, with back wages to be paid by respondent United Sugar Workers Union-
ILO, deducting therefrom whatever wages they may have earned in the meanwhile. With costs
against private respondents.
Makalintal, Actg. C.J., Castro, Teehankee, Makasiar, Antonio and Esguerra, JJ., concur.
Barredo, J., took no part.
Zaldivar, J., is on leave.

Footnotes
1 107 Phil. 915.
2 The eight complainants in Case No. 81-ULP-Iloilo now L-28791, are the following:
Valentin Guijarno, Herminigildo de Juan, Nicolas Casumpang, Eleuterio Boblo,
Benito Guavez, Arsenio Jemena, Dimas Bocbocila and Nicolas Alamon.
3 The six complainants in Case No. 88-ULP-Iloilo, now L-28792, are the following:
Ismael Billones, Raymundo Alamon, Santiago Bañes, Sofronio Conclara, Adriano
Biñas and Aurelio Alamon.
4 The five complainants in Case No. 89-ULP-Iloilo, now L-28793, are the following:
Simeon Bernil, Resurrecion Diaz, Feliciano Belgira, Federico Bosque and Agosto
Pulmones.
5 Decision, Annex A of Petition, 34.
6 Ibid, 27.
7 Ibid, 19.
8 Ibid, 11.
9 Ibid, 20.
10 Ibid, 18.
11 Ibid, 5.
12 Ibid, 6.
13 Ibid, 15.
14 Ibid, 8, 12, 13, 17 and 24.
15 Ibid, 4 and 12.
16 Ibid, 25.
17 Ibid, 23. Petitioner Arsenio Jemena did not specify his date of employment, and
petitioner Ismael Billones was not presented as a witness, but it would appear that no
question as to their having been in the employment at the time of the collective
bargaining contract could seriously be raised.
18 107 Phil. 915.
19 Ibid, 919.
20 L-16561, January 28, 1961, 1 SCRA 353.
21 Ibid, 356.
22 L-18112, October 30, 1962, 6 SCRA 367.
23 Ibid, 372. Cf. Findlay Millar Timber Co. v. Phil. Land-Air-Sea Labor Union, L-
18217 and L-18222, September 29, 1962, 6 SCRA 227; United States Lines Co. v.
Associated Watchmen & Security Union, L-15508, June 29, 1963, 8 SCRA 326;
National Brewery & Allied Industries Labor Union of the Phil. v. San Miguel Brewery,
Inc., L-18170, August 31, 1963, 8 SCRA 805; Phil. Steam Navigation Co. v. Phil.
Marine Officers Guild, L-20667 and L-20669, October 29, 1965, 15 SCRA 174; Rizal
Labor Union v. Rizal Cement Co., Inc., L-19779, July 30, 1966, 17 SCRA 858.
24 L-22456, September 27, 1967, 21 SCRA 216.
25 Ibid, 222-223.
26 Ibid, 223. Cf. Seno v. Mendoza, L-20565, November 29, 1967, 21 SCRA 1124.
27 L-24096, April 20, 1971, 38 SCRA 382.
28 L-16561, January 28, 1961, 1 SCRA 353.
29 Art. XIV, Sec. 6.
30 Art. II, Sec. 5 of the 1935 Constitution.
31 Art. II, Sec. 6 of the revised Charter reads in full: "The State shall promote social
justice to ensure the dignity, welfare, and security of all the people. Towards this end,
the State shall regulate the acquisition, ownership, use, enjoyment, and disposition of
private property, and equitably diffuse property ownership and profits."
32 Art. II, Sec. 9 of the revised Constitution.
33 Republic Act No. 875 (1953).
34 A proviso in Sec. 4, par. (a)(4) reads as follows: "That nothing in this Act or in any
other Act or statute of the Republic of the Philippines shall preclude an employer
from making an agreement with a labor organization to require as a condition of
employment membership therein, if such labor organization is the representative of
the employees as provided in Section twelve, but such agreement shall not cover
members of any religious sects which prohibit affiliation of their members in any such
labor organization." As amended by Republic Act No. 3350 (1961).
35 L-22456, September 27, 1967, 21 SCRA 216.
36 Ibid, 225..
________________________________________________________________________________
2. ELECTROMAT MANUFACTURING and G. R. No. 172699
RECORDING CORPORATION,
Petitioner,

- versus -

Present:

CARPIO, J.,
HON. CIRIACO LAGUNZAD, in his capacity as Chairperson,
Regional Director, National Capital Region,
Department of Labor and Employment; LEONARDO-DE CASTRO,*
and HON. HANS LEO J. CACDAC, in his BRION,
capacity as Director of Bureau of Labor
Relations, Department of Labor and PERALTA,** and
Employment, PEREZ, JJ.
Public Respondents.

Promulgated:
NAGKAKAISANG SAMAHAN NG
MANGGAGAWA NG ELECTROMAT-WASTO, July 27, 2011
Private Respondent.
x----------------------------------------------------------------------------------------x

DECISION
BRION, J.:

We resolve the present petition for review on certiorari[1] assailing the decision[2] and the
resolution[3] of the Court of Appeals (CA) dated February 3, 2006 and May 11, 2006, respectively,
rendered in CA G.R. SP No. 83847.

The Antecedents

The private respondent Nagkakaisang Samahan ng Manggagawa ng Electromat-Wasto (union), a


charter affiliate of the Workers Advocates for Struggle, Transformation and Organization (WASTO),
applied for registration with the Bureau of Labor Relations (BLR). Supporting the application were
the following documents: (1) copies of its ratified constitution and by-laws (CBL); (2) minutes of the
CBLs adoption and ratification; (3) minutes of the organizational meetings; (4) names and addresses
of the union officers; (5) list of union members; (6) list of rank-and-file employees in the company; (7)
certification of non-existence of a collective bargaining agreement (CBA) in the company; (8)
resolution of affiliation with WASTO, a labor federation; (9) WASTOs resolution of acceptance; (10)
Charter Certificate; and (11) Verification under oath.

The BLR thereafter issued the union a Certification of Creation of Local Chapter (equivalent to the
certificate of registration of an independent union), pursuant to Department Order No. (D.O.) 40-03.[4]
On October 1, 2003, the petitioner Electromat Manufacturing and Recording Corporation (company)
filed a petition for cancellation of the unions registration certificate, for the unions failure to comply
with Article 234 of the Labor Code. It argued that D.O. 40-03 is an unconstitutional diminution of the
Labor Codes union registration requirements under Article 234.

On November 27, 2003, Acting Director Ciriaco A. Lagunzad of the Department of Labor and
Employment (DOLE)-National Capital Region dismissed the petition.[5]

In the appeal by the company, BLR Director Hans Leo J. Cacdac affirmed the dismissal.[6] The
company thereafter sought relief from the CA through a petition for certiorari, contending that the
BLR committed grave abuse of discretion in affirming the unions registration despite its non-
compliance with the requirements for registration under Article 234 of the Labor Code. It assailed the
validity of D.O. 40-03 which amended the rules of Book V (Labor Relations) of the Labor Code. It
posited that the BLR should have strictly adhered to the union registration requirements under the
Labor Code, instead of relying on D.O. 40-03 which it considered as an invalid amendment of the
law since it reduced the requirements under Article 234 of the Labor Code. It maintained that the
BLR should not have granted the unions registration through the issuance of a Certification of
Creation of Local Chapter since the union submitted only the Charter Certificate issued to it by
WASTO.
The CA Decision
In its decision rendered on February 3, 2006,[7] the CA Tenth Division dismissed the petition and
affirmed the assailed BLR ruling. It brushed aside the companys objection to D.O. 40-03, and its
submission that D.O. 40-03 removed the safety measures against the commission of fraud in the
registration of unions. It noted that there are sufficient safeguards found in other provisions of the
Labor Code to prevent the same.[8] In any event, it pointed out that D.O. 40-03 was issued by the
DOLE pursuant to its rule-making power under the law.[9]
The company moved for reconsideration, arguing that the unions registration certificate was invalid
as there was no showing that WASTO, the labor federation to which the union is affiliated, had at
least ten (10) locals or chapters as required by D.O. 40-03. The CA denied the motion,[10] holding
that no such requirement is found under the rules. Hence, the present petition.
The Case for the Petitioner
The company seeks a reversal of the CA rulings, through its submissions (the petition [11] and the
memorandum[12]), on the ground that the CA seriously erred and gravely abused its discretion in
affirming the registration of the union in accordance with D.O. 40-03. Specifically, it assails as
unconstitutional Section 2(E), Rule III of D.O. 40-03 which provides:
The report of creation of a chartered local shall be accompanied by a charter
certificate issued by the federation or national union indicating the creation or
establishment of the chartered local.
The company points out that D.O. 40-03 delisted some of the requirements under Article 234 of the
Labor Code for the registration of a local chapter. Article 234 states:
ART. 234. Requirements of Registration.[13] Any applicant labor organization,
association or group of unions or workers shall acquire legal personality and shall be
entitled to the rights and privileges granted by law to legitimate labor organizations
upon issuance of the certificate of registration based on the following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address
of the labor organization, the minutes of the organizational
meetings and the list of the workers who participated in such
meetings;
(c) The names of all its members comprising at least twenty percent
(20%) of all the employees in the bargaining unit where it seeks
to operate;
(d) If the applicant union has been in existence for one or more
years, copies of its annual financial reports; and
(e) Four (4) copies of the constitution and by-laws of the applicant
union, minutes of its adoption or ratification, and the list of the
members who participated in it.
The company contends that the enumeration of the requirements for union registration under the law
is exclusive and should not be diminished, and that the same requirements should apply to all labor
unions whether they be independent labor organizations, federations or local chapters. It adds that in
making a different rule for local chapters, D.O. 40-03 expanded or amended Article 234 of the Labor
Code, resulting in an invalid exercise by the DOLE of its delegated rule-making power. It thus posits
that the unions certificate of registration which was issued in violation of the letters of Article 234 of
the Labor Code[14] is void and of no effect, and that the CA committed grave abuse of discretion
when it affirmed the unions existence.
The Case for the Union
In a Resolution dated January 16, 2008,[15] the Court directed union board member Alex Espejo, in
lieu of union President Roberto Beltran whose present address could not be verified, to furnish the
Court a copy of the union comment/opposition to the companys motion for reconsideration dated
February 22, 2006 in CA G.R. SP No. 83847, which the union adopted as its comment on the
present petition.[16]
Through this comment/opposition,[17] the union submits that the company failed to show that
the CA committed reversible error in upholding the registration certificate issued to it by the BLR.
Citing Castillo v. National Labor Relations Commission,[18] it stressed that the issuance of the
certificate by the DOLE agencies was supported by substantial evidence, which should be entitled to
great respect and even finality.
The Courts Ruling
We resolve the core issue of whether D.O. 40-03 is a valid exercise of the rule-making
power of the DOLE.
We rule in the affirmative. Earlier in Progressive Development Corporation v. Secretary,
Department of Labor and Employment,[19] the Court encountered a similar question on the validity of
the old Section 3, Rule II, Book V of the Rules Implementing the Labor Code[20] which stated:
Union affiliation; direct membership with a national union. - The affiliate of a
labor federation or national union may be a local or chapter thereof or an
independently registered union.
a) The labor federation or national union concerned shall issue a charter
certificate indicating the creation or establishment of a local or chapter,
copy of which shall be submitted to the Bureau of Labor Relations within
thirty (30) days from issuance of such charter certificate.
xxxx
e) The local or chapter of a labor federation or national union shall have and
maintain a constitution and by-laws, set of officers and books of
accounts. For reporting purposes, the procedure governing the reporting
of independently registered unions, federations or national unions shall
be observed.
Interpreting these provisions of the old rules, the Court said that by force of law,[21] the local
or chapter of a labor federation or national union becomes a legitimate labor organization upon
compliance with Section 3, Rule II, Book V of the Rules Implementing the Labor Code, the only
requirement being the submission of the charter certificate to the BLR. Further, the Court noted that
Section 3 omitted several requirements which are otherwise required for union registration, as
follows:
1) The requirement that the application for registration must be signed by
at least 20% of the employees in the appropriate bargaining unit;
2) The submission of officers addresses, principal address of the labor
organization, the minutes of organization meetings and the list of the
workers who participated in such meetings;
3) The submission of the minutes of the adoption or ratification of the
constitution and by-laws and the list of the members who participated in
it.[22]
Notwithstanding these omissions, the Court upheld the governments implementing policy
expressed in the old rules when it declared in Progressive Development
Undoubtedly, the intent of the law in imposing lesser requirements in the case of a
branch or local of a registered federation or national union is to encourage the
affiliation of a local union with a federation or national union in order to increase the
local unions bargaining powers respecting terms and conditions of labor.[23]
It was this same Section 3 of the old rules that D.O. 40-03 fine-tuned when the DOLE amended the
rules on Book V of the Labor Code, thereby modifying the governments implementing policy on the
registration of locals or chapters of labor federations or national unions. The company now assails
this particular amendment as an invalid exercise of the DOLEs rule-making power.
We disagree. As in the case of D.O. 9 (which introduced the above-cited Section 3 of the old rules)
in Progressive Development, D.O. 40-03 represents an expression of the governments implementing
policy on trade unionism. It builds upon the old rules by further simplifying the requirements for the
establishment of locals or chapters. As in D.O. 9, we see nothing contrary to the law or the
Constitution in the adoption by the Secretary of Labor and Employment of D.O. 40-03 as this
department order is consistent with the intent of the government to encourage the affiliation of a local
union with a federation or national union to enhance the locals bargaining power. If changes were
made at all, these were those made to recognize the distinctions made in the law itself between
federations and their local chapters, and independent unions; local chapters seemingly have lesser
requirements because they and their members are deemed to be direct members of the federation to
which they are affiliated, which federations are the ones subject to the strict registration requirements
of the law.
In any case, the local union in the present case has more than satisfied the requirements the
petitioner complains about; specifically, the union has submitted: (1) copies of the ratified CBL; (2)
the minutes of the CBLs adoption and ratification; (3) the minutes of the organizational meetings; (4)
the names and addresses of the union officers; (5) the list of union members; (6) the list of rank-and-
file employees in the company; (7) a certification of non-existence of a CBA in the company; (8) the
resolution of affiliation with WASTO and the latters acceptance; and (9) their Charter Certificate.
These submissions were properly verified as required by the rules. In sum, the petitioner has no
factual basis for questioning the unions registration, as even the requirements for registration as an
independent local have been substantially complied with.
We, thus, find no compelling justification to nullify D.O. 40-03. Significantly, the Court
declared in another case:[24]

Pagpalain cannot also allege that Department Order No. 9 is violative of public
policy. x x x [T]he sole function of our courts is to apply or interpret the laws. It does
not formulate public policy, which is the province of the legislative and executive
branches of government. It cannot, thus, be said that the principles laid down by the
Court in Progressive and Protection Technology constitute public policy on the
matter. They do, however, constitute the Courts interpretation of public policy, as
formulated by the executive department through its promulgation of rules
implementing the Labor Code. However, this public policy has itself been changed by
the executive department, through the amendments introduced in Book V of the
Omnibus Rules by Department Order No. 9. It is not for us to question this change in
policy, it being a well-established principle beyond question that it is not within the
province of the courts to pass judgments upon the policy of legislative or executive
action.

This statement is as true then as it is now.


In light of the foregoing, we find no merit in the appeal.
WHEREFORE, premises considered, we DENY the petition for lack of merit. The assailed decision
and resolution of the Court of Appeals are AFFIRMED. Costs against the petitioner Electromat
Manufacturing and Recording Corporation.

SO ORDERED.
3. TAKATA (PHILIPPINES) CORPORATION, Petitioner, v. BUREAU OF LABOR RELATIONS
AND SAMAHANG LAKAS MANGGAGAWA NG TAKATA (SALAMAT), Respondents.
DECISION
PERALTA, J.:
Before us is a petition for review on certiorari filed by petitioner TAKATA Philippines Corporation
assailing the Decision1 dated December 22, 2010 and the Resolution2 dated March 28, 2011 of the
Court of Appeals in CA-G.R. SP No. 112406.

On July 7, 2009, petitioner filed with the Department of Labor and Employment (DOLE) Regional
Office a Petition3 for Cancellation of the Certificate of Union Registration of Respondent Samahang
Lakas Manggagawa ng Takata (SALAMAT) on the ground that the latter is guilty of
misrepresentation, false statement and fraud with respect to the number of those who participated in
the organizational meeting, the adoption and ratification of its Constitution and By-Laws, and in the
election of its officers. It contended that in the May 1, 2009 organizational meeting of respondent,
only 68 attendees signed the attendance sheet, and which number comprised only 17% of the total
number of the 396 regular rank- and-file employees which respondent sought to represent, and
hence, respondent failed to comply with the 20% minimum membership requirement. Petitioner
insisted that the document “Pangalan ng mga Kasapi ng Unyon” bore no signatures of the alleged
119 union members; and that employees were not given sufficient information on the documents
they signed; that the document “Sama-Samang Pahayag ng Pagsapi” was not submitted at the time
of the filing of respondent's application for union registration; that the 119 union members were
actually only 117; and, that the total number of petitioner's employees as of May 1, 2009 was 470,
and not 396 as respondent claimed.4cralawred

Respondent denied the charge and claimed that the 119 union members were more than the 20%
requirement for union registration. The document “Sama-Samang Pahayag ng Pagsapi sa Unyon”
which it presented in its petition for certification election5 supported their claim of 119 members.
Respondent also contended that petitioner was estopped from assailing its legal personality as it
agreed to a certification election and actively participated in the pre-election conference of the
certification election proceedings.6Respondent argued that the union members were informed of the
contents of the documents they signed and that the 68 attendees to the organizational meeting
constituted more than 50% of the total union membership, hence, a quorum existed for the conduct
of the said meeting.7cralawred

On August 27, 2009, DOLE Regional Director, Atty. Ricardo S. Martinez, Sr., issued a
Decision8 granting the petition for cancellation of respondent's certificate of registration, the
dispositive portion of which reads:ChanRoblesVirtualawlibrary
WHEREFORE, from the foregoing considerations, the petition is hereby GRANTED. Accordingly, the
respondent Union Certificate of Registration No. RO400A-2009-05-01-UR-LAG, dated May 19, 2009
is hereby REVOCKED (sic) and /or CANCELLED pursuant to paragraph (a) & (b), Section 3, Rule
XIV of Department Order No. 40-03 and the Samahang Lakas ng Manggagawa ng TAKATA
(SALAMAT) is hereby delisted from the roll of legitimate labor organization of this office.9

In revoking respondent's certificate of registration, the Regional Director found that the 68
employees who attended the organizational meeting was obviously less than 20% of the total
number of 396 regular rank-and-file employees which respondent sought to represent, hence, short
of the union registration requirement; that the attendance sheet which contained the signatures and
names of the union members totalling to 68 contradicted the list of names stated in the document
denominated as “Pangalan ng mga Kasapi ng Unyon.” The document “Sama-Samang Pahayag ng
Pagsapi” was not attached to the application for registration as it was only submitted in the petition
for certification election filed by respondent at a later date. The Regional Director also found that the
proceedings in the cancellation of registration and certification elections are two different and entirely
separate and independent proceedings which were not dependent on each other.

Dissatisfied, respondent, through Bukluran ng Manggagawang Pilipino (BMP) Paralegal Officer,


Domingo P. Mole, filed a Notice and Memorandum of Appeal10 with the Bureau of Labor Relations
(BLR). However, on September 28, 2009, respondent, through its counsels, Attys. Napoleon C.
Banzuela, Jr. and Jehn Louie W. Velandrez, filed an Appeal Memorandum with Formal Entry of
Appearance11 to the Office of the DOLE Secretary, which the latter eventually referred to the BLR.
Petitioner filed an Opposition to the Appeals12praying for their dismissal on the ground of forum
shopping as respondent filed two separate appeals in two separate venues; and for failing to avail of
the correct remedy within the period; and that the certificate of registration was tainted with fraud,
misrepresentation and falsification.

In its Answer,13 respondent claimed that there was no forum shopping as BMP's Paralegal Officer
was no longer authorized to file an appeal on behalf of respondent as the latter's link with BMP was
already terminated and only the Union President was authorized to file the appeal; and that it
complied with Department Order No. 40-03.

On December 9, 2009, after considering respondent's Appeal Memorandum with Formal Entry of
Appearance and petitioner's Answer, the BLR rendered its Decision14 reversing the Order of the
Regional Director, the decretal portion of which reads:ChanRoblesVirtualawlibrary
WHEREFORE, the appeal is hereby GRANTED. The Decision of Regional Director Ricardo S.
Martinez, Sr., dated 27 August 2009, is hereby REVERSED and SET ASIDE.

Accordingly, Samahang Lakas Manggagawa ng TAKATA (SALAMAT) shall remain in the roster of
labor organizations.15

In reversing, the BLR found that petitioner failed to prove that respondent deliberately and
maliciously misrepresented the number of rank-and-file employees. It pointed out petitioner's basis
for the alleged non-compliance with the minimum membership requirement for registration was the
attendance of 68 members to the May 1, 2009 organizational meeting supposedly comprising only
17% of the total 396 regular rank-and-file employees. However, the BLR found that the list of
employees who participated in the organizational meeting was a separate and distinct requirement
from the list of the names of members comprising at least 20% of the employees in the bargaining
unit; and that there was no requirement for signatures opposite the names of the union members;
and there was no evidence showing that the employees assailed their inclusion in the list of union
members.

Petitioner filed a motion for reconsideration, which was denied by the BLR in a Resolution16 dated
January 8, 2010.

Undaunted, petitioner went to the CA via a petition for certiorari under Rule 65.

After the submission of the parties' respective pleadings, the case was submitted for decision.

On December 22, 2010, the CA rendered its assailed decision which denied the petition and
affirmed the decision of the BLR. Petitioner's motion for reconsideration was denied in a Resolution
dated March 29, 2011.

Hence this petition for review filed by petitioner raising the following issues, to
wit:ChanRoblesVirtualawlibrary
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND SERIOUS ERROR IN
AFFIRMING THE DECISION OF PUBLIC RESPONDENT BLR AND NOT FINDING ANY
VIOLATION BY SAMAHANG LAKAS MANGGAGAWA SA TAKATA (SALAMAT ) OF THE RULE ON
FORUM SHOPPING IN THE FILING OF TWO VERIFIED APPEALS FOR AND ITS BEHALF. BOTH
OF THE APPEALS SHOULD HAVE BEEN DISMISSED OUTRIGHT BY PUBLIC RESPONDENT
BLR, ON GROUND OF FORUM SHOPPING.

THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT THE


APPLICATION FOR REGISTRATION OF SAMAHANG LAKAS MANGGAGAWA SA TAKATA
(SALAMAT) WAS COMPLIANT WITH THE LAW. CONSIDERING THE CIRCUMSTANCES
OBTAINING IN THE REGISTRATION OF SALAMAT, IT IS CLEAR THAT THE SAME IS TAINTED
WITH FRAUD, MISREPRESENTATION AND FALSIFICATION. SALAMAT DID NOT POSSESS
THE REQUIRED NUMBER OF MEMBERS AT THE TIME OF FILING OF ITS APPLICATION FOR
REGISTRATION, HENCE, IT SHOULD BE HELD GUILTY OF MISREPRESENTATION , AND
FALSE STATEMENTS AND FRAUD IN CONNECTION THEREWITH.17

Anent the first issue, petitioner contends that respondent had filed two separate appeals with two
different representations at two different venues, in violation of the rule on multiplicity of suits and
forum shopping, and instead of dismissing both appeals, the appeal erroneously filed before the
Labor Secretary was the one held validly filed, entertained and even granted; that it is not within the
discretion of BLR to choose which between the two appeals should be entertained, as it is the fact of
the filing of the two appeals that is being prohibited and not who among the representatives therein
possessed the authority.

We are not persuaded.

We find no error committed by the CA in finding that respondent committed no forum shopping. As
the CA correctly concluded, to wit:ChanRoblesVirtualawlibrary
It is undisputed that BMP Paralegal Officer Domingo P. Mole was no longer authorized to file an
appeal on behalf of union SALAMAT and that BMP was duly informed that its services was already
terminated. SALAMAT even submitted before the BLR its “Resolusyon Blg. 01-2009” terminating the
services of BMP and revoking the representation of Mr. Domingo Mole in any of the pending cases
being handled by him on behalf of the union. So, considering that BMP Paralegal Officer Domingo P.
Mole was no longer authorized to file an appeal when it filed the Notice and Memorandum of Appeal
to DOLE Regional Office No. IV-A, the same can no longer be treated as an appeal filed by union
SALAMAT. Hence, there is no forum shopping to speak of in this case as only the Appeal
Memorandum with Formal Entry of Appearance filed by Atty. Napoleon C. Banzuela, Jr. and Atty.
Jehn Louie W. Velandrez is sanctioned by SALAMAT.18

Since Mole's appeal filed with the BLR was not specifically authorized by respondent, such appeal is
considered to have not been filed at all. It has been held that “if a complaint is filed for and in behalf
of the plaintiff who is not authorized to do so, the complaint is not deemed filed. An unauthorized
complaint does not produce any legal effect.”19cralawred

Respondent through its authorized representative filed its Appeal Memorandum with Formal Entry of
Appearance before the Labor Secretary, and not with the BLR. As the appeal emanated from the
petition for cancellation of certificate of registration filed with the Regional Office, the decision
canceling the registration is appealable to the BLR, and not with the Labor Secretary. However,
since the Labor Secretary motu propio referred the appeal with the BLR, the latter can now act on it.
Considering that Mole's appeal with the BLR was not deemed filed, respondent’s appeal, through
Banzuela and Associates, which the Labor Secretary referred to the BLR was the only existing
appeal with the BLR for resolution. There is, therefore, no merit to petitioner's claim that BLR chose
the appeal of Banzuela and Associates over Mole's appeal.

The case of Abbott Laboratories Philippines, Inc. v. Abbott Laboratories Employees Union20 cited by
petitioner is not at all applicable in this case as the issue therein is the authority of the Labor
Secretary to review the decision of the Bureau of Labor Relations rendered in the exercise of its
appellate jurisdiction over decision of the Regional Director in cases involving cancellations of
certificate of registration of labor unions. We found no grave abuse of discretion committed by the
Secretary of Labor in not acting on therein petitioner's appeal. The decision of the Bureau of Labor
Relations on cases brought before it on appeal from the Regional Director are final and executory.
Hence, the remedy of the aggrieved party is to seasonably avail of the special civil action
of certiorari under Rule 65 and the Rules of Court. In this case, after the Labor Secretary motu
propio referred respondent's appeal filed with it to the BLR which rendered its decision reversing the
Regional Director, petitioner went directly to the CA via a petition for certiorari under Rule 65.

As to the second issue, petitioner seeks the cancellation of respondent's registration on grounds of
fraud and misrepresentation bearing on the minimum requirement of the law as to its membership,
considering the big disparity in numbers, between the organizational meeting and the list of
members, and so misleading the BLR that it obtained the minimum required number of employees
for purposes of organization and registration.

We find no merit in the arguments.

Art. 234 of the Labor Code provides:ChanRoblesVirtualawlibrary


ART. 234. Requirements of Registration. - A federation, national union or industry or trade union
center or an independent union shall acquire legal personality and shall be entitled to the rights and
privileges granted by law to legitimate labor organizations upon issuance of the certificate of
registration based on the following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor organization, the
minutes of the organizational meetings and the list of the workers who participated in such meetings;
(c) In case the applicant is an independent union, the names of all its members comprising at least
twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies of its annual financial
reports; and
(e) Four copies of the constitution and by-laws of the applicant union, minutes of its adoption or
ratification, and the list of the members who participated in it."

And after the issuance of the certificate of registration, the labor organization's registration could be
assailed directly through cancellation of registration proceedings in accordance with Articles 238 and
239 of the Labor Code. And the cancellation of union certificate of registration and the grounds
thereof are as follows:ChanRoblesVirtualawlibrary
ART. 238. Cancellation of Registration. - The certificate of registration of any legitimate labor
organization, whether national or local, may be cancelled by the Bureau, after due hearing, only on
the grounds specified in Article 239 hereof.

ART. 239. Grounds for Cancellation of Union Registration. - The following may constitute grounds for
cancellation of union registration:
(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the
constitution and by-laws or amendments thereto, the minutes of ratification, and the list of members
who took part in the ratification;
(b) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of
the election of officers, and the list of voters;
(c) Voluntary dissolution by the members.

Petitioner's charge that respondent committed misrepresentation and fraud in securing its certificate
of registration is a serious charge and must be carefully evaluated. Allegations thereof should be
compounded with supporting circumstances and evidence.21 We find no evidence on record to
support petitioner's accusation.

Petitioner's allegation of misrepresentation and fraud is based on its claim that during the
organizational meeting on May 1, 2009, only 68 employees attended, while respondent claimed that
it has 119 members as shown in the document denominated as “Pangalan ng mga Kasapi ng
Unyon;” hence, respondent misrepresented on the 20% requirement of the law as to its membership.

We do not agree.

It does not appear in Article 234 (b) of the Labor Code that the attendees in the organizational
meeting must comprise 20% of the employees in the bargaining unit. In fact, even the Implementing
Rules and Regulations of the Labor Code does not so provide. It is only under Article 234 (c) that
requires the names of all its members comprising at least twenty percent (20%) of all the employees
in the bargaining unit where it seeks to operate. Clearly, the 20% minimum requirement pertains to
the employees’ membership in the union and not to the list of workers who participated in the
organizational meeting. Indeed, Article 234 (b) and (c) provide for separate requirements, which
must be submitted for the union's registration, and which respondent did submit. Here, the total
number of employees in the bargaining unit was 396, and 20% of which was about 79. Respondent
submitted a document entitled “Pangalan ng Mga Kasapi ng Unyon” showing the names of 119
employees as union members, thus respondent sufficiently complied even beyond the 20% minimum
membership requirement. Respondent also submitted the attendance sheet of the organizational
meeting which contained the names and signatures of the 68 union members who attended the
meeting. Considering that there are 119 union members which are more than 20% of all the
employees of the bargaining unit, and since the law does not provide for the required number of
members to attend the organizational meeting, the 68 attendees which comprised at least the
majority of the 119 union members would already constitute a quorum for the meeting to proceed
and to validly ratify the Constitution and By-laws of the union. There is, therefore, no basis for
petitioner to contend that grounds exist for the cancellation of respondent's union registration. For
fraud and misrepresentation to be grounds for cancellation of union registration under Article 239 of
the Labor Code, the nature of the fraud and misrepresentation must be grave and compelling
enough to vitiate the consent of a majority of union members.22cralawred

Petitioner's claim that the alleged union members signed documents without adequate information is
not persuasive. The one who alleges a fact has the burden of proving it and a mere allegation is not
evidence.23 In fact, we note that not one of those listed in the document denominated as “Pangalan
ng Mga Kasapi ng Unyon” had come forward to deny their membership with respondent. Notably, it
had not been rebutted that the same union members had signed the document entitled “Sama-
Samang Pahayag ng Pagsapi,” thus, strengthening their desire to be members of the respondent
union.
Petitioner claims that in the list of members, there was an employee whose name appeared twice
and another employee who was merely a project employee. Such could not be considered a
misrepresentation in the absence of showing that respondent deliberately did so for the purpose of
increasing their union membership. In fact, even if those two names were not included in the list of
union members, there would still be 117 members which was still more than 20% of the 396 rank-
and-file employees.

As to petitioner's argument that the total number of its employees as of May 1, 2009 was 470, and
not 396 as respondent claimed, still the 117 union members comprised more than the 20%
membership requirement for respondent's registration.

In Mariwasa Siam Ceramics v. Secretary of the Department of Labor and Employment,24 we


said:ChanRoblesVirtualawlibrary
For the purpose of de-certifying a union such as respondent, it must be shown that there was
misrepresentation, false statement or fraud in connection with the adoption or ratification of the
constitution and by-laws or amendments thereto, the minutes of ratification; or, in connection with the
election of officers, the minutes of the election of officers, the list of voters, or failure to submit these
documents together with the list of the newly elected-appointed officers and their postal addresses to
the BLR.

The bare fact that two signatures appeared twice on the list of those who participated in the
organizational meeting would not, to our mind, provide a valid reason to cancel respondent’s
certificate of registration. The cancellation of a union’s registration doubtless has an impairing
dimension on the right of labor to self-organization. For fraud and misrepresentation to be grounds
for cancellation of union registration under the Labor Code, the nature of the fraud and
misrepresentation must be grave and compelling enough to vitiate the consent of a majority of union
members.

In this case, we agree with the BLR and the CA that respondent could not have possibly committed
misrepresentation, fraud, or false statements. The alleged failure of respondent to indicate with
mathematical precision the total number of employees in the bargaining unit is of no moment,
especially as it was able to comply with the 20% minimum membership requirement. Even if the total
number of rank-and-file employees of petitioner is 528, while respondent declared that it should only
be 455, it still cannot be denied that the latter would have more than complied with the registration
requirement. 25

WHEREFORE, premises considered, the petition for review is DENIED. The Decision dated
December 22, 2010 and the Resolution dated March 29, 2011 of the Court of Appeals, in CA-G.R.
SP No. 112406, are AFFIRMED.

SO ORDERED.

Velasco, Jr., (Chairperson), Villarama, Jr.,* Mendoza, and Leonen, JJ., concur.

4. MARIWASA SIAM CERAMICS, INC.,


Petitioner,

G.R. No. 183317

- versus -
Present:

CORONA, J.,
Chairperson,
THE SECRETARY OF THE DEPARTMENT OF VELASCO, JR.,
LABOR AND EMPLOYMENT, CHIEF OF THE
BUREAU OF LABOR RELATIONS, DEPARTMENT NACHURA,
OF LABOR AND EMPLOYMENT, REGIONAL PERALTA, and
DIRECTOR OF DOLE REGIONAL OFFICE NUMBER
IV-A & DEL CASTILLO,* JJ.

SAMAHAN NG MGA MANGGAGAWA SA


MARIWASA SIAM CERAMICS, INC. (SMMSC-
INDEPENDENT),
Respondents.

Promulgated:

December 21, 2009

x------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

This is a petition for review on certiorari[1] under Rule 45 of the Rules of Court, seeking to annul the
Decision[2] dated December 20, 2007 and the Resolution[3] dated June 6, 2008 of the Court of
Appeals in CA-G.R. SP No. 98332.

The antecedent facts are as follows

On May 4, 2005, respondent Samahan Ng Mga Manggagawa Sa Mariwasa Siam Ceramics, Inc.
(SMMSC-Independent) was issued a Certificate of Registration[4] as a legitimate labor organization
by the Department of Labor and Employment (DOLE), Region IV-A.

On June 14, 2005, petitioner Mariwasa Siam Ceramics, Inc. filed a Petition for Cancellation of Union
Registration against respondent, claiming that the latter violated Article 234[5] of the Labor Code for
not complying with the 20% requirement, and that it committed massive fraud and misrepresentation
in violation of Article 239[6] of the same code.The case was docketed as Case No. RO400-0506-AU-
004.

On August 26, 2005, the Regional Director of DOLE IV-A issued an Order granting the petition,
revoking the registration of respondent, and delisting it from the roster of active labor unions.
Aggrieved, respondent appealed to the Bureau of Labor Relations (BLR).
In a Decision[7] dated June 14, 2006, the BLR granted respondents appeal and disposed as follows

WHEREFORE, premises considered, the appeal by Samahan ng Manggagawa sa


Mariwasa Siam Ceramics, Inc. (SMMSC-Independent) is hereby GRANTED, and the
Decision dated 26 August 2005 by DOLE-Region-IV-A Director Maximo B. Lim is
hereby REVERSED and SET ASIDE. Samahan ng Manggagawa sa Mariwasa Siam
Ceramics, Inc. (SMMSC-Independent), under Registration Certificate No. RO400-
200505-UR-002, remains in the roster of legitimate labor organizations.

SO DECIDED.[8]

Petitioner filed a Motion for Reconsideration but the BLR denied it in a Resolution [9] dated February
2, 2007.

Petitioner sought recourse with the Court of Appeals (CA) through a Petition for Certiorari; but the
CA denied the petition for lack of merit.

Petitioners motion for reconsideration of the CA Decision was likewise denied, hence, this petition
based on the following grounds

Review of the Factual Findings of the Bureau of Labor Relations, adopted


and confirmed by the Honorable Court of Appeals is warranted[;]

The Honorable Court of Appeals seriously erred in ruling that the affidavits of
recantation cannot be given credence[;]

The Honorable Court of Appeals seriously erred in ruling that private


respondent union complied with the 20% membership requirement[; and]

The Honorable Court of Appeals seriously erred when it ruled that private
respondent union did not commit misrepresentation, fraud or false statement.[10]

The petition should be denied.

The petitioner insists that respondent failed to comply with the 20% union membership requirement
for its registration as a legitimate labor organization because of the disaffiliation from the total
number of union members of 102 employees who executed affidavits recanting their union
membership.

It is, thus, imperative that we peruse the affidavits appearing to have been executed by these
affiants.

The affidavits uniformly state


Ako, _____________, Pilipino, may sapat na gulang, regular na empleyado bilang
Rank & File sa Mariwasa Siam Ceramics, Inc., Bo. San Antonio, Sto. Tomas,
Batangas, matapos na makapanumpa ng naaayon sa batas ay malaya at kusang
loob na nagsasaad ng mga sumusunod:

1. Ako ay napilitan at nilinlang sa pagsapi sa Samahan ng mga Manggagawa sa


Mariwasa Siam Ceramics, Inc. o SMMSC-Independent sa kabila ng aking
pag-aalinlangan[;]

2. Aking lubos na pinagsisihan ang aking pagpirma sa sipi ng samahan, at handa


ako[ng] tumalikod sa anumang kasulatan na aking nalagdaan sa kadahilanan
na hindi angkop sa aking pananaw ang mga mungkahi o adhikain ng
samahan.

SA KATUNAYAN NANG LAHAT, ako ay lumagda ng aking pangalan


ngayong ika-____ ng ______, 2005 dito sa Lalawigan ng Batangas, Bayan ng Sto.
Tomas.

____________________
Nagsasalaysay

Evidently, these affidavits were written and prepared in advance, and the pro forma affidavits were
ready to be filled out with the employees names and signatures.

The first common allegation in the affidavits is a declaration that, in spite of his hesitation, the
affiant was forced and deceived into joining the respondent union. It is worthy to note, however, that
the affidavit does not mention the identity of the people who allegedly forced and deceived the affiant
into joining the union, much less the circumstances that constituted such force and deceit. Indeed,
not only was this allegation couched in very general terms and sweeping in nature, but more
importantly, it was not supported by any evidence whatsoever.

The second allegation ostensibly bares the affiants regret for joining respondent union and
expresses the desire to abandon or renege from whatever agreement he may have signed regarding
his membership with respondent.

Simply put, through these affidavits, it is made to appear that the affiants recanted their
support of respondents application for registration.

In appreciating affidavits of recantation such as these, our ruling in La Suerte Cigar and
Cigarette Factory v. Director of the Bureau of Labor Relations[11] is enlightening, viz.

On the second issuewhether or not the withdrawal of 31 union members from NATU
affected the petition for certification election insofar as the 30% requirement is
concerned, We reserve the Order of the respondent Director of the Bureau of Labor
Relations, it appearing undisputably that the 31 union members had withdrawn their
support to the petition before the filing of said petition. It would be otherwise if the
withdrawal was made after the filing of the petition for it would then be presumed that
the withdrawal was not free and voluntary. The presumption would arise that the
withdrawal was procured through duress, coercion or for valuable consideration. In
other words, the distinction must be that withdrawals made before the filing of the
petition are presumed voluntary unless there is convincing proof to the contrary,
whereas withdrawals made after the filing of the petition are deemed involuntary.

The reason for such distinction is that if the withdrawal or retraction is made before
the filing of the petition, the names of employees supporting the petition are
supposed to be held secret to the opposite party. Logically, any such withdrawal or
retraction shows voluntariness in the absence of proof to the contrary. Moreover, it
becomes apparent that such employees had not given consent to the filing of the
petition, hence the subscription requirement has not been met.

When the withdrawal or retraction is made after the petition is filed, the employees
who are supporting the petition become known to the opposite party since their
names are attached to the petition at the time of filing. Therefore, it would not be
unexpected that the opposite party would use foul means for the subject employees
to withdraw their support.[12]

In the instant case, the affidavits of recantation were executed after the identities of the union
members became public, i.e., after the union filed a petition for certification election on May 23,
2005, since the names of the members were attached to the petition. The purported withdrawal of
support for the registration of the union was made after the documents were submitted to the DOLE,
Region IV-A. The logical conclusion, therefore, following jurisprudence, is that the employees were
not totally free from the employers pressure, and so the voluntariness of the employees execution of
the affidavits becomes suspect.

It is likewise notable that the first batch of 25 pro forma affidavits shows that the affidavits were
executed by the individual affiants on different dates from May 26, 2005 until June 3, 2005, but they
were all sworn before a notary public on June 8, 2005.
There was also a second set of standardized affidavits executed on different dates from May
26, 2005 until July 6, 2005. While these 77 affidavits were notarized on different dates, 56 of these
were notarized on June 8, 2005, the very same date when the first set of 25 was notarized.

Considering that the first set of 25 affidavits was submitted to the DOLE on June 14, 2005, it
is surprising why petitioner was able to submit the second set of affidavits only on July 12, 2005.

Accordingly, we cannot give full credence to these affidavits, which were executed under suspicious
circumstances, and which contain allegations unsupported by evidence. At best, these affidavits are
self-serving. They possess no probative value.

A retraction does not necessarily negate an earlier declaration. For this reason, retractions are
looked upon with disfavor and do not automatically exclude the original statement or declaration
based solely on the recantation. It is imperative that a determination be first made as to which
between the original and the new statements should be given weight or accorded belief, applying the
general rules on evidence. In this case, inasmuch as they remain bare allegations, the purported
recantations should not be upheld.[13]

Nevertheless, even assuming the veracity of the affidavits of recantation, the legitimacy of
respondent as a labor organization must be affirmed. While it is true that the withdrawal of support
may be considered as a resignation from the union, the fact remains that at the time of the unions
application for registration, the affiants were members of respondent and they comprised more than
the required 20% membership for purposes of registration as a labor union. Article 234 of the Labor
Code merely requires a 20% minimum membership during the application for union registration. It
does not mandate that a union must maintain the 20% minimum membership requirement all
throughout its existence.[14]
Respondent asserts that it had a total of 173 union members at the time it applied for
registration. Two names were repeated in respondents list and had to be deducted, but the total
would still be 171 union members. Further, out of the four names alleged to be no longer connected
with petitioner, only two names should be deleted from the list since Diana Motilla and T.W. Amutan
resigned from petitioner only on May 10, 2005 and May 17, 2005, respectively, or after respondents
registration had already been granted. Thus, the total union membership at the time of registration
was 169. Since the total number of rank-and-file employees at that time was 528, 169 employees
would be equivalent to 32% of the total rank-and-file workers complement, still very much above the
minimum required by law.

For the purpose of de-certifying a union such as respondent, it must be shown that there was
misrepresentation, false statement or fraud in connection with the adoption or ratification of the
constitution and by-laws or amendments thereto; the minutes of ratification; or, in connection with the
election of officers, the minutes of the election of officers, the list of voters, or failure to submit these
documents together with the list of the newly elected-appointed officers and their postal addresses to
the BLR.[15]

The bare fact that two signatures appeared twice on the list of those who participated in the
organizational meeting would not, to our mind, provide a valid reason to cancel respondents
certificate of registration. The cancellation of a unions registration doubtless has an impairing
dimension on the right of labor to self-organization. For fraud and misrepresentation to be grounds
for cancellation of union registration under the Labor Code, the nature of the fraud and
misrepresentation must be grave and compelling enough to vitiate the consent of a majority of union
members.

In this case, we agree with the BLR and the CA that respondent could not have possibly
committed misrepresentation, fraud, or false statements. The alleged failure of respondent to
indicate with mathematical precision the total number of employees in the bargaining unit is of no
moment, especially as it was able to comply with the 20% minimum membership requirement. Even
if the total number of rank-and-file employees of petitioner is 528, while respondent declared that it
should only be 455, it still cannot be denied that the latter would have more than complied with the
registration requirement.

WHEREFORE, the petition is DENIED. The assailed December 20, 2007 Decision and the
June 6, 2008 Resolution of the Court of Appeals are AFFIRMED. Costs against petitioner.

SO ORDERED.

5. Ergonomic System vs. Enaje


MARTIRES, J.:
This is a petition for review on certiorari assailing the Decision,1 dated 21 September 2010, and
Resolution,2 dated 14 January 2011, of the Court of Appeals (CA), in CA-G.R. SP No. 102802, which
affirmed with modification the decision,3 dated 31 October 2007, and resolution,4 dated 21
December 2007, of the National Labor Relations Commission (NLRC) in NLRC NCR No. RAB IV-01-
16813-03-L. The NLRC, in turn, affirmed the decision,5 dated 31 January 2005, of Labor Arbiter
Generoso V. Santos (LA)in NLRC NCR No. RAB IV-01-16813-03-L, a case for illegal dismissal and
unfair labor practice.
THE FACTS
Respondents were union officers and members of Ergonomic System Employees Union-Workers
Alliance Trade Unions (local union). On 29 October 1999, the local union entered into a Collective
Bargaining Agreement (CBA)6 with petitioner Ergonomic Systems Philippines, Inc. (ESPI),7 which
was valid for five (5) years or until October 2004. The local union, which was affiliated with Workers
Alliance Trade Unions-Trade Union Congress of the Philippines (Federation), was not independently
registered. Thus, on 15 November 2001, before the CBA expired, the union officers secured the
independent registration of the local union with the Regional Office of the Department of Labor and
Employment (DOLE). Later on, the union officers were charged before the Federation and
investigated for attending and participating in other union's seminars and activities using union
leaves without the knowledge and consent of the Federation and ESPI as well as in initiating and
conspiring in the disaffiliation before the freedom period.8
On 10 January 2002, the Federation rendered a decision9 finding respondents-union officers Emerito
C. Enaje, Benedicto P. Abello, Alex M. Malaylay, Francisco G. Encabo, Jr., Rico Samson, Rowena
Betitio, Felipe N. Custosa, Jaime A. Juatan, Leovino Mulintapang, Nelson L. Onte, Emiliano P. Rone,
and Rolieto Llamado guilty of disloyalty. They were penalized with immediate expulsion from the
Federation.10
On 11 January 2002, the Federation furnished ESPI with a copy of its decision against respondents-
union officers and recommended the termination of their employment by invoking Sections 2 and 3,
Article 2 of the CBA.11
ESPI notified respondents-union officers of the Federation's demand and gave them 48 hours to
explain. Except for Nelson Onte, Emiliano Rone, and Rico Samson, the rest of the officers refused to
receive the notices. Thereafter, on 20 February 2002, respondents-union officers were issued letters
of termination, which they again refused to receive. On 26 February 2002, ESPI submitted to the
DOLE a list of the dismissed employees. On the same day, the local union filed a notice of strike with
the National Conciliation and Mediation Board (NCMB).12
From 21 February to 23 February 2002, the local union staged a series of noise barrage and "slow
down" activities. Meanwhile, on 22 February 2002, 40 union members identified as: Amorpio
Adriano, Jimmy Alcantara, Bernardo Antoni, Herminito Bedrijo, Romeo Belarmino, Yolanda Canopin,
Almelito Cuabo, Ricardo Del Pilar, Elmer Desquitado, Winefredo Desquitado, Demetrio Diaz, Erick
Ecraela, Quintero Enriquez, Crisanto Fernandez, Rommel Flores, Nelson Frias, Pedrito Geron,
Dominador Guimaldo, Ambrosio Henarez, Terencio Henares, Albert Lachica, Alberto Lorenzo, Joel
Malaylay, Susan Malbas, Rolando Manaril, Teddy Montible, Fernando Ofaldo, Ronie Olivay, Raul
Pagolong, Lorenzo Raniego, Amado Samson-Ty, Roel Soriano, Jonathan Sualibio, Esteban
Sumicao, Joseph Tabaday, Epifanio Tabarez, Regie Toting, Reynaldo Toting, Norman Valenzuela
and Rolando Yonson refused to submit their Daily Production Reports (DPRs).
On 26 February 2002, 28 union members namely Dioscoro Balajadia, Nerry Balinas, Noel Balmeo,
Arnaldo Castro, Geroncio Dela Cueva, Alberto Gapasin, Julius Genova, Loreto Gracilla, Roberto
Ingiente, Jr., Roque Joven, Paterno Linogo, Isagani Masangka, Angelito Montilla, Pecifico
Nigparanon, Salvador Nobe, Manuel Oavenga, Reynaldo Ortiz, Romeo Quintana, Jemard Remotin,
Reynaldo Roblesa, Samuel Rosales, Roberto Santos, Ronaldo Santos, Rocky Talolong, Emilio
Tonga, Bernardo Valdez, Dante Velasco and Rene Vicente abandoned their work and held a
picket line outside the premises of ESPI.
Then, from 26 February 2002 to 2 March 2002, 10 union members, namely Jaime Bentuco, Marina
Cacao, Carlito Dela Cerna, Christopher Masagca, Christopher Palomares, Rolando Patotoy, Aser
Pesado, Jr., Leonilo Ricafort, Felix Sanchez and Francis Santua did not report for work without
official leave. The union members were required to submit their explanation why they should not be
sanctioned for their refusal to submit DPRs and abandonment of work, but they either refused to
receive the notices or received them under protest. Further, they did not submit their explanation as
required. Subsequently, for refusal to submit DPRs and for abandonment, respondents-union
members were issued letters of termination.13 On 27 January 2003, the respondents filed a
complaint for illegal dismissal and unfair labor practice against ESPI, Phillip C. Ng, and Ma.
Lourminda O. Ng (petitioners).14
The Labor Arbiter's Ruling
In a decision, dated 31 January 2005, the LA held that the local union was the real party in interest
and the Federation was merely an agent in the CBA; thus, the union officers and members who
caused the implied disaffiliation did not violate the union security clause. Consequently, their
dismissal was unwarranted. Nevertheless, the LA ruled that since ESPI effected the dismissal in
response to the Federation's demand which appeared to be justified by a reading of the union
security clause, it would be unjust to hold ESPI liable for the normal consequences of illegal
dismissal.
The LA further opined that there was no ground for the dismissal of the union members because the
refusal to submit DPRs and failure to report for work were meant to protest the dismissal of their
officers, not to sever employer-employee relationship. He added that neither ESPI nor the
respondents were at fault for they were merely protecting their respective interests. In sum, the LA
ordered all the respondents to return to work but without back wages. The fallo reads:
WHEREFORE, premises considered, judgment is hereby rendered ordering the complainants to
report back to their former jobs within ten (10) days from receipt of this Decision and the respondent
company is in turn directed to accept them back but without back wages. In the event however, that
this is no longer possible, the respondent company is ordered to pay the complainants their
separation pay computed at one-half (1/2) month salary for every year of service, a fraction of at
least six (6) months to be considered as one (1) whole year. The respondent is likewise ordered to
pay complainants attorney's fees equivalent to ten (10%) percent of the total thereof as attorney's
fees.
All other claims are dismissed for lack of merit.
SO ORDERED.15
Unconvinced, petitioners and respondents appealed before the NLRC.
The NLRC Ruling
In a decision, dated 31 October 2007, the NLRC affirmed the ruling of the LA. It adjudged that the
dismissal of the union officers was effected only in response to the demand of the Federation and to
comply with the union security clause under the CBA. The NLRC concluded that since there was no
disloyalty to the union, but only disaffiliation from the Federation which was a mere agent in the CBA,
the cause for the respondents' dismissal was non-existent. It disposed the case in this wise:
WHEREFORE, premises considered, the appeals separately filed by complainants and respondents
from the Decision of Labor Arbiter Generoso V. Santos dated January 31, 2005 are both
DISMISSED for lack of merit.
The appeal filed by complainants from the Order dated January 4, 2007 is likewise DISMISSED for
lack of merit.
The assailed Orders are hereby AFFIRMED.
SO ORDERED.16
Undeterred, petitioners and respondents moved for reconsideration. Their motions, however, were
denied by the NLRC in a resolution, dated 21 December 2007.
The CA Ruling
In its decision, dated 21 September 2010, the CA affirmed with modification the NLRC ruling. It held
that ESPI and the respondents acted in good faith when the former dismissed the latter and when
the latter, in tum, staged a strike without complying with the legal requirements. The CA, however,
pronounced that the concept of separation pay as an alternative to reinstatement holds true only in
cases wherein there is illegal dismissal, a fact which does not exist in this case. The dispositive
portion reads:
WHEREFORE, the instant petition is PARTIALLY GRANTED. The Decision of the Labor Arbiter, as
sustained by the National Labor Relations Commission, reverting the employer-employee position of
the parties to the status quo ante is AFFIRMED, with MODIFICATION, in that the provision on the
award of separation pay in lieu of reinstatement is deleted.
SO ORDERED.17
Aggrieved, petitioners and respondents moved for reconsideration but the same was denied by the
CA in a resolution, dated 14 January 2011.
Hence, this petition.
ISSUES
I. WHETHER THE FEDERATION MAY INVOKE THE UNION SECURITY CLAUSE IN
DEMANDING THE RESPONDENTS' DISMISSAL;
II. WHETHER THE STRIKE CONDUCTED BY THE RESPONDENTS COMPLIED WITH THE
LEGAL REQUIREMENTS;
III. WHETHER THE RESPONDENTS' DISMISSAL FROM EMPLOYMENT WAS VALID.
The petitioners argue that the respondents failed to comply with two (2) of the procedural
requirements for a valid strike, i.e., taking of a strike vote and observance of the seven-day period
after submission of the strike vote report; that mere participation of union officers in the illegal strike
is a ground for termination of employment; that the union members committed illegal acts during the
strike which warranted their dismissal, i.e., obstruction of the free ingress to and egress from ESPI's
premises and commission of acts of violence, coercion or intimidation; that the respondents are not
entitled to reinstatement or separation pay because they were validly dismissed from employment;
that the union members who unjustly refused to submit their DPRs and abandoned their work were
rightfully terminated because their acts constituted serious misconduct or willful disobedience of
lawful orders; and that reinstatement is no longer possible because the industrial building owned by
Ergo Contracts Philippines, Inc. was totally destroyed by fire on 6 February 2005.18
In their comment,19 the respondents counter that they were not legally terminated because the
grounds relied upon by the petitioners were non-existent; that as ruled by the NLRC, they merely
disaffiliated from the Federation but they were not disloyal to the local union; that reinstatement is
not physically impossible because it was the industrial building owned by Ergo Contracts Philippines,
Inc. that was gutted down by fire, not that of ESPI; that even if the manufacturing plant of ESPI was
indeed destroyed by fire, the petitioners have other offices around the country where the
respondents may be reinstated; and that having failed to comply with the order to reinstate them and
having ceased operations, the petitioners must be ordered to pay their separation pay.
In their reply,20 the petitioners aver that the respondents violated the union security clause under the
CBA; that their termination was effected in response to the Federation's demand to dismiss them;
that they did not comply with the requisites of a valid strike; that they refused to submit their DPRs
and abandoned their work; and that the award of separation pay had no basis because the
respondents had been legally dismissed from their employment.

THE COURT'S RULING

Only the local union may invoke the union security clause in the CBA.

The controversy between ESPI and the respondents originated from the Federation's act of expelling
the union officers and demanding their dismissal from ESPI. Thus, to arrive at a proper resolution of
this case, one question to be answered is whether the Federation may invoke the union security
clause in the CBA.
"Union security is a generic term, which is applied to and comprehends 'closed shop,' 'union shop,'
'maintenance of membership,' or any other form of agreement which imposes upon employees the
obligation to acquire or retain union membership as a condition affecting employment. There is union
shop when all new regular employees are required to join the union within a certain period as a
condition for their continued employment. There is maintenance of membership shop when
employees, who are union members as of the effective date of the agreement, or who thereafter
become members, must maintain union membership as a condition for continued employment until
they are promoted or transferred out of the bargaining unit, or the agreement is terminated. A closed
shop, on the other hand, may be defined as an enterprise in which, by agreement between the
employer and his employees or their representatives, no person may be employed in any or certain
agreed departments of the enterprise unless he or she is, becomes, and, for the duration of the
agreement, remains a member in good standing of a union entirely comprised of or of which the
employees in interest are a part."21
Before an employer terminates an employee pursuant to the union security clause, it needs to
determine and prove that: (1) the union security clause is applicable; (2) the union is requesting the
enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to
support the decision of the union to expel the employee from the union.22
In this case, the primordial requisite, i.e., the union is requesting the enforcement of the union
security provision in the CBA, is clearly lacking. Under the Labor Code, a chartered local union
acquires legal personality through the charter certificate issued by a duly registered federation or
national union and reported to the Regional Office.23 "A local union does not owe its existence to the
federation with which it is affiliated. It is a separate and distinct voluntary association owing its
creation to the will of its members. Mere affiliation does not divest the local union of its own
personality, neither does it give the mother federation the license to act independently of the local
union. It only gives rise to a contract of agency, where the former acts in representation of the latter.
Hence, local unions are considered principals while the federation is deemed to be merely their
agent."24
The union security clause in the CBA between ESPI and the local union provides:
SECTION 1. Union Shop. All regular, permanent employees covered by this Agreement who are
members of the UNION as of the date of effectivity of this Agreement as well as any employees who
shall subsequently become members of the UNION during the lifetime of this Agreement or any
extension, thereof, shall as a condition of continued employment, maintain their membership in the
UNION during the term of this Agreement or any extension thereof.
xxxx
SECTION 3. The COMPANY shall terminate the services of any concerned employee when so
requested by the UNION for any of the following reasons:
a. Voluntary Resignation from the Union during the term of this Agreement or any extension thereof;
b. Non-payment of membership fee, regular monthly dues, mutual aid benefit and other
assessments submitted by the UNION to the COMPANY;
c. Violation of the UNION Constitution and Bylaws. The UNION shall furnish the COMPANY a copy
of their Constitution and Bylaws and any amendment thereafter.
d. Joining of another Union whose interest is adverse to the UNION, AWATU, during the lifetime of
this Agreement.
e. Other acts which are inimical to the interests of the UNION and AWATU.25
There is no doubt that the union referred to in the foregoing provisions is the Ergonomic Systems
Employees Union or the local union as provided in Article I of the CBA.26 A perusal of the CBA
shows that the local union, not the Federation, was recognized as the sole and exclusive collective
bargaining agent for all its workers and employees in all matters concerning wages, hours of work,
and other terms and conditions of employment. Consequently, only the union may invoke the union
security clause in case any of its members commits a violation thereof. Even assuming that the
union officers were disloyal to the Federation and committed acts inimical to its interest, such
circumstance did not give the Federation the prerogative to demand the union officers' dismissal
pursuant to the union security clause which, in the first place, only the union may rightfully invoke.
Certainly, it does not give the Federation the privilege to act independently of the local union. At
most, what the Federation could do is to refuse to recognize the local union as its affiliate and revoke
the charter certificate it issued to the latter. In fact, even if the local union itself disaffiliated from the
Federation, the latter still has no right to demand the dismissal from employment of the union officers
and members because concomitant to the union's prerogative to affiliate with a federation is its right
to disaffiliate therefrom which the Court explained in Philippine Skylanders, Inc. v. NLRC,27viz:
The right of a local union to disaffiliate from its mother federation is not a novel thesis unillumined by
case law. In the landmark case of Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc.,
we upheld the right of local unions to separate from their mother federation on the ground that as
separate and voluntary associations, local unions do not owe their creation and existence to the
national federation to which they are affiliated but, instead, to the will of their members. The sole
essence of affiliation is to increase, by collective action, the common bargaining power of local
unions for the effective enhancement and protection of their interests. Admittedly, there are times
when without succor and support local unions may find it hard, unaided by other support groups, to
secure justice for themselves.
Yet the local unions remain the basic units of association, free to serve their own interests subject to
the restraints imposed by the constitution and bylaws of the national federation, and free also to
renounce the affiliation upon the terms laid down in the agreement which brought such affiliation into
existence.28
In sum, the Federation could not demand the dismissal from employment of the union officers on the
basis of the union security clause found in the CBA between ESPI and the local union.

A strike is deemed illegal for failure to take a strike vote and to submit a report thereon to the
NCMB.

A strike is the most powerful weapon of workers in their struggle with management in the course of
setting their terms and conditions of employment. As such, it either breathes life to or destroys the
union and its members.29
Procedurally, for a strike to be valid, it must comply with Article 27830 of the Labor Code, which
requires that: (a) a notice of strike be filed with the NCMB 30 days before the intended date thereof,
or 15 days in case of unfair labor practice; (b) a strike vote be approved by a majority of the total
union membership in the bargaining unit concerned, obtained by secret ballot in a meeting called for
that purpose; and (c) a notice be given to the NCMB of the results of the voting at least seven days
before the intended strike. These requirements are mandatory, and the union's failure to comply
renders the strike illegal.31
The union filed a notice of strike on 20 February 2002.32 The strike commenced on 21 February
2002.33The strike vote was taken on 2 April 200234 and the report thereon was submitted to the
NCMB on 4 April 2002.35 Indeed, the first requisite or the cooling-off period need not be observed
when the ground relied upon for the conduct of strike is union-busting.36 Nevertheless, the second
and third requirements are still mandatory. In this case, it is apparent that the union conducted a
strike without seeking a strike vote and without submitting a report thereon to the DOLE. Thus, the
strike which commenced on 21 February 2002 was illegal.
Liabilities of union officers and members
Article 279(a)37 of the Labor Code provides:
Art. 279. Prohibited activities. - (a) x x x
xxxx
Any union officer who knowingly participates in an illegal strike and any worker or union officer who
knowingly participates in the commission of illegal acts during a strike may be declared to have lost
his employment status: Provided, That mere participation of a worker in a lawful strike shall not
constitute sufficient ground for termination of his employment, even if a replacement had been hired
by the employer during such lawful strike.
In the determination of the consequences of illegal strikes, the law makes a distinction between
union members and union officers. The services of an ordinary union member cannot be terminated
for mere participation in an illegal strike; proof must be adduced showing that he or she committed
illegal acts during the strike. A union officer, on the other hand, may be dismissed, not only when he
actually commits an illegal act during a strike, but also if he knowingly participates in an illegal
strike.38
In the present case, respondents-union officers stand to be dismissed as they conducted a strike
despite knowledge that a strike vote had not yet been approved by majority of the union and the
corresponding strike vote report had not been submitted to the NCMB.
With respect to respondents-union members, the petitioners merely alleged that they committed
illegal acts during the strike such as obstruction of ingress to and egress from the premises of ESPI
and execution of acts of violence and intimidation. There is, however, a dearth of evidence to prove
such claims. Hence, there is no basis to dismiss respondents-union members from employment on
the ground that they committed illegal acts during the strike.

Dismissed respondents-union members are not entitled to back wages.

While it is true that the award of back wages is a legal consequence of a finding of illegal dismissal,
in G & S Transport Corporation v. Infante,39 the Court pronounced that the dismissed workers are
entitled only to reinstatement considering that they did not render work for the employer during the
strike, viz:
With respect to back wages, the principle of a "fair day's wage for a fair day's labor" remains
as the basic factor in determining the award thereof. If there is no work performed by the
employee there can be no wage or pay unless, of course, the laborer was able, willing and ready to
work but was illegally locked out, suspended or dismissed or otherwise illegally prevented from
working. While it was found that respondents expressed their intention to report back to work, the
latter exception cannot apply in this case. In Philippine Marine Officers' Guild v. Compañia Maritima,
as affirmed in Philippine Diamond Hotel and Resort v. Manila Diamond Hotel Employees Union, the
Court stressed that for this exception to apply, it is required that the strike be legal, a situation
that does not obtain in the case at bar.40 (emphases supplied)
Thus, in the case at bar, respondents-union members' reinstatement without back wages suffices for
the appropriate relief. Fairness and justice dictate that back wages be denied the employees who
participated in the illegal concerted activities to the great detriment of the employer.41
Nevertheless, separation pay is made an alternative relief in lieu of reinstatement in certain
circumstances, like: (a) when reinstatement can no longer be effected in view of the passage of a
long period of time or because of the realities of the situation; (b) reinstatement is inimical to the
employer's interest; (c) reinstatement is no longer feasible; (d) reinstatement does not serve the best
interests of the parties involved; (e) the employer is prejudiced by the workers' continued
employment; (f) facts that make execution unjust or inequitable have supervened; or (g) strained
relations between the employer and employee.42
Given the lapse of considerable time from the occurrence of the strike, the Court rules that the award
of separation pay of one (1) month salary for each year of service, in lieu of reinstatement, is in
order. This relief strikes a balance between the respondents-union members who may not have
known that they were participating in an illegal strike but who, nevertheless, have rendered service
to the company for years prior to the illegal strike which caused a rift in their relations, and the
employer who definitely suffered losses on account of respondents-union members' failure to report
to work during the illegal strike.
WHEREFORE, the petition is PARTIALLY GRANTED. The 21 September 2010 Decision and 14
January 2011 Resolution of the Court of Appeals in CA-G.R. SP No. 102802
are AFFIRMED with MODIFICATIONin that petitioners are hereby ORDERED to pay each of the
above-named individual respondents, except union officers who are hereby declared validly
dismissed, separation pay equivalent to one (1) month salary for every year of service. Whatever
sums already received from petitioners under any release, waiver or quitclaim shall be deducted
from the total separation pay due to each of them.
SO ORDERED.

6. COASTAL SUBIC BAY TERMINAL, INC., Petitioner, vs.


DEPARTMENT OF LABOR and EMPLOYMENT – OFFICE OF THE SECRETARY, COASTAL
SUBIC BAY TERMINAL, INC. SUPERVISORY UNION-APSOTEU, and COASTAL SUBIC BAY
TERMINAL, INC. RANK-AND-FILE UNION-ALU-TUCP, Respondents.
G.R. No. 157117 November 20, 2006
DECISION
QUISUMBING, J.:
For review on certiorari is the Court of Appeals’ Decision1 dated August 31, 2001, in CA-G.R. SP No.
54128 and the Resolution2 dated February 5, 2003, denying petitioner’s motion for reconsideration.
The Court of Appeals had affirmed the Decision3 dated March 15, 1999 of the Secretary of the
Department of Labor and Employment (DOLE) reversing the Mediator Arbiter’s dismissal of private
respondents’ petitions for certification election.
The facts are as follows:
On July 8, 1998, private respondents Coastal Subic Bay Terminal, Inc. Rank-and-File Union (CSBTI-
RFU) and Coastal Subic Bay Terminal, Inc. Supervisory Union (CSBTI-SU) filed separate petitions
for certification election before Med-Arbiter Eladio de Jesus of the Regional Office No. III. The rank-
and-file union insists that it is a legitimate labor organization having been issued a charter certificate
by the Associated Labor Union (ALU), and the supervisory union by the Associated Professional,
Supervisory, Office and Technical Employees Union (APSOTEU). Private respondents also alleged
that the establishment in which they sought to operate was unorganized.
Petitioner Coastal Subic Bay Terminal, Inc. (CSBTI) opposed both petitions for certification election
alleging that the rank-and-file union and supervisory union were not legitimate labor organizations,
and that the proposed bargaining units were not particularly described.
Without ruling on the legitimacy of the respondent unions, the Med-Arbiter dismissed, without
prejudice to refiling, both petitions which had been consolidated. The Med-Arbiter held that the ALU
and APSOTEU are one and the same federation having a common set of officers. Thus, the
supervisory and the rank-and-file unions were in effect affiliated with only one federation.4
The Med-Arbiter ruled as follows:
Viewed in the light of all the foregoing, this Office finds the simultaneous filing of the instant petitions
to be invalid and unwarranted. Consequently, this Office has no recourse but to dismiss both
petitions without prejudice to the refiling of either.
WHEREFORE, PREMISES CONSIDERED, let the instant petitions be, as they are hereby
DISMISSED.
SO ORDERED.5
Both parties appealed to the Secretary of Labor and Employment, who reversed the decision of the
Med-Arbiter. The Secretary thru Undersecretary R. Baldoz, ruled that CSBTI-SU and CSBTI-RFU
have separate legal personalities to file their separate petitions for certification election. The
Secretary held that APSOTEU is a legitimate labor organization because it was properly registered
pursuant to the 1989 Revised Rules and Regulations implementing Republic Act No. 6715, the rule
applicable at the time of its registration. It further ruled that ALU and APSOTEU are separate and
distinct labor unions having separate certificates of registration from the DOLE. They also have
different sets of locals. The Secretary declared CSBTI-RFU and CSBTI-SU as legitimate labor
organizations having been chartered respectively by ALU and APSOTEU after submitting all the
requirements with the Bureau of Labor Relations (BLR). Accordingly, the Secretary ordered the
holding of separate certification election, viz:
WHEREFORE, the decision of the Med-Arbiter, Regional Office No. III is hereby REVERSED. Let
separate certification elections be conducted immediately among the appropriate employees of
CSBTI, after the usual pre-election conference, with the following choices:
I. For all rank and file employees of CSBTI:
1. COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-FILE UNION-ALU-TUCP;
and
2. NO UNION.
II. For all supervisory employees of CSBTI:
1. COASTAL SUBIC BAY TERMINAL, INC. SUPERVISORY EMPLOYEES UNION-
APSOTEU; and
2. NO UNION.
The latest payroll of the employer, including its payrolls for the last three months immediately
preceding the issuance of this decision, shall be the basis for determining the qualified list of voters.
SO DECIDED.6
The motion for reconsideration was also denied.7
On appeal, the Court of Appeals affirmed the decision of the Secretary.8 It held that there was no
grave abuse of discretion on the part of the Secretary; its findings are supported by evidence on
record; and thus should be accorded with respect and finality.9
The motion for reconsideration was likewise denied.10 Hence, the instant petition by the company
anchored on the following grounds:
I
THE HONORABLE COURT OF APPEALS ERRED IN RELYING ON THE "1989 REVISED
RULES AND REGULATIONS IMPLEMENTING RA 6715" AS BASIS TO RECOGNIZE
PRIVATE RESPONDENT APSOTEU’S REGISTRATION BY THE DOLE REGIONAL
DIRECTOR.
II
THE HONORABLE COURT OF APPEALS ERRED WHEN IT AFFIRMED PUBLIC
RESPONDENT’S APPLICATION OF THE PRINCIPLE OF STARE DECISIS TO HASTILY
DISPOSE OF THE LEGAL PERSONALITY ISSUE OF APSOTEU.
III
THE HONORABLE COURT OF APPEALS DID NOT DECIDE IN ACCORD WITH LAW AND
JURISPRUDENCE WHEN IT AFFIRMED PUBLIC RESPONDENT’S APPLICATION OF
THE "UNION AUTONOMY" THEORY.
IV
IN AFFIRMING PUBLIC RESPONDENT’S FINDING THAT PRIVATE RESPONDENTS ARE
"SEPARATE FEDERATIONS," THE HONORABLE COURT OF APPEALS:
(1) IGNORED JURISPRUDENCE RECOGNIZING THE BINDING NATURE OF A
MED-ARBITER’S FACTUAL FINDINGS; AND
(2) DISREGARDED EVIDENCE ON RECORD OF "ILLEGAL COMMINGLING."11
Plainly, the issues are (1) Can the supervisory and the rank-and-file unions file separate petitions for
certification election?; (2) Was the Secretary’s decision based on stare decisis correct?; and (3)
Were private respondents engaged in commingling?
The issue on the status of the supervisory union CSBTI-SU depends on the status of APSOTEU, its
mother federation.
Petitioner argues that APSOTEU improperly secured its registration from the DOLE Regional
Director and not from the BLR; that it is the BLR that is authorized to process applications and issue
certificates of registration in accordance with our ruling in Phil. Association of Free Labor Unions v.
Secretary of Labor;12 that the certificates of registration issued by the DOLE Regional Director
pursuant to the rules are questionable, and possibly even void ab initio for being ultra vires; and that
the Court of Appeals erred when it ruled that the law applicable at the time of APSOTEU’s
registration was the 1989 Revised Implementing Rules and Regulations of Rep. Act No. 6715.
Petitioner insists that APSOTEU lacks legal personality, and its chartered affiliate CSBTI-SU cannot
attain the status of a legitimate labor organization to file a petition for certification election. It relies
on Villar v. Inciong,13 where we held therein that Amigo Employees Union was not a duly registered
independent union absent any record of its registration with the Bureau.
Pertinent is Article 23514 of the Labor Code which provides that applications for registration shall be
acted upon by the Bureau. "Bureau" as defined under the Labor Code means the BLR and/or the
Labor Relations Division in the Regional Offices of the Department of Labor.15 Further, Section 2,
Rule II, Book V of the 1989 Revised Implementing Rules of the Labor Code (Implementing Rules)
provides that:
Section 2. Where to file application; procedure – Any national labor organization or labor federation
or local union may file an application for registration with the Bureau or the Regional Office where
the applicant’s principal offices is located. The Bureau or the Regional Office shall immediately
process and approve or deny the application. In case of approval, the Bureau or the Regional Office
shall issue the registration certificate within thirty (30) calendar days from receipt of the application,
together with all the requirements for registration as hereinafter provided. 16
The Implementing Rules specifically Section 1, Rule III of Book V, as amended by Department Order
No. 9, thus:
SECTION 1. Where to file applications. – The application for registration of any federation, national
or industry union or trade union center shall be filed with the Bureau. Where the application is filed
with the Regional Office, the same shall be immediately forwarded to the Bureau within forty-eight
(48) hours from filing thereof, together with all the documents supporting the registration.
The applications for registration of an independent union shall be filed with and acted upon by the
Regional Office where the applicant’s principal office is located ….
xxxx
The DOLE issued Department Order No. 40-03, which took effect on March 15, 2003, further
amending Book V of the above implementing rules. The new implementing rules explicitly provide
that applications for registration of labor organizations shall be filed either with the Regional Office or
with the BLR.17
Even after the amendments, the rules did not divest the Regional Office and the BLR of their
jurisdiction over applications for registration by labor organizations. The amendments to the
implementing rules merely specified that when the application was filed with the Regional Office, the
application would be acted upon by the BLR.
The records in this case showed that APSOTEU was registered on March 1, 1991. Accordingly, the
law applicable at that time was Section 2, Rule II, Book V of the Implementing Rules, and not
Department Order No. 9 which took effect only on June 21, 1997. Thus, considering further that
APSOTEU’s principal office is located in Diliman, Quezon City, and its registration was filed with the
NCR Regional Office, the certificate of registration is valid.
The petitioner misapplied Villar v. Inciong.18 In said case, there was no record in the BLR that Amigo
Employees Union was registered.19
Did the Court of Appeals err in its application of stare decisis when it upheld the Secretary’s ruling
that APSOTEU is a legitimate labor organization and its personality cannot be assailed unless in an
independent action for cancellation of registration certificate?20
We think not.
Section 5, Rule V, Book V of the Implementing Rules states:
Section 5. Effect of registration – The labor organization or workers’ association shall be deemed
registered and vested with legal personality on the date of issuance of its certificate of registration.
Such legal personality cannot thereafter be subject to collateral attack, but maybe questioned only in
an independent petition for cancellation in accordance with these Rules.21
Thus, APSOTEU is a legitimate labor organization and has authority to issue charter to its
affiliates.22 It may issue a local charter certificate to CSBTI-SU and correspondingly, CSBTI-SU is
legitimate.
Are ALU, a rank-and-file union and APSOTEU, a supervisory union one and the same because of
the commonalities between them? Are they commingled?
The petitioner contends that applying by analogy, the doctrine of piercing the veil of corporate fiction,
APSOTEU and ALU are the same federation. Private respondents disagree.
First, as earlier discoursed, once a labor union attains the status of a legitimate labor organization, it
continues as such until its certificate of registration is cancelled or revoked in an independent action
for cancellation.23 In addition, the legal personality of a labor organization cannot be collaterally
attacked.24 Thus, when the personality of the labor organization is questioned in the same manner
the veil of corporate fiction is pierced, the action partakes the nature of a collateral attack. Hence, in
the absence of any independent action for cancellation of registration against either APSOTEU or
ALU, and unless and until their registrations are cancelled, each continues to possess a separate
legal personality. The CSBTI-RFU and CSBTI-SU are therefore affiliated with distinct and separate
federations, despite the commonalities of APSOTEU and ALU.
Under the rules implementing the Labor Code, a chartered local union acquires legal personality
through the charter certificate issued by a duly registered federation or national union, and reported
to the Regional Office in accordance with the rules implementing the Labor Code.25 A local union
does not owe its existence to the federation with which it is affiliated. It is a separate and distinct
voluntary association owing its creation to the will of its members. Mere affiliation does not divest the
local union of its own personality, neither does it give the mother federation the license to act
independently of the local union. It only gives rise to a contract of agency, where the former acts in
representation of the latter.26 Hence, local unions are considered principals while the federation is
deemed to be merely their agent.27 As such principals, the unions are entitled to exercise the rights
and privileges of a legitimate labor organization, including the right to seek certification as the sole
and exclusive bargaining agent in the appropriate employer unit.1âwphi1
A word of caution though, under Article 245 of the Labor Code,28 supervisory employees are not
eligible for membership in a labor union of rank-and-file employees. The supervisory employees are
allowed to form their own union but they are not allowed to join the rank-and-file union because of
potential conflicts of interest.29 Further, to avoid a situation where supervisors would merge with the
rank-and-file or where the supervisors’ labor union would represent conflicting interests, a local
supervisors’ union should not be allowed to affiliate with the national federation of unions of rank-
and-file employees where that federation actively participates in the union activity within the
company.30 Thus, 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.31 In De La Salle
University Medical Center and College of Medicine v. Laguesma, we reiterated the rule that for the
prohibition to apply, it is not enough that the supervisory union and the rank-and-file union are
affiliated with a single federation. In addition, the supervisors must have direct authority over the
rank-and-file employees.32
In the instant case, the national federations that exist as separate entities to which the rank-and-file
and supervisory unions are separately affiliated with, do have a common set of officers. In addition,
APSOTEU, the supervisory federation, actively participates in the CSBTI-SU while ALU, the rank-
and-file federation, actively participates in the CSBTI-RFU, giving occasion to possible conflicts of
interest among the common officers of the federation of rank-and-file and the federation of
supervisory unions. For as long as they are affiliated with the APSOTEU and ALU, the supervisory
and rank-and-file unions both do not meet the criteria to attain the status of legitimate labor
organizations, and thus could not separately petition for certification elections.1âwphi1
The purpose of affiliation of the local unions into a common enterprise is to increase the collective
bargaining power in respect of the terms and conditions of labor.33 When there is commingling of
officers of a rank-and-file union with a supervisory union, the constitutional policy on labor is
circumvented. Labor organizations should ensure the freedom of employees to organize themselves
for the purpose of leveling the bargaining process but also to ensure the freedom of workingmen and
to keep open the corridor of opportunity to enable them to do it for themselves.
WHEREFORE, the petition is GRANTED. The Court of Appeals’ Decision dated August 31, 2001, in
CA-G.R. SP No. 54128 and the Resolution dated February 5, 2003 are SET ASIDE. The decision of
the Med-Arbiter is hereby AFFIRMED.
SO ORDERED.
LEONARDO A. QUISUMBING
Associate Justice
7. PROGRESSIVE DEVELOPMENT CORPORATION-PIZZA HUT, petitioner, vs. HON.
BIENVENIDO LAGUESMA, in his capacity as Undersecretary of Labor, and
NAGKAKAISANG LAKAS NG MANGGAGAWA (NLM)-KATIPUNAN, respondents.
DECISION
KAPUNAN, J.:
On July 9, 1993, Nagkakaisang Lakas ng Manggagawa (NLM)-Katipunan (respondent Union)
filed a petition for certification election with the Department of Labor (National Capital Region) in
behalf of the rank and file employees of the Progressive Development Corporation (Pizza Hut)
docketed as NCR Case No. NCR-OD-M-9307-020.[1]
Petitioner filed on August 20, 1993, a verified Motion to Dismiss the petition alleging fraud,
falsification and misrepresentation in the respondent Union's registration making it void and invalid.
The motion specifically alleged that: a) respondent Union's registration was tainted with false, forged,
double or multiple signatures of those who allegedly took part in the ratification of the respondent
Union's constitution and by-laws and in the election of its officers that there were two sets of
supposed attendees to the alleged organizational meeting that was alleged to have taken place on
June 26, 1993; that the alleged chapter is claimed to have been supported by 318 members when in
fact the persons who actually signed their names were much less; and b) while the application for
registration of the charter was supposed to have been approved in the organizational meeting held
on June 27, 1993, the charter certification issued by the federation KATIPUNAN was dated June 26,
1993 or one (1) day prior to the formation of the chapter, thus, there were serious falsities in the
dates of the issuance of the charter certification and the organization meeting of the alleged chapter.
Citing other instances of misrepresentation and fraud, petitioner, on August 29, 1993, filed a
Supplement to its Motion to Dismiss,[2] claiming that:
1) Respondent Union alleged that the election of its officers was held on June 27, 1993;
however, it appears from the documents submitted by respondent union to the BIR-
DOLE that the Union's constitution and by-laws were adopted only on July 7, 1993,
hence, there was no bases for the supposed election of officers on June 27, 1993
because as of this date, there existed no positions to which the officers could be validly
elected;
2) Voting was not conducted by secret ballot in violation of Article 241, section (c) of the
Labor Code;
3) The Constitution and by Laws submitted in support of its petition were not properly
acknowledged and notarized.[3]
On August 30, 1993, petitioner filed a Petition[4] seeking the cancellation of the Union's
registration on the grounds of fraud and falsification, docketed as BIR Case No. 8-21-83.[5]Motion
was likewise filed by petitioner with the Med-Arbiter requesting suspension of proceedings in the
certification election case until after the prejudicial question of the Union's legal personality is
determined in the proceedings for cancellation of registration.
However, in an Order dated September 29, 1993,[6] Med-Arbiter Rasidali C. Abdullah directed
the holding of a certification election among petitioner's rank and file employees. The Order
explained:
x x x Sumasaklaw sa Manggagawa ng Pizza Hut is a legitimate labor organization in contemplation
of law and shall remain as such until its very charter certificate is canceled or otherwise revoked by
competent authority. The alleged misrepresentation, fraud and false statement in connection with the
issuance of the charter certificate are collateral issues which could be properly ventilated in the
cancellation proceedings.[7]
On appeal to the office of the Secretary of Labor, Labor Undersecretary Bienvenido E.
Laguesma in a Resolution dated December 29, 1993[8] denied the same.
A motion for reconsideration of the public respondent's resolution was denied in his
Order[9] dated January 27, 1994, hence, this special civil action for certiorari under Rule 65 of the
Revised Rules of Court where the principal issue raised is whether or not the public respondent
committed grave abuse of discretion in affirming the Med-Arbiter's order to conduct a certification
election among petitioner's rank and file employees, considering that: (1) respondent Union's legal
personality was squarely put in issue; (2) allegations of fraud and falsification, supported by
documentary evidence were made; and (3) a petition to cancel respondent Union's registration is
pending with the regional office of the Department of Labor and Employment.[10]
We grant the petition.
In the public respondent's assailed Resolution dated December 29, 1993, the suggestion is
made that once a labor organization has filed the necessary documents and papers and the same
have been certified under oath and attested to, said organization necessarily becomes clothed with
the character of a legitimate labor organization. The resolution declares:
Records show that at the time of the filing of the subject petition on 9 July 1993 by the petitioner
NLM-KATIPUNAN, for and in behalf of its local affiliate Sumasaklaw sa Manggagawa ng Pizza Hut,
the latter has been clothed with the status and/or character of a legitimate labor organization. This is
so, because on 8 July 1993, petitioner submitted to the Bureau of Labor Relations (BLR), this
Department, the following documents: Charter Certificate, Minutes of the Organizational Meeting,
List of Officers, and their respective addresses, financial statement, Constitution and By-Laws (CBL,
and the minutes of the ratification of the CBL). Said documents (except the charter certificate) are
certified under oath and attested to by the local union's Secretary/Treasurer and President,
respectively.
As to the contention that the certification election proceedings should be suspended in view of the
pending case for the cancellation of the petitioner's certificate of registration, let it be stressed that
the pendency of a cancellation case is not a ground for the dismissal or suspension of a
representation proceedings considering that a registered labor organization continues to be a
legitimate one entitled to all the rights appurtenant thereto until a final valid order is issued canceling
such registration.[11]
In essence, therefore, the real controversy in this case centers on the question of whether or
not, after the necessary papers and documents have been filed by a labor organization, recognition
by the Bureau of Labor Relations merely becomes a ministerial function.
We do not agree.
In the first place, the public respondent's views as expressed in his December 29, 1993
Resolution miss the entire point behind the nature and purpose of proceedings leading to the
recognition of unions as legitimate labor organizations. Article 234 of the Labor Code provides:
Art. 234. Requirements of registration. - Any applicant labor organization, association or group of
unions or workers shall acquire legal personality and shall be entitled to the rights and privileges
granted by law to legitimate labor organizations upon issuance of the certificate of registration based
on the following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor
organization, the minutes of the organizational meetings and the list of the workers who
participated in such meetings;
(c) The names of all its members comprising at least twenty percent (20%) of all the
employees in the bargaining unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies of its annual
financial reports; and
(e) Four (4) copies of the constitution and by-laws of the applicant union, minutes of its
adoption or ratification, and the list of the members who participated in it.
A more than cursory reading of the aforecited provisions clearly indicates that the requirements
embodied therein are intended as preventive measures against the commission of fraud.After a labor
organization has filed the necessary papers and documents for registration, it becomes mandatory
for the Bureau of Labor Relations to check if the requirements under Article 234 have been
sedulously complied with. If its application for registration is vitiated by falsification and serious
irregularities, especially those appearing on the face of the application and the supporting
documents, a labor organization should be denied recognition as a legitimate labor
organization. And if a certificate of recognition has been issued, the propriety of the labor
organization's registration could be assailed directly through cancellation of registration proceedings
in accordance with Articles 238 and 239 of the Labor Code, or indirectly, by challenging its petition
for the issuance of an order for certification election.
These measures are necessary - and may be undertaken simultaneously - if the spirit behind
the Labor Code's requirements for registration are to be given flesh and blood. Registration
requirements specifically afford a measure of protection to unsuspecting employees who may be
lured into joining unscrupulous or fly-by-night unions whose sole purpose is to control union funds or
use the labor organization for illegitimate ends.[12] Such requirements are a valid exercise of the
police power, because the activities in which labor organizations, associations and unions of workers
are engaged directly affect the public interest and should be protected.[13]
Thus, in Progressive Development Corporation vs. Secretary of Labor and Employment,[14] we
held:
The controversy in this case centers on the requirements before a local or chapter of a federation
may file a petition for certification election and be certified as the sole and exclusive bargaining
agent of the petitioner's employees.
xxx
But while Article 257 cited by the Solicitor General directs the automatic conduct of a certification
election in an unorganized establishment, it also requires that the petition for certification election
must be filed by a legitimate labor organization. xxx
xxx
xxx. The employer naturally needs assurance that the union it is dealing with is a bona-fide
organization, one which has not submitted false statements or misrepresentations to the
Bureau. The inclusion of the certification and attestation requirements will in a marked degree allay
these apprehensions of management. Not only is the issuance of any false statement and
misrepresentation or ground for cancellation of registration (see Article 239 (a), (c) and (d)); it is also
a ground for a criminal charge of perjury.
The certification and attestation requirements are preventive measures against the commission of
fraud. They likewise afford a measure of protection to unsuspecting employees who may be lured
into joining unscrupulous or fly-by-night unions whose sole purpose is to control union funds or to
use the union for dubious ends.
xxx
xxx. It is not this Court's function to augment the requirements prescribed by law in order to make
them wiser or to allow greater protection to the workers and even their employer. Our only recourse
is, as earlier discussed, to exact strict compliance with what the law provides as requisites for local
or chapter formation.
xxx
The Court's conclusion should not be misconstrued as impairing the local union's right to be certified
as the employees' bargaining agent in the petitioner's establishment. We are merely saying that the
local union must first comply with the statutory requirements in order to exercise this right. Big
federations and national unions of workers should take the lead in requiring their locals and chapters
to faithfully comply with the law and the rules instead of merely snapping union after union into their
folds in a furious bid with rival federations to get the most number of members.
Furthermore, the Labor Code itself grants the Bureau of Labor Relations a period of thirty (30)
days within which to review all applications for registration. Article 235 provides:
"Art. 235. Action on application. - The Bureau shall act on all applications for registration within thirty
(30) days from filing.
All requisite documents and papers shall be certified under oath by the secretary or the treasurer of
the organization, as the case may be, and attested to by its president."
The thirty-day period in the aforecited provision ensures that any action taken by the Bureau of
Labor Relations is made in consonance with the mandate of the Labor Code, which, it bears
emphasis, specifically requires that the basis for the issuance of a certificate of registration should be
compliance with the requirements for recognition under Article 234. Since, obviously, recognition of a
labor union or labor organization is not merely a ministerial function, the question now arises as to
whether or not the public respondent committed grave abuse of discretion in affirming the Med-
Arbiter's order in spite of the fact that the question of the Union's legitimacy was squarely put in issue
and that the allegations of fraud and falsification were adequately supported by documentary
evidence.
The Labor Code requires that in organized and unorganized[15] establishments, a petition for
certification election must be filed by a legitimate labor organization. The acquisition of rights by any
union or labor organization, particularly the right to file a petition for certification election, first and
foremost, depends on whether or not the labor organization has attained the status of a legitimate
labor organization.
In the case before us, the Med-Arbiter summarily disregarded the petitioner's prayer that the
former look into the legitimacy of the respondent Union by a sweeping declaration that the union was
in the possession of a charter certificate so that "for all intents and purposes, Sumasaklaw sa
Manggagawa sa Pizza Hut (was) a legitimate labor organization."[16] Glossing over the
transcendental issue of fraud and misrepresentation raised by herein petitioner, Med-Arbiter Rasidali
Abdullah held that:
The alleged misrepresentation, fraud and false statement in connection with the issuance of the
charter certificate are collateral issues which could be ventilated in the cancellation proceedings.[17]
It cannot be denied that the grounds invoked by petitioner for the cancellation of respondent
Union's registration fall under paragraph (a) and (c) of Article 239 of the Labor Code. to wit:
(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the
constitution and by-laws or amendments thereto, the minutes of ratification, the list of members who
took part in the ratification of the constitution and by-laws or amendments thereto, the minutes of
ratification, the list of members who took part in the ratification;
xxx
(c) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of
the election of officers, the list of voters, or failure to submit these documents together with the list of
the newly elected-appointed officers and their postal addresses within thirty (30) days from election
xxx
The grounds ventilated in cancellation proceedings in accordance with Article 239 of the Labor
Code constitute a grave challenge to the right of respondent Union to ask for certification election.
The Med-Arbiter should have looked into the merits of the petition for cancellation before issuing an
order calling for certification election. Registration based on false and fraudulent statements and
documents confer no legitimacy upon a labor organization irregularly recognized, which, at best,
holds on to a mere scrap of paper. Under such circumstances, the labor organization, not being a
legitimate labor organization, acquires no rights, particularly the right to ask for certification election
in a bargaining unit.
As we laid emphasis in Progressive Development Corporation Labor,[18] "[t]he employer needs
the assurance that the union it is dealing with is a bona fide organization, one which has not
submitted false statements or misrepresentations to the Bureau." Clearly, fraud, falsification and
misrepresentation in obtaining recognition as a legitimate labor organization are contrary to the Med-
Arbiter's conclusion not merely collateral issues. The invalidity of respondent Union's registration
would negate its legal personality to participate in certification election.
Once a labor organization attains the status of a legitimate labor organization it begins to
possess all of the rights and privileges granted by law to such organizations. As such rights and
privileges ultimately affect areas which are constitutionally protected, the activities in which labor
organizations, associations and unions are engaged directly affect the public interest and should be
zealously protected. A strict enforcement of the Labor Code's requirements for the acquisition of the
status of a legitimate labor organization is in order.
Inasmuch as the legal personality of respondent Union had been seriously challenged, it would
have been more prudent for the Med-Arbiter and public respondent to have granted petitioner's
request for the suspension of proceedings in the certification election case, until the issue of the
legality of the Union's registration shall have been resolved. Failure of the Med-Arbiter and public
respondent to heed the request constituted a grave abuse of discretion.
WHEREFORE, PREMISES CONSIDERED, the instant petition is GRANTED and the
Resolution and Order of the public respondent dated December 29, 1993 and January 24, 1994,
respectively, are hereby SET ASIDE.
The case is REMANDED to the Med-Arbiter to resolve with reasonable dispatch petitioner's
petition for cancellation of respondent Union's registration
SO ORDERED.
Padilla, (Chairman), Bellosillo, and Vitug, JJ., concur.
Hermosisima, Jr., J., on leave.

8. SAN MIGUEL CORPORATION (MANDAUE PACKAGING PRODUCTS PLANTS), petitioner,


vs. MANDAUE PACKING PRODUCTS PLANTS-SAN PACKAGING PRODUCTS SAN
MIGUEL CORPORATION MONTHLIES RANK-AND-FILE UNION FFW (MPPP-SMPP-
SMAMRFU-FFW), respondent.
DECISION
TINGA, J.:
The central question in this Petition for Review is on what date did respondent Mandaue
Packing Products Plants-San Miguel Packaging ProductsSan Miguel Corporation Monthlies Rank-
And-File UnionFFW acquire legal personality in accordance with the Implementing Rules of the
Labor Code. The matter is crucial since respondent filed a petition for certification election at a date
when, it is argued, it had yet to acquire the requisite legal personality. The Department of Labor and
Employment (DOLE) and the Court of Appeals both ruled that respondent had acquired legal
personality on the same day it filed the petition for certification election. The procedure employed by
the respondent did not strictly conform with the relevant provisions of law. But rather than insist on
an overly literal reading of the law that senselessly suffocates the constitutionally guaranteed right to
self-organization, we uphold the assailed decisions and the liberal spirit that animates them.
Antecedent Facts
The present petition assailed the Decision dated 7 June 2001 rendered by the Court of Appeals
Eighth Division[1] which in turn affirmed a Decision dated 22 Feburary 1999 by the DOLE
Undersecretary for Labor Relations, Rosalinda Dimapilis-Baldoz, ordering the immediate conduct of
a certification election among the petitioners rank-and-file employees, as prayed for by respondent.
The following facts are culled from the records.
On 15 June 1998, respondent, identifying itself as an affiliate of Federation of Free Workers
(FFW), filed a petition for certification election with the DOLE Regional Office No. VII. In the petition,
respondent stated that it sought to be certified and to represent the permanent rank-and-file monthly
paid employees of the petitioner.[2] The following documents were attached to the petition: (1) a
Charter Certificate issued by FFW on 5 June 1998 certifying that respondent as of that date was duly
certified as a local or chapter of FFW; (2) a copy of the constitution of respondent prepared by its
Secretary, Noel T. Bathan and attested by its President, Wilfred V. Sagun; (3) a list of respondents
officers and their respective addresses, again prepared by Bathan and attested by Sagun; (4) a
certification signifying that respondent had just been organized and no amount had yet been
collected from its members, signed by respondents treasurer Chita D. Rodriguez and attested by
Sagun; and (5) a list of all the rank-and-file monthly paid employees of the Mandaue Packaging
Products Plants and Mandaue Glass Plant prepared by Bathan and attested by Sagun.[3]
The petition was assigned to Mediator-Arbiter Achilles V. Manit of the DOLE Regional Office No.
VII, and docketed as Case No. R0700-9806-RU-013.[4]
On 27 July 1998, petitioner filed a motion to dismiss the petition for certification election on the
sole ground that herein respondent is not listed or included in the roster of legitimate labor
organizations based on the certification issued by the Officer-In-Charge, Regional Director of the
DOLE Regional Office No. VII, Atty. Jesus B. Gabor, on 24 July 1998.
On 29 July 1998, respondent submitted to the Bureau of Labor Relations the same documents
earlier attached to its petition for certification. The accompanying letter, signed by respondents
president Sagun, stated that such documents were submitted in compliance with the requirements
for the creation of a local/chapter pursuant to the Labor Code and its Implementing Rules; and it was
hoped that the submissions would facilitate the listing of respondent under the roster of legitimate
labor organizations.[5] On 3 August 1998, the Chief of Labor Relations Division of DOLE Regional
Office No. VII issued a Certificate of Creation of Local/Chapter No. ITD. I-ARFBT-058/98, certifying
that from 30 July 1998, respondent has acquired legal personality as a labor organization/workers
association, it having submitted all the required documents.[6]
Opting not to file a comment on the Motion to Dismiss,[7] respondent instead filed a Position
Paper wherein it asserted that it had complied with all the necessary requirements for the conduct of
a certification election, and that the ground relied upon in the Motion to Dismiss was a mere
technicality.[8]
In turn, petitioner filed a Comment, wherein it reiterated that respondent was not a legitimate
labor organization at the time of the filing of the petition. Petitioner also propounded that contrary to
respondents objectives of establishing an organization representing rank-and-file employees, two of
respondents officers, namely Vice-President Emannuel L. Rosell and Secretary Bathan, were
actually supervisory employees. In support of this allegation, petitioner attached various documents
evidencing the designation of these two officers in supervisory roles, as well as their exercise of
various supervisory functions.[9] Petitioner cited Article 245 of the Labor Code, which provides that
supervisory employees shall not be eligible for membership in a labor organization of the rank-and-
file employees.[10]
On 20 August 1998, petitioner filed a petition to cancel the union registration of respondent.
However, this petition was denied, and such denial was subsequently affirmed by the Court of
Appeals in a decision that has since become final.[11]
In the meantime, on 15 September 1998, Med-Arbiter Manit issued an Order dismissing
respondents petition for certification election. The sole ground relied upon for the dismissal was the
Med-Arbiters Opinion that as of the date of filing of the petition on 15 June 1998, respondent did not
have the legal personality to file the said petition for certification election. [12] No discussion was
adduced on petitioners claims that some of respondents officers were actually supervisory
employees.
Respondent promptly appealed the 15 September 1998 Order to the DOLE. On 22 February
1999, DOLE Undersecretary Rosalinda Dimapilis-Baldoz rendered a Decision reversing the Order.
Undersecretary Baldoz concluded that respondent acquired legal personality as early as 15 June
1998, the date it submitted the required documents, citing Section 3, Rule VI of the New Rules
Implementing the Labor Code (Implementing Rules) which deems that a local/chapter acquires legal
personality from the date of filing of the complete documentary requirements as mandated in the
Implementing Rules. The DOLE also ruled that the contention that two of respondents officers were
actually supervisors can be threshed out in the pre-election conferences where the list of qualified
voters is to be determined. The dispositive portion of the DOLE Decision stated:
WHEREFORE, the appeal is GRANTED. The order dated 15 September 1999 of the Med-Arbiter is
REVERSED and SET ASIDE. Accordingly, let the records of the case be remanded to the office of
origin for the immediate conduct of certification election, subject to the usual pre-election conference,
among the monthly-paid rank-and-file employees of the Mandaue Packaging Products Plant San
Miguel Corporation, with the following choices:
1. MANDAUE PACKAGING PRODUCT PLANT SAN MIGUEL PACKAGING
PRODUCTS SAN MIGUEL CORPORATION MONTHLIES RANK AND FILE
UNIONFFW (MPPP-SMPP-SMCMRFUFFW),
2. NO UNION.
Pursuant to Rule XI, Section 11.1 of the New Implementing Rules, the company is hereby directed to
submit to the office of origin the certified list of current employees in the bargaining unit, along with
the payrolls covering the members of the bargaining unit for the last three months prior to the
issuance of this decision.
SO DECIDED.[13]
These two conclusions of the DOLE were affirmed in the assailed Decision of the Court of
Appeals. It is now our task to review whether these conclusions are warranted under law and
jurisprudence. First, we shall discuss the aspect of respondents legal personality in filing the petition
for certification election.
First Issue: On the Acquisition of
Legal Personality by Respondent
Statutory Provisions for Registration Of
Local/Chapter of Federation or National Union
Before we proceed to evaluate the particular facts of this case, it would be useful to review the
statutory paradigm that governs the establishment and acquisition of legal personality by a
local/chapter of a labor organization. The applicable rules have undergone significant amendments
in the last decade, thus a recapitulation of the framework is in order.
The Labor Code defines a labor organization as any union or association of employees which
exists in whole or in part for the purpose of collective bargaining or of dealing with employers
concerning terms and conditions of employment,[14] and a legitimate labor organization as any labor
organization duly registered with the DOLE, including any branch or local thereof.[15] Only legitimate
labor organizations may file a petition for certification election.[16]
Article 234 of the Labor Code enumerates the requirements for registration of an applicant labor
organization, association, or group of unions or workers in order that such entity could acquire legal
personality and entitlement to the rights and privileges granted by law to legitimate labor
organizations. These include a registration fee of fifty pesos (P50.00); a list of the names of the
members and officers, and copies of the constitution and by-laws of the applicant union.[17]
However, the Labor Code itself does not lay down the procedure for the registration of a local or
chapter of a labor organization. Such has been traditionally provided instead in the Implementing
Rules, particularly in Book V thereof. However, in the last decade or so, significant amendments
have been introduced to Book V, first by Department Order No. 9 which took effect on 21 June 1997,
and again by Department Order No. 40 dated 17 February 2003. The differences in the procedures
laid down in these various versions are significant. However, since the instant petition for certification
was filed in 1998, the Implementing Rules, as amended by Department Order No. 9, should govern
the resolution of this petition.[18]
Preliminarily, we should note that a less stringent procedure obtains in the registration of a local
or chapter than that of a labor organization. Undoubtedly, the intent of the law in imposing lesser
requirements in the case of a branch or local of a registered federation or national union is to
encourage the affiliation of a local union with a federation or national union in order to increase the
local union's bargaining powers respecting terms and conditions of labor.[19] This policy has
remained consistent despite the succeeding amendments to Book V of the Omnibus Implementing
Rules, as contained in Department Orders Nos. 9 and 40.
The case of Progressive Development Corp. v. Secretary of Labor,[20] applying Section 3, Rule
II, Book V of the Implementing Rules, in force before 1997, ruled that "a local or chapter therefore
becomes a legitimate labor organization only upon submission of the following to the BLR: (1) a
charter certificate, within thirty (30) days from its issuance by the labor federation or national union;
and (2) The constitution and by-laws, a statement of the set of officers, and the books of accounts all
of which are certified under oath by the secretary or treasurer, as the case may be, of such local or
chapter, and attested to by its president.[21] The submission by the local/chapter of duly certified
books of accounts as a prerequisite for registration of the local/chapter was dropped in Department
Order No. 9,[22] a development noted by the Court in Pagpalain Haulers v. Hon. Trajano,[23] wherein it
was held that the previous doctrines requiring the submission of books of accounts as a prerequisite
for the registration of a local/chapter are already pass and therefore, no longer applicable.[24]
Department Order No. 40, now in effect, has eased the requirements by which a local/chapter
may acquire legal personality. Interestingly, Department Order No. 40 no longer uses the term
local/chapter, utilizing instead chartered local, which is defined as a labor organization in the private
sector operating at the enterprise level that acquired legal personality through the issuance of a
charter certificate by a duly registered federation or national union, and reported to the Regional
Office.[25] Clearly under the present rules, the first step to be undertaken in the creation of a
chartered local is the issuance of a charter certificate by the duly registered federation or national
union. Said federation or national union is then obligated to report to the Regional Office the creation
of such chartered local, attaching thereto the charter certificate it had earlier issued.[26]
But as stated earlier, it is Department Order No. 9 that governs in this case. Section 1, Rule VI
thereof prescribes the documentary requirements for the creation of a local/chapter. It states:
Section 1. Chartering and creation of a local chapter A duly registered federation or national union
may directly create a local/chapter by submitting to the Regional Office or to the Bureau two (2)
copies of the following:
a) A charter certificate issued by the federation or national union indicating the creation or
establishment of the local/chapter;
(b) The names of the local/chapter's officers, their addresses, and the principal office of the
local/chapter;
(c) The local/chapter's constitution and by-laws; provided that where the local/chapter's
constitution and by-laws is the same as that of the federation or national union, this fact
shall be indicated accordingly.
All the foregoing supporting requirements shall be certified under oath by the Secretary or Treasurer
of the local/chapter and attested by its President.
In contrast, an independent union seeking registration is further required under Dept. Order No.
90 to submit the number and names of the members, and annual financial reports.[27]
Section 3, Rule VI of Department Order No. 9 provides when the local/chapter acquires legal
personality.
Section 3. Acquisition of legal personality by local chapter. A local/chapter constituted in accordance
with Section 1 of this Rule shall acquire legal personality from the date of filing of the complete
documents enumerated therein. Upon compliance with all the documentary requirements, the
Regional Office or Bureau shall issue in favor of the local/chapter a certificate indicating that it is
included in the roster of legitimate labor organizations.
It is evident based on this rule that the local/chapter acquires legal personality from the date of
the filing of the complete documentary requirements, and not from the issuance of a certification to
such effect by the Regional Office or Bureau. On the other hand, a labor organization is deemed to
have acquired legal personality only on the date of issuance of its certificate of registration,[28] which
takes place only after the Bureau of Labor Relations or its Regional Offices has undertaken an
evaluation process lasting up until thirty (30) days, within which period it approves or denies the
application.[29] In contrast, no such period of evaluation is provided in Department Order No. 9 for the
application of a local/chapter, and more importantly, under it such local/chapter is deemed to acquire
legal personality from the date of filing of the documents enumerated under Section 1, Rule VI, Book
V.
Apart from promoting a policy of affiliation of local unions with national unions,[30] there is a
practical reason for sanctioning a less onerous procedure for the registration of a local/chapter, as
compared to the national union. The local/chapter relies in part on the legal personality of the
federation or national union, which in turn, had already undergone evaluation and approval from the
Bureau of Legal Relations or Regional Office. In fact, a federation or national union is required, upon
registration, to establish proof of affiliation of at least ten (10) locals or chapters which are duly
recognized as the collective bargaining agent in the establishment or industry in which they operate;
and the names and addresses of the companies where the locals or chapters operate and the list of
all the members in each of the companies.[31] Once the national union or federation acquires legal
personality upon the issuance of its certificate or registration,[32] its legal personality cannot be
subject to collateral attack.[33]
The fact that the local/chapter acquires legal personality from the moment the complete
documentary requirements are submitted seems to imply that the duty of the Bureau or Regional
Office to register the local/chapter is merely ministerial. However, in Progressive
Development Corporation v. Laguesma,[34] the Court, in ruling against a petition for certification filed
by a chapter, held that the mere submission of the documentary requirements does not render
ministerial the function of the Bureau of Labor Relations in according due recognition to the labor
organization.[35] Still, that case was decided before the enactment of Department Order No. 9,
including the aforestated Section 3. Should we consider the said 1997 amendments as having
obviated our characterization in Progressive of the Bureaus duty as non-ministerial?
Notwithstanding the amendments, it still is good policy to maintain that per Department Order
No. 9, the duty of the Bureau of Labor Relations to recognize the local/chapter upon the submission
of the documentary requirements is not ministerial, insofar as the Bureau is obliged to adjudge the
authenticity of the documents required to be submitted. For example, the Bureau is not mandated to
accept just any purported charter certificate matter how spurious it is in appearance. It is empowered
to ascertain whether the submitted charter certificate is genuine, and if finding that said certificate is
fake, deny recognition to the local/chapter.
However, in ascertaining whether or not to recognize and register the local/chapter, the Bureau
or Regional Office should not look beyond the authenticity and due execution of the documentary
requirements for the creation of the local/chapter as enumerated under Section 1, Rule VI, Book V of
Department Order No. 9. Since the proper submission of these documentary requirements is all that
is necessary to recognize a local/chapter, it is beyond the province of the Bureau or Regional Offices
to resort to other grounds as basis for denying legal recognition of the local/chapter. For example,
Department Order No. 9 does not require the local/chapter to submit the names of its members as a
condition precedent to its registration.[36] It therefore would be improper to deny legal recognition to a
local/chapter owing to questions pertaining to its individual members since the local/chapter is not
even obliged to submit the names of its individual members prior to registration.
Certainly, when a local/chapter applies for registration, matters raised against the personality of
the federation or national union itself should not be acted upon by the Bureau or Regional Office,
owing to the preclusion of collateral attack. Instead, the proper matter for evaluation by the Bureau
or Regional Office should be limited to whether the local/chapter is indeed a duly created affiliate of
the national union or federation.
Parenthetically, under the present Implementing Rules as amended by Department Order No.
40, it appears that the local/chapter (or now, chartered local) acquires legal personality upon the
issuance of the charter certificate by the duly registered federation or national union.[37] This might
signify that the creation of the chartered local is within the sole discretion of the federation or national
union and thus beyond the review or interference of the Bureau of Labor Relations or its Regional
Offices. However, Department Order No. 40 also requires that the federation or national union report
the creation of the chartered local to the Regional Office.
Acquisition by Respondent of Legal Personality
We now proceed to determine if and when the respondent acquired legal personality under the
procedure laid down by the rules then in effect, Department Order No. 9, that is.
At the onset, the arguments raised by petitioner on this point are plainly erroneous. Petitioner
cites the case of Toyota Motor Philippines v. Toyota Motor Philippines Corporation Labor
Union,[38] and the purported holding therein that [if] it is true that at the time of the filing of the
petition, the said registration certificate has not been approved yet, then, petitioner lacks the legal
personality to file the petition.[39] However, an examination of the case actually reveals that the cited
portion was lifted from one of the antecedent rulings of the Med-Arbiter in that case which had not
even been affirmed or reinstated by the Court on review.[40] Moreover, such pronouncement made
prior to the enactment of Department Order No. 9 squarely contradicts Section 3, Rule VI thereof,
which provides that legal personality of the local/chapter is vested upon the submission of the
complete documentary requirements.
It is also worth noting that petitioner union in Toyota was an independent labor union, and not a
local/chapter, and under Department Order No. 9, independent labor unions, unlike local/chapters,
acquire legal personality only upon issuance of the certificate of registration by the Bureau or
Regional Office. Still, petitioner cites in its favor Section 5, Rule V of Dept. Order No. 9, which states
that the labor organization or workers association shall be deemed registered and vested with legal
personality on the date of issuance of its certificate of registration. Again, the citation is obviously
misplaced, as respondent herein is a local/chapter, the acquisition of its legal personality being
governed instead by Section 3, Rule VI.
It is thus very clear that the issuance of the certificate of registration by the Bureau or Regional
Office is not the operative act that vests legal personality upon a local/chapter under Department
Order No. 9. Such legal personality is acquired from the filing of the complete documentary
requirements enumerated in Section 1, Rule VI. Admittedly, the manner by which respondent was
deemed to have acquired legal personality by the DOLE and the Court of Appeals was not in strict
conformity with the provisions of Department Order No. 9. Nonetheless, are the deviations significant
enough for the Court to achieve a different conclusion from that made by the DOLE and the Court of
Appeals?
In regular order, it is the federation or national union, already in possession of legal personality,
which initiates the creation of the local/chapter. It issues a charter certificate indicating the creation
or establishment of the local/chapter. It then submits this charter certificate, along with the names of
the local/chapters officers, constitution and by-laws to the Regional Office or Bureau. It is the
submission of these documents, certified under oath by the Secretary or Treasurer of the
local/chapter and attested by the President, which vests legal personality in the local/chapter, which
is then free to file on its own a petition for certification election.
In this case, the federation in question, the FFW, did not submit any of these documentary
requirements to the Regional Office or Bureau. It did however issue a charter certificate to the
putative local/chapter (herein respondent). Respondent then submitted the charter certificate along
with the other documentary requirements to the Regional Office, but not for the specific purpose of
creating the local/chapter, but for filing the petition for certification election.
It could be properly said that at the exact moment respondent was filing the petition for
certification, it did not yet possess any legal personality, since the requisites for acquisition of legal
personality under Section 3, Rule VI of Department Order No. 9 had not yet been complied with. It
could also be discerned that the intention of the Labor Code and its Implementing Rules that only
those labor organizations that have acquired legal personality are capacitated to file petitions for
certification elections. Such is the general rule.
Yet there are peculiar circumstances in this case that allow the Court to rule that respondent
acquired the requisite legal personality at the same time it filed the petition for certification election.
In doing so, the Court acknowledges that the strict letter of the procedural rule was not complied
with. However, labor laws are generally construed liberally in favor of labor, especially if doing so
affirms the constitutionally guaranteed right to self-organization.
True enough, there was no attempt made by the national federation, or the local/chapter for that
matter, to submit the enumerated documentary requirements to the Regional Office or Bureau for the
specific purpose of creating the local/chapter. However, these same documents were submitted by
the local/chapter to the Regional Office as attachments to its petition for certification election. Under
Section 3, Rule VI of Department Order No. 9, it is the submission of these same documents to the
Regional Office or Bureau that operates to vest legal personality on the local/chapter.
Thus, in order to ascertain when respondent acquired legal personality, we only need to
determine on what date the Regional Office or Bureau received the complete documentary
requirements enumerated under Section 1, Rule VI of Department Order No. 9. There is no doubt
that on 15 June 1998, or the date respondent filed its petition for certification election, attached
thereto were respondents constitution, the names and addresses of its officers, and the charter
certificate issued by the national union FFW. The first two of these documents were duly certified
under oath by respondents secretary Bathan and attested to by president Sagun.[41]
It may be noted though that respondent never submitted a separate by-laws, nor does it appear
that respondent ever intended to prepare a set thereof. Section 1(c), Rule VI, Book V of Department
Order No. 9 provides that the submission of both a constitution and a set of by-laws is required, or at
least an indication that the local/chapter is adopting the constitution and by-laws of the federation or
national union. A literal reading of the provision might indicate that the failure to submit a specific set
of by-laws is fatal to the recognition of the local/chapter. A more critical analysis of this requirement
though is in order, especially as it should apply to this petition.
By-laws has traditionally been defined as regulations, ordinances, rules or laws adopted by an
association or corporation or the like for its internal governance, including rules for routine matters
such as calling meetings and the like.[42] The importance of by-laws to a labor organization cannot be
gainsaid. Without such provisions governing the internal governance of the organization, such as
rules on meetings and quorum requirements, there would be no apparent basis on how the union
could operate. Without a set of by-laws which provides how the local/chapter arrives at its decisions
or otherwise wields its attributes of legal personality, then every action of the local/chapter may be
put into legal controversy.
However, if those key by-law provisions on matters such as quorum requirements, meetings, or
on the internal governance of the local/chapter are themselves already provided for in the
constitution, then it would be feasible to overlook the requirement for by-laws. Indeed in such an
event, to insist on the submission of a separate document denominated as By-Laws would be an
undue technicality, as well as a redundancy.
An examination of respondents constitution reveals it sufficiently comprehensive in establishing
the necessary rules for its operation. Article IV establishes the requisites for membership in the
local/chapter. Articles V and VI name the various officers and what their respective functions are.
The procedure for election of these officers, including the necessary vote requirements, is provided
for in Article IX, while Article XV delineates the procedure for the impeachment of these officers.
Article VII establishes the standing committees of the local/chapter and how their members are
appointed. Article VIII lays down the rules for meetings of the union, including the notice and quorum
requirements thereof. Article X enumerates with particularity the rules for union dues, special
assessments, fines, and other payments. Article XII provides the general rule for quorum in meetings
of the Board of Directors and of the members of the local/chapter, and cites the applicability of the
Roberts Rules of Order[43] in its meetings. And finally, Article XVI governs and institutes the
requisites for the amendment of the constitution.
Indeed, it is difficult to see in this case what a set of by-laws separate from the constitution for
respondent could provide that is not already provided for by the Constitution. These premises
considered, there is clearly no need for a separate set of by-laws to be submitted by respondent.
The Court likewise sees no impediment in deeming respondent as having acquired legal
personality as of 15 June 1998, the fact that it was the local/chapter itself, and not the FFW, which
submitted the documents required under Section 1, Rule VI of Department Order No. 9. The evident
rationale why the rule states that it is the federation or national union that submits said documents to
the Bureau or Regional Office is that the creation of the local/chapter is the sole prerogative of the
federation or national union, and not of any other entity. Certainly, a putative local/chapter cannot,
without the imprimatur of the federation or national union, claim affiliation with the larger unit or
source its legal personality therefrom.
In the ordinary course, it should have been FFW, and not respondent, which should have
submitted the subject documents to the Regional Office. Nonetheless, there is no good reason to
deny legal personality or defer its conferral to the local/chapter if it is evident at the onset that the
federation or national union itself has already through its own means established the local/chapter.
In this case, such is evidenced by the Charter Certificate dated 9 June 1998, issued by FFW, and
attached to the petition for certification election. The Charter Certificate expressly states that
respondent has been issued the said certificate to operate as a local or chapter of the [FFW]. The
Charter Certificate expressly acknowledges FFWs intent to establish respondent as of 9 June
1998.[44] This being the case, we consider it permissible for respondent to have submitted the
required documents itself to the Regional Office, and proper that respondents legal personality be
deemed existent as of 15 June 1998, the date the complete documents were submitted.
Second Issue: On the Alleged Presence
Of Supervisory Employees as
Officers of the Respondent
The second issue hinges on a point of some controversy and frequent discussion in recent
years. Petitioner claims error in the common pronouncement in the assailed decisions that the
matter concerning the two officers who are allegedly supervisory employees may be threshed out
during pre-election conferences. Petitioner cites the cases of Toyota Motors andProgressive
Development Corporation-Pizza Hut v. Ledesma[45] wherein the Court ruled that the question of
prohibited membership of both supervisory and rank-and-file employees in the same union must be
inquired into anterior to the granting of an order allowing a certification election; and that a union
composed of both of these kinds of employees does not possess the requisite personality to file for
recognition as a legitimate labor organization. It should be noted though that in the more recent case
of Tagaytay Highlands International Golf Club v. Tagaytay Highlands Employees Union,[46] the Court,
notwithstanding Toyota and Progressive, ruled that after a certificate of registration is issued to a
union, its legal personality cannot be subject to collateral attack, but questioned only in an
independent petition for cancellation.[47]
There is no need to apply any of the above cases at present because the question raised by
petitioner on this point is already settled law, as a result of the denial of the independent petition for
cancellation filed by petitioner against respondent on 20 August 1998. The ground relied upon
therein was the alleged fraud, misrepresentation and false statement in describing itself as a union
of rank and file employees when in fact, two of its officers, Emmanuel Rosell and Noel Bathan, were
occupying supervisory positions.[48] Said petition was denied by the Regional Director, this action
was affirmed by the DOLE, the Court of Appeals, and the Supreme Court.[49] The denial made by the
Court of Appeals and the Supreme Court may have been based on procedural grounds,[50] but the
prior decisions of the Regional Director and the DOLE ruled squarely on the same issue now raised
by the petitioner. We quote from the Resolution of the DOLE dated 29 December 1998:
. . . . [The] substantive issue that is now before us is whether or not the inclusion of the two alleged
supervisory employees in appellee unions membership amounts to fraud, misrepresentation, or false
statement within the meaning of Article 239(a) and (c) of the Labor Code.
We rule in the negative.
Under the law, a managerial employee is one who is vested with powers or prerogatives to lay down
and execute management policies and/or to hire, transfer, suspend, layoff, recall, discharge, assign
or discipline employees. A supervisory employee is one who, in the interest of the employer,
effectively recommends managerial actions if the exercise of such recommendatory authority is not
merely routinary or clerical in nature but requires the use of independent judgment. Finally, all
employees not falling within the definition of managerial or supervisory employee are considered
rank-and-file employees. It is also well-settled that the actual functions of an employee, not merely
his job title, are determinative in classifying such employee as managerial, supervisory or rank and
file.
In the case of Emmanuel Rossell, appellants evidence shows that he undertakes the filling out of
evaluation reports on the performance of mechanics, which in turn are used as basis for
reclassification. Given a ready and standard form to accomplish, coupled with the nature of the
evaluation, it would appear that his functions are more routinary than recommendatory and hardly
leave room for independent judgment. In the case of Noel Bathan, appellants evidence does not
show his job title although it shows that his recommendations on disciplinary actions appear to have
carried some weight on higher management. On this limited point, he may qualify as a supervisory
employee within the meaning of the law. This may, however, be outweighed by his other functions
which are not specified in the evidence.
Assuming that Bathan is a supervisory employee, this does not prove the existence of fraud, false
statement or misrepresentation. Because good faith is presumed in all representations, an essential
element of fraud, false statement and misrepresentation in order for these to be actionable is intent
to mislead by the party making the representation. In this case, there is no proof to show that
Bathan, or appellee union for that matter, intended to mislead anyone. If this was appellee unions
intention, it would have refrained from using a more precise description of the organization instead of
declaring that the organization is composed of rank and file monthlies. Hence, the charge of fraud,
false statement or misrepresentation cannot be sustained.
Appellants reliance on the Toyota case must be tempered by the peculiar circumstances of the
case. Even assuming that Bathan, or Rossel for that matter, are supervisory employees,
the Toyota case cannot certainly be given an interpretation that emasculates the right to self-
organization and the promotion of free trade unionism. We take administrative notice of the realities
in union organizing, during which the organizers must take their chances, oftentimes unaware of the
fine distinctions between managerial, supervisory and rank and file employees. The grounds for
cancellation of union registration are not meant to be applied automatically, but indeed with utmost
discretion. Where a remedy short of cancellation is available, that remedy should be preferred. In
this case, no party will be prejudiced if Bathan were to be excluded from membership in the union.
The vacancy he will thus create can then be easily filled up through the succession provision of
appellee unions constitution and by-laws. What is important is that there is an unmistakeable intent
of the members of appellee union to exercise their right to organize. We cannot impose rigorous
restraints on such right if we are to give meaning to the protection to labor and social justice clauses
of the Constitution.[51]
The above-cited pronouncement by Bureau of Labor Relations Director Benedicto Ernesto R.
Bitonio, Jr. in BLR-A-C-41-11-11-98 was affirmed by the Court of Appeals and the Supreme Court.
Hence, its pronouncement affirming, notwithstanding the questions on the employment status of
Rossell and Bathan, the legitimacy of the respondent, stands as a final ruling beyond the ambit of
review, thus warranting the Courts respect. There may be a difference between this case, which
involves a petition for certification election, and the other case, which concerns a petition for
cancellation. However, petitioner opposes the petition for certification election on the ground of the
illegitimacy of respondent, owing to the alleged supervisory nature of the duties of Rossell and
Bathan. That matter has already been settled in the final disposition of the petition for cancellation,
and thus cannot be unsettled by reason of this present petition.
Effect of Respondents Manifestation
Of Subsequent Developments
A final note. In its Memorandum, petitioner alleges that the bargaining unit that respondent
sought to represent is no longer the same because of the dynamic nature of petitioners business, a
lot of changes having occurred in the work environment, and that four of respondents officers are no
longer connected with petitioner.[52] Assuming that these manifestations are true, they have no effect
on the Courts ruling that a certification election should be immediately conducted with respondent as
one of the available choices. Petitioners bare manifestations adduce no reason why the certification
election should not be conducted forthwith. If there are matters that have arisen since the filing of the
petition that serve to delay or cancel the election, these can be threshed out during the pre-election
conferences. Neither is the fact that some of respondents officers have since resigned from
petitioner of any moment. The local/chapter retains a separate legal personality from that of its
officers or members that remains viable notwithstanding any turnover in its officers or members.
WHEREFORE, the Petition is DENIED. Costs against petitioner.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur.

9. SAN MIGUEL FOODS, INC.-CEBU B-MEG FEED PLANT, petitioner, vs. HON. BIENVENIDO
E. LAGUESMA, Undersecretary of DOLE and ILAW AT BUKLOD NG MANGGAGAWA
(IBM), respondents.
DECISION
HERMOSISIMA, JR., J.:
This is a petition for certiorari under Rule 65 to review and set aside two Resolutions of
Mediator-Arbiter Achilles V. Manit, dated January 5, 1994 and April 6, 1994, and the affirmation
Order on appeal of the public respondent, Undersecretary Bienvenido E. Laguesma of the
Department of Labor and Employment. The petition below was entitled: In Re: Petition for Direct
Certification as the Sole and Exclusive Bargaining Agent of All Monthly Paid Employees of SMFI-
Cebu B-Meg Feeds Plant, docketed as OS-MA-A-3-51-94 (RO700-9309-RU-036).
The essential facts are not disputed.
On September 24, 1993, a petition for certification election among the monthly-paid employees
of the San Miguel Foods, Inc.-Cebu B-Meg Feeds Plant was filed by private respondent labor
federation Ilaw at Buklod ng Manggagawa (IBM, for brevity) before Med-Arbiter Achilles V. Manit,
alleging, inter alia, that it is a legitimate labor organization duly registered with the Department of
labor and Employment (DOLE) under the Registration Certificate No. 5369-IP. SMFI-Cebu B-Meg
Feeds Plant (SMFI, for brevity), herein petitioner, is a business entity duly organized and existing
under the laws of the Philippines which employs roughly seventy-five (75) monthly paid employees,
almost all of whom support the present petition. It was submitted in said petition that there has been
no certification election conducted in SMFI to determine the sole and exclusive bargaining agent
thereat for the past two years and that the proposed bargaining unit, which is SMFIs monthly paid
employees, is an unorganized one. It was also stated therein that petitioner IBM (herein private
respondent) has already complied with the mandatory requirements for the creation of its local or
affiliate in SMFIs establishment.
On October 25, 1993, herein petitioner SMFI filed a Motion to Dismiss the aforementioned
petition dated September 24, 1993 on the ground that a similar petition remains pending between
the same parties for the same cause of action before Med-Arbiter Achilles V. Manit.
SMFI was referring to an evidently earlier petition, docketed as CE CASE NO R0700-9304-RU-
016, filed on April 28, 1993 before the office of Med-Arbiter Manit. Indeed, both petitions involved the
same parties, cause of action and relief being prayed for, which is the issuance of an order by the
Med-Arbiter allowing the conduct of a certification election in SMFIs establishment. The contention is
that the judgment that may be rendered in the first petition would be determinative of the outcome of
the second petition, dated September 24, 1993.
On December 2, 1993, private respondent IBM filed its Opposition to SMFIs Motion to Dismiss
contending, among others, that the case referred to by SMFI had already been resolved by Med-
Arbiter Manit in his Resolution and Order date July 26, 1993[1] and September 2,
1993,[2] respectively, wherein IBMs first petition for certification election was denied mainly due to
IBMs failure to comply with certain mandatory requirements of the law. This denial was affirmed by
the Med-Arbiter in another Order dated November 12, 1993[3] wherein the Resolutions dated July 26,
1993 and September 2, 1993 were made to stand. Thus, IBM argues that there having been no
similar petition pending before Med-Arbiter Manit, another petition for certification election may be
refiled as soon as the said requirements are met. These requirements were finally satisfied before
the second petition for certification election was brought on September 24, 1993.
On January 5, 1994, Med-Arbiter Manit, this time, granted the second petition for certification
election of private respondent IBM in this wise:
Let, therefore, a certification election be conducted among the monthly paid rank and file
employees of SMFI-CEBU B-MEG FEEDS PLANT at Lo-oc, Mandaue City. The choices
shall be: YES-for IBM AT SMFI-CEBU B-MEG; and NO-for No Union.
The parties are hereby notified of the pre-election conference which will take place
on January 17, 1994 at 3:00 oclock in the afternoon to set the date and time of the election
and to thresh out the mechanics thereof. On said date and time the respondent is directed
to submit the payroll of its monthly paid rank and file employees for the month of June 1993
which shall be the basis for the list of the eligible voters. The petitioner is directed to be
ready to submit a list of the monthly paid rank and file employees of SMFI-CEBU B-MEG
FEEDS PLANT when the respondent fails to submit the required payroll.
SO ORDERED.[4]
Petitioner SMFI appealed the foregoing Order to the Secretary of Labor and Employment
alleging that the Med-Arbiter erred in directing the conduct of certification election considering that
the local or chapter of IBM at SMFI is still not a legitimate labor organization with a right to be
certified as the exclusive bargaining agent in petitioners establishment based on two
grounds: (1) the authenticity and due execution of the Charter Certificate submitted by IBM in favor
of its local at SMFI cannot yet be ascertained as it is still now known who is the legitimate and
authorized representative of the IBM Federation who may validly issue said Charter Certificate; and
(2) a group of workers or a local union shall acquire legal personality only upon the issuance of a
Certificate of Registration by the Bureau of Labor Relations under Article 234 of the Labor Code,
which IBM at SMFI did not possess.
In a resolution dated April 6, 1994, public respondent Undersecretary Bienvenido Laguesma, by
authority of the Secretary of Labor and Employment, denied petitioners appeal, viz.:
WHEREFORE, the appeal is hereby denied for lack of merit and the Order of the Med-
Arbiter is hereby affirmed.
Let the records of this case be forwarded to the Regional Office of origin for the immediate
conduct of certification election subject to the usual pre-election conference.
SO RESOLVED.[5]
Thereafter, a Motion for Reconsideration was filed which was also denied by the public
respondent in his Order dated May 24, 1994.[6]
Hence, the instant petition interposing the following justifications:
1) THE HONORABLE UNDERSECRETARY BIENVENIDO E. LAGUESMA GRAVELY
ABUSED HIS DISCRETION WHEN HE ARBITRARILY RULED THAT A LOCAL
OR CHAPTER OF A LABOR FEDERATION, LIKE RESPONDENT IBM, NEED
NOT OBTAIN A CERTIFICATE OF REGISTRATION FROM THE BUREAU OF
LABOR RELATIONS TO ACQUIRE LEGAL PERSONALITY, WHEN ARTICLE
234 OF THE LABOR CODE OF THE PHILIPPINES AND SECTION 3 OF RULE
II OF BOOK V OF THE RULES IMPLEMENTING THE LABOR CODE, AS
AMENDED, CLEARLY PROVIDES THAT A GROUP OF WORKERS OR A
LOCAL UNION SHALL ACQUIRE LEGAL PERSONALITY ONLY UPON THE
ISSUANCE OF THE CERTIFICATE OF REGISTRATION BY THE BUREAU OF
LABOR RELATIONS. AND,
2) THE HONORABLE UNDERSECRETARY BIENVENIDO E. LAGUESMA GRAVELY
ABUSED HIS DISCRETION WHEN HE PREMATURELY AND ARBITRARILY
RULED THAT RESPONDENT IBM IS A LEGITIMATE LABOR ORGANIZATION
WHEN THE AUTHENTICITY AND DUE EXECUTION OF THE CHARTER
CERTIFICATE SUBMITTED BY RESPONDENT IBM CANNOT YET BE
ASCERTAINED BECAUSE IT IS STILL NOT KNOWN WHO ARE THE
LEGITIMATE OFFICERS OF THE IBM FEDERATION WHO MAY VALIDLY
ISSUE SAID CHARTER CERTIFICATE AS THE CASE FILED TO RESOLVE
THE ISSUE ON WHO ARE THE LEGITIMATE OFFICERS OF THE IBM
FEDERATION IS STILL PENDING RESOLUTION BEFORE THIS
HONORABLE SUPREME COURT.[7]
The petition has no merit.
Petitioner asserts that IBM at SMFI is not a legitimate labor organization notwithstanding the
fact that it is a local or chapter of the IBM Federation. This is so because under Article 234 of the
Labor Code, any labor organization shall acquire legal personality upon the issuance of the
Certificate of Registration by the Bureau of Labor Relations.
We do not agree.
I
Article 212(h) of the Labor Code defines a legitimate labor organization as any labor
organization duly registered with the Department of Labor and Employment, and includes any
branch or local thereof.
It is important to determine whether or not a particular labor organization is legitimate since
legitimate labor organizations have exclusive rights under the law which cannot be exercised by non-
legitimate unions, one of which is the right to be certified as the exclusive representative of all the
employees in an appropriate collective bargaining unit for purposes of collective bargaining. These
rights are found under Article 242 of the Labor Code, to wit:
ART. 242. Rights of legitimate organizations.--A legitimate labor organization shall have the
right:
(a) To act as the representative of its members for the purpose of collective bargaining;
(b) To be certiified as the exclusive representative of all the employees in an appropriate collective
bargaining unit for purposes of collective bargaining;
(c) To be furnished by the employer, upon written request, with his annual audited financial
statements, including the balance sheet and the profit and loss statement, within thirty (30) calendar
days from the date of receipt of the request, after the union has been duly recognized by the
employer or certified as the sole and exclusive bargaining representative of the employees in the
bargaining unit, or within sixty (60) calendar days before the expiration of the existing collective
bargaining agreement, or during the collective bargaining negotiation;
(d) To own property, real or personal, for the use and benefit of the labor organization and its
members;
(e) To sue and be sued in its registered name; and
(f) To undertake all other activities designed to benefit the organization and its members, including
cooperative, housing welfare and other projects not contrary to law.
x x x x x x x x x."
The pertinent question, therefore, must be asked: When does a labor organization acquire
legitimacy?
Ordinarily, a labor organization attains the status of legitamacy only upon the issuance in its
name of a Certificate of Registration by the Bureau of Labor Relations pursuant to Articles 234 and
235 of the Labor Code, viz.:
ART. 234. Requirements of registration.--Any applicant labor organization, association or
group of unions or workers shall acquire legal personality and shall be entitled to the rights
and privileges granted by law to legitimate labor organizations upon issuance of the
certificate of registration based on the following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor organization, the
minutes of the organizational meetings and the list of the workers who participated in such meetings;
(c) The names of all its members comprising at least twenty percent (20%) of all the employees in
the bargaining unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies of its annual financial
reports; and
(e) Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or
ratification, and the list of the members who participated in it.
ART. 235. Action on application. -- The Bureau shall act on all applications for registration
within thirty (30) days from filing.
All requisite documents and papers shall be certified under oath by the secretary or the
treasurer of the organization, as the case may be, and attested to by its president.
The foregoing procedure is not the only way by which a labor union may become legitimate,
however. When an unregistered union becomes a branch, local or chapter of a federation, some of
the aforementioned requirements for registration are no longer required.[8] Section 3, Rule II, Book V
of the Implementing Rules of the Labor Code governs the procedure for union affiliation, the relevant
portions of which provide:
Sec. 3. Union Affiliation: Direct Membership with National Union. An affiliate of a labor
federation or national union may be a local or chapter thereof or an independently
registered union.
(a) The labor federation or national union concerned shall issue a chapter certificate
indicating the creation or establishment of a local or chapter, copy of which shall be
submitted to the Bureau of Labor Relations within thirty (30) days from issuance of such
charter certificate.
(b) An independently registered union shall be considered an affiliate of a labor federation
or national union after submission to the Bureau of the contract or agreement of affiliation
within thirty (30) days after its execution.
xxxxxxxxx
(e) The local or chapter of a labor federation or national union shall have and maintain a
constitution and by-laws, set of officers and book of accounts. For reporting purposes, the
procedure governing the reporting of independently registered unions, federations or
national unions shall be observed.
Paragraph (a) refers to a local or chapter of a federation which did not undergo the rudiments of
registration while paragraph (b) refers to an independently registered union which affiliated with a
federation. Implicit in the foregoing differentiation is the fact that a local or chapter need not be
independently registered. By force of law (in this case, Article 212 [h]), such local or chapter
becomes a legitimate labor organization upon compliance with the aforementioned provisions of
Section 3[9] (a) and (e), without having to be issued a Certificate of Registration in its favor by the
BLR.
The cases of Lopez Sugar Corporation v. Secretary of Labor and Employment,[10] Phoenix Iron
and Steel Corporation v. Secretary of Labor and Employment,[11] and Protection Technology, Inc. v.
Secretary, Department of Labor and Employment,[12] all going back to our landmark holding
in Progressive Development Corporation v. Secretary, Department of Labor and
Employment,[13] unequivocably laid down the rule, thus:
A local or chapter therefore becomes a legitimate labor organization only upon submission
of the following to the BLR:
1) A charter certificate, within 30 days from its issuance by the labor federation or
national union, and
2) The constitution and by-laws, a statement on the set of officers, and the books
of accounts all of which are certified under oath by the secretary or
treasurer, as the case may be, of such local or chapter, and attested to by its
president.
Absent compliance with these mandatory requirements, the local or chapter does not
become a legitimate labor organization.
Corollarily, the satisfaction of all these requirements by the local or chapter shall vest upon it the
status of legitimacy with all its concomitant statutory privileges, one of which is the right to be
certified as the exclusive representative of all the employees in an appropriate bargaining unit.
In the case at bench, public respondent Bienvenido E. Laguesma, in affirming the finding of the
Med-Arbiter that IBM at SMFI is a legitimate labor organization,[14] made the following material
pronouncements amply supported by the records:
[t]he resolution of the issue raised by the respondent on whether or not petitioner is a
legitimate labor organization will depend on the documents submitted by the petitioner in
the second petition.
A close scrutiny of the records shows that at the time of the filing of the subject petition on
24 September 1993 by the petitioner Ilaw at Buklod ng Manggagawa, for and in behalf of
its local affiliate IBM at SMFI-CEBU B-MEG, the latter has been clothed with the status
and/or character of a legitimate labor organization. This is so, because on 19 July 1993,
petitioner submitted to the Bureau of Labor Relations (BLR), this Department, the following
documents: charter certificate, constitution and by-laws, names and addresses of the union
officers and a certification of the unions secretary on the non-availability of the unions
Books of Accounts. Said documents (except the charter certificate) are certified under oath
and attested to by the local unions secretary and President, respectively.[15]
Petitioner SMFI does not dispute the fact that IBM at SMFI has complied with the second set of
requirements, i.e., constitution, by-laws, et. al. What is controverted is the non-compliance with the
requirement as to the charter certificate which must be submitted to the BLR within thirty (30) days
from its issuance by the labor federation. While the presence of a charter certificate is conceded,
petitioner maintains that the validity and authenticity of the same cannot yet be ascertained as it is
still not known who is the legitimate and authorized representative of the IBM Federation who may
validly issue said charter certificate in favor of its local, IBM at SMFI. According to petitioner, there
are two (2) contending sets of officers of the IBM Federation at the time the charter certificate was
issued in favor of IBM at SMFI, the faction of Mr. Severino O. Meron and that of Mr. Edilberto B.
Galvez.
On this point, public respondent, in upholding the legitimate status of IBM at SMFI, backed up
by the Solicitor General, had this to say:
The contention of the respondent that unless and until the issue on who is the legitimate
national president, of the Ilaw at Buklod ng Manggagawa is resolved, the petitioner cannot
claim that it has a valid charter certificate necessary for it to acquire legal personality is
untenable. We wish to stress that the resolution of the said issue will not in any way affect
the validity of the charter certificate issued by the IBM in favor of the local union. It must be
borne in mind that the said charter certificate was issued by the IBM in its capacity as a
labor organization, a juridical entity which has a separate and distinct legal personality from
its members. When as in this case, there is no showing that the Federation acting as a
separate entity is questioning the legality of the issuance of the said charter certificate, the
legality of the issuance of the same in favor of the local union is presumed. This,
notwithstanding the alleged controversy on the leadership of the federation.[16]
We agree with this position of the public respondent and the Solicitor General. In addition,
private respondents Comment to this petition indicates that in the election of officers held to
determine the representatives of IBM, the faction of Mr. Meron lost to the group of Mr. Edilberto
Galvez, and the latter was acknowledged as the duly elected IBM National President.[17]Thus, the
authority of Mr. Galvez to sign the charter certificate of IBM at SMFI, as President of the IBM
Federation,[18] can no longer be successfully questioned. A punctilious examination of the records
presents no evidence to the contrary and petitioner, instead of squarely refuting this point, skirted the
issue by insisting that the mere presence of two contending factions in the IBM prevents the
issuance of a valid and authentic charter certificate in favor of IBM at SMFI. This averment of
petitioner simply does not deserve any merit.
II
In any case, this Court notes that it is petitioner, the employer, which has offered the most
tenacious resistance to the holding of a certification election among its monthly-paid rank-and-file
employees. This must not be so, for the choice of a collective bargaining agent is the sole concern of
the employees.[19] The only exception to this rule is where the employer has to file the petition for
certification election pursuant to Article 258[20] of the Labor Code because it was requested to
bargain collectively,[21] which exception finds no application in the case before us. Its role in a
certification election has aptly been described in Trade Unions of the Philippines and Allied Services
(TUPAS) v. Trajano,[22] as that of a mere by-stander. It has no legal standing in a certification
election as it cannot oppose the petition or appeal the Med-Arbiters orders related thereto. An
employer that involves itself in a certification election lends suspicion to the fact that it wants to
create a company union.[23] This Court should be the last agency to lend support to such an attempt
at interference with a purely internal affair of labor.[24]
While employers may rightfully be notified or informed of petitions of such nature, they should
not, however, be considered parties thereto with the concomitant right to oppose it. Sound policy
dictates that they should maintain a strictly hands-off policy.[25]
It bears stressing that no obstacle must be placed to the holding of certification elections,[26] for
it is a statutory policy that should not be circumvented.[27] The certification election is the most
democratic and expeditious method by which the laborers can freely determine the union that shall
act as their representative in their dealings with the establishment where they are working.[28] It is the
appropriate means whereby controversies and disputes on representation may be laid to rest, by the
unequivocal vote of the employees themselves.[29] Indeed, it is the keystone of industrial
democracy.[30]
III
Petitioner next asseverates that the Charter Certificate submitted by the private respondent was
defective in that it was not certified under oath and attested to by the organizations secretary and
President.
Petitioner is grasping at straws. Under our ruling in the Progressive Development
Corporation[31] case, what is required to be certified under oath by the secretary or treasurer and
attested to by the locals president are the constitution and by-laws, a statement on the set of officers,
and the books of accounts of the organization. The charter certificate issued by the mother union
need not be certified under oath by the secretary or treasurer and attested to by the locals president.
IV
Petitioner, in its Reply to public respondents Comment, nevertheless calls the attention of this
court to the fact that, contrary to the assertion of private respondent IBM that it is a legitimate labor
federation and therefore has the capacity and authority to create a local or chapter at SMFI, the
Chief of the Labor Organizations Division of the Bureau of Labor Relations Manila had allegedly
issued a certification last January 17, 1995 to the effect that private respondent is not a legitimate
labor federation.[32]
This is a factual issue which petitioner should have raised before the Med-Arbiter so as to allow
the private respondent ample opportunity to present evidence to the contrary. This Court is definitely
not the proper venue to consider this matter for it is not a trier of facts. It is noteworthy that petitioner
did not challenge the legal personality of the federation in the proceedings before the Med-
Arbiter. Nor was this issue raised in petitioners appeal to the Office of the Secretary of Labor and
Employment. This matter is being raised for the first time in this petition. An issue which was neither
alleged in the pleadings nor raised during the proceedings below cannot be ventilated for the first
time before this Court. It would be offensive to the basic rule of fair play, justice and due
process.[33] Certiorari is a remedy narrow in its scope and inflexible in character. It is not a general
utility tool in the legal workshop.[34] Factual issues are not a proper subject for certiorari, as the
power of the Supreme Court to review labor cases is limited to the issue of jurisdiction and grave
abuse of discretion.[35] It is simply unthinkable for the public respondent Undersecretary of Labor to
have committed grave abuse of discretion in this regard when the issue as to the legal personality of
the private respondent IBM Federation was never interposed in the appeal before said forum.
V
Finally, the certification election sought to be stopped by petitioner is, as of now, fait
accompli. The monthly paid rank-and-file employees of SMFI have already articulated their choice as
to who their collective bargaining agent should be. In the certification election held on August 20,
1994,[36] the SMFI workers chose IBM at SMFI to be their sole and exclusive bargaining agent. This
democratic decision deserves utmost respect. Again, it bears stressing that labor legislation seeks in
the main to protect the interest of the members of the working class. It should never be used to
subvert their will.[37]
WHEREFORE, the petition is DENIED. Costs against petitioner.
SO ORDERED.
Bellosillo, Vitug, and Kapunan, JJ., concur.
Padilla (Chairman), J., no part, on account of interests in San Miguel Group of companies.

10. JERRY E. ACEDERA, ANTONIO PARILLA, AND OTHERS LISTED IN ANNEX


A,[1] petitioners-appellants, vs. INTERNATIONAL CONTAINER TERMINAL SERVICES,
INC. (ICTSI), NATIONAL LABOR RELATIONS COMMISSION and HON. COURT OF
APPEALS, respondents-appellees.
DECISION
CARPIO-MORALES, J.:
For consideration is the petition for review on certiorari assailing the decision of the Court of
Appeals affirming that of the National Labor Relations Commission (NLRC) which affirmed the
decision of the Labor Arbiter denying herein petitioners-appellants Complaint-in-Intervention with
Motion for Intervention.
The antecedent facts are as follows:
Petitioners-appellants Jerry Acedera, et al. are employees of herein private respondent
International Container Terminal Services, Inc. (ICTSI) and are officers/members of Associated Port
Checkers & Workers Union-International Container Terminal Services, Inc. Local Chapter (APCWU-
ICTSI), a labor organization duly registered as a local affiliate of the Associated Port Checkers &
Workers Union (APCWU).
When ICTSI started its operations in 1988, it determined the rate of pay of its employees by
using 304 days, the number of days of work of the employees in a year, as divisor.[2]
On September 28, 1990, ICTSI entered into its first Collective Bargaining Agreement (CBA) with
APCWU with a term of five years effective until September 28, 1995.[3] The CBA was renegotiated
and thereafter renewed through a second CBA that took effect on September 29, 1995, effective for
another five years.[4] Both CBAs contained an identically-worded provision on hours and days of
work reading:
Article IX
Regular Hours of Work and Days of Labor
Section 1. The regular working days in a week shall be five (5) days on any day from Monday to
Sunday, as may be scheduled by the COMPANY, upon seven (7) days prior notice unless any of this
day is declared a special holiday.[5] (Underscoring omitted)
In accordance with the above-quoted provision of the CBA, the employees work week was
reduced to five days or a total of 250 days a year. ICTSI, however, continued using the 304-day
divisor in computing the wages of the employees.[6]
On November 10, 1990, the Regional Tripartite Wage and Productivity Board (RTWPB) in the
National Capital Region decreed a P17.00 daily wage increase for all workers and employees
receiving P125.00 per day or lower in the National Capital Region.[7] The then president of APCWU,
together with some union members, thus requested the ICTSIs Human Resource
Department/Personnel Manager to compute the actual monthly increase in the employees wages by
multiplying the RTWPB mandated increase by 365 days and dividing the product by 12 months.[8]
Heeding the proposal and following the implementation of the new wage order, ICTSI stopped
using 304 days as divisor and started using 365 days in determining the daily wage of its employees
and other consequential compensation, even if the employees work week consisted of only five days
as agreed upon in the CBA.[9]
In early 1997, ICTSI went on a retrenchment program and laid off its on-call employees.[10] This
prompted the APCWU-ICTSI to file a notice of strike which included as cause of action not only the
retrenchment of the employees but also ICTSIs use of 365 days as divisor in the computation of
wages.[11] The dispute respecting the retrenchment was resolved by a compromise
settlement[12] while that respecting the computation of wages was referred to the Labor Arbiter.[13]
On February 26, 1997, APCWU, on behalf of its members and other employees similarly
situated, filed with the Labor Arbiter a complaint against ICTSI which was dismissed for APCWUs
failure to file its position paper.[14] Upon the demand of herein petitioners-appellants, APCWU filed a
motion to revive the case which was granted. APCWU thereupon filed its position paper on August
22, 1997.[15]
On December 8, 1997, petitioners-appellants filed with the Labor Arbiter a Complaint-in-
Intervention with Motion to Intervene.[16] In the petition at bar, they justified their move to intervene in
this wise:
[S]hould the union succeed in prosecuting the case and in getting a favorable reward it is actually
they that would benefit from the decision. On the other hand, should the union fail to prove its case,
or to prosecute the case diligently, the individual workers or members of the union would suffer great
and immeasurable loss. [t]hey wanted to insure by their intervention that the case would thereafter
be prosecuted with all due diligence and would not again be dismissed for lack of interest to
prosecute on the part of the union.[17]
The Labor Arbiter rendered a decision, the dispositive portion of which reads:
WHEREFORE, decision is hereby rendered declaring that the correct divisor in computing the daily
wage and other labor standard benefits of the employees of respondent ICTSI who are members of
complainant Union as well as the other employees similarly situated is two hundred fifty (250) days
such that said respondent is hereby ordered to pay the employees concerned the differentials
representing the underpayment of said salaries and other benefits reckoned three (3) years back
from February 26, 1997, the date of filing of this complaint or computed from February 27 1994 until
paid, but for purposes of appeal, the salary differentials are temporarily computed for one year in the
amount of Four Hundred Sixty Eight Thousand Forty Pesos (P468,040.00).[18]
In the same decision, the Labor Arbiter denied petitioners-appellants Complaint-in-Intervention
with Motion for Intervention upon a finding that they are already well represented by APCWU.[19]
On appeal, the NLRC reversed the decision of the Labor Arbiter and dismissed APCWUs
complaint for lack of merit.[20] The denial of petitioners-appellants intervention was, however,
affirmed.[21]
Unsatisfied with the decision of the NLRC, APCWU filed a petition for certiorari with the Court of
Appeals while petitioners-appellants filed theirs with this Court which referred the petition[22] to the
Court of Appeals.
The Court of Appeals dismissed APCWUs petition on the following grounds: failure to allege
when its motion for reconsideration of the NLRC decision was filed, failure to attach the necessary
appendices to the petition, and failure to file its motion for extension to file its petition within the
reglementary period.[23]
As for petitioners-appellants petition for certiorari, it was dismissed by the Court of Appeals in
this wise:
It is clear from the records that herein petitioners, claiming to be employees of respondent ICTSI,
are already well represented by its employees union, APCWU, in the petition before this Court
(CA-G.R. SP. No. 53266) although the same has been dismissed. The present petition is, therefore
a superfluity that deserves to be dismissed. Furthermore, only Acedera signed the Certificate of
non-forum shopping. On this score alone, this petition should likewise be dismissed. We find that
the same has no merit considering that herein petitioners have not presented any meritorious
argument that would justify the reversal of the Decision of the NLRC.
Article IX of the CBA provides:
REGULAR HOURS OF WORK AND DAYS OF LABOR
Section 1. The regular working days in a week shall be five (5) days on any day from Monday to
Sunday, as may be scheduled by the COMPANY, upon seven (7) days prior notice unless any of this
day is declared a special holiday.
This provision categorically states the required number of working days an employee is expected to
work for a week. It does not, however, indicate the manner in which an employees salary is to be
computed. In fact, nothing in the CBA makes any referral to any divisor which should be the basis for
determining the salary. The NLRC, therefore, correctly ruled that xxx the absence of any express or
specific provision in the CBA that 250 days should be used as divisor altogether makes the position
of the Union untenable.
xxx
Considering that herein petitioners themselves requested that 365 days be used as the divisor in
computing their wage increase and later did not raise or object to the same during the negotiations
of the new CBA, they are clearly estopped to now complain of such computation only because they
no longer benefit from it. Indeed, the 365 divisor for the past seven (7) years has already become
practice and law between the company and its employees.[24] (Emphasis supplied)
xxx
Hence, the present petition of petitioners-appellants who fault the Court of Appeals as follows:
I
. . . IN REJECTING THE CBA OF THE PARTIES AS THE SOURCE OF THE DIVISOR TO
DETERMINE THE WORKERS DAILY RATE TOTALLY DISREGARDED THE APPLICABLE
LANDMARK DECISIONS OF THE HONORABLE SUPREME COURT ON THE MATTER.
II
. . . [IN] DISREGARD[ING] APPLICABLE DECISIONS OF THIS HONORABLE COURT WHEN IT
RULED THAT THE PETITIONERS-APPELLANTS ARE ALREADY IN ESTOPPEL.
III
. . . IN RULING THAT THE PETITIONERS-APPELLANTS HAVE NO LEGAL RIGHT TO
INTERVENE IN AND PURSUE THIS CASE AND THAT THEIR INTERVENTION IS A
SUPERFLUITY.
IV
. . . IN HOLDING, ALTHOUGH MERELY AS AN OBITER DICTUM, THAT ONLY PETITIONER
JERRY ACEDERA SIGNED THE CERTIFICATE OF NON-FORUM SHOPPING.[25]
The third assigned error respecting petitioners-appellants right to intervene shall first be passed
upon, it being determinative of their right to raise the other assigned errors.
Petitioners-appellants anchor their right to intervene on Rule 19 of the 1997 Rules of Civil
Procedure, Section 1 of which reads:
Section 1. Who may intervene.- A person who has legal interest in the matter in litigation, or in the
success of either of the parties, or an interest against both, or is so situated to be adversely affected
by a distribution or other disposition of property in the custody of the court or of an officer thereof
may, with leave of court, be allowed to intervene in the action. The court shall consider whether or
not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties,
and whether or not the intervenors right may be fully protected in a separate proceeding.
They stress that they have complied with the requisites for intervention because (1) they are the
ones who stand to gain or lose by the direct legal operation and effect of any judgment that may be
rendered in this case, (2) no undue delay or prejudice would result from their intervention since their
Complaint-in-Intervention with Motion for Intervention was filed while the Labor Arbiter was still
hearing the case and before any decision thereon was rendered, and (3) it was not possible for them
to file a separate case as they would be guilty of forum shopping because the only forum available
for them was the Labor Arbiter.[26]
Petitioners-appellants, however, failed to consider, in addition to the rule on intervention, the
rule on representation, thusly:
Sec. 3. Representatives as parties.- Where the action is allowed to be prosecuted or defended by a
representative or someone acting in a fiduciary capacity, the beneficiary shall be included in the title
of the case and shall be deemed to be the real party in interest. A representative may be a trustee of
an express trust, a guardian, an executor or administrator, or a party authorized by law or these
Rules. . . [27](Emphasis supplied)
A labor union is one such party authorized to represent its members under Article 242(a) of the
Labor Code which provides that a union may act as the representative of its members for the
purpose of collective bargaining. This authority includes the power to represent its members for the
purpose of enforcing the provisions of the CBA. That APCWU acted in a representative capacity for
and in behalf of its Union members and other employees similarly situated, the title of the case filed
by it at the Labor Arbiters Office so expressly states.
While a party acting in a representative capacity, such as a union, may be permitted to
intervene in a case, ordinarily, a person whose interests are already represented will not be
permitted to do the same[28] except when there is a suggestion of fraud or collusion or that the
representative will not act in good faith for the protection of all interests represented by him.[29]
Petitioners-appellants cite the dismissal of the case filed by ICTSI, first by the Labor Arbiter, and
later by the Court of Appeals.[30] The dismissal of the case does not, however, by itself show the
existence of fraud or collusion or a lack of good faith on the part of APCWU. There must be clear
and convincing evidence of fraud or collusion or lack of good faith independently of the dismissal.
This, petitioners-appellants failed to proffer.
Petitioners-appellants likewise express their fear that APCWU would not prosecute the case
diligently because of its sweetheart relationship with ICTSI.[31] There is nothing on record, however,
to support this alleged relationship which allegation surfaces as a mere afterthought because it was
never raised early on. It was raised only in petitioners-appellants reply to ICTSIs comment in the
petition at bar, the last pleading submitted to this Court, which was filed on June 20, 2001 or more
than 42 months after petitioners-appellants filed their Complaint-in-Intervention with Motion to
Intervene with the Labor Arbiter.
To reiterate, for a member of a class to be permitted to intervene in a representative action,
fraud or collusion or lack of good faith on the part of the representative must be proven. It must be
based on facts borne on record. Mere assertions, as what petitioners-appellants proffer, do not
suffice.
The foregoing discussion leaves it unnecessary to discuss the other assigned errors.
WHEREFORE, the present petition is hereby DENIED.
SO ORDERED.
Puno, J., (Chairman), Panganiban, Sandoval-Gutierrez, and Corona, JJ., concur.

11. MINETTE BAPTISTA, BANNIE EDSEL SAN MIGUEL, and MA. FEDAYON, Petitioners,
vs.
ROSARIO VILLANUEVA, JANETTE ROLDAN, DANILO OLAYVAR, ONOFRE ESTRELLA,
CATALINO LEDDA, MANOLO GUBANGCO, GILBERT ORIBIANA, CONSTANCIO SANTIAGO,
RUTH BAYQUEN, RUBY CASTANEDA, ALFRED LANDAS, JR., ROSELYN GARCES, EUGENE
CRUZ, MENANDRO SAMSON, FEDERICO MUNOZ and SALVADOR DIWA, Respondents.
DECISION
MENDOZA, J.:
This Petition for Review on Certiorari1 under Rule 45 of the 1997 Rules of Civil Procedure filed by
Minette Baptista, Bannie Edsel San Miguel and Ma. Fe Dayon (petitioners) assails the March 9,
2010 Decision2 and the December 1, 2010 Resolution3 of the Court of Appeals (CA) in CA-G.R. SP
No. 105027, which affirmed the March 31, 2008 Decision4 of the National Labor Relations
Commission (NLRC) dismissing the complaint for Unfair Labor Practice (ULP) filed against the
named respondents.
The Facts
Petitioners were former union members of Radio Philippines Network Employees Union (RPNEU), a
legitimate labor organization and the sole and exclusive bargaining agent of the rank and file
employees of Radio Philippines Network (RPN), a government-sequestered corporation involved in
commercial radio and television broadcasting affairs, while the respondents were the union’s elected
officers and members.
On April 26, 2005, on suspicion of union mismanagement, petitioners, together with some other
union members, filed a complaint for impeachment of their union president, Reynato Siozon, before
the executive board of RPN, which was eventually abandoned. They later re-lodged the
impeachment complaint, this time, against all the union officers and members of RPNEU before the
Department of Labor and Employment (DOLE). They likewise filed various petitions for audit
covering the period from 2000 to 2004.5
Thereafter, two (2) written complaints, dated May 26, 2005 and May 27, 2005, were filed against
petitioners and several others for alleged violation of the union’s Constitution and By-Laws.6 Months
later, on September 19, 2005, a different group of union members filed a third complaint against
petitioners and 12 others,7 before the Chairman of RPNEU’s Committee on Grievance and
Investigation (the Committee) citing as grounds the "commission of an act which violates RPNEU
Constitution and By-Laws, specifically, Article IX, Section 2.2 for joining or forming a union outside
the sixty (60) days period and Article IX, Section 2.5 for urging or advocating that a member start an
action in any court of justice or external investigative body against the Union or its officer without first
exhausting all internal remedies open to him or available in accordance with the CBL."8 These
complaints were, later on, consolidated.9
Thereafter, petitioners received a memorandum notice from Jeric Salinas, Chairman of the
Committee, requesting them to answer the complaint and attend a hearing scheduled on October 3,
2005.10 Petitioners and their group, through an exchange of communications with the Committee,
denied the charges imputed against them and contested the procedure adopted by the Committee in
its investigation. On November 9, 2005, the Committee submitted their recommendation of expulsion
from the union to RPNEU’s Board of Directors.11 On December 21, 2005, the RPNEU’s Board of
Directors affirmed the recommendation of expulsion of petitioners and the 12 others from union
membership in a Board Resolution No. 018-2005.12 Through a Memorandum,13 dated December 27,
2005, petitioners were served an expulsion notice from the union, which was set to take effect on
December 29, 2005. On January 2, 2006, petitioners with the 12 others wrote to RPNEU’s President
and Board of Directors that their expulsion from the union was an ultra vires act because the
Committee failed to observe the basic elements of due process because they were not given the
chance to physically confront and examine their complainants.14
In a letter, dated January 24, 2006, RPNEU’s officers informed their company of the expulsion of
petitioners and the 12 others from the union and requested the management to serve them notices
of termination from employment in compliance with their CBA’s union security clause.15 On February
17, 2006, RPN HRD Manager, Lourdes Angeles, informed petitioners and the 12 others of the
termination of their employment effective March 20, 2006, enforcing Article II, Section 216 also known
as the union security clause of their current CBA.17
Aggrieved, petitioners filed three (3) separate complaints for ULP against the respondents, which
were later consolidated,18 questioning legality of their expulsion from the union and their subsequent
termination from employment.
In a decision,19 dated April 30, 2007, the Labor Arbiter (LA) ruled in favor of the petitioners and
adjudged the respondents guilty of ULP pursuant to Article 249 (a) and (b) of the Labor Code. The
LA clarified that only the union officers of RPNEU could be held responsible for ULP, so they
exonerated six (6) of the original defendants who were mere union members. The LA also ordered
the reinstatement of petitioners as bonafide members of RPNEU. The decretal portion reads:
WHEREFORE, premises above considered, a decision is being issued declaring union officers Ruth
Bayquen, Ruby Castañeda, Alfred Landas, Roce Garces, Board of Directors Federico Muñoz,
Janette Roldan, Rosario Villanueva, Menandro Samson, Salvador Diwa and Eugene Cruz guilty of
unfair labor practice for violating Article 249, paragraph A and B of the Labor Code. Respondents
are also ordered to cease and desist from further committing unfair labor practice and order the
reinstatement of the complainants as bonafide members of the union.
The other claims are hereby denied for lack of factual and legal basis.
SO ORDERED.20
Undaunted, the respondents appealed the LA decision to the NLRC.
In its Decision,21 dated March 31, 2008, the NLRC vacated and set aside the LA decision and
dismissed the complaint for ULP for lack of merit. The NLRC found that petitioners filed a suit calling
for the impeachment of the officers and members of the Executive Board of RPNEU without first
resorting to internal remedies available under its own Constitution and By-Laws. The NLRC likewise
decreed that the LA’s order of reinstatement was improper because the legality of the membership
expulsion was not raised in the proceedings and, hence, beyond the jurisdiction of the LA.22 The fallo
of the NLRC decision reads:
WHEREFORE, the partial appeal filed by the respondents is GRANTED. The decision, dated 30
April 2007 is VACATED and SET ASIDE. The complaint is dismissed for lack of merit.
SO ORDERED.23
Petitioners filed for a motion for reconsideration, but the NLRC denied it in its Resolution,24 dated
May 30, 2008.
The CA, in its March 9, 2010 Decision, sustained the NLRC decision. The CA stated that the
termination of employment by virtue of a union security clause was recognized in our jurisdiction. It
explained that the said practice fortified the union and averted disunity in the bargaining unit within
the duration of the CBA. The CA declared that petitioners were accorded due process before they
were removed from office. In fact, petitioners were given the opportunity to explain their case and
they actually availed of said opportunity by submitting letters containing their arguments.25
Petitioners moved for reconsideration, but the CA likewise denied the same in its December 1, 2010
Resolution,26The CA expounded:
Anent petitioners’ charge of ULP against respondents, the records are barren of proof to sustain
such charge. What remains apparent is that petitioners were expelled from the union due to their
violation of Section 2.5 of Article IX of the CBL which punishes the act of "urging or advocating that a
member start an action in any court of justice or external investigative body against the Union or any
of its officer, without first exhausting all internal remedies open to him or available in accordance with
the Constitution and By-Laws of Union." As petitioners’ expulsion was pursuant to the union’s CBL,
We absolve respondents of the charges of ULP absent any substantial evidence to sustain it.
The importance of a union’s constitution and bylaws cannot be overemphasized. They embody a
covenant between a union and its members and constitute the fundamental law governing the
member’s rights and obligations. As such, the union’s constitution and bylaws should be upheld, as
long as they are not contrary to law, good morals or public policy. In Diamonon v. Department of
Labor and Employment, the High Court affirmed the validity and importance of the provision in the
CBL of exhaustion of administrative remedies, viz:
When the Constitution and by-laws of both unions dictated the remedy for intra-union dispute, such
as petitioner’s complaint against private respondents for unauthorized or illegal disbursement of
union funds, this should be resorted to before recourse can be made to the appropriate
administrative or judicial body, not only to give the grievance machinery or appeals’ body of the
union the opportunity to decide the matter by itself, but also to prevent unnecessary and premature
resort to administrative or judicial bodies. Thus, a party with an administrative remedy must not
merely initiate the prescribed administrative procedure to obtain relief, but also pursue it to its
appropriate conclusion before seeking judicial intervention.27
Thus, petitioners advance the following
GROUNDS/ARGUMENTS IN SUPPORT OF THE PETITION
1. WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS MISERABLY FAILED
TO APPRECIATE THE REAL ISSUE IN THIS CASE.
2. WITH DUE RESPECT, THE DECISION AND RESOLUTION ARRIVED AT BY THE
HONORABLE COURT OF APPEALS ARE NOT IN ACCORD WITH LAW AND
APPLICABLE JURISPRUDENCE, THEREBY GRAVELY ABUSING ITS DISCRETION
AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION.28
Petitioners submit that the respondents committed ULP under Article 289 (a) and (b) of the Labor
Code.29 They insist that they were denied substantive and procedural due process of law when they
were expelled from the RPNEU.
The petition is bereft of merit.
The primary concept of ULP is embodied in Article 247 of the Labor Code, which provides:
Article 247. Concept of unfair labor practice and procedure for prosecution thereof.––Unfair labor
practices violate the constitutional right of workers and employees to self-organization, are inimical to
the legitimate interests of both labor and management, including their right to bargain collectively
and otherwise deal with each other in an atmosphere of freedom and mutual respect, disrupt
industrial peace and hinder the promotion of healthy and stable labor-management relations.
In essence, ULP relates to the commission of acts that transgress the workers’ right to organize. As
specified in Articles 248 and 249 of the Labor Code, the prohibited acts must necessarily relate to
the workers' right to self-organization and to the observance of a CBA.30 Absent the said vital
elements, the acts complained, although seemingly unjust, would not constitute ULP.31
In the case at bench, petitioners claim that the respondents, as union officers, are guilty of ULP for
violating paragraphs (a) and (b) of Article 249 of the Labor Code, to wit:
ART. 249. UNFAIR LABOR PRACTICES OF LABOR ORGANIZATIONS.- It shall be unfair labor
practice for a labor organization, its officers, agents or representatives:
(a) To restrain or coerce employees in the exercise of their rights to self-organization.
However, a labor organization shall have the right to prescribe its own rules with respect to
the acquisition or retention of membership:
(b) To cause or attempt to cause an employer to discriminate against an employee, including
discrimination against an employee with respect to whom membership in such organization
has been denied or to terminate an employee on any ground other than the usual terms and
conditions under which membership or continuation of membership is made available to
other members;
Petitioners posit that the procedure that should have been followed by the respondents in resolving
the charges against them was Article XVII, Settlement of Internal Disputes of their Constitution and
By-Laws, specifically, Section 232 thereof, requiring members to put their grievance in writing to be
submitted to their union president, who shall strive to have the parties settle their differences
amicably. Petitioners maintain that any form of grievance would be referred only to the committee
upon failure of the parties to settle amicably.33
The Court is not persuaded.
Based on RPNEU’s Constitution and By-Laws, the charges against petitioners were not mere
internal squabbles, but violations that demand proper investigation because, if proven, would
constitute grounds for their expulsion from the union. As such, Article X, Investigation Procedures
and Appeal Process of RPNEU’s Constitution and By-Laws, which reads –
SECTION 1. Charge against any member or officer of the Union shall be submitted to the Board of
Directors (BOD) in writing, which shall refer the same, if necessary, to the committee on Grievance
and Investigation. The Committee shall hear any charge and subsequently, forward its finding and
recommendation to the BOD. The BOD has the power to approve or nullify the recommendation of
the Committee on Grievance and Investigation based on the merit of the appeal.
was correctly applied under the circumstances.
Besides, any supposed procedural flaw in the proceedings before the Committee was deemed cured
when petitioners were given the opportunity to be heard. Due process, as a constitutional precept, is
satisfied when a person was notified of the charge against him and was given an opportunity to
explain or defend himself. In administrative proceedings, the filing of charges and giving reasonable
opportunity for the person so charged to answer the accusations against him constitute the minimum
requirements of due process.34 The essence of due process is simply to be heard, or as applied to
administrative proceedings, an opportunity to explain one’s side, or an opportunity to seek a
reconsideration of the action or ruling complained of.35 It cannot be denied that petitioners were
properly notified of the charges filed against them and were equally afforded the opportunity to
present their side.
Next, petitioners point out that they were not given the opportunity to personally face and confront
their accusers, which were violative of their right to examine the complainants and the supposed
charges against them.36
Petitioners’ contention is without merit. Mere absence of a one-onone confrontation between the
petitioners and their complainants does not automatically affect the validity of the proceedings before
the Committee. Not all cases necessitate a trial-type hearing.37 As in this case, what is indispensable
is that a party be given the right to explain one’s side, which was adequately afforded to the
petitioners.
It is well-settled that workers’ and employers’ organizations shall have the right to draw up their
constitutions and rules to elect their representatives in full freedom, to organize their administration
and activities and to formulate their programs.38 In this case, RPNEU’s Constitution and By-Laws
expressly mandate that before a party is allowed to seek the intervention of the court, it is a pre-
condition that he should have availed of all the internal remedies within the organization. Petitioners
were found to have violated the provisions of the union’s Constitution and By-Laws when they filed
petitions for impeachment against their union officers and for audit before the DOLE without first
exhausting all internal remedies available within their organization. This act is a ground for expulsion
from union membership. Thus, petitioners’ expulsion from the union was not a deliberate attempt to
curtail or restrict their right to organize, but was triggered by the commission of an act, expressly
sanctioned by Section 2.5 of Article IX of the union’s Constitution and By-Laws.1âwphi1
For a charge of ULP against a labor organization to prosper, the onus probandi rests upon the party
alleging it to prove or substantiate such claims by the requisite quantum of evidence.39 In labor
cases, as in other administrative proceedings, substantial evidence or such relevant evidence as a
reasonable mind might accept as sufficient to support a conclusion is required.40 Moreover, it is
indubitable that all the prohibited acts constituting unfair labor practice should materially relate to the
workers' right to self-organization.41
Unfortunately, petitioners failed to discharge the burden required to prove the charge of ULP against
the respondents. Aside from their self-serving allegations, petitioners were not able to establish how
they were restrained or coerced by their union in a way that curtailed their right to self-organization.
The records likewise failed to sufficiently show that the respondents unduly persuaded management
into discriminating against petitioners. other than to bring to its attention their expulsion from the
union, which in turn, resulted in the implementation of their CBA' s union security clause. As earlier
stated, petitioners had the burden of adducing substantial evidence to support its allegations of
ULP,42 which burden they failed to discharge. In fact, both the NLRC and the CA found that
petitioners were unable to prove their charge of ULP against the respondents.
It is axiomatic that absent any clear showing of abuse, arbitrariness or capriciousness, the findings of
fact by the NLRC, especially when affirmed by the CA, as in this case, are binding and conclusive
upon the Court.43 Having found none, the Court finds no cogent reason to deviate from the
challenged decision.
WHEREFORE, the petition is DENIED. The March 9, 2010 Decision and the December 1, 2010
Resolution of the Court of Appeals in CA-G.R. SP No. 105027 are AFFIRMED.
SO ORDERED.
JOSE CATRAL MENDOZA
Associate Justice
16
All covered employees not otherwise disqualified herein shall become and remain members in
good standing of the UNION. Any employee whose membership in the UNION is terminated shall
likewise be deemed terminated from the COMPANY.
30Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery v. Asia Brewery, Inc., G.R. No. 162025,
August 3, 2010, 626 SCRA 376, 388.
31
General Santos Coca-Cola Plant Free Workers Union-Tupas v. Coca-Cola Bottlers Phils., Inc.
(General Santos City), G.R. No. 178647, February 13, 2009, 579 SCRA 414, 419, citing Philcom
Employees Union v. Philippine Global Communication, 527 Phil. 540, 557 (2006).
32
SECTION 2. Any grievance shall be made in writing and submitted to the President three (3) days
from the day the incident happened who shall the[n] call the members involved and shall undertake
to have the parties settle their differences amicably.
33
SECTION 3. In the event of failure to settle the grievance amicably, the President shall refer the
matter to the Grievance Committee, which shall investigate the grievance, observing procedural due
process in the investigation.
34
Cayago v. Lina, 489 Phil. 735, 750-751 (2005).
35
Libres v. NLRC, 367 Phil. 181, 190 (1999).
36
Rollo, p. 490.
37
Mariveles Shipyard Corp. v. Court of Appeals, 461 Phil. 249, 265 (2003); Columbus Philippines
Bus Corp. v. National Labor Relations Commission, 417 Phil. 81, 98 (2001).
38 Article 3, ILO Convention No. 87.
39UST Faculty Union v. University oj'5)a111o Tomas. G.R. No. 180892. April 7. 2009, 584 SCRA
648, 662.
40
Standard Chartered Bank Employees Union (NUBE) v. Confesor, 4 76 Phil. 346, 36 7 (2004 ).
41
Great Pacific Life Employees Union v. Great Pacific Life Assurance Corporation. 362 Phil. 452,
464 (1999).
42
Tiu v. National Labor Relations Commission, 343 Phil. 478, 485 (1997).
43
Acevedo v. Advanstar Company, Inc. 511 Phil. 279.287 (2005)

12. Abaria vs. NLRC


VILLARAMA, JR., J.:
The consolidated petitions before us involve the legality of mass termination of hospital employees
who participated in strike and picketing activities.
The factual antecedents:
Metro Cebu Community Hospital, Inc. (MCCHI), presently known as the Visayas Community Medical
Center (VCMC), is a non-stock, non-profit corporation organized under the laws of the Republic of
the Philippines. It operates the Metro Cebu Community Hospital (MCCH), a tertiary medical
institution located at Osmea Boulevard, Cebu City.MCCH is owned by the United Church of Christ in
the Philippines (UCCP) and Rev. Gregorio P. Iyoy is the Hospital Administrator.
The National Federation of Labor (NFL) is the exclusive bargaining representative of the rank-and-
file employees of MCCHI. Under the 1987 and 1991 Collective Bargaining Agreements (CBAs), the
signatories were Ciriaco B. Pongasi, Sr. for MCCHI, and Atty. Armando M. Alforque (NFL Legal
Counsel) and Paterno A. Lumapguid as President of NFL-MCCH Chapter. In the CBA effective from
January 1994 until December 31, 1995, the signatories were Sheila E. Buot as Board of Trustees
Chairman, Rev. Iyoy as MCCH Administrator and Atty. Fernando Yu as Legal Counsel of NFL, while
Perla Nava, President of Nagkahiusang Mamumuo sa MCCH (NAMA-MCCH-NFL) signed the Proof
of Posting.[1]
On December 6, 1995, Nava wrote Rev. Iyoy expressing the unions desire to renew the CBA,
attaching to her letter a statement of proposals signed/endorsed by 153 union members. Nava
subsequently requested that the following employees be allowed to avail of one-day union leave with
pay on December 19, 1995: Celia Sabas, Jesusa Gerona, Albina Baez, Eddie Villa, Roy Malazarte,
Ernesto Canen, Jr., Guillerma Remocaldo, Catalina Alsado, Evelyn Ong, Melodia Paulin, Sofia
Bautista, Hannah Bongcaras, Ester Villarin, Iluminada Wenceslao and Perla Nava. However, MCCHI
returned the CBA proposal for Nava to secure first the endorsement of the legal counsel of NFL as
the official bargaining representative of MCCHI employees.[2]
Meanwhile, Atty. Alforque informed MCCHI that the proposed CBA submitted by Nava was never
referred to NFL and that NFL has not authorized any other legal counsel or any person for collective
bargaining negotiations. By January 1996, the collection of union fees (check-off) was temporarily
suspended by MCCHI in view of the existing conflict between the federation and its local affiliate.
Thereafter, MCCHI attempted to take over the room being used as union office but was prevented to
do so by Nava and her group who protested these actions and insisted that management directly
negotiate with them for a new CBA. MCCHI referred the matter to Atty. Alforque, NFLs Regional
Director, and advised Nava that their group is not recognized by NFL.[3]
In his letter dated February 24, 1996 addressed to Nava, Ernesto Canen, Jr., Jesusa Gerona,
Hannah Bongcaras, Emma Remocaldo, Catalina Alsado and Albina Baez, Atty. Alforque suspended
their union membership for serious violation of the Constitution and By-Laws. Said letter states:
During the last General Membership Meeting of the union on February 20,
1996, you openly declared that you recognized the officers of the KMU not those of
the NFL, that you submit to the stuctures [sic] and authority of the KMU not of the
NFL, and that you are loyal only to the KMU not to the NFL.
Also, in the same meeting, you admitted having sent a proposal for a
renewed collective bargaining agreement to the management without any
consultation with the NFL. In fact, in your letter dated February 21, 1996 addressed
to Rev. Gregorio Iyoy, the Administrator of the hospital, you categorically stated as
follows: We do not need any endorsement from NFL, more particularly from Atty.
Armando Alforque to negotiate our CBA with MCCH. You did not only ignore the
authority of the undersigned as Regional Director but you maliciously prevented and
bluntly refused my request to join the union negotiating panel in the CBA
negotiations.
Your above flagrant actuations, made in the presence of the union
membership, constitute the following offenses:
1. Willful violation of the Constitution and By-Laws of the Federation and the
orders and decisions of duly constituted authorities of the same (Section 4 (b), Article
III), namely:
a) Defying the decision of the organization disaffiliating from the KMU; and
b) Section 9 (b), Article IX which pertains to the powers and responsibilities of
the Regional Director, particularly, to negotiate and sign collective bargaining
agreement together with the local negotiating panel subject to prior ratification by the
general membership;
2. Joining or assisting another labor organization or helping in the formation
of a new labor organization that seeks or tends to defeat the purpose of the
Federation (Section 4 (d), Article III) in relation to the National Executive Boards
Resolution No. 8, September 26-27, 1994, to wit:
Pursuant to the NEB Resolution disaffiliating from the KMU
dated September 11, 1993, the NEB in session hereby declare that
KMU is deemed an organization that seeks to defeat the objective of
establishing independent and democratic unions and seeks to
replace the Federation as exclusive representative of its members.
Committing acts that tend to alienate the loyalty of the
members to the Federation, subvert its duly constituted authorities,
and divide the organization in any level with the objective of
establishing a pro-KMU faction or independent union loyal to the
KMU shall be subject to disciplinary action, suspension or expulsion
from union membership, office or position in accordance with
paragraph[s] d and f of Section 4, Article III, and paragraph h, Section
6, Article VI, paragraph d, Section 9, Article IX.
You are, therefore, directed to submit written explanation on the above
charges within five (5) days from receipt hereof. Failure on your part shall be
considered a waiver of your right to be heard and the Federation will act accordingly.
Considering the gravity of the charges against you, the critical nature of the
undertaking to renew the collective bargaining agreement, and the serious threat you
posed to the organization, you are hereby placed under temporary suspension from
your office and membership in the union immediately upon receipt hereof pending
investigation and final disposition of your case in accordance with the unions
constitution and by-laws.
For your guidance and compliance.[4]
On February 26, 1996, upon the request of Atty. Alforque, MCCHI granted one-day union leave with
pay for 12 union members.[5] The next day, several union members led by Nava and her group
launched a series of mass actions such as wearing black and red armbands/headbands, marching
around the hospital premises and putting up placards, posters and streamers. Atty. Alforque
immediately disowned the concerted activities being carried out by union members which are not
sanctioned by NFL. MCCHI directed the union officers led by Nava to submit within 48 hours a
written explanation why they should not be terminated for having engaged in illegal concerted
activities amounting to strike, and placed them under immediate preventive suspension. Responding
to this directive, Nava and her group denied there was a temporary stoppage of work, explaining that
employees wore their armbands only as a sign of protest and reiterating their demand for MCCHI to
comply with its duty to bargain collectively. Rev. Iyoy, having been informed that Nava and her group
have also been suspended by NFL, directed said officers to appear before his office for investigation
in connection with the illegal strike wherein they reportedly uttered slanderous and scurrilous words
against the officers of the hospital, threatening other workers and forcing them to join the strike. Said
union officers, however, invoked the grievance procedure provided in the CBA to settle the dispute
between management and the union.[6]
On March 13 and 19, 1996, the Department of Labor and Employment (DOLE) Regional Office No. 7
issued certifications stating that there is nothing in their records which shows that NAMA-MCCH-NFL
is a registered labor organization, and that said union submitted only a copy of its Charter Certificate
on January 31, 1995.[7] MCCHI then sent individual notices to all union members asking them to
submit within 72 hours a written explanation why they should not be terminated for having supported
the illegal concerted activities of NAMA-MCCH-NFL which has no legal personality as per DOLE
records. In their collective response/statement dated March 18, 1996, it was explained that the
picketing employees wore armbands to protest MCCHIs refusal to bargain; it was also contended
that MCCHI cannot question the legal personality of the union which had actively assisted in CBA
negotiations and implementation.[8]
On March 13, 1996, NAMA-MCCH-NFL filed a Notice of Strike but the same was deemed not filed
for want of legal personality on the part of the filer. The National Conciliation and Mediation Board
(NCMB) Region 7 office likewise denied their motion for reconsideration on March 25, 1996. Despite
such rebuff, Nava and her group still conducted a strike vote on April 2, 1996 during which an
overwhelming majority of union members approved the strike.[9]
Meanwhile, the scheduled investigations did not push through because the striking union members
insisted on attending the same only as a group. MCCHI again sent notices informing them that their
refusal to submit to investigation is deemed a waiver of their right to explain their side and
management shall proceed to impose proper disciplinary action under the circumstances. On March
30, 1996, MCCHI sent termination letters to union leaders and other members who participated in
the strike and picketing activities.On April 8, 1996, it also issued a cease-and-desist order to the rest
of the striking employees stressing that the wildcat concerted activities spearheaded by the Nava
group is illegal without a valid Notice of Strike and warning them that non-compliance will compel
management to impose disciplinary actions against them. For their continued picketing activities
despite the said warning, more than 100 striking employees were dismissed effective April 12 and
19, 1996.
Unfazed, the striking union members held more mass actions. The means of ingress to and egress
from the hospital were blocked so that vehicles carrying patients and employees were barred from
entering the premises. Placards were placed at the hospitals entrance gate stating: Please proceed
to another hospital and we are on protest. Employees and patients reported acts of intimidation and
harassment perpetrated by union leaders and members. With the intensified atmosphere of violence
and animosity within the hospital premises as a result of continued protest activities by union
members, MCCHI suffered heavy losses due to low patient admission rates. The hospitals suppliers
also refused to make further deliveries on credit.
With the volatile situation adversely affecting hospital operations and the condition of confined
patients, MCCHI filed a petition for injunction in the NLRC (Cebu City) on July 9, 1996 (Injunction
Case No. V-0006-96). A temporary restraining order (TRO) was issued on July 16, 1996. MCCHI
presented 12 witnesses (hospital employees and patients), including a security guard who was
stabbed by an identified sympathizer while in the company of Navas group. MCCHIs petition was
granted and a permanent injunction was issued on September 18, 1996 enjoining the Nava group
from committing illegal acts mentioned in Art. 264 of the Labor Code.[10]
On August 27, 1996, the City Government of Cebu ordered the demolition of the structures and
obstructions put up by the picketing employees of MCCHI along the sidewalk, having determined the
same as a public nuisance or nuisance per se.[11]
Thereafter, several complaints for illegal dismissal and unfair labor practice were filed by the
terminated employees against MCCHI, Rev. Iyoy, UCCP and members of the Board of Trustees of
MCCHI.
On August 4, 1999, Executive Labor Arbiter Reynoso A. Belarmino rendered his
decision[12] dismissing the complaints for unfair labor practice in NLRC Case Nos. RAB-VII-02-0309-
98, RAB-VII-02-0394-98 and RAB-VII-03-0596-98 filed by Nava and 90 other
complainants. Executive Labor Arbiter Belarmino found no basis for the charge of unfair labor
practice and declared the strike and picketing activities illegal having been conducted by NAMA-
MCCH-NFL which is not a legitimate labor organization. The termination of union leaders Nava,
Alsado, Baez, Bongcaras, Canen, Gerona and Remocaldo were upheld as valid but MCCHI was
directed to grant separation pay equivalent to one-half month for every year of service, in the total
amount of P3,085,897.40 for the 84 complainants.[13]
Complainants appealed to the Commission. On March 14, 2001, the NLRCs Fourth Division
rendered its Decision,[14] the dispositive portion of which reads:
WHEREFORE, premises considered, the decision of the Executive Labor
Arbiter dismissing the complaint for unfair labor practice and illegal dismissal is
AFFIRMED with MODIFICATIONS declaring the dismissal of all the complainants in
RAB Case No. 07-02-0394-98 and RAB Case No. 07-03-0596-98 valid and
legal. Necessarily, the award of separation pay and attorneys fees are hereby
Deleted.
Resolution on RAB Case No. 07-02-0309-98 is hereby Deferred upon Joint
Motion of the parties.
SO ORDERED.[15]
In its Resolution dated July 2, 2001, the NLRC denied complainants motion for reconsideration.[16]
Complainants elevated the case to the Court of Appeals (CA) (Cebu Station) via a petition for
certiorari, docketed as CA-G.R. SP No. 66540.[17]
In its Resolution dated November 14, 2001, the CAs Eighth Division dismissed the petition on the
ground that out of 88 petitioners only 47 have signed the certification against forum
shopping.[18] Petitioners moved to reconsider the said dismissal arguing that the 47 signatories more
than constitute the principal parties as the petition involves a matter of common concern to all the
petitioning employees.[19] By Resolution[20] dated May 28, 2002, the CA reinstated the case only
insofar as the 47 petitioners who signed the petition are concerned.
Petitioners challenged the validity of the November 14, 2001 and May 28, 2002 resolutions before
this Court in a petition for review on certiorari, docketed as G.R. No. 154113.
Meanwhile, the NLRCs Fourth Division (Cebu City) rendered its Decision[21] dated March 12, 2003 in
RAB Case Nos. 07-02-0309-98 (NLRC Case No. V-001042-99) pertaining to complainants Erma
Yballe, Evelyn Ong, Nelia Angel and Eleuteria Cortez as follows:
WHEREFORE, premises considered, the decision of the Executive Labor Arbiter
dismissing the complaint for unfair labor practice and illegal dismissal is AFFIRMED
with MODIFICATIONS declaring all complainants to have been validly
dismissed. Necessarily, the award of separation pay and attorneys fees are hereby
Deleted.
SO ORDERED.[22]
The NLRC likewise denied the motion for reconsideration filed by complainants Yballe, et al. in its
Resolution dated April 13, 2004.[23]
On October 17, 2008, the CA rendered its Decision[24] in CA-G.R. SP No. 66540, the dispositive
portion of which states:
WHEREFORE, premises considered, judgment is hereby rendered
AFFIRMING the Decision of the National Labor Relations Commission (NLRC)
Fourth Division dated March 14, 2001 in NLRC Case No. V-001042-99, WITH
MODIFICATIONS to the effect that (1) the petitioners, except the union officers, shall
be awarded separation pay equivalent to one-half (1/2) month pay for every year of
service, and (2) petitioner Cecilia Sabas shall be awarded overtime pay amounting to
sixty-three (63) hours.
SO ORDERED.[25]
Petitioners filed a motion for reconsideration while private respondents filed a motion for partial
reconsideration questioning the award of separation pay. The former also invoked the decision of
this Court in Bascon v. Court of Appeals,[26] while the latter argued for the application of the ruling in
decision rendered by the CA (Cebu City) in Miculob v. NLRC, et al. (CA-G.R. SP No. 84538),[27] both
involving similar complaints filed by dismissed employees of MCCHI.
By Resolution[28] dated April 17, 2009, the CA denied both motions:
WHEREFORE, the petitioners Motion for Reconsideration and the private
respondent[s] Motion for Partial Reconsideration of the October 17, 2008 Decision
are both DENIED for lack of merit.
The Motions for Substitution of Counsel and Compromise Agreements
submitted by petitioners Bernardito Lawas, Avelina Bangalao, Dailenda Hinampas
and Daylinda Tigo are hereby approved. Consequently, said petitioners are ordered
dropped from the list of petitioners and the case is deemed dismissed as to them.
SO ORDERED.[29]
Complainants Yballe, et al. also challenged before the CA the March 12, 2003 Decision and April 13,
2004 Resolution of the NLRC in a petition for certiorari, docketed as CA-G.R. SP No. 84998
(Cebu City). By Decision[30] dated November 7, 2008, the CA granted their petition, as follows:
WHEREFORE, the challenged Decision of public respondent dated March 12,
2003 and its Resolution dated April 13, 2004 are hereby REVERSED AND SET
ASIDE. Private respondent Metro Cebu Community Hospital is ordered to reinstate
petitioners Erma Yballe, Eleuteria Cortes, Nelia Angel and Evelyn Ong without loss
of seniority rights and other privileges; to pay them their full backwages inclusive of
their allowances and other benefits computed from the time of their dismissal up to
the time of their actual reinstatement.
No pronouncement as to costs.
SO ORDERED.[31]
Private respondents (MCCHI, et al.) moved to reconsider the above decision but the CA denied their
motion on February 22, 2011.[32]
Both petitioners and private respondents in CA-G.R. SP No. 66540 appealed to this Court. Private
respondent MCCHI in CA-G.R. SP No. 84998, under its new name Visayas Community Medical
Center (VCMC), filed a petition for certiorari in this Court.
In G.R. No. 187778, petitioners Nava, et al. prayed that the CA decision be set aside and a new
judgment be entered by this Court (1) declaring private respondents guilty of unfair labor practice
and union busting; (2) directing private respondents to cease and desist from further committing
unfair labor practices against the petitioners; (3) imposing upon MCCH the proposed CBA or, in the
alternative, directing the hospital and its officers to bargain with the local union; (4) declaring private
respondents guilty of unlawfully suspending and illegally dismissing the individual petitioners-
employees; (5) directing private respondents to reinstate petitioners-employees to their former
positions, or their equivalent, without loss of seniority rights with full backwages and benefits until
reinstatement; and (6) ordering private respondents to pay the petitioners moral damages,
exemplary damages, legal interests, and attorneys fees.[33]
On the other hand, petitioner MCCHI in G.R. No. 187861 prayed for the modification of the CA
decision by deleting the award of separation pay and reinstating the March 14, 2001 decision of the
NLRC.[34]
In G.R. No. 196156, MCCHI/VCMC prayed for the annulment of the November 7, 2008 Decision and
February 22, 2011 Resolution of the CA, for this Court to declare the dismissal of respondents
Yballe, et al. as valid and legal and to reinstate the March 12, 2003 Decision and April 13, 2004
Resolution of the NLRC.
G.R. No. 187861 was consolidated with G.R. Nos. 154113 and 187778 as they involve similar
factual circumstances and identical or related issues. G.R. No. 196156 was later also consolidated
with the aforesaid cases.
The issues are: (1) whether the CA erred in dismissing the petition for certiorari (CA-G.R. SP
No. 66540) with respect to the petitioners in G.R. No. 154113 for their failure to sign the certification
against forum shopping; (2) whether MCCHI is guilty of unfair labor practice; (3) whether petitioning
employees were illegally dismissed; and (4) if their termination was illegal, whether petitioning
employees are entitled to separation pay, backwages, damages and attorneys fees.

Dropping of petitioners who did not sign the


certification against forum shopping improper
The Court has laid down the rule in Altres v. Empleo[35] as culled from jurisprudential
pronouncements, that the certification against forum shopping must be signed by all the plaintiffs or
petitioners in a case; otherwise, those who did not sign will be dropped as parties to the case. Under
reasonable or justifiable circumstances, however, as when all the plaintiffs or petitioners share a
common interest and invoke a common cause of action or defense, the signature of only one of
them in the certification against forum shopping substantially complies with the Rule.
In the case at bar, the signatures of 47 out of 88 petitioning employees in the certification against
forum shopping constitute substantial compliance with the rule. There is no question that they
shared a common interest and invoked a common cause of action when they filed suit before the
Labor Arbiter and NLRC questioning the validity of their termination and charging MCCHI with unfair
labor practice. Thus, when they appealed their case to the CA, they pursued the same as a
collective body, raising only one argument in support of their cause of action, i.e., the illegal
dismissal allegedly committed by MCCHI when union members resorted to strike and mass actions
due to MCCHIs refusal to bargain with officers of the local chapter. There is sufficient basis,
therefore, for the 47 signatories to the petition, to speak for and in behalf of their co-petitioners and
to file the Petition for Certiorari in the appellate court.[36] Clearly, the CA erred in dropping as parties-
petitioners those who did not sign the certification against forum shopping.
However, instead of remanding the case to the CA for it to resolve the petition with respect to the
herein petitioners in G.R. No. 154113, and as prayed for, the Court shall consider them parties-
petitioners in CA-G.R. SP No. 66540,which case has already been decided and now subject of
appeal in G.R. No. 187778.

MCCHI not guilty of unfair labor practice


Art. 248 (g) of the Labor Code, as amended, makes it an unfair labor practice for an employer [t]o
violate the duty to bargain collectively as prescribed by the Code. The applicable provision in this
case is Art. 253 which provides:
ART. 253. Duty to bargain collectively when there exists a collective
bargaining agreement. When there is a collective bargaining agreement, the duty to
bargain collectively shall also mean that neither party shall terminate nor modify such
agreement during its lifetime. However, either party can serve a written notice to
terminate or modify the agreement at least sixty (60) days prior to its expiration
date. It shall be the duty of both parties to keep the status quo and to continue in full
force and effect the terms and conditions of the existing agreement during the 60-day
period and/or until a new agreement is reached by the parties.
NAMA-MCCH-NFL charged MCCHI with refusal to bargain collectively when the latter refused to
meet and convene for purposes of collective bargaining, or at least give a counter-proposal to the
proposed CBA the union had submitted and which was ratified by a majority of the union
membership. MCCHI, on its part, deferred any negotiations until the local unions dispute with the
national union federation (NFL) is resolved considering that the latter is the exclusive bargaining
agent which represented the rank-and-file hospital employees in CBA negotiations since 1987.
We rule for MCCHI.
Records of the NCMB and DOLE Region 7 confirmed that NAMA-MCCH-NFL had not registered as
a labor organization, having submitted only its charter certificate as an affiliate or local chapter of
NFL.[37] Not being a legitimate labor organization, NAMA-MCCH-NFL is not entitled to those rights
granted to a legitimate labor organization under Art. 242, specifically:
(a) To act as the representative of its members for the purpose of collective
bargaining;
(b) To be certified as the exclusive representative of all the employees in an
appropriate collective bargaining unit for purposes of collective bargaining;
xxxx
Aside from the registration requirement, it is only the labor organization designated or selected by
the majority of the employees in an appropriate collective bargaining unit which is the exclusive
representative of the employees in such unit for the purpose of collective bargaining, as provided in
Art. 255.[38] NAMA-MCCH-NFL is not the labor organization certified or designated by the majority of
the rank-and-file hospital employees to represent them in the CBA negotiations but the NFL, as
evidenced by CBAs concluded in 1987, 1991 and 1994. While it is true that a local union has the
right to disaffiliate from the national federation, NAMA-MCCH-NFL has not done so as there was no
any effort on its part to comply with the legal requisites for a valid disaffiliation during the freedom
period[39] or the last 60 days of the last year of the CBA, through a majority vote in a secret balloting
in accordance with Art. 241 (d).[40] Nava and her group simply demanded that MCCHI directly
negotiate with the local union which has not even registered as one.
To prove majority support of the employees, NAMA-MCCH-NFL presented the CBA proposal
allegedly signed by 153 union members. However, the petition signed by said members showed that
the signatories endorsed the proposed terms and conditions without stating that they were likewise
voting for or designating the NAMA-MCCH-NFL as their exclusive bargaining representative. In any
case, NAMA-MCCH-NFL at the time of submission of said proposals was not a duly registered labor
organization, hence it cannot legally represent MCCHIs rank-and-file employees for purposes of
collective bargaining. Hence, even assuming that NAMA-MCCH-NFL had validly disaffiliated from its
mother union, NFL, it still did not possess the legal personality to enter into CBA negotiations. A local
union which is not independently registered cannot, upon disaffiliation from the federation, exercise
the rights and privileges granted by law to legitimate labor organizations; thus, it cannot file a petition
for certification election.[41] Besides, the NFL as the mother union has the right to investigate
members of its local chapter under the federations Constitution and By-Laws, and if found guilty to
expel such members.[42]MCCHI therefore cannot be faulted for deferring action on the CBA proposal
submitted by NAMA-MCCH-NFL in view of the union leaderships conflict with the national
federation. We have held that the issue of disaffiliation is an intra-union dispute[43] which must be
resolved in a different forum in an action at the instance of either or both the federation and the local
union or a rival labor organization, not the employer.[44]
Not being a legitimate labor organization nor the certified exclusive bargaining representative of
MCCHIs rank-and-file employees, NAMA-MCCH-NFL cannot demand from MCCHI the right to
bargain collectively in their behalf.[45] Hence, MCCHIs refusal to bargain then with NAMA-MCCH-
NFL cannot be considered an unfair labor practice to justify the staging of the strike.[46]

Strike and picketing activities conducted by union


officers and members were illegal
Art. 263 (b) of the Labor Code, as amended, provides:
ART. 263. Strikes, picketing and lockouts. x x x
(b) Workers shall have the right to engage in concerted activities for purposes
of collective bargaining or for their mutual benefit and protection. The right
of legitimate labor organizations to strike and picket and of employers to lockout,
consistent with the national interest, shall continue to be recognized and
respected. However, no labor union may strike and no employer may declare a
lockout on grounds involving inter-union and intra-union disputes.
x x x x (Emphasis supplied.)
As borne by the records, NAMA-MCCH-NFL was not a duly registered or an independently
registered union at the time it filed the notice of strike on March 13, 1996 and when it conducted the
strike vote on April 2, 1996. It could not then legally represent the union members. Consequently,
the mandatory notice of strike and the conduct of the strike vote report were ineffective for having
been filed and conducted by NAMA-MCCH-NFL which has no legal personality as a legitimate labor
organization, in violation of Art. 263 (c), (d) and (f) of the Labor Code and Rule XXII, Book V of the
Omnibus Rules Implementing the Labor Code.[47]
Art. 263 of the Labor Code provides:
ART. 263. Strikes, picketing and lockouts. (a) x x x
xxxx
(c) In cases of bargaining deadlocks, the duly certified or recognized
bargaining agent may file a notice of strike or the employer may file a notice of
lockout with the Department at least 30 days before the intended date thereof. In
cases of unfair labor practice, the period of notice shall be 15 days and in the
absence of a duly certified or recognized bargaining agent, the notice of strike
may be filed by any legitimate labor organization in behalf of its
members. However, in case of dismissal from employment of union officers duly
elected in accordance with the union constitution and by-laws, which may constitute
union busting, where the existence of the union is threatened, the 15-day cooling-off
period shall not apply and the union may take action immediately. (As amended by
Executive Order No. 111, December 24, 1986.)
(d) The notice must be in accordance with such implementing rules and
regulations as the Department of Labor and Employment may promulgate.
xxxx
(f) A decision to declare a strike must be approved by a majority of the total
union membership in the bargaining unit concerned, obtained by secret ballot in
meetings or referenda called for that purpose. A decision to declare a lockout must
be approved by a majority of the board of directors of the corporation or association
or of the partners in a partnership, obtained by secret ballot in a meeting called for
that purpose. The decision shall be valid for the duration of the dispute based on
substantially the same grounds considered when the strike or lockout vote was
taken. The Department may, at its own initiative or upon the request of any affected
party, supervise the conduct of the secret balloting. In every case, the union or the
employer shall furnish the Ministry the voting at least seven days before the intended
strike or lockout, subject to the cooling-off period herein provided. (As amended by
Batas Pambansa Bilang 130, August 21, 1981 and further amended by Executive
Order No. 111, December 24, 1986.) (Emphasis supplied.)
Rule XXII, Book V of the Omnibus Rules Implementing the Labor Code reads:
RULE XXII
CONCILIATION, STRIKES AND LOCKOUTS
xxxx
SEC. 6. Who may declare a strike or lockout. Any certified or duly recognized
bargaining representative may declare a strike in cases of bargaining deadlocks and
unfair labor practices.The employer may declare a lockout in the same cases. In the
absence of a certified or duly recognized bargaining representative, any legitimate
labor organization in the establishment may declare a strike but only on grounds of
unfair labor practice. (Emphasis supplied.)
Furthermore, the strike was illegal due to the commission of the following prohibited activities [48]: (1)
violence, coercion, intimidation and harassment against non-participating employees; and (2)
blocking of free ingress to and egress from the hospital, including preventing patients and their
vehicles from entering the hospital and other employees from reporting to work, the putting up of
placards with a statement advising incoming patients to proceed to another hospital because
MCCHI employees are on strike/protest. As shown by photographs[49] submitted by MCCHI, as well
as the findings of the NCMB and Cebu City Government, the hospital premises and sidewalk within
its vicinity were full of placards, streamers and makeshift structures that obstructed its use by the
public who were likewise barraged by the noise coming from strikers using megaphones.[50] On
the other hand, the affidavits[51] executed by several hospital employees and patients narrated in
detail the incidents of harassment, intimidation, violence and coercion, some of these witnesses
have positively identified the perpetrators. The prolonged work stoppage and picketing activities of
the striking employees severely disrupted hospital operations that MCCHI suffered heavy financial
losses.
The findings of the Executive Labor Arbiter and NLRC, as sustained by the appellate court,
clearly established that the striking union members created so much noise, disturbance and
obstruction that the local government authorities eventually ordered their removal for being a public
nuisance. This was followed by an injunction from the NCMB enjoining the union leaders from further
blocking the free ingress to and egress from the hospital, and from committing threats, coercion and
intimidation against non-striking employees and patients/vehicles desiring to enter for the purpose of
seeking medical treatment/confinement. By then, the illegal strike had lasted for almost five months.

Consequences of illegal strike to union


officers and members
Art. 264 (a) of the Labor Code, as amended, provides for the consequences of an illegal strike to the
participating workers:
x x x Any union officer who knowingly participates in illegal strike and any worker or
union officer who knowingly participates in the commission of illegal acts during a
strike may be declared to have lost his employment status: Provided, That mere
participation of a worker in a lawful strike shall not constitute sufficient ground for
termination of his employment, even if a replacement had been hired by the
employer during such lawful strike.
The above provision makes a distinction between workers and union officers who participate in an
illegal strike: an ordinary striking worker cannot be terminated for mere participation in an illegal
strike. There must be proof that he or she committed illegal acts during a strike. A union officer, on
the other hand, may be terminated from work when he knowingly participates in an illegal strike, and
like other workers, when he commits an illegal act during a strike.[52]
Considering their persistence in holding picketing activities despite the declaration by the
NCMB that their union was not duly registered as a legitimate labor organization and the letter from
NFLs legal counsel informing that their acts constitute disloyalty to the national federation, and their
filing of the notice of strike and conducting a strike vote notwithstanding that their union has no legal
personality to negotiate with MCCHI for collective bargaining purposes, there is no question that
NAMA-MCCH-NFL officers knowingly participated in the illegal strike. The CA therefore did not err in
ruling that the termination of union officers Perla Nava, Catalina Alsado, Albina Baez, Hannah
Bongcaras, Ernesto Canen, Jesusa Gerona and Guillerma Remocaldo was valid and justified.
With respect to the dismissed union members, although MCCHI submitted photographs taken at the
picket line, it did not individually name those striking employees and specify the illegal act committed
by each of them. As to the affidavits executed by non-striking employees, they identified mostly
union officers as the persons who blocked the hospital entrance, harassed hospital employees and
patients whose vehicles were prevented from entering the premises. Only some of these witnesses
actually named a few union members who committed similar acts of harassment and
coercion. Consequently, we find no error committed by the CA in CA-G.R. SP No. 66540 when it
modified the decision of the NLRC and ruled that the dismissal of union members who merely
participated in the illegal strike was illegal. On the other hand, in CA-G.R. SP No. 84998, the CA did
not err in ruling that the dismissal of Yballe, et al. was illegal; however, it also ordered their
reinstatement with full back wages.

Dismissed union members not entitled to


backwages but should be awarded
separation pay in lieu of reinstatement
Since there is no clear proof that union members actually participated in the commission of illegal
acts during the strike, they are not deemed to have lost their employment status as a consequence
of a declaration of illegality of the strike.
Petitioners in G.R. Nos. 154113 and 187778 assail the CA in not ordering their reinstatement with
back wages. Invoking stare decisis, they cited the case of Bascon v. Court of Appeals[53] decided by
this Court in 2004 and which involved two former hospital employees who likewise sued MCCHI after
the latter terminated their employment due to their participation in the same illegal strike led by
NAMA-MCCH-NFL. In said case we ruled that petitioners Cole and Bascon were illegally dismissed
because MCCHI failed to prove that they committed illegal acts during the strike. We thus ordered
the reinstatement of petitioners Bascon and Cole without loss of seniority rights and other privileges
and payment of their back wages inclusive of allowances, and other benefits computed from the time
they were dismissed up to the time of their actual reinstatement. Bascon was also the basis of the
award of back wages in CA-G.R. SP No. 84998.
Stare decisis et non quieta movere. Stand by the decision and disturb not what is settled. Under the
doctrine of stare decisis, once a court has laid down a principle of law as applicable to a certain state
of facts, it will adhere to that principle and apply it to all future cases where the facts are substantially
the same,[54] even though the parties may be different. It proceeds from the first principle of justice
that, absent any powerful countervailing considerations, like cases ought to be decided alike. Thus,
where the same questions relating to the same event have been put forward by parties similarly
situated as in a previous case litigated and decided by a competent court, the rule of stare decisis is
a bar to any attempt to relitigate the same issue.[55]
The doctrine though is not cast in stone for upon a showing that circumstances attendant in a
particular case override the great benefits derived by our judicial system from the doctrine of stare
decisis, the Court is justified in setting it aside.[56] For the Court, as the highest court of the land, may
be guided but is not controlled by precedent. Thus, the Court, especially with a new membership, is
not obliged to follow blindly a particular decision that it determines, after re-examination, to call for a
rectification.[57]
Although the Bascon case involved the very same illegal strike in MCCHI which led to the
termination of herein petitioners, its clearly erroneous application of the law insofar only as the award
of back wages warrants setting aside the doctrine. Indeed, the doctrine of stare
decisis notwithstanding, the Court has abandoned or overruled precedents whenever it realized that
the Court erred in the prior decisions. Afterall, more important than anything else is that this Court
should be right.[58]
In G & S Transport Corporation v. Infante,[59] the Court explained the rationale for its recent
rulings deleting back wages awarded to the dismissed workers if the strike was found to be illegal.
Considering that they did not render work for the employer during the strike, they are entitled only to
reinstatement.
With respect to backwages, the principle of a fair days wage for a fair
days labor remains as the basic factor in determining the award thereof. If there
is no work performed by the employee there can be no wage or pay unless, of
course, the laborer was able, willing and ready to work but was illegally locked out,
suspended or dismissed or otherwise illegally prevented from working. While it was
found that respondents expressed their intention to report back to work, the latter
exception cannot apply in this case. In Philippine Marine Officers Guild v. Compaia
Maritima, as affirmed in Philippine Diamond Hotel and Resort v. Manila Diamond
Hotel Employees Union, the Court stressed that for this exception to apply, it is
required that the strike be legal, a situation that does not obtain in the case at bar.
Under the circumstances, respondents reinstatement without backwages
suffices for the appropriate relief. If reinstatement is no longer possible, given the
lapse of considerable time from the occurrence of the strike, the award of separation
pay of one (1) month salary for each year of service, in lieu of reinstatement, is in
order.[60] (Emphasis supplied.)
The CA decision in CA-G.R. SP No. 66540 ordering the payment of separation pay in lieu of
reinstatement without back wages is thus in order, to conform to the policy of a fair days wage for a
fair days labor. The amount of separation pay is increased to one month pay for every year of
service, consistent with jurisprudence. Accordingly, the decision in CA-G.R. SP No. 84998 is
modified by deleting the award of back wages and granting separation pay in lieu of reinstatement.
It is to be noted that as early as April 8, 1996, union members who took part in the concerted
activities have been warned by management that NAMA-MCCH-NFL is not a legitimate labor
organization and its notice of strike was denied by the NCMB, and directed to desist from further
participating in such illegal activities. Despite such warning, they continued with their picketing
activities and held more mass actions after management sent them termination notices. The
prolonged work stoppage seriously disrupted hospital operations, which could have eventually
brought MCCHI into bankruptcy had the City Government of Cebu not issued a demolition order and
the NLRC Region 7 not formally enjoined the prohibited picketing activities. Also, the illegal dismissal
complaints subsequently filed by the terminated employees did not obliterate the fact that they did
not suffer loss of earnings by reason of the employers unjustified acts, there being no unfair labor
practice committed by MCCHI. Hence, fairness and justice dictate that back wages be denied the
said employees who participated in the illegal concerted activities to the great detriment of the
employer.
Separation pay is made an alternative relief in lieu of reinstatement in certain circumstances,
like: (a) when reinstatement can no longer be effected in view of the passage of a long period of time
or because of the realities of the situation; (b) reinstatement is inimical to the employers interest; (c)
reinstatement is no longer feasible; (d) reinstatement does not serve the best interests of the parties
involved; (e) the employer is prejudiced by the workers continued employment; (f) facts that make
execution unjust or inequitable have supervened; or (g) strained relations between the employer and
employee.[61]
Considering that 15 years had lapsed from the onset of this labor dispute, and in view of
strained relations that ensued, in addition to the reality of replacements already hired by the hospital
which had apparently recovered from its huge losses, and with many of the petitioners either
employed elsewhere, already old and sickly, or otherwise incapacitated, separation pay without back
wages is the appropriate relief. We note that during the pendency of the cases in this Court, some of
the petitioners have entered into compromise agreements with MCCHI, all of which were duly
approved by this Court. Thus, excluded from the herein monetary awards are the following
petitioners whose compromise agreements have been approved by this Court and judgment having
been entered therein: Gloria Arguilles, Romulo Alforque, Gerna Patigdas-Barte, Daylinda Tigo
Merlyn Nodado, Ramon Tagnipis, Bernabe Lumapguid, Romeo Empuerto, Marylen Labra, Milagros
Castillo Bernadette Pontillas-Tibay, Constancio Pagador, Nolan Alvin Panal, Edilberto Villa, Roy
Malazarte, Felecianita Malazarte and Noel Hortelano.
Attorneys fees
The dismissed employees having been compelled to litigate in order to seek redress and protect
their rights, they are entitled to reasonable attorneys fees pursuant to Art. 2208 (2) of the Civil
Code. In view of the attendant circumstances of this case, we hold that attorneys fees in the amount
of P50,000.00 is reasonable and justified. However, the respondents in G.R. No. 196156 are not
entitled to the same relief since they did not appeal from the CA decision which did not include the
award of attorneys fees.
WHEREFORE, the petition for review on certiorari in G.R. No. 187861 is DENIED while the
petitions in G.R. Nos. 154113, 187778 and 196156 are PARTLY GRANTED. The Decision dated
October 17, 2008 of the Court of Appeals in CA-G.R. SP No. 66540 is
hereby AFFIRMED with MODIFICATIONS in that MCCHI is ordered to pay the petitioners in G.R.
Nos. 154113 and 187778, except the petitioners who are union officers, separation pay equivalent to
one month pay for every year of service, and reasonable attorneys fees in the amount
of P50,000.00. The Decision dated November 7, 2008 is
likewise AFFIRMED with MODIFICATIONS in that MCCHI is ordered to pay the private respondents
in G.R. No. 196156 separation pay equivalent to one month pay for every year of service, and that
the award of back wages is DELETED.
The case is hereby remanded to the Executive Labor Arbiter for the recomputation of
separation pay due to each of the petitioners union members in G.R. Nos. 154113, 187778 and
196156 except those who have executed compromise agreements approved by this Court.
No pronouncement as to costs.
SO ORDERED.