Anda di halaman 1dari 176

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

S.S. VENTURES INTERNATIONAL, G.R. No. 161690


INC.,
Petitioner,
Present:
QUISUMBING, J., Chairperson,
- versus - YNARES-SANTIAGO,*
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.
S.S. VENTURES LABOR UNION
(SSVLU) and DIR. HANS LEO Promulgated:
CACDAC, in His capacity as
Director of the Bureau of Labor July 23, 2008
Relations (BLR),
Respondents.
x-----------------------------------------------------------------------------------------x
DECISION

VELASCO, JR., J.:


Petitioner S.S. Ventures International, Inc. (Ventures), a PEZA-registered export firm with
principal place of business at Phase I-PEZA-Bataan Export Zone, Mariveles, Bataan, is in the
business of manufacturing sports shoes. Respondent S.S. Ventures Labor Union (Union), on the
other hand, is a labor organization registered with the Department of Labor and Employment
(DOLE) under Certificate of Registration No. RO300-00-02-UR-0003.

On March 21, 2000, the Union filed with DOLE-Region III a petition
for certification election in behalf of the rank-and-file employees of
Ventures. Five hundred forty two (542)signatures, 82 of which belong to
______________________
* Additional member as per Special Order No. 509 dated July 1, 2008.
terminated Ventures employees, appeared on the basic documents supporting the petition.

On August 21, 2000, Ventures filed a Petition[1] to cancel the Unions certificate of registration
invoking the grounds set forth in Article 239(a) of the Labor Code.[2] Docketed as Case No.
RO300-0008-CP-002 of the same DOLE regional office, the petition alleged the following:

(1) The Union deliberately and maliciously included the names of more or less 82 former
employees no longer connected with Ventures in its list of members who attended the
organizational meeting and in the adoption/ratification of its constitution and by-laws held on
January 9, 2000 in Mariveles, Bataan; and the Union forged the signatures of these 82 former
employees to make it appear they took part in the organizational meeting and adoption and
ratification of the constitution;

1
(2) The Union maliciously twice entered the signatures of three persons namely: Mara
Santos, Raymond Balangbang, and Karen Agunos;

(3) No organizational meeting and ratification actually took place; and


(4) The Unions application for registration was not supported by at least 20% of the rank-
and-file employees of Ventures, or 418 of the total 2,197-employee complement.Since more or
less 82 of the 500[3] signatures were forged or invalid, then the remaining valid signatures would
only be 418, which is very much short of the 439 minimum (2197 total employees x 20% = 439.4)
required by the Labor Code.[4]

In its Answer with Motion to Dismiss,[5] the Union denied committing the imputed acts of
fraud or forgery and alleged that: (1) the organizational meeting actually took place on January
9, 2000 at the Shoe City basketball court in Mariveles; (2) the 82 employees adverted to in
Ventures petition were qualified Union members for, although they have been ordered dismissed,
the one-year prescriptive period to question their dismissal had not yet lapsed; (3) it had complied
with the 20%-member registration requirement since it had 542 members; and (4) the double
signatures were inadvertent human error.

In its supplemental reply memorandum[6] filed on March 20, 2001, with attachments,
Ventures cited other instances of fraud and misrepresentation, claiming that the affidavits
executed by 82 alleged Union members show that they were deceived into signing paper minutes
or were harassed to signing their attendance in the organizational meeting. Ventures added that
some employees signed the affidavits denying having attended such meeting.
In a Decision dated April 6, 2001, Regional Director Ana C. Dione of DOLE-Region III found
for Ventures, the dispositive portion of which reads:

Viewed in the light of all the foregoing, this office hereby grants the
petition. WHEREFORE, this office resolved to CANCEL Certificate of Registration No. [RO300-
00-02-UR-0003] dated 28 February 2000 of respondent S.S. Ventures Labor Union-Independent.

So Ordered.[7]

Aggrieved, the Union interposed a motion for reconsideration, a recourse which appeared to have
been forwarded to the Bureau of Labor Relations (BLR). Although it would later find this motion
to have been belatedly filed, the BLR, over the objection of Ventures which filed a Motion to
Expunge, gave it due course and treated it as an appeal.

Despite Ventures motion to expunge the appeal,[8] the BLR Director rendered on October 11,
2002 a decision[9] in BLR-A-C-60-6-11-01, granting the Unions appeal and reversing the
decision of Dione. The fallo of the BLRs decision reads:
WHEREFORE, the appeal is hereby GRANTED. The Decision of Director Ana C. Dione dated 6
April 2001 is hereby REVERSED and SET ASIDE. S.S. Ventures Labor Union-Independent shall
remain in the roster of legitimate labor organizations.
SO ORDERED.[10]

2
Ventures sought reconsideration of the above decision but was denied by the BLR.

Ventures then went to the Court of Appeals (CA) on a petition for certiorari under Rule 65,
the recourse docketed as CA-G.R. SP No. 74749. On October 20, 2003, the CA rendered a
Decision,[11] dismissing Ventures petition. Ventures motion for reconsideration met a similar
fate.[12]

Hence, this petition for review under Rule 45, petitioner Ventures raising the following
grounds:
I.

PUBLIC RESPONDENT ACTED RECKLESSLY AND IMPRUDENTLY, GRAVELY


ABUSED ITS DISCRETION AND EXCEEDED ITS JURISDICTION IN DISREGARDING
THE SUBSTANTIAL AND OVERWHELMING EVIDENCE ADDUCED BY THE
PETITIONER SHOWING THAT RESPONDENT UNION PERPETRATED FRAUD,
FORGERY, MISREPRESENTATION AND MISSTATEMENTS IN CONNECTION WITH
THE ADOPTION AND RATIFICATION OF ITS CONSTITUTION AND BY-LAWS, AND IN
THE PREPARATION OF THE LIST OF MEMBERS WHO TOOK PART IN THE ALLEGED
ORGANIZATIONAL MEETING BY HOLDING THAT:

A.

THE 87 AFFIDAVITS OF ALLEGED UNION MEMBERS HAVE NO EVIDENTIARY


WEIGHT.

B.

THE INCLUSION OF THE 82 EMPLOYEES IN THE LIST OF ATTENDEES TO THE


JANUARY 9, 2000 MEETING IS AN INTERNAL MATTER WITHIN THE
AMBIT OF THE WORKERS RIGHT TO SELF-ORGANIZATION AND
OUTSIDE THE SPHERE OF INFLUENCE (OF) THIS OFFICE (PUBLIC
RESPONDENT IN THIS CASE) AND THE PETITIONER.

II.

PUBLIC RESPONDENT ACTED RECKLESSLY AND IMPRUDENTLY, GRAVELY


ABUSED ITS DISCRETION AND EXCEEDED ITS JURISDICTION IN IGNORING AND
DISREGARDING THE BLATANT PROCEDURAL LAPSES OF THE RESPONDENT UNION
IN THE FILING OF ITS MOTION FOR RECONSIDERATION AND APPEAL.

A.

BY GIVING DUE COURSE TO THE MOTION FOR RECONSIDERATION


FILED BY THE RESPONDENT UNION DESPITE THE FACT THAT IT WAS
FILED BEYOND THE REGLEMENTARY PERIOD.

B.

BY ADMITTING THE APPEAL FILED BY ATTY. ERNESTO R. ARELLANO


AND HOLDING THAT THE SAME DOES NOT CONSTITUTE FORUM
SHOPPING UNDER SUPREME COURT CIRCULAR NO. 28-91.

III.

PUBLIC RESPONDENT ACTED RECKLESSLY AND IMPRUDENTLY, GRAVELY


ABUSED ITS DISCRETION AND EXCEEDED ITS JURISDICTION IN INVOKING THE
CONSTITUTIONAL RIGHT TO SELF-ORGANIZATION AND ILO CONVENTION NO. 87
3
TO JUSTIFY THE MASSIVE FRAUD, MISREPRESENTATION, MISSTATEMENTS AND
FORGERY COMMITTED BY THE RESPONDENT UNION.[13]
The petition lacks merit.

The right to form, join, or assist a union is specifically protected by Art. XIII, Section
[14]
3 of the Constitution and such right, according to Art. III, Sec. 8 of the Constitution and Art.
246 of the Labor Code, shall not be abridged. Once registered with the DOLE, a union is
considered a legitimate labor organization endowed with the right and privileges granted by law
to such organization. While a certificate of registration confers a union with legitimacy with the
concomitant right to participate in or ask for certification election in a bargaining unit, the
registration may be canceled or the union may be decertified as the bargaining unit, in which case
the union is divested of the status of a legitimate labor organization.[15] Among the grounds for
cancellation is the commission of any of the acts enumerated in Art. 239(a)[16] of the Labor Code,
such as fraud and misrepresentation in connection with the adoption or ratification of the unions
constitution and like documents. The Court, has in previous cases, said that to decertify a union,
it is not enough to show that the union includes ineligible employees in its membership. It must
also be shown that there was misrepresentation, false statement, or fraud in connection with the
application for registration and the supporting documents, such as the adoption or ratification of
the constitution and by-laws or amendments thereto and the minutes of ratification of the
constitution or by-laws, among other documents.[17]

Essentially, Ventures faults both the BLR and the CA in finding that there was no fraud or
misrepresentation on the part of the Union sufficient to justify cancellation of its registration. In
this regard, Ventures makes much of, first, the separate hand-written statements of 82 employees
who, in gist, alleged that they were unwilling or harassed signatories to the attendance sheet of
the organizational meeting.

We are not persuaded. As aptly noted by both the BLR and CA, these mostly undated
written statements submitted by Ventures on March 20, 2001, or seven months after it filed its
petition for cancellation of registration, partake of the nature of withdrawal of union membership
executed after the Unions filing of a petition for certification election on March 21, 2000. We
have in precedent cases[18] said that the employees withdrawal from a labor union made before
the filing of the petition for certification election is presumed voluntary, while withdrawal after
the filing of such petition is considered to be involuntary and does not affect the same. Now then,
if a withdrawal from union membership done after a petition for certification election has been
filed does not vitiate such petition, is it not but logical to assume that such withdrawal cannot
work to nullify the registration of the union? Upon this light, the Court is inclined to agree with
the CA that the BLR did not abuse its discretion nor gravely err when it concluded that the
affidavits of retraction of the 82 members had no evidentiary weight.

It cannot be over-emphasized that the registration or the recognition of a labor union after
it has submitted the corresponding papers is not ministerial on the part of the BLR. Far from
it. After a labor organization has filed the necessary registration documents, it becomes
mandatory for the BLR to check if the requirements under Art. 234 [19] of the Labor Code have
been sedulously complied with.[20] If the unions application is infected by falsification and like
serious irregularities, especially those appearing on the face of the application and its attachments,
a union should be denied recognition as a legitimate labor organization. Prescinding from these
4
considerations, the issuance to the Union of Certificate of Registration No. RO300-00-02-UR-
0003 necessarily implies that its application for registration and the supporting documents thereof
are prima facie free from any vitiating irregularities.

Second, Ventures draws attention to the inclusion of 82 individuals to the list of participants
in the January 9, 2000 organizational meeting. Ventures submits that the 82, being no longer
connected with the company, should not have been counted as attendees in the meeting and the
ratification proceedings immediately afterwards.

The assailed inclusion of the said 82 individuals to the meeting and proceedings adverted
to is not really fatal to the Unions cause for, as determined by the BLR, the allegations of
falsification of signatures or misrepresentation with respect to these individuals are without
basis.[21] The Court need not delve into the question of whether these 82 dismissed individuals
were still Union members qualified to vote and affix their signature on its application for
registration and supporting documents. Suffice it to say that, as aptly observed by the CA, the
procedure for acquiring or losing union membership and the determination of who are qualified
or disqualified to be members are matters internal to the union and flow from its right to self-
organization.

To our mind, the relevancy of the 82 individuals active participation in the Unions
organizational meeting and the signing ceremonies thereafter comes in only for purposes of
determining whether or not the Union, even without the 82, would still meet what Art. 234(c) of
the Labor Code requires to be submitted, to wit:

Art. 234. Requirements of Registration.Any applicant labor organization x x x shall acquire


legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor
organizations upon issuance of the certificate of registration based on the following requirements:

xxxx

(c) The names of all its members comprising at least twenty percent (20%) of all the employees in
the bargaining unit where it seeks to operate.

The BLR, based on its official records, answered the poser in the affirmative. Wrote the
BLR:

It is imperative to look into the records of respondent union with this Bureau pursuant to
our role as a central registry of union and CBA records under Article 231 of the Labor Code and
Rule XVII of the rules implementing Book V of the Labor Code, as amended x x x.

In its union records on file with this Bureau, respondent union submitted the names of [542]
members x x x. This number easily complied with the 20% requirement, be it 1,928 or 2,202
employees in the establishment. Even subtracting the 82 employees from 542 leaves 460 union
members, still within 440 or 20% of the maximum total of 2,202 rank-and-file employees.

Whatever misgivings the petitioner may have with regard to the 82 dismissed employees
is better addressed in the inclusion-exclusion proceedings during a pre-election conference x x
x. The issue surrounding the involvement of the 82 employees is a matter of membership or
voter eligibility. It is not a ground to cancel union registration. (Emphasis added.)

5
The bare fact that three signatures twice appeared on the list of those who participated in the
organizational meeting would not, to our mind, provide a valid reason to cancel Certificate of
Registration No. RO300-00-02-UR-0003. As the Union tenably explained without rebuttal from
Ventures, the double entries are no more than normal human error, effected without malice. Even
the labor arbiter who found for Ventures sided with the Union in its explanation on the absence
of malice.[22]

The cancellation of a unions registration doubtless has an impairing dimension on the right
of labor to self-organization. Accordingly, we can accord concurrence to the following apt
observation of the BLR: [F]or 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.[23]

In its Comment, the Union points out that for almost seven (7) years following the filing of its
petition, no certification election has yet been conducted among the rank-and-file employees. If
this be the case, the delay has gone far enough and can no longer be allowed to continue. The CA
is right when it said that Ventures should not interfere in the certification election by actively and
persistently opposing the certification election of the Union. A certification election is
exclusively the concern of employees and the employer lacks the legal personality to challenge
it.[24] In fact, jurisprudence frowns on the employers interference in a certification election for
such interference unduly creates the impression that it intends to establish a company union. [25]

Ventures allegations on forum shopping and the procedural lapse supposedly committed by the
BLR in allowing a belatedly filed motion for reconsideration need not detain us long. Suffice it
to state that this Court has consistently ruled that the application of technical rules of procedure
in labor cases may be relaxed to serve the demands of substantial justice.[26] So it must be in this
case.

WHEREFORE, the petition is DENIED. The Decision and Resolution dated October 20,
2003 and January 19, 2004, respectively, of the CA are AFFIRMED. S.S. Ventures Labor Union
shall remain in the roster of legitimate labor organizations, unless it has in the meantime lost its
legitimacy for causes set forth in the Labor Code. Costs against petitioner.
SO ORDERED.
PRESBITERO J. VELASCO, JR.
Associate Justice

6
WE CONCUR:

LEONARDO A. QUISUMBING
Associate Justice
Chairperson

CONSUELO YNARES-SANTIAGO CONCHITA CARPIO MORALES


Associate Justice Associate Justice

DANTE O. TINGA
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Courts Division.

LEONARDO A. QUISUMBING
Associate Justice
Chairperson

CERTIFICATION

7
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons
Attestation, I certify that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO
Chief Justice

[1]
Rollo, pp. 68-77.
[2]
Art. 239. GROUNDS FOR CANCELLATION OF UNION REGISTRATION. x x x (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.
[3]
Per the Union, 542 union members signed the petition for certification election.
[4]
Rollo, p. 71.
[5]
Id. at 78-82.
[6]
Id. at 118-120.
[7]
Id. at 127.
[8]
Id. at 144-145.
[9]
Id. at 146-154.
[10]
Id. at 86.
[11]
Id. at 52-59. Penned by Associate Justice Eliezer R. De Los Santos and concurred in by Associate Justices B.A. Adefuin-De La Cruz
(now retired) and Jose C. Mendoza.
[12]
Per CA Resolution dated January 19, 2004.
[13]
Rollo, pp. 11-12.
[14]
Sec. 3. The State shall afford full protection to labor x x x organized and unorganized x x x. It shall guarantee the rights of all workers
in self-organization, collective bargaining and negotiation, and peaceful concerted activities x x x.
[15]
2 Azucena, THE LABOR CODE 197-198 (6th ed., 2007).
[16]
Supra note 2.
[17]
Air Philippines Corporation v. Bureau of Labor Relations, G.R. No. 155395, June 22, 2006, 492 SCRA 243, 250.
[18]
Oriental Tin Can Labor Union v. Secretary of Labor and Employment, G.R. Nos. 116751 & 116779, August 28, 1998, 294 SCRA
640; La Suerte Cigar and Cigarette Factory v. Director of Bureau of Labor Relations, No. L-55674, July 25, 1983, 123 SCRA 679.
[19]
Art. 234. Requirements of registration.Any applicant labor organization x x x 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, x x x 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 the employees in the bargaining unit where it seeks to operate; (d) x x x; 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.
[20]
Progressive Development Corp.-Pizza Hut v. Laguesma, G.R. No. 115077, April 18, 1977, 271 SCRA 593, 599.
[21]
Rollo, pp. 153-154.
[22]
Id. at 127.
[23]
Id. at 152.
[24]
Oriental Tin Can Labor Union, supra note 18, at 650.
[25]
San Miguel Foods, Inc.-Cebu B-Meg Feed Plant v. Laguesma, G.R. No. 116172, October 10, 1996, 263 SCRA 68, 82.
[26]
Fiel v. Kris Security Systems, Inc., G.R. No. 155875, April 3, 2003, 400 SCRA 533, 536; El Toro Security Agency, Inc. v. NLRC,
G.R. No. 114308, April 18, 1996, 256 SCR

8
NATIONAL UNION OF
WORKERS IN HOTELS, G.R. No. 181531
RESTAURANTS AND ALLIED
INDUSTRIES- MANILA Present:
PAVILION HOTEL CHAPTER,
Petitioner, QUISUMBING, J., Chairperson,
CARPIO MORALES,
- versus - CHICO-NAZARIO,*
LEONARDO-DE CASTRO,** and
PERALTA,*** JJ.
SECRETARY OF LABOR AND
EMPLOYMENT, BUREAU OF
LABOR RELATIONS, HOLIDAY
INN MANILA PAVILION Promulgated:
HOTEL LABOR UNION AND July 31, 2009
ACESITE PHILIPPINES HOTEL
CORPORATION,
Respondents.

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

DECISION

CARPIO MORALES, J.:


National Union of Workers in Hotels, Restaurants and Allied Industries Manila Pavilion
Hotel Chapter (NUWHRAIN-MPHC), herein petitioner, seeks the reversal of the Court of
Appeals November 8, 2007 Decision[1] and of the Secretary of Labor and Employments January
25, 2008 Resolution[2] in OS-A-9-52-05 which affirmed the Med-Arbiters Resolutions dated
January 22, 2007[3] and March 22, 2007.[4]

A certification election was conducted on June 16, 2006 among the rank-and-file employees of
respondent Holiday Inn Manila Pavilion Hotel (the Hotel) with the following results:

EMPLOYEES IN VOTERS LIST = 353


TOTAL VOTES CAST = 346
NUWHRAIN-MPHC = 151
HIMPHLU = 169
NO UNION = 1
SPOILED = 3
SEGREGATED = 22

In view of the significant number of segregated votes, contending unions, petitioner,


NUHWHRAIN-MPHC, and respondent Holiday Inn Manila Pavillion Hotel Labor Union
(HIMPHLU), referred the case back to Med-Arbiter Ma. Simonette Calabocal to decide which
among those votes would be opened and tallied. Eleven (11) votes were initially segregated
because they were cast by dismissed employees, albeit the legality of their dismissal was still
9
pending before the Court of Appeals. Six other votes were segregated because the employees who
cast them were already occupying supervisory positions at the time of the election. Still five other
votes were segregated on the ground that they were cast by probationary employees and, pursuant
to the existing Collective Bargaining Agreement (CBA), such employees cannot vote. It bears
noting early on, however, that the vote of one Jose Gatbonton (Gatbonton), a probationary
employee, was counted.

By Order of August 22, 2006, Med-Arbiter Calabocal ruled for the opening of 17 out of the 22
segregated votes, specially those cast by the 11 dismissed employees and those cast by the six
supposedly supervisory employees of the Hotel.

Petitioner, which garnered 151 votes, appealed to the Secretary of Labor and Employment
(SOLE), arguing that the votes of the probationary employees should have been opened
considering that probationary employee Gatbontons vote was tallied. And petitioner averred that
respondent HIMPHLU, which garnered 169 votes, should not be immediately certified as the
bargaining agent, as the opening of the 17 segregated ballots would push the number of valid
votes cast to 338 (151 + 169 + 1 + 17), hence, the 169 votes which HIMPHLU garnered would
be one vote short of the majority which would then become 169.

By the assailed Resolution of January 22, 2007, the Secretary of Labor and Employment (SOLE),
through then Acting Secretary Luzviminda Padilla, affirmed the Med-Arbiters Order. It held that
pursuant to Section 5, Rule IX of the Omnibus Rules Implementing the Labor Code on exclusion
and inclusion of voters in a certification election, the probationary employees cannot vote, as at
the time the Med-Arbiter issued on August 9, 2005 the Order granting the petition for the conduct
of the certification election, the six probationary employees were not yet hired, hence, they could
not vote.

The SOLE further held that, with respect to the votes cast by the 11 dismissed employees,
they could be considered since their dismissal was still pending appeal.

As to the votes cast by the six alleged supervisory employees, the SOLE held that their
votes should be counted since their promotion took effect months after the issuance of the above-
said August 9, 2005 Order of the Med-Arbiter, hence, they were still considered as rank-and-file.

Respecting Gatbontons vote, the SOLE ruled that the same could be the basis to include
the votes of the other probationary employees, as the records show that during the pre-election
conferences, there was no disagreement as to his inclusion in the voters list, and neither was it
timely challenged when he voted on election day, hence, the Election Officer could not then
segregate his vote.

The SOLE further ruled that even if the 17 votes of the dismissed and supervisory
employees were to be counted and presumed to be in favor of petitioner, still, the same would not
suffice to overturn the 169 votes garnered by HIMPHLU.

In fine, the SOLE concluded that the certification of HIMPHLU as the exclusive bargaining
agent was proper.
10
Petitioners motion for reconsideration having been denied by the SOLE by Resolution of March
22, 2007, it appealed to the Court of Appeals.

By the assailed Decision promulgated on November 8, 2007, the appellate court affirmed the
ruling of the SOLE. It held that, contrary to petitioners assertion, the ruling in Airtime Specialist,
Inc. v. Ferrer Calleja[5] stating that in a certification election, all rank-and-file employees in the
appropriate bargaining unit, whether probationary or permanent, are entitled to vote, is
inapplicable to the case at bar. For, the appellate court continued, the six probationary employees
were not yet employed by the Hotel at the time the August 9, 2005 Order granting the certification
election was issued. It thus held that Airtime Specialist applies only to situations wherein the
probationary employees were already employed as of the date of filing of the petition for
certification election.

Respecting Gatbontons vote, the appellate court upheld the SOLEs finding that since it was not
properly challenged, its inclusion could no longer be questioned, nor could it be made the basis
to include the votes of the six probationary employees.

The appellate court brushed aside petitioners contention that the opening of the 17 segregated
votes would materially affect the results of the election as there would be the likelihood of a run-
off election in the event none of the contending unions receive a majority of the valid votes cast. It
held that the majority contemplated in deciding which of the unions in a certification election is
the winner refers to the majority of valid votes cast, not the simple majority of votes cast, hence,
the SOLE was correct in ruling that even if the 17 votes were in favor of petitioner, it would still
be insufficient to overturn the results of the certification election.

Petitioners motion for reconsideration having been denied by Resolution of January 25, 2008, the
present recourse was filed.

Petitioners contentions may be summarized as follows:

1. Inclusion of Jose Gatbontons vote but excluding the vote of the six other probationary
employees violated the principle of equal protection and is not in accord with the ruling
in Airtime Specialists, Inc. v. Ferrer-Calleja;
2. The time of reckoning for purposes of determining when the probationary employees can
be allowed to vote is not August 9, 2005 the date of issuance by Med-Arbiter Calabocal
of the Order granting the conduct of certification elections, but March 10, 2006 the date
the SOLE Order affirmed the Med-Arbiters Order.

3. Even if the votes of the six probationary employees were included, still, HIMPHLU
could not be considered as having obtained a majority of the valid votes cast as the
opening of the 17 ballots would increase the number of valid votes from 321 to 338,
hence, for HIMPHLU to be certified as the exclusive bargaining agent, it should have
garnered at least 170, not 169, votes.

11
Petitioner justifies its not challenging Gatbontons vote because it was precisely its position
that probationary employees should be allowed to vote. It thus avers that justice and equity dictate
that since Gatbontons vote was counted, then the votes of the 6 other probationary employees
should likewise be included in the tally.

Petitioner goes on to posit that the word order in Section 5, Rule 9 of Department Order
No. 40-03 reading [A]ll employees who are members of the appropriate bargaining unit sought
to be represented by the petitioner at the time of the issuance of the order granting the conduct of
certification election shall be allowed to vote refers to an order which has already become final
and executory, in this case the March 10, 2002 Order of the SOLE.

Petitioner thus concludes that if March 10, 2006 is the reckoning date for the determination
of the eligibility of workers, then all the segregated votes cast by the probationary employees
should be opened and counted, they having already been working at the Hotel on such date.

Respecting the certification of HIMPHLU as the exclusive bargaining agent, petitioner


argues that the same was not proper for if the 17 votes would be counted as valid, then the total
number of votes cast would have been 338, not 321, hence, the majority would be 170; as such,
the votes garnered by HIMPHLU is one vote short of the majority for it to be certified as the
exclusive bargaining agent.

The relevant issues for resolution then are first, whether employees on probationary status
at the time of the certification elections should be allowed to vote, and second, whether
HIMPHLU was able to obtain the required majority for it to be certified as the exclusive
bargaining agent.

On the first issue, the Court rules in the affirmative.

The inclusion of Gatbontons vote was proper not because it was not questioned but because
probationary employees have the right to vote in a certification election. The votes of the six other
probationary employees should thus also have been counted. As Airtime Specialists, Inc. v.
Ferrer-Calleja holds:

In a certification election, all rank and file employees in the appropriate bargaining
unit, whether probationary or permanent are entitled to vote. This principle is clearly stated
in Art. 255 of the Labor Code which states that the labor organization designated or selected by
the majority of the employees in an appropriate bargaining unit shall be the exclusive
representative of the employees in such unit for purposes of collective bargaining. Collective
bargaining covers all aspects of the employment relation and the resultant CBA negotiated by the
certified union binds all employees in the bargaining unit. Hence, all rank and file employees,
probationary or permanent, have a substantial interest in the selection of the bargaining
representative. The Code makes no distinction as to their employment status as basis for
eligibility in supporting the petition for certification election. The law refers to all the
employees in the bargaining unit. All they need to be eligible to support the petition is to
belong to the bargaining unit. (Emphasis supplied)

Rule II, Sec. 2 of Department Order No. 40-03, series of 2003, which amended Rule XI of
the Omnibus Rules Implementing the Labor Code, provides:
12
Rule II

Section 2. Who may join labor unions and workers' associations. - All persons employed in
commercial, industrial and agricultural enterprises, including employees of government owned or
controlled corporations without original charters established under the Corporation Code, as well
as employees of religious, charitable, medical or educational institutions whether operating for
profit or not, shall have the right to self-organization and to form, join or assist labor unions for
purposes of collective bargaining: provided, however, that supervisory employees shall not be
eligible for membership in a labor union of the rank-and-file employees but may form, join or
assist separate labor unions of their own. Managerial employees shall not be eligible to form, join
or assist any labor unions for purposes of collective bargaining. Alien employees with valid
working permits issued by the Department may exercise the right to self-organization and join or
assist labor unions for purposes of collective bargaining if they are nationals of a country which
grants the same or similar rights to Filipino workers, as certified by the Department of Foreign
Affairs.

For purposes of this section, any employee, whether employed for a definite period or
not, shall beginning on the first day of his/her service, be eligible for membership in any
labor organization.

All other workers, including ambulant, intermittent and other workers, the self-employed,
rural workers and those without any definite employers may form labor organizations for their
mutual aid and protection and other legitimate purposes except collective bargaining. (Emphasis
supplied)

The provision in the CBA disqualifying probationary employees from voting cannot
override the Constitutionally-protected right of workers to self-organization, as well as the
provisions of the Labor Code and its Implementing Rules on certification elections and
jurisprudence thereon.

A law is read into, and forms part of, a contract. Provisions in a contract are valid only if
they are not contrary to law, morals, good customs, public order or public policy.[6]

Rule XI, Sec. 5 of D.O. 40-03, on which the SOLE and the appellate court rely to support
their position that probationary employees hired after the issuance of the Order granting the
petition for the conduct of certification election must be excluded, should not be read in isolation
and must be harmonized with the other provisions of D.O. Rule XI, Sec. 5 of D.O. 40-03, viz:

Rule XI
xxxx
Section 5. Qualification of voters; inclusion-exclusion. - All employees who are members of the
appropriate bargaining unit sought to be represented by the petitioner at the time of the
issuance of the order granting the conduct of a certification election shall be eligible to
vote. An employee who has been dismissed from work but has contested the legality of the
dismissal in a forum of appropriate jurisdiction at the time of the issuance of the order for the
conduct of a certification election shall be considered a qualified voter, unless his/her dismissal
was declared valid in a final judgment at the time of the conduct of the certification election.
(Emphasis supplied)

xxxx

13
Section 13. Order/Decision on the petition. - Within ten (10) days from the date of the last hearing,
the Med-Arbiter shall issue a formal order granting the petition or a decision denying the same. In
organized establishments, however, no order or decision shall be issued by the Med-Arbiter during
the freedom period.

The order granting the conduct of a certification election shall state the following:

(a) the name of the employer or establishment;

(b) the description of the bargaining unit;

(c) a statement that none of the grounds for dismissal enumerated in the succeeding paragraph
exists;

(d) the names of contending labor unions which shall appear as follows: petitioner union/s in the
order in which their petitions were filed, forced intervenor, and no union; and

(e) a directive upon the employer and the contending union(s) to submit within ten (10) days
from receipt of the order, the certified list of employees in the bargaining unit, or where
necessary, the payrolls covering the members of the bargaining unit for the last three (3)
months prior to the issuance of the order. (Emphasis supplied)
xxxx

Section 21. Decision of the Secretary. - The Secretary shall have fifteen (15) days from receipt of
the entire records of the petition within which to decide the appeal. The filing of the
memorandum of appeal from the order or decision of the Med-Arbiter stays the holding of
any certification election.

The decision of the Secretary shall become final and executory after ten (10) days from
receipt thereof by the parties. No motion for reconsideration of the decision shall be entertained.
(Emphasis supplied)

In light of the immediately-quoted provisions, and prescinding from the principle that all
employees are, from the first day of their employment, eligible for membership in a labor
organization, it is evident that the period of reckoning in determining who shall be included in
the list of eligible voters is, in cases where a timely appeal has been
filedfrom the Order of the Med-
Arbiter, the date when the Order of the Secretary of Labor and Employment,
whether affirming or denying the appeal, becomes final andexecutory.

The filing of an appeal to the SOLE from the Med-Arbiters Order stays its execution, in
accordance with Sec. 21, and rationally, the Med-Arbiter cannot direct the employer to furnish
him/her with the list of eligible voters pending the resolution of the appeal.

During the pendency of the appeal, the employer may hire additional employees. To
exclude the employees hired after the issuance of the Med-Arbiters Order but before the appeal
has been resolved would violate the guarantee that every employee has the right to be part of a
labor organization from the first day of their service.

In the present case, records show that the probationary employees, including Gatbonton,
were included in the list of employees in the bargaining unit submitted by the Hotel on May 25,
2006 in compliance with the directive of the Med-Arbiter after the appeal and subsequent motion
for reconsideration have been denied by the SOLE, rendering the Med-Arbiters August 22, 2005
14
Order final and executory 10 days after the March 22, 2007 Resolution (denying the motion for
reconsideration of the January 22 Order denying the appeal), and rightly so. Because, for purposes
of self-organization, those employees are, in light of the discussion above, deemed eligible to
vote.

A certification election is the process of determining the sole and exclusive bargaining
agent of the employees in an appropriate bargaining unit for purposes of collective
bargaining. Collective bargaining, refers to the negotiated contract between a legitimate labor
organization and the employer concerning wages, hours of work and all other terms and
conditions of employment in a bargaining unit.[7]

The significance of an employees right to vote in a certification election cannot thus be


overemphasized. For he has considerable interest in the determination of who shall represent him
in negotiating the terms and conditions of his employment.

Even if the Implementing Rules gives the SOLE 20 days to decide the appeal from the Order of
the Med-Arbiter, experience shows that it sometimes takes months to be resolved.To rule then
that only those employees hired as of the date of the issuance of the Med-Arbiters Order are
qualified to vote would effectively disenfranchise employees hired during the pendency of the
appeal. More importantly, reckoning the date of the issuance of the Med-Arbiters Order as the
cut-off date would render inutile the remedy of appeal to the SOLE.

But while the Court rules that the votes of all the probationary employees should be
included, under the particular circumstances of this case and the period of time which it took for
the appeal to be decided, the votes of the six supervisory employees must be excluded because at
the time the certification elections was conducted, they had ceased to be part of the rank and file,
their promotion having taken effect two months before the election.

As to whether HIMPHLU should be certified as the exclusive bargaining agent, the Court rules
in the negative. It is well-settled that under the so-called double majority rule, for there to be a
valid certification election, majority of the bargaining unit must have voted AND the
winning union must have garnered majority of the valid votes cast.

Prescinding from the Courts ruling that all the probationary employees votes should be
deemed valid votes while that of the supervisory employees should be excluded, it follows that
the number of valid votes cast would increase from 321 to 337. Under Art. 256 of the Labor Code,
the union obtaining the majority of the valid votes cast by the eligible voters shall be certified as
the sole and exclusive bargaining agent of all the workers in the appropriate bargaining unit. This
majority is 50% + 1. Hence, 50% of 337 is 168.5 + 1 or at least 170.

HIMPHLU obtained 169 while petitioner received 151 votes. Clearly, HIMPHLU was not
able to obtain a majority vote. The position of both the SOLE and the appellate court that the
opening of the 17 segregated ballots will not materially affect the outcome of the certification
election as for, so they contend, even if such member were all in favor of petitioner, still,
HIMPHLU would win, is thus untenable.

15
It bears reiteration that the true importance of ascertaining the number of valid votes cast
is for it to serve as basis for computing the required majority, and not just to determine which
union won the elections. The opening of the segregated but valid votes has thus become
material. To be sure, the conduct of a certification election has a two-fold objective: to
determine the appropriate bargaining unit and to ascertain the majority representation of
the bargaining representative, if the employees desire to be represented at all by anyone. It
is not simply the determination of who between two or more contending unions won, but whether
it effectively ascertains the will of the members of the bargaining unit as to whether they want to
be represented and which union they want to represent them.

Having declared that no choice in the certification election conducted obtained the required
majority, it follows that a run-off election must be held to determine which between HIMPHLU
and petitioner should represent the rank-and-file employees.

A run-off election refers to an election between the labor unions receiving the two (2)
highest number of votes in a certification or consent election with three (3) or more choices,
where such a certified or consent election results in none of the three (3) or more choices receiving
the majority of the valid votes cast; provided that the total number of votes for all contending
unions is at least fifty percent (50%) of the number of votes cast.[8] With 346 votes cast, 337 of
which are now deemed valid and HIMPHLU having only garnered 169 and petitioner having
obtained 151 and the choice NO UNION receiving 1 vote, then the holding of a run-off election
between HIMPHLU and petitioner is in order.

WHEREFORE, the petition is GRANTED. The Decision dated November 8, 2007 and
Resolution dated January 25, 2008 of the Court of Appeals affirming the Resolutions dated
January 22, 2007 and March 22, 2007, respectively, of the Secretary of Labor and Employment
in OS-A-9-52-05 are ANNULLED and SET ASIDE.

The Department of Labor and Employment-Bureau of Labor Relations is DIRECTED to


cause the holding of a run-off election between petitioner, National Union of Workers in Hotels,
Restaurants and Allied Industries-Manila Pavilion Hotel Chapter (NUWHRAIN-MPC), and
respondent Holiday Inn Manila Pavilion Hotel Labor Union (HIMPHLU).

SO ORDERED.

CONCHITA CARPIO MORALES


Associate Justice

WE CONCUR:

16
LEONARDO A. QUISUMBING
Associate Justice
Chairperson

MINITA V. CHICO NAZARIO TERESITA J. LEONARDO-DE CASTRO


Associate Justice Associate Justice

DIOSDADO M. PERALTA
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Courts Division.

LEONARDO A. QUISUMBING
Associate Justice
Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons
Attestation, I certify that the conclusions in the above decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO
Chief Justice

17
*
Additional member per Special Order No. 658.
**
Additional member per Special Order No. 635.
***
Additional member per Special Order No. 664.
[1]
CA rollo, pp. 194-203. Penned by Associate Justice Remedios A. Salazar Fernando and concurred in by Associate Justices Rosalinda
Asuncion Vicente and Enrico A. Lanzanas..
[2]
Id. at 237-238. Penned by Associate Justice Remedios A. Salazar Fernando and concurred in by Associate Justices Rosalinda
Asuncion Vicente and Enrico A. Lanzanas.
[3]
Id. at 19-23.
[4]
Id. at 24-25.
[5]
180 SCRA 749
[6]
CIVIL CODE, Art. 1306.
[7]
Honda Phils, Inc. v. Samahan ng Malayang Manggagawa sa Honda, G.R. No. 145561, June 15, 2005, 460 SCRA 186.
[8]
Department Order No. 40-03, series of 2003.

18
SECOND DIVISION

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

SAMAHAN NG MANGGAGAWA SA HANJIN SHIPYARD REP. BY ITS PRESIDENT, ALFIE


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

DECISION

MENDOZA, J.:

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

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

The Facts

On February 16, 2010, Samahan, through its authorized representative, Alfie F. Alipio, filed an application for registration5 of
its name "Samahan ng Mga Manggagawa sa Hanjin Shipyard" with the DOLE. Attached to the application were the list of
names of the association's officers and members, signatures of the attendees of the February 7, 2010 meeting, copies of
their Constitution and By-laws. The application stated that the association had a total of 120 members.

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

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

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

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

On March 26, 2010, DOLE-Pampanga called for a conference, wherein Samahan requested for a 10-day period to file a
responsive pleading. No pleading, however, was submitted. Instead, Samahan filed a motion to dismiss on April 14, 2010.9

The Ruling of the DOLE Regional Director

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

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

SO DECIDED.12
19
The Ruling of the Bureau of Labor Relations

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

In its Comment to the Appeal,15 Hanjin averred that it was a party-in-interest. It reiterated that Samahan committed
misrepresentation in its application for registration before DOLE Pampanga. While Samahan insisted that the remaining 63
members were either working, or had at least worked in Hanjin, only 10 attested to such fact, thus, leaving its 53 members
without any workplace to claim.

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

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

Accordingly, Samahan ng mga Manggagawa sa Hanjin Shipyard shall remain in the roster of legitimate workers'
association.21
On October 14, 2010, Hanjin filed its motion for reconsideration.22

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

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

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

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

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

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

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

The Ruling of the Court of Appeals

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

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

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

20
R0300-1003-CP-001, which ordered the cancellation of petitioner association's registration is REINSTATED.

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

I. THE COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT SAMAHAN CANNOT FORM A WORKERS'
ASSOCIATION OF EMPLOYEES IN HANJIN AND INSTEAD SHOULD HAVE FORMED A UNION, HENCE THEIR
REGISTRATION AS A WORKERS' ASSOCIATION SHOULD BE CANCELLED.

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

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

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

The Court's Ruling

The petition is partly meritorious.

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

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

collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law.
xxx

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

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

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

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

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

Many associations or groups of employees, or even combinations of only several persons, may qualify as a labor organization
21
yet fall short of constituting a labor union. While every labor union is a labor organization, not every labor organization is a
labor union. The difference is one of organization, composition and operation.48

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

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

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

In contrast, the existence of employer-employee relationship is not mandatory in the formation of workers' association. What
the law simply requires is that the members of the workers' association, at the very least, share the same interest. The very
definition of a workers' association speaks of "mutual aid and protection."

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

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

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

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

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

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

COVERAGE OF THE RIGHT TO SELF-ORGANIZATION

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

Section 2. Who may join labor unions and workers' associations. - All persons employed in commercial, industrial and
agricultural enterprises, including employees of government owned or controlled corporations without original charters
established under the Corporation Code, as well as employees of religious, charitable, medical or educational institutions
whether operating for profit or not, shall have the right to self-organization and to form, join or assist labor unions for
purposes of collective bargaining: provided, however, that supervisory employees shall not be eligible for membership in a
labor union of the rank-and-file employees but may form, join or assist separate labor unions of their own. Managerial
employees shall not be eligible to form, join or assist any labor unions for purposes of collective bargaining. Alien employees
with valid working permits issued by the Department may exercise the right to self-organization and join or assist labor
unions for purposes of collective bargaining if they are nationals of a country which grants the same or similar rights to
Filipino workers, as certified by the Department of Foreign Affairs.

For purposes of this section, any employee, whether employed for a definite period or not, shall beginning on the first day of
his/her service, be eligible for membership in any labor organization.

22
All other workers, including ambulant, intermittent and other workers, the self-employed, rural workers and those without
any definite employers may form labor organizations for their mutual aid and protection and other legitimate
purposes except collective bargaining.

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

No misrepresentation on the part of Samahan to warrant cancellation of registration

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

Misrepresentation, as a ground for the cancellation of registration of a labor organization, is committed "in connection with
the adoption, or ratification of the constitution and by-laws or amendments thereto, the minutes of ratification, the list of
members who took part in the ratification of the constitution and by-laws or amendments thereto, and those in connection
with the election of officers, minutes of the election of officers, and the list of voters, xxx."56

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

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

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

The records of this case reveal no deliberate or malicious intent to commit misrepresentation on the part of Samahan. The
use of such words "KAMI, ang mga Manggagawa sa HANJIN Shipyard" in the preamble of the constitution and by-laws did
not constitute misrepresentation so as to warrant the cancellation of Samahan's certificate of registration. Hanjin failed to
indicate how this phrase constitutes a malicious and deliberate misrepresentation. Neither was there any showing that the
alleged misrepresentation was serious in character. Misrepresentation is a devious charge that cannot simply be entertained
by mere surmises and conjectures.

Even granting arguendo that Samahan's members misrepresented themselves as employees or workers of Hanjin, said
misrepresentation does not relate to the adoption or ratification of its constitution and by-laws or to the election of its
officers.

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

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

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

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

23
[Emphases Supplied]
The policy underlying the prohibition in Section 18 against the registration of a corporate name which is "identical or
deceptively or confusingly similar" to that of any existing corporation or which is "patently deceptive" or "patently confusing"
or "contrary to existing laws," is the avoidance of fraud upon the public which would have occasion to deal with the entity
concerned, the evasion of legal obligations and duties, and the reduction of difficulties of administration and supervision over
corporations.60

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

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

WHEREFORE, the petition is PARTIALLY GRANTED. The July 4, 2013 Decision and the January 28, 2014 Resolution of the
Court of Appeals are hereby REVERSED and SET ASIDE. The September 6, 2010 Resolution of the Bureau of Labor
Relations, as modified by its November 28, 2011 Resolution, is REINSTATED.

SO ORDERED. chanroblesvi rtua llawli bra ry

Brion,*(Acting Chairperson), Peralta,**Del Castillo, and Leonen, JJ., concur.

Endnotes:

*
Per Special Order No. 2222, dated September 29, 2015.

**
Per Special Order No. 2223, dated September 29, 2015.

1
Rollo pp. 22-30; penned by Associate Justice Hakim S. Abdulwahid, with Associate Justice Marlene Gonzales-Sison and
Associate Justice Edwin D. Sorongon, concurring.

2
Id. at 32.

3
CA rollo, pp. 118-123.

4
Id. at 86-91.

5
Id. at 31.

6
Id. at 61.

7
Id. at 62-68.

8
Id. at 69-75.

9
Id. at 87.

10
Id. at 53.

11
Id. at 86-91.

12
Id. at 91.

13
Id. at 92-100.

14
Id. at 97.

15
Id. at 101-114.

16
Id. at 121.

17
Id. at 122.

18
Id. at 121.

19
Id.

20
Id. at 123.

21
Id.

22
Id. at 124-140.

23
Id. at 29-30.

24
Id. at 30.
24
25
Id. at 3-21.

26
Id. at 144-145.

27
Id at 148-151.

28
Id. at 159-163.

29
Id. at 167-168.

30
Id. at 183-222.

31
Id. at 192.

32
Id. at 220.

33
Id. at 238-242.

34
Id. at 246-267.

35
Id. at 279.

36
Id. at 278.

Rollo, pp. 29-30.


37

38
Id. at 12.

39
Id. at 15.

40
Comment, id. at 50-73.

41
Reply, id. at 96-102.

42
Article 211 (now 217), Labor Code of the Philippines.

Knitjoy Mfg., Inc. v. Ferrer-Calleja, G.R. No. 81883, September 23, 1992, 214 SCRA 174.
43

44
Article 218 (g), Labor Code of the Philippines.

45
Azucena, The Labor Code with Comments and Cases, Volume 2, p. 127 (1996); Pascual, Labor Relations Law, pp. 35-36.

46
Section 1 (zz), Omnibus Rules Implementing the Labor Code.

47
Section 1 (ccc), Omnibus Rules Implementing the Labor Code.

48
Azucena, p. 13, The Labor Code with Comments and Cases, Volume 2, 7th Edition, 2010.

49
Azucena, p. 417, The Labor Code with Comments and Cases, Volume 2, 7th Edition, 2010.

50
Supra note 45.

51
Article 255. Exclusive bargaining representation and workers' participation in policy and decision-making. The labor
organization designated or selected by the majority of the employees in an appropriate collective bargaining unit shall be the
exclusive representative of the employees in such unit for the purpose of collective bargaining. However, an individual
employee or group of employees shall have the right at any time to present grievances to their employer.

Any provision of law to the contrary notwithstanding, workers shall have the right, subject to such rules and regulations as
the Secretary of Labor and Employment may promulgate, to participate in policy and decision-making processes of the
establishment where they are employed insofar as said processes will directly affect their rights, benefits and welfare. For
this purpose, workers and employers may form labor-management councils: Provided, That the representatives of the
workers in such labor-management councils shall be elected by at least the majority of all employees in said establishment.

Allied Free Workers Union v. Compania Maritima, 19 Phil. 258, 278-279 (1967). (Azucena 351)
52

Reyes v. Trajano, 209 Phil. 484, 4891992).


53

54
Section 2, Rule 2, Department Order No. 40-03, Series of 2003.

Arizala v. Court of Appeals, 267 Phil. 615, 629 (1990).


55

56
Section 3, Rule XIV, Department Order No. 40-03, Series of 2003.

57
G.R. No. 196276, June 4, 2014, 725 SCRA 61-76.

58
581 Phil. 405 (2008).

59
Section 1(ff), Rule 1, Department Order No. 40-03, Series of 2003.

Lyceum of the Philippines v. Court of Appeals, G.R. No. 101897, March 5, 1993, 219 SCRA 610, 615.
60

25
THIRD DIVISION

[G.R. No. 96566. January 6, 1992.]

ATLAS LITHOGRAPHIC SERVICES, INC., Petitioner, v. UNDERSECRETARY BIENVENIDO E. LAGUESMA


(Department of Labor and Employment) and ATLAS LITHOGRAPHIC SERVICES, INC. SUPERVISORY,
ADMINISTRATIVE, PERSONNEL, PRODUCTION, ACCOUNTING AND CONFIDENTIAL EMPLOYEES-ASSOCIATION-
KAISAHAN NG MANGGAGAWANG PILIPINO (KAMPIL-KATIPUNAN), Respondents.

Romero, Lagman, Valdecantos & Arreza Law Offices for Petitioner.

Esteban M. Mendoza for Private Respondent.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; INDUSTRIAL PEACE ACT OF 1953; EMPLOYMENT; GROUP CLASSIFICATION OF
EMPLOYEES. — Under the Industrial Peace Act of 1953, employees were classified into three groups, namely: (1) managerial
employees; (2) supervisors; and (3) rank-and-file employees. Supervisors, who were considered employees in relation to
their employer could join a union but not a union of rank-and-file employees.

2. ID.; PRESIDENTIAL DECREE NO. 442; ID.; ID.; SUPERVISORS, DELETED. — With the enactment in 1974 of the Labor
Code (Pres. Decree No. 442), employees were classified into managerial and rank-and-file employees. Neither the category
of supervisors nor their right to organize under the old statute were recognized. So that, in Bulletin Publishing Corporation v.
Sanchez (144 SCRA 628 [1986]), the Court interpreted the superseding labor law to have removed from supervisors the
right to unionize among themselves.

3. ID.; ID.; ID.; ID.; AUTOMATIC DISSOLUTION OF SUPERVISORY UNIONS. — In Section 11, Rule II, Book V of the Omnibus
Rules implementing Pres. Decree No. 442, the supervisory unions existing since the effectivity of the New Code in January 1,
1975 ceased to operate as such and the members who did not qualify as managerial employees under this definition in
Article 212 (k) therein became eligible to form, to join or assist a rank-and-file union.

4. ID.; REPUBLIC ACT NO. 6715; ID.; ID.; SUPERVISORY EMPLOYEES AGAIN RECOGNIZED. — A revision of the Labor Code
undertaken by the bicameral Congress brought about the enactment of Rep. Act No. 6715 in March 1989 in which employees
were reclassified into three groups, namely: (1) the managerial employees; (2) supervisors, and (3) the rank-and-file
employees. Under the present law, the category of supervisory employees is once again recognized.

5. ID.; ID.; ID.; ID.; MANAGERIAL EMPLOYEES, DEFINED. — The definition of managerial employees was limited to those
having authority to hire and fire while those who only recommend effectively the hiring or firing or transfers of personnel
would be considered as closer to rank-and-file employees.

6. ID.; ID.; ID.; ID; SUPERVISORY EMPLOYEES NOT ALLOWED TO JOIN RANK-AND-FILE UNION; REASON. — The exclusion,
therefore, of middle level executives from the category of managers brought about a third classification, the supervisory
employees. These supervisory employees are allowed to form their own union but they are not allowed to join the rank-and-
file union because of conflict of interest (Journal of the Senate, First Regular Session, 1987-1988, Volume 3, p. 2245).

7. ID.; ID.; ID.; ID.; ID.; EXTENT OF PROHIBITION. — The Court emphasizes that the limitation is not confined to a case of
supervisors wanting to join a rank-and-file local union. The prohibition extends to a supervisors’ local union applying for
membership in a national federation the members of which include local unions of rank-and-file employees. The intent of the
law is clear especially where, as in the case at bar, the supervisors will be co-mingling with those employees whom they
directly supervise in their own bargaining unit.

8. STATUTORY CONSTRUCTION; LABOR LAWS; INTERPRETATION THEREOF SHOULD PROMOTE LABOR PEACE. —
Technicalities should not be allowed to stand in the way of equitably and completely resolving the rights and obligations of
the parties. (Rapid Manpower Consultants, Inc. v. NLRC, 190 SCRA [1990]) What should be paramount is the intent behind
the law, not its literal construction. Where one interpretation would result in mischievous consequences while another would
bring about equity, justice, and the promotion of labor peace, there can be no doubt as to what interpretation shall prevail.

9. LABOR AND SOCIAL LEGISLATION; ID.; EMPLOYEES RIGHT TO SELF-ORGANIZATION; NOT INTERFERED WITH BY THE
PROHIBITION ON SUPERVISORY EMPLOYEES FROM JOINING RANK AND FILE LABOR UNION. — The respondent contends
that the law prohibits the employer from interfering with the employees’ right to self-organization. There is no question about
this intendment of the law. There is, however, in the present case, no violation of such a guarantee to the employee.
Supervisors are not prohibited from forming their own union. What the law prohibits is their membership in a labor
organization of rank-and-file employees (Art. 245, Labor Code) or their joining a national federation of rank-and-file
employees that includes the very local union which they are not allowed to directly join.

10. ID.; DEPARTMENT OF LABOR AND EMPLOYMENT; ORDER ALLOWING CERTIFICATION ELECTION INVOLVING A UNION OF
SUPERVISORY AND RANK AND FILE EMPLOYEES AND A NO UNION, CONTRARY TO LAW. — In a motion dated November 15,
1991 it appears that the petitioner has knuckled under to the respondents’ pressures and agreed to let the national
federation KAMPIL-KATIPUNAN represent its supervisors in negotiating a collective bargaining agreement. Against the advise
of its own counsel and on the basis of alleged "industrial peace," the petitioner expressed a loss of interest in pursuing this
action. The petitioner is, of course, free to grant whatever concessions it wishes to give to its employees unilaterally or
26
through negotiations but we cannot allow the resulting validation of an erroneous ruling and policy of the Department of
Labor and Employment (DOLE) to remain on the basis of the petitioner’s loss of interest. The December 14, 1990 order and
the November 21, 1990 resolution of DOLE are contrary to law and must be declared as such.

DECISION

GUTIERREZ, JR., J.:

This is a petition for certiorari under Rule 65 of the Rules of Court seeking the modification of the Order dated 14 December
1990 and the Resolution dated 21 November 1990 issued by the public respondents.

The antecedent facts of the case as gathered from the records are as follows: chan rob1e s virtual 1aw l ib rary

On July 16, 1990, the supervisory, administrative personnel, production, accounting and confidential employees of the
petitioner Atlas Lithographic Services, Inc. (ALSI) affiliated with private respondent Kaisahan ng Manggagawang Pilipino, a
national labor organization. The local union adopted the name Atlas Lithographic Services, Inc. Supervisory, Administrative,
Personnel Production, Accounting and Confidential Employees Association or ALSI-SAPPACEA-KAMPIL in short and which we
shall hereafter refer to as the ‘supervisors’ union.

Shortly thereafter, private respondent Kampil-Katipunan filed on behalf of the ‘supervisors’ union a petition for certification
election so that it could be the sole and exclusive bargaining agent of the supervisory employees.

The petitioners opposed the private respondent’s petition claiming that under Article 245 of the Labor Code the private
respondent cannot represent the supervisory employees for collective bargaining purposes because the private respondent
also represents the rank-and-file employees’ union.

On September 18, 1990, the Med-Arbiter issued an order in favor of the private respondent, the dispositive portion of which
provides:red:cha nrob les.com. ph

"WHEREFORE, premises considered, a certification election among the supervisory employees belonging to the
Administrative, Personnel, Production, Accounting Departments as well as confidential employees performing supervisory
functions of Atlas Lithographic Services, Incorporated is hereby ordered conducted within 20 days from receipt hereof,
subject to usual pre-election conference, with the following choices: jgc:chan roble s.com.p h

"1. KAMPIL (KATIPUNAN);

"2. No union.

"SO ORDERED." (Rollo, pp. 39-40).

The petitioners, as expected, appealed for the reversal of the above order. The public respondent, however, issued a
resolution affirming the Med-Arbiter’s order.

The petitioners, in turn, filed a motion for reconsideration but the same was denied. Hence, this petition for certiorari.

The sole issue to be resolved in this case is whether or not, under Article 245 of the Labor Code, a local union of supervisory
employees may be allowed to affiliate with a national federation of labor organizations of rank-and-file employees and which
national federation actively represents its affiliates in collective bargaining negotiations with the same employer of the
supervisors and in the implementation of resulting collective bargaining agreements.

The petitioner argues that KAMPIL-KATIPUNAN already represents its rank-and-file employees and, therefore, to allow the
supervisors of those employees to affiliate with the private respondent is tantamount to allowing the circumvention of the
principle of the separation of unions under Article 245 of the Labor Code.

It further argues that the intent of the law is to prevent a single labor organization from representing different classes of
employees with conflicting interests.

The public respondent, on the other hand, contends that despite affiliation with a national federation, the local union does
not lose its personality which is separate, and distinct from the national federation. It cites as its legal basis the case of
Adamson & Adamson, Inc. v. CIR, (127 SCRA 268 [1984]).

It maintains that Rep. Act No. 6715 contemplates the principle laid down by this Court in the Adamson case interpreting
Section 3 of Rep. Act No. 875 (the Industrial Peace Act) on the right of a supervisor’s union to affiliate. The private
respondent asserts that the legislature must have noted the Adamson ruling then prevailing when it conceived the
reinstatement in the present Labor Code of a similar provision on the right of supervisors to organize.

Under the Industrial Peace Act of 1953, employees were classified into three groups, namely: (1) managerial employees; (2)
supervisors; and (3) rank-and-file employees. Supervisors, who were considered employees in relation to their employer
could join a union but not a union of rank-and-file employees.

With the enactment in 1974 of the Labor Code (Pres. Decree No. 442), employees were classified into managerial and rank-
and-file employees. Neither the category of supervisory nor their right to organize under the old statute were recognized. So
that, in Bulletin Publishing Corporation v. Sanchez (144 SCRA 628 [1986]), the Court interpreted the superseding labor law
to have removed from supervisors the right to unionize among themselves. The Court ruled: jgc: chan roble s.com.p h

"In the light of the factual background of this case, We are constrained to hold that the supervisory employees of petitioner
firm may not, under the law, form a supervisors union, separate and distinct from the existing bargaining unit (BEU),
27
composed of the rank-and-file employees of the Bulletin Publishing Corporation. It is evident that most of the private
respondents are considered managerial employees. Also, it is distinctly stated in Section 11, Rule 11, of the Omnibus Rules
Implementing the Labor Code, that supervisory unions are presently no longer recognized nor allowed to exist and operate
as such." (pp. 633, 634).

In Section 11, Rule II, Book V of the Omnibus Rules implementing Pres. Decree No. 442, the supervisory unions existing
since the effectivity of the New Code in January 1, 1975 ceased to operate as such and the members who did not qualify as
managerial employees under this definition in Article 212 (k) therein became eligible to form, to join or assist a rank-and-file
union.

A revision of the Labor Code undertaken by the bicameral Congress brought about the enactment of Rep. Act No. 6715 in
March 1989 in which employees were reclassified into three groups, namely- (1) the managerial employees; (2) supervisors;
and (3) the rank-and-file employees. Under the present law, the category of supervisory employees is once again
recognized. Hence, Art. 212(m) states: jgc:chanro bles. com.ph

"(m) . . . Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial
actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent
judgment . . ."cralaw virtua1aw l ib rary

The rationale of the amendment is the government’s recognition of the right of supervisors to organize with the qualification
that they shall not join or assist in the organization of rank-and-file employees. The reason behind the Industrial Peace Act
provision on the same subject matter has been adopted in the present statute. The interests of supervisors on the one hand,
and the rank-and-file employees on the other, are separate and distinct. The functions of supervisors, being recommendatory
in nature, are more identified with the interests of the employer. The performance of those functions may, thus, run counter
to the interests of the rank-and-file.

This intent of the law is made clear in the deliberations of the legislators on then Senate Bill 530 now enacted as Rep. Act No.
6715.

The definition of managerial employees was limited to those having authority to hire and fire while those who only
recommend effectively the hiring or firing or transfers of personnel would be considered as closer to rank-and-file employees.
The exclusion, therefore, of middle level executives from the category of managers brought about a third classification, the
supervisory employees. These supervisory employees are allowed to form their own union but they are not allowed to join
the rank-and-file union because of conflict of interest (Journal of the Senate, First Regular Session, 1987-1988, Volume 3, p.
2245)

In terms of classification, however, while they are more closely Identified with the rank-and-file they are still not allowed to
join the union of rank-and-file employees. To quote the Senate Journal: jgc:chanroble s.com.p h

"In reply to Sen. Guingona’s query whether `supervisors’ are included in the term ‘employee,’ Sen. Herrera stated that while
they are considered as rank-and-file employees, they cannot join the union and they would have to form their own
supervisors’ union pursuant to Rep. Act 875." (supra, p. 2288)

The peculiar role of supervisors is such that while they are not managers, when they recommend action implementing
management policy or ask for the discipline or dismissal of subordinates, they identify with the interests of the employer and
may act contrary to the interests of the rank-and-file.

We agree with the petitioners’ contention that a conflict of interest nay arise in the areas of discipline, collective bargaining
and strikes.

Members of the supervisory union might refuse to carry out disciplinary measure against their co-member rank-and-file
employees.

In the area of bargaining, their interests cannot be considered identical. The needs of one are different from those of the
other. Moreover, in the event of a strikes the national federation might influence the supervisors’ union to conduct a
sympathy strike on the sole basis of affiliation.

More important, the factual issue in the Adamson case are different from the present case. First, the rank-and-file employees
in the Adamson case are not directly under the supervisors who comprise the supervisors’ union. In the case at bar, the
rank-and- file employees are directly under the supervisors organized by one and the same federation.

The contemplation of the law in Sec. 3 of the Industrial Peace Act is to prohibit supervisors from joining a labor organization
of employees under their supervision. Sec. 3 of the Industrial Peace Act provides: red:cha nrob les.com. ph

"SECTION 3. Employees’ Right to Self-Organization. — Employees shall have the right to Self-organization and to form, join
or assist labor organizations of their own choosing for the purpose of collective bargaining through representatives of their
own choosing and to engage in concerted activities for the purpose of collective bargaining and other mutual aid or
protection. Individuals employed as supervisors shall not be eligible for membership in a labor organization of employees
under their supervision but may form separate organizations of their own (Emphasis supplied)

This was not the consideration in the Adamson case because as mentioned earlier, the rank-and-file employees in the
Adamson case were not under the supervision of the supervisors involved.

Meanwhile, Article 245 of the Labor Code as amended by Rep. Act No. 6715 provides: jgc:chan roble s.com.p h

"ARTICLE 245. Ineligibility of managerial employees to join any labor organization: right of supervisory employees. —
Managerial employees are not eligible to join, assist or form any labor organization supervisory employees shall not be
eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own.

The Court construes Article 245 to mean that, as in Section 3 of the Industrial Peace Act, supervisors shall not be given an
28
occasion to bargain together with the rank-and-file against the interests of the employer regarding terms and conditions of
work.

Second, the national union in the Adamson case did not actively represent its local chapters. In the present case, the local
union is actively represented by the national federation. In fact, it was the national federation, the KAMPIL-KATIPUNAN,
which initially filed a petition for certification in behalf of the respondent union.

Thus, if the intent of the law is to avoid a situation where Supervisors would merge with the rank-and-file or where the
supervisors’ labor organization would represent conflicting interests, then a local supervisors’ union should not be allowed to
affiliate with the national federation of union of rank-and-file employees where that federation actively participates in union
activity in the company.

The petitioner further contends that the term labor organization includes a federation considering that Art. 212 (g) mentions
‘any union or association of employees.’

The respondent, however, argues that the phrase refers to a local union only in which case, the prohibition in Art. 245 is
inapplicable to the case at bar.

The prohibition against a supervisors’ union joining a local union of rank-and-file is replete with jurisprudence. The Court
emphasizes that the limitation is not confined to a case of supervisors wanting to join a rank-and-file local union. The
prohibition extends to a supervisors’ local union applying for membership in a national federation the members of which
include local unions of rank-and-file employees. The intent of the law is clear especially where, as in the case at bar, the
supervisors will be co-mingling with those employees whom they directly supervise in their own bargaining unit.

Technicalities should not be allowed to stand in the way of the parties. (Rapid Manpower Consultants, Inc. v. NLRC, 190
SCRA 747 1990]) What should be paramount is the intent behind the law, not its literal construction. Where one
interpretation would result in mischievous consequences while another would bring about equity, justice, and the promotion
of labor peace, there can be no doubt as to what interpretation shall prevail.

Finally, the respondent contends that the law prohibits the employer from interfering with the employees’ right to self-
organization.

There is no question about this intendment of the law. There is, however, in the present case, no violation of such a
guarantee to the employee. Supervisors are not prohibited from forming their own union. What the law prohibits is their
membership in a labor organization of rank-and-file employees (Art. 245, Labor Code) or their joining a national federation of
rank-and-file employees that includes the very local union which they are not allowed to directly join.

In a motion dated November 15, 1991 it appears that the petitioner has knuckled under to the respondents’ pressures and
agreed to let the national federation KAMPIL-KATIPUNAN represent its supervisors in negotiating a collective bargaining
agreement. Against the advise of its own counsel and on the basis of alleged "industrial peace," the petitioner expressed a
loss of interest in pursuing this action. The petitioner is, of course, free to grant whatever concessions it wishes to give to its
employees unilaterally or through negotiations but we cannot allow the resulting validation of an erroneous ruling and policy
of the Department of Labor and Employment (DOLE) to remain on the basis of the petitioner’s loss of interest. The December
14, 1990 order and the November 21, 1990 resolution of DOLE are contrary to law and must be declared as such.

WHEREFORE, the petition is hereby GRANTED. The private respondent is disqualified from affiliating with a national
federation of labor organizations which includes the petitioner’s rank-and-file employees.

SO ORDERED.

Feliciano, Bidin, Davide, Jr. and Romero, JJ., concur.

29
THIRD DIVISION

[G.R. No. 142000. January 22, 2003]

TAGAYTAY HIGHLANDS INTERNATIONAL GOLF CLUB


INCORPORATED, petitioner, vs. TAGAYTAY HIGHLANDS EMPLOYEES
UNION-PGTWO, respondent.

DECISION
CARPIO-MORALES, J.:

Before this Court on certiorari under Rule 45 is the petition of the Tagaytay Highlands International
Golf Club Incorporated (THIGCI) assailing the February 15, 2002 decision of the Court of Appeals
denying its petition to annul the Department of Labor and Employment (DOLE) Resolutions of
November 12, 1998 and December 29, 1998.
On October 16, 1997, the Tagaytay Highlands Employees Union (THEU)Philippine Transport and
General Workers Organization (PTGWO), Local Chapter No. 776, a legitimate labor organization said
to represent majority of the rank-and-file employees of THIGCI, filed a petition for certification election
before the DOLE Mediation-Arbitration Unit, Regional Branch No. IV.
THIGCI, in its Comment[1] filed on November 27, 1997, opposed THEUs petition for certification
election on the ground that the list of union members submitted by it was defective and fatally flawed
as it included the names and signatures of supervisors, resigned, terminated and absent without leave
(AWOL) employees, as well as employees of The Country Club, Inc., a corporation distinct and
separate from THIGCI; and that out of the 192 signatories to the petition, only 71 were actual rank-and-
file employees of THIGCI.
THIGCI thus submitted a list of the names of its 71 actual rank-and-file employees which it
annexed[2] to its Comment to the petition for certification election. And it therein incorporated the
following tabulation[3] showing the number of signatories to said petition whose membership in the union
was being questioned as disqualified and the reasons for disqualification:

# of Signatures Reasons for Disqualification

13 Supervisors of THIGCI

6 Resigned employees of THIGCI

2 AWOL employees of THIGCI

53 Rank-and-file employees of The Country Club at Tagaytay Highlands, Inc.

14 Supervisors of The Country Club at Tagaytay Highlands, Inc.

6 Resigned employees of The Country Club at Tagaytay Highlands, Inc.

3 Terminated employees of The Country Club at Tagaytay Highlands, Inc.

1 AWOL employees of The Country Club at Tagaytay Highlands, Inc.

4 Signatures that cannot be deciphered

16 Names in list that were erased

30
2 Names with first names only

THIGCI also alleged that some of the signatures in the list of union members were secured through
fraudulent and deceitful means, and submitted copies of the handwritten denial and withdrawal of some
of its employees from participating in the petition.[4]
Replying to THIGCIs Comment, THEU asserted that it had complied with all the requirements for
valid affiliation and inclusion in the roster of legitimate labor organizations pursuant to DOLE
Department Order No. 9, series of 1997,[5] on account of which it was duly granted a Certification of
Affiliation by DOLE on October 10, 1997;[6] and that Section 5, Rule V of said Department Order
provides that the legitimacy of its registration cannot be subject to collateral attack, and for as long as
there is no final order of cancellation, it continues to enjoy the rights accorded to a legitimate
organization.
THEU thus concluded in its Reply[7] that under the circumstances, the Med-Arbiter should, pursuant
to Article 257 of the Labor Code and Section 11, Rule XI of DOLE Department Order No. 09,
automatically order the conduct of a certification election.
By Order of January 28, 1998, [8] DOLE Med-Arbiter Anastacio Bactin ordered the holding of a
certification election among the rank-and-file employees of THIGCI in this wise, quoted verbatim:

We evaluated carefully this instant petition and we are of the opinion that it is complete in form and
substance. In addition thereto, the accompanying documents show that indeed petitioner union
is a legitimate labor federation and its local/chapter was duly reported to this Office as one of
its affiliate local/chapter. Its due reporting through the submission of all the requirements for
registration of a local/chapter is a clear showing that it was already included in the roster of
legitimate labor organizations in this Office pursuant to Department Order No. 9 Series of 1997
with all the legal right and personality to institute this instant petition. Pursuant therefore to the
provisions of Article 257 of the Labor Code, as amended, and its Implementing Rules as amended
by Department Order No. 9, since the respondents establishment is unorganized, the holding of a
certification election is mandatory for it was clearly established that petitioner is a legitimate labor
organization. Giving due course to this petition is therefore proper and appropriate. (Emphasis
[9]

supplied)

Passing on THIGCIs allegation that some of the union members are supervisory, resigned and
AWOL employees or employees of a separate and distinct corporation, the Med-Arbiter held that the
same should be properly raised in the exclusion-inclusion proceedings at the pre-election
conference. As for the allegation that some of the signatures were secured through fraudulent and
deceitful means, he held that it should be coursed through an independent petition for cancellation of
union registration which is within the jurisdiction of the DOLE Regional Director. In any event, the Med-
Arbiter held that THIGCI failed to submit the job descriptions of the questioned employees and
other supporting documents to bolster its claim that they are disqualified from joining THEU.
THIGCI appealed to the Office of the DOLE Secretary which, by Resolution of June 4, 1998, set
aside the said Med-Arbiters Order and accordingly dismissed the petition for certification election on
the ground that there is a clear absence of community or mutuality of interests, it finding that THEU
sought to represent two separate bargaining units (supervisory employees and rank-and-file
employees) as well as employees of two separate and distinct corporate entities.
Upon Motion for Reconsideration by THEU, DOLE Undersecretary Rosalinda Dimalipis-Baldoz, by
authority of the DOLE Secretary, issued DOLE Resolution of November 12, 1998[10]setting aside the
June 4, 1998 Resolution dismissing the petition for certification election. In the November 12, 1998
Resolution, Undersecretary Dimapilis-Baldoz held that since THEU is a local chapter, the twenty
percent (20%) membership requirement is not necessary for it to acquire legitimate status, hence, the
alleged retraction and withdrawal of support by 45 of the 70 remaining rank-and-file members . . . cannot
negate the legitimacy it has already acquired before the petition; that rather than disregard the
legitimate status already conferred on THEU by the Bureau of Labor Relations, the names of alleged
disqualified supervisory employees and employees of the Country Club, Inc., a separate and distinct
corporation, should simply be removed from the THEUs roster of membership; and that regarding the
participation of alleged resigned and AWOL employees and those whose signatures are illegible, the
issue can be resolved during the inclusion-exclusion proceedings at the pre-election stage.
31
The records of the case were thus ordered remanded to the Office of the Med-Arbiter for the
conduct of certification election.
THIGCIs Motion for Reconsideration of the November 12, 1998 Resolution having been denied by
the DOLE Undersecretary by Resolution of December 29, 1998,[11] it filed a petition for certiorari before
this Court which, by Resolution of April 14, 1999,[12] referred it to the Court of Appeals in line with its
pronouncement in National Federation of Labor (NFL) v. Hon. Bienvenido E. Laguesma, et al.,[13] and in
strict observance of the hierarchy of courts, as emphasized in the case of St. Martin Funeral Home v.
National Labor Relations Commission.[14]
By Decision of February 15, 2000,[15] the Court of Appeals denied THIGCIs Petition for Certiorari
and affirmed the DOLE Resolution dated November 12, 1998. It held that while a petition for
certification election is an exception to the innocent bystander rule, hence, the employer may pray for
the dismissal of such petition on the basis of lack of mutuality of interests of the members of the union
as well as lack of employer-employee relationship following this Courts ruling in Toyota Motor
Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union et al[16] and Dunlop
Slazenger [Phils.] v. Hon. Secretary of Labor and Employment et al,[17] petitioner failed to adduce
substantial evidence to support its allegations.
Hence, the present petition for certiorari, raising the following

ISSUES/ASSIGNMENT OF ERRORS:

THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE RESOLUTION


DATED 12 NOVEMER 1998 HOLDING THAT SUPERVISORY EMPLOYEES AND NON-
EMPLOYEES COULD SIMPLY BE REMOVED FROM APPELLEES ROSTER OF RANK-
AND-FILE MEMBERSHIP INSTEAD OF RESOLVING THE LEGITIMACY OF
RESPONDENT UNIONS STATUS

THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE RESOLUTION


DATED 12 NOVEMBER 1998 HOLDING THAT THE DISQUALIFIED EMPLOYEES
STATUS COULD READILY BE RESOLVED DURING THE INCLUSION AND EXCLUSION
PROCEEDINGS

THE COURT OF APPEALS GRIEVOUSLY ERRED IN NOT HOLDING THAT THE


ALLEGATIONS OF PETITIONER HAD BEEN DULY PROVEN BY FAILURE OF
RESPONDENT UNION TO DENY THE SAME AND BY THE SHEER WEIGHT OF
EVIDENCE INTRODUCED BY PETITIONER AND CONTAINED IN THE RECORDS OF THE
CASE [18]

The statutory authority for the exclusion of supervisory employees in a rank-and-file union, and
vice-versa, is Article 245 of the Labor Code, to wit:

Article 245. Ineligibility of managerial employees to join any labor organization; right of
supervisory employees. Managerial employees are not eligible to join, assist or form any labor
organization.Supervisory employees shall not be eligible for membership in a labor organization of
the rank-and-file employees but may join, assist or form separate labor organizations of their own.

While above-quoted Article 245 expressly prohibits supervisory employees from joining a rank-and-
file union, it does not provide what would be the effect if a rank-and-file union counts supervisory
employees among its members, or vice-versa.
Citing Toyota[19] which held that a labor organization composed of both rank-and-file and
supervisory employees is no labor organization at all, and the subsequent case of Progressive
Development Corp. Pizza Hut v. Ledesma[20] which held that:

The Labor Code requires that in organized and unorganized establishments, a petition for
certification election must be filed by a legitimate labor organization. The acquisition of rights by
any union or labor organization, particularly the right to file a petition for certification
32
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 petitioners prayer that the former
look into the legitimacy of the respondent Union by a sweeping declaration that the union was in
the possession of a charter certificate so that for all intents and purposes, Sumasaklaw sa
Manggagawa sa Pizza Hut (was) a legitimate organization, (Underscoring and emphasis
[21]

supplied),

petitioner contends that, quoting Toyota, [i]t becomes necessary . . ., anterior to the granting of an
order allowing a certification election, to inquire into the composition of any labor organization whenever
the status of the labor organization is challenged on the basis of Article 245 of the Labor Code.[22]
Continuing, petitioner argues that without resolving the status of THEU, the DOLE Undersecretary
conveniently deferred the resolution on the serious infirmity in the membership of [THEU] and ordered
the holding of the certification election which is frowned upon as the following ruling of this Court shows:

We also do not agree with the ruling of the respondent Secretary of Labor that the infirmity in the
membership of the respondent union can be remedied in the pre-election conference thru the
exclusion-inclusion proceedings wherein those employees who are occupying rank-and-file
positions will be excluded from the list of eligible voters. Public respondent gravely misappreciated
the basic antipathy between the interest of supervisors and the interest of rank-and-file
employees. Due to the irreconcilability of their interest we held in Toyota Motor Philippines v.
Toyota Motors Philippines Corporation Labor Union, viz:

xxx

Clearly, based on this provision [Article 245], a labor organization composed of both rank-and-file
and supervisory employees is no labor organization at all. It cannot, for any guise or purpose, be a
legitimate labor organization. Not being one, an organization which carries a mixture of rank-and-
file and supervisory employees cannot posses any of the rights of a legitimate labor organization,
including the right to file a petition for certification election for the purpose of collective
bargaining. It becomes necessary, therefore, anterior to the granting of an order allowing a
certification election, to inquire into the composition of any labor organization whenever the status
of the labor organization is challenged on the basis of Article 245 of the Labor Code. (Emphasis by
petitioner) (Dunlop Slazenger (Phils.), v. Secretary of Labor, 300 SCRA 120
[1998]; Underscoring and emphasis supplied by petitioner.)

The petition fails. After a certificate of registration is issued to a union, its legal personality cannot
be subject to collateral attack. It may be questioned only in an independent petition for cancellation in
accordance with Section 5 of Rule V, Book IV of the Rules to Implement the Labor Code (Implementing
Rules) which section reads:

Sec. 5. Effect of registration. The labor organization or workers association shall be deemed
registered and vested with legal personality on the date of issuance of its certificate of
registration. Such legal personality cannot thereafter be subject to collateral attack, but may be
questioned only in an independent petition for cancellation in accordance with these Rules.
(Emphasis supplied)

The grounds for cancellation of union registration are provided for under Article 239 of the Labor
Code, as follows:

Art. 239. Grounds for cancellation of union registration. The following shall constitute grounds for
cancellation of union registration:

33
(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of
the constitution and by-laws or amendments thereto, the minutes of ratification, and the list of
members who took part in the ratification;

(b) Failure to submit the documents mentioned in the preceding paragraph within thirty (30) days
from adoption or ratification of the constitution and by-laws or amendments thereto;

(c) Misrepresentation, false statements or fraud in connection with the election of officers,
minutes of the election of officers, the list of voters, or failure to subject these documents together
with the list of the newly elected/appointed officers and their postal addresses within thirty (30)
days from election;

(d) Failure to submit the annual financial report to the Bureau within thirty (30) days after the
losing of every fiscal year and misrepresentation, false entries or fraud in the preparation of the
financial report itself;

(e) Acting as a labor contractor or engaging in the cabo system, or otherwise engaging in any
activity prohibited by law;

(f) Entering into collective bargaining agreements which provide terms and conditions of
employment below minimum standards established by law;

(g) Asking for or accepting attorneys fees or negotiation fees from employers;

(h) Other than for mandatory activities under this Code, checking off special assessments or any
other fees without duly signed individual written authorizations of the members;

(i) Failure to submit list of individual members to the Bureau once a year or whenever required by
the Bureau; and

(j) Failure to comply with the requirements under Articles 237 and 238, (Emphasis supplied),

while the procedure for cancellation of registration is provided for in Rule VIII, Book V of the
Implementing Rules.
The inclusion in a union of disqualified employees is not among the grounds for cancellation, unless
such inclusion is due to misrepresentation, false statement or fraud under the circumstances
enumerated in Sections (a) and (c) of Article 239 of above-quoted Article 239 of the Labor Code.
THEU, having been validly issued a certificate of registration, should be considered to have already
acquired juridical personality which may not be assailed collaterally.
As for petitioners allegation that some of the signatures in the petition for certification election were
obtained through fraud, false statement and misrepresentation, the proper procedure is, as reflected
above, for it to file a petition for cancellation of the certificate of registration, and not to intervene in a
petition for certification election.
Regarding the alleged withdrawal of union members from participating in the certification election,
this Courts following ruling is instructive:

[T]he best forum for determining whether there were indeed retractions from some of the laborers
is in the certification election itself wherein the workers can freely express their choice in a secret
ballot.Suffice it to say that the will of the rank-and-file employees should in every possible instance
be determined by secret ballot rather than by administrative or quasi-judicial inquiry. Such
representation and certification election cases are not to be taken as contentious litigations for suits
but as mere investigations of a non-adversary, fact-finding character as to which of the competing
unions represents the genuine choice of the workers to be their sole and exclusive collective
bargaining representative with their employer. [23]

34
As for the lack of mutuality of interest argument of petitioner, it, at all events, does not lie given, as
found by the court a quo, its failure to present substantial evidence that the assailed employees are
actually occupying supervisory positions.
While petitioner submitted a list of its employees with their corresponding job titles and
ranks,[24] there is nothing mentioned about the supervisors respective duties, powers and prerogatives
that would show that they can effectively recommend managerial actions which require the use of
independent judgment.[25]
As this Court put it in Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor:[26]

Designation should be reconciled with the actual job description of subject employees x x x The
mere fact that an employee is designated manager does not necessarily make him one. Otherwise,
there would be an absurd situation where one can be given the title just to be deprived of the right
to be a member of a union. In the case of National Steel Corporation vs. Laguesma (G. R. No.
103743, January 29, 1996), it was stressed that:

What is essential is the nature of the employees function and not the nomenclature or
title given to the job which determines whether the employee has rank-and-file or managerial status
or whether he is a supervisory employee. (Emphasis supplied). [27]

WHEREFORE, the petition is hereby DENIED. Let the records of the case be remanded to the
office of origin, the Mediation-Arbitration Unit, Regional Branch No. IV, for the immediate conduct of a
certification election subject to the usual pre-election conference.
SO ORDERED.
Puno, (Chairman), Panganiban, Sandoval-Gutierrez and Corona, JJ., concur.

[1]
CA Rollo at 59 62.
[2]
Ibid at 63.
[3]
Ibid at 60.
[4]
Ibid at 64-66.
Dated May 1, 1997 which took effect on June 21, 1997, Amending the Rules Implementing Book V of the Labor Code as
[5]

Amended.
[6]
CA Rollo at 58.
[7]
Ibid at 6770.
[8]
Ibid at 74-79.
[9]
Ibid at 77 78.
[10]
Ibid at 22-27.
[11]
Rollo at 29-30.
[12]
CA Rollo at 111.
[13]
G. R. No. 123426, March 10, 1999 (304 SCRA 405.
[14]
G. R. No. 130866, September 16, 1998 (295 SCRA 494).
[15]
Rollo at 35-44.
[16]
G. R. No. 121084, February 19, 1997 (268 SCRA 573).
[17]
G. R. No. 131248, December 11, 1998 (300 SCRA 120).
[18]
Rollo at 17 18.
[19]
Supra.
[20]
G. R. No. 115077, April 18, 1997 (271 SCRA 593).
[21]
Id at 602.

35
[22]
Supra at 582.
Atlas Free Workers Union (AFWU)PSSLU Local v. Noriel. No. L-51905, May 26, 1981 (104 SCRA 565, 572-73, citations
[23]

omitted), vide LVN Pictures, Inc. vs. Phil. Musicians Guild, 110 Phil, 725; Federation of Free Workers v. Paredes, 54 SCRA
76 (1973); Phil. Communications, Electronics and Electricity Workers Federation v. CIR, 56 SCRA 480 (1974).
[24]
Records at 347-354.
Vide AD Gothong Manufacturing Corporation Employees UnionALU v. Confessor. G. R. No. 113638, November 16, 1999,
[25]

318 SCRA 58.


[26]
G. R. No. 96663, August 10, 1999, 312 SCRA 104.
[27]
G. R. No. 96663, August 10, 1999 (312 SCRA 104, 118).

36
THIRD DIVISION

SAN MIGUEL CORPORATION G.R. No. 171153


EMPLOYEES UNIONPHILIPPINE
TRANSPORT AND GENERAL Present:
WORKERS ORGANIZATION
(SMCEUPTGWO), YNARES-SANTIAGO, J.,
Petitioner, Chairperson,
AUSTRIA-MARTINEZ,
- versus - CHICO-NAZARIO,
NACHURA, and
SAN MIGUEL PACKAGING REYES, JJ.
PRODUCTS EMPLOYEES
UNIONPAMBANSANG DIWA NG Promulgated:
MANGGAGAWANG
PILIPINO(SMPPEUPDMP),
Respondent. [ 1] September 12, 2007
x-------------------------------------------------x

DECISION

CHICO-NAZARIO, J.:

In this Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court,
petitioner SAN MIGUEL CORPORATION EMPLOYEES UNION-PHILIPPINE
TRANSPORT AND GENERAL WORKERS ORGANIZATION (SMCEU-PTGWO) prays that
this Court reverse and set aside the (a) Decision[2] dated 9 March 2005 of the Court of Appeals in
CA-G.R. SP No. 66200, affirming the Decision[3] dated 19 February 2001 of the Bureau of Labor
Relations (BLR) of the Department of Labor and Employment (DOLE) which upheld the
Certificate of Registration of respondent SAN MIGUEL PACKAGING PRODUCTS
EMPLOYEES UNIONPAMBANSANG DIWA NG MANGGAGAWANG
PILIPINO (SMPPEUPDMP); and (b) the Resolution[4] dated 16 January 2006 of the Court of
Appeals in the same case, denying petitioners Motion for Reconsideration of the aforementioned
Decision.

The following are the antecedent facts:


Petitioner is the incumbent bargaining agent for the bargaining unit comprised of the regular
monthly-paid rank and file employees of the three divisions of San Miguel Corporation (SMC),
namely, the San Miguel Corporate Staff Unit (SMCSU), San Miguel Brewing Philippines
(SMBP), and the San Miguel Packaging Products (SMPP), in all offices and plants of SMC,
including the Metal Closure and Lithography Plant in Laguna. It had been the certified bargaining
agent for 20 years from 1987 to 1997.

Respondent is registered as a chapter of Pambansang Diwa ng Manggagawang Pilipino


(PDMP). PDMP issued Charter Certificate No. 112 to respondent on 15 June 1999.[5] In
37
compliance with registration requirements, respondent submitted the requisite documents to the
BLR for the purpose of acquiring legal personality.[6] Upon submission of its charter certificate
and other documents, respondent was issued Certificate of Creation of Local or Chapter PDMP-
01 by the BLR on 6 July 1999.[7] Thereafter, respondent filed with the Med-Arbiter of the DOLE
Regional Officer in the National Capital Region (DOLE-NCR), three separate petitions for
certification election to represent SMPP, SMCSU, and SMBP.[8] All three petitions were
dismissed, on the ground that the separate petitions fragmented a single bargaining unit. [9]

On 17 August 1999, petitioner filed with the DOLE-NCR a petition seeking the cancellation of
respondents registration and its dropping from the rolls of legitimate labor organizations. In its
petition, petitioner accused respondent of committing fraud and falsification, and non-compliance
with registration requirements in obtaining its certificate of registration. It raised allegations that
respondent violated Articles 239(a), (b) and (c)[10] and 234(c)[11] of the Labor Code. Moreover,
petitioner claimed that PDMP is not a legitimate labor organization, but a trade union center,
hence, it cannot directly create a local or chapter. The petition was docketed as Case No. NCR-
OD-9908-007-IRD.[12]
On 14 July 2000, DOLE-NCR Regional Director Maximo B. Lim issued an Order dismissing the
allegations of fraud and misrepresentation, and irregularity in the submission of documents by
respondent. Regional Director Lim further ruled that respondent is allowed to directly create a
local or chapter. However, he found that respondent did not comply with the 20% membership
requirement and, thus, ordered the cancellation of its certificate of registration and removal from
the rolls of legitimate labor organizations.[13]Respondent appealed to the BLR. In a Decision
dated 19 February 2001, it declared:

As a chartered local union, appellant is not required to submit the number of employees and names
of all its members comprising at least 20% of the employees in the bargaining unit where it seeks
to operate. Thus, the revocation of its registration based on non-compliance with the 20%
membership requirement does not have any basis in the rules.

Further, although PDMP is considered as a trade union center, it is a holder of Registration


Certificate No. FED-11558-LC issued by the BLR on 14 February 1991, which bestowed upon it
the status of a legitimate labor organization with all the rights and privileges to act as
representative of its members for purposes of collective bargaining agreement. On this basis,
PDMP can charter or create a local, in accordance with the provisions of Department Order No.
9.

WHEREFORE, the appeal is hereby GRANTED. Accordingly, the decision of the Regional
Director dated July 14, 2000, canceling the registration of appellant San Miguel Packaging
Products Employees Union-Pambansang Diwa ng Manggagawang Pilipino (SMPPEU-PDMP) is
REVERSED and SET ASIDE. Appellant shall hereby remain in the roster of legitimate labor
organizations.[14]
While the BLR agreed with the findings of the DOLE Regional Director dismissing the
allegations of fraud and misrepresentation, and in upholding that PDMP can directly create a
local or a chapter, it reversed the Regional Directors ruling that the 20% membership is a
requirement for respondent to attain legal personality as a labor organization.Petitioner thereafter
filed a Motion for Reconsideration with the BLR. In a Resolution rendered on 19 June 2001 in
BLR-A-C-64-05-9-00 (NCR-OD-9908-007-IRD), the BLR denied the Motion for
Reconsideration and affirmed its Decision dated 19 February 2001.[15]

38
Invoking the power of the appellate court to review decisions of quasi-judicial agencies, petitioner
filed with the Court of Appeals a Petition for Certiorari under Rule 65 of the 1997 Rules of Civil
Procedure docketed as CA-G.R. SP No. 66200. The Court of Appeals, in a Decision dated 9
March 2005, dismissed the petition and affirmed the Decision of the BLR, ruling as follows:
In Department Order No. 9, a registered federation or national union may directly create a
local by submitting to the BLR copies of the charter certificate, the locals constitution and
by-laws, the principal office address of the local, and the names of its officers and their
addresses. Upon complying with the documentary requirements, the local shall be issued a
certificate and included in the roster of legitimate labor organizations. The [herein
respondent] is an affiliate of a registered federation PDMP, having been issued a charter
certificate. Under the rules we have reviewed, there is no need for SMPPEU to show a
membership of 20% of the employees of the bargaining unit in order to be recognized as a
legitimate labor union.

xxxx

In view of the foregoing, the assailed decision and resolution of the BLR are AFFIRMED,
and the petition is DISMISSED.[16]

Subsequently, in a Resolution dated 16 January 2006, the Court of Appeals denied


petitioners Motion for Reconsideration of the aforementioned Decision.

Hence, this Petition for Certiorari under Rule 45 of the Revised Rules of Court where
petitioner raises the sole issue of:

WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED


REVERSIBLE ERROR IN RULING THAT PRIVATE RESPONDENT IS NOT
REQUIRED TO SUBMIT THE NUMBER OF EMPLOYEES AND NAMES OF
ALL ITS MEMBERS COMPRISING AT LEAST 20% OF THE EMPLOYEES IN
THE BARGAINING UNIT WHERE IT SEEKS TO OPERATE.

The present petition questions the legal personality of respondent as a legitimate labor
organization.

Petitioner posits that respondent is required to submit a list of members comprising at least
20% of the employees in the bargaining unit before it may acquire legitimacy, citing Article
234(c) of the Labor Code which stipulates that 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.[17]
39
Petitioner also insists that the 20% requirement for registration of respondent must be based
not on the number of employees of a single division, but in all three divisions of the company in
all the offices and plants of SMC since they are all part of one bargaining unit. Petitioner refers
to Section 1, Article 1 of the Collective Bargaining Agreement (CBA),[18] quoted hereunder:

ARTICLE 1
SCOPE

Section 1. Appropriate Bargaining Unit. The appropriate bargaining unit covered by this
Agreement consists of all regular rank and file employees paid on the basis of fixed salary per
month and employed by the COMPANY in its Corporate Staff Units (CSU), San Miguel Brewing
Products (SMBP) and San Miguel Packaging Products (SMPP) and in different operations
existing in the City of Manila and suburbs, including Metal Closure and Lithography Plant located
at Canlubang, Laguna subject to the provisions of Article XV of this Agreement provided however,
that if during the term of this Agreement, a plant within the territory covered by this Agreement is
transferred outside but within a radius of fifty (50) kilometers from the Rizal Monument, Rizal
Park, Metro Manila, the employees in the transferred plant shall remain in the bargaining unit
covered by this Agreement. (Emphasis supplied.)

Petitioner thus maintains that respondent, in any case, failed to meet this 20% membership
requirement since it based its membership on the number of employees of a single division only,
namely, the SMPP.

There is merit in petitioners contentions.

A legitimate labor organization[19] is defined as any labor organization duly registered with
the Department of Labor and Employment, and includes any branch or local thereof.[20] The
mandate of the Labor Code is to ensure strict compliance with the requirements on registration
because a legitimate labor organization is entitled to specific rights under the Labor Code,[21] and
are involved in activities directly affecting matters of public interest. Registration requirements
are intended to 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.[22] 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[23] of all the employees in an appropriate collective
bargaining unit for purposes of collective bargaining.[24] 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.[25]

A perusal of the records reveals that respondent is registered with the BLR as a local or chapter
of PDMP and was issued Charter Certificate No. 112 on 15 June 1999. Hence, respondent was
directly chartered by PDMP.

The procedure for registration of a local or chapter of a labor organization is provided in


Book V of the Implementing Rules of the Labor Code, as amended by Department Order No. 9
which took effect on 21 June 1997, and again by Department Order No. 40 dated 17 February
2003. The Implementing Rules as amended by D.O. No. 9 should govern the resolution of the
40
petition at bar since respondents petition for certification election was filed with the BLR in 1999;
and that of petitioner on 17 August 1999.[26]

The applicable Implementing Rules enunciates a two-fold procedure for the creation of a
chapter or a local. The first involves the affiliation of an independent union with a federation or
national union or industry union. The second, finding application in the instant petition, involves
the direct creation of a local or a chapter through the process of chartering.[27]

A duly registered federation or national union may directly create a local or chapter by
submitting to the DOLE Regional Office or to the BLR two 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/chapters officers, their addresses, and the principal office of the
local/chapter; and

(c) The local/chapters constitution and by-laws; Provided, That where the local/chapters
constitution and by-laws is the same as that of the federation or national union, this fact shall
be indicated accordingly.

All the foregoing supporting requirements shall be certified under oath by the Secretary or the
Treasurer of the local/chapter and attested to by its President.[28]

The Implementing Rules stipulate that a local or chapter may be directly created by
a federation or national union. A duly constituted local or chapter created in accordance with the
foregoing shall acquire legal personality from the date of filing of the complete documents with
the BLR.[29] The issuance of the certificate of registration by the BLR or the DOLE Regional
Office is not the operative act that vests legal personality upon a local or a 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.[30]

Petitioner insists that Section 3 of the Implementing Rules, as amended by Department Order No.
9, violated Article 234 of the Labor Code when it provided for less stringent requirements for the
creation of a chapter or local. This Court disagrees.

Article 234 of the Labor Code provides that an independent labor organization acquires
legitimacy only upon its registration with the BLR:

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;
41
(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. (Italics supplied.)

It is emphasized that the foregoing pertains to the registration of an independent labor


organization, association or group of unions or workers.

However, the creation of a branch, local or chapter is treated differently. This Court, in the
landmark case of Progressive Development Corporation v. Secretary, Department of Labor and
Employment,[31] declared that when an unregistered union becomes a branch, local or chapter,
some of the aforementioned requirements for registration are no longer necessary or
compulsory. Whereas an applicant for registration of an independent union is mandated to submit,
among other things, the number of employees and names of all its members comprising at least
20% of the employees in the bargaining unit where it seeks to operate, as provided under Article
234 of the Labor Code and Section 2 of Rule III, Book V of the Implementing Rules, the same is
no longer required of a branch, local or chapter.[32] The intent of the law in imposing less
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.[33]

Subsequently, in Pagpalain Haulers, Inc. v. Trajano[34] where the validity of Department Order
No. 9 was directly put in issue, this Court was unequivocal in finding that there is no inconsistency
between the Labor Code and Department Order No. 9.
As to petitioners claims that respondent obtained its Certificate of Registration through fraud and
misrepresentation, this Court finds that the imputations are not impressed with merit. In the
instant case, proof to declare that respondent committed fraud and misrepresentation remains
wanting. This Court had, indeed, on several occasions, pronounced that 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.[35]

This Court emphasizes, however, that a direct challenge to the legitimacy of a labor organization
based on fraud and misrepresentation in securing its certificate of registration is a serious
allegation which deserves careful scrutiny. Allegations thereof should be compounded with
supporting circumstances and evidence. The records of the case are devoid of such
evidence. Furthermore, this Court is not a trier of facts, and this doctrine applies with greater
force in labor cases. Findings of fact of administrative agencies and quasi-judicial bodies, such
as the BLR, which have acquired expertise because their jurisdiction is confined to specific
matters, are generally accorded not only great respect but even finality.[36]

Still, petitioner postulates that respondent was not validly and legitimately created, for PDMP
cannot create a local or chapter as it is not a legitimate labor organization, it being a trade union
center.

42
Petitioners argument creates a predicament as it hinges on the legitimacy of PDMP as a labor
organization. Firstly, this line of reasoning attempts to predicate that a trade union center is not a
legitimate labor organization. In the process, the legitimacy of PDMP is being impugned, albeit
indirectly. Secondly, the same contention premises that a trade union center cannot directly create
a local or chapter through the process of chartering.

Anent the foregoing, as has been held in a long line of cases, the legal personality of a
legitimate labor organization, such as PDMP, cannot be subject to a collateral attack. The law is
very clear on this matter. Article 212 (h) of the Labor Code, as amended, defines a legitimate
labor organization[37] as any labor organization duly registered with the DOLE, and includes any
branch or local thereof.[38] On the other hand, a trade union center is any group of registered
national unions or federations organized for the mutual aid and protection of its members; for
assisting such members in collective bargaining; or for participating in the formulation of social
and employment policies, standards, and programs, and is duly registered with the DOLE in
accordance with Rule III, Section 2 of the Implementing Rules.[39]

The Implementing Rules stipulate that a labor organization shall be deemed registered and
vested with legal personality on the date of issuance of its certificate of registration. Once a
certificate of registration is issued to a union, its legal personality cannot be subject to collateral
attack.[40] It may be questioned only in an independent petition for cancellation in accordance
with Section 5 of Rule V, Book V of the Implementing Rules. The aforementioned provision is
enunciated in the following:

Sec. 5. Effect of registration. The labor organization or workers association shall be deemed
registered and vested with legal personality on the date of issuance of its certificate of
registration.Such legal personality cannot thereafter be subject to collateral attack, but may be
questioned only in an independent petition for cancellation in accordance with these Rules.

PDMP was registered as a trade union center and issued Registration Certificate No. FED-11558-
LC by the BLR on 14 February 1991. Until the certificate of registration of PDMP is cancelled,
its legal personality as a legitimate labor organization subsists. Once a union acquires legitimate
status as a labor organization, it continues to be recognized as such until its certificate of
registration is cancelled or revoked in an independent action for cancellation. [41] It bears to
emphasize that what is being directly challenged is the personality of respondent as a legitimate
labor organization and not that of PDMP. This being a collateral attack, this Court is without
jurisdiction to entertain questions indirectly impugning the legitimacy of PDMP.

Corollarily, PDMP is granted all the rights and privileges appurtenant to a legitimate labor
organization,[42] and continues to be recognized as such until its certificate of registration is
successfully impugned and thereafter cancelled or revoked in an independent action for
cancellation.
We now proceed to the contention that PDMP cannot directly create a local or a chapter, it being
a trade union center.

This Court reverses the finding of the appellate court and BLR on this ground, and rules
that PDMP cannot directly create a local or chapter.
43
After an exhaustive study of the governing labor law provisions, both statutory and
regulatory,[43] we find no legal justification to support the conclusion that a trade union center is
allowed to directly create a local or chapter through chartering. Apropos, we take this occasion to
reiterate the first and fundamental duty of this Court, which is to apply the law. The solemn power
and duty of the Court to interpret and apply the law does not include the power to correct by
reading into the law what is not written therein.[44]

Presidential Decree No. 442, better known as the Labor Code, was enacted in 1972. Being
a legislation on social justice,[45] the provisions of the Labor Code and the Implementing Rules
have been subject to several amendments, and they continue to evolve, considering that labor
plays a major role as a socio-economic force. The Labor Code was first amended by Republic
Act No. 6715, and recently, by Republic Act No. 9481. Incidentally, the term trade union
center was never mentioned under Presidential Decree No. 442, even as it was amended by
Republic Act No. 6715. The term trade union center was first adopted in the Implementing Rules,
under Department Order No. 9.

Culling from its definition as provided by Department Order No. 9, a trade union center is
any group of registered national unions or federations organized for the mutual aid and protection
of its members; for assisting such members in collective bargaining; or for participating in the
formulation of social and employment policies, standards, and programs, and is duly registered
with the DOLE in accordance with Rule III, Section 2 of the Implementing Rules. [46] The same
rule provides that the application for registration of an industry or trade union center shall be
supported by the following:

(a) The list of its member organizations and their respective presidents and, in the case
of an industry union, the industry where the union seeks to operate;

(b) The resolution of membership of each member organization, approved by the Board
of Directors of such union;

(c) The name and principal address of the applicant, the names of its officers and their
addresses, the minutes of its organizational meeting/s, and the list of member
organizations and their representatives who attended such meeting/s; and

(d) A copy of its constitution and by-laws and minutes of its ratification by a majority of
the presidents of the member organizations, provided that where the ratification was
done simultaneously with the organizational meeting, it shall be sufficient that the fact
of ratification be included in the minutes of the organizational meeting.[47]

Evidently, while a national union or federation is a labor organization with at least ten
locals or chapters or affiliates, each of which must be a duly certified or recognized collective
bargaining agent;[48] a trade union center, on the other hand, is composed of a group of registered
national unions or federations.[49]

The Implementing Rules, as amended by Department Order No. 9, provide that a duly
registered federation or national union may directly create a local or chapter. The provision
reads:

44
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/chapters officers, their addresses, and the principal office of the
local/chapter; and

(c) The local/chapters constitution and by-laws; provided that where the local/chapters constitution
and by-laws is the same as that of the federation or national union, this fact shall be indicated
accordingly.

All the foregoing supporting requirements shall be certified under oath by the Secretary or the
Treasurer of the local/chapter and attested to by its President.[50]

Department Order No. 9 mentions two labor organizations either of which is allowed to
directly create a local or chapter through chartering a duly registered federation or a national
union. Department Order No. 9 defines a "chartered local" as a labor organization in the private
sector operating at the enterprise level that acquired legal personality through a charter certificate,
issued by a duly registered federation or national union and reported to the Regional Office in
accordance with Rule III, Section 2-E of these Rules.[51]

Republic Act No. 9481 or An Act Strengthening the Workers Constitutional Right to Self-
Organization, Amending for the Purpose Presidential Decree No. 442, As Amended, Otherwise
Known as the Labor Code of the Philippines lapsed[52] into law on 25 May 2007 and became
effective on 14 June 2007.[53] This law further amends the Labor Code provisions on Labor
Relations.

Pertinent amendments read as follows:

SECTION 1. Article 234 of Presidential Decree No. 442, as amended, otherwise known as the
Labor Code of the Philippines, is hereby further amended to read as follows:

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

45
(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.

SECTION 2. A new provision is hereby inserted into the Labor Code as Article 234-A to read as
follows:

ART. 234-A. Chartering and Creation of a Local Chapter. A duly


registered federation or national union may directly create a local chapter by
issuing a charter certificate indicating the establishment of the local chapter. The
chapter shall acquire legal personality only for purposes of filing a petition for
certification election from the date it was issued a charter certificate.

The chapter shall be entitled to all other rights and privileges of a legitimate labor
organization only upon the submission of the following documents in addition to
its charter certificate:

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

(b) The chapter's constitution and by-laws: Provided, That where the chapter's
constitution and by-laws are the same as that of the federation or the national union,
this fact shall be indicated accordingly.
The additional supporting requirements shall be certified under oath by the
secretary or treasurer of the chapter and attested by its president. (Emphasis ours.)
Article 234 now includes the term trade union center, but interestingly, the provision indicating
the procedure for chartering or creating a local or chapter, namely Article 234-A, still makes no
mention of a trade union center.

Also worth emphasizing is that even in the most recent amendment of the implementing
[54]
rules, there was no mention of a trade union center as being among the labor organizations
allowed to charter.

This Court deems it proper to apply the Latin maxim expressio unius est exclusio
alterius. Under this maxim of statutory interpretation, the expression of one thing is the exclusion
of another. When certain persons or things are specified in a law, contract, or will, an intention to
exclude all others from its operation may be inferred. If a statute specifies one exception to a
general rule or assumes to specify the effects of a certain provision, other exceptions or effects
are excluded.[55] Where the terms are expressly limited to certain matters, it may not, by
interpretation or construction, be extended to other matters. [56] Such is the case here. If its intent
were otherwise, the law could have so easily and conveniently included trade union centers in
identifying the labor organizations allowed to charter a chapter or local. Anything that is not
included in the enumeration is excluded therefrom, and a meaning that does not appear nor is
intended or reflected in the very language of the statute cannot be placed therein.[57] The rule is
restrictive in the sense that it proceeds from the premise that the legislating body would not have
made specific enumerations in a statute if it had the intention not to restrict its meaning and
confine its terms to those expressly mentioned.[58] Expressium facit cessare tacitum.[59] What is
expressed puts an end to what is implied. Casus omissus pro omisso habendus est. A person,
object or thing omitted must have been omitted intentionally.
Therefore, since under the pertinent status and applicable implementing rules, the power granted
to labor organizations to directly create a chapter or local through chartering is given to a
federation or national union, then a trade union center is without authority to charter directly.

46
The ruling of this Court in the instant case is not a departure from the policy of the law to
foster the free and voluntary organization of a strong and united labor movement,[60] and thus
assure the rights of workers to self-organization.[61] The mandate of the Labor Code in ensuring
strict compliance with the procedural requirements for registration is not without reason. It has
been observed that the formation of a local or chapter becomes a handy tool for the circumvention
of union registration requirements. Absent the institution of safeguards, it becomes a convenient
device for a small group of employees to foist a not-so-desirable federation or union on
unsuspecting co-workers and pare the need for wholehearted voluntariness, which is basic to free
unionism.[62] As a legitimate labor organization is entitled to specific rights under the Labor Code
and involved in activities directly affecting public interest, it is necessary that the law afford
utmost protection to the parties affected.[63] However, as this Court has enunciated in Progressive
Development Corporation v. Secretary of Department of Labor and Employment, it is not this
Court's function to augment the requirements prescribed by law. Our only recourse, as previously
discussed, is to exact strict compliance with what the law provides as requisites for local or
chapter formation.[64]

In sum, although PDMP as a trade union center is a legitimate labor organization, it has no power
to directly create a local or chapter. Thus, SMPPEU-PDMP cannot be created under the more
lenient requirements for chartering, but must have complied with the more stringent rules for
creation and registration of an independent union, including the 20% membership requirement.

WHEREFORE, the instant Petition is GRANTED. The Decision dated 09 March 2005 of the
Court of Appeals in CA-GR SP No. 66200 is REVERSED and SET ASIDE. The Certificate of
Registration of San Miguel Packaging Products Employees UnionPambansang Diwa ng
Manggagawang Pilipino is ORDERED CANCELLED, and SMPPEU-
PDMP DROPPED from the rolls of legitimate labor organizations.

Costs against petitioner.

SO ORDERED.

MINITA V. CHICO-NAZARIO
Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson

47
MA. ALICIA AUSTRIA-MARTINEZ ANTONIO EDUARDO B. NACHURA
Associate Justice Associate Justice

RUBEN T. REYES
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision were reached in consultation before the case
was assigned to the writer of the opinion of the Courts Division.

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons
Attestation, it is hereby certified that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO
Chief Justice

[1]
The Bureau of Labor Relations (BLR) was omitted as public respondent from the title of the case.
In appeals via Petition for Certiorari under Rule 45 of the Revised Rules of Court, the tribunal promulgating the appealed
Decision is not impleaded.
[2]
Penned by Associate Justice Mario L. Guarina III with Associate Justices Marina L. Buzon and Santiago Javier Ranada, concurring;
Rollo, pp. 23-31.
[3]
CA rollo, pp. 17-21.
[4]
Rollo, p. 51.
[5]
Charter Certificate; CA rollo, p. 45.
[6]
The following documents were submitted:
a. Charter Certificate
b. Constitution and By-Laws
c. Lists and Addresses of Union Officers
d. Financial Report
e. Organization Meeting and Joint Resolution and Petition for Certification Election
[7]
Certificate of Creation of Chapter/local; CA rollo, p. 44.
[8]
On 15 June 1999, within the freedom period of the Collective Bargaining Agreement, respondent filed a Petition for Certification
Election covering SMC-SMPP. The three petitions were consolidated on appeal with an earlier petition for certification election
filed by San Miguel Corporation Employees Union Greater Manila and Canlubang Area (SMCEU-GMCA) docketed as OS-
A-2-17-00.
[9]
Id. at 18; Section 2 of Rule XI, Book V of the Implementing Rules, as amended by D.O. No. 9 provides that where two or more
petitions for certification election involving the same bargaining unit are filed in one Regional Office, the same shall be
automatically consolidated.

48
[10]
Article 239. Grounds for Cancellation of Union Registration. The following shall constitute grounds for cancellation of union
registration:
a. Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-laws
or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification;
b. Failure to submit the documents mentioned in the preceding paragraph within thirty (30) days from adoption or ratification
of the constitution and by-laws of amendments thereto;
c. Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers,
the list of voters, or failure to submit these documents together with the list of the newly elected/appointed officers and
their postal addresses within thirty (30) days from election; x x x.
[11]
The Labor Code stipulates the following:
Article 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.
[12]
CA rollo, pp. 33-39.
[13]
Id. at 25-32.
[14]
Id. at 20-21.
[15]
Id. at 22-24.
[16]
Rollo, pp. 29-30.
[17]
Article 234, Labor Code.
[18]
CA rollo, pp. 31-32.
[19]
A labor organization is any union or association of employees which exists in whole or in part for the purpose of collective
bargaining or for dealing with employers concerning terms and conditions of employment. [Section 1(h), Rule 1, Book V of
the Implementing Rules, as amended by Department Order No. 9].
[20]
Article 212(g), Labor Code; Section 1(i), Rule 1, Book V of the Implementing Rules, as amended by Department Order No. 9.
[21]
Article 242 of the Labor Code grants the following:
Rights of Legitimate Labor 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 certified 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 the 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 representatives 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.
[22]
Progressive Development Corporation v. Secretary, Department of Labor and Employment, G.R. No. 96425, 4 February 1992, 205
SCRA 802, 808.
[23]
Provided there is compliance with the requirements.
[24]
San Miguel Foods, Inc-Cebu B-Meg Feed Plant v. Laguesma, 331 Phil. 356, 371 (1996).
[25]
Progressive Development Corporation-Pizza Hut v. Laguesma, 338 Phil. 310, 321 (1997).
[26]
Section 1, Rule XXVI, Department Order No. 40, which states:
Section 1. Rules governing prior applications, petitions, complaints, cases. - All applications, petitions, complaints,
cases or incidents commenced or filed prior to the effectivity of these amendatory Rules shall be governed by the old
rules as amended by Department Order No. 9, series of 1997.
[27]
Rule VI, Book V, Implementing Rules, as amended by Department Order No. 9. Additionally, section 2 thereof provides that a duly
registered workers association may likewise charter any of its branches, subject to the filing of the documents prescribed under Section
1.
[28]
Section 1, Rule VI, Book V of the Implementing Rules, as amended by Department Order No. 9.
[29]
Section 3, Rule VI of the Implementing Rules of Book V, as amended by Department Order No. 9, clearly states:
SEC. 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 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. (Laguna Autoparts Manufacturing
Corporation v. Office of the Secretary, Department of Labor and Employment, G.R. No. 157146, 29 April 2005, 457
SCRA 730, 740.
[30]
Progressive Development Corporation v. Secretary, Department of Labor and Employment, supra note 22.
[31]
Id.
[32]
Progressive Development Corporation v. Secretary, Department of Labor and Employment, id.; San Miguel Foods, Inc.-Cebu B-
Meg Feed Plant v. Laguesma, supra note 24.
[33]
Progressive Development Corporation v. Secretary, Department of Labor and Employment, supra note 22.
[34]
369 Phil. 618, 627 (1999).

49
[35]
Progressive Development CorporationPizza Hut v. Laguesma, supra note 25.
[36]
Seastar Marine Services, Inc. v. Bul-An, Jr., G.R. No. 142609, 25 November 2004, 444 SCRA 140, 154-155; Naguiat v. National
Labor Relations Commission, 336 Phil. 545, 553 (1997).
[37]
A labor organization is any union or association of employees which exists in whole or in part for the purpose of collective
bargaining or for dealing with employers concerning terms and conditions of employment. [Section 1(h), Rule 1, Book V of
the Implementing Rules, as amended by Department Order No. 9].
[38]
Article 212(g), Labor Code; Section 1(i), Rule 1, Book V of the Implementing Rules, as amended
by Department Order No. 9.
[39]
Section 1(p), Rule I, Book V, of the Implementing Rules, as amended by Department Order No. 9.
[40]
Tagaytay Highlands International Golf Club Incorporated v. Tagaytay Highlands Employees Union-PGTWO, 443 Phil. 841, 852
(2003).
[41]
Laguna Autoparts Manufacturing Corporation v. Office of the Secretary, Department of Labor and Employment, supra note 29.
[42]
Under Article 234 of the Labor Code, 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 upon compliance with the documentary requirements.
[43]
As amended by Department Order No. 9, Department Order No. 40-03, and Department Order No. 40-B-03.
[44]
Agote v. Lorenzo, G.R. No. 142675, 22 July 2005, 464 SCRA 60, 76.
[45]
As aptly put by Justice Laurel, social justice is the humanization of laws and the equalization of
social and economic forces by the state so that justice in its rational and objectively secular conception may at least be
approximated.
[46]
Section 1(p), Rule I, Book V, of the Implementing Rules, as amended by Department Order No. 9.
[47]
Under a different section; Section 2 (III), Rule III, Book V of the Implementing Rules, as amended by Department Order No. 9.
[48]
Rule I(m), Book V, Implementing Rules, as amended by Department Order No. 9.
[49]
Rule (p), id.
[50]
Section 1, Rule VI, Book V, id.
[51]
Section 1(i), Rule I, Book V, Implementing Rules, as amended by Department Order No. 40-03.
[52]
Republic Act No. 9481 was not signed by the President, but lapsed into law by virtue of the provisions of the 1987 Philippine
Constitution.
[53]
Republic Act No. 9481 was published on 30 May 2007 in a newspaper of general circulation (MALAYA). The date of effectivity is
computed 15 days from date of publication.
[54]
Subsequently amended by Department Order No. 40-B-03, Department Order No. 40-C-05, and Department Order No. 40-D-05.
[55]
Blacks Law Dictionary, p. 581; Office of the Ombudsman v. Valera, G.R. No. 164250, 5 September 2005, 471 SCRA 715, 746
and City Government of San Pablo, Laguna v. Reyes, 364 Phil. 842, 853 (1999).
[56]
Sarmiento, III v. Mison, G.R. No. 79974, 17 December 1987, 156 SCRA 549, 552; Integrated Bar of the Philippines v. Zamora, 392
Phil. 618, 642 (2000).
[57]
Singapore Airlines Local Employees Association v. National Labor Relations Commission, 215 Phil. 420, 428 (1984).
[58]
San Pablo Mfg. Corp. v. Commissioner of Internal Revenue, G.R. No. 147749, 22 June 2006, 492 SCRA 192, 200.
[59]
Abakada Guro Party List v. Ermita, G.R. No. 168056, 1 September 2005, 469 SCRA 1, Espiritu v. Cipriano, G.R. No.
32743, February 15, 1974, 55 SCRA 533, 538.
[60]
Chapter 1, Book V, Labor Code, as amended by Republic Act No. 6715.
[61]
As embodied under Article 3 of the Labor Code.
[62]
Progressive Development Corporation v. Secretary, Department of Labor and Employment, supra note 22.
[63]
Article 242 of the Labor Code grants the following:
Rights of Legitimate Labor 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 certified 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 the 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 representatives 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.
[64]
Supra note 22.

50
SECOND DIVISION

THE HERITAGE HOTEL MANILA G.R. No. 177024


(OWNED AND OPERATED BY
GRAND PLAZA HOTEL
CORPORATION)
Petitioner, Present:
Quisumbing, J., Chairperson,
- versus - Carpio,*
Chico-Nazario,**
Brion, and
Abad, JJ.
PINAG-ISANG GALING AT LAKAS
NG MGA MANGGAGAWA SA
HERITAGE MANILA Promulgated:
(PIGLAS-HERITAGE),
Respondent. October 30, 2009
x ---------------------------------------------------------------------------------------- x

DECISION

ABAD, J.:

This case is about a companys objections to the registration of its rank and file union for
non-compliance with the requirements of its registration.

The Facts and the Case

Sometime in 2000, certain rank and file employees of petitioner Heritage Hotel Manila (petitioner
company) formed the Heritage Hotel Employees Union (the HHE union). The Department of
Labor and Employment-National Capital Region (DOLE-NCR) later issued a certificate of
registration[1] to this union.

Subsequently, the HHE union filed a petition for certification election [2] that petitioner company
opposed. The company alleged that the HHE union misrepresented itself to be an independent
union, when it was, in truth, a local chapter of the National Union of Workers in Hotel and
Restaurant and Allied Industries (NUWHRAIN). The company claimed that the HHE union
intentionally omitted disclosure of its affiliation with NUWHRAIN because the companys
supervisors union was already affiliated with it.[3] Thus, the company also filed a petition for the
cancellation of the HHE unions registration certificate.[4]

Meanwhile, the Med-Arbiter granted the HHE unions petition for certification
election.[5] Petitioner company appealed the decision to the Secretary of Labor but the latter

51
denied the appeal.[6] The Secretary also denied petitioners motion for reconsideration, prompting
the company to file a petition for certiorari[7] with the Court of Appeals.

On October 12, 2001 the Court of Appeals issued a writ of injunction against the holding of the
HHE unions certification election, effective until the petition for cancellation of that unions
registration shall have been resolved with finality.[8] The decision of the Court of Appeals became
final when the HHE union withdrew the petition for review that it filed with this Court.[9]

On December 10, 2003 certain rank and file employees of petitioner company held a meeting and
formed another union, the respondent Pinag-Isang Galing at Lakas ng mga Manggagawa sa
Heritage Manila (the PIGLAS union). This union applied for registration with the DOLE-
NCR[10] and got its registration certificate on February 9, 2004. Two months later, the members
of the first union, the HHE union, adopted a resolution for its dissolution. The HHE union then
filed a petition for cancellation of its union registration.[11]

On September 4, 2004 respondent PIGLAS union filed a petition for certification election[12] that
petitioner company also opposed, alleging that the new unions officers and members were also
those who comprised the old union. According to the company, the employees involved formed
the PIGLAS union to circumvent the Court of Appeals injunction against the holding of the
certification election sought by the former union. Despite the companys opposition, however, the
Med-Arbiter granted the petition for certification election.[13]

On December 6, 2004 petitioner company filed a petition to cancel the union registration
of respondent PIGLAS union.[14] The company claimed that the documents submitted with the
unions application for registration bore the following false information:

(a) The List of Members showed that the PIGLAS union had 100 union
members;[15]
(b) The Organizational Minutes said that 90 employees attended the meeting on
December 10, 2003;[16]
(c) The Attendance Sheet of the meeting of December 10, 2003 bore the
signature of 127 members who ratified the unions Constitution and By-
Laws;[17] and
(d) The Signature Sheet bore 128 signatures of those who attended that
meeting.[18]

Petitioner company alleged that the misrepresentation was evidenced by the discrepancy in the
number of union members appearing in the application and the list as well as in the number of
signatories to the attendance and signature sheets. The minutes reported that only 90 employees
attended the meeting. The company further alleged that 33 members of respondent PIGLAS
union were members of the defunct HHE union. This, according to the company, violated the
policy against dual unionism and showed that the new union was merely an alter ego of the old.

On February 22, 2005 the DOLE-NCR denied the companys petition to cancel respondent
PIGLAS unions registration for the reason that the discrepancies in the number of members stated
in the applications supporting documents were not material and did not constitute

52
misrepresentation. As for the charge of dual unionism, the same is not a ground for canceling
registration. It merely exposed a union member to a possible charge of disloyalty, an internal
matter. Here, the members of the former union simply exercised their right to self-organization
and to the freedom of association when they subsequently joined the PIGLAS union.[19]

On appeal, the Bureau of Labor Relation (BLR) affirmed the ruling of the DOLE-NCR. It
reasoned that respondent PIGLAS unions organization meeting lasted for 12 hours. It was
possible for the number of attendees to have increased from 90 to 128 as the meeting
progressed. Besides, with a total of 250 employees in the bargaining unit, the union needed only
50 members to comply with the 20 percent membership requirement. Thus, the union could not
be accused of misrepresentation since it did not pad its membership to secure registration.

As for the issue of dual unionism, it has become moot and academic, said the BLR, because of
the dissolution of the old union and the cancellation of its certificate of registration.[20]

Petitioner company filed a petition for certiorari with the Court of Appeals,[21] assailing the order
of the BLR. But the latter court dismissed the petition, not being accompanied by material
documents and portions of the record.[22] The company filed a motion for reconsideration,
attaching parts of the record that were deemed indispensable but the court denied it for lack of
merit.[23] Hence, the company filed this petition for review under Rule 45.

Issues Presented

The petition presents the following issues:

1. Whether or not the Court of Appeals erred in dismissing the petition


for certiorari before it for failure of petitioner company to attach certain material
portions of the record;

2. Whether or not the union made fatal misrepresentation in its application for union
registration; and

3. Whether or not dual unionism is a ground for canceling a unions registration.

The Rulings of the Court

First. While the Court of Appeals correctly dismissed the companys petition initially for failure
to attach material portions of the record, the court should have bended back a little when petitioner
company subsequently attached those missing materials to its motion for reconsideration. As a
general rule, petitions for certiorari that lack copies of essential pleadings and portions of the
record may be dismissed but this rule has not been regarded as absolute. The omission may be
cured.[24]

53
The Court of Appeals has three courses of action when the annexes to the petition are insufficient.
It may dismiss the petition,[25] require the submission of the relevant documents, or order the
filing of an amended petition with the required pleadings or documents. A petition lacking in
essential pleadings or portions of the record may still be given due course, or reinstated if earlier
dismissed, upon subsequent submission of the necessary documents or to serve the higher interest
of justice.[26]

Second. Since a remand of the case to the Court of Appeals for a determination of the substantive
issues will only result in more delays and since these issues have been amply argued by the
opposing sides in the various pleadings and documents they submitted to this Court, the case may
now be resolved on the merits.

Did respondent PIGLAS union commit fraud and misrepresentation in its application for union
registration? We agree with the DOLE-NCR and the BLR that it did not. Except for the evident
discrepancies as to the number of union members involved as these appeared on the documents
that supported the unions application for registration, petitioner company has no other evidence
of the alleged misrepresentation. But those discrepancies alone cannot be taken as an indication
that respondent misrepresented the information contained in these documents.

The charge that a labor organization committed fraud and misrepresentation in securing its
registration is a serious charge and deserves close scrutiny. It is serious because once such charge
is proved, the labor union acquires none of the rights accorded to registered
organizations. Consequently, charges of this nature should be clearly established by evidence and
the surrounding circumstances.[27]

Here, the discrepancies in the number of union members or employees stated in the various
supporting documents that respondent PIGLAS union submitted to labor authorities can be
explained. While it appears in the minutes of the December 10, 2003 organizational meeting that
only 90 employees responded to the roll call at the beginning, it cannot be assumed that such
number could not grow to 128 as reflected on the signature sheet for attendance. The meeting
lasted 12 hours from 11:00 a.m. to 11:00 p.m. There is no evidence that the meeting hall was
locked up to exclude late attendees.

There is also nothing essentially mysterious or irregular about the fact that only 127 members
ratified the unions constitution and by-laws when 128 signed the attendance sheet. It cannot be
assumed that all those who attended approved of the constitution and by-laws. Any member had
the right to hold out and refrain from ratifying those documents or to simply ignore the process.

At any rate, the Labor Code[28] and its implementing rules[29] do not require that the number of
members appearing on the documents in question should completely dovetail. For as long as the
documents and signatures are shown to be genuine and regular and the constitution and by-laws
democratically ratified, the union is deemed to have complied with registration requirements.

Petitioner company claims that respondent PIGLAS union was required to submit the names
of all its members comprising at least 20 percent of the employees in the bargaining unit. Yet the
list it submitted named only 100 members notwithstanding that the signature and attendance
54
sheets reflected a membership of 127 or 128 employees. This omission, said the company,
amounted to material misrepresentation that warranted the cancellation of the unions registration.
But, as the labor authorities held, this discrepancy is immaterial. A comparison of the documents
shows that, except for six members, the names found in the subject list are also in the attendance
and signature sheets. Notably, the bargaining unit that respondent PIGLAS union sought to
represent consisted of 250 employees. Only 20 percent of this number or 50 employees were
required to unionize. Here, the union more than complied with such requirement.

Labor laws are liberally construed in favor of labor especially if doing so would affirm its
constitutionally guaranteed right to self-organization.[30] Here, the PIGLAS unions supporting
documents reveal the unmistakable yearning of petitioner companys rank and file employees to
organize. This yearning should not be frustrated by inconsequential technicalities.

Third. The fact that some of respondent PIGLAS unions members were also members of the old
rank and file union, the HHE union, is not a ground for canceling the new unions registration.
The right of any person to join an organization also includes the right to leave that organization
and join another one. Besides, HHE union is dead. It had ceased to exist and its certificate of
registration had already been cancelled. Thus, petitioners arguments on this point may also be
now regarded as moot and academic.

WHEREFORE, the Court DENIES the petition and AFFIRMS the decision of the Bureau of
Labor Relations in BLR-A-26-3-05 dated May 26, 2006.

SO ORDERED.

ROBERTO A. ABAD
Associate Justice

WE CONCUR:

LEONARDO A. QUISUMBING
Associate Justice

ANTONIO T. CARPIO MINITA V. CHICO-NAZARIO


Associate Justice Associate Justice

ARTURO D. BRION
Associate Justice

55
ATTESTATION

I attest that the conclusions in the above decision were reached in consultation before the case
was assigned to the writer of the opinion of the Courts Division.

LEONARDO A. QUISUMBING
Associate Justice
Chairperson, Second Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairpersons Attestation,
it is hereby certified that the conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO
Chief Justice

*
Designated as additional member in lieu of Associate Justice Mariano C. Del Castillo, per Special Order No. 757 dated October 12,
2009.
**
Designated as additional member in lieu of Associate Justice Conchita Carpio Morales, per Special Order No. 759 dated October 12,
2009.
[1]
Rollo, p. 58.
[2]
Id. at 59-70.
[3]
Id. at 100.
[4]
Id. at 109-120.
[5]
Id. at 99-103.
[6]
Id. at 218.
[7]
Docketed as CA-G.R. SP No. 65033.
[8]
Rollo, pp. 137-147.
[9]
Id. at 293-296.
[10]
Id. at 192.
[11]
Id. at 182-190.
[12]
Id. at 233-241.
[13]
Id. at 272-274.
[14]
Id. at 44-55.
[15]
Id. at 161-162.
[16]
Id. at 157-158.
[17]
Id. at 148-154.
[18]
Id. at 164-171.
[19]
Id. at 375-377.
[20]
Id. at 333-338.
[21]
Docketed as CA-G.R. SP No. 97237.
[22]
Rollo, pp. 33-34.
[23]
Id. at 289.
[24]
Air Philippines Corporation v. Zamora, G.R. No. 148247, August 7, 2006, 498 SCRA 59, 69.
[25]
Last paragraph of Rule 46 of the Rules of Court.
[26]
Suan v. Court of Appeals, G.R. No. 150819, July 27, 2006, 496 SCRA 760, 767-768.
[27]
San Miguel Corporation Employees Union-Philippine Transport and General Workers Organization v. San Miguel Packaging
Products Employees Union-Pambansang Diwa ng Manggagawang Pilipino, G.R. No. 171153, September 12, 2007, 533 SCRA 125,
144.
[28]
The pertinent Labor Code provision states:
ART. 234. REQUIREMENTS FOR REGISTRATION

56
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 (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 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.
[29]
Rule 3, Section 2.A of Department Order No. 40-03, Series of 2003 states that an application for registration of an independent labor
union must be accompanied by the following:
1) the name of the applicant labor union, its principal address, the name of its officers and their respective addresses,
approximate number of employees in the bargaining unit where it seeks to operate, with a statement that it is not
reported as a chartered local of any federation or national union;
2) the minutes of the organizational meeting(s) and the list of employees who participated in the said meeting(s);
3) the name of all its members comprising at least 20% of the employees in the bargaining unit;
4) the annual financial reports if the applicant has been in existence for one or more years, unless it has not collected
any amount from the members, in which case a statement to this effect shall be included in the application;
5) the applicants constitution and by-laws, minutes of its adoption and ratification and the list of the members who
participated in it. The list of ratifying members shall be dispensed with where the constitution and by-laws was
ratified or adopted during the organizational meeting. In such a case, the factual circumstances of the ratification
shall be recorded in the minutes of the organizational meeting(s).
[30]
San Miguel Corporation (Mandaue Packaging Products Plants) v. Mandaue Packing Products Plants-San Miguel Packaging
Products-San Miguel Corporation Monthlies Rank-and-File Union-FFW, G.R. No. 152356, August 16, 2005, 467 SCRA 107, 127.

57
Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

EAGLE RIDGE GOLF & COUNTRY G.R. No. 178989


CLUB,
Petitioner,
Present:

CORONA, J., Chairperson,


- versus -
VELASCO, JR.,
NACHURA,
PERALTA, and
COURT OF APPEALS and EAGLE
RIDGE EMPLOYEES UNION (EREU), MENDOZA, JJ.
Respondents.
Promulgated:

March 18, 2010


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

DECISION

VELASCO, JR., J.:

In this petition for certiorari under Rule 65, Eagle Ridge Golf & Country Club (Eagle
Ridge) assails and seeks to nullify the Resolutions of the Court of Appeals (CA) dated April 27,
2007[1] and June 6, 2007,[2] issued in CA-G.R. SP No. 98624, denying a similar recourse
petitioner earlier interposed to set aside the December 21, 2006 Decision[3] of the Bureau of Labor
Relations (BLR), as reiterated in a Resolution[4] of March 7, 2007.

Petitioner Eagle Ridge is a corporation engaged in the business of maintaining golf courses.
It had, at the end of CY 2005, around 112 rank-and-file employees. The instant case is an off-
shot of the desire of a number of these employees to organize themselves as a legitimate labor
union and their employers opposition to their aspiration.
The Facts

58
On December 6, 2005, at least 20% of Eagle Ridges rank-and-file employeesthe percentage
threshold required under Article 234(c) of the Labor Code for union registrationhad a meeting
where they organized themselves into an independent labor union, named Eagle Ridge Employees
Union (EREU or Union),[5] elected a set of officers,[6] and ratified[7] their constitution and by-
laws.[8]

On December 19, 2005, EREU formally applied for registration[9] and filed BLR Reg.
Form No. I-LO, s. 1998[10] before the Department of Labor and Employment (DOLE) Regional
Office IV (RO IV). In time, DOLE RO IV granted the application and issued EREU Registration
Certificate (Reg. Cert.) No. RO400-200512-UR-003.

The EREU then filed a petition for certification election in Eagle Ridge Golf & Country
Club, docketed as Case No. RO400-0601-RU-002. Eagle Ridge opposed this
petition,[11] followed by its filing of a petition for the cancellation[12] of Reg. Cert. No. RO400-
200512-UR-003. Docketed as RO400-0602-AU-003, Eagle Ridges petition ascribed
misrepresentation, false statement, or fraud to EREU in connection with the adoption of its
constitution and by-laws, the numerical composition of the Union, and the election of its officers.

Going into specifics, Eagle Ridge alleged that the EREU declared in its application for
registration having 30 members, when the minutes of its December 6, 2005 organizational
meeting showed it only had 26 members. The misrepresentation was exacerbated by the
discrepancy between the certification issued by the Union secretary and president that 25
members actually ratified the constitution and by-laws on December 6, 2005 and the fact that 26
members affixed their signatures on the documents, making one signature a forgery.

Finally, Eagle Ridge contended that five employees who attended the organizational
meeting had manifested the desire to withdraw from the union. The five executed individual
affidavits or Sinumpaang Salaysay[13] on February 15, 2006, attesting that they arrived late at said
meeting which they claimed to be drinking spree; that they did not know that the documents they
signed on that occasion pertained to the organization of a union; and that they now wanted to be
excluded from the Union. The withdrawal of the five, Eagle Ridge maintained, effectively
reduced the union membership to 20 or 21, either of which is below the mandatory minimum
20% membership requirement under Art. 234(c) of the Labor Code. Reckoned from 112 rank-
and-file employees of Eagle Ridge, the required number would be 22 or 23 employees.

As a counterpoint, EREU, in its Comment,[14] argued in gist:

1) the petition for cancellation was procedurally deficient as it does not contain a
certification against forum shopping and that the same was verified by one not duly authorized by
Eagle Ridges board;

2) the alleged discrepancies are not real for before filing of its application on December
19, 2005, four additional employees joined the union on December 8, 2005, thus raising the union
membership to 30 members as of December 19, 2005;

3) the understatement by one member who ratified the constitution and by-laws was a
typographical error, which does not make it either grave or malicious warranting the cancellation
of the unions registration;

59
4) the retraction of 5 union members should not be given any credence for the reasons
that: (a) the sworn statements of the five retracting union members sans other affirmative evidence
presented hardly qualify as clear and credible evidence considering the joint affidavits of the other
members attesting to the orderly conduct of the organizational meeting; (b) the retracting members
did not deny signing the union documents; (c) following, Belyca Corporation v. Ferrer-
Calleja[15] and Oriental Tin Can Labor Union v. Secretary of Labor and Employment,[16] it can be
presumed that duress, coercion or valuable consideration was brought to bear on the retracting
members; and (d) citing La Suerte Cigar and Cigarette Factory v. Director of Bureau of Labor
Relations,[17] Belyca Corporation and Oriental Tin Can Labor Union, where the Court ruled that
once the required percentage requirement has been reached, the employees withdrawal from union
membership taking place after the filing of the petition for certification election will not affect the
petition, it asserted the applicability of said ruling as the petition for certification election was filed
on January 10, 2006 or long before February 15, 2006 when the affidavits of retraction were
executed by the five union members, thus contending that the retractions do not affect nor be
deemed compelling enough to cancel its certificate of registration.

The Union presented the duly accomplished union membership forms [18] dated December
8, 2005 of four additional members. And to rebut the allegations in the affidavits of retraction of
the five union members, it presented the Sama-Samang Sinumpaang Salaysay[19] dated March 20,
2006 of eight union members; another Sama-Samang Sinumpaang Salaysay,[20] also bearing date
March 20, 2006, of four other union members; and the Sworn Statement[21] dated March 16, 2006
of the Unions legal counsel, Atty. Domingo T. Aonuevo. These affidavits attested to the orderly
and proper proceedings of the organizational meeting on December 6, 2005.

In its Reply,[22] Eagle Ridge reiterated the grounds it raised in its petition for cancellation
and asserted further that the four additional members were fraudulently admitted into
the Union. As Eagle Ridge claimed, the applications of the four neither complied with the
requirements under Section 2, Art. IV of the unions constitution and by-laws nor were they shown
to have been duly received, issued receipts for admission fees, processed with recommendation
for approval, and approved by the union president.
Moreover, Eagle Ridge presented another Sinumpaang Salaysay[23] of retraction dated
March 15, 2006 of another union member. The membership of EREU had thus been further
reduced to only 19 or 20. This same member was listed in the first Sama-Samang Sinumpaang
Salaysay[24] presented by the Union but did not sign it.

The Ruling of the DOLE Regional Director

After due proceedings, the DOLE Regional Director, Region IV-A, focusing on the
question of misrepresentation, issued on April 28, 2006 an Order [25] finding for Eagle Ridge, its
petition to cancel Reg. Cert. No. RO400-200512-UR-003 being granted and EREU being delisted
from the roster of legitimate labor organizations.

Aggrieved, the Union appealed to the BLR, the recourse docketed as BLR A-C-30-5-31-
06 (Case No. RO400-0602-AU-003).

The Ruling of the BLR

60
Initially, the BLR, then headed by an Officer-in-Charge (OIC), affirmed[26] the appealed
order of the DOLE Regional Director.

Undeterred by successive set backs, EREU interposed a motion for reconsideration,


contending that:
1) Contrary to the ruling of the BLR OIC Director, a certificate of non-forum shopping is
mandatory requirement, under Department Order No. (DO) 40-03 and the Rules of Court, non-
compliance with which is a ground to dismiss a petition for cancellation of a certificate of
registration;

2) It was erroneous for both the Regional Director and the BLR OIC Director to give
credence to the retraction statements of union members which were not presented for reaffirmation
during any of the hearings of the case, contrary to the requirement for the admission of such
evidence under Sec. 11, Rule XI of DO 40-03.
In a Decision dated December 21, 2006, the BLR, now headed by Director Rebecca C.
Chato, set aside the July 28, 2006 order of the BLR OIC Director, disposing as follows:
WHEREFORE, the motion for reconsideration is hereby GRANTED and our Resolution
dated 28 July 2006 is hereby VACATED. Accordingly, the Eagle Ridge Employees Union
(EREU) shall remain in the roster of legitimate organizations.

In finding for the Union, the BLR Director eschewed procedural technicalities.
Nonetheless, she found as without basis allegations of misrepresentation or fraud as ground for
cancellation of EREUs registration.
In turn aggrieved, Eagle Ridge sought but was denied reconsideration per the BLRs
Resolution dated March 7, 2007.

Eagle Ridge thereupon went to the CA on a petition for certiorari.

The Ruling of the CA

On April 27, 2007, the appellate court, in a terse two-page Resolution,[27] dismissed Eagle
Ridges petition for being deficient, as:
1. the questioned [BLR] Decision dated December 21, 2006 and the Resolution dated March 7,
2007 Resolution [appended to the petition] are mere machine copies; and

2. the verification and certification of non-forum shopping was subscribed to by Luna C. Piezas
on her representation as the legal counsel of the petitioner, but sans [the requisite] Secretarys
Certificate or Board Resolution authorizing her to execute and sign the same.

The CA later denied, in its second assailed resolution, Eagle Ridges motion
for reconsideration, albeit the latter had submitted a certificate to show that its legal counsel has
been authorized, per a board resolution, to represent the corporation.
The Issues

Eagle Ridge is now before us via this petition for certiorari on the submissions that:
I.

61
[THE CA] COMMITTED SERIOUS ERROR AND GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN DISMISSING THE
COMPANYS PETITION FOR CERTIORARI AND DENYING ITS MOTION FOR
RECONSIDERATION CONSIDERING THAT THE COMPANYS PREVIOUS COUNSEL
WAS AUTHORIZED TO REPRESENT THE COMPANY IN THE PETITION FOR
CERTIORARI FILED BEFORE THE [CA];

II.

IN ORDER NOT TO FURTHER PREJUDICE THE COMPANY, IT IS RESPECTFULLY


SUBMITTED THAT THIS HONORABLE COURT COULD TAKE COGNIZANCE OF THE
MERITS OF THIS CASE AND RESOLVE THAT BASED ON THE EVIDENCE ON RECORD,
THERE WAS FRAUD, MISREPRESENTATION AND/OR FALSE STATEMENT WHICH
WARRANT THE CANCELLATION OF CERTIFICATE OF REGISTRATION OF EREU.[28]

The Courts Ruling

We dismiss the petition.

Procedural Issue: Lack of Authority

Certiorari is an extraordinary, prerogative remedy and is never issued as a matter of


[29]
right. Accordingly, the party who seeks to avail of it must strictly observe the ruleslaid down
by law.[30]

Petitions for certiorari under Rule 65 of the Rules of Court require a sworn certification of
non-forum shopping as provided in the third paragraph of Section 3, Rule 46. [31] Sec. 3,
paragraphs 4 and 6 of Rule 46 pertinently provides:

SEC. 3. Contents and filing of petition; effect of non-compliance with requirements. x x x x

xxxx

xxxx

The petitioner shall also submit together with the petition a sworn certification that he
has not theretofore commenced any action involving the same issues in the Supreme Court,
the Court of Appeals x x x, or any other tribunal or agency; if there is such other action or
proceeding, he must state the status of the same x x x.

xxxx

The failure of the petitioner to comply with any of the foregoing requirements shall
be sufficient ground for the dismissal of the petition. (Emphasis supplied.)

Evidently, the Rules requires the petitioner, not his counsel, to sign under oath the requisite
certification against non-forum shopping. Such certification is a peculiar personal representation
on the part of the principal party, an assurance to the court that there are no other pending cases
involving basically the same parties, issues, and cause of action.[32]

62
In the instant case, the sworn verification and certification of non-forum shopping in the
petition for certiorari of Eagle Ridge filed before the CA carried the signature of its counsel
without the requisite authority.

Eagle Ridge tried to address its faux pas by submitting its board secretarys
Certificate[33] dated May 15, 2007, attesting to the issuance on May 10, 2007 of Board Resolution
No. ERGCCI 07/III-01 that authorized its counsel of record, Atty. Luna C. Piezas, to represent it
before the appellate court.

The CA, however, rejected Eagle Ridges virtual plea for the relaxation of the rules on the
signing of the verification and certification against forum shopping, observing that the board
resolution adverted to was approved after Atty. Piezas has signed and filed for Eagle Ridge the
petition for certiorari.

The appellate courts assailed action is in no way tainted with grave abuse of discretion, as
Eagle Ridge would have this Court believed. Indeed, a certification of non-forum shopping signed
by counsel without the proper authorization is defective and constitutes a valid cause for dismissal
of the petition.[34]

The submission of the board secretarys certificate through a motion for reconsideration of
the CAs decision dismissing the petition for certiorari may be considered a substantial
compliance with the Rules of Court.[35] Yet, this rule presupposes that the authorizing board
resolution, the approval of which is certified to by the secretarys certification, was passed within
the reglementary period for filing the petition. This particular situation does not, however, obtain
under the premises. The records yield the following material dates and incidents: Eagle Ridge
received the May 7, 2007 resolution of the BLR Director on March 9, 2007, thus giving it 60 days
or up to May 8, 2007 to file a petition for certiorari, as it in fact filed its petition on April 18, 2007
before the CA. The authorization for its counsel, however, was only issued in a meeting of its
board on May 10, 2007 or a couple of days beyond the 60-day reglementary period referred to in
filing a certiorari action. Thus, there was no substantial compliance with the Rules.

As with most rules of procedure, however, exceptions are invariably recognized and the
relaxation of procedural rules on review has been effected to obviate jeopardizing substantial
justice.[36] This liberality stresses the importance of review in our judicial grievance structure to
accord every party litigant the amplest opportunity for the proper and just disposition of his cause,
freed from the constraints of technicalities.[37] But concomitant to a liberal interpretation of the
rules of procedure should be an effort on the part of the party invoking liberality to adequately
explain his failure to abide by the rules.[38]

To us, Eagle Ridge has not satisfactorily explained its failure to comply. It may be true, as
Eagle Ridge urges, that its counsels authority to represent the corporation was never questioned
before the DOLE regional office and agency. But EREUs misstep could hardly lend Eagle Ridge
comfort. And obviously, Eagle Ridge and its counsel erred in equating the latters representation
as legal counsel with the authority to sign the verification and the certificate of non-forum
shopping in the formers behalf. We note that the authority to represent a client before a court or
quasi-judicial agency does not require an authorizing board resolution, as the counsel-client
63
relationship is presumed by the counsels representation by the filing of a pleading on behalf of
the client. In filing a pleading, the counsel affixes his signature on it, but it is the client who must
sign the verification and the certification against forum shopping, save when a board resolution
authorizes the former to sign so.

It is entirely a different matter for the counsel to sign the verification and the certificate of
non-forum shopping. The attestation or certification in either verification or certification of non-
forum shopping requires the act of the principal party. As earlier indicated, Sec. 3 of Rule 46
exacts this requirement; so does the first paragraph of Sec. 5 of Rule 7 pertinently reading:
SEC. 5. Certification against forum shopping. The plaintiff or principal party shall
certify under oath in the complaint or other initiatory pleading asserting a claim for relief, or in a
sworn certification annexed thereto and simultaneously filed therewith: (a) that he has not
theretofore commenced any action or filed any claim involving the same issues in any court,
tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim
is pending therein; (b) if there is such other pending action or claim, a complete statement of the
present status thereof; and (c) if he should thereafter learn that the same or similar action or claim
has been filed or is pending, he shall report that fact within five (5) days therefrom to the court
wherein his aforesaid complaint or initiatory pleading has been filed. (Emphasis added.)

It is, thus, clear that the counsel is not the proper person to sign the certification against
forum shopping. If, for any reason, the principal party cannot sign the petition, the one signing
on his behalf must have been duly authorized.[39]

In addition, Eagle Ridge maintains that the submitted board resolution, albeit passed after
the filing of the petition was filed, should be treated as a ratificatory medium of the counsels act
of signing the sworn certification of non-forum shopping.

We are not inclined to grant the desired liberality owing to Eagle Ridges failure to
sufficiently explain its failure to follow the clear rules.

If for the foregoing considerations alone, the Court could very well dismiss the instant
petition. Nevertheless, the Court will explore the merits of the instant case to obviate the inequity
that might result from the outright denial of the petition.

Substantive Issue: No Fraud in the Application

Eagle Ridge cites the grounds provided under Art. 239(a) and (c) of the Labor Code for its
petition for cancellation of the EREUs registration. On the other hand, the Unionasserts bona
fide compliance with the registration requirements under Art. 234 of the Code, explaining the
seeming discrepancies between the number of employees who participated in the organizational
meeting and the total number of union members at the time it filed its registration, as well as the
typographical error in its certification which understated by one the number of union members
who ratified the unions constitution and by-laws.

Before their amendment by Republic Act No. 9481[40] on June 15, 2007, the then governing
Art. 234 (on the requirements of registration of a labor union) and Art. 239 (on the grounds for
cancellation of union registration) of the Labor Code respectively provided as follows:

64
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 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;

xxxx

(e) Four copies (4) 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.[41]
xxxx

ART. 239. GROUNDS FOR CANCELLATION OF UNION REGISTRATION. The


following shall constitute grounds for cancellation of union registration:

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


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

xxxx

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


officers, minutes of the election of officers, the list of voters, or failure to submit these
documents together with the list of the newly elected/appointed officers and their postal addresses
within thirty (30) days from election.[42] (Emphasis supplied.)

A scrutiny of the records fails to show any misrepresentation, false statement, or fraud
committed by EREU to merit cancellation of its registration.
First. The Union submitted the required documents attesting to the facts of the
organizational meeting on December 6, 2005, the election of its officers, and the adoption of
the Unions constitution and by-laws. It submitted before the DOLE Regional Office with its
Application for Registration and the duly filled out BLR Reg. Form No. I-LO, s. 1998, the
following documents, to wit:

(a) the minutes of its organizational meeting[43] held on December 6, 2005 showing 26 founding
members who elected its union officers by secret ballot;

(b) the list of rank-and-file employees[44] of Eagle Ridge who attended the organizational meeting
and the election of officers with their individual signatures;

(c) the list of rank-and-file employees[45] who ratified the unions constitution and by-laws showing
the very same list as those who attended the organizational meeting and the election of officers
with their individual signatures except the addition of four employees without their
signatures, i.e., Cherry Labajo, Grace Pollo, Annalyn Poniente and Rowel Dolendo;

(d) the unions constitution and by-laws[46] as approved on December 6, 2005;

65
(e) the list of officers[47] and their addresses;

(f) the list of union members[48] showing a total of 30 members; and

(g) the Sworn Statement[49] of the unions elected president and secretary. All the foregoing
documents except the sworn statement of the president and the secretary were accompanied by
Certifications[50] by the union secretary duly attested to by the union president.

Second. The members of the EREU totaled 30 employees when it applied on December
19, 2005 for registration. The Union thereby complied with the mandatory minimum 20%
membership requirement under Art. 234(c). Of note is the undisputed number of 112 rank-and-
file employees in Eagle Ridge, as shown in the Sworn Statement of the Union president and
secretary and confirmed by Eagle Ridge in its petition for cancellation.

Third. The Union has sufficiently explained the discrepancy between the number of those
who attended the organizational meeting showing 26 employees and the list of union members
showing 30. The difference is due to the additional four members admitted two days after the
organizational meeting as attested to by their duly accomplished Union Membership
forms. Consequently, the total number of union members, as of December 8, 2005, was 30, which
was truthfully indicated in its application for registration on December 19, 2005.

As aptly found by the BLR Director, the Union already had 30 members when it applied
for registration, for the admission of new members is neither prohibited by law nor was it
concealed in its application for registration. Eagle Ridges contention is flawed when it equated
the requirements under Art. 234(b) and (c) of the Labor Code. Par. (b) clearly required the
submission of the minutes of the organizational meetings and the list of workers who participated
in the meetings, while par. (c) merely required the list of names of all the union members
comprising at least 20% of the bargaining unit. The fact that EREU had 30 members when it
applied for registration on December 19, 2005 while only 26 actually participated in the
organizational meeting is borne by the records.

Fourth. In its futile attempt to clutch at straws, Eagle Ridge assails the inclusion of the
additional four members allegedly for not complying with what it termed as the sine qua
non requirements for union member applications under the Unions constitution and by-laws,
specifically Sec. 2 of Art. IV. We are not persuaded. Any seeming infirmity in the application
and admission of union membership, most especially in cases of independent labor unions, must
be viewed in favor of valid membership.

The right of employees to self-organization and membership in a union must not be


trammeled by undue difficulties. In this case, when the Union said that the four employee-
applicants had been admitted as union members, it is enough to establish the fact of admission of
the four that they had duly signified such desire by accomplishing the membership form. The
fact, as pointed out by Eagle Ridge, that the Union, owing to its scant membership, had not yet
fully organized its different committees evidently shows the direct and valid acceptance of the
four employee applicants rather than deter their admissionas erroneously asserted by Eagle Ridge.

66
Fifth. The difference between the number of 26 members, who ratified the Unions
constitution and by-laws, and the 25 members shown in the certification of the Union secretary
as having ratified it, is, as shown by the factual antecedents, a typographical error. It was an
insignificant mistake committed without malice or prevarication. The list of those who attended
the organizational meeting shows 26 members, as evidenced by the signatures beside their
handwritten names. Thus, the certifications understatement by one member, while not factual,
was clearly an error, but neither a misleading one nor a misrepresentation of what had actually
happened.

Sixth. In the more meaty issue of the affidavits of retraction executed by six union
members, we hold that the probative value of these affidavits cannot overcome those of the
supporting affidavits of 12 union members and their counsel as to the proceedings and the conduct
of the organizational meeting on December 6, 2005. The DOLE Regional Director and the BLR
OIC Director obviously erred in giving credence to the affidavits of retraction, but not according
the same treatment to the supporting affidavits.

The six affiants of the affidavits of retraction were not presented in a hearing before the
Hearing Officer (DOLE Regional Director), as required under the Rules Implementing Book V
of the Labor Code covering Labor Relations. Said Rules is embodied in Department Order No.
(DO) 40-03 which was issued on February 17, 2003 and took effect on March 15, 2003 to replace
DO 9 of 1997. Sec. 11, Rule XI of DO 40-03 specifically requires:

Section 11. Affirmation of testimonial evidence. Any affidavit submitted by a party to


prove his/her claims or defenses shall be re-affirmed by the presentation of the affiantbefore
the Med-Arbiter or Hearing Officer, as the case may be. Any affidavit submitted without the
re-affirmation of the affiant during a scheduled hearing shall not be admitted in evidence,
except when the party against whom the affidavit is being offered admits all allegations therein
and waives the examination of the affiant.

It is settled that affidavits partake the nature of hearsay evidence, since they are not
generally prepared by the affiant but by another who uses his own language in writing the affiants
statement, which may thus be either omitted or misunderstood by the one writing them. [51] The
above rule affirms the general requirement in adversarial proceedings for the examination of the
affiant by the party against whom the affidavit is offered. In the instant case, it is required for
affiants to re-affirm the contents of their affidavits during the hearing of the instant case for them
to be examined by the opposing party, i.e., the Union.

For their non-presentation and consonant to the above-quoted rule, the six affidavits of
retraction are inadmissible as evidence against the Union in the instant case.Moreover, the
affidavit and joint-affidavits presented by the Union before the DOLE Regional Director were
duly re-affirmed in the hearing of March 20, 2006 by the affiants.Thus, a reversible error was
committed by the DOLE Regional Director and the BLR OIC Director in giving credence to the
inadmissible affidavits of retraction presented by Eagle Ridge while not giving credence to the
duly re-affirmed affidavits presented by the Union.

67
Evidently, the allegations in the six affidavits of retraction have no probative value and at
the very least cannot outweigh the rebutting attestations of the duly re-affirmed affidavits
presented by the Union.

Seventh. The fact that six union members, indeed, expressed the desire to withdraw their
membership through their affidavits of retraction will not cause the cancellation of registration
on the ground of violation of Art. 234(c) of the Labor Code requiring the mandatory minimum
20% membership of rank-and-file employees in the employees union.

The six retracting union members clearly severed and withdrew their union
membership. The query is whether such separation from the Union can detrimentally affect the
registration of the Union.

We answer in the negative.

Twenty percent (20%) of 112 rank-and-file employees in Eagle Ridge would require a
union membership of at least 22 employees (112 x 205 = 22.4). When the EREU filed its
application for registration on December 19, 2005, there were clearly 30 union members. Thus,
when the certificate of registration was granted, there is no dispute that the Union complied with
the mandatory 20% membership requirement.

Besides, it cannot be argued that the six affidavits of retraction retroact to the time of the
application of registration or even way back to the organizational meeting. Prior to their
withdrawal, the six employees in question were bona fide union members. More so, they never
disputed affixing their signatures beside their handwritten names during the organizational
meetings. While they alleged that they did not know what they were signing, it bears stressing
that their affidavits of retraction were not re-affirmed during the hearings of the instant case
rendering them of little, if any, evidentiary value.

With the withdrawal of six union members, there is still compliance with the mandatory
membership requirement under Art. 234(c), for the remaining 24 union members constitute more
than the 20% membership requirement of 22 employees.

Eagle Ridge further argues that the list of union members includes a supervisory
employee. This is a factual issue which had not been raised at the first instance before the DOLE
Regional Director and cannot be appreciated in this proceeding. To be sure, Eagle Ridge knows
well who among its personnel belongs or does not belong to the supervisory group. Obviously,
its attempt to raise the issue referred to is no more than an afterthought and ought to be rejected.

Eighth. Finally, it may not be amiss to note, given the factual antecedents of the instant
case, that Eagle Ridge has apparently resorted to filing the instant case for cancellation of
the Unions certificate of registration to bar the holding of a certification election. This can be
gleaned from the fact that the grounds it raised in its opposition to the petition for certification
election are basically the same grounds it resorted to in the instant case for cancellation of EREUs
certificate of registration. This amounts to a clear circumvention of the law and cannot be
countenanced.
68
For clarity, we reiterate the following undisputed antecedent facts:

(1) On December 6, 2005, the Union was organized, with 26 employees of Eagle Ridge
attending;

(2) On December 19, 2005, the Union filed its formal application for registration indicating
a total of 30 union members with the inclusion of four additional members on December 8, 2005
(Reg. Cert. No. RO400-200512-UR-003 was eventually issued by the DOLE RO IV-A);

(3) On January 10, 2006, the Union filed before the DOLE RO IV-A its petition for
certification election in Eagle Ridge;

(4) On February 13, 2006, Eagle Ridge filed its Position Paper opposing the petition for
certification election on essentially the same grounds it raised in the instant case; and

(5) On February 24, 2006, Eagle Ridge filed the instant case for cancellation of the Unions
certificate of registration on essentially the same grounds it raised in its opposition to the Unions
petition for certification election.

Evidently, as the Union persuasively argues, the withdrawal of six member-employees


from the Union will affect neither the Unions registration nor its petition for certification election,
as their affidavits of retraction were executed after the Unions petition for certification election
had been filed. The initial five affidavits of retraction were executed on February 15, 2006; the
sixth, on March 15, 2006. Indisputably, all six were executed way after the filing of the petition
for certification election on January 10, 2006.

In Eastland Manufacturing Company, Inc. v. Noriel,[52] the Court emphasized, and


reiterated its earlier rulings,[53] that even if there were less than 30% [the required percentage of
minimum membership then] of the employees asking for a certification election, that of itself
would not be a bar to respondent Director ordering such an election provided, of course, there is
no grave abuse of discretion.[54] Citing Philippine Association of Free Labor Unions v. Bureau of
Labor Relations,[55] the Court emphasized that a certification election is the most appropriate
procedure for the desired goal of ascertaining which of the competing organizations should
represent the employees for the purpose of collective bargaining.[56]

Indeed, where the company seeks the cancellation of a unions registration during the
pendency of a petition for certification election, the same grounds invoked to cancel should not
be used to bar the certification election. A certification election is the most expeditious and fairest
mode of ascertaining the will of a collective bargaining unit as to its choice of its exclusive
representative.[57] It is the fairest and most effective way of determining which labor organization
can truly represent the working force. It is a fundamental postulate that the will of the majority,
if given expression in an honest election with freedom on the part of the voters to make their
choice, is controlling.[58]

69
The Court ends this disposition by reproducing the following apt excepts from its holding
in S.S. Ventures International, Inc. v. S.S. Ventures Labor Union (SSVLU) on theeffect of the
withdrawal from union membership right before or after the filing of a petition for certification
election:

We are not persuaded. As aptly noted by both the BLR and CA, these mostly undated
written statements submitted by Ventures on March 20, 2001, or seven months after it filed its
petition for cancellation of registration, partake of the nature of withdrawal of union membership
executed after the Unions filing of a petition for certification election on March 21, 2000. We have
in precedent cases said that the employees withdrawal from a labor union made before the
filing of the petition for certification election is presumed voluntary, while withdrawal after
the filing of such petition is considered to be involuntary and does not affect the same. Now
then, if a withdrawal from union membership done after a petition for certification election
has been filed does not vitiate such petition, is it not but logical to assume that such
withdrawal cannot work to nullify the registration of the union? Upon this light, the Court is
inclined to agree with the CA that the BLR did not abuse its discretion nor gravely err when it
concluded that the affidavits of retraction of the 82 members had no evidentiary
weight.[59] (Emphasis supplied.)

WHEREFORE, premises considered, we DISMISS the instant petition for lack of merit.

Costs against petitioner.

SO ORDERED.

PRESBITERO J. VELASCO, JR.


Associate Justice

WE CONCUR:

RENATO C. CORONA
Associate Justice
Chairperson

70
ANTONIO EDUARDO B. NACHURA DIOSDADO M. PERALTA
Associate Justice Associate Justice

JOSE CATRAL MENDOZA


Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Courts Division.

RENATO C. CORONA
Associate Justice
Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons
Attestation, I certify that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

71
REYNATO S. PUNO
Chief Justice

[1]
Rollo, pp. 282-283. Penned by Associate Justice Romeo F. Barza and concurred in by Associate Justices Mariano C. del
Castillo (now a member of the Court) and Arcangelita M. Romilla-Lontok.
[2]
Id. at 297-300.
[3]
Id. at 232-235. Penned by Director Rebecca C. Chato.
[4]
Id. at 242-244.
[5]
Id. at 54-55.
[6]
Id. at 57-58.
[7]
Id. at 60-61.
[8]
Id. at 63-72.
[9]
Id. at 50-53, dated December 13, 2005.
[10]
Id. at 79-80, dated December 14, 2005.
[11]
Through a position paper; id. at 98-104, dated February 10, 2006.
[12]
Id. at 43-49, dated February 23, 2006, entitled In Re: Petition to Cancel the Registration Certificate of Eagle Ridge
Employees Union (EREU); Eagle Ridge Golf & Country Club, petitioner vs. Eagle Ridge Employees Union, respondent.
[13]
Id. at 81-85.
[14]
Id. at 86-97, dated March 20, 2006.
[15]
No. L-77395, November 29, 1988, 168 SCRA 184.
[16]
G.R. No. 116779, August 28, 1998, 294 SCRA 640.
[17]
G.R. No. 55674, July 25, 1983, 123 SCRA 679.
[18]
Rollo, pp. 105-108.
[19]
Id. at 109-111.
[20]
Id. at 112-113.
[21]
Id. at 114-115.
[22]
Id. at 116-126, dated March 25, 2006.
[23]
Id. at 138.
[24]
Id. at 109-111.
[25]
Id. at 139-148. Penned by Regional Director Atty. Maximo B. Lim.
[26]
Id. at 206, per Resolution of July 28, 2006.
[27]
Id. at 283.
[28]
Id. at 24.
[29]
Nisce v. Equitable PCI Bank, Inc., G.R. No. 167434, February 19, 2007, 516 SCRA 231, 251; Cervantes v. Court of Appeals,
G.R. No. 166755, November 18, 2005, 475 SCRA 562.
[30]
University of Immaculate Concepcion v. Secretary of Labor and Employment, G.R. No. 143557, June 25, 2004, 432 SCRA
601.
[31]
Last sentence of Secs. 1, 2, and 3 of Rule 65.
[32]
United Residents of Dominican Hill, Inc. v. Commission on the Settlement of Land Problems, G.R. No. 135945, 7 March
2001, 353 SCRA 782.
[33]
Rollo, p. 288, issued by Eagle Ridge Corporate Secretary Mariza Santos-Tan.
[34]
Sapitan v. JB Line Bicol Express, Inc., G.R. No. 163775, October 19, 2007, 537 SCRA 230, 241.
[35]
Varorient Shipping Co., Inc. v. National Labor Relations Commission, G.R. No. 164940, November 28, 2007, 539 SCRA 131,
138.
[36]
Far Corporation v. Magdaluyo, G.R. No. 148739, November 19, 2004, 443 SCRA 218; Go v. Tong, G.R. No. 151942,
November 27 2003, 416 SCRA 557, 567; Fajardo v. Cas, G.R. No. 140356, March 20, 2001, 354 SCRA 736; Ginetev. Court of Appeals,
G.R. No. 127596, September 24, 1998, 296 SCRA 38.
[37]
Yambao v. Court of Appeals, G.R. No. 140894, November 27, 2000, 346 SCRA 141, 146.
[38]
Enriquez v. Enriquez, G.R. No. 139303, August 25, 2005, 468 SCRA 77, 86.
[39]
Sapitan v. JB Line Bicol Express, Inc., supra note 34; citing Fuentebella and Rolling Hills Memorial Park, Inc. v. Castro,
G.R. No. 150865, June 30, 2006, 494 SCRA 183, 190.
[40]
An Act Strengthening the Workers Constitutional Right to Self-Organization, took effect on June 15, 2007 after due
publication.
[41]
As amended by RA 9481, Art. 234 now reads:
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;
72
(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 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 statements; 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.
[42]
As amended by RA 9481, the grounds for cancellation of registration has been reduced to three; thus, Art. 239 now reads:
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.
[43]
Rollo, pp. 54-55.
[44]
Id. at 57-58.
[45]
Id. at 60-61.
[46]
Id. at 63-72.
[47]
Id. at 73-74.
[48]
Id. at 77.
[49]
Id. at 76.
[50]
Id. at 56, 59, 62, 73, 75 and 78.
[51]
Tating v. Marcella, G.R. No. 155208, March 27, 2007, 519 SCRA 79, 88 [citations omitted].
[52]
No. L-45528, February 10, 1982, 111 SCRA 674.
[53]
Scout Ramon Albano Memorial College v. Noriel, No. L-48347, October 3, 1978, 85 SCRA 494; National Mines and Allied
Workers Union v. Luna, No. L-46722, June 15, 1978, 83 SCRA 607; Monark International, Inc. v. Noriel, Nos.L-47570-71, May 11,
1978, 83 SCRA 114; Kapisanan ng mga Manggagawa sa La Suerte v. Noriel, No. L-45475, June 20, 1977, 77 SCRA 414.
[54]
Eastland Manufacturing Company, Inc. v. Noriel, supra note 52, at 675-676.
[55]
No. L-42115, January 37, 1976, 69 SCRA 132.
[56]
Eastland Manufacturing Company, Inc. v. Noriel, supra note 52, at 676.
[57]
Consolidated Farms, Inc. II v. Noriel, No. L-47752, July 31, 1978, 84 SCRA 469, 472.
[58]
Philippine Association of Free Labor Unions v. Bureau of Labor Relations, supra note 55, at 139.
[59]
G.R. No. 161690, July 23, 2008, 559 SCRA 435, 443-444.

73
Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 169717 March 16, 2011

SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF UNIONS IN THE PHILIPPINES FOR


EMPOWERMENT AND REFORMS (SMCC-SUPER), ZACARRIAS JERRY VICTORIO-Union
President,Petitioner,
vs.
CHARTER CHEMICAL and COATING CORPORATION, Respondent.

DECISION

DEL CASTILLO, J.:

The right to file a petition for certification election is accorded to a labor organization provided that it complies with
the requirements of law for proper registration. The inclusion of supervisory employees in a labor organization
seeking to represent the bargaining unit of rank-and-file employees does not divest it of its status as a legitimate
labor organization. We apply these principles to this case.

This Petition for Review on Certiorari seeks to reverse and set aside the Court of Appeal’s March 15, 2005
Decision1 in CA-G.R. SP No. 58203, which annulled and set aside the January 13, 2000 Decision2 of the
Department of Labor and Employment (DOLE) in OS-A-6-53-99 (NCR-OD-M-9902-019) and the September 16,
2005 Resolution3 denying petitioner union’s motion for reconsideration.

Factual Antecedents

On February 19, 1999, Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Philippines for
Empowerment and Reforms (petitioner union) filed a petition for certification election among the regular rank-and-file
employees of Charter Chemical and Coating Corporation (respondent company) with the Mediation Arbitration Unit
of the DOLE, National Capital Region.

On April 14, 1999, respondent company filed an Answer with Motion to Dismiss4 on the ground that petitioner union
is not a legitimate labor organization because of (1) failure to comply with the documentation requirements set by
law, and (2) the inclusion of supervisory employees within petitioner union.5

Med-Arbiter’s Ruling

On April 30, 1999, Med-Arbiter Tomas F. Falconitin issued a Decision6 dismissing the petition for certification
election. The Med-Arbiter ruled that petitioner union is not a legitimate labor organization because the Charter
Certificate, "Sama-samang Pahayag ng Pagsapi at Authorization," and "Listahan ng mga Dumalo sa
Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas" were not executed under oath and
certified by the union secretary and attested to by the union president as required by Section 235 of the Labor
Code7 in relation to Section 1, Rule VI of Department Order (D.O.) No. 9, series of 1997. The union registration was,
thus, fatally defective.

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

As a result, not being a legitimate labor organization, petitioner union has no right to file a petition for certification
election for the purpose of collective bargaining.

Department of Labor and Employment’s Ruling

On July 16, 1999, the DOLE initially issued a Decision8 in favor of respondent company dismissing petitioner union’s
appeal on the ground that the latter’s petition for certification election was filed out of time. Although the DOLE ruled,
contrary to the findings of the Med-Arbiter, that the charter certificate need not be verified and that there was no
independent evidence presented to establish respondent company’s claim that some members of petitioner union
were holding supervisory positions, the DOLE sustained the dismissal of the petition for certification after it took
judicial notice that another union, i.e., Pinag-isang Lakas Manggagawa sa Charter Chemical and Coating
Corporation, previously filed a petition for certification election on January 16, 1998. The Decision granting the said

74
petition became final and executory on September 16, 1998 and was remanded for immediate implementation.
Under Section 7, Rule XI of D.O. No. 9, series of 1997, a motion for intervention involving a certification election in
an unorganized establishment should be filed prior to the finality of the decision calling for a certification election.
Considering that petitioner union filed its petition only on February 14, 1999, the same was filed out of time.

On motion for reconsideration, however, the DOLE reversed its earlier ruling. In its January 13, 2000 Decision, the
DOLE found that a review of the records indicates that no certification election was previously conducted in
respondent company. On the contrary, the prior certification election filed by Pinag-isang Lakas Manggagawa sa
Charter Chemical and Coating Corporation was, likewise, denied by the Med-Arbiter and, on appeal, was dismissed
by the DOLE for being filed out of time. Hence, there was no obstacle to the grant of petitioner union’s petition for
certification election, viz:

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

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


and Reform (SMCC-SUPER); and

2. No Union.

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

SO DECIDED.9

Court of Appeal’s Ruling

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

WHEREFORE, the petition is hereby GRANTED. The assailed Decision and Resolution dated January 13, 2000
and February 17, 2000 are hereby [ANNULLED] and SET ASIDE.

SO ORDERED.10

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

Issues

Whether x x x the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of jurisdiction
in granting the respondent [company’s] petition for certiorari (CA G.R. No. SP No. 58203) in spite of the fact that the
issues subject of the respondent company[’s] petition was already settled with finality and barred from being re-
litigated.

II

Whether x x x the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of jurisdiction
in holding that the alleged mixture of rank-and-file and supervisory employee[s] of petitioner [union’s] membership is
[a] ground for the cancellation of petitioner [union’s] legal personality and dismissal of [the] petition for certification
election.

III

Whether x x x the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of jurisdiction
in holding that the alleged failure to certify under oath the local charter certificate issued by its mother federation and
list of the union membership attending the organizational meeting [is a ground] for the cancellation of petitioner
[union’s] legal personality as a labor organization and for the dismissal of the petition for certification election.12
75
Petitioner Union’s Arguments

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

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

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

Respondent Company’s Arguments

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

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

It also contends that petitioner union is not a legitimate labor organization because its composition is a mixture of
supervisory and rank-and-file employees in violation of Article 245 of the Labor Code. Respondent company
maintains that the ruling in Toyota Motor Philippines vs. Toyota Motor Philippines Labor Union14 continues to be
good case law. Thus, the illegal composition of petitioner union nullifies its legal personality to file the subject
petition for certification election and its legal personality may be collaterally attacked in the proceedings for a petition
for certification election as was done here.

Our Ruling

The petition is meritorious.

The issue as to the legal personality of petitioner union is not barred by the July 16, 1999 Decision of the DOLE.

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

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

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

The charter certificate need not be certified under oath by the local union’s secretary or treasurer and attested to by
its president.

76
Preliminarily, we must note that Congress enacted Republic Act (R.A.) No. 948116 which took effect on June 14,
2007.17 This law introduced substantial amendments to the Labor Code. However, since the operative facts in this
case occurred in 1999, we shall decide the issues under the pertinent legal provisions then in force (i.e., R.A. No.
6715,18 amending Book V of the Labor Code, and the rules and regulations19 implementing R.A. No. 6715, as
amended by D.O. No. 9,20

series of 1997) pursuant to our ruling in Republic v. Kawashima Textile Mfg., Philippines, Inc.21

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

We disagree.

The then prevailing Section 1, Rule VI of the Implementing Rules of Book V, as amended by D.O. No. 9, series of
1997, provides:

Section 1. Chartering and creation of a local chapter — A duly registered federation or national union may directly
create a local/chapter by submitting to the Regional Office or to the Bureau two (2) copies of the following:

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

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

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

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

As readily seen, the Sama-samang Pahayag ng Pagsapi at Authorization and Listahan ng mga Dumalo sa
Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas are not among the documents that
need to be submitted to the Regional Office or Bureau of Labor Relations in order to register a labor organization.
As to the charter certificate, the above-quoted rule indicates that it should be executed under oath. Petitioner union
concedes and the records confirm that its charter certificate was not executed under oath. However, in San Miguel
Corporation (Mandaue Packaging Products Plants) v. Mandaue Packing Products Plants-San Miguel Corporation
Monthlies Rank-and-File Union-FFW (MPPP-SMPP-SMAMRFU-FFW),22 which was decided under the auspices of
D.O. No. 9, Series of 1997, we ruled –

In San Miguel Foods-Cebu B-Meg Feed Plant v. Hon. Laguesma, 331 Phil. 356 (1996), the Court ruled that it
was not necessary for the charter certificate to be certified and attested by the local/chapter officers. Id. While this
ruling was based on the interpretation of the previous Implementing Rules provisions which were
supplanted by the 1997 amendments, we believe that the same doctrine obtains in this case. Considering that
the charter certificate is prepared and issued by the national union and not the local/chapter, it does not make
sense to have the local/chapter’s officers x x x certify or attest to a document which they had no hand in the
preparation of.23 (Emphasis supplied)

In accordance with this ruling, petitioner union’s charter certificate need not be executed under oath. Consequently,
it validly acquired the status of a legitimate labor organization upon submission of (1) its charter certificate,24 (2) the
names of its officers, their addresses, and its principal office,25 and (3) its constitution and by-laws26— the last two
requirements having been executed under oath by the proper union officials as borne out by the records.

The mixture of rank-and-file and supervisory employees in petitioner union does not nullify its legal personality as a
legitimate labor organization.

The CA found that petitioner union has for its membership both rank-and-file and supervisory employees. However,
petitioner union sought to represent the bargaining unit consisting of rank-and-file employees. Under Article 24527 of
the Labor Code, supervisory employees are not eligible for membership in a labor organization of rank-and-file
employees. Thus, the appellate court ruled that petitioner union cannot be considered a legitimate labor organization
pursuant to Toyota Motor Philippines v. Toyota Motor Philippines Corporation Labor Union28 (hereinafter Toyota).

77
Preliminarily, we note that petitioner union questions the factual findings of the Med-Arbiter, as upheld by the
appellate court, that 12 of its members, consisting of batchman, mill operator and leadman, are supervisory
employees. However, petitioner union failed to present any rebuttal evidence in the proceedings below after
respondent company submitted in evidence the job descriptions29 of the aforesaid employees. The job descriptions
indicate that the aforesaid employees exercise recommendatory managerial actions which are not merely routinary
but require the use of independent judgment, hence, falling within the definition of supervisory employees under
Article 212(m)30 of the Labor Code. For this reason, we are constrained to agree with the Med-Arbiter, as upheld by
the appellate court, that petitioner union consisted of both rank-and-file and supervisory employees.

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

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

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

"Sec. 1. Who may join unions. - x x x Supervisory employees and security guards shall not be eligible for
membership in a labor organization of the rank-and-file employees but may join, assist or form separate
labor organizations of their own; Provided, that those supervisory employees who are included in an existing
rank-and-file bargaining unit, upon the effectivity of Republic Act No. 6715, shall remain in that unit x x x. (Emphasis
supplied) and Rule V (Representation Cases and Internal-Union Conflicts) of the Omnibus Rules, viz:

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

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

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

xxxx

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

By that provision, any questioned mingling will prevent an otherwise legitimate and duly registered labor
organization from exercising its right to file a petition for certification election.

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

"Clearly, based on this provision, a labor organization composed of both rank-and-file and supervisory employees is
no labor organization at all. It cannot, for any guise or purpose, be a legitimate labor organization. Not being one, an
organization which carries a mixture of rank-and-file and supervisory employees cannot possess any of the
rights of a legitimate labor organization, including the right to file a petition for certification election for the
purpose of collective bargaining. It becomes necessary, therefore, anterior to the granting of an order
allowing a certification election, to inquire into the composition of any labor organization whenever the
status of the labor organization is challenged on the basis of Article 245 of the Labor Code.

xxxx

In the case at bar, as respondent union's membership list contains the names of at least twenty-seven (27)
supervisory employees in Level Five positions, the union could not, prior to purging itself of its supervisory employee
members, attain the status of a legitimate labor organization. Not being one, it cannot possess the requisite
personality to file a petition for certification election." (Emphasis supplied)

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

78
It should be emphasized that the petitions for certification election involved in Toyota and Dunlop were filed on
November 26, 1992 and September 15, 1995, respectively; hence, the 1989 Rules was applied in both cases.

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

Rule XI
Certification Elections

xxxx

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

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

"Section. 1. Chartering and creation of a local/chapter.- A duly registered federation or national union may directly
create a local/chapter by submitting to the Regional Office or to the Bureau two (2) copies of the following: a) a
charter certificate issued by the federation or national union indicating the creation or establishment of the
local/chapter; (b) the names of the local/chapter's officers, their addresses, and the principal office of the
local/chapter; and (c) the local/ chapter's constitution and by-laws; provided that where the local/chapter's
constitution and by-laws is the same as that of the federation or national union, this fact shall be indicated
accordingly.

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

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

Then came Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay Highlands Employees Union-PGTWO in which the
core issue was whether mingling affects the legitimacy of a labor organization and its right to file a petition for
certification election. This time, given the altered legal milieu, the Court abandoned the view
in Toyota and Dunlopand reverted to its pronouncement in Lopez that while there is a prohibition against the
mingling of supervisory and rank-and-file employees in one labor organization, the Labor Code does not provide for
the effects thereof. Thus, the Court held that after a labor organization has been registered, it may exercise all the
rights and privileges of a legitimate labor organization. Any mingling between supervisory and rank-and-file
employees in its membership cannot affect its legitimacy for that is not among the grounds for cancellation of its
registration, unless such mingling was brought about by misrepresentation, false statement or fraud under Article
239 of the Labor Code.

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

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

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

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

79
The legal personality of petitioner union cannot be collaterally attacked by respondent company in the certification
election proceedings.

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

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

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

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

No pronouncement as to costs.

SO ORDERED.

MARIANO C. DEL CASTILLO


Associate Justice

WE CONCUR:

RENATO C. CORONA
Chief Justice
Chairperson

PRESBITERO J. VELASCO, JR. TERESITA J. LEONARDO-DE CASTRO


Associate Justice Associate Justice

JOSE PORTUGAL PEREZ


Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson's attestation, it is hereby
certified that the conclusions in the above Decision had been reached in consultation before the case was assigned
to the writer of the opinion of the Court’s Division.

RENATO C. CORONA
Chief Justice

Footnotes

1Rollo, pp. 29-36; penned by Associate Justice Estela M. Perlas-Bernabe and concurred in by Associate
Justices Elvi John S. Asuncion and Hakim S. Abdulwahid.

2 Id. at 74-75.

3 Id. at 38.

4 Id. at 214-223.

5 Id. at 215-220.

80
6 Id. at 40-50.

7 Presidential Decree No. 442, as amended.

8 Rollo, pp. 52-54.

9 Id. at 75.

10 Id. at 36.

11 335 Phil. 1045 (1997).

12 Rollo, pp. 12-13.

13 443 Phil. 841 (2003).

14 Supra note 11.

15Upon reconsideration, the DOLE noted that the other union which allegedly filed a prior petition for
certification election was prevented from doing so because its petition for certification election was filed out
of time. Thus, there was no obstacle to the conduct of a certification election in respondent company.

16"An Act Strengthening the Workers’ Constitutional Right to Self-Organization, Amending for the Purpose
Presidential Decree No. 442, as Amended, Otherwise Known as the Labor Code of the Philippines."

17Republic v. Kawashima Textile Mfg., Philippines, Inc., G.R. No. 160352, July 23, 2008, 559 SCRA
386, 396.

"An Act to Extend Protection to Labor, Strengthen the Constitutional Rights of Workers to Self-
18

Organization, Collective Bargaining and Peaceful Concerted Activities, and Foster Industrial Peace and
Harmony." Effective March 21, 1989.

19 Approved on May 24, 1989.

20 Effective: June 21, 1997.

21 Supra note 17 at 396-397.

22 504 Phil. 376 (2005).

23 Id. at 400.

24 DOLE records, p. 51.

25 Id. at 43-44.

26 Id. at 25-40.

27
Article 245. Ineligibility of Managerial Employees to Join Any Labor Organization; Right of Supervisory
Employees.— x x x Supervisory employees shall not be eligible for membership in the collective bargaining
unit of the rank-and-file employees but may join, assist or form separate collective bargaining units and/or
legitimate labor organizations of their own. x x x

28 Supra note 11.

29Respondent company claimed that the batchman, mill operator and leadman perform, among others, the
following functions:

Prepares, coordinates and supervises work schedules and activities of subordinates or helpers in
their respective area of responsibility.

1. Recommends the reduction, increase, transfer and number of employees assigned to them.

2. Sees to it that daily production schedules and outputs are carried on time.

81
3. Coordinates with their respective managers the needed raw materials and the quality of finished
products. (Rollo, p. 220)

30Article 212(m) of the Labor Code, states in part: "Supervisory employees are those who, in the interest of
the employer, effectively recommend such managerial actions if the exercise of such authority is not merely
routinary or clerical in nature but requires the use of independent judgment. x x x"

31 Supra note 17.

32 Id. at 402-407.

33 Id. at 408.

82
SECOND DIVISION

YOKOHAMA TIRE G.R. No. 163532


PHILIPPINES, INC.,
Petitioner,
Present:

CARPIO, J., Chairperson,


BRION,
- versus - DEL CASTILLO,
ABAD, and
PEREZ, JJ.
YOKOHAMA EMPLOYEES
UNION, Promulgated:
Respondent. March 10, 2010
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

RESOLUTION

CARPIO, J.:

This is a petition[1] for review on certiorari under Rule 45 of the Rules of Court. The petition
challenges the 16 January 2004 Decision[2] and 12 May 2004 Resolution[3] of the Court of Appeals
in CA-G.R. SP No. 65460. The Court of Appeals affirmed the 12 March[4] and 3 May[5] 2001
Resolutions of the Bureau of Labor Relations (BLR) in BLR-A-C-7-2-05-01, reversing the 18
December 2000 Decision[6] of the Department of Labor and Employment (DOLE) Regional Office
No. 3, San Fernando, Pampanga (Regional Office), in Case No. RO300-0001-CP-002.

Yokohama Employees Union (YEU) is the labor organization of the rank-and-file employees of
Yokohama Tire Philippines, Inc. (YTPI). YEU was registered as a legitimate labor labor union on
10 September 1999.

YEU filed before the Regional Office a petition for certification election. YTPI filed before the
Regional Office a petition[7] dated 24 January 2000 for the revocation of YEUs registration. YTPI
alleged that YEU violated Article 239(a)[8] of the Labor Code: (1) YEU fraudulently included the
signature of a certain Ronald O. Pineda (Pineda) in the organizational documents; (2) Pineda was
not aware of any election of union officers; (3) YEU fraudulently obtained the employees
signatures by making them believe that they were signing a petition for a 125% increase in the
minimum wage, not a petition for registration; (4) the employees did not belong to a single
bargaining unit; and (5) YEU fraudulently stated in its organizational meeting minutes that its
second vice president was Bernard David, not Bernardo David.
83
In its 18 December 2000 Decision, the Regional Office granted the 24 January 2000 petition. The
Regional Office held that YEU committed misrepresentation: (1) YEU failed to remove Pinedas
signature from the organizational documents despite instructions to do so; and (2) YEU declared
that it conducted an election of union officers when, in truth, it did not.
YEU appealed the 18 December 2000 Decision to the BLR. In its 12 March 2001 Resolution, the
BLR reversed the 18 December 2000 Decision. The BLR found that (1) Pineda did not approach
any officer of YEU to have his signature removed from the organizational documents; (2) Pinedas
affidavit that no election of officers took place was unreliable and inconsistent with his earlier
written statement; (3) the affidavit of a certain Rachelle Gonzales (Gonzales) that no election of
officers took place was unreliable and inconsistent with her earlier resignation letter; (4) the
affidavit of a certain Arthur Calma (Calma) did not state that no election of officers took place;
(5) at least 82 other members of YEU did not question the legality of YEUs organization; and (6)
50 YEU members executed a Sama-Samang Pahayag[9] stating that:

3. Noong ika-25 ng Hulyo 1999, kami ay dumalo sa isang pulong para sa pag-oorganisa ng aming Unyon
at pagraratipika ng Saligang Batas at Alituntunin nito. x x x

xxxx

5. Walang katotohanan ang alegasyon ng Yokohama na walang naganap na pagpupulong kaugnay ng


pag-oorganisa o pagtatayo namin ng Unyon. Nakakatuwa ring isipin ang alegasyon ng kompanya na
hindi namin lubos na naiintindihan ang aming kapasyahang magtayo at sumapi sa aming Unyon.

6. Malinaw na ginagawa ng kompanya ang lahat ng paraan upang hadlangan ang aming karapatan sa
pag-oorganisa at kilalanin bilang kinatawan ng lahat ng mga regular na manggagawa para sa sama-
samang pakikipagtawaran.

7. Sa kabila ng lahat ng ito, kami ay lubos pa ring naninindigan sa aming Unyon at patuloy na ipaglalaban
ang aming karapatan sa pag-oorganisa at sa sama-samang pakikipagtawaran;[10]

The BLR also held that (1) YTPI was estopped from questioning the fact that the Sama-Samang
Pahayag was an unsworn document since it filed the 24 January 2000 petition for the revocation
of YEUs registration based on unsworn documents; (2) the fact that there was no express
mention of an election of union officers in the Sama-Samang Pahayagdid not necessarily mean
that no election occurred; (3) there was an organizational meeting and an organizational
meeting may include an election of union officers; (4) any infirmity in the election of union
officers may be remedied under the last paragraph[11] of Article 241 of the Labor Code and under
Rule XIV of DOLE Department Order No. 9; and (5) cancellation of union registration must be
done with great caution.
84
YTPI filed before the BLR a motion[12] for reconsideration. In its 3 May 2001 Resolution, the BLR
denied the motion for lack of merit.

YTPI filed before the Court of Appeals a petition[13] for certiorari under Rule 65 of the Rules of
Court. In its 16 January 2004 Decision, the Court of Appeals denied the petition and held that
the BLR did not commit grave abuse of discretion: (1) Pinedas affidavit that no election of
officers took place was unreliable and inconsistent with his earlier written statement; (2)
Gonzales affidavit that no election of officers took place was unreliable and inconsistent with
her earlier resignation letter; (3) Calmas affidavit was unreliable because he admitted that he
stayed at the organizational meeting for only 20 minutes; (4) the affidavit of a certain Bernardino
David (David) that no election of officers took place was unreliable and inconsistent with his
earlier sinumpaang salaysay; (5) Davids affidavit was only filed before the BLR when YTPI filed
its motion for reconsideration of the BLRs 12 March 2001 Resolution; (6) Pineda did not
approach any officer of YEU to have his signature removed from the organizational documents;
(7) the Sama-Samang Pahayag was entitled to credit even if it was an unsworn document; (8)
the allegation that the signatures of a certain Denry Villanueva (Villanueva) and a certain
Apolinar Bognot (Bognot) in the Sama-Samang Pahayag were forged was only raised for the
first time before the BLR when YTPI filed its motion for reconsideration of the BLRs 12 March
2001 Resolution; (9) Villanueva and Bognot were not signatories to YEUs organizational
documents; (10) cancellation of union registration must be done with great caution; (11) YTPI,
in filing the petition for revocation of YEUs registration, had the burden of proving that YEU
committed fraud and misrepresentation; and (12) YTPI failed to prove that YEU committed fraud
and misrepresentation.

YTPI filed before the Court of Appeals a motion[14] for reconsideration. In its 12 May 2004
Resolution, the Court of Appeals denied the motion for lack of merit.

Hence, the present petition. YTPI raises as issues that (1) the Court of Appeals erred in finding
that YEU did not commit fraud or misrepresentation, and (2) the Court of Appeals erred in
holding that YTPI had the burden of proving that YEU committed fraud and misrepresentation.

The petition is unmeritorious.

The Court of Appeals found that YEU did not commit fraud or misrepresentation:

Anent whether an election of officers was conducted or not, the petitioner relied largely on
the affidavit of Pineda to substantiate its claim that no election of officers was held by the union.However,
respondent BLR Director accorded greater credence to Pinedas handwritten statement, wherein he made
references to at least 2 meetings he had attended during which he had signed the organizational
documents, than to Pinedas later affidavit, whereby he denied any knowledge of the holding of an

85
election. A perusal of the affirmative handwritten statement easily explains why the public respondent
preferred it to the negating affidavit, to wit:

Noong unang araw na pumirma ako galing ako sa graveyard. Pagkatapos yung
pangalawang meeting graveyard din ako, pinapirma ako doon sa siyam (9) na pirasong
papel noong umagang pag-uwi namin. x x x

July 25, 99 - Unang Pirmahan

July 26, 99 - Pinirmahan ko ang siyam na piraso

July 27, 99 - Pinatatanggal ko ang aking pangalan sa listahan

The petitioner also relied on the affidavit of Ma. Rachelle Gonzales attesting that there was no election
of officers, but respondent BLR Director dismissed the affidavit as nothing but the petitioners belated
attempt to establish its claim about the election being held considering that Gonzales did not even
intimate such matter in her handwritten resignation letter to YEU.

Another affidavit, that of Arthur Calma, stated that no election was held, but, again, respondent BLR
Director gave Calmas affidavit scant consideration because the affiant admittedly remainedin the YEU
office for only 20 minutes. In contrast, the public respondent accorded more weight to the sama-samang
pahayag executed by 50 YEU members who averred about the holding of an organizational meeting. The
public respondent justifiably favored the latter, deeming the meeting to include the holding of an election
of officers, for, after all, Art. 234, (b), Labor Code, does not itself distinguish between the two.

Respondent BLR Director is further assailed for not taking into consideration the affidavit asserting that
no election of officers was ever conducted, which Bernardino David, YEUs second vice president,
executed. The omission is not serious enough, however, because the affidavit was submitted only when
the petitioner moved for the reconsideration of the questioned decision, and because the affidavit was
even inconsistent with Davids earlier sinumpaang salaysay, whereby he attested to his attendance at the
organizational meeting and to his election thereat as vice president.

As to the inclusion of Pinedas signature in the organizational documents, the BLR Director correctly ruled
that evidence to prove the participation of YEU in the failure to delete Pinedas signature from the
organizational documents was wanting. It is not deniable that Pineda never approached any officer of
YEU; and that Pineda approached a certain Tonton whom he knew to be a union organizer but who was
not an officer of the union nor an employee of the company.

If the petitioner was [sic] sincere and intent on this imputed error, its effort to show so does not [sic]
appear in the record. What appears is its abject failure to establish Tontons actual identity.The petitioner
seemed content in making the insinuation in the petition for certiorari that Tonton was widely recognized
as the organizer behind the creation of YEU. That was not enough.

In sum, the BLR Director was neither capricious nor whimsical in his exercise of judgment, and, therefore,
did not commit grave abuse of discretion. For certiorari to lie, more than mere abuse of discretion is
required to be established by the petitioner. Herein, no degree of abuse of discretion was attendant.[15]

86
YTPI claims that the Court of Appeals erred in finding that YEU did not commit fraud or
misrepresentation. YTPI stated that:

There was evidence that respondent committed fraud and misrepresentation in its failure to omit the
name of Ronald Pineda prior to the filing of the respondents organizational documents with the
Department of Labor and Employment. On the other hand, the Regional Director held that there was no
election of officers that had taken place during respondents alleged organizational meeting as there
was no proof of such election.[16] (Emphasis in the original)

The Court is not convinced. A petition for review on certiorari under Rule 45 of the Rules of
Court should include only questions of law questions of fact are not reviewable. A question of
law exists when the doubt centers on what the law is on a certain set of facts, while a question
of fact exists when the doubt centers on the truth or falsity of the alleged facts. There is a
question of law if the issue raised is capable of being resolved without need of reviewing the
probative value of the evidence. Once the issue invites a review of the evidence, the question is
one of fact.[17]

Whether YEU committed fraud and misrepresentation in failing to remove Pinedas signature
from the list of employees who supported YEUs application for registration and whether YEU
conducted an election of its officers are questions of fact. They are not reviewable.

Factual findings of the Court of Appeals are binding on the Court. Absent grave abuse of
discretion, the Court will not disturb the Court of Appeals factual findings. [18] In Encarnacion v.
Court of Appeals,[19] the Court held that, unless there is a clearly grave or whimsical abuse on its
part, findings of fact of the appellate court will not be disturbed.The Supreme Court will only
exercise its power of review in known exceptions such as gross misappreciation of evidence or
a total void of evidence. YTPI failed to show that the Court of Appeals gravely abused its
discretion.

The Court of Appeals held that YTPI had the burden of proving that YEU committed fraud and
misrepresentation:

The cancellation of union registration at the employers instance, while permitted, must be approached
with caution and strict scrutiny in order that the right to belong to a legitimate labor organization and to
enjoy the privileges appurtenant to such membership will not be denied to the employees. As the
applicant for cancellation, the petitioner naturally had the burden to present proof sufficient to warrant
the cancellation. The petitioner was thus expected to satisfactorily establish that YEU committed
misrepresentations, false statements or fraud in connection with the election of its officers, or with the
minutes of the election of officers, or in the list of votes, as expressly required in Art. 239, (c), Labor
Code. But, as the respondent BLR Director has found and determined, and We fully agree with him, the
petitioner simply failed to discharge its burden.[20]

87
YTPI claims that the Court of Appeals erred in holding that YTPI had the burden of proving that
YEU committed fraud and misrepresentation. YTPI stated that:

5.5 In the Decision dated 16 January 2004, the Honorable Court of Appeals upheld the BLR
Directors ruling that the petitioner had the burden of proving that subject election of officers never took
place.

5.6 However, the petitioner does not have the burden of proof vis--vis whether or not the
said elections took place. The respondent has the burden of proof in showing that an election of officers
took place.[21] (Emphasis in the original)

The Court is not convinced. YTPI, being the one which filed the petition for the revocation of
YEUs registration, had the burden of proving that YEU committed fraud and
misrepresentation. YTPI had the burden of proving the truthfulness of its accusations that YEU
fraudulently failed to remove Pinedas signature from the organizational documents and that
YEU fraudulently misrepresented that it conducted an election of officers.

In Heritage Hotel Manila v. Pinag-Isang Galing at Lakas ng mga Manggagawa sa Heritage


Manila,[22] the employer filed a petition to revoke the registration of its rank-and-file employees
union, accusing it of committing fraud and misrepresentation. The Court held that the petition
was rightfully denied because the employer failed to prove that the labor union committed
fraud and misrepresentation. The Court held that:

Did respondent PIGLAS union commit fraud and misrepresentation in its application
for union registration? We agree with the DOLE-NCR and the BLR that it did not. Except for the evident
discrepancies as to the number of union members involved as these appeared on the documents that
supported the unions application for registration, petitioner company has no other evidence of the
alleged misrepresentation. But those discrepancies alone cannot be taken as an indication that
respondent misrepresented the information contained in these documents.

The charge that a labor organization committed fraud and misrepresentation in securing its registration
is a serious charge and deserves close scrutiny. It is serious because once such charge is proved,
the labor union acquires none of the rights accorded to registered organizations. Consequently, charges
of this nature should be clearly established by evidence and the surrounding
circumstances.[23] (Emphasis supplied)

WHEREFORE, we DENY the petition. We AFFIRM the 16 January 2004 Decision and 12 May
2004 Resolution of the Court of Appeals in CA-G.R. SP No. 65460.
88
SO ORDERED.

ANTONIO T. CARPIO

Associate Justice

WE CONCUR:

ARTURO D. BRION
Associate Justice

MARIANO C. DEL CASTILLO ROBERTO A. ABAD


Associate Justice Associate Justice

JOSE PORTUGAL PEREZ


Associate Justice

ATTESTATION
I attest that the conclusions in the above Resolution had been reached in consultation before
the case was assigned to the writer of the opinion of the Courts Division.

89
ANTONIO T. CARPIO
Associate Justice
Chairperson

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons
Attestation, I certify that the conclusions in the above Resolution had been reached in
consultation before the case was assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO
Chief Justice

[1]
Rollo, pp. 9-31.
[2]
Id. at 38-46. Penned by Associate Justice Lucas P. Bersamin, with Associate Justices Renato C. Dacudao and Elvi John S. Asuncion
concurring.
[3]
Id. at 48.
[4]
Id. at 139-149. Penned by Director IV Hans Leo J. Cacdac.
[5]
Id. at 150-153.
[6]
Id. at 131-138. Penned by Regional Director Ana C. Dione.
[7]
Id. at 92-98.
[8]
Article 239(a) of the Labor Code provides:

ART. 239. Grounds for cancellation of union registration. The following shall constitute grounds for cancellation of union
registration:
(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or
amendments thereto, the minutes of ratification, and the list of members who took part in the ratification.
[9]
Rollo, pp. 120-130.
[10]
Id. at 120.
[11]
The last paragraph of Article 241 of the Labor Code provides that:

Any violation of the above rights and conditions of membership shall be a ground for cancellation of union registration or
expulsion of officer from office, whichever is appropriate. At least thirty percent (30%) of all the members of a union or any
member or members specially concerned may report such violation to the Bureau. The Bureau shall have the power to hear and
decide any reported violation to mete the appropriate penalty.
[12]
Rollo, pp. 154-174.
[13]
Id. at 49-85.
[14]
Id. at 180-195.
[15]
Id. at 42-44.
[16]
Id. at 17-18.
[17]
Pagsibigan v. People, G.R. No. 163868, 4 June 2009, 588 SCRA 249, 256.
[18]
Encarnacion v. Court of Appeals, G.R. No. 101292, 8 June 1993, 223 SCRA 279, 282.
[19]
Id. at 284.
[20]
Rollo, p. 45.
[21]
Id. at 19.
[22]
G.R. No. 177024, 30 October 2009.
[23]
Id.

90
THIRD DIVISION

G.R. No. 196276, June 04, 2014

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.4 cra lawred

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.7 cralawre d

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:ChanRobles Virtualawl ibra ry

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: ChanRobles Virtualawl ibra ry

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.

91
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: ChanRob l esVi rtua lawlib rary

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: ChanRobles Vi rtua lawlib rary

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.”19 cralaw red

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
92
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: ChanRob les Vi rtualaw lib rary

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: ChanRobles Vi rtualaw lib rary

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.22 cra lawred

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.

93
In Mariwasa Siam Ceramics v. Secretary of the Department of Labor and Employment,24 we said: ChanRobles Vi rtualawl ib rary

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.

Endnotes:

*
Designated Acting Member, per Special Order No. 1691, dated May 22, 2014.

1
Penned by Associate Justice Florito S. Macalino, with Associate Justices Juan Q. Enriquez, Jr and Ramon M. Bato, Jr.,
concurring; rollo, pp. 328-336.

2
Id. at 375-376.

3
Id. at 48-67.

4
Annex “D,” Reply to Comment, id. at 73-83.

5
Docketed as RO400-A- 0905- LAG -RU -004

Rollo, pp. 68-72.


6

7
Id. at 84-89.

8
Id. at 90-98; Docketed as RO400-A-0904-RFO-AU-001.

9
Id. at 98.

10
Id. at 99-107.

11
Id. at 108-119.

12
Id. at 120-186.

13
Id. at 187-189.

14
Id. at 191-196; Per Director IV Rebecca C. Chato; Docketed as BLR-A-C-43-10-1-09.

15
Id. at 196. (Emphasis in the original)

16
Id. at 233-234.

17
Id. at 17-18.

18
Id. at 333.

19
Tamondong v. Court of Appeals, 486 Phil. 729, 741 (2004).

20
380 Phil. 364 (2000).

San Miguel Corporation Employees Union-Phil. Transport and General Workers Org. v. San Miguel Packaging Products
21

Employees Union-Pambansang Diwa ng Manggagawang Pilipino, 559 Phil. 549, 566-567 (2007).

Mariwasa Siam Ceramics, Inc. v. Secretary of the Department of Labor and Employment, G.R. No. 183317, December 21,
22

2009, 608 SCRA 706, 716 (2009).

94
23
P.T. Cerna Corporation v. Court of Appeals, G.R. No. 91622, April 6, 1993, 221 SCRA 19, 25.

24
Supra note 22.

25
Id. at 715-716.

95
FIRST DIVISION

CATHAY PACIFIC STEEL G.R. No. 164561


CORPORATION, BENJAMIN CHUA
JR., VIRGILIO AGERO, and Present:
LEONARDO VISORRO, JR.,
Petitioners, PANGANIBAN, C.J.
Chairperson,
YNARES-SANTIAGO,
AUSTRIA-MARTINEZ,
- versus - CALLEJO, SR., and
CHICO-NAZARIO, JJ.

HON. COURT OF APPEALS,


CAPASCO UNION OF Promulgated:
SUPERVISORY EMPLOYEES (CUSE)
and ENRIQUE TAMONDONG III,
Respondents.
August 30, 2006
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CHICO-NAZARIO, J.:

This is a special civil action for Certiorari under Rule 65 of the Rules of Court seeking to annul
and set aside, on the ground of grave abuse of discretion amounting to lack or excess of
jurisdiction, (1) the Decision[1] of the Court of Appeals in CA-G.R. SP No. 57179 dated 28 October
2003 which annulled the Decision[2] of the National Labor Relations Commission (NLRC) in NLRC
Case No. 017822-99 dated 25 August 1999, thereby, reinstating the Decision[3] of Acting
Executive Labor Arbiter Pedro C. Ramos dated 7 August 1998; and (2) the Resolution[4] of the
same court, dated 3 June 2004, which denied the petitioners Motion for Reconsideration.
Herein petitioners are Cathay Pacific Steel Corporation (CAPASCO), a domestic corporation
engaged in the business of manufacturing steel products; Benjamin Chua, Jr. (now deceased),
the former CAPASCO President; Virgilio Agerro, CAPASCOs Vice-President; and
96
Leonardo Visorro, Jr., CAPASCOs Administrative-Personnel Manager. Herein private
respondents are Enrique Tamondong III, the Personnel Superintendent of CAPASCO who was
previously assigned at the petitioners Cainta Plant, and CAPASCO Union of Supervisory
Employees (CUSE), a duly registered union of CAPASCO.

The facts of the case are as follows:


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

Petitioner CAPASCO, hired private respondent Tamondong as Assistant to the Personnel


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

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

In contrast, petitioner CAPASCO contended that by virtue of private


respondent Tamondongs position as Personnel Superintendent and the functions actually
97
performed by him in the company, he was considered as a managerial employee, thus, under
the law he was prohibited from joining a union as well as from being elected as one of its
officers.Accordingly, petitioners maintained their argument that the dismissal of private
respondent Tamondong was perfectly valid based on loss of trust and confidence because of
the latters active participation in the affairs of the union.

On 7 August 1998, Acting Executive Labor Arbiter Pedro C. Ramos rendered a Decision in favor
of private respondent Tamondong, decreeing as follows:

WHEREFORE, premises considered, judgment is hereby rendered finding [petitioner CAPASCO] guilty of
unfair labor practice and illegal dismissal. Concomitantly, [petitioner CAPASCO] is hereby ordered:

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

2. To reinstate [private respondent Tamondong] to his former position without loss of seniority
rights and other privileges and his full backwages inclusive of allowances, and to his other
benefits or their monetary equivalent, computed from the time his compensation was
withheld from him up to the time of his actual reinstatement, and herein partially computed
as follows:

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

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

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

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

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

Aggrieved, petitioners appealed the afore-quoted Decision to the NLRC. On 25 August 1999, the
NLRC rendered its Decision modifying the Decision of the Acting Executive Labor Arbiter Pedro
C. Ramos, thus:

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

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


respondent Tamondong] for utter lack of merit;

b) Dismissing the Complaint for Unfair Labor Practice for lack of factual basis;

c) Deleting the awards to [private respondent Tamondong] of backwages, moral and


exemplary damages, and attorneys fees;

98
d) Affirming the awards to [private respondent Tamondong], representing 13th month
pay for 1997 and 1998, holiday pay for 12 days, and service incentive leave for 1997
totaling P26,418.00; and

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


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

Petitioners filed a Motion for Clarification and Partial Reconsideration, while, private
respondent Tamondong filed a Motion for Reconsideration of the said NLRC Decision, but the
NLRC affirmed its original Decision in its Resolution[13] dated 25 November 1999.

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

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

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

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

In the Memorandum[15] filed by petitioners, they aver that private respondent Tamondong as
Personnel Superintendent of CAPASCO was performing functions of a managerial employee
because he was the one laying down major management policies on personnel relations such
as: issuing memos on company rules and regulations, imposing disciplinary sanctions such as
warnings and suspensions, and executing the same with full power and discretion. They claim
that no further approval or review is necessary for private respondent Tamondong to execute
these functions, and the notations NOTED BY of petitioner Agerro, the Vice-President of
petitioner CAPASCO, on the aforesaid memos are nothing but mere notice that petitioner
Agerro was aware of such company actions performed by private
respondent Tamondong. Additionally, private respondent Tamondong was not only a

99
managerial employee but also a confidential employee having knowledge of confidential
information involving company policies on personnel relations. Hence, the Court of Appeals
acted with grave abuse of discretion amounting to lack or excess of jurisdiction when it held that
private respondent Tamondong was not a managerial employee but a mere supervisory
employee, therefore, making him eligible to participate in the union activities of private
respondent CUSE.

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

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

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

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

The special civil action for Certiorari is intended for the correction of errors of jurisdiction only
or grave abuse of discretion amounting to lack or excess of jurisdiction. Its principal office is only
to keep the inferior court within the parameters of its jurisdiction or to prevent it from
committing such a grave abuse of discretion amounting to lack or excess of jurisdiction.[16]

The essential requisites for a Petition for Certiorari under Rule 65 are: (1) the writ is directed
against a tribunal, a board, or an officer exercising judicial or quasi-judicial function; (2) such
100
tribunal, board, or officer has acted without or in excess of jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain,
speedy, and adequate remedy in the ordinary course of law.[17] Excess of jurisdiction as
distinguished from absence of jurisdiction means that an act, though within the general power
of a tribunal, board or officer is not authorized, and invalid with respect to the particular
proceeding, because the conditions which alone authorize the exercise of the general power in
respect of it are wanting.[18] Without jurisdiction means lack or want of legal power, right or
authority to hear and determine a cause or causes, considered either in general or with
reference to a particular matter. It means lack of power to exercise authority.[19] Grave abuse of
discretion implies such capricious and whimsical exercise of judgment as is equivalent to lack of
jurisdiction or, in other words, where the power is exercised in an arbitrary manner by reason
of passion, prejudice, or personal hostility, and it must be so patent or gross as to amount to an
evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in
contemplation of law.[20]

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

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

In the case at bar, petitioners received on 9 June 2004 the Resolution of the Court of Appeals
dated 3 June 2004 denying their Motion for Reconsideration. Upon receipt of the said
Resolution, they had 15 days or until 24 June 2004 within which to file an appeal by way of
Petition for Review under Rule 45, but instead of doing so, they just allowed the 15 day period
to lapse, and then on the 61st day from receipt of the Resolution denying their Motion for
Reconsideration, they filed this Petition for Certiorari under Rule 65 alleging grave abuse of
discretion on the part of the appellate court. Admittedly, this Court, in accordance with the
liberal spirit pervading the Rules of Court and in the interest of justice, has the discretion to treat

101
a Petition for Certiorari as a Petition for Review on Certiorari under Rule 45, especially if
filed within the reglementary period for filing a Petition for Review.[24] However, in the present
case, this Court finds no compelling reason to justify a liberal application of the rules, as this
Court did in the case of DelsanTransport Lines, Inc. v. Court of Appeals.[25] In the said case, this
Court treated the Petition for Certiorari filed by the petitioner therein as having been filed under
Rule 45 because said Petition was filed within the 15-day reglementary period for filing a Petition
for Review on Certiorari. Petitioners counsel therein received the Court of Appeals Resolution
denying their Motion for Reconsideration on 26 October 1993 and filed the Petition
for Certiorari on 8 November 1993, which was within the 15-day reglementary period for filing
a Petition for Review on Certiorari. It cannot therefore be claimed that the Petition was used, as
a substitute for appeal after that remedy has been lost through the fault of the
petitioner.[26] Conversely, such was not the situation in the present case. Hence, this Court finds
no reason to justify a liberal application of the rules.
Accordingly, where the issue or question involves or affects the wisdom or legal soundness of
the decision, and not the jurisdiction of the court to render said decision, the same is beyond
the province of a petition for certiorari.[27] It is obvious in this case that the arguments raised by
the petitioners delved into the wisdom or legal soundness of the Decision of the Court of
Appeals, therefore, the proper remedy is a Petition for Review on Certiorari under Rule
45. Consequently, it is incumbent upon this Court to dismiss this Petition.

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

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

[Private respondent] Tamondong may have possessed enormous powers and was performing important
functions that goes with the position of Personnel Superintendent, nevertheless, there was no clear
showing that he is at liberty, by using his own discretion and disposition, to lay down and execute major
business and operational policies for and in behalf of CAPASCO. [Petitioner] CAPASCO miserably failed to
establish that [private respondent] Tamondong was authorized to act in the interest of the company using
his independent judgment. x x x. Withal, [private respondent] Tamondong may have been exercising

102
certain important powers, such as control and supervision over erring rank-and-file employees, however,
x x x he does not possess the power to hire, transfer, terminate, or discipline erring employees of the
company. At the most, the record merely showed that [private respondent] Tamondong informed and
warned rank-and-file employees with respect to their violations of CAPASCOs rules and regulations.
x x x. [Also, the functions performed by private respondent such as] issuance of warning[31] to employees
with irregular attendance and unauthorized leave of absences and requiring employees to explain
regarding charges of abandonment of work, are normally performed by a mere supervisor, and not by a
manager.[32]

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


employees from managerial employees, to wit: supervisory employees are those who, in the
interest of the employer, effectively recommend such managerial actions, if the exercise of such
authority is not merely routinary or clerical in nature but requires the use of independent
judgment; whereas, managerial employees are those who are vested with powers or
prerogatives to lay down and execute management policies and/or hire, transfer, suspend, lay
off, recall, discharge, assign or discipline employees. Thus, from the foregoing provision of the
Labor Code, it can be clearly inferred that private respondent Tamondong was just a supervisory
employee. Private respondent Tamondong did not perform any of the functions of a managerial
employee as stated in the definition given to it by the Code. Hence, the Labor Code[33] provisions
regarding disqualification of a managerial employee from joining, assisting or forming any labor
organization does not apply to herein private respondent Tamondong. Being a supervisory
employee of CAPASCO, he cannot be prohibited from joining or participating in the union
activities of private respondent CUSE, and in making such a conclusion, the Court of Appeals did
not act whimsically, capriciously or in a despotic manner, rather, it was guided by the evidence
submitted before it. Thus, given the foregoing findings of the Court of Appeals that private
respondent is a supervisory employee, it is indeed an unfair labor practice[34] on the part of
petitioner CAPASCO to dismiss him on account of his union activities, thereby curtailing his
constitutionally guaranteed right to self-organization.[35]
With regard to the allegation that private respondent Tamondong was not only a managerial
employee but also a confidential employee, the same cannot be validly raised in this Petition
for Certiorari. It is settled that an issue which was not raised in the trial court cannot be raised
for the first time on appeal. This principle applies to a special civil action for certiorari under Rule
65.[36] In addition, petitioners failed to adduced evidence which will prove that, indeed, private
respondent was also a confidential employee.

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

SO ORDERED.

103
MINITA V. CHICO-NAZARIO
Associate Justice

WE CONCUR:

ARTEMIO V. PANGANIBAN
Chief Justice
Chairperson

CONSUELO YNARES-SANTIAGO MA. ALICIA AUSTRIA-MARTINEZ


Associate Justice Associate Justice

ROMEO J. CALLEJO, SR.


Associate Justice

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions
in the above Decision were reached in consultation before the case was assigned to the writer
of the opinion of the Courts Division.

104
ARTEMIO V. PANGANIBAN
Chief Justice

[1]
Penned by Associate Justice Rosmari D. Carandang with Associate Justices Mercedes Gozo- Dadole and Juan Q. Enriquez, Jr.,
concurring; rollo, pp. 27-35.
[2]
Penned by Commissioner Ireneo B. Bernardo with Presiding Commissioner Lourdes C. Javier and Commissioner Tito F. Genilo,
concurring; id. at 151-161.
[3]
Penned by Acting Executive Labor Arbiter Pedro C. Ramos, id. at 128-150.
[4]
Id. at 36-37.
[5]
Id. at 50.
[6]
Id. at 51.
[7]
Id. at 52.
[8]
Id. at 73.
[9]
Id. at 74-75.
[10]
Id. at 94-95.
[11]
Id. at 149-150.
[12]
Id. at 160-161.
[13]
Id. at 163-164.
[14]
Id. at 34.
[15]
Id. at 241-260.
[16]
People v. Court of Appeals, G.R. No. 142051, 24 February 2004, 423 SCRA 605, 612.
[17]
Rivera v. Espiritu, 425 Phil. 169, 179-180 (2002).
[18]
Land Bank of the Philippines v. Court of Appeals, 456 Phil. 755, 785 (2003).
[19]
Id.
[20]
Id. at 481.
[21]
Id. at 480.
[22]
Land Bank of the Philippines v. Continental Watchman Agency Incorporated, G.R. No. 136114, 22 January 2004, 420 SCRA 624,
630.
[23]
Land Bank of the Philippines v. Court of Appeals, supra note 21.
[24]
Land Bank of the Philippines v. Continental Watchman Agency Incorporated, supra note 22.
[25]
335 Phil. 1066 (1997).
[26]
Id.
[27]
A.F. Sanchez Brokerage, Inc. v. Court of Appeals, G.R. No. 147079, 21 December 2004, 447 SCRA 427, 436, citing Land Bank of
the Philippines v. Court of Appeals, supra note 18 at 482.
[28]
Rollo, p. 103.
[29]
218 Phil. 719, 726 (1984).
[30]
Among the characteristics of the managerial rank are: (1) he is not subject to the rigid observance of regular office hours; (2) his
work requires the consistent exercise of discretion and judgment in its performance; (3) the output produced or the result accomplished
cannot be standardized in relation to a given period of time; (4) he manages a customarily recognized department or subdivision of the
establishment, customarily and regularly directing the work of other employees therein; (5) he either has the authority to hire or discharge
other employees or his suggestions and recommendations as to hiring and discharging, advancement and promotion or other change
of status of other employees are given particular weight; and (6) as a rule, he is not paid hourly wages nor subjected to maximum hours
of work.
[31]
Rollo, pp. 97-99; p. 102.
[32]
Id. at 32-33.
[33]
Article 245. Ineligibility of Managerial Employees to join any labor organization; Right of Supervisory Employees. Managerial
employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in
a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own.
[34]
Aricle 248(a) of the Labor Code as amended.
[35]
Article 13, Section 3 of the 1987 Philippine Constitution.
[36]
Buag v. Court of Appeals, 363 Phil. 216 (1999).

105
SECOND DIVISION

[G.R. No. 102084. August 12, 1998]

DE LA SALLE UNIVERSITY MEDICAL CENTER AND COLLEGE OF


MEDICINE, petitioner, vs. HON. BIENVENIDO E. LAGUESMA,
Undersecretary of Labor and Employment; ROLANDO S. DE LA CRUZ, Med-
Arbiter Regional Office No. IV, DE LA SALLE UNIVERSITY MEDICAL CENTER
AND COLLEGE OF MEDICINE SUPERVISORY UNION-FEDERATION OF
FREE WORKERS, respondents.

DECISION
MENDOZA, J.:

Petitioner De La Salle University Medical Center and College of Medicine (DLSUMCCM) is a


hospital and medical school at Dasmarias, Cavite. Private respondent Federation of Free WorkersDe
La Salle University Medical Center and College of Medicine Supervisory Union Chapter (FFW-
DLSUMCCMSUC), on the other hand, is a labor organization composed of the supervisory employees
of petitioner DLSUMCCM.
On April 17, 1991, the Federation of Free Workers (FFW), a national federation of labor unions,
issued a certificate to private respondent FFW-DLSUMCCMSUC recognizing it as a local chapter. On
the same day, it filed on behalf of private respondent FFW-DLSUMCCMSUC a petition for certification
election among the supervisory employees of petitioner DLSUMCCM. Its petition was opposed by
petitioner DLSUMCCM on the grounds that several employees who signed the petition for certification
election were managerial employees and that the FFW-DLSUMCCMSUC was composed of both
supervisory and rank-and-file employees in the company.[1]
In its reply dated May 22, 1991, private respondent FFW-DLSUMCCMSUC denied petitioners
allegations. It contended that
2. Herein petition seeks for the holding of a certification election among the supervisory employees
of herein respondent. It does not intend to include managerial employees.

....

6. It is not true that supervisory employees are joining the rank-and-file employees
union. While it is true that both regular rank-and-file employees and supervisory
employees of herein respondent have affiliated with FFW, yet there are two separate
unions organized by FFW. The supervisory employees have a separate charter certificate
issued by FFW.[2]

On July 5, 1991, respondent Rolando S. de la Cruz, med-arbiter of the Department of Labor and
Employment Regional Office No. IV, issued an order granting respondent unions petition for certification
election. He said:

. . . . [petitioner] . . . claims that based on the job descriptions which will be presented at
the hearing, the covered employees who are considered managers occupy the positions
of purchasing officers, personnel officers, property officers, cashiers, heads of various
sections and the like.

[Petitioner] also argues that assuming that some of the employees concerned are not
managerial but mere supervisory employees, the Federation of Free Workers (FFW)
cannot extend a charter certificate to this group of employees without violating the express
provision of Article 245 which provides that supervisory employees shall not be eligible for
106
membership in a labor organization of the rank-and-file employees but may join, assist or
form separate labor organizations of their own because the FFW had similarly issued a
charter certificate to its rank-and-file employees.

....

In its position paper, [petitioner] stated that most, if not all, of the employees listed in . . .
the petition are considered managerial employees, thereby admitting that it has
supervisory employees who are undoubtedly qualified to join or form a labor organization
of their own. The record likewise shows that [petitioner] promised to present the job
descriptions of the concerned employees during the hearing but failed to do so. Thus, this
office has no basis in determining at this point in time who among them are considered
managerial or supervisory employees. At any rate, there is now no question that
[petitioner] has in its employ supervisory employees who are qualified to join or form a
labor union. Consequently, this office is left with no alternative but to order the holding of
certification election pursuant to Article 257 of the Labor Code, as amended, which
mandates the holding of certification election if a petition is filed by a legitimate labor
organization involving an unorganized establishment, as in the case of herein respondent.

As to the allegation of [petitioner] that the act of the supervisory employees in affiliating
with FFW to whom the rank-and-file employees are also affiliated is violative of Article 245
of the Labor Code, suffice it to state that the two groups are considered separate
bargaining units and local chapters of FFW. They are, for all intents and purposes,
separate with each other and their affiliation with FFW would not make them members of
the same labor union. This must be the case because it is settled that the locals are
considered the basic unit or principal with the labor federation assuming the role of an
agent. The mere fact, therefore, that they are represented by or under the same agent is
of no moment. They are still considered separate with each other.[3]

On July 30, 1991, petitioner DLSUMCCM appealed to the Secretary of Labor and Employment,
citing substantially the same arguments it had raised before the med-arbiter. However, its appeal was
dismissed. In his resolution, dated August 30, 1991, respondent Undersecretary of Labor and
Employment Bienvenido E. Laguesma found the evidence presented by petitioner DLSUMCCM
concerning the alleged managerial status of several employees to be insufficient. He also held that,
following the ruling of this Court in Adamson & Adamson, Inc. v. CIR,[4] unions formed independently
by supervisory and rank-and-file employees of a company may legally affiliate with the same national
federation.
Petitioner moved for a reconsideration but its motion was denied. In his order dated September 19,
1991, respondent Laguesma stated:

We reviewed the records once more, and find that the issues and arguments adduced by
movant have been squarely passed upon in the Resolution sought to be
reconsidered.Accordingly, we find no legal justification to alter, much less set aside, the
aforesaid resolution. Perforce, the motion for reconsideration must fail.

WHEREFORE, the instant motion for reconsideration is hereby denied for lack of merit
and the resolution of this office dated 30 August 1991 STANDS.

No further motions of a similar nature shall hereinafter be entertained.[5]

Hence, this petition for certiorari.


Petitioner DLSUMCCM contends that respondent Laguesma gravely abused his discretion. While
it does not anymore insist that several of those who joined the petition for certification election are
holding managerial positions in the company, petitioner nonetheless pursues the question whether

107
unions formed independently by supervisory and rank-and-file employees of a company may validly
affiliate with the same national federation. With respect to this question, it argues:

THE PUBLIC RESPONDENT, HONORABLE BIENVENIDO E. LAGUESMA,


UNDERSECRETARY OF LABOR AND EMPLOYMENT, IN A CAPRICIOUS, ARBITRARY AND
WHIMSICAL EXERCISE OF POWER ERRED AND COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO ACTING WITHOUT OR IN EXCESS OF JURISDICTION WHEN
HE DENIED THE PETITIONERS APPEAL AND ORDERED THE HOLDING OF A
CERTIFICATION ELECTION AMONG THE MEMBERS OF THE SUPERVISORY UNION
EMPLOYED IN PETITIONERS COMPANY DESPITE THE FACT THAT SAID SUPERVISORY
UNION WAS AFFILIATED WITH THE FEDERATION OF FREE WORKERS TO WHICH THE
RANK-AND-FILE EMPLOYEES OF THE SAME COMPANY ARE LIKEWISE AFFILIATED,
CONTRARY TO THE EXPRESS PROVISIONS OF ARTICLE 245 OF THE LABOR CODE, AS
AMENDED.[6]

The contention has no merit.


Supervisory employees have the right to self-organization as do other classes of employees save
only managerial ones. The Constitution states that the right of the people, including those employed in
the public and private sectors, to form unions, associations or societies for purposes not contrary to
law, shall not be abridged.[7] As we recently held in UnitedPepsi-Cola Supervisory Union v.
Laguesma,[8] the framers of the Constitution intended, by this provision, to restore the right of
supervisory employees to self-organization which had been withdrawn from them during the period of
martial law. Thus:

Commissioner Lerum sought to amend the draft of what was later to become Art. III, 8 of
the present Constitution:

....

MR. LERUM. . . . Also, we have unions of supervisory employees and of security


guards. But what is tragic about this is that after the 1973 Constitution was approved and
in spite of an express recognition of the right to organize in P.D. No. 442, known as the
Labor Code, the right of government workers, supervisory employees and security guards
to form unions was abolished.

....

We are afraid that without any corresponding provision covering the private sector, the
security guards, the supervisory employees ... will still be excluded and that is the purpose
of this amendment.

....

In sum, Lerums proposal to amend Art. III, 8 of the draft Constitution by including labor
unions in the guarantee of organizational right should be taken in the context of
statements that his aim was the removal of the statutory ban against security guards and
supervisory employees joining labor organizations. The approval by the Constitutional
Commission of his proposal can only mean, therefore, that the Commission intended the
absolute right to organize of government workers, supervisory employees, and security
guards to be constitutionally guaranteed.[9]

Conformably with the constitutional mandate, Art. 245 of the Labor Code now provides for the right
of supervisory employees to self-organization, subject to the limitation that they cannot join an
organization of rank-and-file employees:

108
Supervisory employees shall not be eligible for membership in a labor organization of the
rank-and-file employees but may join, assist or form separate labor organizations of their
own.

The reason for the segregation of supervisory and rank-and-file employees of a company with
respect to the exercise of the right to self-organization is the difference in their interests.Supervisory
employees are more closely identified with the employer than with the rank-and-file employees. If
supervisory and rank-and-file employees in a company are allowed to form a single union, the
conflicting interests of these groups impair their relationship and adversely affect discipline, collective
bargaining, and strikes.[10] These consequences can obtain not only in cases where supervisory and
rank-and-file employees in the same company belong to a single union but also where unions formed
independently by supervisory and rank-andfile employees of a company are allowed to affiliate with the
same national federation. Consequently, this Court has held in Atlas Lithographic Services Inc. v.
Laguesma[11] that -

To avoid a situation where supervisors would merge with the rank-and-file or where the
supervisors labor organization would represent conflicting interests, then a local
supervisors union should not be allowed to affiliate with a national federation of unions of
rank-and-file employees where that federation actively participates in union activities in the
company.

As we explained in that case, however, such a situation would obtain only where two conditions
concur: First, the rank-and-file employees are directly under the authority of supervisory
employees.[12] Second, the national federation is actively involved in union activities in the
company.[13] Indeed, it is the presence of these two conditions which distinguished Atlas Lithographic
Services, Inc. v. Laguesma from Adamson & Adamson, Inc. v. CIR[14] where a different conclusion was
reached.
The affiliation of two local unions in a company with the same national federation is not by itself a
negation of their independence since in relation to the employer, the local unions are considered as the
principals, while the federation is deemed to be merely their agent. This conclusion is in accord with
the policy that any limitation on the exercise by employees of the right to self-organization guaranteed
in the Constitution must be construed strictly. Workers should be allowed the practice of this freedom
to the extent recognized in the fundamental law. As held in Liberty Cotton Mills Workers Union v. Liberty
Cotton Mills, Inc.:[15]

The locals are separate and distinct units primarily designed to secure and maintain an equality of
bargaining power between the employer and their employee members in the economic struggle for
the fruits of the joint productive effort of labor and capital; and the association of locals into the
national unionwas in furtherance of the same end. These associations are consensual entities
capable of entering into such legal relations with their members. The essential purpose was the
affiliation of the local unions into a common enterprise to increase by collective action the common
bargaining power in respect of the terms and conditions of labor. Yet the locals remained the basic
units of association, free to serve their own and the common interest of all, and free also to renounce
the affiliation for mutual welfare upon the terms laid down in the agreement which brought it to
existence.[16]

The questions in this case, therefore, are whether the rank-and-file employees of petitioner
DLSUMCCM who compose a labor union are directly under the supervisory employees whose own
union is affiliated with the same national federation (Federation of Free Workers) and whether such
national federation is actively involved in union activities in the company so as to make the two unions
in the same company, in reality, just one union.
Although private respondent FFW-DLSUMCCMSUC and another union composed of rank-and-file
employees of petitioner DLSUMCCM are indeed affiliated with the same national federation, the FFW,
petitioner DLSUMCCM has not presented any evidence showing that the rank-and-file employees
composing the other union are directly under the authority of the supervisory employees. As held
in Adamson & Adamson, Inc. v. CIR,[17] the fact that the two groups of workers are employed by the
same company and the fact that they are affiliated with a common national federation are not sufficient

109
to justify the conclusion that their organizations are actually just one. Their immediate professional
relationship must be established. To borrow the language of Adamson & Adamson, Inc. v. CIR:[18]

We find without merit the contention of petitioner that if affiliation will be allowed, only one
union will in fact represent both supervisors and rank-and-file employees of the petitioner;
that there would be an indirect affiliation of supervisors and rank-andfile employees with
one labor organization; that there would be a merging of the two bargaining units; and that
the respondent union will lose its independence because it becomes an alter ego of the
federation.[19]

Mention has already been made of the fact that the petition for certification election in this case
was filed by the FFW on behalf of the local union. This circumstance, while showing active involvement
by the FFW in union activities at the company, is by itself insufficient to justify a finding of violation of
Art. 245 since there is no proof that the supervisors who compose the local union have direct authority
over the rank-and-file employees composing the other local union which is also affiliated with the
FFW. This fact differentiates the case from Atlas Lithographic Services, Inc. v. Laguesma,[20] in which,
in addition to the fact that the petition for certification election had been filed by the national federation,
it was shown that the rank-and-file employees were directly under the supervisors organized by the
same federation.
It follows that respondent labor officials did not gravely abuse their discretion.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.
Regalado (Chairman), Melo, and Martinez, JJ., concur.
Puno- no part.

[1] Rollo, p. 30.


[2] Id., pp. 38-39.
[3]Id., pp. 41-45.
[4]127 SCRA 268 (1984).
[5]Id., pp. 17-18.
[6]Id., p. 8.
[7]Art. III, 8.
[8]G.R. No. 122226, 25 March 1998.
[9]Id., at 21-25.
[10]Atlas Lithographic Services Inc. v. Laguesma, 205 SCRA 12 (1992).
[11]Ibid.
[12]Id., at 18.
[13]Id., at 19.
[14]See note 4, supra.
[15]66 SCRA 512 (1975).
[16]Id., at 519.
[17]See note 4, supra.
[18]Ibid.
[19]Id., at 273.
[20]See note 10, supra.

110
THIRD DIVISION

[G.R. No. 96663. August 10, 1999.]

PEPSI-COLA PRODUCTS PHILIPPINES, INC., Petitioner, v. HONORABLE SECRETARY OF LABOR, MED-ARBITER


NAPOLEON V. FERNANDO & PEPSI-COLA SUPERVISORY EMPLOYEES ORGANIZATION - UOEF, Respondents.

[G.R. No. 103300. August 10, 1999.]

PEPSI COLA PRODUCTS PHILIPPINES, Petitioner, v. OFFICE OF THE SECRETARY DEPARTMENT OF LABOR AND
HON. CELENIO N. DAING, in his capacity as Med-Arbiter Labor Regional Office No. X, Cagayan de Oro City,
CAGAYAN DE ORO PEPSI COLA SUPERVISORS UNION (UOEF), Respondents.

DECISION

PURISIMA, J.:

These are petitions for certiorari relating to three (3) cases filed with the Med-Arbiter, to wit: MED ARB ROX Case No. R100-
9101-RU-002 for Certification Election filed by Pepsi Cola Supervisors Union-UOEF (Union), MED ARB Case No. R1000-9102-
RU-008, Re: Petition to Set Aside, Cancel and/ or Revoke the Charter Affiliation of the Union, and MED-ARB ROX Case No.
R1000-9104-RU-012, for Cancellation of Registration Certificate No. 11492-LC in favor of the Union. chanroble svi rtualaw lib rary

G.R. No. 96663

The facts that matter can be culled as follows: c hanro b1es vi rt ual 1aw li bra ry

Sometime in June 1990, the Pepsi-Cola Employees Organization-UOEF (Union) filed a petition for certification election with
the Med-Arbiter seeking to be the exclusive bargaining agent of supervisors of Pepsi-Cola Philippines, Inc. (PEPSI).

On July 12, 1990, the Med-Arbiter granted the Petition, with the explicit statement that it was an affiliate of Union de
Obreros Estivadores de Filipinas (federation) together with two (2) rank and file unions, Pepsi-Cola Labor Unity (PCLU) and
Pepsi-Cola Employees Union of the Philippines (PEUP). chan roblesv irtuallawl i brary: red

On July 23, 1990, PEPSI filed with the Bureau of Labor Relations a petition to Set Aside, Cancel and/or Revoke Charter
Affiliation of the Union, entitled PCPPI v. PCEU-UOEF and docketed as Case No. 725-90, on the grounds that (a) the
members of the Union were managers and (b) a supervisors’ union can not affiliate with a federation whose members include
the rank and file union of the same company.

On August 29,1990, PEPSI presented a motion to re-open the case since it was not furnished with a copy of the Petition for
Certification Election.

On September 4, 1990, PEPSI submitted its position paper to the BLR in Case No. 725-90.

On September 21, 1990, PEPSI received summons to appear at the pre-trial conference set on September 25, 1990 but
which the hearing officer rescheduled on October 21, 1990. chanro bles vi rtua l lawlib ra ry

On October 12, 1990, PEPSI filed a Notice of Appeal and Memorandum of Appeal with the Secretary of Labor, questioning the
setting of the certification election on the said date and five (5) days after. It also presented an urgent Ex-Parte Motion to
Suspend the Certification Election, which motion was granted on October 18, 1990.

On November 12, 1990, the Secretary of Labor denied the appeal and Motion for Reconsideration. Even as the Petition to
Cancel, Revoke and Suspend Union Charter Certificate was pending before the BLR, PEPSI found its way to this Court via the
present petition for certiorari.

On February 6, 1991, the Court granted the prayer for temporary restraining order and/or preliminary injunction.

The pivot of inquiry here is: whether or not a supervisors’ union can affiliate with the same Federation of which two (2) rank
and file unions are likewise members, without violating Article 245 of the Labor Code (PD 442), as amended, by Republic Act
6715, which provides: cha nro bles lawl ibra ry : red nad

"ARTICLE 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees. —
Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be
eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own." cralaw virtua 1aw lib rary

In its Comment dated March 19, 1991, the Federation argued that: jgc:chanrob les.co m.ph

"The pertinent portion of Article 245 of the Labor Code states that. "Supervisory employees shall not be eligible for
membership in a labor organization of the rank and file employees but may join, assist or form separate labor organization of
their own."cralaw virtua1aw l ibra ry

111
This provision of law does not prohibit a local union composed of supervisory employees from being affiliated to a federation
which has local unions with rank-and-file members as affiliates. chan rob les vi rtualaw lib rary c hanro bles. com:chan rob les.com. ph

x x x

. . . the Petition to Cancel, Revoke or Set Aside the Charter Certificate of the private respondent is anchored on the alleged
ground that certain managerial employees are included as members thereof. The grounds for the cancellation of the
registration certificate of a labor organization are provided in Section 7 of Rule II, Book V of the Omnibus Rules
Implementing the Labor Code, and the inclusion of managerial employees is not one of the grounds. . . . (in this case, the
private respondent herein) remains to be a legitimate labor organization." 1

On April 8, 1991, the Secretary of Labor and Employment, through the Office of the Solicitor General, sent in a Comment,
alleging inter alia, that: jgc:chanrob les.c om.ph

". . . under Article 259 of the New Labor Code, only orders of the Med-Arbiter can be appealed through the Secretary of
Labor and only on the ground that the rules and regulations for the conduct of the certification election have been violated.
The Order of the Representation Officer is "interlocutory" and not appealable. . . .

. . . until and unless there is a final order cancelling its certificate of registration or charter certificate, a labor organization
remains to be a legitimate labor organization entitled to exercise all the rights and duties accorded to it by the Labor Code
including the right to be certified as a bargaining representative. . . . chanrobles vi rtualaw lib rary c hanro bles. com:chan rob les.com. ph

. . . Public respondent cannot be deemed to have committed grave abuse of discretion with respect to an issue that was
never presented before it for resolution. . . .

Article 245 of the New Labor Code does not preclude the supervisor’s union and the rank-and-file union from being affiliated
with the same federation.

x x x

A federation of local union is not the labor organization referred to in Article 245 but only becomes entitled to all the rights
enjoyed by the labor organization (at the company level) when it has complied with the registration requirements found in
Articles 234 and 237. Hence, what is prohibited by Article 245 is membership of supervisory employees in a labor union (at
the company level) of the rank and file. . . .

. . . In other words, the affiliation of the supervisory employee’s union with the same federation with which the rank and file
employees union is affiliated did not make the supervisory employees members of the rank and file employee’s union and
vice versa." 2 . . .

PEPSI, in its Reply dated May 7, 1991, asserted: chanrob les law li bra ry : red

"It is our humble contention that a final determination of the Petition to Set-Aside, Cancel, Revoke Charter Union Affiliation
should first be disposed of before granting the Petition for the Conduct of Certification Election. To allow the conduct of the
certification election to proceed would make any decision arrived at by the Bureau of Labor Relations useless inasmuch as
the same would necessarily be rendered moot and academic." 3

On June 7, 1991, petitioner again filed a Supplemental Reply stressing: j gc:cha nrob les.co m.ph

"It is likewise stressed that officials of both the PCLU and PEUP are top ranking officers of UOEF, the federation of
supervisors’ union, to wit: chan rob 1es vi rtual 1a w libra ry

POSITION IN RANK AND FILE UNION POSITION IN FEDERATION

1. Rogelio de la Cruz PCLU-President General Vice President

2. Felix Gatela PEUP-President General Treasurer

3. Carlito Epino PCLU Board Member Educational Research Director

x x x

The respondent supervisory union could do indirectly what it could not do directly as the simple expedient of affiliating with
UOEF would negate the manifest intent and letter of the law that supervisory employees can only "join, assist or form
separate labor organizations of their own" and cannot "be eligible for membership in a labor organization of the rank and file
employees." 4 chan robles v irt ual lawl ibra ry

On August 6, 1991, the Secretary of Labor and Employment filed a Rejoinder, claiming thus: jgc:chanrob les.co m.ph

". . . an employer has no legal standing to question the validity of a certification election.

. . . For this reason, the Supreme Court has consistently held that, as a rule, a certification election is the sole and exclusive
concern of the employees and that the employer is definitely an intruder or a mere bystander (Consolidated Farms v. Noriel,
L-47752, July 31, 1978, 84 SCRA 469; Filipino Metals Corporation v. Ople, L-43861, September 4, 1981, 107 SCRA 211;
Trade Unions of the Philippines and Allied Services (TUPAS) v. Trajano No. L-61153, January 17, 1983, 120 SCRA 64).

x x x
112
In Adamson & Adamson, Inc. v. CIR No. L-35120, January 31, 1984, 127 SCRA 268, the Supreme Court (then dealing with
the interpretation of Section 3 of the Industrial Peace Act, from which Section 245 of the Labor Code was derived) grappled
with the issue in the case at bar. It held that,

‘There is nothing in the provisions of the Industrial Peace Act which provides that a duly registered local union affiliating with
a national union or federation loses its legal personality, or its independence.’ c han roblesv irt ual|awlib ra ry

x x x

However, there is absolutely nothing in the Labor Code that prohibits a federation from representing or exercising influence
over its affiliates. On the contrary, this is precisely the reason why federations are formed and are allowed by law to exist."
5

On November 8, 1991, the Union also filed a Rejoinder.

On December 9, 1991, the Court resolved to DISMISS the case for "failure to sufficiently show that the questioned judgment
is tainted with grave abuse of discretion."cralaw vi rtua 1aw lib rary

In a Resolution dated March 2, 1992, the Second Division of the Court resolved to grant the motion for reconsideration
interposed on January 28, 1992.

G.R. No. 103300

What are assailed in this case is Med-Arbiter Order dated May 23, 1991 and the Decision and Order of the Secretary of Labor
and Employment, dated October 4, 1991 and December 12, 1991, respectively. cha nrob lesvi rtua llawlib ra ry:red

The decretal portion of the Med-Arbiter Order under attack, reads: jgc:chanroble s.com.p h

"WHEREFORE, premises considered, an order is hereby issued: chan rob1es v irt ual 1aw l ibra ry

1. Dismissing MED ARB ROX CASE NO. R1000-919104-RU-012 and R1000-9102-RU-008 for lack of merit; and

2. Ordering the conduct of a Certification Election to be participated by and among the supervisory workers of the respondent
company, Pepsi-Cola Products Philippines, Inc. at its plant at Tin-ao, Cagayan de Oro City, including all the satellite
warehouse within the territorial coverage and control of the Cagayan de Oro Pepsi-Cola Plant. The choices are as follows: cha nrob 1es vi rtua l 1aw lib rary

1. Cagayan de Oro Pepsi-Cola Supervisors Union (U.O.E.P.)

2. No union

The parties are directed to attend a pre-election conference on June 10, 1991, 2:30 p.m. at the Regional Office to determine
the qualification of the voters and to thresh out the mechanics of the election. Respondent/employer is directed to submit
five (5) copies of the names of the rank and file workers taken from the payroll on October 1-31, 1991, alphabetically
arranged (sic) indicating their names and positions and dates of employment and to bring the aforementioned payroll during
the pre-election conference for verification purposes." 6 . . . chanrobles. com.ph : vi rtua l law lib ra ry

The supervisory employees of the Union are: chanrob 1es vi rtual 1aw lib rary

POSITION

1. Felipe Valdehueza Route Manager

2. Gerberto Vertudazo C & C Manager

3. Paul Mendoza Sales Service Department Manager

4. Gilberto Emano, Jr. Route Manager

5. Jaime Huliganga Chief Checker

6. Elias Edgama, Sr. Accounting Manager

7. Romanico Ramos Route Manager

8. Raul Yacapin Route Manager

9. Jovenal Albaque Route Manager

10. Fulvio Narciso Route Manager

11. Apolinario Opiniano Route Manager

12. Alfredo Panas Route Manager

13. Simplicio Nelie Route Manager

14. Arthur Rodriguez Route Manager

113
15. Marco Ilano Warehouse Operations Manager and

16. Deodoro Ramos Maintenance Manager

On June 6, 1991, PEPSI appealed the said Order to the Secretary of Labor and Employment on the ground of grave abuse of
discretion, docketed as Case No. OS-A-232-91.

On October 4, 1991, the Secretary modified the appealed decision, ruling thus: jgc:chan roble s.com.p h

"WHEREFORE, the Order of the Med-Arbiter dated 23 May 1991 is hereby modified to the effect that MED ARB ROX Case No.
R1000-9104-RU-012 and R1000-9102-RU-008 are hereby referred to the Office of the Regional Director which has
jurisdiction over these cases. The call for certification election among the supervisory workers of the Pepsi-Cola Products
Philippines, Inc. at its plant at Tin-ao, Cagayan de Oro City is hereby sustained." 7 chanrob les.co m : virt ual law lib rary

On October 19, 1991, PEPSI presented a motion for reconsideration of the aforesaid Order but the same was denied on
December 12, 1991.

Meanwhile, the BLR issued Registration Certificate No. 11492-LC in favor of the Union. Dissatisfied therewith, PEPSI brought
the instant petition for certiorari, contending that: jgc:chanrob les.c om.ph

"PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION IN RULING THAT PRIVATE RESPONDENT’S OFFICERS
AND MEMBERS ARE NOT MANAGERIAL EMPLOYEES;

PRIVATE RESPONDENT IS PROHIBITED FROM AFFILIATING ITSELF WITH A FEDERATION ALREADY AFFILIATED WITH THE
RANK AND FILE UNION; chanroblesvi rtua lawlib rary

PUBLIC RESPONDENT COMMITTED GRAVE OF (SIC) ABUSE OF DISCRETION IN RULING THAT THE INSTITUTION OF A
PETITION FOR CANCELLATION OF UNION REGISTRATION DOES NOT CONSTITUTE A PREJUDICIAL QUESTION TO A PETITION
CERTIFICATION ELECTION." 8

The petitions must fail for want of merit.

At the outset, it must be stressed that on September 1, 1992, there was a Resolution of the Union withdrawing from the
Federation, to wit: jgc:chan roble s.com.p h

"BE IT RESOLVED, as it is hereby RESOLVED, that this UNION WITHDRAW, as it hereby WITHDRAWS its affiliation from the
Union de Obreros Estivadores de Filipinas, and at the same time, give our thanks to the said federation for its help and
guidance rendered to this Union in the past." 9 chanrobles.co m.ph : virtual law lib rary

The issue in G.R. No. 96663, whether or not the supervisors union can be affiliated with a Federation with two (2) rank and
file unions directly under the supervision of the former, has thus become moot and academic in view of the Union’s
withdrawal from the federation.

In a long line of cases (Narciso Nakpil, et. al., v. Hon. Crisanto Aragon, et. al., G. R. No. L - 24087, January 22, 1980, 95
SCRA 85; Toribio v. Bidin, et. al., G.R. No. L-37960, February 28, 1980, 96 SCRA 361; Gumaua v. Espino, G.R. No. L- 36188
- 37586 February 29, 1980, 96 SCRA 402), the Court dismissed the petition for being moot and academic. In the case of F .
C. Fisher v. Yangco Steamship Co., March 31, 1915, the Court held: jgc:chan roble s.com.p h

"It is unnecessary, however to indulge in academic discussion of a moot question. . . .

. . . The action would have been dismissed at any time on a showing of the facts as they were . The question left for the
court was a moot one. Its Resolution would have been useless. Its judgment would have been impossible of execution . .
." chanroblesv irtual|awlib ra ry

However, in the case of University of San Agustin, Inc., Et. Al. v. Court of Appeals, Et Al., the court resolved the case, ruling
that "even if a case were moot and academic, a statement of the governing principle is appropriate in the resolution of
dismissal for the guidance not only of the parties but of others similarly situated. . . ." 10

In Atlas Lithographic Services, Inc. v. Laguesma, 205 SCRA 12, [1992] decided by the Third Division with J. Gutierrez, Jr., as
ponente and JJ. Feliciano, Bidin, Romero and now Chief Justice Davide, Jr., as members it was ratiocinated: jgc:chan roble s.com.p h

"x x x

Thus, if the intent of the law is to avoid a situation where supervisors would merge with the rank-and-file or where the
supervisors’ labor organization would represent conflicting interests, then a local supervisors’ union should not be allowed to
affiliate with the national federation of union of rank-and-file employees where that federation actively participates in union
activity in the company. chanrobles vi rtua lawlib rary chan roble s .com:chan roble s.com.p h

x x x

The prohibition against a supervisors’ union joining a local union of rank and file is replete with jurisprudence. The Court
emphasizes that the limitation is not confined to a case of supervisors’ wanting to join a rank-and-file union. The prohibition
extends to a supervisors’ local union applying for membership in a national federation the members of which include local
unions of rank and file employees. The intent of the law is clear especially where, as in this case at bar, the supervisors will
be co-mingling with those employees whom they directly supervise in their own bargaining unit." cralaw virtua1aw li bra ry

Anent the issue of whether or not the Petition to cancel/revoke registration is a prejudicial question to the petition for
certification election, the following ruling in the case of Association of the Court of Appeals Employees (ACAE) v. Hon. Pura

114
Ferrer-Calleja, in her capacity as Director, Bureau of Labor Relations et. al., 203 SCRA 597, 598, [1991], is in point, to wit:
1aw libra ry
chanrob 1es vi rtua l

. . . It is a well-settled rule that "a certification proceedings is not a litigation in the sense that the term is ordinarily
understood, but an investigation of a non-adversarial and fact finding character." (Associated Labor Unions (ALU) v. Ferrer-
Calleja, 179 SCRA 127 [1989]; Philippine Telegraph and Telephone Corporation v. NLRC, 183 SCRA 451 [1990]. Thus, the
technical rules of evidence do not apply if the decision to grant it proceeds from an examination of the sufficiency of the
petition as well as a careful look into the arguments contained in the position papers and other documents. chanrobles lawl ib rary : red nad

"At any rate, the Court applies the established rule correctly followed by the public respondent that an order to hold a
certification election is proper despite the pendency of the petition for cancellation of the registration certificate of the
respondent union. The rationale for this is that at the time the respondent union filed its petition, it still had the legal
personality to perform such act absent an order directing the cancellation.

x x x"

As regards the issue of whether or not confidential employees can join the labor union of the rank and file, what was held in
the case of National Association of Trade Unions (NATU)-Republic Planters Bank Supervisors Chapter v. Hon. R. D. Torres, et.
al., G.R. No. 93468, December 29, 1994, applies to this case. Citing Bulletin Publishing Corporation v. Sanchez, 144 SCRA
628, 635, Golden Farms v. NLRC, 175 SCRA 471, and Pier 8 Arrastre and Stevedoring Services, Inc. v. Hon. Nieves Roldan-
Confessor Et. Al., G.R. No. 110854, February 14, 1995, the Court ruled: jgc:chan roble s.com. ph

". . . A confidential employee is one entrusted with confidence on delicate matters, or with the custody, handling, or care and
protection of the employer’s property. While Art. 245 of the Labor Code singles out managerial employee as ineligible to join,
assist or form any labor organization, under the doctrine of necessary implication, confidential employees are similarly
disqualified. This doctrine states that what is implied in a statute is as much a part thereof as that which is expressed, as
elucidated in several case; the latest of which is Chua v. Civil Service Commission where we said: cha nrob les lawl ibra ry : redna d

No statute can be enacted that can provide all the details involved in its application. There is always an omission that may
not meet a particular situation. What is thought, at the time of the enactment, to be an all embracing legislation maybe
inadequate to provide for the unfolding events of the future. So-called gaps in the law develop as the law is enforced. One of
the rules of statutory construction used to fill in the gap is the doctrine of necessary implication . . ., Every statute is
understood, by implication, to contain all such provisions as may be necessary to effectuate its object and purpose, or to
make effective rights, powers, privileges or jurisdiction which it grants, including all such collateral and subsidiary
consequences as may be fairly and logically inferred from its terms. Ex necessitate legis . . .

In applying the doctrine of necessary implication, we took into consideration the rationale behind the disqualification of
managerial employees expressed in Bulletin Publishing Corporation v. Sanchez, thus." . . if these managerial employees
would belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of evident
conflict of interests. The Union can also become company — dominated with the presence of managerial employees in Union
membership." Stated differently, in the collective bargaining process, managerial employees are supposed to be on the side
of the employer, to act as its representatives, and to see to it that its interest are well protected. The employer is not
assured of such protection if these employees themselves are union members. Collective bargaining in such a situation can
become one-sided. It is the same reason that impelled this Court to consider the position of confidential employees as
included in the disqualification found in Art. 245 as if the disqualification of confidential employees were written in the
provision. If confidential employees could unionize in order to bargain for advantages for themselves, then they could be
governed by their own motives rather than the interest of the employers. Moreover, unionization of confidential employees
for the purpose of collective bargaining would mean the extension of the law to persons or individuals who are supposed to
act "in the interest of" the employers. It is not farfetched that in the course of collective bargaining, they might jeopardize
that interest which they are duty bound to protect. Along the same line of reasoning we held in Golden Farms, Inc. v. Ferrer-
Calleja reiterated in Philips Industrial Development, Inc., NLRC, that "confidential employees such as accounting personnel,
radio and telegraph operators who, having access to confidential information, may become the source of undue advantage.
Said employee(s) may act as spy or spies of either party to a collective bargaining agreement." chanroble s.com:c ralaw:red

The Court finds merit in the submission of the OSG that Route Managers, Chief Checkers and Warehouse Operations
Managers are supervisors while Credit & Collection Managers and Accounting Managers are highly confidential employees.
Designation should be reconciled with the actual job description of subject employees. A careful scrutiny of their job
description indicates that they don’t lay down company policies. Theirs is not a final determination of the company policies
since they have to report to their respective superior. The mere fact that an employee is designated manager does not
necessarily make him one. Otherwise, there would be an absurd situation where one can be given the title just to be
deprived of the right to be a member of a union. In the case of National Steel Corporation v. Laguesma, G. R. No. 103743,
January 29, 1996, it was stressed that: jgc:chanro bles.c om.ph

"What is essential is the nature of the employee’s function and not the nomenclature or title given to the job which
determines whether the employee has rank and file or managerial status, or whether he is a supervisory employee." cralaw virtua1aw l ibra ry

WHEREFORE, the petitions under consideration are DISMISSED but subject Decision, dated October 4, 1991, of the Secretary
of Labor and Employment is MODIFIED in that Credit and Collection Managers and Accounting Managers are highly
confidential employees not eligible for membership in a supervisors’ union. No pronouncement as to costs. chanroblesv irt ualawli bra ry

SO ORDERED.

Melo, Vitug and Gonzaga-Reyes, JJ., concur.

Panganiban, J., concurs in the result.

Endnotes:

1. Pepsi - Cola Supervisory Employees Organization - UOEF, Comment, pp. 4-6, Rollo, pp. 71-73.
115
2. Rollo, pp. 86-89, 92.

3. Rollo, p. 104.

4. Rollo, p. 110.

5. Rejoinder, pp. 2,3,10,14; Rollo, pp. 125,126, 133,137.

6. OSG Comment, pp. 3 - 4, Rollo, pp. 145 - 146.

7. OSG Comment, p. 5, Rollo, p. 147.

8. Petition, pp. 8, 13, 14; Rollo, pp. 9, 14, 15.

9. Annex I, Rollo, p. 213.

10. 230 SCRA 761, 770, citing Eastern Broadcasting Corporation (DYRE) v. Dans, etc, Et Al., 137 SCRA 628.

116
THIRD DIVISION

[G.R. No. 146206 : August 01, 2011]

SAN MIGUEL FOODS, INCORPORATED, PETITIONER, VS. SAN MIGUEL CORPORATION SUPERVISORS AND
EXEMPT UNION, RESPONDENT.

DECISION

PERALTA, J.:

The issues in the present case, relating to the inclusion of employees in supervisor levels 3 and 4 and the exempt employees
in the proposed bargaining unit, thereby allowing their participation in the certification election; the application of the
“community or mutuality of interests― test; and the determination of the employees who belong to the category of
confidential employees, are not novel.

In G.R. No. 110399, entitled San Miguel Corporation Supervisors and Exempt Union v. Laguesma,[1] the Court held that even
if they handle confidential data regarding technical and internal business operations, supervisory employees 3 and 4 and the
exempt employees of petitioner San Miguel Foods, Inc. (SMFI) are not to be considered confidential employees, because the
same do not pertain to labor relations, particularly, negotiation and settlement of grievances. Consequently, they were
allowed to form an appropriate bargaining unit for the purpose of collective bargaining. The Court also declared that the
employees belonging to the three different plants of San Miguel Corporation Magnolia Poultry Products Plants in Cabuyao,
San Fernando, and Otis, having “community or mutuality of interests,― constitute a single bargaining unit. They
perform work of the same nature, receive the same wages and compensation, and most importantly, share a common stake
in concerted activities. It was immaterial that the three plants have different locations as they did not impede the operations
of a single bargaining representative.[2]

Pursuant to the Court's decision in G.R. No. 110399, the Department of Labor and Employment – National Capital Region
(DOLE-NCR) conducted pre-election conferences.[3] However, there was a discrepancy in the list of eligible voters, i.e.,
petitioner submitted a list of 23 employees for the San Fernando plant and 33 for the Cabuyao plant, while respondent listed
60 and 82, respectively.[4]

On August 31, 1998, Med-Arbiter Agatha Ann L. Daquigan issued an Order[5] directing Election Officer Cynthia Tolentino to
proceed with the conduct of certification election in accordance with Section 2, Rule XII of Department Order No. 9.

On September 30, 1998, a certification election was conducted and it yielded the following results,[6]thus:

Cabuyao Plant San Fernando Total


Plant

Yes 23 23 46
No 0 0 0
Spoiled 2 0 2
Segregated 41 35 76
Total Votes
Cast 66 58 124
On the date of the election, September 30, 1998, petitioner filed the Omnibus Objections and Challenge to
Voters,[7] questioning the eligibility to vote by some of its employees on the grounds that some employees do not belong to
the bargaining unit which respondent seeks to represent or that there is no existence of employer-employee relationship with
petitioner. Specifically, it argued that certain employees should not be allowed to vote as they are: (1) confidential
employees; (2) employees assigned to the live chicken operations, which are not covered by the bargaining unit; (3)
employees whose job grade is level 4, but are performing managerial work and scheduled to be promoted; (4) employees
who belong to the Barrio Ugong plant; (5) non-SMFI employees; and (6) employees who are members of other unions.

On October 21, 1998, the Med-Arbiter issued an Order directing respondent to submit proof showing that the employees in
the submitted list are covered by the original petition for certification election and belong to the bargaining unit it seeks to
represent and, likewise, directing petitioner to substantiate the allegations contained in its Omnibus Objections and Challenge
to Voters.[8]

In compliance thereto, respondent averred that (1) the bargaining unit contemplated in the original petition is the Poultry
Division of San Miguel Corporation, now known as San Miguel Foods, Inc.; (2) it covered the operations in Calamba, Laguna,
Cavite, and Batangas and its home base is either in Cabuyao, Laguna or San Fernando, Pampanga; and (3) it submitted
individual and separate declarations of the employees whose votes were challenged in the election.[9]

Adding the results to the number of votes canvassed during the September 30, 1998 certification election, the final tally
showed that: number of eligible voters – 149; number of valid votes cast – 121; number of spoiled ballots - 3; total
number of votes cast – 124, with 118 (i.e., 46 + 72 = 118 ) “Yes― votes and 3 “No― votes.[10]

The Med-Arbiter issued the Resolution[11] dated February 17, 1999 directing the parties to appear before the Election Officer
of the Labor Relations Division on March 9, 1999, 10:00 a.m., for the opening of the segregated ballots. Thereafter, on April
12, 1999, the segregated ballots were opened, showing that out of the 76 segregated votes, 72 were cast for “Yes―
and 3 for “No,― with one “spoiled― ballot.[12]

Based on the results, the Med-Arbiter issued the Order[13] dated April 13, 1999, stating that since the “Yes― vote
received 97% of the valid votes cast, respondent is certified to be the exclusive bargaining agent of the supervisors and

117
exempt employees of petitioner's Magnolia Poultry Products Plants in Cabuyao, San Fernando, and Otis.

On appeal, the then Acting DOLE Undersecretary, in the Resolution[14] dated July 30, 1999, in OS-A-2-70-91 (NCR-OD-M-
9010-017), affirmed the Order dated April 13, 1999, with modification that George C. Matias, Alma Maria M. Lozano,
Joannabel T. Delos Reyes, and Marilyn G. Pajaron be excluded from the bargaining unit which respondent seeks to
represent. She opined that the challenged voters should be excluded from the bargaining unit, because Matias and Lozano
are members of Magnolia Poultry Processing Plants Monthly Employees Union, while Delos Reyes and Pajaron are employees
of San Miguel Corporation, which is a separate and distinct entity from petitioner.

Petitioner’s Partial Motion for Reconsideration[15] dated August 14, 1999 was denied by the then Acting DOLE
Undersecretary in the Order[16] dated August 27, 1999.

In the Decision[17] dated April 28, 2000, in CA-G.R. SP No. 55510, entitled San Miguel Foods, Inc. v. The Honorable Office of
the Secretary of Labor, Bureau of Labor Relations, and San Miguel Corporation Supervisors and Exempt Union, the Court of
Appeals (CA) affirmed with modification the Resolution dated July 30, 1999 of the DOLE Undersecretary, stating that those
holding the positions of Human Resource Assistant and Personnel Assistant are excluded from the bargaining unit.

Petitioner’s Motion for Partial Reconsideration[18] dated May 23, 2000 was denied by the CA in the Resolution[19] dated
November 28, 2000.

Hence, petitioner filed this present petition raising the following issues:

I.

WHETHER THE COURT OF APPEALS DEPARTED FROM JURISPRUDENCE WHEN IT EXPANDED THE SCOPE OF THE
BARGAINING UNIT DEFINED BY THIS COURT'S RULING IN G.R. NO. 110399.

II.

WHETHER THE COURT OF APPEALS DEPARTED FROM JURISPRUDENCE - SPECIFICALLY, THIS COURT'S DEFINITION OF A
“CONFIDENTIAL EMPLOYEE― - WHEN IT RULED FOR THE INCLUSION OF THE “PAYROLL MASTER― POSITION IN
THE BARGAINING UNIT.

III.

WHETHER THIS PETITION IS A “REHASH― OR A “RESURRECTION― OF THE ISSUES RAISED IN G.R. NO.
110399, AS ARGUED BY PRIVATE RESPONDENT.

Petitioner contends that with the Court's ruling in G.R. No. 110399[20] identifying the specific employees who can participate
in the certification election, i.e., the supervisors (levels 1 to 4) and exempt employees of San Miguel Poultry Products Plants
in Cabuyao, San Fernando, and Otis, the CA erred in expanding the scope of the bargaining unit so as to include employees
who do not belong to or who are not based in its Cabuyao or San Fernando plants. It also alleges that the employees of the
Cabuyao, San Fernando, and Otis plants of petitioner’s predecessor, San Miguel Corporation, as stated in G.R. No.
110399, were engaged in “dressed― chicken processing, i.e., handling and packaging of chicken meat, while the new
bargaining unit, as defined by the CA in the present case, includes employees engaged in “live― chicken operations,
i.e., those who breed chicks and grow chickens.

Respondent counters that petitioner’s proposed exclusion of certain employees from the bargaining unit was a rehashed
issue which was already settled in G.R. No. 110399. It maintains that the issue of union membership coverage should no
longer be raised as a certification election already took place on September 30, 1998, wherein respondent won with 97%
votes.

Petitioner’s contentions are erroneous. In G.R. No. 110399, the Court explained that the employees of San Miguel
Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis constitute a single bargaining unit, which is
not contrary to the one-company, one-union policy. An appropriate bargaining unit is defined as a group of employees of a
given employer, comprised of all or less than all of the entire body of employees, which the collective interest of all the
employees, consistent with equity to the employer, indicate to be best suited to serve the reciprocal rights and duties of the
parties under the collective bargaining provisions of the law.[21]

In National Association of Free Trade Unions v. Mainit Lumber Development Company Workers Union – United Lumber and
General Workers of the Phils,[22] the Court, taking into account the “community or mutuality of interests― test, ordered
the formation of a single bargaining unit consisting of the Sawmill Division in Butuan City and the Logging Division in Zapanta
Valley, Kitcharao, Agusan [Del] Norte of the Mainit Lumber Development Company. It held that while the existence of a
bargaining history is a factor that may be reckoned with in determining the appropriate bargaining unit, the same is not
decisive or conclusive. Other factors must be considered. The test of grouping is community or mutuality of interest. This is
so because the basic test of an asserted bargaining unit’s acceptability is whether or not it is fundamentally the
combination which will best assure to all employees the exercise of their collective bargaining rights.[23] Certainly, there is a
mutuality of interest among the employees of the Sawmill Division and the Logging Division. Their functions mesh with one
another. One group needs the other in the same way that the company needs them both. There may be differences as to
the nature of their individual assignments, but the distinctions are not enough to warrant the formation of a separate
bargaining unit.[24]

Thus, applying the ruling to the present case, the Court affirms the finding of the CA that there should be only one
bargaining unit for the employees in Cabuyao, San Fernando, and Otis[25] of Magnolia Poultry Products Plant involved in
“dressed― chicken processing and Magnolia Poultry Farms engaged in “live― chicken operations. Certain
factors, such as specific line of work, working conditions, location of work, mode of compensation, and other relevant
conditions do not affect or impede their commonality of interest. Although they seem separate and distinct from each other,
the specific tasks of each division are actually interrelated and there exists mutuality of interests which warrants the
formation of a single bargaining unit.

118
Petitioner asserts that the CA erred in not excluding the position of Payroll Master in the definition of a confidential employee
and, thus, prays that the said position and all other positions with access to salary and compensation data be excluded from
the bargaining unit.

This argument must fail. Confidential employees are defined as those who (1) assist or act in a confidential capacity, in
regard (2) to persons who formulate, determine, and effectuate management policies in the field of labor relations.[26] The
two criteria are cumulative, and both must be met if an employee is to be considered a confidential employee - that is, the
confidential relationship must exist between the employee and his supervisor, and the supervisor must handle the prescribed
responsibilities relating to labor relations. The exclusion from bargaining units of employees who, in the normal course of
their duties, become aware of management policies relating to labor relations is a principal objective sought to be
accomplished by the “confidential employee rule.―[27]

A confidential employee is one entrusted with confidence on delicate, or with the custody, handling or care and protection of
the employer’s property.[28] Confidential employees, such as accounting personnel, should be excluded from the
bargaining unit, as their access to confidential information may become the source of undue advantage.[29] However, such
fact does not apply to the position of Payroll Master and the whole gamut of employees who, as perceived by petitioner, has
access to salary and compensation data. The CA correctly held that the position of Payroll Master does not involve dealing
with confidential labor relations information in the course of the performance of his functions. Since the nature of his work
does not pertain to company rules and regulations and confidential labor relations, it follows that he cannot be excluded from
the subject bargaining unit.

Corollarily, although Article 245[30] of the Labor Code limits the ineligibility to join, form and assist any labor organization to
managerial employees, jurisprudence has extended this prohibition to confidential employees or those who by reason of their
positions or nature of work are required to assist or act in a fiduciary manner to managerial employees and, hence, are
likewise privy to sensitive and highly confidential records.[31] Confidential employees are thus excluded from the rank-and-
file bargaining unit. The rationale for their separate category and disqualification to join any labor organization is similar to
the inhibition for managerial employees, because if allowed to be affiliated with a union, the latter might not be assured of
their loyalty in view of evident conflict of interests and the union can also become company-denominated with the presence
of managerial employees in the union membership.[32] Having access to confidential information, confidential employees
may also become the source of undue advantage. Said employees may act as a spy or spies of either party to a collective
bargaining agreement.[33]

In this regard, the CA correctly ruled that the positions of Human Resource Assistant and Personnel Assistant belong to the
category of confidential employees and, hence, are excluded from the bargaining unit, considering their respective positions
and job descriptions. As Human Resource Assistant,[34] the scope of one’s work necessarily involves labor relations,
recruitment and selection of employees, access to employees' personal files and compensation package, and human resource
management. As regards a Personnel Assistant,[35] one's work includes the recording of minutes for management during
collective bargaining negotiations, assistance to management during grievance meetings and administrative investigations,
and securing legal advice for labor issues from the petitioner’s team of lawyers, and implementation of company
programs. Therefore, in the discharge of their functions, both gain access to vital labor relations information which outrightly
disqualifies them from union membership.

The proceedings for certification election are quasi judicial in nature and, therefore, decisions rendered in such proceedings
can attain finality.[36] Applying the doctrine of res judicata, the issue in the present case pertaining to the coverage of the
employees who would constitute the bargaining unit is now a foregone conclusion.

It bears stressing that a certification election is the sole concern of the workers; hence, an employer lacks the personality to
dispute the same. The general rule is that an employer has no standing to question the process of certification election,
since this is the sole concern of the workers.[37] Law and policy demand that employers take a strict, hands-off stance in
certification elections. The bargaining representative of employees should be chosen free from any extraneous influence of
management. A labor bargaining representative, to be effective, must owe its loyalty to the employees alone and to no
other.[38] The only exception is where the employer itself has to file the petition pursuant to Article 258[39] of the Labor Code
because of a request to bargain collectively.[40]

With the foregoing disquisition, the Court writes finis to the issues raised so as to forestall future suits of similar nature.

WHEREFORE, the petition is DENIED. The Decision dated April 28, 2000 and Resolution dated November 28, 2000 of the
Court of Appeals, in CA-G.R. SP No. 55510, which affirmed with modification the Resolutions dated July 30, 1999 and August
27, 1999 of the Secretary of Labor, are AFFIRMED.

SO ORDERED.

Carpio,* Velasco, (Chairperson), Abad, and Sereno,** JJ., concur.

Endnotes:

*
Designated as an additional member in lieu of Associate Justice Jose Catral Mendoza, per Special Order No. 1056a dated
July 27, 2011.

**
Designated as an a additional member, per Special Order No. 1028 dated June 21, 2011.

[1]
343 Phil. 143 (1997).

[2]
Id. at 151, 153-154.

[3]
Per petitioner’s Reply to Comment dated January 6, 2004, its Otis Plant is no longer operational.

[4]
See CA Decision dated April 28, 2000, p. 5; rollo, p. 15.

119
[5]
Rollo, pp. 127-130.

[6]
Supra note 4.

[7]
Rollo, pp. 131-133.

[8]
See Resolution dated July 30, 1999 of then Acting DOLE Undersecretary Rosalinda Dimapilis-Baldoz, id. at 84.

[9]
Id.

[10]
Id.

[11]
Rollo, pp. 142-150.

[12]
Supra note 8.

[13]
Rollo, pp. 88-89.

[14]
Per then Acting DOLE Undersecretary Rosalinda Dimapilis-Baldoz, id. at 83-86.

[15]
CA rollo, pp. 130-141.

[16]
Rollo, p. 87.

Penned by Associate Justice Portia Aliño-Hormachuelos, with Associate Justices Corona Ibay-Somera and Elvi John S.
[17]

Asuncion, concurring; id. at 11-26.

[18]
CA rollo, pp. 437-449.

Penned by Associate Justice Portia Aliño-Hormachuelos, with Associate Justices Elvi John S. Asuncion and Eliezer R.
[19]

Delos Santos, concurring, rollo, pp. 28-29.

[20]
San Miguel Corporation Supervisors and Exempt Employees Union v. Laguesma, supra note 1.

Id. at 153, citing University of the Philippines v. Calleja-Ferrer, 211 SCRA 464 (1992), which cited Rothenberg on Labor
[21]

Relations, p. 482.

[22]
G.R. No. 79526, December 21, 1990, 192 SCRA 598.

[23]
Id. at 602, citing Democratic Labor Association v. Cebu Stevedoring Company, Inc., et al., 103 Phil 1103 (1958).

[24]
Id.

[25]
See note 3.

Sugbuanon Rural Bank, Inc., v. Laguesma, G.R. No. 381 Phil. 414, 424 (2000), citing San Miguel Corp. Supervisors and
[26]

Exempt Employees Union v. Laguesma, supra note 1, at 374, which cited Westinghouse Electric Corp. v. NLRB (CA6) 398
F2d. 689 (1968), Ladish Co., 178 NLRB 90 (1969) and B.F. Goodrich Co., 115 NLRB 722 (1956).

[27]
Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery v. Asia Brewery, Inc., G.R. 162025, August 3, 2010, 626 SCRA
376, 387, citing San Miguel Corp. Supervisors and Exempt Employees Union v. Laguesma, supra note 1, at 374-375, which
cited Westinghouse Electric Corp. v. NLRB, id., Ladish Co., id., and B.F. Goodrich Co., id.

[28]
Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor, G.R. No. 103300, August 10, 1999, 312 SCRA 104, 116.

Golden Farms, Inc. v. Ferrer-Calleja, 256 Phil. 903, 909 (1989), cited in Standard Chartered Bank Employees Union
[29]

(SCBEU-NUBE) v. Standard Chartered Bank, G.R. No. 161933, April 22, 2008, 552 SCRA 284, 291-292 and Philips Industrial
Development, Inc. v. NLRC, G.R. No. 88957, June 25, 1992, 210 SCRA 339, 348.

[30]
Art. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees. -
Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be
eligible for membership in the collective bargaining unit of the rank-and-file employees but may join, assist or form separate
collective bargaining units and/or legitimate labor organizations of their own. The rank-and-file union and the supervisor's
union operating within the supervisors’ union operating within the same establishment may join the same federation or
national union.

Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery v. Asia Brewery, Inc., supranote 27, at 381, citing Metrolab
[31]

Industries, Inc. v. Roldan-Confesor, G.R. No. 108855, February 28, 1996, 254 SCRA 182, 197.

[32]
Id. at 381-382, citing Bulletin Publishing Corporation v. Sanchez, 228 Phil. 600, 608-609 (1986).

[33]
Id. at 382, citing Golden Farms, Inc. v. Ferrer-Calleja, supra note 29.

Human Resource Assistant: To support the human resources objectives of the MPPP, MPF this position shall provide
[34]

coordination, advice, information and assistance to the plant personnel manager in the following duties:

MANPOWER PLANNING (PROCESS[ING] AND LIVE)

1.1. Assists and participates in the studies on manning and manpower forecasts needed to meet the current and future
personnel requirements of processing, live operations.

120
1.2. Checks plans for the implementation of staff movements such as transfers, promotions and separations of both
processing [and] live operations.

1.3 Coordinates with all department[s] for the consolidation of manpower cost budget and its complement.

1.4 Provides updated organization to the plant management.

COMPENSATION ADMINISTRATION (PROCESSING AND LIVE)

2.1 Initially evaluates and classifies all positions.

2.2 Prepares salary analyses and recommendations for consultation with compensation dept.

2.3 Develops/updates compensation packages for specific personnel when the need arises.

2.4 Administers compensation-related benefits, such as extra time worked allowance, special allowance, supplementary
allowance, housing assistance, per diem, relocation expense reimbursement, etc.

2.5 Provide the Personnel Manager Officer and Compensation Department with the records related to Compensation such as
salary profiles per classification used negotiations.

RECRUITMENT (PROCESSING, LIVE)

3.1 Conducts preliminary interview of applicants before giving tests.

3.2 Coordinates with Dept. Heads/Managers pertaining to internal recruitment selection and hiring of qualified applicants.

3.3. Checks all pre-employment papers of the applicants to ensure its completeness such as the requisition, approved
Plantilla, applicant’s SSS number and TIN, etc. (CA rollo, pp. 66-67) (Emphasis supplied.)

[35]
Personnel Assistant:

LABOR RELATIONS

1. Records minutes during Labor Management Cooperation dialogues and CBA negotiations meeting and facilitates the same
when requested.

2. Coordinates Grievance Meeting officially submitted by the Union to Management and feedbacks PPM on schedules and
results.

3. Provides support to departments in recording of minutes and schedule of Administrative Investigations.

4. Consults and coordinates with SMB Legal Group to seek legal clarification or opinion on certain labor issues and reports to
PPM for action.

5. Performs and maintains liaison with union representative on certain issues to minimize courses of action.

6. Ensures timely preparation and submission of DOLE monthly and quarterly reportorial requirements.

EMPLOYEE RELATIONS

1. Facilitates timely implementation of Corporate Special Programs in discussion with the PPM aligned with budgeted costs
and Management thrust.

2. Coordinates with local unions for participation/support in the activities of program implementation and reports to PPM on
results of meetings.

3. Maintains regular dialogues and liaisoning activities with employees on concern affecting them and provides feedback to
PPM. (Id. at 69-70) (Emphasis supplied.)

[36]
United Pepsi-Cola Supervisory Union (UPSU) v. Laguesma, 351 Phil. 244, 261 (1998) citing B.F. Goodrich Philippines, Inc.
v. B.F. Goodrich (Marikina Factory) Confidential & Salaried Employees Union-NATU, 151 Phil. 585 (1973).

[37]
Barbizon Philippines, Inc. v. Nagkakaisang Supervisor ng Barbizon Philippines, Inc. - 330 Phil. 472, 493 (1996),
citing Golden Farms, Inc. v. Secretary of Labor, G.R. No. 102130, July 26, 1994, 234 SCRA 517, 523; National Association of
Trade Unions - Republic Planters Bank Supervisors Chapter v. Torres, G.R. No. 93468, December 29, 1994, 239 SCRA 546,
551; Philippine Telegraph and Telephone Corp. v. Laguesma, G.R. No. 101730, June 17, 1993, 223 SCRA 452, 456-457.

[38]
Barbizon Philippines, Inc. v. Nagkakaisang Supervisor ng Barbizon Philippines, Inc. - NAFLU, supra, citing Golden Farms,
Inc. v. Secretary of Labor, supra.

Art. 258. When an employer may file petition. - When requested to bargain collectively, an employer may petition the
[39]

Bureau for an election. If there is no existing certified collective bargaining agreement in the unit, the Bureau shall, after
hearing, order a certification election.

All certification election cases shall be decided within twenty (20) days.

The Bureau shall conduct a certification election within twenty (20) days in accordance with the rules and regulations
prescribed by the Secretary of Labor.

[40]
National Association of Trade Unions - Republic Planters Bank Supervisors Chapter v. Torres, supra note 37.
121
SECOND DIVISION

[G.R. No. 110399. August 15, 1997.]

SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION AND ERNESTO L. PONCE, President, Petitioners,
v. HONORABLE BIENVENIDO E. LAGUESMA IN HIS CAPACITY AS UNDERSECRETARY OF LABOR AND
EMPLOYMENT, HONORABLE DANILO L. REYNANTE IN HIS CAPACITY AS MED-ARBITER AND SAN MIGUEL
CORPORATION, Respondents.

DECISION

ROMERO, J.:

This is a Petition for Certiorari with Prayer for the Issuance of Preliminary Injunction seeking to reverse and set aside the
Order of public respondent, Undersecretary of the Department of Labor and Employment, Bienvenido E. Laguesma, dated
March 11, 1993, in Case No. OS MA A-2-70-91 1 entitled "In Re: Petition for Certification Election Among the Supervisory
and Exempt Employees of the San Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis,
San Miguel Corporation Supervisors and Exempt Union, Petitioner." The Order excluded the employees under supervisory
levels 3 and 4 and the so-called exempt employees from the proposed bargaining unit and ruled out their participation in the
certification election.cralaw nad

The antecedent facts are undisputed: cha nro b1es vi rtua l 1aw lib ra ry

On October 5, 1990, petitioner union filed before the Department of Labor and Employment (DOLE) a Petition for Direct
Certification or Certification Election among the supervisors and exempt employees of the SMC Magnolia Poultry Products
Plants of Cabuyao, San Fernando and Otis.

On December 19, 1990, Med-Arbiter Danilo L. Reynante issued an Order ordering the conduct of certification election among
the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis as
one bargaining unit.

On January 18, 1991, respondent San Miguel Corporation filed a Notice of Appeal with Memorandum on Appeal, pointing out,
among others, the Med-Arbiter’s error in grouping together all three (3) separate plants, Otis, Cabuyao and San Fernando,
into one bargaining unit, and in including supervisory levels 3 and above whose positions are confidential in nature.

On July 23, 1991, the public respondent, Undersecretary Laguesma, granted respondent company’s Appeal and ordered the
remand of the case to the Med-Arbiter of origin for determination of the true classification of each of the employees sought to
be included in the appropriate bargaining unit.

Upon petitioner-union’s motion dated August 7, 1991, Undersecretary Laguesma granted the reconsideration prayed for on
September 3, 1991 and directed the conduct of separate certification elections among the supervisors ranked as supervisory
levels 1 to 4 (S1 to S4) and the exempt employees in each of the three plants at Cabuyao, San Fernando and Otis.

On September 21, 1991, respondent company, San Miguel Corporation filed a Motion for Reconsideration with Motion to
suspend proceedings.

On March 11, 1993, an Order was issued by the public respondent granting the Motion, citing the doctrine enunciated in
Philips Industrial Development, Inc. v. NLRC 2 case. Said Order reads in part: jgc:cha nrob les.c om.ph

". . . Confidential employees, like managerial employees, are not allowed to form, join or assist a labor union for purposes of
collective bargaining.

In this case, S3 and S4 Supervisors and the so-called exempt employees are admittedly confidential employees and
therefore, they are not allowed to form, join or assist a labor union for purposes of collective bargaining following the above
court’s ruling. Consequently, they are not allowed to participate in the certification election.

WHEREFORE, the Motion is hereby granted and the Decision of this Office dated 03 September 1991 is hereby modified to
the extent that employees under supervisory levels 3 and 4 (S3 and S4) and the so-called exempt employees are not allowed
to join the proposed bargaining unit and are therefore excluded from those who could participate in the certification election."
3

Hence this petition.

For resolution in this case are the following issues: chan rob1e s virtual 1aw l ib rary

1. Whether Supervisory employees 3 and 4 and the exempt employees of the company are considered confidential
employees, hence ineligible from joining a union.

2. If they are not confidential employees, do the employees of the three plants constitute an appropriate single bargaining
unit.
122
On the first issue, this Court rules that said employees do not fall within the term "confidential employees" who may be
prohibited from joining a union.

There is no question that the said employees, supervisors and the exempt employees, are not vested with the powers and
prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, layoff, recall, discharge or
dismiss employees. They are, therefore, not qualified to be classified as managerial employees who, under Article 245 4 of
the Labor Code, are not eligible to join, assist or form any labor organization. In the very same provision, they are not
allowed membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own. The only question that need be addressed is whether these employees are properly classified as
confidential employees or not.

Confidential employees are those who (1) assist or act in a confidential capacity, (2) to persons who formulate, determine,
and effectuate management policies in the field of labor relations. 5 The two criteria are cumulative, and both must be met if
an employee is to be considered a confidential employee — that is, the confidential relationship must exist between the
employee and his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations. 6

The exclusion from bargaining units of employees who, in the normal course of their duties, become aware of management
policies relating to labor relations is a principal objective sought to be accomplished by the "confidential employee rule." The
broad rationale behind this rule is that employees should not be placed in a position involving a potential conflict of interests.
7 "Management should not be required to handle labor relations matters through employees who are represented by the
union with which the company is required to deal and who in the normal performance of their duties may obtain advance
information of the company’s position with regard to contract negotiations, the disposition of grievances, or other labor
relations matters." 8

There have been ample precedents in this regard, thus in Bulletin Publishing Company v. Hon. Augusto Sanchez, 9 the Court
held that "if these managerial employees would belong to or be affiliated with a Union, the latter might not be assured of
their loyalty to the Union in view of evident conflict of interest. The Union can also become company-dominated with the
presence of managerial employees in Union membership." The same rationale was applied to confidential employees in
"Golden Farms, Inc. v. Ferrer-Calleja" 10 and in the more recent case of "Philips Industrial Development, Inc. v. NLRC" 11
which held that confidential employees, by the very nature of their functions, assist and act in a confidential capacity to, or
have access to confidential matters of, person who exercise managerial functions in the field of labor relations. Therefore, the
rationale behind the ineligibility of managerial employees to form, assist or join a labor union was held equally applicable to
them. 12

An important element of the "confidential employee rule" is the employee’s need to use labor relations information. Thus, in
determining the confidentiality of certain employees, a key question frequently considered is the employees’ necessary
access to confidential labor relations information. 13

It is the contention of respondent corporation that Supervisory employees 3 and 4 and the exempt employees come within
the meaning of the term "confidential employees" primarily because they answered in the affirmative when asked "Do you
handle confidential data or documents?" in the Position Questionnaires submitted by the Union. 14 In the same
questionnaire, however, it was also stated that the confidential information handled by questioned employees relate to
product formulation, product standards and product specification which by no means relate to "labor relations." 15

Granting arguendo that an employee has access to confidential labor relations information but such is merely incidental to his
duties and knowledge thereof is not necessary in the performance of such duties, said access does not render the employee
a confidential employee. 16 "If access to confidential labor relations information is to be a factor in the determination of an
employee’s confidential status, such information must relate to the employer’s labor relations policies. Thus, an employee of
a labor union, or of a management association, must have access to confidential labor relations information with respect to
his employer, the union, or the association, to be regarded a confidential employee, and knowledge of labor relations
information pertaining to the companies with which the union deals, or which the association represents, will not cause an
employee to be excluded from the bargaining unit representing employees of the union or association." 17 "Access to
information which is regarded by the employer to be confidential from the business standpoint, such as financial information
18 or technical trade secrets, will not render an employee a confidential employee." 19

Herein listed are the functions of supervisors 3 and higher: chan rob 1es vi rtual 1aw lib rary

1. To undertake decisions to discontinue/temporarily stop shift operations when situations require.

2. To effectively oversee the quality control function at the processing lines in the storage of chicken and other products.

3. To administer efficient system of evaluation of products in the outlets.

4. To be directly responsible for the recall, holding and rejection of direct manufacturing materials.

5. To recommend and initiate actions in the maintenance of sanitation and hygiene throughout the plant. 20

It is evident that whatever confidential data the questioned employees may handle will have to relate to their functions. From
the foregoing functions, it can be gleaned that the confidential information said employees have access to concern the
employer’s internal business operations. As held in Westinghouse Electric Corporation v. National Labor Relations Board, 21
"an employee may not be excluded from appropriate bargaining unit merely because he has access to confidential
information concerning employer’s internal business operations and which is not related to the field of labor relations." chanroble s virtual law lib rary

It must be borne in mind that Section 3 of Article XIII of the 1987 Constitution mandates the State to guarantee to "all"
workers the right to self-organization. Hence, confidential employees who may be excluded from bargaining unit must be
strictly defined so as not to needlessly deprive many employees of their right to bargain collectively through representatives
of their choosing. 22

In the case at bar, supervisors 3 and above may not be considered confidential employees merely because they handle
"confidential data" as such must first be strictly classified as pertaining to labor relations for them to fall under said
123
restrictions. The information they handle are properly classifiable as technical and internal business operations data which, to
our mind, has no relevance to negotiations and settlement of grievances wherein the interests of a union and the
management are invariably adversarial. Since the employees are not classifiable under the confidential type, this Court rules
that they may appropriately form a bargaining unit for purposes of collective bargaining. Furthermore, even assuming that
they are confidential employees, jurisprudence has established that there is no legal prohibition against confidential
employees who are not performing managerial functions to form and join a union. 23

In this connection, the issue of whether the employees of San Miguel Corporation Magnolia Poultry Products Plants of
Cabuyao, San Fernando, and Otis constitute a single bargaining unit needs to be threshed out.

It is the contention of the petitioner union that the creation of three (3) separate bargaining units, one each for Cabuyao,
Otis and San Fernando as ruled by the respondent Undersecretary, is contrary to the one-company, one-union policy. It adds
that Supervisors level 1 to 4 and exempt employees of the three plants have a similarity or a community of interests.

This Court finds the contention of the petitioner meritorious.

An appropriate bargaining unit may be defined as "a group of employees of a given employer, comprised of all or less than
all of the entire body of employees, which the collective interest of all the employees, consistent with equity to the employer,
indicate to be best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of
the law." 24

A unit to be appropriate must effect a grouping of employees who have substantial, mutual interests in wages, hours,
working conditions and other subjects of collective bargaining.25 cralaw:re d

It is readily seen that the employees in the instant case have "community or mutuality of interests," which is the standard in
determining the proper constituency of a collective bargaining unit. 26 It is undisputed that they all belong to the Magnolia
Poultry Division of San Miguel Corporation. This means that, although they belong to three different plants, they perform
work of the same nature, receive the same wages and compensation, and most importantly, share a common stake in
concerted activities.

In light of these considerations, the Solicitor General has opined that separate bargaining units in the three different plants of
the division will fragmentize the employees of the said division, thus greatly diminishing their bargaining leverage. Any
concerted activity held against the private respondent for a labor grievance in one bargaining unit will, in all probability, not
create much impact on the operations of the private Respondent. The two other plants still in operation can well step up their
production and make up for the slack caused by the bargaining unit engaged in the concerted activity. This situation will
clearly frustrate the provisions of the Labor Code and the mandate of the Constitution. 27

The fact that the three plants are located in three different places, namely, in Cabuyao, Laguna, in Otis, Pandacan, Metro
Manila, and in San Fernando, Pampanga is immaterial. Geographical location can be completely disregarded if the communal
or mutual interests of the employees are not sacrificed as demonstrated in UP v. Calleja-Ferrer where all non-academic rank
and file employees of the University of the Philippines in Diliman, Quezon City, Padre Faura, Manila, Los Baños, Laguna and
the Visayas were allowed to participate in a certification election. We rule that the distance among the three plants is not
productive of insurmountable difficulties in the administration of union affairs. Neither are there regional differences that are
likely to impede the operations of a single bargaining representative.

WHEREFORE, the assailed Order of March 11, 1993 is hereby SET ASIDE and the Order of the Med-Arbiter on December 19,
1990 is REINSTATED under which a certification election among the supervisors (level 1 to 4) and exempt employees of the
San Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis as one bargaining unit is
ordered conducted. cha nrob les vi rtual lawlib rary

SO ORDERED.

Regalado, Puno, Mendoza and Torres, Jr., JJ., concur.

Endnotes:

1. (NCR-OD-M-90-10-01).

2. 210 SCRA 339 (1992).

3. Rollo, pp. 45-46.

4. Art. 245. — Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees
shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form
separate labor organization of their own.

5. Westinghouse Electric Corp. v. NLRB (CA6) 398 F2d 669 (1968); Ladish Co., 178 NLRB 90, 1969.

6. B.F. Goodrich Co., 115 NLRB 722 (1956).

7. Westinghouse Electric Corporation v. NLRB, supra; citing Retail Clerks International Assn. v. NLRB, 125 US App. D.C. 63,
366 F2d 642, 645 n. 7 (1966).

8. In the Matter of The Hoover Company and United Electrical, Radio and Machine Workers of America, 55 NLRB 1321
(1941); Philippine Phosphate Fertilizer Corporation v. Hon. Ruben Torres, Et. Al. 231 SCRA 335 (1994); National Association
of Trade Unions, etc. v. Hon. R. Torres, Et. Al. 239 SCRA 546 (1994).

9. 144 SCRA 682 (1986).


124
10. 175 SCRA 471 (1989).

11. Supra.

12. Philips Industrial Development Inc. v. NLRC, supra.

13. NLRB v. Swift and Co. (CA1) 292 F2d 561; citing Pullman Standard Div., Pullman Inc., 214 NLRB 762, 1974-1975;
Kieckhefer Container Co., 118 NLRB 950, 1957-1958.

14. Rollo, p. 86.

15. Rollo, p. 131.

16. Chrysler Corp., 173 NLRB 1046 (1968); Standard Oil Co., 127 NLRB 656 (1960).

17. Pacific Maritime Assn., 185 NLRB 780 (1970); Air Line Pilots Asso., 97 NLRB 929 (1951).

18. Westinghouse Electric Corp. v. NLRB, supra, citing NLRB v. Armour and Co. (CA10) 154 F2d 570, 169 ALR 421, cert den
329 US 732, 91 L Ed 633, 67 S Ct 92; NLRB v. Poultrymen’s Service Corp. (CA3) 138 F2d 204; Pacific Far East Line Inc., 174
NLRB 1168 (1969), Dun and Bradstreet, Inc., 194 NLRB 9 (1972); Fairfax Family Fund Inc., 195 NLRB 306 (1972).

19. Lykiens Hosiery Mills, Inc. 82 NLRB 981 (1948); Janowski, 83 NLRB 273 (1948).

20. Rollo, p. 157.

21. Supra.

22. Ford Motor Co., 66 NLRB 1317, 1322 (1946); B.F. Goodrich Co., supra; Vulcanized Rubber and Plastics Co., Inc., 129
NLRB 1256 (1961).

23. National Association of Trade Unions v. Hon. Ruben Torres, Et Al., supra.

24. University of the Philippines v. Calleja-Ferrer, 211 SCRA 464 (1992); citing Rothenberg on Labor Relations, p. 482.

25. Democratic Labor Association v. Cebu Stevedoring Co., Inc., Et Al., G.R. No. L-10321, February 28, 1958; citing Smith
on Labor Laws, 316-317; Francisco, Labor Laws, 162.

26. Supra; National Association of Free Trade Unions v. Mainit Lumber Development Company Workers Union-United Lumber
and General Workers of the Philippines, 192 SCRA 598 (1990); Philippine Land-Air-Sea Labor Union v. Court of Industrial
Relations, 110 Phil. 176.

27. Rollo, pp. 136-137.

125
THIRD DIVISION

[G.R. NO. 161933 : April 22, 2008]

STANDARD CHARTERED BANK EMPLOYEES UNION (SCBEU-NUBE), Petitioner, v. STANDARD CHARTERED BANK
and ANNEMARIE DURBIN, in her capacity as Chief Executive Officer, Philippines, Standard Chartered
Bank, Respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

For resolution is an appeal by certiorari filed by petitioner under Rule 45 of the Rules of Court, assailing the Decision1 dated
October 9, 2002 and Resolution2 dated January 26, 2004 issued by the Court of Appeals (CA), dismissing their petition and
affirming the Secretary of Labor and Employment's Orders dated May 31, 2001 and August 30, 2001.

Petitioner and the Standard Chartered Bank (Bank) began negotiating for a new Collective Bargaining Agreement (CBA) in
May 2000 as their 1998-2000 CBA already expired. Due to a deadlock in the negotiations, petitioner filed a Notice of Strike
prompting the Secretary of Labor and Employment to assume jurisdiction over the labor dispute.

On May 31, 2001, Secretary Patricia A. Sto. Tomas of the Department of Labor and Employment (DOLE) issued an Order with
the following dispositive portion:

WHEREFORE, PREMISES CONSIDERED, the Standard Chartered Bank and the Standard Chartered Bank Employees Union are
directed to execute their collective bargaining agreement effective 01 April 2001 until 30 March 2003 incorporating therein
the foregoing dispositions and the agreements they reached in the course of negotiations and conciliation. All other
submitted issues that were not passed upon are dismissed.

The charge of unfair labor practice for bargaining in bad faith and the claim for damages relating thereto are hereby
dismissed for lack of merit.

Finally, the charge of unfair labor practice for gross violation of the economic provisions of the CBA is hereby dismissed for
want of jurisdiction.

SO ORDERED.3

Both petitioner and the Bank filed their respective motions for reconsideration, which were denied by the Secretary per Order
dated August 30, 2001.4

Petitioner sought recourse with the CA via a Petition for Certiorari, and in the assailed Decision dated October 9, 20025 and
Resolution dated January 26, 2004,6 the CA dismissed their petition and affirmed the Secretary's Orders.

Hence, herein petition based on the following grounds:

I.

THE COURT A QUO ERRED IN DECIDING THAT THERE WAS NO BASIS FOR REVISING THE SCOPE OF EXCLUSIONS FROM THE
APPROPRIATE BARGAINING UNIT UNDER THE CBA.

II.

THE COURT A QUO ERRED IN DECIDING THAT A ONE-MONTH OR LESS TEMPORARY OCCUPATION OF A POSITION (ACTING
CAPACITY) DOES NOT MERIT ADJUSTMENT IN REMUNERATION.7

The resolution of this case has been overtaken by the execution of the parties' 2003-2005 CBA. While this would render the
case moot and academic, nevertheless, the likelihood that the same issues will come up in the parties' future CBA
negotiations is not far-fetched, thus compelling its resolution. Courts will decide a question otherwise moot if it is capable of
repetition yet evading review.[8]

The CBA provisions in dispute are the exclusion of certain employees from the appropriate bargaining unit and the
adjustment of remuneration for employees serving in an acting capacity for one month.

In their proposal, petitioner sought the exclusion of only the following employees from the appropriate bargaining unit - all
managers who are vested with the right to hire and fire employees, confidential employees, those with access to labor
relations materials, Chief Cashiers, Assistant Cashiers, personnel of the Telex Department and one Human Resources (HR)
staff.9
126
In the previous 1998-2000 CBA,10 the excluded employees are as follows:

A. All covenanted and assistant officers (now called National Officers)

B. One confidential secretary of each of the:

1. Chief Executive, Philippine Branches

2. Deputy Chief Executive/Head, Corporate Banking Group

3. Head, Finance

4. Head, Human Resources

5. Manager, Cebu

6. Manager, Iloilo

7. Covenanted Officers provided said positions shall be filled by new recruits.

C. The Chief Cashiers and Assistant Cashiers in Manila, Cebu and Iloilo, and in any other branch that the BANK may establish
in the country.

D. Personnel of the Telex Department

E. All Security Guards

F. Probationary employees, without prejudice to Article 277 (c) of the Labor Code, as amended by R.A. 6715, casuals or
emergency employees; and c ralawli brary

G. One (1) HR Staff11

The Secretary, however, maintained the previous exclusions because petitioner failed to show that the employees sought to
be removed from the list qualify for exclusion.12

With regard to the remuneration of employees working in an acting capacity, it was petitioner's position that additional pay
should be given to an employee who has been serving in a temporary/acting capacity for one week. The Secretary likewise
rejected petitioner's proposal and instead, allowed additional pay for those who had been working in such capacity for one
month. The Secretary agreed with the Bank's position that a restrictive provision would curtail management's prerogative,
and at the same time, recognized that employees should not be made to work in an acting capacity for long periods of time
without adequate compensation.

The Secretary's disposition of the issues raised by petitioner were affirmed by the CA.13 The Court sustains the CA.

Whether or not the employees sought to be excluded from the appropriate bargaining unit are confidential employees is a
question of fact, which is not a proper issue in a Petition for Review under Rule 45 of the Rules of Court.14 This holds more
true in the present case in which petitioner failed to controvert with evidence the findings of the Secretary and the CA.

The disqualification of managerial and confidential employees from joining a bargaining unit for rank and file employees is
already well-entrenched in jurisprudence. While Article 245 of the Labor Code limits the ineligibility to join, form and assist
any labor organization to managerial employees, jurisprudence has extended this prohibition to confidential employees or
those who by reason of their positions or nature of work are required to assist or act in a fiduciary manner to managerial
employees and hence, are likewise privy to sensitive and highly confidential records.15

In this case, the question that needs to be answered is whether the Bank's Chief Cashiers and Assistant Cashiers, personnel
of the Telex Department and HR staff are confidential employees, such that they should be excluded.

As regards the qualification of bank cashiers as confidential employees, National Association of Trade Unions (NATU) -
Republic Planters Bank Supervisors Chapter v. Torres16 declared that they are confidential employees having control, custody
and/or access to confidential matters, e.g., the branch's cash position, statements of financial condition, vault combination,
cash codes for telegraphic transfers, demand drafts and other negotiable instruments, pursuant to Sec. 1166.4 of the Central
Bank Manual regarding joint custody, and therefore, disqualified from joining or assisting a union; or joining, assisting or
forming any other labor organization.17

Golden Farms, Inc. v. Ferrer-Calleja18 meanwhile stated that "confidential employees such as accounting personnel, radio
and telegraph operators who, having access to confidential information, may become the source of undue advantage. Said
employee(s) may act as spy or spies of either party to a collective bargaining agreement."19

Finally, in Philips Industrial Development, Inc. v. National Labor Relations Commission,20 the Court designated personnel
staff, in which human resources staff may be qualified, as confidential employees because by the very nature of their
functions, they assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise
managerial functions in the field of labor relations.

127
Petitioner insists that the foregoing employees are not confidential employees; however, it failed to buttress its claim. Aside
from its generalized arguments, and despite the Secretary's finding that there was no evidence to support it, petitioner still
failed to substantiate its claim. Petitioner did not even bother to state the nature of the duties and functions of these
employees, depriving the Court of any basis on which it may be concluded that they are indeed confidential employees. As
aptly stated by the CA:

While We agree that petitioner's proposed revision is in accordance with the law, this does not necessarily mean that the list
of exclusions enumerated in the 1998-2000 CBA is contrary to law. As found by public respondent, petitioner failed to
show that the employees sought to be removed from the list of exclusions are actually rank and file employees
who are not managerial or confidential in status and should, accordingly, be included in the appropriate
bargaining unit.

Absent any proof that Chief Cashiers and Assistant Cashiers, personnel of the Telex department and one (1) HR Staff have
mutuality of interest with the other rank and file employees, then they are rightfully excluded from the appropriate
bargaining unit. x x x21(Emphasis supplied) c ralawl ibra ry

Petitioner cannot simply rely on jurisprudence without explaining how and why it should apply to this case. Allegations must
be supported by evidence. In this case, there is barely any at all.

There is likewise no reason for the Court to disturb the conclusion of the Secretary and the CA that the additional
remuneration should be given to employees placed in an acting capacity for one month. The CA correctly stated:

Likewise, We uphold the public respondent's Order that no employee should be temporarily placed in a position (acting
capacity) for more than one month without the corresponding adjustment in the salary. Such order of the public respondent
is not in violation of the "equal pay for equal work" principle, considering that after one (1) month, the employee performing
the job in an acting capacity will be entitled to salary corresponding to such position.

xxx

In arriving at its Order, the public respondent took all the relevant evidence into account and weighed both parties
arguments extensively. Thus, public respondent concluded that a restrictive provision with respect to employees being placed
in an acting capacity may curtail management's valid exercise of its prerogative. At the same time, it recognized that
employees should not be made to perform work in an acting capacity for extended periods of time without being adequately
compensated. x x x22

Thus, the Court reiterates the doctrine that:

[T]he office of a Petition for Review on Certiorari under Rule 45 of the Rules of Court requires that it shall raise only
questions of law. The factual findings by quasi-judicial agencies, such as the Department of Labor and Employment, when
supported by substantial evidence, are entitled to great respect in view of their expertise in their respective fields. Judicial
review of labor cases does not go so far as to evaluate the sufficiency of evidence on which the labor official's findings rest. It
is not our function to assess and evaluate all over again the evidence, testimonial and documentary, adduced by the parties
to an appeal, particularly where the findings of both the trial court (here, the DOLE Secretary) and the appellate court on the
matter coincide, as in this case at bar. The Rule limits that function of the Court to the review or revision of errors of law and
not to a second analysis of the evidence. x x x Thus, absent any showing of whimsical or capricious exercise of judgment,
and unless lack of any basis for the conclusions made by the appellate court be amply demonstrated, we may not disturb
such factual findings.23

WHEREFORE, the petition is DENIED.

SO ORDERED.

Ynares-Santiago, J., Chairperson, Chico-Nazario, Nachura, Reyes, JJ., concur.

Endnotes:

1
Penned by Associate Justice Elvi John S. Asuncion, with Associate Justices Portia Aliño-Hormachuelos and Juan Q.
Enriquez, Jr., concurring; rollo, pp. 27-31.

2
Id. at 25.

3
CA rollo, p. 42.

4
Id. at 17-23.

5
Id. at 243-246.

128
6
Id. at 268.

7
Rollo, p. 14.

8
Metropolitan Bank and Trust Company, Inc. v. National Wages and Productivity Commission, G.R. No. 144322, February 6,
2007, 514 SCRA 346, 360.

9
CA rollo, p. 37.

10
Id. at 102.

11
Id. at 105.

12
Id. at 37.

13
Id. at 246.

14
Kabankalan Catholic College v. Kabankalan Catholic College Union-PACIWU-TUCP, G.R. No. 157320, June 28, 2005, 461
SCRA 481, 491.

15
Metrolab Industries, Inc. v. Roldan-Confesor, 324 Phil. 416 437-438 (1996).

16
G.R. No. 93468, December 29, 1994, 239 SCRA 546.

17
Id. at 559.

18
G.R. No. 78755, July 19, 1989, 175 SCRA 471.

19
Id. at 477.

20
G.R. No. 88957, June 25, 1992, 210 SCRA 339, 347-348.

21
Rollo, p. 29.

22
Id. at 29-30.

23
Telefunken Semiconductors Employees Union-FFW v. Court of Appeals, 401 Phil. 776, 791-792 (2000).

129
THIRD DIVISION

[G.R. NO. 157117 : November 20, 2006]

COASTAL SUBIC BAY TERMINAL, INC., Petitioner, v. 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.

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:

130
1. COASTAL SUBIC BAY TERMINAL, INC. SUPERVISORY EMPLOYEES UNION-APSOTEU; and cralawlib rary

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:

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? cra lawlib rary

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

131
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 '.

xxx

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? cralawlib ra ry

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.24Thus, 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. ς ηα ñrοb lεš ν ιr†υαl l αω l ιb rα rÿ

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
132
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. ςη αñ rοbl ε š νιr†υ αl lα ω lιbrαrÿ

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.

Endnotes:

1
Rollo, pp. 51-64.

2
Id. at 66.

3
Id. at 154-158.

4
Id. at 126-127.

5
Id. at 127.

6
Id. at 158.

7
Id. at 171-172.

8
Id. at 63.

9
Id. at 62.

10
Id. at 66.

11
Id. at 23-24.

12
No. L-22228, February 27, 1969, 27 SCRA 40.

13
Nos. L-50283-84, April 20, 1983, 121 SCRA 444.

14
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.

15
Article 212 (b).

16
Rules and Regulations Implementing R.A. 6715, approved by Secretary of the Department of Labor and Employment
Franklin Drilon on May 24, 1989.

17
Rule III, Section 1 in relation to Rule I, Section 1(f).

Rule III, Section 1. Where to file. - Applications for registration of independent labor unions, chartered locals, workers'
associations shall be filed with the Regional Office where the applicant principally operates. It shall be processed by the Labor
Relations Division at the Regional Office in accordance with Sections 2-A, 2-C, and 2-E of this Rule.

133
Applications for registration of federations, national unions or workers' associations operating in more than one region shall
be filed with the Bureau or the Regional Offices, but shall be processed by the Bureau in accordance with Sections 2-B and 2-
D of this Rule.

18
Supra note 13.

19
labor code, Article 231.

ART 231. Registry of unions and file of collective agreements. - The Bureau shall keep a registry of legitimate labor
organizations '.

xxx

20
Rollo, p. 156.

21
Sec. 5, Rule V, Book V of the Implementing Rules of the Labor Code.

22
Sec. 1, Rule VI, Book V of the Implementing Rules of the Labor Code.

23
Supra note 21.

24
See Tagaytay Highlands International Golf Club, Incorporated v. Tagaytay Highlands Employees Union-PTGWO, G.R. No.
142000, January 22, 2003, 395 SCRA 699, 707.

25
Section 1(i), Rule I, Book V of the Implementing Rules of the Labor Code.

26
Alliance of Nationalist and Genuine Labor Org. v. Samahan ng mga Manggagawang Nagkakaisa sa Manila Bay Spinning
Mills, G.R. No.118562, July 5, 1996, 258 SCRA 371, 377.

27
De La Salle University Medical Center and College of Medicine v. Laguesma, G.R. No. 102084, August 12, 1998, 294 SCRA
141, 149.

28
ART. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory
employees. ' Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees
shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form
separate labor organizations of their own.

29
Atlas Lithographic Services, Inc. v. Laguesma, G.R. No. 96566, January 6, 1992, 205 SCRA 12, 17.

30
Id. at 19.

31
Id.

32
Supra note 27 at 150.

33
Id. at 149 citing Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., No. L-33987, September 4, 1975, 66
SCRA 512, 519.

134
THIRD DIVISION

TUNAY NA PAGKAKAISA NG G.R. No. 162025


MANGGAGAWA
SA ASIABREWERY, Present:
Petitioner,
CARPIO MORALES, J.,
Chairperson,
- versus - BRION,
BERSAMIN,
ABAD, and
VILLARAMA, JR., JJ.

ASIA BREWERY, INC., Promulgated:


Respondent.
August 3, 2010
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

VILLARAMA, JR., J.:

For resolution is an appeal by certiorari filed by petitioner under Rule 45 of the 1997 Rules of
Civil Procedure, as amended, assailing the Decision[1] dated November 22, 2002 and
Resolution[2] dated January 28, 2004 rendered by the Court of Appeals (CA) in CA-G.R. SP No.
55578, granting the petition of respondent company and reversing the Voluntary Arbitrators
Decision[3] dated October 14, 1999.

The facts are:

Respondent Asia Brewery, Inc. (ABI) is engaged in the manufacture, sale and distribution of beer,
shandy, bottled water and glass products. ABI entered into a Collective Bargaining Agreement
(CBA),[4] effective for five (5) years from August 1, 1997 to July 31, 2002, with Bisig at Lakas
ng mga Manggagawa sa Asia-Independent (BLMA-INDEPENDENT), the exclusive bargaining
representative of ABIs rank-and-file employees. On October 3, 2000, ABI and BLMA-
INDEPENDENT signed a renegotiated CBA effective from August 1, 2000 to 31 July 2003.[5]

Article I of the CBA defined the scope of the bargaining unit, as follows:
Section 1. Recognition. The COMPANY recognizes the UNION as the sole and exclusive
bargaining representative of all the regular rank-and-file daily paid employees within the scope of
the appropriate bargaining unit with respect to rates of pay, hours of work and other terms and
conditions of employment. The UNION shall not represent or accept for membership employees
outside the scope of the bargaining unit herein defined.

Section 2. Bargaining Unit. The bargaining unit shall be comprised of all regular rank-
and-file daily-paid employees of the COMPANY. However, the following jobs/positions as herein
defined shall be excluded from the bargaining unit, to wit:

1. Managers
2. Assistant Managers
3. Section Heads
135
4. Supervisors
5. Superintendents
6. Confidential and Executive Secretaries
7. Personnel, Accounting and Marketing Staff
8. Communications Personnel
9. Probationary Employees
10. Security and Fire Brigade Personnel
11. Monthly Employees
12. Purchasing and Quality Control Staff[6] [EMPHASIS SUPPLIED.]

Subsequently, a dispute arose when ABIs management stopped deducting union dues from
eighty-one (81) employees, believing that their membership in BLMA-INDEPENDENT violated
the CBA. Eighteen (18) of these affected employees are QA Sampling Inspectors/Inspectresses
and Machine Gauge Technician who formed part of the Quality Control Staff. Twenty (20)
checkers are assigned at the Materials Department of the Administration Division, Full Goods
Department of the Brewery Division and Packaging Division. The rest are secretaries/clerks
directly under their respective division managers.[7]

BLMA-INDEPENDENT claimed that ABIs actions restrained the employees right to self-
organization and brought the matter to the grievance machinery. As the parties failed to amicably
settle the controversy, BLMA-INDEPENDENT lodged a complaint before the National
Conciliation and Mediation Board (NCMB). The parties eventually agreed to submit the case for
arbitration to resolve the issue of [w]hether or not there is restraint to employees in the exercise
of their right to self-organization.[8]

In his Decision, Voluntary Arbitrator Bienvenido Devera sustained the BLMA-INDEPENDENT


after finding that the records submitted by ABI showed that the positions of the subject employees
qualify under the rank-and-file category because their functions are merely routinary and
clerical. He noted that the positions occupied by the checkers and secretaries/clerks in the
different divisions are not managerial or supervisory, as evident from the duties and
responsibilities assigned to them. With respect to QA Sampling Inspectors/Inspectresses and
Machine Gauge Technician, he ruled that ABI failed to establish with sufficient clarity their basic
functions as to consider them Quality Control Staff who were excluded from the coverage of the
CBA. Accordingly, the subject employees were declared eligible for inclusion within the
bargaining unit represented by BLMA-INDEPENDENT.[9]

On appeal, the CA reversed the Voluntary Arbitrator, ruling that:


WHEREFORE, foregoing premises considered, the questioned decision of the Honorable
Voluntary Arbitrator Bienvenido De Vera is hereby REVERSED and SET ASIDE, and A NEW
ONE ENTERED DECLARING THAT:

a) the 81 employees are excluded from and are not eligible for inclusion in the
bargaining unit as defined in Section 2, Article I of the CBA;

b) the 81 employees cannot validly become members of respondent and/or if


already members, that their membership is violative of the CBA and that they
should disaffiliate from respondent; and

c) petitioner has not committed any act that restrained or tended to restrain its
employees in the exercise of their right to self-organization.

NO COSTS.

SO ORDERED.[10]
136
BLMA-INDEPENDENT filed a motion for reconsideration. In the meantime, a certification
election was held on August 10, 2002 wherein petitioner Tunay na Pagkakaisa ng Manggagawa
sa Asia (TPMA) won. As the incumbent bargaining representative of ABIs rank-and-file
employees claiming interest in the outcome of the case, petitioner filed with the CA an omnibus
motion for reconsideration of the decision and intervention, with attached petition signed by the
union officers.[11] Both motions were denied by the CA.[12]

The petition is anchored on the following grounds:


(1)
THE COURT OF APPEALS ERRED IN RULING THAT THE 81 EMPLOYEES ARE
EXCLUDED FROM AND ARE NOT ELIGIBLE FOR INCLUSION IN THE BARGAINING
UNIT AS DEFINED IN SECTION 2, ARTICLE 1 OF THE CBA[;]
(2)
THE COURT OF APPEALS ERRED IN HOLDING THAT THE 81 EMPLOYEES CANNOT
VALIDLY BECOME UNION MEMBERS, THAT THEIR MEMBERSHIP IS VIOLATIVE OF
THE CBA AND THAT THEY SHOULD DISAFFILIATE FROM RESPONDENT;
(3)
THE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT PETITIONER (NOW
PRIVATE RESPONDENT) HAS NOT COMMITTED ANY ACT THAT RESTRAINED OR
TENDED TO RESTRAIN ITS EMPLOYEES IN THE EXERCISE OF THEIR RIGHT TO SELF-
ORGANIZATION.[13]

Although Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor
organization to managerial employees, jurisprudence has extended this prohibition to confidential
employees or those who by reason of their positions or nature of work are required to assist or act
in a fiduciary manner to managerial employees and hence, are likewise privy to sensitive and
highly confidential records.[14] Confidential employees are thus excluded from the rank-and-file
bargaining unit. The rationale for their separate category and disqualification to join any labor
organization is similar to the inhibition for managerial employees because if allowed to be
affiliated with a Union, the latter might not be assured of their loyalty in view of evident conflict
of interests and the Union can also become company-denominated with the presence of
managerial employees in the Union membership.[15] Having access to confidential information,
confidential employees may also become the source of undue advantage. Said employees may
act as a spy or spies of either party to a collective bargaining agreement.[16]

In Philips Industrial Development, Inc. v. NLRC,[17] this Court held that petitioners division
secretaries, all Staff of General Management, Personnel and Industrial Relations Department,
Secretaries of Audit, EDP and Financial Systems are confidential employees not included within
the rank-and-file bargaining unit.[18] Earlier, in Pier 8 Arrastre & Stevedoring Services, Inc. v.
Roldan-Confesor,[19] we declared that legal secretaries who are tasked with, among others, the
typing of legal documents, memoranda and correspondence, the keeping of records and files, the
giving of and receiving notices, and such other duties as required by the legal personnel of the
corporation, fall under the category of confidential employees and hence excluded from the
bargaining unit composed of rank-and-file employees.[20]

Also considered having access to vital labor information are the executive secretaries of the
General Manager and the executive secretaries of the Quality Assurance Manager, Product
Development Manager, Finance Director, Management System Manager, Human Resources
137
Manager, Marketing Director, Engineering Manager, Materials Manager and Production
Manager.[21]

In the present case, the CBA expressly excluded Confidential and Executive Secretaries from the
rank-and-file bargaining unit, for which reason ABI seeks their disaffiliation from
petitioner. Petitioner, however, maintains that except for Daisy Laloon, Evelyn Mabilangan and
Lennie Saguan who had been promoted to monthly paid positions, the following secretaries/clerks
are deemed included among the rank-and-file employees of ABI:[22]
NAME DEPARTMENT IMMEDIATE SUPERIOR

C1 ADMIN DIVISION
1. Angeles, Cristina C. Transportation Mr. Melito K. Tan
2. Barraquio, Carina P. Transportation Mr. Melito K. Tan
3. Cabalo, Marivic B. Transportation Mr. Melito K. Tan
4. Fameronag, Leodigario C. Transportation Mr. Melito K. Tan

1. Abalos, Andrea A. Materials Mr. Andres G. Co


2. Algire, Juvy L. Materials Mr. Andres G. Co
3. Anouevo, Shirley P. Materials Mr. Andres G. Co
4. Aviso, Rosita S. Materials Mr. Andres G. Co
5. Barachina, Pauline C. Materials Mr. Andres G. Co
6. Briones, Catalina P. Materials Mr. Andres G. Co
7. Caralipio, Juanita P. Materials Mr. Andres G. Co
8. Elmido, Ma. Rebecca S. Materials Mr. Andres G. Co
9. Giron, Laura P. Materials Mr. Andres G. Co
10. Mane, Edna A. Materials Mr. Andres G. Co

xxxx

C2 BREWERY DIVISION

1. Laloon, Daisy S. Brewhouse Mr. William Tan

1. Arabit, Myrna F. Bottling Production Mr. Julius Palmares


2. Burgos, Adelaida D. Bottling Production Mr. Julius Palmares
3. Menil, Emmanuel S. Bottling Production Mr. Julius Palmares
4. Nevalga, Marcelo G. Bottling Production Mr. Julius Palmares

1. Mapola, Ma. Esraliza T. Bottling Maintenance Mr. Ernesto Ang


2. Velez, Carmelito A. Bottling Maintenance Mr. Ernesto Ang

1. Bordamonte, Rhumela D. Bottled Water Mr. Faustino Tetonche


2. Deauna, Edna R. Bottled Water Mr. Faustino Tetonche
3. Punongbayan, Marylou F. Bottled Water Mr. Faustino Tetonche
4. Saguan, Lennie Y. Bottled Water Mr. Faustino Tetonche

1. Alcoran, Simeon A. Full Goods Mr. Tsoi Wah Tung


2. Cervantes, Ma. Sherley Y. Full Goods Mr. Tsoi Wah Tung
3. Diongco, Ma. Teresa M. Full Goods Mr. Tsoi Wah Tung
4. Mabilangan, Evelyn M. Full Goods Mr. Tsoi Wah Tung
5. Rivera, Aurora M. Full Goods Mr. Tsoi Wah Tung
6. Salandanan, Nancy G. Full Goods Mr. Tsoi Wah Tung

1. Magbag, Ma. Corazon C. Tank Farm/ Mr. Manuel Yu Liat


Cella Services

1. Capiroso, Francisca A. Quality Assurance Ms. Regina Mirasol

1. Alconaba, Elvira C. Engineering Mr. Clemente Wong


2. Bustillo, Bernardita E. Electrical Mr. Jorge Villarosa
138
3. Catindig, Ruel A. Civil Works Mr. Roger Giron
4. Sison, Claudia B. Utilities Mr. Venancio Alconaba

xxxx

C3 PACKAGING DIVISION

1. Alvarez, Ma. Luningning L. GP Administration Ms. Susan Bella


2. Caiza, Alma A. GP Technical Mr. Chen Tsai Tyan
3. Cantalejo, Aida S. GP Engineering Mr. Noel Fernandez
4. Castillo, Ma. Riza R. GP Production Mr. Tsai Chen Chih
5. Lamadrid, Susana C. GP Production Mr. Robert Bautista
6. Mendoza, Jennifer L. GP Technical Mr. Mel Oa

As can be gleaned from the above listing, it is rather curious that there would be several
secretaries/clerks for just one (1) department/division performing tasks which are mostly routine
and clerical. Respondent insisted they fall under the Confidential and Executive Secretaries
expressly excluded by the CBA from the rank-and-file bargaining unit.However, perusal of the
job descriptions of these secretaries/clerks reveals that their assigned duties and responsibilities
involve routine activities of recording and monitoring, and other paper works for their respective
departments while secretarial tasks such as receiving telephone calls and filing of office
correspondence appear to have been commonly imposed as additional duties.[23] Respondent
failed to indicate who among these numerous secretaries/clerks have access to confidential data
relating to management policies that could give rise to potential conflict of interest with their
Union membership. Clearly, the rationale under our previous rulings for the exclusion
of executive secretaries or division secretaries would have little or no significance considering
the lack of or very limited access to confidential information of these secretaries/clerks. It is not
even farfetched that the job category may exist only on paper since they are all daily-paid
workers. Quite understandably, petitioner had earlier expressed the view that the positions were
just being reclassified as these employees actually discharged routine functions.

We thus hold that the secretaries/clerks, numbering about forty (40), are rank-and-file employees
and not confidential employees.

With respect to the Sampling Inspectors/Inspectresses and the Gauge Machine Technician, there
seems no dispute that they form part of the Quality Control Staff who, under the express terms of
the CBA, fall under a distinct category. But we disagree with respondents contention that the
twenty (20) checkers are similarly confidential employees being quality control staff entrusted
with the handling and custody of company properties and sensitive information.

Again, the job descriptions of these checkers assigned in the storeroom section of the Materials
Department, finishing section of the Packaging Department, and the decorating and glass sections
of the Production Department plainly showed that they perform routine and mechanical tasks
preparatory to the delivery of the finished products.[24] While it may be argued that quality control
extends to post-production phase -- proper packaging of the finished products -- no evidence was
presented by the respondent to prove that these daily-paid checkers actually form part of the
companys Quality Control Staff who as such were exposed to sensitive, vital and confidential
information about [companys] products or have knowledge of mixtures of the products, their
defects, and even their formulas which are considered trade secrets. Such allegations of
respondent must be supported by evidence.[25]

139
Consequently, we hold that the twenty (20) checkers may not be considered confidential
employees under the category of Quality Control Staff who were expressly excluded from the
CBA of the rank-and-file bargaining unit.

Confidential employees are defined as those who (1) assist or act in a confidential capacity, (2) to
persons who formulate, determine, and effectuate management policies in the field of labor
relations. The two (2) criteria are cumulative, and both must be met if an employee is to be
considered a confidential employee that is, the confidential relationship must exist between the
employee and his supervisor, and the supervisor must handle the prescribed responsibilities relating
to labor relations. The exclusion from bargaining units of employees who, in the normal course of
their duties, become aware of management policies relating to labor relations is a principal
objective sought to be accomplished by the confidential employee rule.[26] There is no showing in
this case that the secretaries/clerks and checkers assisted or acted in a confidential capacity to
managerial employees and obtained confidential information relating to labor relations
policies. And even assuming that they had exposure to internal business operations of the company,
respondent claimed, this is not per se ground for their exclusion in the bargaining unit of the daily-
paid rank-and-file employees.[27]

Not being confidential employees, the secretaries/clerks and checkers are not disqualified from
membership in the Union of respondents rank-and-file employees. Petitioner argues that
respondents act of unilaterally stopping the deduction of union dues from these employees
constitutes unfair labor practice as it restrained the workers exercise of their right to self-
organization, as provided in Article 248 (a) of the Labor Code.

Unfair labor practice refers to acts that violate the workers right to organize. The prohibited acts
are related to the workers right to self organization and to the observance of a CBA. For a charge
of unfair labor practice to prosper, it must be shown that ABI was motivated by ill will, bad faith,
or fraud, or was oppressive to labor, or done in a manner contrary to morals, good customs, or
public policy, and, of course, that social humiliation, wounded feelings or grave anxiety resulted
x x x[28] from ABIs act in discontinuing the union dues deduction from those employees it
believed were excluded by the CBA. Considering that the herein dispute arose from a simple
disagreement in the interpretation of the CBA provision on excluded employees from the
bargaining unit, respondent cannot be said to have committed unfair labor practice that restrained
its employees in the exercise of their right to self-organization, nor have thereby demonstrated an
anti-union stance.

WHEREFORE, the petition is GRANTED. The Decision dated November 22, 2002 and
Resolution dated January 28, 2004 of the Court of Appeals in CA-G.R. SP No. 55578 are
hereby REVERSED and SET ASIDE. The checkers and secretaries/clerks of respondent
company are hereby declared rank-and-file employees who are eligible to join the Union of the
rank-and-file employees.

No costs.

SO ORDERED.

MARTIN S. VILLARAMA, JR.


Associate Justice

140
WE CONCUR:

CONCHITA CARPIO MORALES


Associate Justice
Chairperson

LUCAS P. BERSAMIN
Associate Justice
ARTURO D. BRION
Associate Justice

ROBERTO A. ABAD
Associate Justice

ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Courts Division.

CONCHITA CARPIO MORALES


Associate Justice
Chairperson, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the 1987 Constitution and the Division Chairpersons
Attestation, I certify that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

RENATO C. CORONA
Chief Justice


Designated additional member per Special Order No. 843 dated May 17, 2010.

141
[1]
CA rollo, pp. 190-201. Penned by Associate Justice Jose L. Sabio, Jr. and concurred in by Associate Justices Portia Alio-
Hormachuelos and Amelita G. Tolentino.
[2]
Id. at 245-246.
[3]
Id. at 27-40.
[4]
Id. at 80-101.
[5]
Rollo, pp. 103-124.
[6]
Id. at 105.
[7]
CA rollo, pp. 47-49, 61-63.
[8]
Records, pp. 220-221.
[9]
CA rollo, pp. 37-40.
[10]
Id. at 200.
[11]
Id. at 204-219.
[12]
Id. at 245-246.
[13]
Rollo, pp. 53, 59, 61.
[14]
Metrolab Industries, Inc. v. Roldan-Confesor, G.R. No. 108855, February 28, 1996, 254 SCRA 182, 197.
[15]
Bulletin Publishing Corporation v. Sanchez, No. L-74425, October 7, 1986, 144 SCRA 628, 635.
[16]
Golden Farms, Inc. v. Ferrer-Calleja, G.R. No. 78755, July 19, 1989, 175 SCRA 471, 477.
[17]
G.R. No. 88957, June 25, 1992, 210 SCRA 339.
[18]
Id. at 347.
[19]
G.R. No. 110854, February 13, 1995, 241 SCRA 294.
[20]
Id. at 305.
[21]
Metrolab Industries, Inc. v. Roldan-Confesor, supra note 14, at 196-197.
[22]
CA rollo, pp. 62-63.
[23]
Id. at 68-79.
[24]
Id. at 64-67.
[25]
See Standard Chartered Bank Employees Union (SCBEU-NUBE) v. Standard Chartered Bank, G.R. No. 161933, April 22, 2008,
552 SCRA 284, 293.
[26]
San Miguel Corp. Supervisors and Exempt Employees Union v. Laguesma, G.R. No. 110399, August 15, 1997, 277 SCRA 370, 374-
375, citing Westinghouse Electric Corp. v. NLRB (CA6) 398 F2d 669 (1968), Ladish Co., 178 NLRB 90 (1969) and B.F. Goodrich
Co., 115 NLRB 722 (1956).
[27]
Id. at 378.
[28]
Union of Filipro Employees-Drug, Food and Allied Industries Unions-Kilusang Mayo Uno v. Nestl Philippines, Incorporated, G.R.
Nos. 158930-31 & 158944-45, March 3, 2008, 547 SCRA 323, 335, citing San Miguel Corporation v. Del Rosario, G.R. Nos.
168194 & 168603, December 13, 2005, 477 SCRA 604, 619.

142
FIRST DIVISION

G.R. No. 172132, July 23, 2014

THE HERITAGE HOTEL MANILA, ACTING THROUGH ITS OWNER, GRAND PLAZA HOTEL
CORPORATION, Petitioner, v. SECRETARY OF LABOR AND EMPLOYMENT; MED-ARBITER TOMAS F. FALCONITIN;
AND NATIONAL UNION OF WORKERS IN THE HOTEL, RESTAURANT AND ALLIED INDUSTRIES–HERITAGE HOTEL
MANILA SUPERVISORS CHAPTER (NUWHRAIN-HHMSC), Respondents.

DECISION

BERSAMIN, J.:

Although case law has repeatedly held that the employer was but a bystander in respect of the conduct of the certification
election to decide the labor organization to represent the employees in the bargaining unit, and that the pendency of the
cancellation of union registration brought against the labor organization applying for the certification election should not
prevent the conduct of the certification election, this review has to look again at the seemingly never-ending quest of the
petitioner employer to stop the conduct of the certification election on the ground of the pendency of proceedings to cancel
the labor organization’s registration it had initiated on the ground that the membership of the labor organization was a
mixture of managerial and supervisory employees with the rank-and-file employees.

Under review at the instance of the employer is the decision promulgated on December 13, 2005,1whereby the Court of
Appeals (CA) dismissed its petition for certiorari to assail the resolutions of respondent Secretary of Labor and Employment
sanctioning the conduct of the certification election initiated by respondent labor organization.2 cralawlawli bra ry

Antecedents

On October 11, 1995, respondent National Union of Workers in Hotel Restaurant and Allied Industries-Heritage Hotel Manila
Supervisors Chapter (NUWHRAIN-HHMSC) filed a petition for certification election,3seeking to represent all the supervisory
employees of Heritage Hotel Manila. The petitioner filed its opposition, but the opposition was deemed denied on February
14, 1996 when Med-Arbiter Napoleon V. Fernando issued his order for the conduct of the certification election.

The petitioner appealed the order of Med-Arbiter Fernando, but the appeal was also denied. A pre-election conference was
then scheduled. On February 20, 1998, however, the pre-election conference was suspended until further notice because of
the repeated non-appearance of NUWHRAIN-HHMSC.4 cralawlawlibra ry

On January 29, 2000, NUWHRAIN-HHMSC moved for the conduct of the pre-election conference. The petitioner primarily filed
its comment on the list of employees submitted by NUWHRAIN-HHMSC, and simultaneously sought the exclusion of some
from the list of employees for occupying either confidential or managerial positions.5 The petitioner filed a motion to dismiss
on April 17, 2000,6 raising the prolonged lack of interest of NUWHRAIN-HHMSC to pursue its petition for certification election.

On May 12, 2000, the petitioner filed a petition for the cancellation of NUWHRAIN-HHMSC’s registration as a labor union for
failing to submit its annual financial reports and an updated list of members as required by Article 238 and Article 239 of
the Labor Code, docketed as Case No. NCR-OD-0005-004-IRD entitled The Heritage Hotel Manila, acting through its owner,
Grand Plaza Hotel Corporation v. National Union of Workers in the Hotel, Restaurant and Allied Industries-Heritage Hotel
Manila Supervisors Chapter (NUWHRAIN-HHSMC).7 It filed another motion on June 1, 2000 to seek either the dismissal or
the suspension of the proceedings on the basis of its pending petition for the cancellation of union registration.8 cralawlaw libra ry

The following day, however, the Department of Labor and Employment (DOLE) issued a notice scheduling the certification
elections on June 23, 2000.9 cralawlawlib rary

Dissatisfied, the petitioner commenced in the CA on June 14, 2000 a special civil action for certiorari,10alleging that the DOLE
gravely abused its discretion in not suspending the certification election proceedings. On June 23, 2000, the CA dismissed
the petition for certiorari for non-exhaustion of administrative remedies.11 cra lawlawlib rary

The certification election proceeded as scheduled, and NUWHRAIN-HHMSC obtained the majority vote of the bargaining
unit.12 The petitioner filed a protest (with motion to defer the certification of the election results and the winner),13 insisting
on the illegitimacy of NUWHRAIN-HHMSC.

Ruling of the Med-Arbiter

On January 26, 2001, Med-Arbiter Tomas F. Falconitin issued an order,14 ruling that the petition for the cancellation of union
registration was not a bar to the holding of the certification election, and disposing thusly: chanRoble svirtual Lawlib ra ry

WHEREFORE, premises considered, respondent employer/protestant’s protest with motion to defer certification of results and
winner is hereby dismissed for lack of merit.

Accordingly, this Office hereby certify pursuant to the rules that petitioner/protestee, National Union of Workers in Hotels,
Restaurants and Allied Industries-Heritage Hotel Manila Supervisory Chapter (NUWHRAIN-HHSMC) is the sole and exclusive
bargaining agent of all supervisory employees of the Heritage Hotel Manila acting through its owner, Grand Plaza Hotel
Corporation for purposes of collective bargaining with respect to wages, and hours of work and other terms and conditions of

143
employment.

SO ORDERED.

The petitioner timely appealed to the DOLE Secretary claiming that: (a) the membership of NUWHRAIN-HHMSC consisted of
managerial, confidential, and rank-and-file employees; (b) NUWHRAIN-HHMSC failed to comply with the reportorial
requirements; and (c) Med-Arbiter Falconitin simply brushed aside serious questions on the illegitimacy of NUWHRAIN-
HHMSC.15 It contended that a labor union of mixed membership of supervisory and rank-and-file employees had no legal
right to petition for the certification election pursuant to the pronouncements in Toyota Motor Philippines Corporation v.
Toyota Motor Philippines Corporation Labor Union16(Toyota Motor) and Dunlop Slazenger (Phils.) v. Secretary of Labor and
Employment17(Dunlop Slazenger).

Ruling of the DOLE Secretary

On August 21, 2002, then DOLE Secretary Patricia A. Sto. Tomas issued a resolution denying the appeal,18 and affirming the
order of Med-Arbiter Falconitin, viz:chanRob lesvi rtua lLawl ibra ry

WHEREFORE, the appeal is DENIED. The order of the Med-Arbiter dated 26 January 2001 is hereby AFFIRMED.

SO RESOLVED.

DOLE Secretary Sto. Tomas observed that the petitioner’s reliance on Toyota Motor and Dunlop Slazengerwas misplaced
because both rulings were already overturned by SPI Technologies, Inc. v. Department of Labor and Employment,19 to the
effect that once a union acquired a legitimate status as a labor organization, it continued as such until its certificate of
registration was cancelled or revoked in an independent action for cancellation.

The petitioner moved for reconsideration.

In denying the motion on October 21, 2002, the DOLE Secretary declared that the mixture or co-mingling of employees in a
union was not a ground for dismissing a petition for the certification election under Section 11, par. II, Rule XI of Department
Order No. 9; that the appropriate remedy was to exclude the ineligible employees from the bargaining unit during the
inclusion-exclusion proceedings;20 that the dismissal of the petition for the certification election based on the legitimacy of
the petitioning union would be inappropriate because it would effectively allow a collateral attack against the union’s legal
personality; and that a collateral attack against the personality of the labor organization was prohibited under Section 5, Rule
V of Department Order No. 9, Series of 1997.21 cralawlawl ibra ry

Upon denial of its motion for reconsideration, the petitioner elevated the matter to the CA by petition for certiorari.22 cralaw lawlib rary

Ruling of the CA

On December 13, 2005,23 the CA dismissed the petition for certiorari, giving its following disquisition: cha nRoblesv irt ual Lawlib rary

The petition for certiorari filed by the petitioner is, in essence, a continuation of the debate on the relevance of the Toyota
Motor, Dunlop Slazenger and Progressive Developmentcases to the issues raised.

Toyota Motor and Dunlop Slazenger are anchored on the provisions of Article 245 of the Labor Code which prohibit
managerial employees from joining any labor union and permit supervisory employees to form a separate union of their
own. The language naturally suggests that a labor organization cannot carry a mixture of supervisory and rank-and-file
employees. Thus, courts have held that a union cannot become a legitimate labor union if it shelters under its wing both
types of employees. But there are elements of an elliptical reasoning in the holding of these two cases that a petition for
certification election may not prosper until the composition of the union is settled therein. Toyota Motor, in particular, makes
the blanket statement that a supervisory union has no right to file a certification election for as long as it counts rank-and-file
employees among its ranks. More than four years after Dunlop Slazenger, the Court clarified in Tagaytay Highlands
International Golf Club Inc vs Tagaytay Highlands Employees Union-PTGWO that while Article 245 prohibits supervisory
employees from joining a rank-and-file union, it does not provide what the effect is if a rank-and-file union takes in
supervisory employees as members, or vice versa. Toyota Motor and Dunlop Slazenger jump into an unnecessary conclusion
when they foster the notion that Article 245 carries with it the authorization to inquire collaterally into the issue wherever it
rears its ugly head.

Tagaytay Highlands proclaims, in the light of Department Order 9, that after a certificate of registration is issued to a union,
its legal personality cannot be subject to a collateral attack. It may be questioned only in an independent petition for
cancellation. In fine, Toyota and Dunlop Slazenger are a spent force. Since Tagaytay Highlands was handed down after these
two cases, it constitutes the latest expression of the will of the Supreme Court and supersedes or overturns previous rulings
inconsistent with it. From this perspective, it is needless to discuss whether SPI Technologies as a mere resolution of the
Court may prevail over a full-blown decision that Toyota Motor or Dunlop Slazenger was. The ruling in SPI Technologies has
been echoed in Tagaytay Highlands, for which reason it is with Tagaytay Highlands, not SPI Technologies, that the petitioner
must joust.

The fact that the cancellation proceeding has not yet been resolved makes it obvious that the legal personality of the
respondent union is still very much in force. The DOLE has thus every reason to proceed with the certification election and
commits no grave abuse of discretion in allowing it to prosper because the right to be certified as collective bargaining agent
is one of the legitimate privileges of a registered union. It is for the petitioner to expedite the cancellation case if it wants to
put an end to the certification case, but it cannot place the issue of the union’s legitimacy in the certification case, for that
would be tantamount to making the collateral attack the DOLE has staunchly argued to be impermissible.

The reference made by the petitioner to another Progressive Development case that it would be more prudent for the DOLE
to suspend the certification case until the issue of the legality of the registration is resolved, has also been satisfactorily
answered. Section 11, Rule XI of Department Order 9 provides for the grounds for the dismissal of a petition for certification
election, and the pendency of a petition for cancellation of union registration is not one of them. Like Toyota
144
Motor and Dunlop Slazenger, the second Progressive case came before Department Order 9.

IN VIEW OF THE FOREGOING, the disputed resolutions of the Secretary of Labor and Employment are AFFIRMED, and the
petition is DISMISSED.

SO ORDERED.

The petitioner sought reconsideration,24 but its motion was denied.

Issues

Hence, this appeal, with the petitioner insisting that: chanRoble svi rtual Lawli bra ry

THE COURT OF APPEALS ERRED IN RULING THAT TAGAYTAY HIGHLANDS APPLIES TO THE CASE AT BAR

II

[THE HONORABLE COURT OF APPEALS] SERIOUSLY ERRED WHEN IT DISREGARDED PROGRESSIVE DEVELOPMENT
CORPORATION – PIZZA HUT V. LAGUESMA WHICH HELD THAT IT WOULD BE MORE PRUDENT TO SUSPEND THE
CERTIFICATION CASE UNTIL THE ISSUE OF THE LEGALITY OF THE REGISTRATION OF THE UNION IS FINALLY RESOLVED

III

BECAUSE OF THE PASSAGE OF TIME, RESPONDENT UNION NO LONGER POSSESSES THE MAJORITY STATUS SUCH THAT A
NEW CERTIFICATION ELECTION IS IN ORDER25 chanroble slaw

The petitioner maintains that the ruling in Tagaytay Highlands International Golf Club Inc v. Tagaytay Highlands Employees
Union-PTGWO26 (Tagaytay Highlands) was inapplicable because it involved the co-mingling of supervisory and rank-and-file
employees in one labor organization, while the issue here related to the mixture of membership between two employee
groups — one vested with the right to self-organization (i.e., the rank-and-file and supervisory employees), and the other
deprived of such right (i.e., managerial and confidential employees); that suspension of the certification election was
appropriate because a finding of “illegal mixture” of membership during a petition for the cancellation of union registration
determined whether or not the union had met the 20% representation requirement under Article 234(c) of the Labor
Code; 27 and that in holding that mixed membership was not a ground for canceling the union registration, except when such
was done through misrepresentation, false representation or fraud under the circumstances enumerated in Article 239(a) and
(c) of the Labor Code, the CA completely ignored the 20% requirement under Article 234(c) of the Labor Code.

The petitioner posits that the grounds for dismissing a petition for the certification election under Section 11, Rule XI of
Department Order No. 9, Series of 1997, were not exclusive because the other grounds available under the Rules of
Court could be invoked; that in Progressive Development Corporation v. Secretary, Department of Labor and
Employment,28 the Court ruled that prudence could justify the suspension of the certification election proceedings until the
issue of the legality of the union registration could be finally resolved; that the non-submission of the annual financial
statements and the list of members in the period from 1996 to 1999 constituted a serious challenge to NUWHRAIN-HHMSC’s
right to file its petition for the certification election; and that from the time of the conduct of the certification election on June
23, 2000, the composition of NUWHRAIN-HHMSC had substantially changed, thereby necessitating another certification
election to determine the true will of the bargaining unit.

In short, should the petition for the cancellation of union registration based on mixed membership of supervisors and
managers in a labor union, and the non-submission of reportorial requirements to the DOLE justify the suspension of the
proceedings for the certification elections or even the denial of the petition for the certification election?

Ruling

We deny the petition for review on certiorari.

Basic in the realm of labor union rights is that the certification election is the sole concern of the workers,29 and the employer
is deemed an intruder as far as the certification election is concerned.30Thus, the petitioner lacked the legal personality to
assail the proceedings for the certification election,31and should stand aside as a mere bystander who could not oppose the
petition, or even appeal the Med-Arbiter’s orders relative to the conduct of the certification election.32 As the Court has
explained in Republic v. Kawashima Textile Mfg., Philippines, Inc.33 (Kawashima): chanRoblesvi rtua lLawl ibra ry

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

The petitioner’s meddling in the conduct of the certification election among its employees unduly gave rise to the suspicion
that it intended to establish a company union.34 For that reason, the challenges it posed against the certification election
proceedings were rightly denied.

Under the long established rule, too, the filing of the petition for the cancellation of NUWHRAIN-HHMSC’s registration should
not bar the conduct of the certification election.35 In that respect, only a final order for the cancellation of the registration
would have prevented NUWHRAIN-HHMSC from continuing to enjoy all the rights conferred on it as a legitimate labor union,

145
including the right to the petition for the certification election.36 This rule is now enshrined in Article 238-A of the Labor Code,
as amended by Republic Act No. 9481,37 which reads: chanRoblesvi rt ual Lawlib rary

Article 238-A. Effect of a Petition for Cancellation of Registration. – A petition for cancellation of union registration shall not
suspend the proceedings for certification election nor shall it prevent the filing of a petition for certification election.

xxxx

Still, the petitioner assails the failure of NUWHRAIN-HHMSC to submit its periodic financial reports and updated list of its
members pursuant to Article 238 and Article 239 of the Labor Code. It contends that the serious challenges against the
legitimacy of NUWHRAIN-HHMSC as a union raised in the petition for the cancellation of union registration should have
cautioned the Med-Arbiter against conducting the certification election.

The petitioner does not convince us.

In The Heritage Hotel Manila v. National Union of Workers in the Hotel, Restaurant and Allied Industries-Heritage Hotel
Manila Supervisors Chapter (NUWHRAIN-HHMSC),38 the Court declared that the dismissal of the petition for the cancellation
of the registration of NUWHRAIN-HHMSC was proper when viewed against the primordial right of the workers to self-
organization, collective bargaining negotiations and peaceful concerted actions, viz: chanRob lesvi rtualLaw lib rary

xxxx

[Articles 238 and 239 of the Labor Code] give the Regional Director ample discretion in dealing with a petition for
cancellation of a union's registration, particularly, determining whether the union still meets the requirements prescribed by
law. It is sufficient to give the Regional Director license to treat the late filing of required documents as sufficient compliance
with the requirements of the law. After all, the law requires the labor organization to submit the annual financial report and
list of members in order to verify if it is still viable and financially sustainable as an organization so as to protect the
employer and employees from fraudulent or fly-by-night unions. With the submission of the required documents by
respondent, the purpose of the law has been achieved, though belatedly.

We cannot ascribe abuse of discretion to the Regional Director and the DOLE Secretary in denying the petition for
cancellation of respondent's registration. The union members and, in fact, all the employees belonging to the appropriate
bargaining unit should not be deprived of a bargaining agent, merely because of the negligence of the union officers who
were responsible for the submission of the documents to the BLR.

Labor authorities should, indeed, act with circumspection in treating petitions for cancellation of union registration, lest they
be accused of interfering with union activities. In resolving the petition, consideration must be taken of the fundamental
rights guaranteed by Article XIII, Section 3 of the Constitution, i.e., the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities. Labor authorities should bear in mind that registration confers
upon a union the status of legitimacy and the concomitant right and privileges granted by law to a legitimate labor
organization, particularly the right to participate in or ask for certification election in a bargaining unit. Thus, the cancellation
of a certificate of registration is the equivalent of snuffing out the life of a labor organization. For without such registration, it
loses - as a rule - its rights under the Labor Code.

It is worth mentioning that the Labor Code's provisions on cancellation of union registration and on reportorial requirements
have been recently amended by Republic Act (R.A.) No. 9481, An Act Strengthening the Workers’ Constitutional Right to
Self-Organization, Amending for the Purpose Presidential Decree No. 442, As Amended, Otherwise Known as the Labor Code
of the Philippines, which lapsed into law on May 25, 2007 and became effective on June 14, 2007. The amendment sought to
strengthen the workers’ right to self-organization and enhance the Philippines' compliance with its international obligations as
embodied in the International Labor Organization (ILO) Convention No. 87, pertaining to the non-dissolution of workers’
organizations by administrative authority. Thus, R.A. No. 9481 amended Article 239 to read: chanRoble svirtual Lawli bra ry

ART. 239. Grounds for Cancellation of Union Registration.--The following may constitute grounds for cancellation of union
registration:c hanRoblesv irtual Lawlib rary

(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.


R.A. No. 9481 also inserted in the Labor Code Article 242-A, which provides: chan roble svirtual lawlib rary

ART. 242-A. Reportorial Requirements.--The following are documents required to be submitted to the Bureau by the
legitimate labor organization concerned: chanRob lesvi rtual Lawli bra ry

(a) Its constitution and by-laws, or amendments thereto, the minutes of ratification, and the list of members who took part
in the ratification of the constitution and by-laws within thirty (30) days from adoption or ratification of the constitution and
by-laws or amendments thereto;

(b) Its list of officers, minutes of the election of officers, and list of voters within thirty (30) days from election;

(c) Its annual financial report within thirty (30) days after the close of every fiscal year; and

(d) Its list of members at least once a year or whenever required by the Bureau.

Failure to comply with the above requirements shall not be a ground for cancellation of union registration but
shall subject the erring officers or members to suspension, expulsion from membership, or any appropriate
penalty.

146
xxxx

The ruling thereby wrote finis to the challenge being posed by the petitioner against the illegitimacy of NUWHRAIN-HHMSC.

The remaining issue to be resolved is which among Toyota Motor, Dunlop Slazenger and Tagaytay Highlands applied in
resolving the dispute arising from the mixed membership in NUWHRAIN-HHMSC.

This is not a novel matter. In Kawashima,39 we have reconciled our rulings in Toyota Motor, Dunlop Slazenger and Tagaytay
Highlands by emphasizing on the laws prevailing at the time of filing of the petition for the certification election.

Toyota Motor and Dunlop Slazenger involved petitions for certification election filed on November 26, 1992 and September
15, 1995, respectively. In both cases, we applied the Rules and Regulations Implementing R.A. No. 6715 (also known as
the 1989 Amended Omnibus Rules), the prevailing rule then.

The 1989 Amended Omnibus Rules was amended on June 21, 1997 by Department Order No. 9, Series of 1997. Among the
amendments was the removal of the requirement of indicating in the petition for the certification election that there was no
co-mingling of rank-and-file and supervisory employees in the membership of the labor union. This was the prevailing rule
when the Court promulgated Tagaytay Highlands, declaring therein that mixed membership should have no bearing on the
legitimacy of a registered labor organization, unless the co-mingling was due to misrepresentation, false statement or fraud
as provided in Article 239 of the Labor Code.40cralawlawl ibra ry

Presently, then, the mixed membership does not result in the illegitimacy of the registered labor union unless the same was
done through misrepresentation, false statement or fraud according to Article 239 of the Labor Code. In Air Philippines
Corporation v. Bureau of Labor Relations,41 we categorically explained that—

Clearly, then, for the purpose of de-certifying a union, it is not enough to establish that the rank-and-file union includes
ineligible employees in its membership. Pursuant to Article 239 (a) and (c) of the Labor Code, 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, 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.

We note that NUWHRAIN-HHMSC filed its petition for the certification election on October 11, 1995. Conformably
with Kawashima, the applicable law was the 1989 Amended Omnibus Rules, and the prevailing rule was the pronouncement
in Toyota Motor and Dunlop Slazenger to the effect that a labor union of mixed membership was not possessed with the
requisite personality to file a petition for the certification election.

Nonetheless, we still rule in favor of NUWHRAIN-HHMSC. We expound.

In both Toyota Motor and Dunlop Slazenger, the Court was convinced that the concerned labor unions were comprised by
mixed rank-and-file and supervisory employees. In Toyota Motor, the employer submitted the job descriptions of the
concerned employees to prove that there were supervisors in the petitioning union for rank-and-file employees. In Dunlop
Slazenger, the Court observed that the labor union of supervisors included employees occupying positions that apparently
belonged to the rank-and-file. In both Toyota Motor and Dunlop Slazenger, the employers were able to adduce substantial
evidence to prove the existence of the mixed membership. Based on the records herein, however, the petitioner failed in that
respect. To recall, it raised the issue of the mixed membership in its comment on the list of members submitted by
NUWHRAIN-HHMSC, and in its protest. In the comment, it merely identified the positions that were either confidential or
managerial, but did not present any supporting evidence to prove or explain the identification. In the protest, it only
enumerated the positions that were allegedly confidential and managerial, and identified two employees that belonged to the
rank-and-file, but did not offer any description to show that the positions belonged to different employee groups.

Worth reiterating is that the actual functions of an employee, not his job designation, determined whether the employee
occupied a managerial, supervisory or rank-and-file position.42 As to confidential employees who were excluded from the
right to self-organization, they must (1) assist or act in a confidential capacity, in regard (2) to persons who formulated,
determined, and effectuated management policies in the field of labor relations.43 In that regard, mere allegations sans
substance would not be enough, most especially because the constitutional right of workers to self-organization would be
compromised.

At any rate, the members of NUWHRAIN-HHSMC had already spoken, and elected it as the bargaining agent. As between the
rigid application of Toyota Motors and Dunlop Slazenger, and the right of the workers to self-organization, we prefer the
latter. For us, the choice is clear and settled. “What is important is that there is an unmistakeable intent of the members of
[the] 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.” 44
cralawlawlibra ry

WHEREFORE, the Court DENIES the petition for review on certiorari; AFFIRMS the decision promulgated on December 13,
2005 by the Court of Appeals; and ORDERS the petitioner to pay the costs of suit.

SO ORDERED

Sereno, C.J., Leonardo-De Castro, Villarama, Jr., and Reyes, JJ., concur.

Endnotes:

1
Rollo, pp. 45-52; penned by Associate Justice Mario L. Guariña III (retired), with Associate Justice Roberto A. Barrios
(retired) and Associate Justice Santiago Javier Ranada (retired), concurring.

2
Id. at 159-162 and 179-181.
147
3
Id. at 55-56 (docketed as NCR-OD-M-9510-014 entitled In Re: Petition for Certification Election Among the Regular
Supervisory Employees of the Heritage Hotel Manila: NUWHRAIN-HHSMC Chapter, petitioner: Heritage Hotel, respondent).

4
Id. at 159-160.

5
Id. at 58-70.

6
Id. at 71.

7
Id. at 75-83.

8
Id. at 85-88.

9
Id. at 89.

10
Id. at 90-105.

11
Id. at 111-112; penned by Associate Justice Romeo A. Brawner (later Presiding Justice), with Associate Justice Quirino D.
Abad Santos, Jr. (retired) and Associate Justice Andres B. Reyes, Jr. (presently Presiding Justice), concurring.

12
Id. at 139.

13
Id. at 113-122.

14
Id. at 139-142.

15
Id. at 143-151.

16
G.R. No. 121084, February 19, 1997, 268 SCRA 573, 584.

17
G.R. No. 131248, December 11, 1998, 300 SCRA 120, 128.

18
Rollo, pp. 159-162.

19
G.R. No. 137422, March 8, 1999.

20
Rollo, pp. 179-181.

21
Id. at 180.

22
Id. at 182-209.

23
Supra note 1.

24
Id. at 256-268.

25
Id. at 14.

26
G.R. No. 142000, January 22, 2003, 395 SCRA 699.

27
Article 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 based on the following requirements:.

xxxx

(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;

xxxx

28
G.R. No. 96425, February 4, 1992, 205 SCRA 802, 808.

San Miguel Foods, Inc. v. San Miguel Corporation Supervisors and Exempt Union, G.R. No. 146206, August 1, 2011, 655
29

SCRA 1, 17; Trade Unions of the Phils. and Allied Services v. Trajano, G.R. No. L-61153, January 17, 1983, 120 SCRA 64,
66.

30
Consolidated Farms, Inc. v. Noriel, G.R. No. L-47752, July 31, 1978, 84 SCRA 469, 473.

31
San Miguel Foods, Inc. v. San Miguel Corporation Supervisors and Exempt Union, supra note 29.

Sta. Lucia East Commercial Corporation v. Secretary of Labor and Employment, G.R. No. 162355, August 14, 2009, 596
32

SCRA 92, 103; San Miguel Foods, Inc.-Cebu B-Meg Feed Plant v. Laguesma, G.R. No. 116172, October 10, 1996, 263 SCRA
68, 82.

33
G.R. No. 160352, July 23, 2008, 559 SCRA 386, 408.

34
Oriental Tin Can Labor Union v. Secretary of Labor and Employment, G.R. No. 116751, August 28, 1998, 294 SCRA 640,
651.

148
Samahan ng Manggagawa sa Pacific Plastic v. Laguesma, G.R. No. 111245, January 31, 1997, 267 SCRA 303,
35

310; National Union of Bank Employees v. Minister of Labor, G.R. No. L-53406, December 14, 1981, 110 SCRA 274, 392.

Itogon-Suyoc Mines, Inc. v. Sañgilo-Itogon Workers’ Union, G.R. No. L-24189, August 30, 1968, 24 SCRA 873, 881-882.
36

An Act Strengthening the Workers’ Constitutional Right to Self-Organization, Amending for the Purpose Presidential Decree
37

No. 442, As Amended, otherwise known as The Labor Code of the Philippines.

38
G.R. No. 178296, January 12, 2011, 639 SCRA 420, 435-439.

39
Supra note 33.

40
Supra note 26, at 709.

41
G.R. No. 155395, June 22, 2006, 492 SCRA 243, 249-250.

Pepsi Cola Products, Philippines v. Secretary of Labor, G.R. Nos. 96663 & 103300, August 10, 1999, 312 SCRA 104, 118.
42

San Miguel Foods, Inc. v. San Miguel Corporation Supervisors and Exempt Union, supra, note 29 at 12.
43

44
See San Miguel Corporation (Mandaue Packaging Products Plants) v. Mandaue Packing Products Plants-San Miguel
Packaging Products-San Miguel Corporation Monthlies Rank-And-File Union-FFW (MPPP-SMPP-SMCMRFU-FFW), G.R. No.
152356, August 16, 2005, 467 SCRA 107, 134-135, which quoted from the Resolution of the DOLE-BLR dated December 29,
1998 in relation to mixed membership as sufficient basis for cancelling the labor organizations’s registration, and the
application of Toyota Motor to the issue dealt with in the case, as follows:
chanRob lesvi rtual Lawl ibra ry

x x x [T]he 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. x x x. 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. (Emphasis supplied)

149
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 91902 May 20, 1991

MANILA ELECTRIC COMPANY, petitioner,


vs.
THE HON. SECRETARY OF LABOR AND EMPLOYMENT, STAFF AND TECHNICAL EMPLOYEES
ASSOCIATION OF MERALCO, and FIRST LINE ASSOCIATION OF MERALCO SUPERVISORY
EMPLOYEES,respondents.

Rolando R. Arbues, Atilano S. Guevarra, Jr. and Gil S. San Diego for petitioner.
The Solicitor General for public respondent.
Felipe Gojar for STEAM-PCWF.
Wakay & Wakay Legal Services for First Line Association of Meralco Supervisory Employees.

MEDIALDEA, J.:

This petition seeks to review the Resolution of respondent Secretary of Labor and Employment Franklin M. Drilon
dated November 3, 1989 which affirmed an Order of Med-Arbiter Renato P. Parungo (Case No. NCR-O-D-M-1-70),
directing the holding of a certification election among certain employees of petitioner Manila Electric Company
(hereafter "MERALCO") as well as the Order dated January 16, 1990 which denied the Motion for Reconsideration
of MERALCO.

The facts are as follows:

On November 22, 1988, the Staff and Technical Employees Association of MERALCO (hereafter "STEAM-PCWF")
a labor organization of staff and technical employees of MERALCO, filed a petition for certification election, seeking
to represent regular employees of MERALCO who are: (a) non-managerial employees with Pay Grades VII and
above; (b) non-managerial employees in the Patrol Division, Treasury Security Services Section, Secretaries who
are automatically removed from the bargaining unit; and (c) employees within the rank and file unit who are
automatically disqualified from becoming union members of any organization within the same bargaining unit.

Among others, the petition alleged that "while there exists a duly-organized union for rank and file employees in Pay
Grade I-VI, which is the MERALCO Employees and Worker's Association (MEWA) which holds a valid CBA for the
rank and file employees,1 there is no other labor organization except STEAM-PCWF claiming to represent the
MERALCO employees.

The petition was premised on the exclusion/disqualification of certain MERALCO employees pursuant to Art. I,
Secs. 2 and 3 of the existing MEWA CBA as follows:

ARTICLE I

SCOPE

xxx xxx xxx

Sec. 2. Excluded from the appropriate bargaining unit and therefore outside the scope of this Agreement
are:

(a) Employees in Patrol Division;

(b) Employees in Treasury Security Services Section;

(c) Managerial Employees; and

(d) Secretaries.

Any member of the Union who may now or hereafter be assigned or transferred to Patrol Division or
Treasury Security Services Section, or becomes Managerial Employee or a Secretary, shall be considered
150
automatically removed from the bargaining unit and excluded from the coverage of this agreement. He shall
thereby likewise be deemed automatically to have ceased to be member of the union, and shall desist from
further engaging in union activity of any kind.

Sec. 3. Regular rank-and-file employees in the organization elements herein below listed shall be covered
within the bargaining unit, but shall be automatically disqualified from becoming union members:

1. Office of the Corporate Secretary

2. Corporate Staff Services Department

3. Managerial Payroll Office

4. Legal Service Department

5. Labor Relations Division

6. Personnel Administration Division

7. Manpower Planning & Research Division

8. Computer Services Department

9. Financial Planning & Control Department

10. Treasury Department, except Cash Section

11. General Accounting Section

xxx xxx xxx

(p. 19, Rollo)

MERALCO moved for the dismissal of the petition on the following grounds:

The employees sought to be represented by petitioner are either 1) managerial who are prohibited by law
from forming or joining supervisory union; 2) security services personnel who are prohibited from joining or
assisting the rank-and-file union; 3) secretaries who do not consent to the petitioner's representation and
whom petitioner can not represent; and 4) rank-and-file employees represented by the certified or duly
recognized bargaining representative of the only rank-and-file bargaining unit in the company, the Meralco
Employees Workers Association (MEWA), in accordance with the existing Collective Bargaining Agreement
with the latter.

II

The petition for certification election will disturb the administration of the existing Collective Bargaining
Agreement in violation of Art. 232 of the Labor Code.

III

The petition itself shows that it is not supported by the written consent of at least twenty percent (20%) of the
alleged 2,500 employees sought to be represented. (Resolution, Sec. of Labor, pp. 223-224, Rollo)

Before Med-Arbiter R. Parungo, MERALCO contended that employees from Pay Grades VII and above are
classified as managerial employees who, under the law, are prohibited from forming, joining or assisting a labor
organization of the rank and file. As regards those in the Patrol Division and Treasury Security Service Section,
MERALCO maintains that since these employees are tasked with providing security to the company, they are not
eligible to join the rank and file bargaining unit, pursuant to Sec. 2(c), Rule V, Book V of the then Implementing
Rules and Regulations of the Labor Code (1988) which reads as follows:

Sec. 2. Who may file petition. — The employer or any legitimate labor organization may file the petition.

The petition, when filed by a legitimate labor organization, shall contain, among others:
151
xxx xxx xxx

(c) description of the bargaining unit which shall be the employer unit unless circumstances otherwise
require, and provided, further: that the appropriate bargaining unit of the rank and file employees shall not
include security guards (As amended by Sec. 6, Implementing Rules of EO 111)

xxx xxx xxx

(p. 111, Labor Code, 1988 Ed.)

As regards those rank and file employees enumerated in Sec. 3, Art. I, MERALCO contends that since they are
already beneficiaries of the MEWA-CBA, they may not be treated as a separate and distinct appropriate bargaining
unit.

MERALCO raised the same argument with respect to employees sought to be represented by STEAM-PCWF,
claiming that these were already covered by the MEWA-CBA.

On March 15, 1989, the Med-Arbiter ruled that having been excluded from the existing Collective Bargaining
Agreement for rank and file employees, these employees have the right to form a union of their own, except those
employees performing managerial functions. With respect to those employees who had resented their alleged
involuntary membership in the existing CBA, the Med-Arbiter stated that the holding of a certification election would
allow them to fully translate their sentiment on the matter, and thus directed the holding of a certification election.
The dispositive portion of the Resolution provides as follows:

WHEREFORE, premises considered, a certification election is hereby ordered conducted among the regular
rank-and-file employees of MERALCO to wit:

1. Non-managerial employees with Pay Grades VII and above;

2. Non-managerial employees of Patrol Division, Treasury Security Services Section and Secretaries; and

3. Employees prohibited from actively participating as members of the union.

within 20 days from receipt hereof, subject to the usual pre-election conference with the following choices:

1. Staff and Technical, Employees Association of MERALCO (STEAM-PCWF);

2. No Union.

SO ORDERED. (p. 222, Rollo)

On April 4, 1989, MERALCO appealed, contending that "until such time that a judicial finding is made to the effect
that they are not managerial employee, STEAM-PCWF cannot represent employees from Pay Grades VII and
above, additionally reiterating the same reasons they had advanced for disqualifying respondent STEAM-PCWF.

On April 7, 1989, MEWA filed an appeal-in-intervention, submitting as follows:

A. The Order of the Med-Arbiter is null and void for being in violation of Article 245 of the Labor Code;

B. The Order of the Med-Arbiter violates Article 232 of the Labor Code; and

C. The Order is invalid because the bargaining unit it delineated is not an appropriated (sic) bargaining unit.

On May 4, 1989, STEAM-PCWF opposed the appeal-in-intervention.

With the enactment of RA 6715 and the rules and regulations implementing the same, STEAM-PCWF renounced its
representation of the employees in Patrol Division, Treasury Security Services Section and rank-and-file employees
in Pay Grades I-VI.

On September 13, 1989, the First Line Association of Meralco

Supervisory Employees. (hereafter FLAMES) filed a similar petition (NCR-OD-M-9-731-89) seeking to represent
those employees with Pay Grades VII to XIV, since "there is no other supervisory union at MERALCO." (p.
266, Rollo). The petition was consolidated with that of STEAM-PCWF.

152
On November 3, 1989, the Secretary of Labor affirmed with modification, the assailed order of the Med-Arbiter,
disposing as follows:

WHEREFORE, premises considered, the Order appealed from is hereby affirmed but modified as far as the
employees covered by Section 3, Article I of the exist CBA in the Company are concerned. Said employees
shall remain in the unit of the rank-and-file already existing and may exercise their right to self organization
as above enunciated.

Further, the First Line Association of Meralco Supervisory Employees (FLAMES) is included as among the
choices in the certification election.

Let, therefore, the pertinent records of the case be immediately forwarded to the Office of origin for the
conduct of the certification election.

SO ORDERED. (p. 7, Rollo)

MERALCO's motion for reconsideration was denied on January 16, 1990.

On February 9, 1990, MERALCO filed this petition, premised on the following ground:

RESPONDENT SECRETARY ACTED WITH GRAVE ABUSE OF DISCRETION AND/OR IN EXCESS OF


JURISDICTION AMOUNTING TO LACK OF JURISDICTION IN RULING THAT:

I. ANOTHER RANK-AND-FILE BARGAINING UNIT CAN BE ESTABLISHED INDEPENDENT, DISTINCT


AND SEPARATE FROM THE EXISTING RANK-AND-FILE BARGAINING UNIT.

II. THE EMPLOYEES FROM PAY GRADES VII AND ABOVE ARE RANK-AND-FILE EMPLOYEES.

III. THE SECURITY GUARDS OR PERSONNEL MAY BE LUMPED TOGETHER WITH THE RANK-AND-
FILE UNION AND/OR THE SUPERVISORY UNION. (p. 8, Rollo)

On February 26, 1990, We issued a temporary restraining order (TRO) against the implementation of the disputed
resolution.

In its petition, MERALCO has relented and recognized respondents STEAM-PCWF and FLAMES' desired
representation of supervisory employees from Grades VII up. However, it believes that all that the Secretary of
Labor has to do is to establish a demarcation line between supervisory and managerial rank, and not to classify
outright the group of employees represented by STEAM-PCWF and FLAMES as rank and file employees.

In questioning the Secretary of Labor's directive allowing security guards (Treasury/Patrol Services Section) to be
represented by respondents, MERALCO contends that this contravenes the provisions of the recently passed RA
6715 and its implementing rules (specifically par. 2, Sec. 1, Rule II, Book V) which disqualifies supervisory
employees and security guards from membership in a labor organization of the rank and file (p. 11, Rollo).

The Secretary of Labor's Resolution was obviously premised on the provisions of Art. 212, then par. (k), of the 1988
Labor Code defining "managerial" and "rank and file" employees, the law then in force when the complaint was filed.
At the time, only two groups of employees were recognized, the managerial and rank and file. This explains the
absence of evidence on job descriptions on who would be classified managerial employees. It is perhaps also for
this reason why the Secretary of Labor limited his classification of the Meralco employees belonging to Pay Grades
VII and up, to only two groups, the managerial and rank and file.

However, pursuant to the Department of Labor's goal of strenghthening the constitutional right of workers to self-
organization, RA 6715 was subsequently passed which reorganized the employee-ranks by including a third group,
or the supervisory employees, and laying down the distinction between supervisory employees and those of
managerial ranks in Art. 212, renumbered par. [m], depending on whether the employee concerned has the power
to lay down and execute management policies, in the case of managerial employees, or merely to recommend
them, in case of supervisory employees.

In this petition, MERALCO has admitted that the employees belonging to Pay Grades VII and up are supervisory (p.
10, Rollo). The records also show that STEAM-PCWF had "renounced its representation of the employees in Patrol
Division, Treasury Security Service Section and rank and file employees in Pay Grades I-VI" (p. 6, Rollo); while
FLAMES, on the other hand, had limited its representation to employees belonging to Pay Grades VII-XIV, generally
accepted as supervisory employees, as follows:

It must be emphasized that private respondent First Line Association of Meralco Supervisory Employees
seeks to represent only the Supervisory Employees with Pay Grades VII to XIV.
153
Supervisory Employees with Pay Grades VII to XIV are not managerial employees. In fact the petition itself
of petitioner Manila Electric Company on page 9, paragraph 3 of the petition stated as follows, to wit:

There was no need for petitioner to prove that these employees are not rank-and-file. As adverted to
above, the private respondents admit that these are not the rank-and-file but the supervisory
employees, whom they seek to represent. What needs to be established is the rank where
supervisory ends and managerial begins.

and First Line Association of Meralco Supervisory Employees herein states that Pay Grades VII to XIV are
not managerial employees. In fact, although employees with Pay Grade XV carry the Rank of Department
Managers, these employees only enjoys (sic) the Rank Manager but their recommendatory powers are
subject to evaluation, review and final action by the department heads and other higher executives of the
company. (FLAMES' Memorandum, p. 305, Rollo)

Based on the foregoing, it is clear that the employees from Pay Grades VII and up have been recognized and
accepted as supervisory. On the other hand, those employees who have been automatically disqualified have been
directed by the Secretary of Labor to remain in the existing labor organization for the rank and file, (the condition in
the CBA deemed as not having been written into the contract, as unduly restrictive of an employee's exercise of the
right to self-organization). We shall discuss the rights of the excluded employees (or those covered by Sec. 2, Art. I,
MEWA-CBA later.

Anent the instant petition therefore, STEAM-PCWF, and FLAMES would therefore represent supervisory employees
only. In this regard, the authority given by the Secretary of Labor for the establishment of two labor organizations for
the rank and file will have to be disregarded since We hereby uphold certification elections only for supervisory
employees from Pay Grade VII and up, with STEAM-PCWF and FLAMES as choices.

As to the alleged failure of the Secretary of Labor to establish a demarcation line for purposes of segregating the
supervisory from the managerial employees, the required parameter is really not necessary since the law itself, Art.
212-m, (as amended by Sec. 4 of RA 6715) has already laid down the corresponding guidelines:

Art. 212. Definitions. . . .

(m) "Managerial employee" is one who is vested with powers or prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees. Supervisory employees are those who, in the interest of the employer, effectively recommend
such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but
requires the use of independent judgment. All employees not falling within any of the above definitions are
considered rank-and-file employees for purposes of to Book.

In his resolution, the Secretary of Labor further elaborated:

. . . Thus, the determinative factor in classifying an employee as managerial, supervisory or rank-and-file is


the nature of the work of the employee concerned.

In National Waterworks and Sewerage Authority vs. National Waterworks and Sewerage Authority
Consolidated Unions (11 SCRA 766) the Supreme Court had the occasion to come out with an enlightening
dissertation of the nature of the work of a managerial employees as follows:

. . . that the employee's primary duty consists of the management of the establishment or of a
customarily recognized department or subdivision thereof, that he customarily and regularly directs
the work of other employees therein, that he has the authority to hire or discharge other employees
or that his suggestions and recommendations as to the hiring and discharging and or to the
advancement and promotion or any other change of status of other employees are given particular
weight, that he customarily and regularly exercises discretionary powers . . . (56 CJS, pp. 666-668.
(p. 226, Rollo)

We shall now discuss the rights of the security guards to self-organize. MERALCO has questioned the
legality of allowing them to join either the rank and file or the supervisory union, claiming that this is a
violation of par. 2, Sec. 1, Rule II, Book V of the Implementing Rules of RA 6715, which states as follows:

Sec 1. Who may join unions. . . .

xxx xxx xxx

154
Supervisory employees and security guards shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist or form separate labor organizations
of their own; . . .

xxx xxx xxx

(emphasis ours)

Paragraph 2, Sec. 1, Rule II, Book V, is similar to Sec. 2 (c), Rule V, also of Book V of the implementing
rules of RA 6715:

Rule V.
REPRESENTATION CASES AND
INTERNAL-UNION CONFLICTS

Sec. 1. . . .

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

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

(a) . . .

(b) . . .

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

xxx xxx xxx

(emphasis ours)

Both rules, barring security guards from joining a rank and file organization, appear to have been carried over from
the old rules which implemented then Art. 245 of the Labor Code, and which provided thus:

Art. 245. Ineligibility of security personnel to join any labor organization.—Security guards and other
personnel employed for the protection and security of the person, properties and premises of the employer
shall not be eligible for membership in any labor organization.

On December 24, 1986, Pres. Corazon C. Aquino issued E.O. No. 111 which eliminated the above-cited provision
on the disqualification of security guards. What was retained was the disqualification of managerial employees,
renumbered as Art. 245 (previously Art. 246), as follows:

Art. 245. Ineligibility of managerial employees to joint any labor organization.—Managerial employees are
not eligible to join, assist or form any labor organization.

With the elimination, security guards were thus free to join a rank and file organization.

On March 2, 1989, the present Congress passed RA 6715.2 Section 18 thereof amended Art. 245, to read as
follows:

Art. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory
employees.—Managerial employees are not eligible to join, assist or form any labor
organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-
and-file employees but may join, assist, or form separate labor organizations of their own. (emphasis ours)

As will be noted, the second sentence of Art. 245 embodies an amendment disqualifying supervisory
employeesfrom membership in a labor organization of the rank-and-file employees. It does not include security
guards in the disqualification.

The implementing rules of RA 6715, therefore, insofar as they disqualify security guards from joining a rank and file
organization are null and void, for being not germane to the object and purposes of EO 111 and RA 6715 upon
which such rules purportedly derive statutory moorings. In Shell Philippines, Inc. vs. Central Bank, G.R. No. 51353,
June 27, 1988, 162 SCRA 628, We stated:
155
The rule-making power must be confined to details for regulating the mode or proceeding to carry into effect
the law as it has been enacted. The power cannot be extended to amending or expanding the statutory
requirements or to embrace matters not covered by the statute. Rules that subvert the statute cannot be
sanctioned. (citing University of Sto. Tomas vs. Board of Tax Appeals, 93 Phil. 376).

While therefore under the old rules, security guards were barred from joining a labor organization of the rank and
file, under RA 6715, they may now freely join a labor organization of the rank and file or that of the supervisory
union, depending on their rank. By accommodating supervisory employees, the Secretary of Labor must likewise
apply the provisions of RA 6715 to security guards by favorably allowing them free access to a labor organization,
whether rank and file or supervisory, in recognition of their constitutional right to self-organization.

We are aware however of possible consequences in the implementation of the law in allowing security personnel to
join labor unions within the company they serve. The law is apt to produce divided loyalties in the faithful
performance of their duties. Economic reasons would present the employees concerned with the temptation to
subordinate their duties to the allegiance they owe the union of which they are members, aware as they are that it is
usually union action that obtains for them increased pecuniary benefits.

Thus, in the event of a strike declared by their union, security personnel may neglect or outrightly abandon their
duties, such as protection of property of their employer and the persons of its officials and employees, the control of
access to the employer's premises, and the maintenance of order in the event of emergencies and untoward
incidents.

It is hoped that the corresponding amendatory and/or suppletory laws be passed by Congress to avoid possible
conflict of interest in security personnel.
1âwphi 1

ACCORDINGLY, the petition is hereby DISMISSED. We AFFIRM with modification the Resolution of the Secretary
of Labor dated November 3, 1989 upholding an employee's right to self-organization. A certification election is
hereby ordered conducted among supervisory employees of MERALCO, belonging to Pay Grades VII and above,
using as guideliness an employee's power to either recommend or execute management policies, pursuant to Art.
212 (m), of the Labor Code, as amended by Sec. 4 of RA 6715, with respondents STEAM-PCWF and FLAMES as
choices.

Employees of the Patrol Division, Treasury Security Services Section and Secretaries may freely join either the
labor organization of the rank and file or that of the supervisory union depending on their employee rank.
Disqualified employees covered by Sec. 3, Art. I of the MEWA-CBA, shall remain with the existing labor organization
of the rank and file, pursuant to the Secretary of Labor's directive:

By the parties' own agreement, they find the bargaining unit, which includes the positions enumerated in
Section 3, Article I of their CBA, appropriate for purposes of collective bargaining. The composition of the
bargaining unit should be left to the agreement of the parties, and unless there are legal infirmities in such
agreement, this Office will not substitute its judgment for that of the parties. Consistent with the story of
collective bargaining in the company, the membership of said group of employees in the existing rank-and-
file unit should continue, for it will enhance stability in that unit already well establish. However, we cannot
approve of the condition set in Section 3, Article I of the CBA that the employees covered are automatically
disqualified from becoming union members. The condition unduly restricts the exercise of the right to self
organization by the employees in question. It is contrary to law and public policy and, therefore, should be
considered to have not been written into the contract. Accordingly, the option to join or not to join the union
should be left entirely to the employees themselves. (p. 229, Rollo)

The Temporary Restraining Order (TRO) issued on February 26, 1990 is hereby LIFTED. Costs against petitioner.

SO ORDERED.

Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin,
Sarmiento, Griño-Aquino, Regalado and Davide, Jr., JJ., concur.

Footnotes

1
This CBA expired on November 30, 1989. There is an on-going CBA negotiation with National Capitol
Region, Dole, per Comment of FLAMES, dated March 6, 1990, p. 248, Rollo.

2
Published in two newspapers, the law took effect on March 21, 1989.

156
THIRD DIVISION

[G.R. No. 79025. December 29, 1989.]

BENGUET ELECTRIC COOPERATIVE, INC., Petitioner, v. HON. PURA FERRER-CALLEJA, Director of the Bureau of
Labor Relations, and BENECO EMPLOYEES LABOR UNION, Respondents.

E.L. Gayo & Associates for Petitioner.

SYLLABUS

1. LABOR LAW; LABOR RELATIONS; RIGHT TO SELF-ORGANIZATION; NOT AVAILABLE TO EMPLOYEES OF A COOPERATIVE
WHO AT THE SAME TIME IS A MEMBER-OWNER THEREOF. — The issue of whether or not employees of a cooperative are
qualified to form or join a labor organization for purposes of collective bargaining has already been resolved and clarified in
the case of Cooperative Rural Bank of Davao City, Inc. v. Ferrer-Calleja, Et. Al. [G.R. No. 77951, September 26, 1988] and
reiterated in the cases of Batangas-I Electric Cooperative Labor Union v. Young, Et. Al. [G.R. Nos. 62386, 70880 and 74560,
November 9, 1988] and San Jose City Electric Service Cooperative, Inc. v. Ministry of Labor and Employment, Et. Al. [G.R.
No. 77231, May 31, 1989] wherein the Court had stated that the right to collective bargaining is not available to an
employee of a cooperative who at the same time is a member and co-owner thereof. With respect, however, to employees
who are neither members nor co-owners of the cooperative they are entitled to exercise the rights to self-organization,
collective bargaining and negotiation as mandated by the 1987 Constitution and applicable statutes.

2. ID.; ID.; ID.; ID.; RATIONALE. — Contrary to respondents’ claim, the fact that the members-employees of petitioner do
not participate in the actual management of the cooperative does not make them eligible to form, assist or join a labor
organization for the purpose of collective bargaining with petitioner. The Court’s ruling in the Davao City case that members
of cooperative cannot join a labor union for purposes of collective bargaining was based on the fact that as members of the
cooperative they are co-owners thereof. As such, they cannot invoke the right to collective bargaining for "certainly an owner
cannot bargain with himself or his co-owners." [Cooperative Rural Bank of Davao City, Inc. v. Ferrer-Calleja, Et Al., supra]. It
is the fact of ownership of the cooperative, and not involvement in the management thereof, which disqualifies a member
from joining any labor organization within the cooperative. Thus, irrespective of the degree of their participation in the actual
management of the cooperative, all members thereof cannot form, assist or join a labor organization for the purpose of
collective bargaining.

3. ID.; ID.; ID.; ID.; MEMBERSHIP IN THE COOPERATIVE; DISTINGUISHED FROM STOCKHOLDERS OF ORDINARY
CORPORATIONS. — While cooperatives may exercise some of the rights and privileges given to ordinary corporations
provided under existing laws, such cooperatives enjoy other privileges not granted to the latter [See Sections 4, 5, 6, and 8,
Pres. Decree No. 175; Cooperative Rural Bank of Davao City v. Ferrer-Calleja, supra]. Similarly, members of cooperatives
have rights and obligations different from those of stockholders of ordinary corporations. It was precisely because of the
special nature of cooperatives, that the Court held in the Davao City case that members-employees thereof cannot form or
join a labor union for purposes of collective bargaining. The Court held that: A cooperative . . . is by its nature different from
an ordinary business concern being run either by persons, partnerships, or corporations. Its owners and/or members are the
ones who run and operate the business while the others are its employees. As above stated, irrespective of the number of
shares owned by each member they are entitled to cast one vote each in deciding upon the affairs of the cooperative. Their
share capital earn limited interest. They enjoy special privileges as — exemption from income tax and sales taxes,
preferential light to supply their products to State agencies and even exemption from the minimum wage laws. An employee
therefore of such a cooperative who is a member and co-owner thereof cannot invoke the right to collective bargaining for
certainly an owner cannot bargain with himself or his co-owners.

DECISION

CORTES, J.:

On June 21, 1985 Beneco Worker’s Labor Union-Association of Democratic Labor Organizations (hereinafter referred to as
BWLU-ADLO) filed a petition for direct certification as the sole and exclusive bargaining representative of all the rank and file
employees of Benguet Electric Cooperative, Inc. (hereinafter referred to as BENECO) at Alapang, La Trinidad, Benguet
alleging, inter alia, that BENECO has in its employ two hundred and fourteen (214) rank and file employees; that one
hundred and ninety-eight (198) or 92.5% of these employees have supported the filing of the petition; that no certification
election has been conducted for the last 12 months; that there is no existing collective bargaining representative of the rank
and file employees sought to be represented by BWLU-ADLO; and, that there is no collective bargaining agreement in the
cooperative.chan roble s law lib rary

An opposition to the petition was filed by the Beneco Employees Labor Union (hereinafter referred to as BELU) contending
that it was certified as the sole and exclusive bargaining representative of the subject workers pursuant to an order issued by
the med-arbiter on October 20, 1980; that pending resolution by the National Labor Relations Commission are two cases it
filed against BENECO involving bargaining deadlock and unfair labor practice; and, that the pendency of these cases bars any
representation question.

157
BENECO, on the other hand, filed a motion to dismiss the petition claiming that it is a non-profit electric cooperative engaged
in providing electric services to its members and patron-consumers in the City of Baguio and Benguet Province; and, that the
employees sought to be represented by BWLU-ADLO are not eligible to form, join or assist labor organizations of their own
choosing because they are members and joint owners of the cooperative. chanro bles. com.ph : vi rtua l law lib rary

On September 2, 1985 the med-arbiter issued an order giving due course to the petition for certification election. However,
the med-arbiter limited the election among the rank and file employees of petitioner who are non members thereof and
without any involvement in the actual ownership of the cooperative. Based on the evidence during the hearing the med-
arbiter found that there are thirty-seven (37) employees who are not members and without any involvement in the actual
ownership of the cooperative. The dispositive portion of the med-arbiter’s order is as follows: cha nrob 1es vi rtua l 1aw lib rary

WHEREFORE, premises considered, a certification election should be as it is hereby ordered to be conducted at the premises
of Benguet, Electric Cooperative, Inc., at Alapang, La Trinidad, Benguet within twenty (20) days from receipt hereof among
all the rank and file employees (non-members/consumers and without any involvement in the actual ownership of the
cooperative) with the following choices: chan rob1e s virtual 1aw l ibra ry

1. BENECO WORKERS LABOR UNION-ADLO

2. BENECO EMPLOYEES LABOR UNION

3. NO UNION

The payroll for the month of June 1980 shall be the basis in determining the qualified voters who may participate in the
certification election to be conducted.

SO ORDERED. [Rollo, pp. 22-23.]

BELU and BENECO appealed from this order but the same was dismissed for lack of merit on March 25, 1986. Whereupon
BENECO filed with this Court a petition for certiorari with prayer for preliminary injunction and or restraining order, docketed
as G.R. No. 74209, which the Supreme Court dismissed for lack of merit in a minute resolution dated April 28, 1986.

The ordered certification election was held on October 1, 1986. Prior to the conduct thereof BENECO’s counsel verbally
manifested that "the cooperative is protesting that employees who are members-consumers are being allowed to vote when .
. . they are not eligible to be members of any labor union for purposes of collective bargaining; much less, to vote in this
certification election." [Rollo, p. 28]. Petitioner submitted a certification showing that only four (4) employees are not
members of BENECO and insisted that only these employees are eligible to vote in the certification election. Canvass of the
votes showed that BELU garnered forty-nine (49) of the eighty-three (83) "valid" votes cast.

Thereafter BENECO formalized its verbal manifestation by filing a Protest. Finding, among others, that the issue as to
whether or not member-consumers who are employees of BENECO could form, assist or join a labor union has been
answered in the affirmative by the Supreme Court in G.R. No. 74209, the med-arbiter dismissed the protest on February 17,
1987. On June 23, 1987, Bureau of Labor Relations (BLR) director Pura Ferrer-Calleja affirmed the med-arbiter’s order and
certified BELU as the sole and exclusive bargaining agent of all the rank and file employees of BENECO.

Alleging that the BLR director committed grave abuse of discretion amounting to lack or excess of jurisdiction BENECO filed
the instant petition for certiorari. In his Comment the Solicitor General agreed with BENECO’s stance and prayed that the
petition be given due course. In view of this, respondent director herself was required by the Court to file a Comment. On
April 19, 1989 the Court gave due course to the petition and required the parties to submit their respective memoranda.

The main issue in this case is whether or not respondent director committed grave abuse of discretion in certifying
respondent BELU as the sole and exclusive bargaining representative of the rank and file employees of BENECO.

Under Article 256 of the Labor Code [Pres. Decree 442] to have a valid certification election, "at least a majority of all eligible
voters in the unit must have cast their votes. The labor union receiving the majority of the valid votes cast shall be certified
as the exclusive bargaining agent of all workers in the unit." Petitioner BENECO asserts that the certification election held on
October 1, 1986 was null and void since members-employees of petitioner cooperative who are not eligible to form and join a
labor union for purposes of collective bargaining were allowed to vote therein. cha nrob lesvi rtua lawlib rary

Respondent director and private respondent BELU on the other hand submit that members of a cooperative who are also
rank and file employees are eligible to form, assist or join a labor union [Comment of Respondent Director, p. 4; Rollo, p.
125; Comment of BELU, pp. 9-10; Rollo pp. 99-100].

The Court finds the present petition meritorious.

The issue of whether or not employees of a cooperative are qualified to form or join a labor organization for purposes of
collective bargaining has already been resolved and clarified in the case of Cooperative Rural Bank of Davao City, Inc. v.
Ferrer-Calleja, Et. Al. [G.R. No. 77951, September 26, 1988] and reiterated in the cases of Batangas-I Electric Cooperative
Labor Union v. Young, Et. Al. [G.R. Nos. 62386, 70880 and 74560, November 9, 1988] and San Jose City Electric Service
Cooperative, Inc. v. Ministry of Labor and Employment, Et. Al. [G.R. No. 77231, May 31, 1989] wherein the Court had stated
that the right to collective bargaining is not available to an employee of a cooperative who at the same time is a member and
co-owner thereof. With respect, however, to employees who are neither members nor co-owners of the cooperative they are
entitled to exercise the rights to self-organization, collective bargaining and negotiation as mandated by the 1987
Constitution and applicable statutes. chanrobles law l ibra ry

Respondent director argues that to deny the members of petitioner cooperative the right to form, assist or join a labor union
of their own choice for purposes of collective bargaining would amount to a patent violation of their right to self-organization.
She points out that:jgc:chanrob les.co m.ph

"albeit a person assumes a dual capacity as rank and file employee and as member of a certain cooperative does not
militate, as in the instant case, against his/her exercise of the right to self-organization and to collective bargaining
guaranteed by the Constitution and Labor Code because, while so doing, he/she is acting in his/her capacity as rank and file
158
employee thereof. It may be added that while the employees concerned became members of petitioner cooperative, their
status employment as rank and filers who are hired for fixed compensation had not changed. They still do not actually
participate in the management of the cooperative as said function is entrusted to the Board of Directors and to the elected or
appointed officers thereof. They are not vested with the powers and prerogatives to lay down and execute managerial
policies; to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees; and/or to effectively recommend
such managerial functions [Comment of Respondent Director, p. 4; Rollo, p. 125.]

Private respondent BELU concurs with the above contention of respondent director and, additionally, claims that since
membership in petitioner cooperative is only nominal, the rank and file employees who are members thereof should not be
deprived of their right to self-organization.

The above contentions are untenable. Contrary to respondents’ claim, the fact that the members-employees of petitioner do
not participate in the actual management of the cooperative does not make them eligible to form, assist or join a labor
organization for the purpose of collective bargaining with petitioner. The Court’s ruling in the Davao City case that members
of cooperative cannot join a labor union for purposes of collective bargaining was based on the fact that as members of the
cooperative they are co-owners thereof. As such, they cannot invoke the right to collective bargaining for "certainly an owner
cannot bargain with himself or his co-owners." [Cooperative Rural Bank of Davao City, Inc. v. Ferrer-Calleja, Et Al., supra]. It
is the fact of ownership of the cooperative, and not involvement in the management thereof, which disqualifies a member
from joining any labor organization within the cooperative. Thus, irrespective of the degree of their participation in the actual
management of the cooperative, all members thereof cannot form, assist or join a labor organization for the purpose of
collective bargaining.

Respondent union further claims that if nominal ownership in a cooperative is "enough to take away the constitutional
protections afforded to labor, then there would be no hindrance for employers to grant, on a scheme of generous profit
sharing, stock bonuses to their employees and thereafter claim that since their employees are not stockholders [of the
corporation], albeit in a minimal and involuntary manner, they are now also co-owners and thus disqualified to form unions."
To allow this, BELU argues, would be "to allow the floodgates of destruction to be opened upon the rights of labor which the
Constitution endeavors to protect and which welfare it promises to promote." [Comment of BELU, p. 10; Rollo, p. 100].

The above contention of respondent union is based on the erroneous presumption that membership in a cooperative is the
same as ownership of stocks in ordinary corporations. While cooperatives may exercise some of the rights and privileges
given to ordinary corporations provided under existing laws, such cooperatives enjoy other privileges not granted to the
latter [See Sections 4, 5, 6, and 8, Pres. Decree No. 175; Cooperative Rural Bank of Davao City v. Ferrer-Calleja, supra].
Similarly, members of cooperatives have rights and obligations different from those of stockholders of ordinary corporations.
It was precisely because of the special nature of cooperatives, that the Court held in the Davao City case that members-
employees thereof cannot form or join a labor union for purposes of collective bargaining. The Court held that: chanrob1es vi rtua l 1a w libra ry

A cooperative . . . is by its nature different from an ordinary business concern being run either by persons, partnerships, or
corporations. Its owners and/or members are the ones who run and operate the business while the others are its employees.
As above stated, irrespective of the number of shares owned by each member they are entitled to cast one vote each in
deciding upon the affairs of the cooperative. Their share capital earn limited interest. They enjoy special privileges as —
exemption from income tax and sales taxes, preferential light to supply their products to State agencies and even exemption
from the minimum wage laws.

An employee therefore of such a cooperative who is a member and co-owner thereof cannot invoke the right to collective
bargaining for certainly an owner cannot bargain with himself or his co-owners.

It is important to note that, in her order dated September 2, 1985, med-arbiter Elnora V. Balleras made a specific finding
that there are only thirty-seven (37) employees of petitioner who are not members of the cooperative and who are,
therefore, the only employees of petitioner cooperative eligible to form or join a labor union for purposes of collective
bargaining [Annex "A" of the Petition, p. 12; Rollo, p. 22]. However, the minutes of the certification election [Annex "C" of
the Petition: Rollo, p. 28] show that a total of eighty-three (83) employees were allowed to vote and of these, forty-nine (49)
voted for respondent union. Thus, even if We agree with respondent union’s contention that the thirty seven (37) employees
who were originally non-members of the cooperative can still vote in the certification election since they were only "forced
and compelled to join the cooperative on pain of disciplinary action," the certification election held on October 1, 1986 is still
null and void since even those who were already members of the cooperative at the time of the issuance of the med-arbiter’s
order, and therefore cannot claim that they were forced to join the union, were allowed to vote in the election. cha nrob les lawl ibra ry : rednad

Article 256 of the Labor Code provides, among others, that: chanrob1e s virtual 1aw lib rary

To have a valid, election, at least a majority of all eligible voters in the unit must have cast their votes. The labor union
receiving the majority of the valid votes cast shall be certified as the exclusive bargaining agent of all workers in the unit . . .
[Emphasis supplied.]

In this case it cannot be determined whether or not respondent union was duly elected by the eligible voters of the
bargaining unit since even employees who are ineligible to join a labor union within the cooperative because of their
membership therein were allowed to vote in the certification election.

Considering the foregoing, the Court finds that respondent director committed grave abuse of discretion in certifying
respondent union as the sole and exclusive bargaining representative of the rank and file employees of petitioner
cooperative.

WHEREFORE, the petition is hereby GRANTED and the assailed resolution of respondent director is ANNULLED. The
certification election conducted on October 1, 1986, is SET ASIDE. The Regional Office No. 1 of San Fernando, La Union is
hereby directed to immediately conduct new certification election proceedings among the rank and file employees of the
petitioner who are not members of the cooperative. chan roble s virtualawl ibra ry cha nrob les.c om:chanro bles. com.ph

SO ORDERED.
Fernan (C.J.), Gutierrez, Jr., and Bidin, JJ., concur.

Feliciano, J., is on leave.


159
FIRST DIVISION

[G.R. No. 82914. June 20, 1988.]

KAPATIRAN SA MEAT AND CANNING DIVISION (TUPAS Local Chapter No. 1027), Petitioner, v. THE HONORABLE
BLR DIRECTOR PURA FERRER CALLEJA, MEAT AND CANNING DIVISION UNIVERSAL ROBINA CORPORATION and
MEAT AND CANNING DIVISION NEW EMPLOYEES AND WORKERS UNITED LABOR ORGANIZATION, Respondents.

Alar, Comia, Manalo and Associates for Petitioner.

Danilo Bolos for respondent Robina Corporation.

RESOLUTION

GRIÑO-AQUINO, J.:

The petitioner, Kapatiran sa Meat and Canning Division (TUPAS Local Chapter No. 1027) hereinafter referred to as "TUPAS,"
seeks a review of the resolution dated January 27, 1988 (Annex D) of Public respondent Pura Ferrer-Calleja, Director of the
Bureau of Labor Relations, dismissing its appeal from the Order dated November 17, 1987 (Annex C) of the Med-Arbiter
Rasidali C. Abdullah ordering a certification election to be conducted among the regular daily paid rank and file
employees/workers of Universal Robina Corporation-Meat and Canning Division to determine which of the contending
unions:chanrob1es vi rt ual 1aw li bra ry

a) Kapatiran sa Meat and Canning Division TUPAS Local Chapter No. 1027 (or "TUPAS" for brevity);

b) Meat and Canning Division New Employees and Workers United Labor Organization (or "NEW ULO" for brevity);

c) No Union.

shall be the bargaining unit of the daily wage rank and file employees in the Meat and Canning Division of the company.

From 1984 to 1987 TUPAS was the sole and exclusive collective bargaining representative of the workers in the Meat and
Canning Division of the Universal Robina Corporation, with a 3-year collective bargaining agreement (CBA) which was to
expire on November 15, 1987.

Within the freedom period of 60 days prior to the expiration of its CBA, TUPAS filed an amended notice of strike on
September 28, 1987 as a means of pressuring the company to extend, renew, or negotiate a new CBA with it.

On October 8, 1987, the NEW ULO, composed mostly of workers belonging to the IGLESIA NI KRISTO sect, registered as a
labor union.

On October 12, 1987, the TUPAS staged a strike. ROBINA obtained an injunction against the strike, resulting in an
agreement to return to work and for the parties to negotiate a new CBA.

The next day, October 13, 1987, NEW ULO, claiming that it has "the majority of the daily wage rank and file employees
numbering 191," filed a petition for a certification election at the Bureau of Labor Relations (Annex A).

TUPAS moved to dismiss the petition for being defective in form and that the members of the NEW ULO were mostly
members of the Iglesia ni Kristo sect which three (3) years previous refused to affiliate with any labor union. It also accused
the company of using the NEW ULO to defeat TUPAS’ bargaining rights (Annex B).

On November 17, 1987, the Med-Arbiter ordered the holding of a certification election within 20 days (Annex C). chanrobles v irt ual lawl ibra ry

TUPAS appealed to the Bureau of Labor Relations (BLR). In the meantime, it was able to negotiate a new 3-year CBA with
ROBINA, which was signed on December 3, 1987 and to expire on November 15, 1990.

On January 27, 1988, respondent BLB Director Calleja dismissed the appeal (Annex D).

TUPAS’ motion for reconsideration (Annex E) was denied on March 17, 1988 (Annex F). On April 30, 1988, it filed this
petition alleging that the public respondent acted in excess of her jurisdiction and with grave abuse of discretion in affirming
the Med-Arbiter’s order for a certification election.

After deliberating on the petition and the documents annexed thereto, We find no merit in the petition. The public respondent
did not err in dismissing the petitioner’s appeal in BLR Case No. A-12-389-87. This Court’s decision in Victoriano v. Elizalde
Rope Workers’ Union, 59 SCRA 54, upholding the right of members of the IGLESIA NI KRISTO sect not to join a labor union
for being contrary to their religious beliefs, does not bar the members of that sect from forming their own union. The public
respondent correctly observed that the "recognition of the tenets of the sect . . . should not infringe on the basic right of self-
organization granted by the constitution to workers, regardless of religious affiliation."
cralaw virt ua1aw lib ra ry

The fact that TUPAS was able to negotiate a new CBA with ROBINA within the 60-day freedom period of the existing CBA,
160
does not foreclose the right of the rival union, NEW ULO, to challenge TUPAS’ claim to majority status, by filing a timely
petition for certification election on October 13, 1987 before TUPAS’ old CBA expired on November 15, 1987 and before it
signed a new CBA with the company on December 3, 1987. As pointed out by Med-Arbiter Abdullah, a "certification election
is the best forum in ascertaining the majority status of the contending unions wherein the workers themselves can freely
choose their bargaining representative thru secret ballot." Since it has not been shown that this order is tainted with
unfairness, this Court will not thwart the holding of a certification election (Associated Trade Unions [ATU] v. Noriel, 88 SCRA
96).

WHEREFORE, the petition for certiorari is denied, with costs against the petitioner.

SO ORDERED.

Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.

161
SECOND DIVISION

[G.R. No. 132088. June 28, 2000]

EVERDINA ACOSTA, NOEMI ACOSTA, ELVIRA AMPARADO, REBECCA


AQUINO, ROBERTO ARCAYA, EVA ARCEO, JULIET ARELLANO, ANITA
ASCANO, GRACE AUSTRA, LUISA AVILES, SUSIE AW, VICTORIA BADILLO
SUSAN BALDEMOR, ELISA BASA, NORY BATUIGAS, TERESITA BAUTISTA,
SEGUNDINA BERMAS, FERMINER BOCO, EVELYN BULAONG, SYLVIA
BULARIO, GILDA BOLOSAN, JOSIE BUNGAY, ARACELI CABUSE, TERESA
CACHO, ROSSANA CAJANDINEZ, NELY CALPITO, OLIVIA CARDINES,
THELMA CARINO, CORAZON CARRACEDO, ELENITA CASAUAY, MARIETA
CAULI, MARILOU CAYTON, VIRGINIA CHIAPOCO, ALLEN CIPRIANO,
MELINDA B. CONTRERAS, ZENAIDA CORPORAL, PRISCILLA CORPUZ, LUZ
COSIO, EMILIA CRUZ, CRISTINA DELA CRUZ, ROSALINA DELA CRUZ,
GRACE CUNANAN, EVELYN DE CASTRO, HAYDEE DE VALLE, CECILIA DEL
ROSARIO, GULLERMINA DE LA CRUZ, FRANCIS DlNGIL, BELLA DY,
CORAZON ESTEBAL, LUZ FAJARDO, TERESA FRAGO, VIRGINIA GACHO,
SABINO GALES, MYRNA GALLEGO, MARILYN GARNA, NATIVIDAD GAVILAN,
LOLITA GAVINO, MARILOU GO, LETICIA GOMEZ, OLYMPIO GONZAGA, RUTH
GONZALES, REMEDIOS HAVOC, GREGORIA HERNANDEZ, OSCAR HIDALGO,
BIBIANO HUGO, RITA HUERTA, LOURDES HULIPAS, ROMEO IDOS, ERLINDA
ISLA, LITA ITALIA, MATIAS JABONETE, DIANA JIMENEZ, DOMINADOR
LABACLADO, ALMA LAGUIAN, MELCY LALU, REBECCA LAMALINAO,
MARITA LAMSEN, LOURDES ESTER LAREDO, TERESITA LATION, ROSALINA
LEDESMA, NORMA LECCIONES, NORMA LEYTE, CECILIA LINCOPINES,
OFELIA LIZARDO, VENILLA LOCSIN, ADELINA LORENZO, SATURNINA
LORENZO, ALEJANDRA MABAET, JULIETA MADRID, ERLINDA MAGPAYO,
ROLANDO MAGSINO, ERLINDA MAILIG, FLORENDA MALAPAYA, CORAZON
MALLEN, ESMERALDA MANALANG, MERLE MANALO, ERLINDA MANEGA,
SHIRLEY MANGAHAS, ELFRIDA MARQUEZ, EFIGENIA MENEZ, NILDA NAVA,
MERLY NERY, ROSAMINDA OBEN, MELISSA OLAQUERRA, ENRIQUETA
OLIVAR, DOLORES ORDINARIO, ESTRELLA ORTEGA, ROSE ORPRECIO,
AURORA OSTACO, ELVIRA PAMPANGA, NORMA PAQUIZ, EVANGELINE
PARDO, GLORIA PARMAN, ERLINDA PASTRANA, LERMA QUIRIT, MECELIN
QUILANDRA, MEWLIN QUILLANORA, NATIVIDAD RAGUD, ERLINDA RANTE,
EUFEMIA RAMIREZ, JUDITHA RANESES, ULDARICO REJABA, MELINA
REJUSO, FELISA RENIDO, MILAGROS REY, REDENTOR REYES, RESALINA
SAGUN, ZENAIDA SALAZAR, FE SALIMA, SHIRLEY SARAGON,
PURIFICACION SARI, ELVIRA SATUMBAGA, MARIBEY SEALMOY, EDITHA
SINJAY, TITA SILVINO, AURORA TOLENTINO, ESPERANZA URBIZTONDO,
SATURNINO YODICO, RODOLFO MARIANO,ALICIA MARINAY, SUSAN
MATANGA, PATRIA MATIAS, LOUELITA MAYUNA, LOLITA MERCADO,
EUGENIA MILLA, CRESENCIA MIRADOR, ERMA MORAL, RAQUEL MORALES,
DOLORES LAGRADA, petitioners, vs. HON. COURT OF APPEALS and THE
CIVIL SERVICE COMMISSION and THE SECRETARY OF EDUCATION,
CULTURE AND SPORTS, respondents.

DECISION
DE LEON, JR., J.:

Before us is a petition for review on certiorari which seeks to set aside the Decision[1] dated
August 29, 1997 and Resolution[2] dated January 7, 1998 of the Court of Appeals in CA-G.R.
SP No. 39878, affirming the Resolutions[3] of respondent Civil Service Commission (CSC)
162
finding petitioners guilty of conduct prejudicial to the service and imposing a penalty of six-(6)
months suspension without pay.

Petitioners are teachers from different public schools in Metro Manila. On various dates in
September and October 1990, petitioners did not report for work and instead, participated in
mass actions by public school teachers at the Liwasang Bonifacio for the purpose of petitioning
the government for redress of their grievances.

On the basis of reports submitted by their respective school principals that petitioners participated in
said mass actions and refused to comply with the return-to-work order issued on September 17, 1990
by then Secretary Isidro D. Cario of the Department of Education, Culture and Sports (DECS),
petitioners were administratively charged with such offenses as grave misconduct, gross neglect of
duty, gross violation of civil service law, rules and regulations and reasonable office regulations,
refusal to perform official duty, gross insubordination, conduct prejudicial to the best interest of the
service and absence without official leave. Petitioners failed to answer these charges. Following the
investigations conducted by the DECS Investigating Committees, Secretary Cario found petitioners
guilty as charged and ordered their immediate dismissal from the service. [4]

Petitioners appealed the orders of Secretary Cario to the Merit Systems Protection Board
(MSPB) and later to the CSC. In 1995, the CSC modified the said orders of Secretary Cario as
follows:

WHEREFORE, the Commission hereby finds Everdina Acosta guilty of Conduct


Prejudicial to the Best Interest of the Service. She is hereby meted out the penalty of six
(6) months suspension without pay. Considering the period of time she was out of
service, she is automatically reinstated to her former positions (sic).[5]

Following the denial of their motion for reconsideration, petitioners questioned the matter
before the Court of Appeals. The appellate court denied their petition for certiorari and
subsequent motion for reconsideration. Hence, this petition.

Petitioners submit the following issues for our consideration:

RESPONDENT COURT OF APPEALS GRIEVOUSLY ERRED WHEN IT AFFIRMED


THE ASSAILED RESOLUTIONS OF THE CIVIL SERVICE COMMISSION THAT
WRONGLY PENALIZED PETITIONERS WHOSE ONLY "OFFENSE" WAS TO
EXERCISE THEIR CONSITUTIONAL RIGHT TO PEACEABLY ASSEMBLE AND
PETITION THE GOVERNMENT FOR REDRESS OF GRIEVANCES.

RESPONDENT COYRT OF APPEALS GRIEVOUSLY ERRED WHEN IT AFFIRMED


THE ASSAILED RESOLUTIONS OF THE CIVIL SERVICE COMMISSION THAT
WRONGLY DENIED PETITIONERS THEIR RIGHT TO BACKWAGES.

This petition is not impressed with merit.

Petitioners do not deny their absence from work nor the fact that said absences were due to
their participation in the mass actions at the Liwasang Bonifacio. However, they contend that
their participation in the mass actions was an exercise of their constitutional rights to
peaceably assemble and petition the government for redress of grievances. Petitioners
likewise maintain that they never went on strike because they never sought to secure changes
or modification of the terms and conditions of their employment.

Petitioners' contentions are without merit. The character and legality of the mass actions which
they participated in have been passed upon by this Court as early as 1990 in Manila Public
School Teachers' Association (MPSTA) v. Laguio, Jr.[6] wherein we ruled that "these 'mass
actions' were to all intents and purposes a strike; they constituted a concerted and
unauthorized stoppage of, or absence from, work which it was the teachers' sworn duty to
perform, undertaken for essentially economic reasons." [7] In Bangalisan v. Court of
Appeals,[8] we added that:

163
It is an undisputed fact that there was a work stoppage and that petitioners' purpose
was to realize their demands by withholding their services. The fact that the
conventional term "strike" was not used by the striking employees to describe their
common course of action is inconsequential, since the substance of the situation, and
not its appearance, will be deemed to be controlling.

The ability to strike is not essential to the right of association. In the absence of statute,
public employees do not have the right to engage in concerted work stoppages for any
purpose.

Further, herein petitioners, except Mariano, are being penalized not because they
exercised their right of peaceable assembly and petition for redress of grievances but
because of their successive unauthorized and unilateral absences which produced
adverse effects upon their students for whose education they are responsible. The
actuations of petitioners definitely constituted conduct prejudicial to the best interest of
the service, punishable under the Civil Service law, rules and regulations.

As aptly stated by the Solicitor General, "It is not the exercise by the petitioners of their
constitutional right to peaceably assemble that was punished, but the manner in which
they exercised such right which resulted in the temporary stoppage or disruption of
public service and classes in various public schools in Metro Manila. For, indeed, there
are efficient and non-disruptive avenues, other than the mass actions in question,
whereby petitioners could petition the government for redress of grievances."

It bears stressing that suspension of public services, however temporary, will inevitably
derail services to the public, which is one of the reasons why the right to strike is denied
government employees. It may be conceded that the petitioners had valid grievances
and noble intentions in staging the "mass actions," but that will not justify their absences
to the prejudice of innocent school children. Their righteous indignation does not
legalize an illegal work stoppage.[9]

In Jacinto v. Court of Appeals,[10] De la Cruz v. Court of Appeals,[11] and Alipat v. Court of


Appeals,[12] we upheld our rulings in MPSTA and Bangalisan. Considering the factual
circumstances of this case and the doctrine of stare decisis to which we consistently adhere,
we find no compelling reason to deviate from our earlier rulings in these related cases.

Anent the second issue, petitioners invoke our statement in Bangalisan that payment of
salaries corresponding to the period when an employee is not allowed to work may be decreed
if he is found innocent of the charges which caused his suspension and if his suspension is
unjustified. Petitioners cite CSC Resolution No. 93-162 and contend that the determination of
the CSC therein that not an iota of evidence was given to substantiate the conclusion that they
participated in a "teacher's strike" amounted to a finding that they were innocent of the charges
filed against them.

As a general proposition, a public official is not entitled to any compensation if he has not
rendered any service.[13] While there are recognized instances when backwages may be
awarded to a suspended or dismissed public official who is later ordered reinstated, as pointed
by petitioners in citing Bangalisan, the factual circumstances of the case at bar impel us to rule
otherwise.

Petitioners' reliance on CSC Resolution No. 93-162 is misplaced. Said CSC resolution
disposed of the appeals of Fely Ilarina, Adelaida Dela Cruz, Alicia Galvo, Nenita Albios and
Nerissa Abellanda. Petitioners were never parties to their appeals and, therefore, cannot cite
CSC Resolution No. 93-162 in support of their contention. Petitioners also overlook the fact
that although no evidence was presented to prove that Ilarina, et al. participated in the mass
actions, the CSC explained that the deficiency was cured by their admissions during the
hearings before the MSPB.[14] More importantly, however, herein petitioners' claim of
exoneration is belied by the determination of the CSC that their participation in the mass
actions constituted conduct prejudicial to the service. Being found liable for a lesser offense is
not equivalent to exoneration.[15]
164
Petitioners also point out that from the issuance of the orders of dismissal by Secretary Cario
to the modification thereof by the CSC, almost five (5) years elapsed. Petitioners argue that the
period in excess of their preventive suspension and penalty of six (6) months suspension
amounted to unjustified suspension for which an award of backwages was proper pursuant to
our rulings in Bautista v. Peralta[16] and Abellera v. City of Baguio.[17]

We disagree. It will be recalled that in Jacinto, we upheld the legality of the immediate
execution of the dismissal orders issued by Secretary Cario on the ground that under Section
47(2),[18] Subtitle A, Title I, Book V of Executive Order No. 292, otherwise known as the
Administrative Code of 1987, the decision of a department secretary confirming the dismissal
of an employee under his jurisdiction is executory even pending appeal thereof. [19] Since
dismissal orders remain valid and effective until modified or set aside, the intervening period
during which an employee is not permitted to work cannot be argued as amounting to
unjustified suspension. In Gloria v. Court of Appeals,[20] we further explained that:

Preventive suspension pending investigation, as already discussed, is not a penalty but


only a means of enabling the disciplining authority to conduct an unhampered
investigation. On the other hand, preventive suspension pending appeal is actually
punitive although it is in effect subsequently considered illegal if respondent is
exonerated and the administrative decision finding him guilty is reversed. Hence, he
should be reinstated with full pay for the period of the suspension. Thus, 47(4) states
that respondent "shall be considered as under preventive suspension during the
pendency of the appeal in the event he wins." On the other hand, if his conviction is
affirmed, i.e. if he is not exonerated, the period of his suspension becomes part of the
final penalty of suspension or dismissal.[21]

Petitioners' reliance on Fabella v. Court of Appeals[22] is likewise unavailing. In that case, the
petitioners therein immediately went to court to seek injunctive relief against the DECS
administrative proceedings on the ground that they were deprived of due process. The trial
court declared the administrative proceedings void and ordered the payment of backwages to
the petitioners therein. The Court of Appeals then upheld the order of the trial court. In
affirming both the trial court and the Court of Appeals, we stated therein that:

x x x Because the administrative proceedings involved in this case are void, no


delinquency or misconduct may be imputed to private respondents. Moreover, the
suspension or dismissal meted on them is baseless. Private respondents should, as a
consequence, be reinstated and awarded all monetary benefits that may have accrued
to them during the period of their unjustified suspension or dismissal. x x x[23]

On the other hand, in the case at bar, petitioners initially assailed the alleged non-observance
of due process by the DECS Investigating Committees only upon appeal to the MSPB.
Significantly, however, it has been our consistent ruling that an appeal is curative of any
supposed denial of due process.[24] Thus, after full ventilation of their case before the MSPB
and CSC, and later on before the Court of Appeals, petitioners cannot now allege denial of due
process to justify their claim for backwages.

WHEREFORE, the instant petition is DENIED.

SO ORDERED.

Bellosillo, (Chairman), Mendoza, and Buena, JJ., concur.

Quisumbing, J., no part.

[1]
Penned by now Supreme Court Associate Justice Fidel P. Purisima an concurred in by Associate Justices Ma. Alicia Austria-
Martinez and Romeo J. Callejo, Sr.
[2]
Penned by Justice Purisima and concurred in by Justices Callejo and Oswaldo D. Agcaoili.

165
[3]
Annexes "2" to "299" of the Petition before the Court of Appeals, CA-Rollo, pp. 116-710.
[4]
Petition, Rollo, pp. 22-23; Resolutions to this effect were issued by Secretary Cario on various dates in October 1990. Except for the
names of the parties, dates and case numbers, said resolutions similarly provided as follows:
October 15, 1990
Case No. DECS x x x
The Regional Director
DECS, National Capital Region
PPSTA Building, Banawe St.,
Quezon City
DECISION
Dear Sir:
This is a motu-propio administrative complaint separately filed by the Secretary of Education, Culture and Sports against the
following public school teachers, namely:
NAME SCHOOL ABSENCES
xxxxxxxxx
based on the report submitted by their respective school principals wherein it was alleged that the above-named teachers participated
in the mass action/illegal strike on Sept. 17-21, 1990 and subsequently defied the return-to-work order dated September 17, 1990
issued by this Office, which acts constitute grave misconduct, gross neglect of duty, gross violation of Civil Service Law, Rules and
Regulations and reasonable office regulations, refusal to perform official duty, gross insubordination, conduct prejudicial to the best
interest of the service and absence without official leave (AWOL), in violation of Presidential Decree 807, otherwise known as the
Civil Service Decree of the Philippines.
Required to explain within a period of not less than 72 hours but not more than 5 days from receipt of the complaint, respondents
failed to submit the required answer within the given time and up to the present, and despite the denial of their request for extension of
30 days within which to submit their answers dated September 25, 1990 filed by their counsel, Atty. Gregorio Fabros, in a letter of this
office to him dated September 28, 1990, respondents failed to submit the same, which failure, is considered a waiver on their part of
their right to answer the charges and to controvert the same.
Wherefore, after careful evaluation of the records, this Office finds the respondents guilty as charged.
In accordance with Memorandum Circular 30 s. 1989 of the civil Service Commission on guidelines in the Application of Penalty in
Administrative Cases, the herein respondents are dismissed from office effective immediately.
Advice of the date the respondents received this decision is desired.
Very truly yours,
(Signed)
ISIDRO D. CARIO
Secretary
Copy furnished:
1. All respondents
2. The IBM, Dakota, Manila
3. City Superintendent of Schools
[5]
Annex "C," Rollo, pp. 73; Except for the names of the parties, dates and case numbers, the dispositive portion of the orders of the
CSC were similarly worded.
[6]
200 SCRA 323 (1991).
[7]
Id. at 329-30.
[8]
276 SCRA 619 (1997).
[9]
Id. at 627-628.
[10]
281 SCRA 657 (1997).
[11]
G.R. No. 126183, March 25, 1999.
[12]
G.R. No. 132841, June 21, 1999.
[13]
Villamor vs. Lacson, 12 SCRA 418, 423 (1964).
[14]
Annex "E" of the Petition, Rollo, p. 81.
[15]
Jacinto v. Court of Appeals, supra at 682.
[16]
18 SCRA 223 (1966).
[17]
19 SCRA 600 (1967).

[18]
SEC. 47. Disciplinary Jurisdiction.

xxx

....(2) The Secretaries and heads of agencies and instrumentalities, provinces, cities and municipalities shall have jurisdiction to
investigate and decide matters involving disciplinary action against officers and employees under their jurisdiction. Their decisions
shall be final in case the penalty imposed is suspension for not more than thirty days or a fine in an amount not exceeding thirty days
salary. In case the decision rendered by a bureau or office head is appealable to the (Civil Service) Commission, the same may be
initially appealed to the department and finally to the Commission and pending appeal, the same shall be executory except when the
penalty is removal, in which case the same shall be executory only after confirmation by the Secretary concerned.
[19]
Jacinto v. Court of Appeals, supra at 680.
[20]
G.R. No. 131012, April 21, 1999.
[21]
Id., at 12-13.
[22]
282 SCRA 256 (1997).
[23]
Id. at 273.
[24]
Esber v. Sto. Tomas, 225 SCRA 664 (1993); Cebu Stevedoring Co., Inc. v. Regional Director/Minister of Labor, 168 SCRA 315
(1988); B. Sta. Rita & Company, Inc. v. Arroyo, 168 SCRA 581 (1988); Rosales v. Court of Appeals, 165 SCRA 344 (1988);
Sumpang v. Inciong, 137 SCRA 56 (1985).

166
SECOND DIVISION

[G.R. No. 85750. September 28, 1990.]

INTERNATIONAL CATHOLIC MIGRATION COMMISSION, Petitioner, v. HON. PURA CALLEJA IN HER CAPACITY AS
DIRECTOR OF THE BUREAU OF LABOR RELATIONS AND TRADE UNIONS OF THE PHILIPPINES AND ALLIED
SERVICES (TUPAS) WFTU, Respondents.

[G.R. No. 89331.]

KAPISANAN NG MANGGAGAWA AT TAC SA IRRI - ORGANIZED LABOR ASSOCIATION IN LINE INDUSTRIES AND
AGRICULTURE, Petitioner, v. SECRETARY OF LABOR AND EMPLOYMENT AND INTERNATIONAL RICE RESEARCH
INSTITUTE, INC., Respondents.

Araullo, Zambrano, Gruba, Chua Law Firm for petitioner in 85750.

Dominguez, Armamento, Cabana & Associates for petitioner in G.R. No. 89331.

Jimenez & Associates for IRRI.

Alfredo L. Bentulan for private respondent in 85750.

DECISION

MELENCIO-HERRERA, J.:

Consolidated on 11 December 1989, these two cases involve the validity of the claim of immunity by the International
Catholic Migration Commission (ICMC) and the International Rice Research Institute, Inc. (IRRI) from the application of
Philippine labor laws.

Facts and Issues

A. G.R. No. 85750 — the International Catholic Migration Commission (ICMC) Case.

As an aftermath of the Vietnam War, the plight of Vietnamese refugees fleeing from South Vietnam’s communist rule
confronted the international community.

In response to this crisis, on 23 February 1981, an Agreement was forged between the Philippine Government and the United
Nations High Commissioner for Refugees whereby an operating center for processing Indo-Chinese refugees for eventual
resettlement to other countries was to be established in Bataan (Annex "A," Rollo, pp. 22-32).

ICMC was one of those accredited by the Philippine Government to operate the refugee processing center in Morong, Bataan.
It was incorporated in New York, USA, at the request of the Holy See, as a non-profit agency involved in international
humanitarian and voluntary work. It is duly registered with the United Nations Economic and Social Council (ECOSOC) and
enjoys Consultative Status, Category II. As an international organization rendering voluntary and humanitarian services in
the Philippines, its activities are parallel to those of the International Committee for Migration (ICM) and the International
Committee of the Red Cross (ICRC) [DOLE Records of BLR Case No. A-2-62-87, ICMC v. Calleja, Vol. I].

On 14 July 1986, Trade Unions of the Philippines and Allied Services (TUPAS) filed with the then Ministry of Labor and
Employment a Petition for Certification Election among the rank and file members employed by ICMC. The latter opposed the
petition on the ground that it is an international organization registered with the United Nations and, hence, enjoys
diplomatic immunity.

On 5 February 1987, Med-Arbiter Anastacio L. Bactin sustained ICMC and dismissed the petition for lack of jurisdiction.

On appeal by TUPAS, Director Pura Calleja of the Bureau of Labor Relations (BLR), reversed the Med-Arbiter’s Decision and
ordered the immediate conduct of a certification election. At that time, ICMC’s request for recognition as a specialized agency
was still pending with the Department of Foreign Affairs (DEFORAF).

Subsequently, however, on 15 July 1988, the Philippine Government, through the DEFORAF, granted ICMC the status of a
specialized agency with corresponding diplomatic privileges and immunities, as evidenced by a Memorandum of Agreement
between the Government and ICMC (Annex "E", Petition, Rollo, pp. 41-43), infra.

ICMC then sought the immediate dismissal of the TUPAS Petition for Certification Election invoking the immunity expressly
granted but the same was denied by respondent BLR Director who, again, ordered the immediate conduct of a pre-election
conference. ICMC’s two Motions for Reconsideration were denied despite an opinion rendered by DEFORAF on 17 October

167
1988 that said BLR Order violated ICMC’s diplomatic immunity.

Thus, on 24 November 1988, ICMC filed the present Petition for Certiorari with Preliminary Injunction assailing the BLR
Order.

On 28 November 1988, the Court issued a Temporary Restraining Order enjoining the holding of the certification election.

On 10 January 1989, the DEFORAF, through its Legal Adviser, retired Justice Jorge C. Coquia of the Court of Appeals, filed a
Motion for Intervention alleging that, as the highest executive department with the competence and authority to act on
matters involving diplomatic immunity and privileges, and tasked with the conduct of Philippine diplomatic and consular
relations with foreign governments and UN organizations, it has a legal interest in the outcome of this case.

Over the opposition of the Solicitor General, the Court allowed DEFORAF intervention.

On 12 July 1989, the Second Division gave due course to the ICMC Petition and required the submittal of memoranda by the
parties, which has been complied with.

As initially stated, the issue is whether or not the grant of diplomatic privileges and immunities to ICMC extends to immunity
from the application of Philippine labor laws.

ICMC sustains the affirmative of the proposition citing (1) its Memorandum of Agreement with the Philippine Government
giving it the status of a specialized agency, (infra); (2) the Convention on the Privileges and Immunities of Specialized
Agencies, adopted by the UN General Assembly on 21 November 1947 and concurred in by the Philippine Senate through
Resolution No. 91 on 17 May 1949 (the Philippine Instrument of Ratification was signed by the President on 30 August 1949
and deposited with the UN on 20 March 1950) infra; and (3) Article II, Section 2 of the 1987 Constitution, which declares
that the Philippines adopts the generally accepted principles of international law as part of the law of the land.

Intervenor DEFORAF upholds ICMC’s claim of diplomatic immunity and seeks an affirmance of the DEFORAF determination
that the BLR Order for a certification election among the ICMC employees is violative of the diplomatic immunity of said
organization.

Respondent BLR Director, on the other hand, with whom the Solicitor General agrees, cites State policy and Philippine labor
laws to justify its assailed Order, particularly, Article II, Section 18 and Article III, Section 8 of the 1987 Constitution, infra;
and Articles 243 and 246 of the Labor Code, as amended, ibid. In addition, she contends that a certification election is not a
litigation but a mere investigation of a non-adversary, fact-finding character. It is not a suit against ICMC, its property, funds
or assets, but is the sole concern of the workers themselves.

B. G.R. No. 89331 — (The International Rice Research Institute [IRRI] Case).

Before a Decision could be rendered in the ICMC Case, the Third Division, on 11 December 1989, resolved to consolidate
G.R. No. 89331 pending before it with G.R. No. 85750, the lower-numbered case pending with the Second Division, upon
manifestation by the Solicitor General that both cases involve similar issues.

The facts disclose that on 9 December 1959, the Philippine Government and the Ford and Rockefeller Foundations signed a
Memorandum of Understanding establishing the International Rice Research Institute (IRRI) at Los Baños, Laguna. It was
intended to be an autonomous, philanthropic, tax-free non-profit, non-stock organization designed to carry out the principal
objective of conducting "basic research on the rice plant, on all phases of rice production, management, distribution and
utilization with a view to attaining nutritive and economic advantage or benefit for the people of Asia and other major rice-
growing areas through improvement in quality and quantity of rice." cralaw vi rtua 1aw lib rary

Initially, IRRI was organized and registered with the Securities and Exchange Commission as a private corporation subject to
all laws and regulations. However, by virtue of Pres. Decree No. 1620, promulgated on 19 April 1979, IRRI was granted the
status, prerogatives, privileges and immunities of an international organization.

The Organized Labor Association in Line Industries and Agriculture (OLALIA), is a legitimate labor organization with an
existing local union, the Kapisanan ng Manggagawa at TAC sa IRRI (Kapisanan, for short) in respondent IRRI.

On 20 April 1987, the Kapisanan filed a Petition for Direct Certification Election with Region IV, Regional Office of the
Department of Labor and Employment (DOLE).

IRRI opposed the petition invoking Pres. Decree No. 1620 conferring upon it the status of an international organization and
granting it immunity from all civil, criminal and administrative proceedings under Philippine laws.

On 7 July 1987, Med-Arbiter Leonardo M. Garcia, upheld the opposition on the basis of Pres. Decree No. 1620 and dismissed
the Petition for Direct Certification.

On appeal, the BLR Director, who is the public respondent in the ICMC Case, set aside the Med-Arbiter’s Order and
authorized the calling of a certification election among the rank-and-file employees of IRRI. Said Director relied on Article
243 of the Labor Code, as amended, infra, and Article XIII, Section 3 of the 1987 Constitution, 1 and held that "the
immunities and privileges granted to IRRI do not include exemption from coverage of our Labor Laws." Reconsideration
sought by IRRI was denied.

On appeal, the Secretary of Labor, in a Resolution of 5 July 1989, set aside the BLR Director’s Order, dismissed the Petition
for Certification Election, and held that the grant of specialized agency status by the Philippine Government to the IRRI bars
DOLE from assuming and exercising jurisdiction over IRRI. Said Resolution reads in part as follows: jgc:chan robles. com.ph

"Presidential Decree No. 1620 which grants to the IRRI the status, prerogatives, privileges and immunities of an international
organization is clear and explicit. It provides in categorical terms that: jgc:chanroble s.com.p h

"Art. 3 — The Institute shall enjoy immunity from any penal, civil and administrative proceedings, except insofar as immunity
has been expressly waived by the Director-General of the Institution or his authorized representative.
168
"Verily, unless and until the Institute expressly waives its immunity, no summons, subpoena, orders, decisions or
proceedings ordered by any court or administrative or quasi-judicial agency are enforceable as against the Institute. In the
case at bar there was no such waiver made by the Director-General of the Institute. Indeed, the Institute, at the very first
opportunity already vehemently questioned the jurisdiction of this Department by filing an ex-parte motion to dismiss the
case."cralaw virtua1aw l ib rary

Hence, the present Petition for Certiorari filed by Kapisanan alleging grave abuse of discretion by respondent Secretary of
Labor in upholding IRRI’s diplomatic immunity.

The Third Division, to which the case was originally assigned required the respondents to comment on the petition. In a
Manifestation filed on 4 August 1990, the Secretary of Labor declared that it was "not adopting as his own" the decision of
the BLR Director in the ICMC Case as well as the Comment of the Solicitor General sustaining said Director. The last pleading
was filed by IRRI on 14 August 1990.

Instead of a Comment, the Solicitor General filed a Manifestation and Motion praying that he be excused from filing a
comment "it appearing that in the earlier case of International Catholic Migration Commission v. Hon. Pura Calleja, G.R. No.
85750, the Office of the Solicitor General had sustained the stand of Director Calleja on the very same issue now before it,
which position has been superseded by respondent Secretary of Labor in G.R. No. 89331," the present case. The Court
acceded to the Solicitor General’s prayer.

The Court is now asked to rule upon whether or not the Secretary of Labor committed grave abuse of discretion in dismissing
the Petition for Certification Election filed by Kapisanan.

Kapisanan contends that Article 3 of Pres. Decree No. 1620 granting IRRI the status, privileges, prerogatives and immunities
of an international organization, invoked by the Secretary of Labor, is unconstitutional in so far as it deprives the Filipino
workers of their fundamental and constitutional right to form trade unions for the purpose of collective bargaining as
enshrined in the 1987 Constitution. chan robles. com.ph : vi rtua l law lib ra ry

A procedural issue is also raised. Kapisanan faults respondent Secretary of Labor for entertaining IRRI’s appeal from the
Order of the Director of the Bureau of Labor Relations directing the holding of a certification election. Kapisanan contends
that pursuant to Sections 7, 8, 9 and 10 of Rule V 2 of the Omnibus Rules Implementing the Labor Code, the Order of the
BLR Director had become final and unappealable and that, therefore, the Secretary of Labor had no more jurisdiction over
the said appeal.

On the other hand, in entertaining the appeal, the Secretary of Labor relied on Section 25 of Rep. Act. No. 6715, which took
effect on 21 March 1989, providing for the direct filing of appeal from the Med-Arbiter to the Office of the Secretary of Labor
and Employment instead of to the Director of the Bureau of Labor Relations in cases involving certification election orders.

III

Findings in Both Cases.

There can be no question that diplomatic immunity has, in fact, been granted ICMC and IRRI.

Article II of the Memorandum of Agreement between the Philippine Government and ICMC provides that ICMC shall have a
status "similar to that of a specialized agency." Article III, Sections 4 and 5 of the Convention on the Privileges and
Immunities of Specialized Agencies, adopted by the UN General Assembly on 21 November 1947 and concurred in by the
Philippine Senate through Resolution No. 19 on 17 May 1949, explicitly provides: jgc:cha nrob les.c om.ph

"Article III, Section 4. The specialized agencies, their property and assets, wherever located and by whomsoever held, shall
enjoy immunity from every form of legal process except insofar as in any particular case they have expressly waived their
immunity. It is however, understood that no waiver of immunity shall extend to any measure of execution." cralaw virtua 1aw lib rary

Sec. 5. — The premises of the specialized agencies shall be inviolable. The property and assets of the specialized agencies,
wherever located and by whomsoever held shall be immune from search, requisition, confiscation, expropriation and any
other form of interference, whether by executive, administrative, judicial or legislative action." (Emphasis ours).

IRRI is similarly situated. Pres. Decree No. 1620, Article 3, is explicit in its grant of immunity, thus: jgc:chanroble s.com.p h

"Article 3. Immunity from Legal Process. — The Institute shall enjoy immunity from any penal, civil and administrative
proceedings, except insofar as that immunity has been expressly waived by the Director-General of the Institute or his
authorized representatives." cralaw virtua 1aw lib rary

Thus it is that the DEFORAF, through its Legal Adviser, sustained ICMC’s invocation of immunity when in a Memorandum,
dated 17 October 1988, it expressed the view that "the Order of the Director of the Bureau of Labor Relations dated 21
September 1988 for the conduct of Certification Election within ICMC violates the diplomatic immunity of the organization."
Similarly, in respect of IRRI, the DEFORAF speaking through The Acting Secretary of Foreign Affairs, Jose D. Ingles, in a
letter, dated 17 June 1987, to the Secretary of Labor, maintained that "IRRI enjoys immunity from the jurisdiction of DOLE in
this particular instance." cralaw virtua 1aw lib rary

The foregoing opinions constitute a categorical recognition by the Executive Branch of the Government that ICMC and IRRI
enjoy immunities accorded to international organizations, which determination has been held to be a political question
conclusive upon the Courts in order not to embarrass a political department of Government.

"It is a recognized principle of international law and under our system of separation of powers that diplomatic immunity is
essentially a political question and courts should refuse to look beyond a determination by the executive branch of the
government, and where the plea of diplomatic immunity is recognized and affirmed by the executive branch of the
government as in the case at bar, it is then the duty of courts to accept the claim of immunity upon appropriate suggestion

169
by the principal law officer of the government . . . or other officer acting under his direction. Hence, in adherence to the
settled principle that courts may not so exercise their jurisdiction . . . as to embarrass the executive arm of the government
in conducting foreign relations, it is accepted doctrine that in such cases the judicial department of (this) government follows
the action of the political branch and will not embarrass the latter by assuming an antagonistic jurisdiction." 3

A brief look into the nature of international organizations and specialized agencies is in order. The term "international
organization" is generally used to describe an organization set up by agreement between two or more states. 4 Under
contemporary international law, such organizations are endowed with some degree of international legal personality 5 such
that they are capable of exercising specific rights, duties and powers. 6 They are organized mainly as a means for conducting
general international business in which the member states have an interest. 7 The United Nations, for instance, is an
international organization dedicated to the propagation of world peace.

"Specialized agencies" are international organizations having functions in particular fields. The term appears in Articles 57 8
and 63 9 of the Charter of the United Nations: jgc:chan robles .com.p h

"The Charter, while it invests the United Nations with the general task of promoting progress and international cooperation in
economic, social, health, cultural, educational and related matters, contemplates that these tasks will be mainly fulfilled not
by organs of the United Nations itself but by autonomous international organizations established by inter-governmental
agreements outside the United Nations. There are now many such international agencies having functions in many different
fields, e.g. in posts, telecommunications, railways, canals, rivers, sea transport, civil aviation, meteorology, atomic energy,
finance, trade, education and culture, health and refugees. Some are virtually world-wide in their membership, some are
regional or otherwise limited in their membership. The Charter provides that those agencies which have ‘wide international
responsibilities’ are to be brought into relationship with the United Nations by agreements entered into between them and
the Economic and Social Council, are then to be known as ‘specialized agencies.’" 10

The rapid growth of international organizations under contemporary international law has paved the way for the development
of the concept of international immunities.

"It is now usual for the constitutions of international organizations to contain provisions conferring certain immunities on the
organizations themselves, representatives of their member states and persons acting on behalf of the organizations. A series
of conventions, agreements and protocols defining the immunities of various international organizations in relation to their
members generally are now widely in force; . . ." 11

There are basically three propositions underlying the grant of international immunities to international organizations. These
principles, contained in the ILO Memorandum are stated thus: 1) international institutions should have a status which
protects them against control or interference by any one government in the performance of functions for the effective
discharge of which they are responsible to democratically constituted international bodies in which all the nations concerned
are represented; 2) no country should derive any national financial advantage by levying fiscal charges on common
international funds; and 3) the international organization should, as a collectivity of States members, be accorded the
facilities for the conduct of its official business customarily extended to each other by its individual member States. 12 The
theory behind all three propositions is said to be essentially institutional in character. "It is not concerned with the status,
dignity or privileges of individuals, but with the elements of functional independence necessary to free international
institutions from national control and to enable them to discharge their responsibilities impartially on behalf of all their
members." 13 The raison d’etre for these immunities is the assurance of unimpeded performance of their functions by the
agencies concerned.

The grant of immunity from local jurisdiction to ICMC and IRRI is clearly necessitated by their international character and
respective purposes. The objective is to avoid the danger of partiality and interference by the host country in their internal
workings. The exercise of jurisdiction by the Department of Labor in these instances would defeat the very purpose of
immunity, which is to shield the affairs of international organizations, in accordance with international practice, from political
pressure or control by the host country to the prejudice a member States of the organization, and to ensure the unhampered
performance of their functions.

ICMC’s and IRRI’s immunity from local jurisdiction by no means deprives labor of its basic rights, which are guarantee by
Article II, Section 18, 14 Article III, Section 8, 15 and Article XIII, Section 3 (supra), of the 1987 Constitution; and
implemented by Articles 243 and 246 of the Labor Code, 16 relied on by the BLR Director and by Kapisanan.

For, ICMC employees are not without recourse whenever there are disputes to be settled. Section 31 of the Convention on
the Privileges and Immunities of the Specialized Agencies of the United Nations 17 provides that "each specialized agency
shall make provision for appropriate modes of settlement of: (a) disputes arising out of contracts or other disputes of private
character to which the specialized agency is a party." Moreover, pursuant to Article IV of the Memorandum of Agreement
between ICMC and the Philippine Government, whenever there is any abuse of privilege by ICMC, the Government is free to
withdraw the privileges and immunities accorded. Thus: jgc:cha nroble s.com.p h

"Article IV. Cooperation with Government Authorities. — 1. The Commission shall cooperate at all times with the appropriate
authorities of the Government to ensure the observance of Philippine laws, rules and regulations, facilitate the proper
administration of justice and prevent the occurrences of any abuse of the privileges and immunities granted its officials and
alien employees in Article III of this Agreement to the Commission.

"2. In the event that the Government determines that there has been an abuse of the privileges and immunities granted
under this Agreement, consultations shall be held between the Government and the Commission to determine whether any
such abuse has occurred and, if so, the Government shall withdraw the privileges and immunities granted the Commission
and its officials."
cralaw virt ua1aw lib ra ry

Neither are the employees of IRRI without remedy in case of dispute with management as, in fact, there had been organized
a forum for better management-employee relationship as evidenced by the formation of the Council of IRRI Employees and
Management (CIEM) wherein "both management and employees were and still are represented for purposes of maintaining
mutual and beneficial cooperation between IRRI and its employees." The existence of this Union factually and tellingly belies
the argument that Pres. Decree No. 1620, which grants to IRRI the status, privileges and Immunities of an international
organization, deprives its employees of the right to self-organization. cralawna d

170
The immunity granted being "from every form of legal process except in so far as in any particular case they have expressly
waived their immunity," it is inaccurate to state that a certification election is beyond the scope of that immunity for the
reason that it is not a suit against ICMC. A certification election cannot be viewed as an independent or isolated process. It
could trigger off a series of events in the collective bargaining process together with related incidents and/or concerted
activities, which could inevitably involve ICMC in the "legal process," which includes "any penal, civil and administrative
proceedings." The eventuality of Court litigation is neither remote and from which international organizations are precisely
shielded to safeguard them from the disruption of their functions. Clauses on jurisdictional immunity are said to be standard
provisions in the constitutions of international organizations. "The immunity covers the organization concerned, its property
and its assets. It is equally applicable to proceedings in personam and proceedings in rem." 18

We take note of a Manifestation, dated 28 September 1989, in the ICMC Case (p. 161, Rollo), wherein TUPAS calls attention
to the case entitled "International Catholic Migration Commission v. NLRC, et als., (G.R. No. 72222, 30 January 1989, 169
SCRA 606), and claims that, having taken cognizance of that dispute (on the issue of payment of salary for the unexpired
portion of a six-month probationary employment), the Court is now estopped from passing upon the question of DOLE
jurisdiction over ICMC.

We find no merit to said submission. Not only did the facts of said controversy occur between 1983-1985, or before the grant
to ICMC on 15 July 1988 of the status of a specialized agency with corresponding immunities, but also because ICMC in that
case did not invoke its immunity and, therefore, may be deemed to have waived it, assuming that during that period (1983-
1985) it was tacitly recognized as enjoying such immunity.

Anent the procedural issue raised in the IRRI Case, suffice it to state that the Decision of the BLR Director, dated 15 February
1989, had not become final because of a Motion for Reconsideration filed by IRRI. Said Motion was acted upon only on 30
March 1989 when Rep. Act No. 6715, which provides for direct appeals from the Orders of the Med-Arbiter to the Secretary
of Labor in certification election cases either from the order or the results of the election itself, was already in effect,
specifically since 21 March 1989. Hence, no grave abuse of discretion may be imputed to respondent Secretary of Labor in
his assumption of appellate jurisdiction, contrary to Kapisanan’s allegations. The pertinent portion of that law provides:jgc:c hanro bles. com.ph

"Article 259. — Any party to an election may appeal the order or results of the election as determined by the Med-Arbiter
directly to the Secretary of Labor and Employment on the ground that the rules and regulations or parts thereof established
by the Secretary of Labor and Employment for the conduct of the election have been violated. Such appeal shall be decided
within 15 calendar days" (Emphasis ours).

En passant, the Court is gratified to note that the heretofore antagonistic positions assumed by two departments of the
executive branch of government have been rectified and the resultant embarrassment to the Philippine Government in the
eyes of the international community now, hopefully, effaced.

WHEREFORE, in G.R. No. 85750 (the ICMC Case), the Petition is GRANTED, the Order of the Bureau of Labor Relations for
certification election is SET ASIDE, and the Temporary Restraining Order earlier issued is made PERMANENT.

In G.R. No. 89331 (the IRRI Case), the Petition is Dismissed, no grave abuse of discretion having been committed by the
Secretary of Labor and Employment in dismissing the Petition for Certification Election.

No pronouncement as to costs.

SO ORDERED.

Padilla, Sarmiento and Regalado, JJ., concur.

Paras, J., On leave.

Endnotes:

1. Article XIII, Section 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and
promote full employment opportunities for all. It shall guarantee the rights of all workers to self-organization, collective
bargaining and negotiations and peaceful concerted activities including the right to strike in accordance with law. They shall
be entitled to security of tenure, humane conditions of work and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits as may be provided by law.

2. RULE V. Section 7. Appeal — Any aggrieved party may appeal the order of the Med-Arbiter to the Bureau only on the
following grounds: a) grave abuse of discretion and b) gross incompetence. The appeal shall specifically state the grounds
relied upon by the appellant with supporting memorandum.

Section 8. Where to file appeal — The appellant shall file his appeal which shall be under oath, in the Regional Office where
the case originated, copy furnished the appellee.

Section 9. Period to Appeal. — The appeal shall be filed within ten (10) working days from receipt of the Order by the
appellant. Likewise, the appellee shall file his answer thereto within ten (10) working days from receipt of the appeal. The
Regional Director shall immediately forward the entire records of the case to the Bureau.

Section 10. Decision of the Bureau is final and unappealable. — The Bureau shall have twenty (20) working days within which
to decide the appeal from receipt of the records of the case. The decision of the Bureau in all cases shall be final and
unappealable.

3. World Health Organization and Dr. Leonce Verstuyft v. Hon. Benjamin Aquino, Et Al., L-35131, 29 November 1972, 48
SCRA 242.

4. MICHAEL AKEHURST, A MODERN INTRODUCTION TO INTERNATIONAL LAW (1984) at 69.


171
5. The leading judicial authority on the personality of international organizations is the advisory opinion given by the ICJ in
the Reparation for Injuries Suffered in the Service of the United Nations Case ([1949] I.C.J. Rep 174) where the Court
recognized the UN’s international personality.

6. M. AKEHURST, supra, at 70.

7. J.L. BRIERLY, THE LAW OF NATIONS (1963) at 95.

8. Article 57. — 1. The various specialized agencies, established by intergovernmental agreement and having wide
international responsibilities, as defined in their basic instruments, in economic, social cultural, educational, health, and
related fields, shall be brought into relationship with the United Nations in accordance with the provisions of Article 63.

2. Such agencies thus brought into relationship with the United Nations are hereinafter referred to as specialized agencies.

9. Article 63. — 1. The Economic and Social Council may enter into agreements with any of the agencies referred to in Article
57 defining the terms on which the agency concerned shall be brought into relationship with the United Nations. Such
agreements shall be subject to approval by the General Assembly.

2. It may co-ordinate the activities of the specialized agencies through consultation with and recommendations to such
agencies and through recommendations to the General Assembly and to the Members of the United Nations.

10. BRIERLY, supra, at 121-122.

11. C. WILFRED JENKS, INTERNATIONAL IMMUNITIES (1961) at 2-3.

12. Ibid., at 17.

13. Ibid.

14. Article II, Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers
and promote their welfare.

15. Article III, Section 8. The right of the people, including those employed in the public and private sectors, to form unions,
associations, or societies for purposes not contrary to law shall not be abridged.

16. Article 243. Coverage and Employees’ Right to Self-Organization. — All persons employed in commercial, industrial and
agricultural enterprises and in religious, charitable, medical or educational institutions whether operating for profit or not,
shall have the right to self-organization and to form, join or assist labor organizations of their own choosing for purposes of
collective bargaining. Ambulant, intermittent and itinerant workers, self-employed people, rural workers and those without
any definite employees may form labor organizations for their mutual aid and protection.

Article 246. Non-abridgement of Right to Self-organization. — It shall be unlawful for any person to restrain, coerce,
discriminate against or unduly interfere with employees and workers in the exercise of the right to self-organization. Such
right shall include the right to form, join, or assist labor organizations for the purpose of collective bargaining through
representatives of their own choosing and to engage in lawful concerted activities for the same purpose or for their mutual
aid and protection, subject to the provisions of Article 264 of this Code.

17. This Convention, adopted by the U.N. General Assembly on November 21, 1947, was concurred in by the Philippine
Senate under Senate Resolution No. 21, dated 17 May 1949. The Philippine Instrument of Ratification was signed by the
Philippine President on 21 February 1959. (Vol. 1, Phil. Treaty Series, p. 621).

18. JENKS, supra at 38.

172
SECOND DIVISION

[G.R. No. 119675. November 21, 1996.]

REPUBLIC PLANTERS BANK GENERAL SERVICES EMPLOYEES UNION — NATIONAL ASSOCIATION OF TRADE
UNIONS, Petitioner, v. BIENVENIDO LAGUESMA and REPUBLIC PLANTERS BANK, Respondents.

DECISION

PUNO, J.:

Republic Planters Bank General Services Employees Union-National Association of Trade Unions (petitioner) seeks to annul
the resolution rendered by Undersecretary Bienvenido Laguesma, dismissing its petition for certification election for lack of
merit.

The facts show that on January 21, 1991, petitioner filed a petition for certification election to determine the sole and
exclusive bargaining representative of all regular employees outside the bargaining unit of Republic Planters Bank. 1 The
proposed bargaining unit is composed of clerks, messengers, janitors, plumbers, telex operators, mailing and printing
personnel, drivers, mechanics and computer personnel. Allegedly, these employees are regular employees but are considered
as contractual employees by private respondent bank. They are excluded from the existing collective bargaining agreement
between private respondent and Republic Planters Bank Employees Union (RPBEU), the duly certified bargaining
representative of the regular employees of private Respondent.

Private respondent filed its position paper and moved to dismiss the petition for certification election. Firstly, it contended
that petitioner union is comprised of some thirty (30) employees of Superior Maintenance Services, Inc. (SMSI) 2 who are
assigned o the bank as messengers and janitors under a Contract of Services. The other employees in the proposed
bargaining unit are employed on "contractual basis" and are not members of petitioner. Secondly, it stressed the existence of
a bargaining unit represented by Republic Planters Bank Employees Union (RPBEU). Thirdly, it alleged that the petition failed
to state the number of employees in the proposed bargaining unit and there is no prior determination that the members of
petitioner are employees of private Respondent.

Petitioner opposed the motion to dismiss and averred that the proposed unit is not part of the existing bargaining unit.
Petitioner further argued that some of its members had been in the employ of private respondent for more than six (6)
months. Allegedly, they perform services that are necessary and desirable to the usual business operations of
private Respondent. As to its member performing janitorial and messengerial services for private respondent, petitioner
contended that Superior Maintenance Services, Inc. (SMSI) is engaged in ‘labor-only’ contracting.

Med-Arbiter Anastacio Bactin dismissed the petition for certification election on the ground that there is already a certified
bargaining agent representing the appropriate bargaining unit within private Respondent. Thus, if qualified, the employees
who were excluded from the existing collective bargaining agreement may join the existing bargaining unit in accord with the
one-union, one-company policy of the Department of Labor and Employment. The dispositive portion of the Med-Arbiter’s
Order 3 states:jgc:chan robles. com.ph

"WHEREFORE, premises considered, the petition for certification election is hereby DISMISSED for lack of legal basis.

"The employees who are rendering services to the respondent Bank as clerks, messengers, plumbers, telex operators,
mailing and printing personnel, drivers, mechanics, and computer personnel are hereby DECLARED as employees of Republic
Planters Bank. Since they are employees of the bank, they may join the existing bargaining agent of the rank and file
employees of the respondent bank.

"However, the janitors who are tasked to clean the premises of the bank are classified as employees of Superior Maintenance
Services, Incorporated since their job is not related to the main business of the respondent bank.

"SO ORDERED." cralaw virtua1aw lib rary

Private respondent interposed an appeal protesting the finding of employer-employee relationship. On December 21, 1992,
Undersecretary Bienvenido Laguesma reversed the Order of the Med-arbiter. 4

Petitioner filed a Motion for Reconsideration. 5 It submitted additional documentary evidence prepared by some of the
contractual employees, namely, Concepcion L. Garcia (messenger), Noel Gavarra (machine operator), Consuelo David (clerk
typist), Maria Trinita M. Samson (clerk typist), and Rodelio Tabernilla (messenger). 6

Private respondent opposed the motion for reconsideration on the ground that the documents submitted for the first time on
appeal are inadmissible in evidence. The documents were also denounced as self-serving.

On May 10, 1993, Undersecretary Laguesma modified the December 21, 1992 Resolution, thus: jgc:chanro bles. com.ph

"WHEREFORE, the questioned Order is hereby modified by declaring that Concepcion L. Garcia, Noel Gavarra, Consuelo
David, Maria Trinita M. Samson, and Rodelio Tabernilla are regular employees of respondent bank and therefore, part of the
existing rank and file unit.
173
"SO ORDERED." cralaw virtua1aw lib rary

Both parties moved for reconsideration of the May 10, 1993 Order. Petitioner sought a ruling that the other workers in the
proposed bargaining unit should also be considered regular employees of private respondent since they perform duties
necessary to the bank’s business operations. Petitioner submitted additional documents containing the job descriptions of
eleven (11) employees assigned at private respondent, most of whom were performing messengerial services. Private
respondent reiterated its objection to the admissibility of the new evidence.

On February 24, 1995, Undersecretary Laguesma issued another Order, setting aside the May 10, 1993 Order and reinstating
the Resolution dated December 21, 1992. The pertinent portion of the Order states: jgc:chan robles. com.ph

"Indeed, the documents submitted by petitioner, including those appended to its present motion, which purportedly are the
job descriptions of the subject workers, may not be given weight for being self-serving. It is quite obvious that they were
prepared by the workers themselves and was not approved by their supposed employer. Being so, they are mere scraps of
paper having no evidentiary value.

"Moreover, respondent correctly pointed out that petitioner submitted the said documents for the first time on a motion for
reconsideration, after this Office ruled that the questioned finding of the Med-Arbiter is not supported by any evidence. To
our mind, such belated submission should not be tolerated nor encouraged, otherwise there will be no end to the
proceedings.

"WHEREFORE, the motion for reconsideration of petitioner is hereby denied for lack of merit while the motion of respondent
is hereby granted. Accordingly, our Order dated 10 May 1993 is hereby set aside and our Order (Resolution) dated 10 [sic]
May December 1992, dismissing the petition, is hereby reinstated." cralaw virt ua1aw lib ra ry

SO ORDERED." cralaw virt ua1aw lib ra ry

Hence, this petition for certiorari.

Petitioner contends grave abuse of discretion on the part of public respondent when (1) it allowed private respondent to
participate or intervene in the certification election, contrary to our decision in Golden Farms Inc. v. Secretary of Labor; and
(2) it did not give value to the documents it submitted on appeal.

The petition lacks merit.

We start with the restatement of the rule that no petition for certification election may be entertained if filed outside the
sixty-day period immediately before the expiration of the collective bargaining agreement. 7 The purpose of the prohibition
against the filing of a petition for certification election outside the so-called freedom period is to ensure industrial peace
between the employer and its employees during the existence of the CBA. 8 Thus in Trade Unions of the Philippines v.
Laguesma, 9 we held that when a legitimate labor organization has been certified as the sole and exclusive bargaining agent
of the rank-and-file employees of a given employer, it means that it shall remain as such during the existence of the CBA, to
the exclusion of other labor organizations, and no petition questioning the majority status of said incumbent agent or any
certification election be conducted outside the sixty-day freedom period immediately before the expiry date of the CBA.

In the case at bar, the petition for certification election was filed on January 21, 1991. The collective bargaining agreement
between the duly certified bargaining agent, Republic Planters Bank Employees Union, and private respondent was effective
from June 30, 1988 to June 30, 1991. 10 It is crystal clear that the filing of the petition for certification election was
premature.

Petitioner tries to tilt the balance in its favor by assailing the legal standing of private respondent in intervening in the
certification election. The attempt is futile. To begin with, petitioner did not raise this issue in the proceedings below. It is too
late to litigate the issue on appeal. Besides, our ruling in Golden Farms, Inc. v. Secretary of Labor 11 cannot be invoked by
petitioner. In Golden Farms Inc., we upheld the general rule that "an employer has no legal standing to question a
certification election since this is the sole concern of the workers." Its facts, however, are different for in said .case, the
existence of employer-employee relationship was not disputed. Likewise, the petition for certification election was filed within
the freedom period. The main issue involved therein was also different, i.e., the propriety of forming a separate bargaining
unit for the monthly paid office employees despite the existence of a bargaining unit for the daily paid rank-and-file workers
assigned at the banana fields. Considering the dissimilarity of interests between the two groups of employees in terms of
duties and obligations, working conditions, salary rates and skills, we allowed the formation of a separate and distinct
bargaining unit for the monthly paid employees of Golden Farms, Inc.

The more applicable case is Singer Sewing Machine Company v. Drilon, Et Al., 12 where we ruled that if the union members
are not employees, no right to organize for purposes of bargaining, nor to be certified as bargaining agent can be recognized.
Since the persons involved are not employees of the company, we held that they are not entitled to the constitutional right to
join or form a labor organization for purposes of collective bargaining. Singer reiterated our earlier pronouncement in La
Suerte Cigar and Cigarette Factory v. Director of Labor Relations (123 SCRA 679 [1983]), thus: jgc:chanro bles. com.ph

"The question of whether employer-employee relationship exists is a primordial consideration before extending labor benefits
under the workmen’s compensation, social security, medicare, termination pay and labor relations law. It is important in the
determination of who shall be included in the proposed bargaining unit because, it is the sine qua non, the fundamental and
essential condition that a bargaining unit be composed of employees. Failure to establish this juridical relationship between
the union members and the employer affects the legality of the union itself. It means the ineligibility of the union members
to present 2 petition for certification election as well as to vote therein." cralaw virtua1aw l ibra ry

Finally, the public respondent did not commit grave abuse of discretion when it rejected the documents submitted by
petitioner for the first time on appeal. Truly, technical rules of procedure need not be strictly followed by the public
respondent in rendering decisions if they are impediments in giving justice and equity to the litigants. In the case at bar, the
public respondent rejected the documents defining the duties of the members of petitioner union in question less because
they were belatedly submitted only on appeal but more because they were self-serving and did not bear the approval of their
employer. The rejection is based on sound reason and we are not free to modify the findings of respondent public official.
174
IN VIEW WHEREOF, the present petition for certiorari is DISMISSED for lack of merit.

SO ORDERED.

Regalado, Romero, Mendoza and Torres, Jr., JJ., concur.

Endnotes:

1. Annex "A", Rollo, p. 21; The case was docketed as NCR-OD-M-91-01-055 and raffled to Med-Arbiter Anastacio L. Bactin.

2. SMSI is a business firm engaged in sanitation, maintenance and janitorial work.

3. Rollo, pp. 47-52.

4. Rollo, pp. 62-65.

5. Annex "G", Rollo, pp. 31-91.

6. The newly submitted evidence showed their respective job descriptions.

7. Articles 232 and 253-A of the Labor Code.

8. Atlantic, Gulf and Pacific Co. of Manila, Inc., vs Laguesma, G.R. No. 96635, August 6, 1992, 212 SCRA 281.

9. G.R. No. 95013, September 21, 1994, 236 SCRA 586; Cf. Article 253-A of the Labor Code; Section 3, Rule V, Book V of
the Rules Implementing the Labor Code.

10. Annex "A" of Petition, Rollo, pp. 21-22.

11. G.R. No. 102130, July 25, 1994, 234 SCRA 517.

12. G.R. No. 91307, January 24, 1991, 193 SCRA 270, 275.

175
176