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ART. 234. Requirements of registration. - Any applicant labor organization, association or group of unions or workers shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration based on the following requirements. (a) Fifty pesos (P50.00) registration fee; (b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and the list of the workers who participated in such meetings; (c) The names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate; (As amended by Executive Order No. 111, December 24, 1986). (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. (As amended by Batas Pambansa Bilang 130, August 21, 1981).

ART. 242. 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 bargaining unit for purposes of collective bargaining; (c) To be furnished by the employer, upon written request, with its annual audited financial statements, including the balance sheet and the profit and loss statement, within thirty (30) calendar days from the date of receipt of the request, after the union has been duly recognized by the employer or certified as the sole and exclusive bargaining representative of the employees in the bargaining unit, or within sixty (60) calendar days before the expiration of the existing collective bargaining agreement, or during the collective bargaining negotiation; (d) To own property, real or personal, for the use and benefit of the labor organization and its members; (e) To sue and be sued in its registered name; and (f) To undertake all other activities designed to benefit the organization and its members, including cooperative, housing, welfare and other projects not contrary to law. Notwithstanding any provision of a general or special law to the contrary, the income and the properties of legitimate labor organizations, including grants, endowments, gifts, donations and contributions they may receive from fraternal and similar organizations, local or foreign, which are actually, directly and exclusively used for their lawful purposes, shall be free from taxes, duties and other assessments. The exemptions provided herein may be withdrawn only by a special law expressly repealing this provision.

RA 9481 Secs 1 and 2 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 (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. Sec. 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 chapters officers, their addresses, and the principal office of the chapter; and (b) The chapters constitution and by-laws: Provided, That where the chapters 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.

RA 9481 Sec. 7 Sec. 7. A new provision, Article 242-A is hereby inserted into the Labor Code to read as follows: ART. 242-A. Reportorial Requirements. - The following are documents required to be submitted to the Bureau by the legitimate labor organization concerned: (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 bylaws within thirty (30) days from adoption or ratification of the constitution and by-lam 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.

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UNION AFFILIATION LOCAL AND PARENT UNION RELATIONSILO Convention No. 87, Art. 5
Article 5

Workers' and employers' organizations shall have the right to establish and join federations and confederations and any such organization, federation or confederation shall have the right to affiliate with international organizations of workers and employers.

Rule-Affiliation
ADAMSON & ADAMSON V CIR (ADAMSON & ADAMSON SUPERVISORY UNION) See page 66

1.

Affiliation: Relations

Purpose

of

Nature

of

Art. 211. Declaration of Policy. It is the policy of the State: c. To foster the free and voluntary organization of a strong and united labor movement;

ATLAS LITHOGRAPHIC SERVICES, INC. V LAGUESMA See page 67 COLLEGE OF MEDICINE V LAGUESMA See page 68

Purpose
PHIL SKYLANDERS INC V NLRC (PAFLU) See page 65

3. Local Union Disaffiliation Nature Right Disaffiliation

VOLKSCHEL LABOR UNION V BUREAU OF LABOR RELATIONS (ALUMETAL) 137 SCRA 42 CUEVAS; June 19, 1985
NATURE Petition for certiorari to review the resolutions of the Bureau of Labor Relations. FACTS - Petitioner Volkschel Labor Union (Volkschel) was once affiliated with the Associated Labor Union for Metal Workers (ALUMETAL). Both unions, using the name Volkschel-ALUMETAL, jointly entered into a collective bargaining agreement with respondent companies. - One of the subjects dealt with is the payment of union dues which is provided for in Section 3, Art. 1, of the CBA, which says that the COMPANY agrees to make payroll deductions not oftener than twice a month of UNION membership dues and such special assessments fees or fines as may be duly authorized by the UNION, provided that the same is covered by the individual check-off authorization of the UNION members. - March 10, 1976: a majority of petitioners members decided to disaffiliate from respondent federation in order to operate on its own as an independent labor group pursuant to Art. 241 of the Labor Code: Incumbent affiliates of existing federations or national unions may disaffiliate only for the purpose of joining a federation or national union in the industry or region in which it properly belongs or for the purpose of operating as an independent labor group. - A resolution was adopted and signed by petitioners members revoking their check-off authorization in favor of ALUMETAL and notices thereof were served on ALUMETAL and respondent companies. - Med-Arbiter George Eduvalla rendered a Resolution which found the disaffiliation legal but at the same time gave the opinion that members should continue paying their dues to ALUMETAL. Director Francisco Estrella reversed the Med-Arbiters decision and declared

Nature Relationship
FILIPINO PIPE AND FOUNDRY CORP V NLRC, NLU-TUCP, LERUM

See page 65

Effect-Legal Personality
ADAMSON & ADAMSON V CIR (ADAMSON & ADAMSON SUPERVISORY UNION) See page 66

2.

SupervisorRank Affiliation

and

File

Union

Art. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees. (as amended by RA 9481
2007) 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 rank and file union and the supervisors union operating within the same establishment may join the same federation or national union.

Art. 245-A.Effect of Inclusion as Members of Employees Outside the Bargaining Unit.- The
inclusion as union members of employees outside the bargaining unit shall not be a ground for the cancellation of the registration of the union. Said employees are automatically deemed remove from the list of membership of said union. ART. 243. Coverage and employees right to selforganization. - 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

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that the Bureau recognized the continued affiliation of Volkschel with ALUMETAL. ISSUES 1. WON Volkschel Labor Unions disaffiliation from ALUMETAL is valid. 2. WON respondent companies have the right to effect union dues collections despite revocation by the employees. HELD 1. YES Ratio A local union, being a separate and voluntary association, is free to serve the interest of all its members including the freedom to disaffiliate when circumstances warrant. Reasoning This right is consistent with the Constitutional guarantee of freedom of association (Art. III, Sec. 8, 1987 Constitution). - The disaffiliation was prompted by the federations deliberate and habitual dereliction of duties as mother federation towards petitioner union. - It would go against the spirit of the labor law to restrict petitioners right to self-organization due to the existence of the CBA. A disaffiliation does not disturb the enforceability and administration of a collective agreement; it does not occasion a change of administrators of the contract nor even an amendment of the provisions thereof. 2. NO Ratio The obligation of respondent companies is conditioned on the individual check-off authorization of petitioners members. The employees check-off authorization, even if declared irrevocable, is good only as long as they remain members of the union concerned. Reasoning ALUMETAL is entitled to receive the dues from respondent companies as long as petitioner union is affiliated with it and respondent companies are authorized by their employees (members of petitioner union) to deduct union dues. - Without said affiliation, the employer has no link to the mother union. DISPOSITION Resolutions of Bureau of Labor Relations are reversed and set aside. ALUMETAL is ordered to return to petitioner all the union dues.

allegedly to thwart such disaffiliation and seeking a declaration of the nullity thereof. Respondent Bureau issued an order setting aside the certification of the collective bargaining agreement and ordering a certification election. ISSUE WON the existing CBA is a bar to a certification election HELD NO Ratio Once the fact of disaffiliation has been demonstrated beyond doubt, as in this case, a certification election is the most expeditious way of determining which labor organization is to be the exclusive bargaining representative. Reasoning The collective bargaining agreement entered into by petitioner with management was decertified in the challenged order, in which it was specifically pointed out; "it is not disputed that the CBA certified by the NLRC was not ratified by the majority of the employees within the bargaining unit. This is blatant non-observance of the basic requirement necessary to certification. With respect to the complaint of the confirmation of disaffiliation of the members of PLAC the same should be resolved in the most expedient and simple method of determining the exclusive bargaining representative through the holding of a certification election." On the Nature of the Right of Disaffiliation: Mass disaffiliation is nothing new in the Philippine labor movement. Nor is it open to any legal objection. It is implicit in the freedom of association explicitly ordained by the Constitution. There is then the incontrovertible right of any individual to join an organization of his choice. That option belongs to him. A workingman is not to be denied that liberty. He may be, as a matter of fact, more in need of it if the institution of collective bargaining as an aspect of industrial democracy is to succeed. Disposition Petition is DISMISSED

PHIL. LABOR ALLIANCE COUNCIL v BLR 75 SCRA 162 FERNANDO, J.; January 31, 1977
NATURE certiorari and prohibition proceeding to indict an order for a certification election by respondent Bureau of Labor Relations as tainted by a jurisdictional infirmity in view of what is contended to be an existing duly certified collective bargaining contract FACTS - there was a renewal of the collective bargaining agreement with a union shop clause on March 9,1974 between petitioner union and respondent company to last for another period of 3 years. The claim was that at that time it was the only bargaining agent of the respondent company unchallenged by any labor organization. Then came the assertion that on May 27, 1974, with due notice to all the members of the petitioner union, and with more than 1,500 of them present, such collective bargaining agreement was ratified by a unanimous vote. It was then so certified by the former NLRC on June 4, 1974. It was further alleged that at the time of such certification, there was no pending request for union recognition by any other labor organization with management. - on June 20, 1974, respondent Federation of Free Workers, setting forth that its members represent more than 60% out of 1,500, more or less, rank-and-file employees of respondent company, sought a certification election. Petitioner union opposed such a move on the grounds that the collective bargaining agreement entered into with the respondent company had been certified. The NLRC affirmed the dismissal of the petition for certification, and the Secretary of Labor affirmed. - respondent Federation filed a complaint with the respondent Bureau of Labor Relations, the present Labor Code having become effective, alleging that some 848 employees, in a resolution attached to the complaint disaffiliated from petitioner union and affiliated with it, characterizing the certified agreement as having been entered into

MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD V RAMOS 326 SCRA 428 PURISIMA; February 28, 2000
NATURE Petition for certiorari FACTS -Petitioner MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD (MSMG) had a union security clause provision on their CBA with respondent M. Greenfield Inc. -MSMG was an affiliate of respondent United Lumber and General Workers of the Philippines (ULGWP). -MSMG held a general membership meeting. Many did not attend. As such they were fined with P50 by the union. MSMG wrote to respondent company saying that they deduct the P50 from the employees salaries. ULGWP opposed and wrote to respondent company. The company did not deduct. -The imposition of P50.00 fine became the subject of bitter disagreement between the Federation and the local union culminating in the latter's declaration of general autonomy -The officials of ULGWP called a Special National Executive Board Meeting where a Resolution was passed placing the MSMG under trusteeship and appointing respondent Cesar Clarete as administrator. -The said administrator wrote the respondent company informing the latter of its designation of a certain Alfredo Kalingking as local union president and "disauthorizing" the incumbent union officers from representing the employees. This action by the national federation was protested by the

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petitioners - The petitioner union officers received identical letters from the administrator requiring them to explain within 72 hours why they should not be removed from their office and expelled from union membership. -ULGWP advised respondent company of the expulsion of the 30 union officers and demanded their separation from employment pursuant to the Union Security Clause. The company at first refused but later, when the ULGWP declared a strike against them, they subsequently agreed. ISSUE/S 1. WON MSMGs disaffiliation was an act of disloyalty to ULGWP HELD 1. NO Ratio A local union has the right to disaffiliate from its mother union or declare its autonomy. A local union, being a separate and voluntary association, is free to serve the interests of all its members including the freedom to disaffiliate or declare its autonomy from the federation to which it belongs when circumstances warrant, in accordance with the constitutional guarantee of freedom of association. Reasoning -The purpose of affiliation by a local union with a mother union or a federation is to increase by collective action the 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, subject to the restraints imposed by the Constitution and By-Laws of the Association, and free also to renounce the affiliation for mutual welfare upon the terms laid down in the agreement which brought it into existence. -Thus, a local union which has affiliated itself with a federation is free to sever such affiliation anytime and such disaffiliation cannot be considered disloyalty. In the absence of specific provisions in the federation's constitution prohibiting disaffiliation or the declaration of autonomy of a local union, a local may dissociate with its parent union. -The evidence on hand does not show that there is such a provision in ULGWP's constitution. Respondents' reliance upon Article V, Section 6, of the federation's constitution is not right because said section, in fact, bolsters the petitioner union's claim of its right to declare autonomy: Sec. 6. The autonomy of a local union affiliated with ULGWP shall be respected insofar as it pertains to its internal affairs, except as provided elsewhere in this Constitution. -There is no disloyalty to speak of, neither is there any violation of the federation's constitution because there is nothing in the said constitution which specifically prohibits disaffiliation or declaration of autonomy. Hence, there cannot be any valid dismissal because Article II, Section 4 of the union security clause in the CBA limits the dismissal to only three (3) grounds, to wit: failure to maintain membership in the union (1) for nonpayment of union dues, (2) for resignation; and (3) for violation of the union's Constitution and By-Laws

PAFLU to represent them in any CBA. - During a special meeting of the Union, a Resolution was approved which called for the investigation of all the petitioners for "continuously maligning, libelling and slandering not only the incumbent officers but even the union itself and the federation" and for causing divisiveness. - The union security clause was reincorporated in the new CBA: any members who shall resign, be expelled, or shall in any manner cease to be a member of the UNION, shall be dismissed from his employment upon written request of the UNION to the Company. - Petitioners contend that their acts do not constitute disloyalty as these are in the exercise of their constitutional right to selforganization. - The PAFLU President then rendered a decision finding them guilty of the charges and expelling them from the Union and as a consequence the Management of the employer is hereby requested to terminate them from their employment in conformity with the security clause. ISSUE/S 1. WON PAFLU had the authority to investigate the petitioners and, thereafter, expel them from the roll of membership of the Amigo Employees Union-PAFLU 2. WON the petitioners were entitled to disaffiliate from the Union HELD 1.YES Ratio That PAFLU had the authority to investigate petitioners on the charges filed by their co-employees in the local union and after finding them guilty as charged, to expel them from the roll of membership of the Amigo Employees Union-PAFLU is clear under the constitution of the PAFLU to which the local union was affiliated. And pursuant to the security clause of the new CBA, reiterating the same clause in the old CBA, PAFLU was justified in applying said security clause. UNION-MEMBER RELATIONS: Discipline Issues Inherent in every labor union, or any organization for that matter, is the right of self-preservation. When members of a labor union, therefore, sow the seeds of dissension and strife within the union; when they seek the disintegration and destruction of the very union to which they belong, they thereby forfeit their rights to remain as members of the union which they seek to destroy. Prudence and equity, as well as the dictates of law and justice, therefore, compelling mandate the adoption by the labor union of such corrective and remedial measures in keeping with its laws and regulations, for its preservation and continued existence; lest by its folly and inaction, the labor union crumble and fall. 2. YES Ratio Although they are entitled to disaffiliate from their union and form a new organization of their own, they must, however, suffer the consequences of their separation from the union under the security clause of the CBA. Reasoning Disaffiliation from a labor union is not open to legal objection. It is implicit in the freedom of association ordained by the Constitution. But this Court has laid down the ruling that a closed shop is a valid form of union security, and such provision in a collective bargaining agreement is not a restriction of the right of freedom of association guaranteed by the Constitution. Local Union Disaffiliation: Rule - Legality act - Disaffiliation There are two hundred thirty four (234) union members in the Amigo Employees Union-PAFLU, and only 96 signed the "Sama-Samang Kapasiyahan." They constituted a small minority for which reason they could not have successfully disaffiliated the local union from PAFLU. It can be inferred that the majority wanted the union to remain an affiliate of PAFLU. The action of the majority must, therefore, prevail over that of the minority members. Disposition The Order appealed from affirming the joint decision of the OIC granting clearance to terminate petitioners as well as dismissing their complaint with application for preliminary injunction, is hereby AFFIRMED.

Rule-Legality Act-Disaffiliation
VILLAR V INCIONG 121 SCRA 44 GUERRERO; April 20, 1983
NATURE Petition for review by certiorari FACTS - Petitioners were members of the Amigo Employees Union-PAFLU, a duly registered labor organization which was the existing bargaining agent of the employees in private respondent Amigo Manufacturing, Inc. They then signed a joint resolution which stated that they were disaffiliating themselves as members of the PAFLU, and were not further authorizing

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TROPICAL HUT EMPLOYEES UNION V. TROPICAL HUT FOOD MARKET INC. 181 SCRA 173 MEDIALDEA; Jan 20, 1990
NATURE Petition for certiorari. FACTS - Rank and file workers of Tropical Hut organized a Union (THEU) and sought affiliation with NATU. Registration certificate was issued by Dept of Labor. But NATU itself was not registered as a federation. - CBA was concluded bet the 2 parties. - Dilag, President of Union, was appointed Manager. He resigned as President of THEU-NATU. VP Encinas assumed presidency. - THEU wrote NATU saying they want to disaffiliate from the federation. THEU affiliated with CGW. - THEU-CGW conducted elections and Encinas won. NATU requested Tropical Hut to dismiss Encinas because of his violations. - Tropical Hut suspended Encinas pending application for clearance with Dept of Labor to dismiss him. THEU-CGW members protested. - Upon request of NATU, Tropical Hut also suspended and applied for clearance to dismiss members and officers of THEU-CGW. - A petition was made to cancel the word NATU after the word THEU in the registration. - NLRC directed certification election between THEU-NATU and THEUCGW. Reinstatement of complainants were also ordered. ISSUE/S 1. WON petitioners failed to exhaust administrative remedies when they immediately elevated the case to this Court without an appeal having been made to the Office of the President 2. WON disaffiliation of local union from the national federation was valid 3. WON dismissal of petitioner employees resulting from their unions disaffiliation for the mother federation was illegal and constituted unfair labor practice HELD 1. NO Remedy of appeal from the Secretary of Labor to the Office of the President is not a mandatory requirement before resort to courts can be had, but an optional relief provided by law to parties seeking expeditious disposition of their labor disputes. 2. YES - The right of a local union to disaffiliate from its mother federation is wellsettled. A local union, being a separate and voluntary association, is free to serve the interest of all its members including the freedom to disaffiliate when circumstances warrant. This right is consistent with the constitutional guarantee of freedom of association. - The inclusion of the word NATU after the name of the local union THEU in the registration with the Department of Labor is merely to stress that the THEU is NATU's affiliate at the time of the registration. It does not mean that the said local union cannot stand on its own. - In the absence of enforceable provisions in the federation's constitution preventing disaffiliation of a local union a local may sever its relationship with its parent. There is nothing in the constitution of the NATU or in the constitution of the THEU-NATU that the THEU was expressly forbidden to disaffiliate from the federation. Firstly, NATU was not even a legitimate labor organization, it appearing that it was not registered. Secondly, the act of non-compliance with the procedure on withdrawal is premised on purely technical grounds which cannot rise above the fundamental right of self-organization. - There is no merit in the contention of the respondents that the act of disaffiliation violated the union security clause of the CBA and that their dismissal as a consequence thereof is valid. A perusal of the collective bargaining agreements shows that the THEU-NATU, and not the NATU federation, was recognized as the sole and exclusive collective bargaining agent. Although NATU was designated as the sole bargaining agent in the check-off authorization form attached to the CBA, this simply means it was acting only for and in behalf of its affiliate. NATU possessed the

status of an agent while the local union remained the basic principal union. 3. YES - The union security clause embodied in the agreements cannot be used to justify the dismissals. CBA imposes dismissal only in case an employee is expelled from the union for joining another federation or for forming another union or who fails or refuses to maintain membership therein. The case at bar does not involve the withdrawal of merely some employees from the union but of the whole THEU itself from its federation. - With regard to the process by which the workers were suspended or dismissed, this Court finds that it was hastily and summarily done without the necessary due process.

ALEX FERRER et al v. NLRC[HUI KAM CHANG et al]

224 SCRA 410 MELO; July 5, 1993

- Petitioners were regular and permanent employees of the Occidental Foundry Corporation (OFC) in Malanday, Valenzuela, Metro Manila which was under the management of Hui Kam Chang. As piece workers, petitioners' earnings ranged from P110 to P140 a day. They had been in the employ of OFC for about 10 yrs at the time of their dismissal in 1989. - the Samahang Manggagawa ng Occidental Foundry CorporationFFW (SAMAHAN) and the OFC entered into a CBA which would be effective for the 3-year period between October 1, 1988 and September 30, 1991 - Art II thereof provides for a union security clause thus: Sec. 1 : The company agrees that all permanent and regular factory workers in the company who are members in good standing of the union or who thereafter may become members, shall as a condition of continued employment, maintain their membership in the union in good standing for the duration of the agreement. ---xxx xxx xxx--Sec. 3 : The parties agree that failure to retain membership in good standing with the UNION shall be ground for the operation of paragraph 1 hereof and the dismissal by the company of the aforesaid employee upon written request by the union. The aforesaid request shall be accompanied by a verified carbon original of the Board of (sic) Resolution by the UNION signed by at least a majority of its officers/directors. - Ferrer and the SAMAHAN, filed in the DOLE, a complaint for the expulsion from SAMAHAN of the following officers: Genaro Capitle (PRES), Jesus Tumagan (VP), Godofredo Pacheco (auditor), and Marcelino Pacheco (board member). -The complaint was founded on said officers' alleged inattentiveness to the economic demands of the workers. However, Diaz and Alex Ferrer withdrew the petition - Petitioners conducted a special election of officers of the SAMAHAN which was, however, later questioned by the FFW. Nonetheless, the elected set of officers tried to dissuade the OFC from remitting union dues to the officers led by Capitle who were allied with the Federation of Free Workers (FFW). - Later, however, Romulo Erlano, one of the officers elected at the special election, manifested to the DOLE that he was no longer objecting to the remittance of union dues to the officers led by Capitle. Petitioners' move to stage a strike based on economic demands was also later disowned by members of the SAMAHAN. - The intraunion squabble came to a head when a resolution expelling petitioners from the SAMAHAN was issued by the aforesaid union officials headed by Capitle, together with board members George Ignas, Pio Domingo, and Jaime Baynado - Capitle sent OFC a letter asking Hui Kam Chang to dismiss Ferrer et al pursuant to the CBA (failing to retain good standing in union membership). - Petitioners had learned about their dismissal from employment as shown by the letter which they sent the Federation of Democratic Labor Unions (FEDLU). They volunteered therein to be admitted as members of the FEDLU and requested that they be represented by

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said federation before the DOLE in the complaint which they intended to file against the union (SAMAHAN), the FFW and the company for illegal dismissal, reinstatement, and other benefits in accordance with law. - Petitioners wrote to Hui Kam Chang professing innocence of the charges levelled against them by the SAMAHAN and the FFW and pleading that they be reinstated. No response came from Hui Kam Chang. - Thus, contending that their dismissal was without cause and in utter disregard of their right to due process of law, petitioners, through the FEDLU, filed a complaint for illegal dismissal and unfair labor practice before the NLRC against Hui Kam Chang, OFC, Macedonio S. Velasco (as representative of the FFW) the FFW, and the SAMAHAN officers headed by Capitle. - LA: Dismissed complaint; said that in dismissing petitioners, OFC was "merely complying with the mandatory provisions of the CBA - the law between it and the union." The dismissal of petitioners was an exercise of legitimate management prerogative which cannot be considered as an unfair labor practice. - NLRC: affirmed in toto the decision of the LA; denied MR of petitioners. Hence, this instant petition for certiorari ISSUE: WON petitioners violated their CBA (meaning, they were fired pursuant to the CBA provision mentioned above TF no illegal dismissal) HELD: NO. REASONING: - A CBA is the law between the company and the union and compliance therewith is mandated by the express policy to give protection to labor. Said policy should be given paramount consideration unless otherwise provided for by law (Meycauayan College vs. Drilon, 185 SCRA 50 [1990]. - A CBA provision for a closed shop is a valid form of union security and it is not a restriction on the right or freedom of association guaranteed by the Constitution (Lirag Textile Mill, Inc. vs. Blanco, 109 SCRA 87 [1981]. However, in the implementation of the provisions of the CBA, both parties thereto should see to it that no right is violated or impaired. - In the case at bar, while it is true that the CBA between OFC and the SAMAHAN provided for the dismissal of employees who have not maintained their membership in the union, the manner in which the dismissal was enforced left much to be desired in terms of respect for the right of petitioners to procedural due process. (No hearing was conducted which shouldve been done pursuant to the SAMAHANS own constitution and by-laws to petitioners an opportunity to air their side and explain their moves.) - While the law recognizes the right of an employer to dismiss employees in warranted cases, it frowns upon arbitrariness as when employees are not accorded due process (Tan, Jr. vs. NLRC, 183 SCRA 651 [1990]). Thus, the prerogatives of the OFC to dismiss petitioners should not have been whimsically done for it unduly exposed itself to a charge of unfair labor practice for dismissing petitioners in line with the closed shop provision of the CBA, without a proper hearing (Tropical Hut Employees' Union-CGW vs. Tropical Hut Food Market, Inc). Neither can the manner of dismissal be considered within the ambit of managerial prerogatives, for while termination of employment is traditionally considered a management prerogative, it is not an absolute prerogative subject as it is to limitations founded in law, the CBA, or general principles of fair play and justice (University of Sto. Tomas vs. NLRC, 190 SCRA 758 [1990]). - Under Rule XIV, Sections 2, 5, and 6 of the rules implementing Batas Pambansa Blg. 130, the OFC and the SAMAHAN should solidarity indemnify petitioners for the violation of their right to procedural due process (Wenphil vs. NLRC, 170 SCRA 69,1989). However, such penalty may be imposed only where the termination of employment is justified and not when the dismissal is illegal as in this case where the damages are in the form of back wages. - As earlier discussed, petitioners' alleged act of sowing disunity among the members of the SAMAHAN could have been ventilated and threshed out through a grievance procedure within the union itself. But resort to such procedure was not pursued. What actually happened in this case was that some members, including petitioners, tried to unseat the SAMAHAN leadership headed by Capitle due to the latter's alleged inattention to petitioners' demands for the implementation of the P25wage increase which took effect on July 1, 1989. The intraunion controversy was such that petitioners even requested the FFW to intervene to facilitate the enforcement of the said wage increase

- Petitioners sought the help of the FEDLU only after they had learned of the termination of their employment upon the recommendation of Capitle. Their alleged application with federations other than the FFW can hardly be considered as disloyalty to the SAMAHAN, nor may the filing of such applications denote that petitioners failed to maintain in good standing their membership in the SAMAHAN. The SAMAHAN is a different entity from FFW, the federation to which it belonged. Neither may it, be inferred that petitioners sought disaffiliation from the FFW for petitioners had not formed a union distinct from that of the SAMAHAN. - Parenthetically, the right of a local union to disaffiliate from a federation in the absence of any provision in the federation's constitution preventing disaffiliation of a local union is legal (People's Industrial and Commercial Employees and Worker's Org. (FFW) vs. People's Industrial and Commercial Corp., 112 SCRA 440 (1982]). Such right is consistent with the constitutional guarantee of freedom of association (Tropical Hut Employees Union-CGW vs. Tropical Hut Food Market, Inc., 181 SCRA 173 [1990]). - Hence, while petitioners' act of holding a special election to oust Capitle, et al. may be considered as an act of sowing disunity among the SAMAHAN members, and, perhaps, disloyalty to the union officials, which could have been dealt with by the union as a disciplinary matter, it certainly cannot be considered as constituting disloyalty to the union. Faced with a SAMAHAN leadership which they had tried to remove as officials, it was but a natural act of self-preservation that petitioners fled to the arms of the FEDLU after the union and the OFC had tried to terminate their employment. Petitioners should not be made accountable for such an act. Disposition: WHEREFORE, the decision appealed from is hereby SET ASIDE and private respondents are hereby ordered to reinstate petitioners to their former or equivalent positions without loss of seniority rights and with full back wages, inclusive of allowances and other benefits or their monetary equivalent, pursuant to Article 279 of the Labor Code, as amended by Republic Act No. 6715.

PHIL SKYLANDERS INC V NLRC (PAFLU) 375 SCRA 369 BELLOSILLO; Jan 31, 2002
NATURE Petition for certiorari FACTS Nov 1993, the Philippine Skylanders Employees Association (PSEA), a local labor union affiliated with the Philippine Association of Free Labor Unions (PAFLU) September (PAFLU), won in the certification election conducted among the rank and file employees of Philippine Skylanders, Inc. (PSI). Its rival union, Philippine Skylanders Employees Association-WATU (PSEA-WATU) immediately protested the result of the election before the Secretary of Labor. Several months later, pending settlement of the controversy, PSEA sent PAFLU a notice of disaffiliation citing as reason PAFLU's supposed deliberate and habitual dereliction of duty toward its members. PSEA subsequently affiliated itself with the National Congress of Workers (NCW), changed its name to Philippine Skylanders Employees Association - National Congress of Workers (PSEANCW), and allowed the former officers of PSEA-PAFLU to continue occupying their positions as elected officers PSEA-NCW. On 17 March 1994 PSEA-NCW entered into a collective bargaining agreement with PSI which was immediately registered with DOLE. PAFLU Secretary General Serafin Ayroso wrote Mariles C. Romulo requesting a copy of PSI's audited financial statement. Ayroso explained that with the dismissal of PSEA-WATU's election protest the time was ripe for the parties to enter into a collective bargaining agreement. PSI through its personnel manager Francisco Dakila denied the request citing as reason PSEA's disaffiliation from PAFLU and its subsequent affiliation with NCW.

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PAFLU through Serafin Ayroso filed a complaint for unfair labor practice against PSI, its president Mariles Romulo and personnel manager Francisco Dakila. PAFLU amended its complaint by including the elected officers of PSEA-PAFLU as additional party respondents. Labor Arbiter declared PSEA's disaffiliation from PAFLU invalid and held PSI, PSEA-PAFLU and their respective officers guilty of unfair labor practice. NLRC upheld the Decision of the Labor Arbiter and conjectured that since an election protest questioning PSEA-PAFLU's certification as the sole and exclusive bargaining agent was pending resolution before the Secretary of Labor, PSEA could not validly separate from PAFLU, join another national federation and subsequently enter into a collective bargaining agreement with its employer-company ISSUE/S WON PSEA, which is an independent and separate local union, may validly disaffiliate from PAFLU pending the settlement of an election protest questioning its status as the sole and exclusive bargaining agent of PSI's rank and file employees HELD YES. The pendency of an election protest involving both the mother federation and the local union did not constitute a bar to a valid disaffiliation. Reasoning In Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc. the SC upheld the right of local unions to separate from their mother federation on the ground that as separate and voluntary associations, local unions do not owe their creation and existence to the national federation to which they are affiliated but, instead, to the will of their members. The sole essence of affiliation is to increase, by collective action, the common bargaining power of local unions for the effective enhancement and protection of their interests. Yet the local unions remain the basic units of association, free to serve their own interests subject to the restraints imposed by the constitution and by-laws of the national federation, and free also to renounce the affiliation upon the terms laid down in the agreement which brought such affiliation into existence. Policy considerations dictate that in weighing the claims of a local union as against those of a national federation, those of the former must be preferred. Parenthetically though, the desires of the mother federation to protect its locals are not altogether to be shunned. It will however be to err greatly against the Constitution if the desires of the federation would be favored over those of its members. If it were otherwise, instead of protection, there would be disregard and neglect of the lowly workingmen. Disposition Petition is granted.

4.02 RATIONALE
RATIONALE CLOSED SHOP: The requirement for employees or workers to become members of a union as a condition for employment redounds to the benefit and advantage of said employees because by holding out to loyal members a promise of employment in the closedshop the union wields group solidarity. In fact it is said that the closedshop contract is the most prized achievement of unionism.

DEL MONTE PHILIPPINES, INC. v. SALDIVAR 504 SCRA 192 TINGA; OCT 11, 2006
FACTS The Associated Labor Union (ALU) is the exclusive bargaining agent of plantation workers of petitioner Del Monte Philippines, Inc. (Del Monte) in Bukidnon. Respondent Nena Timbal (Timbal), as a rankand-file employee of Del Monte plantation in Bukidnon, is also a member of ALU. Del Monte and ALU entered into a Collective Bargaining Agreement (CBA) with an effective term of five (5) years from 1 September 1988 to 31 August 1993. Timbal, along with four other employees (collectively, co-employees), were charged by ALU for disloyalty to the union, particularly for encouraging defections to a rival union, the National Federation of Labor (NFL). The matter was referred to a body within the ALU organization, ominously named "Disloyalty Board. The charge against Timbal was supported by an affidavit Artajo, also an employee of Del Monte. Artajo alleged that she was personally informed by Timbal on 13 July 1991 that a seminar was to be conducted by the NFL on the following day. When Artajo demurred from attending, Timbal assured her that she would be given honorarium in the amount of P500.00 if she were to attend the NFL meeting and bring new recruits. Artajo admitted having attended the NFL meeting together with her own recruits, including Paz Piquero (Piquero). Artajo stated that after the meeting she was given P500.00 by Timbal. Timbal filed an Answer before the Disloyalty Board, denying the allegations in the complaint and the averments in Artajo's Affidavit. Nevertheless, the ALU Disloyalty Board concluded that Timbal was guilty of acts or conduct inimical to the interests of ALU, through a Resolution. It found that the acts imputed to Timbal were partisan activities, prohibited since the "freedom period" had not yet commenced as of that time. Thus, the Disloyalty Board recommended the expulsion of Timbal from membership in ALU, and likewise her dismissal from Del Monte in accordance with the Union

PART FOUR UNION SECURITY 4.01 STATUTORY BASIS

ART. 248. Unfair labor practices of employers. - It shall be unlawful for an employer to commit any of the following unfair labor practice:

(e) To discriminate in regard to wages, hours of work and other terms and conditions of employment in order to encourage or discourage membership in any labor organization. Nothing in this Code or in any other law shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for employment, except those employees who are already members of another

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Security Clause in the existing CBA between ALU and Del Monte. The Disloyalty Board also reached the same conclusions as to the coemployees, expressed in separate resolutions also recommending their expulsion from ALU. The Regional Vice President of ALU adopted the recommendations of the Disloyalty Board and expelled Timbal and her co-employees from ALU. The ALU National President affirmed the expulsion. Subsequently, Del Monte terminated Timbal and her co-employees effective 19 June 1993, noting that the termination was "upon demand of [ALU] pursuant to Sections 4 and 5 of Article III of the current Collective Bargaining Agreement." Timbal and her co-employees filed separate complaints against Del Monte and/or its Personnel Manager Warfredo C. Balandra and ALU with the Regional Arbitration Branch (RAB) of the National Labor Relations Commission (NLRC) for illegal dismissal, unfair labor practice and damages. The complaints were consolidated and heard before Labor Arbiter Pedilla. The Labor Arbiter affirmed that all five were illegally dismissed and ordered Del Monte to reinstate complainants, including Timbal, to their former positions and to pay their full backwages and other allowances, though the other claims and charges were dismissed for want of basis. Only Del Monte interposed an appeal with the NLRC. The NLRC reversed the Labor Arbiter and ruled that all the complainants were validly dismissed. On review, the Court of Appeals ruled that only Timbal was illegally dismissed. At the same time, the appellate court found that Del Monte had failed to observe procedural due process in dismissing the coemployees, and thus ordered the company to pay P30,000.00 to each of the co-employees as penalties. The co-employees sought to file a Petition for Review with this Court assailing the ruling of the Court of Appeals affirming their dismissal, but the petition was denied because it was not timely filed. On the other hand, Del Monte, through the instant petition, assails the Court of Appeals decision insofar as it ruled that Timbal was illegally dismissed. Del Monte argues that the decision of the Labor Arbiter, which awarded Timbal full backwages and other allowances, was inconsistent with jurisprudence which held that an employer who acted in good faith in dismissing employees on the basis of a closed-shop provision is not liable to pay full backwages. ISSUE WON there was sufficient cause for the dismissal of a rank-and-file employee effectuated through the enforcement of a closed-shop provision in the Collective Bargaining Agreement (CBA) between the employer and the union. HELD NO. It bears elaboration that Timbal's dismissal is not predicated on any of the just or authorized causes for dismissal under Book Six, Title I of the Labor Code, but on the union security clause in the CBA between Del Monte and ALU. Stipulations in the CBA authorizing the dismissal of employees are of equal import as the statutory provisions on dismissal under the Labor Code, since "[a] CBA is the law between the company and the union and compliance therewith is mandated by the express policy to give protection to labor." The CBA, which covers all regular hourly paid employees at the pineapple plantation in Bukidnon, stipulates that all present and subsequent employees shall be required to become a member of ALU as a condition of continued employment. The CBA adopts a closed-shop policy which mandates, as a condition of employment, membership in the exclusive bargaining agent. A "closedshop" may be defined as an enterprise in which, by agreement between the employer and his employees or their representatives, no person may be employed in any or certain agreed departments of the enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member in good standing of a union entirely comprised of or of which the employees in interest are a part. A CBA provision for a closedshop is a valid form of union security and it is not a restriction on the right or freedom of association guaranteed by the Constitution. Timbal's expulsion from ALU was premised on the ground of disloyalty to the union, which under Section 4(3), Article II of the CBA, also stands as a

ground for her dismissal from Del Monte. Indeed, Section 5, Article II of the CBA enjoins Del Monte to dismiss from employment those employees expelled from ALU for disloyalty, albeit with the qualification "in accordance with law." Article 279 of the Labor Code ordains that "in cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by [Title I, Book Six of the Labor Code]." Admittedly, the enforcement of a closedshop or union security provision in the CBA as a ground for termination finds no extension within any of the provisions under Title I, Book Six of the Labor Code. Yet jurisprudence has consistently recognized, thus: "It is State policy to promote unionism to enable workers to negotiate with management on an even playing field and with more persuasiveness than if they were to individually and separately bargain with the employer. For this reason, the law has allowed stipulations for 'union shop' and 'closed shop' as means of encouraging workers to join and support the union of their choice in the protection of their rights and interests vis-a-vis the employer." It might be suggested that since Timbal was expelled from ALU on the ground of disloyalty, Del Monte had no choice but to implement the CBA provisions and cause her dismissal. Similarly, it might be posited that any tribunal reviewing such dismissal is precluded from looking beyond the provisions of the CBA in ascertaining whether such dismissal was valid. Yet deciding the problem from such a closed perspective would virtually guarantee unmitigated discretion on the part of the union in terminating the employment status of an individual employee. What the Constitution does recognize is that all workers, whether union members or not, are "entitled to security of tenure." The guarantee of security of tenure itself is implemented through legislation, which lays down the proper standards in determining whether such right was violated. Agabon v. NLRC did qualify that constitutional due process or security of tenure did not shield from dismissal an employee found guilty of a just cause for termination even if the employer failed to render the statutory notice and hearing requirement. At the same time, it should be understood that in the matter of determining whether cause exists for termination, whether under Book Six, Title I of the Labor Code or under a valid CBA, substantive due process must be observed as a means of ensuring that security of tenure is not infringed. The immutable truth under our constitutional and labor laws is that no employee can be dismissed without cause. Agabon may have tempered the procedural due process requirements if just cause for dismissal existed, but in no way did it eliminate the existence of a legally prescribed cause as a requisite for any dismissal. The fact that a CBA may provide for additional grounds for dismissal other than those established under the Labor Code does not detract from the necessity to duly establish the existence of such grounds before the dismissal may be validated. And even if the employer or, in this case, the collective bargaining agent, is satisfied that cause has been established to warrant the dismissal, such satisfaction will be of no consequence if, upon legal challenge, they are unable to establish before the NLRC or the courts the presence of such causes. In the matter at bar, the Labor Arbiter, the proximate trier of facts, and the Court of Appeals both duly appreciated that the testimony of Artajo against Timbal could not be given credence, especially in proving Timbal's disloyalty to ALU. This is due to the prior animosity between the two engendered by the pending civil complaint filed by Timbal's husband against Artajo. Considering that the civil complaint was filed just six days prior to the execution of Artajo's affidavit against Timbal, it would be plainly injudicious to presume that Artajo possessed an unbiased state of mind as she executed that affidavit. Such circumstance was considered by the Labor Arbiter, and especially the Court of Appeals, as they rendered a favorable ruling to Timbal. The NLRC may have decided against Artajo, but in doing so, it failed to provide any basis as to why Artajo's testimony should be believed, instead of disbelieved. No credible disputation was offered by the NLRC to the claim that Artajo was biased against Timbal; hence, we should adjudge the findings of the Labor Arbiter and the Court of Appeals as more cogent on that point.

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GUIJARNO V CIR 52 SCRA 307 FERNANDO; August 27, 1973

NATURE Special civil action of certiorari FACTS - Three unfair labor practice cases for unlawful dismissal allegedly based on legitimate union activity were filed against respondent Central Santos Lopez Co., Inc. and respondent United Sugar Workers Union-ILO - The respondent company, in its answer, alleged that the only reason for the dismissal of the complainants herein is because their said dismissal was asked by the USWU-ILO of which union respondent company has a valid and existing collective bargaining contract with a closed-shop provision to the effect that those laborers who are no longer members of good standing in the union may be dismissed by the respondent company if their dismissal is sought by the union; that respondent company has never committed acts of unfair labor practice against its employees or workers much less against the complainants herein but that it has a solemn obligation to comply with the terms and conditions of the contract. - Petitioners were employed by the company long before the collective bargaining contract. RATIO: GENERALLY: a state may NOT compel ordinary voluntary associations to admit thereto any given individual, because membership therein may be accorded or withheld as a matter of privilege. EXCEPTION: The rule is qualified in respect of labor unions holding a monopoly in the supply of labor, either in a given locality, or as regards a particular employer with which it has a closed shop agreement. Consequently, it is well settled that such unions are NOT entitled to arbitrarily excluded qualified applicants for membership, and a closed shop provision would not justify the employer in discharging, or a union in insisting upon the discharge of, an employee whom he union thus refuses to admit to membership, without any reasonable ground thereof. - To further increase the effectiveness of labor organizations, a closedshop has been allowed.

-while the CBA was in effect and within the contract bar period, the private respondents joined another union, the Kaisahan Ng Manggagawang Pilipino (KAMPIL) and organized its local chapter in TDI ISSUE 1. WON the union security clause constitutes unfair labor practice nor are they violations of the freedom of association clause of the Constitution. HELD 1. NO. Reasoning Article 249 (e) of the Labor Code as amended specifically recognizes the closed shop arrangement as a form of union security. The closed shop, the union shop, the maintenance of membership shop, the preferential shop, the maintenance of treasury shop, and check-off provisions are valid forms of union security and strength. They do not constitute unfair labor practice nor are they violations of the freedom of association clause of the Constitution. (See Pascual, Labor Relations Law, 1986 Edition, pp. 221-225 and cases cited therein.) There is no showing in these petitions of any arbitrariness or a violation of the safeguards enunciated in the decisions of this Court interpreting union security arrangements brought to us for review. In this light, the petitioner points out that embedded at the very core and as raison d'etre for the doctrine which enforces the closed-shop, the union shop, and other forms of union security clauses in the collective bargaining agreement is the principle of sanctity and inviolability of contracts guaranteed by the Constitution. Private respondents cannot, therefore, escape the effects of the security clause of their own applicable collective bargaining agreement. Disposition Petition of TDLU GRANTED

4.04 CONTRACT INTERPRETATION UNION SECURITY

DRAFTING AND OF PROVISIONS

4.03 VALIDITY AGREEMENT AND EFFECT ON FREEDOM OF CHOICE

TANDUAY DISTILLERY LABOR UNION V. NLRC 149 SCRA 470 GUTIERREZ, JR.; April 30, 1987
NATURE -Consolidated petitions for certiorari FACTS -Private respondents were all employees of Tanduay Distillery, Inc., (TDI) and members of the Tanduay Distillery Labor Union (TDLU), a duly organized and registered labor organization and the exclusive bargaining agent of the rank and file employees of the petitioner company. -a Collective Bargaining Agreement (CBA), was executed between TDI and TDLU. The CBA was duly ratified by a majority of the workers in TDI including herein private respondents, and a copy was filed with the Ministry of Labor and Employment (MOLE) on October 29, 1980 for certification. The CBA had a term of three (3) years from July 1, 1979 to June 30, 1982. It also contained a union security clause, which provides: "All workers who are or may during the effectivity of this Contract, become members of the Union in accordance with its Constitution and By-Laws shall as a condition of their continued employment, maintain membership in good standing in the Union for the duration of the agreement."

RIZAL LABOR UNION V. RIZAL CEMENT CO. INC. G.R. No. L-19779. BARRERA; July 30, 1966
NATURE -for the review of the resolution of the Court of Industrial Relations en banc FACTS -Carlos Santos and 14 other employees of the Rizal Cement Company, while still members of the Binangonan Labor Union, Local, formed and organized the Rizal Labor Union. The company was notified thereof. Prior to this date, Carlos Santos and Teofenes Minguillan, president, and secretary, respectively, of the newlyorganized Rizal Labor Union, received identical letters from the Binangonan Labor Union, requiring them to explain in 48 hours why they should not be expelled for disloyalty. Although Santos and Minguillan requested for the convocation of a general meeting of the members of the Binangonan Labor Union to explain their side, the 15 organizers of the new union were expelled from their original union. On the same day, it demanded the dismissal of the expelled members from employment, which the company did. -The dismissed employees went to the Court of Industrial Relations charging the Company and the Binangonan Labor Union with unfair labor practices. ISSUE 2. WON the dismissal of the complaining 15 employees was justified or not HELD

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2. NO. Reasoning The provisions of the contract relied by respondents read as follows: "The EMPLOYER agrees to have in its employ and to employ only members in good standing of the UNION, in all its branches units, plants, quarries, warehouses, docks, etc. The UNION agrees to furnish at all time the laborers, employees and all technical helps that the EMPLOYER may require. EMPLOYER, however, reserves its right to accept or reject where they fail to meet its requirements." "The EMPLOYER agrees not to have in its employ nor to hire any new employee or laborer unless he is a member of good standing of the UNION, and a bonafide holder of a UNION (NWB) card, provided such new employee or laborer meets the qualifications required by the EMPLOYER." -Inasmuch as Article II above quoted does not provide that employees 'must continue to remain members in good standing' of respondent union 'to keep their jobs,' the collective bargaining agreement between them does not establish a closed shop, except in a very limited sense namely, that the laborers, employees and workers engaged by the company after the signing of the agreement, must be members of respondent union. The agreement does not affect the light of the company to retain those already working therefor on or before said date, or those hired or employed subsequently thereto, while they were members of respondent union, but who, thereafter; resign or are expelled therefrom. "In order that an employer may be deemed bound, under a collective bargaining agreement, to dismiss employees for non-union membership, the stipulation to this effect must be so clear and unequivocal as to leave no room for doubt thereon. An undertaking of this nature is so harsh that it must be strictly construed, and doubts must be resolved against the existence of 'closed shop'. Referring particularly to the above-quoted Article II, we note that the same establishes the exclusive right of respondent union to 'supply' laborers, etc., and limits the authority of the company to 'employ or hire' them. In other words, it requires that the laborers, employees and workers hired or employed by the company be members of respondent union at the time of the commencement of the employer-employee relation. Membership in respondent union is not a condition for the continuation of said relation or for the retention of a laborer or employee engaged either before said agreement or while he was a member of said union. Disposition Petition GRANTED

-Manila Cordage Workers Union caused the filing of a complaint with the CIR for unfair labor practice against Manila Cordage Company and the Manco Labor Union -The Manco Labor Union averred in its answer that the complainants were dismissed on the basis of an existing collective bargaining contract between said union and the Manila Cordage Company. -The Manila Cordage Company alleged: that one of the conditions of employment provided in said collective bargaining agreement is the maintenance-of-membership clause requiring all members of the Manco Labor Union to remain as such members thereof during the life of the contract; that the Manco Labor Union demanded of the Manila Cordage Company the dismissal of the individual complainants from employment for the reason that said complainants had failed to continue and maintain their membership in the union; that acting in good faith and in pursuance of its obligations under the said contract, respondent company had to terminate the employment of said complainants, otherwise the Manila Cordage Company would be charged with contractual breach and confronted with the Manco Labor Union's reprisal. -Court of Industrial Relations ordered the petitioner, Cordage Company, and the Manco Labor Union "To reinstate complainants Silvino Rabago, Natalio Nisperos and Ricardo Trajano to their former positions -The motions for reconsideration of the Manila Cordage Company and the Manco Labor Union were denied, hence this petition ISSUE WON under the maintenance-of-membership clause in the CBA, employees of the company who are already members of the said union were required to remain as such as a condition for continued employment in the company HELD No. -It is a fact that the complainants were employees of the Manila Cordage Company and members of the Manco Labor Union when the following stipulation was included in the collective bargaining agreement: Both parties agree that all employees of the COMPANY who are already members of the UNION at the time of the signing of this AGREEMENT shall continue to remain members of the UNION for the duration- of this AGREEMENT" -The foregoing stipulation, however, does not clearly state that maintenance of membership in the Manco Labor Union is a condition of continuous employment in the Manila Labor Cordage Company. -In consonance with the ruling in Confederated Sons of Labor vs. Anakan Lumber Co., et al., 107 Phil. 915, in order that the Manila Cordage Company may be deemed bound to dismiss employees who do not maintain their membership in the Manco Labor Union, the stipulation to this effect must be so clear as to leave no room for doubt thereon -An undertaking of this nature is so harsh that it must be strictly construed and doubts must be resolved against the existence of the right to dismiss. -Aware of the deficiency of the maintenance- of membership clause, the petitioner urges that the same should be construed together with the "Whereas" provision of the contract which reads: WHEREAS, the parties hereto nave decided to enter into an agreement relating to the terms and conditions of employment and reference to those employees to whom the provisions of this AGREEMENT apply. -To construe the stipulations above-quoted as imposing as a condition to continued employment in the Manila Cordage Company the maintenance of membership in the Manco Labor Union is to violate the natural and constitutional right of the laborer to organize freely. Such interpretation would be inconsistent with the constitutional mandate that the State shall afford protection to labor. -The respondent Court of Industrial Relations correctly found that the disputed "maintenance-of-membership" clause in question did not give the Manila Cordage Company the right to dismiss just because they resigned as members of the Manco Labor Union. Disposition The decision appealed from is hereby affirmed

MANILA CORDAGE CO. V CIR (MANILA CORDAGE WORKERS UNION) 78 SCRA 398 FERNANDEZ; August 31, 977
NATURE Petitions to review the decision and the resolution dated of the Court of Industrial Relations FACTS -In 1957, the Manila Cordage Company and the Manco Labor Union, then acting as the exclusive bargaining representative of the former's employees, entered into a collective bargaining agreement which contained, among others, the following stipulation: Both parties agree that all employees of the COMPANY who are already members of the UNION at the time of the signing of this AGREEMENT shall continue to remain members of the UNION for the duration of this AGREEMENT. -The foregoing stipulation was also embodied in the 1959 CBA between the two -When the collective bargaining agreements were entered into, the employees Rabago, Trajano and Nisperos were already members of Manco Labor Union. -Shortly after 1959, some employees of Manila Cordage Company formed the Manila Cordage Workers Union. -Some employees who were members of the Manco Labor Union resigned from said union and joined the Manila Cordage Workers Union. -At the instance of the Manco Labor Union, the Manila Cordage Company dismissed those who resigned from the Manco Labor Union

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ART. 248. Unfair labor practices of employers. - It shall be unlawful for an employer to commit any of the following unfair labor practice:

(e) To discriminate in regard to wages, hours of work and other terms and conditions of employment in order to encourage or discourage membership in any labor organization. Nothing in this Code or in any other law shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for employment, except those employees who are already members of another union at the time of the signing of the collective bargaining agreement. Employees of an appropriate bargaining unit who are not members of the recognized collective bargaining agent may be assessed a reasonable fee equivalent to the dues and other fees paid by members of the recognized collective bargaining agent, if such non-union members accept the benefits under the collective bargaining agreement: Provided, that the individual authorization required under Article 242, paragraph (o) of this Code shall not apply to the non- members of the recognized collective bargaining agent;

Thereafter, respondent union demanded from the company the dismissal of these 46 employees, upon the authority of Article II of said "Collective Bargaining and Closed Shop Agreement", and claiming to act in pursuance of such Article II and in compliance with the aforementioned agreement, the company dismissed said 46 employees. Inasmuch as they are members of petitioner herein, the latter caused this unfair labor practice proceedings to be instituted. CIR dismiss the charge of union domination against the company. Upon the merits of the case presiding judge absolved union while finding company guilty of unfair labor practices in dismissing 46 employees thereof and ordering said company "to cease and desist from engaging in unfair labor practice and to reinstate the 46 employees concerned, with back wages from the date of their separation from its service until reinstated." MFR reversed. Thus, review for certiorari. Issue Whether the company was bound to expel the aforementioned 46 employees under the provisions of said Article II of its collective bargaining agreement with respondent union Held That the UNION shall have the exclusive right, and privilege to supply the COMPANY with such laborers, employees and workers as are necessary in the logging, mechanical, sawmill, office, logponds, motor pools, security guards and all departments in its many phases of operations, excepting such positions which are highly technical and confidential in character and/or such positions which carry the exercise of authority in the interest of the COMPANY which exercise is not merely clerical or routinary within the contemplation of the law, and that the COMPANY agrees to employ or hire in any of its departments only such person or persons who are members of the UNION. No. it is erroneous to consider such a closed shop agreement. Definition of Closed-Shop Agreement: Closed-Shop agreement is an agreement whereby an employer binds himself to hire only members of the contracting union who must continue to remain members in good standing to keep their job. (National Labor Union vs. Aguinaldo's Echague, Inc., 51 Off. Gaz. No. 6, p. 2899, cited in Bacolod-Murcia Milling Co., Inc. and Alfredo T. Garcia vs. National Employees-Workers Security Union, 53 Off. Gaz., 615; Emphasis ours.) Rothenberg, in his work on Labor Relations, has the following to say about "closed shop": A "closed shop" may be defined as an enterprise in which, agreement between the employer and his employees or their representatives, no person may be employed in any or certain agreed departments of the enterprise unless he or she is, becomes, and, for duration of the agreement, remains a member in good standing for a union entirely comprised of or of which the employees in interest are a part. (Rothenberg on Labor Relations) Inasmuch as Article II above quoted does not provide that employees "must continue to remain members in good standing" of respondent union "to keep their jobs," the collective bargain-agreement between them does not establish a 'closed shop," except in a very limited sense, namely, that the laborers, employees and workers engaged by the company after the signing of the agreement on January 23, 1955, must be members of respondent union. The agreement does not affect the right of the company to retain those already working therefor on or before said date, or those hired or employed subsequently thereto, while they were members of respondent union, but who, thereafter, resign or are expelled therefrom. In order that an employer may be deemed bound, under a collective bargaining agreement, to dismiss employees for nonunion membership, the stipulation to this effect must be so clear and unequivocal as to leave no room for doubt thereon. An undertaking of this nature is so harsh that it must be strictly construed, and doubts must be resolved against the existence of "closed shop". Referring particularly to the above-quoted Article II, we note that the same establishes the exclusive right of respondent union to "supply" laborers etc., and limits the authority of

(Cases cited in Guijarno)

Confederated Sons of Labor v. Anakan Lumber Co. Concepcion ; April 29, 1960
Nature This is an unfair labor practice case instituted at the instance of the Confederated Sons of Labor against the Anakan Lumber Company and the United Workers' Union The amended complaint filed with the Court of Relations charged said respondents with unfair labor practices committed by Anakan Lumber Company through dominating, assisting and interferring with the administration of the respondent United Workers' Union and by contributing financial and other support to it and in discriminating in regards to hire or tenure of employment for the purpose of encouraging membership in the respondent United Workers' Union and/or discouraging membership in the complainant Confederated Sons of Labor or because of union membership or activity by dismissing and in fact did dismiss without cause all its workers affiliated with the complainant union and replaced by new ones. Also the United Workers' Union in causing the respondent Anakan Company to discriminate against the workers mentioned in Paragraph IV of the foregoing complaint in violation of Section 4 (a), subparagraph 4 of the Act by demanding from the respondent Anakan Lumber Company the dismissal of said workers from their work therein, or in discriminating against them to whom membership in the respondent United Workers' Union have been terminated on grounds other than the usual terms and conditions of membership made available to other members by expelling them as members from the said Union in violation of the respondent union's Constitution and By-laws and who were subsequently dismissed by the respondent Anakan Lumber Company on demand by the respondent United Workers' Union, in violation of Section 4(b), sub-paragraph 2 of Republic Act No. 875. It appears that respondent union has a membership of more than 1,000 laborers and employees of the company, with whom it entered, on January 23, 1955, into a contract entitled "Collective Bargaining and Closed Shop Agreement". Subsequently, 46 employees of the company and members of respondent union joined petitioner herein, which is another labor organization. As a consequence, said 46 employees were expelled from respondent union, pursuant to its constitution and by-laws.

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G.R. No. L-16561 GUTIERREZ DAVID; January 28, 1961

the company to "employ or hire" them. In other words, it requires that the laborers, employees and workers hired or employed by the company be members of respondent union at the time of the commencement of the employer-employee relation. Membership respondent union is not a condition for the continuation of said relation or for the retention of a laborer or employee engaged either before said agreement or while he was a member of said union. Indeed, Article III-A of the agreement provides: That the COMPANY may dismiss or otherwise remove from employments any employee or laborer for gross inefficiency, misconduct, gross disrespect to the manager, misbehavior, or culpable negligence in the office, commission of any crime or misdemeanor while in the course of his employment or work or office, only upon report of the same in writing duly signed by the supervisor or company official directly responsible over such employee or laborer to the Manager of the COMPANY which report shall contain in concise form the facts and circumstances upon which such removal or dismissal is based, furnishing therewith in the form of notice the President of the UNION within 3 days before such dismissal or removal is effected, the latter upon receipt thereof shall give his consent or dissent thereto in writing, which in case of dissent shall be considered a formal request for reconsideration of the cause of each individual case or removal or dismissal by the COMPANY. If the parties to the agreement intended to establish a "closed shop", in the strict sense of the phrase, they would have inserted in said Article III-a, among the grounds for dismissal by the company therein specified the discontinuance of membership in respondent union. Their failure to make such insertion strongly indicates that said discontinuance of membership was not understood to be a ground for dismissal. Further confirmation of this view is the fact that on August 24, 1955, or after the dismissal of all of the employees above mentioned--except one who was dismissed on August 30, 1955. Article II of the agreement was amended to read as follows: That the UNION shall have the exclusive right and privilege to supply the COMPANY with such skilled and/or unskilled laborers, employees and workers as are necessary in the logging, mechanical, sawmill, office, log ponds, motor pool, security guards and all departments in its many phases of operation whether on an apprenticeship or temporary status, excepting such positions which are highly technical and confidential in character and/or such positions which carry the exercise of authority in the interest of the COMPANY which exercise is not merely clerical or routinary within the contemplation of the law, and that the COMPANY agrees to comply or hire in any of its department only such person or persons who are members of the union and to retain in its employ only such employees or laborers who remain members of good standing of the Union; subject to the following limitations or conditions, to wit: 1. An apprentice shall, after serving 78 working days, be automatically classified as temporary employee or laborer. 2. A temporary employee becomes automatically permanent and regular after working 152 working days. The addition, to the last part of the original Article II, of the clause "and to retain in its employ only such employees or laborers who remain members of good standing of the union," indicates that the company was not prohibited prior thereto from retaining in its employ such laborers as do not remain members of good standing of respondent union. In short, the dismissal of 45 out of the 46 laborers in question, prior to said amendment of Article II, was illegal, and, hence, said 45 laborers should be reinstated. Considering, however, that the agreement was entitled "Closed Shop" and that there is no local decision squarely in point, the Court is inclined to give the company the benefit of doubt as regards its claim that it acted under the honest belief that it was bound to dismiss them pursuant to said agreement. Disposition Wherefore, the resolution appealed from is hereby affirmed, insofar only as the aforementioned 45 laborers and employees are concerned, and another one shall be entered directing the reinstatement of said 45 laborers and employees, with costs against the respondents. It is so ordered.

NATURE Petition for certiorari FACTS - Freeman Shirt Employees Labor Union won and was certified as the sole collective bargaining representative of the employees of the Freeman Shirt Manufacturing Co., Inc. Thereafter, the company and the winning union entered into a CBA respecting terms and conditions of employment. Included in the agreement is a provision on union security which states that: Membership in the UNION shall be a condition to continued employment in the COMPANY. Employees who are not members of the UNION on the effectivity of this Agreement and who fails to become a member of the UNION within 30 days after such date of effectivity, shall be dismissed by the COMPANY from employment upon notice of that fact by the UNION to the COMPANY; any person hired by the COMPANY during the term of this Agreement who fails to become a member of the UNION within 30 days after becoming a regular employee shall likewise be dismissed upon notice of that fact by the UNION to the COMPANY. Any employee who, during the term of this Agreement, resigns from the UNION or is expelled therefrom in accordance with the Constitution and By-Laws of the UNION shall likewise be dismissed by the COMPANY upon notice of that fact by the UNION to the COMPANY. - The CBA was duly publicized among the employees of the company. Before the expiration of the 30 day-period within which all employees were required to join the union under pain of separation from employment. 10 employees refused to join the union, so they were dismissed by the company upon demand by the union. The filed suit for ULP against the company and Freeman Shirt Employees Labor Union, it being charged that the company dominated the union and that said company violated sec. 4 (a) of Republic Act No. 875 for having dismissed the ten laborers. - CIR[a] absolved the company of the charges of unfair labor practice and ordered the dismissal of the complaint; [b] holding that the closed-shop agreement authorized in sec. 4, subsec.(a) (4) of RA. 875 is applicable only to new employees to be hired or to non-union members, and not to those already in the company's service, it ordered the reinstatement of the dismissed employees. MFR denied, hence, this action ISSUE WON CIR committed error in ordering the reinstatement of the dismissed employees HELD NO. Ratio A closed-shop agreement has been considered as one form of union security whereby only union members can be hired and workers must remain union members in good standing as a condition to continued employment. Such agreement sanctioned under Industrial Peace Act, sec. 4, subsec. a(4)1, apply to persons to be hired or to employees who are not yet members of any labor organization. Reasoning The closed shop agreement applies only to persons to be hired or to employees who are not yet members of any labor organization. It is inapplicable to those already in the service who are members of another union. To hold otherwise, i.e., that the employees in a company who are members of a minority union may be compelled to disaffiliate from their union and join the majority or contracting union, would render nugatory the right of all employees to To discriminate in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization: Provided, That nothing in this Act or in any other Act or statute of the Republic of the Philippines shall preclude an employer from making an agreement with a labor organization to require as a condition of employment membership therein, if such labor organization is the representative of the employees as provided in section twelve;"
1

FREEMAN SHIRT MANUFACTURING CO., INC V CIR

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self-organization and to form, join or assist labor organizations of their own choosing, a right guaranteed by the Industrial Peace Act and by the Constitution. Since a closed-shop clause in a collective bargaining agreement is inapplicable to employees who were already in the company's service at the time of its execution, the dismissal of the employees herein concerned is unjustified. The dismissal here was made pursuant to a closed-shop agreement which is unauthorized by law. Hence, the order for the reinstatement was proper. Disposition.Petition DISMISSED.

KAPISANAN NG MGA MANGGAGAWA NG ALAK V HAMILTON DISTILLERY COMPANY G.R. No. L-18112 CONCEPCION; October 30, 1962
NATURE Appeal by certiorari from a decision of the Court of Industrial Relations FACTS - On September 24, 1957, two labor unions, composed of employees and laborers of the Company, were registered with the Department of Labor, namely, petitioner Kapisanan ng mga Mangagawa ng Alak (NAFLU), and respondent Hamilton Workers' Union (Workers' Union). Thereupon, the latter and the Company entered into a collective bargaining agreement, incorporated into a private instrument purporting to have been executed on September 24, 1957. Moreover, the Company issued a notice bearing the same date, addressed to all of its employees, giving non-members of the Workers' Union 30 days within which to join the same, or else, be dismissed. - Upon learning that the NAFLU was being organized, Co Bon Beng (superintendent of Company) sent for Francisco Dumlao, and inquired whether it was true that he had organized said labor union and was its president. Upon receipt of an affirmative answer, Co Bon Beng urged Dumlao to dissolve the NAFLU, for otherwise he would be dismissed. When Dumlao answered that he could not follow this advice, Co Bon Beng bade him to look for another job. - On September 24, 1957, Co Bon Beng refused to admit him to work, upon the ground that he was unwilling to dissolve the NAFLU. Subsequently, some members thereof resigned therefrom and joined the Workers' Union, because otherwise they would be dismissed by the Company. Beginning from September 30, 1957, those who remained affiliated to the NAFLU were allowed to work only 2 days a week and on October 28, 1957 some members of the NAFLU, who did not join the Workers' Union, were dismissed by the Company. - The dismissed employees reported the matter to the Court of Industrial Relations, with which a formal complaint for unfair labor practice was filed against the Company, its aforementioned superintendent and manager, and the Workers' Union. In their answer to this complaint, respondents denied the charge and invoked a "closed shop" clause in the collective bargaining agreement between the Company and the Workers' Union. - On October 11, 1957, the NAFLU filed with the Court of Industrial Relations a petition for certification. On November 25, 1957, the NAFLU filed, in the unfair labor practice proceedings, an urgent petition for an injunctive relief, praying, among other things, that the effectivity of the collective bargaining agreement between the Company and the Workers' Union be suspended and that the Company be ordered to reinstate the dismissed employees or laborers with backpay. This petition was denied. Thereafter, said Court rendered a decision dismissing the unfair labor practice case. A reconsideration of such decision having been denied by the Court sitting en banc, the case is now before us on appeal by certiorari taken by the NAFLU. ISSUE (1) WON the collective bargaining agreement between the Company and the Workers' Union had been made fraudulently; and (2) WON the dismissal of members of the NAFLU who had failed and refused to join the Workers' Union constitutes an unfair labor practice. HELD 1. YES

- One cannot minimize the importance of the fact that, although the Workers' Union was registered on September 24, 1957, its collective bargaining agreement with the Company and the notice issued by the Company giving its employees who were not members of the Workers' Union 30 days to join the same, or else be dismissed bear the same date. Likewise, note-worthy is the circumstance that, aside from being a Chinese, Valentin Kaw, the president of the Workers' Union was the timekeeper of the Company, who as such, had supervisory authority over its employees and laborers, and could, therefore, exercise substantial pressure upon them to induce, if not compel, them to join the Workers' Union, and that the treasurer thereof was his brother Benito Kaw, another Chinese. Considering further that said agreement was contained in a private document, and that the NAFLU was, also, registered as a duly organized labor union, on the date aforementioned, we find it difficult to avoid the feeling that the Workers' Union was, if not company dominated, at least organized under the patronage of the Company, and that the same was in such a hurry to bargain with the Workers' Union, in order to beat the NAFLU and prevent it from taking appropriate action prior thereto, that the agreement was made in a Private instrument, thus suggesting that it must have been made late at night. Otherwise the agreement could have been executed before a notary public for the corresponding acknowledgment. - Indeed, the record shows that, despite several defections from the NAFLU, prior to the expiration of the period given by the Company to non-members of the Workers' Union, the Company had to dismiss 52 members of the NAFLU, apart from its president, for failure to join the Workers' Union within said period. Considering that the Company had altogether around 100 employees only, it is clear that a petition for certification election, if filed by the NAFLU prior to the execution of the collective bargaining agreement between the Workers' Union and the company, would have, in all probability, barred effectively said agreement. 2. YES - The provisions of the CBA do not legalize the dismissal of members of the NAFLU. The lower court held otherwise, relying upon the "closed shop" clause of said agreement reading: "That the COMPANY shall establish the policy of 'Union Shop' effective October 24, 1957. All workers shall by that date become members of the UNION, except those monthly salaries employees, and other supervisor-employees (technical men) listed by the Management. The COMPANY shall be free to hire new laborers with out giving consideration to their membership or non-membership to the Union. However, all laborers hired must join the UNION within sixty (60) days of employment, or face discharge, except, those selected by the Management above. The UNION assumes responsibility of individually signing up new laborers." - In this connection, it is well settled in this jurisdiction that, in the absence of a manifest intent to the contrary, "closed shop" provisions in a collective bargaining agreement apply only to persons to be hired or to employees who are not yet members of any labor organization and that said provisions of the agreement are not applicable to those already in the service at the time of its execution. - The language of the above quoted "closed shop" clause is not such as to bar necessarily the limitation of its application to new employees or laborers, or at least, to those who were not as yet affiliated to any labor organization. The first sentence of said clause may be construed to refer to laborers or employees admitted after September 24, but before October 24, 1957. At any rate, if the Company and the Workers' Union intended, by said clause, to authorize the dismissal of persons already in the service of said Company on or before September 24, 1957, but belonging to another labor organization, and who failed to quit from the latter and join the Workers' Union on or before October 24, 1957, then such stipulation would be null and void. Disposition decision appealed from is reversed

SALUNGA v. CIR
(pending)

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ELEGANCE INC V CIR (FLORENTINO et al) G.R. No. L-24096 MAKALINTAL; April 20, 1971
FACTS: -In a certification case filed by the said Association, the Elegance Employees and Workers Union, was certified by the Court of Industrial Relations as the exclusive bargaining representative of the employees of petitioner. In their CBA with the company it was agreed that SEC. 3. THE COMPANY agrees to a UNIONSHOP; All present employees and workers in the bargaining unit who are not now members of the Union, must become members within thirty (30) days after the signing of this agreement as a condition of continued employment, with the exception of supervisors -after the 30 day deadline, the Union asked for the dismissal of employees who failed to join the Union. After having a meeting with the union, the employees were dismissed. -dismissed employees filed a complaint with the CIR. The CIR held that the Company committed unfair labor practices and ordered reinstatement and backwages. ISSUE: WON the CIR erred in its decision. HELD: NO -the separation of said employees were effected only by a note posted on the company billboard. There was no opportunity for the employees to be heard before their termination. -second, it was shown in the evidence that said employees did send a letter of application to the Union before the deadline passes. The letter however was not received on time as it was sent by registered mail. -given that the employees did comply with said requirement, and the manner by which thy were dismissed was unjust, the Company should not have dismissed employees. *-FURTHER the Court mentioned that the employees were already employees even before the UNIONSHOP agreement. The statement in the agreement to the effect that existing employees who are members of different unions should join the certified UNION ran counter to the spirit of the Industrial Peace Act which recognizes the right of the employees to self-organization and to form, join or assist labor organizations of their own choosing. And as a matter of fact the doubt was resolved in the case of Freeman Shirt Manufacturing Co., Inc., et al. vs. CIR, et al., where this Court, construing a clause similar to the one involved in the case at bar, said: The closed-shop agreement authorized under Sec. 4 sub-sec. a(4) of the Industrial Peace Act abovequoted should, however, apply only to persons to be hired or to employees who are not yet members of any labor organization. It is inapplicable to those already in the service who are members of another union. To hold otherwise, i.e., that the employees in a company who are members of a minority union may be compelled to disaffiliate from their union and join the majority or contracting union, would render nugatory the right of all employees to self-organization and to form, join or assist labor organizations of their own choosing, a right guaranteed by the Industrial Peace Act (Sec. 3, Republic Act No. 875) as well as by the Constitution (Art. III, see. 1 [6]).

another was filed on June 28, 1956, docketed as Case 6-ULP-MIN, covering alleged dismissal of 29 employees named in the complaint. The theory of both complaint is that the company and its corespondent officials, individually or collectively, interfered with, restrained, or coerced the PLASLU's affiliates or members who complained in the exercise of their right to self-organization by inquiring into their union affiliation and activities, convincing them to withdraw from their union or join another as a condition for continued employment with the company, by threatening them with dismissal if they did not resign from their union, by discriminating against them through the application of the rotation system, and reducing them to part-time work as compared to those who resigned their union affiliation and joined another who were continued on full-time basis. - The company and its co-respondents denied the commission of unfair labor practices. They reasoned out that they entered into a closed-shop agreement with Western Lanao Labor Union (WELLU). - Both cases were dismissed by TC saying that closed shop agreement applied to both present and future employees. - Respondent court (CIR) reversed ordering reinstatement and backwages. ISSUE/S 1. WON closed shop agreement applies to both present and future employees. HELD 1. NO. Ratio The closed-shop agreement authorized under sec. 4, subsec. a (4) of the Industrial Peace Act above quoted should however, apply only to persons to be hired or to employees who are not yet members of any labor organization. It is inapplicable to those already in the service who are members of another union. To hold otherwise, i.e., that the employees in a company who are members of a minority union may be compelled to disaffiliate from their union and join the majority or contracting union, would render nugatory the right of all employees to self organization and to form, join or assist labor organization of their own choosing a right guaranteed by the Industrial Peace Act (sec. 3, Rep. Act No. 875) as well as by the Constitution (Art. III, sec. 1 [6]) [Freeman Shirt Mfg v CIR] Reasoning It should, however, be observed that the employer, petitioner herein, cannot be blamed if in its interpretation of in the closed shop provision was led to apply its effects not only to future employees but also to those who were already in the service considering not only the ambiguous terms into which the same is couched but also the meaning of a closed shop as understood in American jurisdiction, and therefore, it is fair to presume that before the promulgation of our decision in the Freeman case the employer acted having in mind the closed shop as construed in the United States after whose statutes our Republic Act No. 875 was patterned, for authorities abound insinuating that in the application of law of American origin the rulings of the Supreme Court of the United States construing similar provisions are considered of persuasive effect and may be followed as authority.So, it is fair to presume, we repeat, that when petitioner separated the complainants because of their refusal to disaffiliate themselves from the PLASLU and join the WELLU which has collective bargaining agreement with the employer, merely acted in pursuance of the terms of the closed shop clause in the light of American jurisprudence thereby justifying its claim that it has acted on the matter not without justification. It is, therefore, fair to conclude that the employer had acted in good faith. In reaching this view, this Court holds the opinion that while complainants are entitled to reinstatement or the theory that the separation was based upon a mistaken interpretation of the closed shop provision, they are not however entitled back wages because their separation was effected in faith. Disposition WHEREFORE, the decision of respondent court which is in the form of a resolution issued on January 6, 1961 is modified in the sense that those who were dismissed improperly as aforesaid should be reinstated but without back wages. No pronouncement as to costs.

FINDLAY MILLAR TIMBER COMPANY V PHILIPPINE LAND-AIR-SEA LABOR UNION 6 SCRA 227 BAUTISTA ANGELO; September 29, 1962
FACTS - Two cases for unfair labor practice were filed before the Court of Industrial Relations by some employees and laborers of Findlay Millar Timber Company which were affiliated with the Philippine Land-Air-Sea Labor Union, referred to herein as PLASLU, for short, against said company and some of its principal officials. One was filed on August 15, 1955, docketed as Case No. 41-ULP-Cebu, relating to the alleged dismissal of 60 employees as a result of some discriminatory acts, and

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UNITED STATES LINES CO., ET AL. V ASSOCIATED WATCHMEN AND SECURITY UNION, ET AL. G.R. No. L-15508 MAKALINTAL; June 29, 1963
NATURE Petition for review by certiorari FACTS - a strke was held by respondent Associated Watchmen, of which other individual respondents were members - Maligaya Ship Watchmen Agency was registered in the DOLE as a Union, known as The Maligaya Ship Watchmen a Union . A closed-shop agreement was signed between the agency and the union. The contract provided that Maligaya Ship Watchmen Agency shall hire no other watchmen but members of the maligaya Ship Watchmen Union during the entire duration of the agreement. - At the time the contract was entered into, the watchmens strike against the United State Lines had been certified to the CIR and was pending to determine who should be the proper bargaining representative of the employees. So the 11 watchmen respondents reported to the head watchmen of the USL for assignment, but the company refused to take them back unless they first joined the Maligaya Ship Watchmen Union. - A complaint for unfair labor practice was filed with respondent court ISSUES 1. Is it unfair labor practice for an employer to refuse to reinstate employees who went on strke unless they first become members of the union which has a collective bargaining agreement with the employer containing a closed shop provision? HELD 1. YES Reasoning it has been held in a number of cases that the closed-shop provision of such an agreement, assuming it to be valid, cannot operate retroactively so as to compel those already employed to join the union favored by the closed-shop provision (Local 7, Press & Printing Free Workers, et al. v. Tabigne, L-16093, November 29, 1960; Freeman shirt Manufacturing Co. v. CIR, L-16561, January 28, 1961; Findlay Millar Company, L-18217 &L-18222, September 29, 1962; Kapisanan Ng Mga Manggagawa ng Alak [NAFLU]v. Hamilton Distillery Company, et al., L18112, October 30, 1962). The fact that the watchmen who are respondents here went on strike before the agreement was entered into did not deprive them to their status as employees. Disposition There being no reason to say that the foregoing findings are not supported by substantial evidence so as to justify their reversal, the decision appealed from is affirmed.

- Petitioner CARINO was the former President of Harrison Industrial Workers' Union ("Union"). He was widely believed to have grossly mismanaged Union affairs; charges include unilaterally increasing union dues and payment of attys fees out of union funds without receipts. - At a general membership meeting, the Union decided to expel him and to recommend his termination from employment. They accordingly informed the company of the expulsion and demanded application of the Union Security Clause of the then existing CBA. Cario received a letter of termination, effective the next day. - Carino then filed a complaint for illegal dismissal with the Labor Arbiter. LA held that there was no just cause for the dismissal. The manner of petitioner's dismissal had been in disregard of the requirements of notice and hearing laid down in the Labor Code. - The Company and the Union appealed before NLRC. NLRC held Cario's silence as "tantamount to [an] admission of guilt" and as constituting the ultimate cause for his dismissal. ISSUE/S 1. WON there had been just cause for his dismissal 2. WON his right to procedural due process was violated HELD 1. YES Reasoning The Collective Bargaining Agreement between the Company and the Union provided that any union member may be suspended and/or expelled by the Union for Participation in an unfair labor practice or any derogatory act against the UNION or any of its officers or members; and Involvement in any violation of this Agreement or the UNION's Constitution and By-Laws. 2. YES Reasoning The right of an employee to be informed of the charges against him and to reasonable opportunity to present his side in a controversy with either the Company or his own Union, is not wiped away by a Union Security Clause or a Union Shop Clause in a CBA. An employee is entitled to be protected not only from a company which disregards his rights but also from his own Union, the leadership of which could yield to the temptation of swift and arbitrary expulsion from membership and hence dismissal from his job. Union Security: IMPLEMENTATION Obligations and Liabilities - For the company to inquire into the lawfulness of the acts of the Union in this regard (expulsion of its members) does NOT constitute interference in the administration of Union affairs. - Employer is bound to exercise caution in terminating the services of his employee especially so when it is made upon the request of a labor union pursuant to the CBA. Dismissals must not be arbitrary and capricious. - Due process must be observed because it affects not only his position but also his means of livelihood. Employers should therefore respect and protect the rights of their employees, which include the right to labor. Disposition The Court DISMISSED the Petition for certiorari for lack of merit but MODIFIED the Decision of the NLRC dated 26 May 1989 by eliminating the grant of separation pay and in lieu thereof imposing a penalty of P5,000.00 payable to the petitioner to be borne solidarily by the Company and the Union.

National Brewery & Allied Industries Labor Union of the Phil. v. San Miguel Brewery, Inc., L-18170, August 31, 1963, 8 SCRA 805

4.06 IMPLEMENTATION OBLIGATIONS AND LIABILITIES

CARINO v. NLRC (Harrison Industrial Corp) 185 SCRA 177 FELICIANO; May 8, 1990
NATURE Petition to declare null and void NLRC decision FACTS

SANYO PHILIPPINES WORKERS UNION-PSSLU V HON. CAIZARES 211 SCRA 361 MEDIALDEA, July 8,1992
NATURE PETITION to review the orders of the National Labor Relations Commission. FACTS

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-Union had an existing CBA with Sanyo Philippines, Inc. (SANYO) which provided a union security clause. The said clause gave the Union the right to demand from the company the dismissal of members of the union by reason of their voluntary resignation from membership or willful refusal to pay the Union Dues or by reasons of their having formed, organized, joined, affiliated, supported and/or aided directly or indirectly another labor organization -Through the union security clause, PSSLU informed SANYO management of the cancellation of membership of the respondents from the Union. These workers were apparently not members of the Union but of another union, KAMAO. Some of the members of KAMAO executed a pledge of cooperation with PSSLU, nevertheless, the Union sent another letter to Sanyo management recommending the dismissal of the nonUnion workers and former Union members. Sanyo management sent a memorandum to the said workers, informing them that they were put under preventive suspension, and if they failed to appeal the decision of the union for dismissal, then they would be considered dismissed from the company. No reply from the said workers so company considered them dismissed. -dismissed employees filed complaint with NLRC for illegal dismissal against the Union and Sanyo -Union filed motion to dismiss: LA had no jurisdiction over cases arising from the interpretation or implementation of the collective bargaining agreements -dismissed complainants opposed motion to dismiss LA: Resolution of case suspended until presentation of position papers and supporting documents Union filed another motion to solve motion to dismiss complaint with a prayer that the Labor Arbiter resolve the issue of jurisdiction LA: assumed jurisdiction over case Unions contention: under Article 217(c) of the Labor Code, in relation to Article 261 thereof, as well as Policy Instruction No. 6 of the Secretary of Labor, respondent Arbiter has no jurisdiction and authority to take cognizance of the complaint brought by private respondents which involves the implementation of the union security clause of the CBA. The function of the Labor Arbiter under the same law and rule is to refer this case to the grievance machinery and voluntary arbitration. Respondent dismissed workers contention: (1) Labor Arbiters have jurisdiction over the case, being a termination dispute; (2) Some of the respondents were not covered by the provisions of the CBA, joining KAMAO during the freedom period. Respondent Labor Arbiters Contention: a distinction should be made between a case involving "interpretation or implementation of collective bargaining agreement or "interpretation" or "enforcement" of company personnel policies, on the one hand and a case involving termination, on the other hand. The case at bar does not involve an "interpretation or implementation" of a collective bargaining agreement or "interpretation or enforcement" of company policies but involves a "termination." Where the dispute is just in the interpretation, implementation or enforcement stage, it may be referred to the grievance machinery set up in the CBA or by voluntary arbitration. Where there was already actual termination, i.e., violation of rights, it is already cognizable by the Labor Arbiter. ISSUE WON the Labor Arbiter had jurisdiction over the case HELD YES. Only disputes involving the union and the company shall be referred to the grievance machinery or voluntary arbitrators. Ratio. both the union and the company are united or have come to an agreement regarding the dismissal of private respondents. No grievance between them exists which could be brought to a grievance machinery. The problem or dispute in the present case is between the union and the company on the one hand and some union and non-union members who were dismissed, on the other hand. The dispute has to be settled before an impartial body. The grievance machinery with members designated by the union and the company cannot be expected to be impartial against the dismissed employees. Due process demands that the dismissed workers grievances be ventilated before an impartial body. Since there has already been an actual termination, the matter falls within the jurisdiction of the Labor Arbiter. Reasoning. A217 interpretation: Termination cases fall under the jurisdiction of the Labor Arbiter. Expressly excepted from his jurisdiction

are cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the interpretation and enforcement of company personnel policies. - The procedure introduced in RA 6715 of referring certain grievances originally and exclusively to the grievance machinery and when not settled at this level, to a panel of voluntary arbitrators outlined in CBA's does not only include grievances arising from the interpretation or implementation of the CBA but applies as well to those arising from the implementation of company personnel policies. No other body shall take cognizance of these cases. - While it appears that the dismissal of the private respondents was made upon the recommendation of PSSLU pursuant to the union security clause provided in the CBA, We are of the opinion that these facts do not come within the phrase "grievances arising from the interpretation or implementation of (their) Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies," the jurisdiction of which pertains to the Grievance Machinery or thereafter, to a voluntary arbitrator or panel of voluntary arbitrators. Disposition. ACCORDINGLY, the petition is DISMISSED. Public respondent Labor Arbiter is directed to resolve the complaints of private respondents immediately. SO ORDERED.

MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD (MSMG-UWP) v RAMOS 326 SCRA 428 PURISIMA; February 28, 2000
FACTS - MSMG is an affiliate of the United Lumber and General Workers of the Phils. (ULGWP). - The collective bargaining agreement between MSMG and M. Greenfield, Inc. provides that any employee who fails to maintain his membership in the union for non-payment of UNION dues, for resignation and for violation of unions Constitution and By-Laws shall be dismissed from the employment by the company; and that the UNION shall hold the company free and blameless from any and all liabilities that may arise should the dismissed employee question his dismissal. - MSMG officers were expelled by the federation for allegedly commiting acts of disloyalty and/or inimical to the interest of ULGWP and in violation of its Constitution and By-laws. Upon demand of the federation, the company terminated the petitioners without conducting a separate and independent investigation. Respondent company did not inquire into the cause of the expulsion and whether or not the federation had sufficient grounds to effect the same. Relying merely upon the federations allegations, respondent company terminated petitioners from employment when a separate inquiry could have revealed if the federation had acted arbitrarily and capriciously in expelling the union officers. ISSUE WON the dismissal of the union officers is valid HELD NO Although this Court has ruled that union security clauses embodied in the collective bargaining agreement may be validly enforced and that dismissals pursuant thereto may likewise be valid, this does not erode the fundamental requirement of due process. The reason behind the enforcement of union security clauses which is the sanctity and inviolability of contracts cannot override ones right to due process. The power to dismiss is a normal prerogative of the employer. However, this is not without limitation. The employer is bound to exercise caution in terminating the services of his employees especially so when it is made upon the request of a labor union pursuant to the Collective Bargaining Agreement, xxx. Dismissals must not be arbitrary and capricious. Due process must be observed in dismissing an employee because it affects not only his position but also his means of livelihood. Employers should respect and protect the rights of their employees, which include the right to labor. As held in the case of Cario v NLRC, "the right of an employee to be informed of the charges against him and to reasonable

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opportunity to present his side in a controversy with either the company or his own union is not wiped away by a union security clause or a union shop clause in a collective bargaining agreement. An employee is entitled to be protected not only from a company which disregards his rights but also from his own union the leadership of which could yield to the temptation of swift and arbitrary expulsion from membership and mere dismissal from his job." While respondent company may validly dismiss the employees expelled by the union for disloyalty under the union security clause of the collective bargaining agreement upon the recommendation by the union, this dismissal should not be done hastily and summarily thereby eroding the employees right to due process, self-organization and security of tenure. The enforcement of union security clauses is authorized by law provided such enforcement is not characterized by arbitrariness, and always with due process. Even on the assumption that the federation had valid grounds to expel the union officers, due process requires that these union officers be accorded a

ART. 241. Rights and conditions of membership in a labor organization. - The following are the rights and conditions of membership in a labor organization: (m) The books of accounts and other records of the financial activities of any labor organization shall be open to inspection by any officer or member thereof during office hours; (n) No special assessment or other extraordinary fees may be levied upon the members of a labor organization unless authorized by a written resolution of a majority of all the members in a general membership meeting duly called for the purpose. The secretary of the organization shall record the minutes of the meeting including the list of all members present, the votes cast, the purpose of the special assessment or fees and the recipient of such assessment or fees. The record shall be attested to by the president. (o) Other than for mandatory activities under the Code, no special assessments, attorneys fees, negotiation fees or any other extraordinary fees may be checked off from any amount due to an employee without an individual written authorization duly signed by the employee. The authorization should specifically state the amount, purpose and beneficiary of the deduction;

4.07 FINANCIAL SECURITYAGENCY SHOP

ART. 248. Unfair labor practices of employers. - It shall be unlawful for an employer to commit any of the following unfair labor practice:

(e) To discriminate in regard to wages, hours of work and other terms and conditions of employment in order to encourage or discourage membership in any labor organization. Nothing in this Code or in any other law shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for employment, except those employees who are already members of another union at the time of the signing of the collective bargaining agreement. Employees of an appropriate bargaining unit who are not members of the recognized collective bargaining agent may be assessed a reasonable fee equivalent to the dues and other fees paid by members of the recognized collective bargaining agent, if such non-union members accept the benefits under the collective bargaining agreement: Provided, that the individual authorization required under Article 242, paragraph (o) of this Code shall not apply to the non- members of the recognized collective bargaining agent;

NATIONAL BREWERY V SAN MIGUEL BREWERY 8 SCRA 805 REGALA; August 31, 1963
NATURE Appeal directly from the CFI of Manila dismissing the complaint upon the petition of the defendant San Miguel Brewery Workers' Association FACTS - National Brewery & Allied Industries Labor Union of the Philippines is the bargaining representative of all regular workers paid on the daily basis and of route helpers of San Miguel Brewery, Inc. It signed a CBA with the company, which provided among other things, that: "The COMPANY will deduct the UNION agency fee from the wages of workers who are not members of the UNION, provided the aforesaid workers authorize the Company to make such deductions in writing or if no such authorization is given, if a competent court direct the COMPANY to make such deduction." - Alleging that it had obtained benefits for all workers in the company and that "defendant Independent SMB Workers' Association refuses to pay UNION AGENCY FEE to the plaintiff UNION and defendant COMPANY also refuses to deduct the UNION AGENCY FEE from the wages of workers who are not members of the plaintiff UNION," the union brought suit in the CFI of Manila for the collection of union agency fees under the CBA. The lower court dismissed the complaint. ISSUE 1. WON a union agency fee as a form of union security is valid. HELD 1. NO. Ratio Where the parties are not free to require of employees membership in a union as a condition of employment, neither can they require a lesser form of union security. For one cannot waive a right he does not have. Reasoning The right of employees "to self-organization and to form, join or assist labor organization of their own choosing" (Sec. 3, RA 875 or the Industrial Peace Act) is a fundamental right that yields only to the proviso that nothing in this Act or statute of the Republic of the Philippines shall preclude an employer from making an agreement with a labor organization to require as a condition of

CHECK- OFF
ART. 113. Wage deduction. - No employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees, except: -xxx(b) For union dues, in cases where the right of the worker or his union to check-off has been recognized by the employer or authorized in writing by the individual worker concerned;

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employment membership therein, if such Labor organization is the representative of the employees - Although a closed-shop agreement may validly be entered into under the Industrial Peace Act, the same cannot be made to apply to employees who, like the employees in this case, are already in the service and are members of another union (Freeman Shirt Mfg. Co. vs. CIR). Hence, if a closed shop agreement cannot be applied to these employees, neither may an agency fee, as a lesser form of union security, be imposed upon them. - The union claims, that whatever benefits the majority union obtains from the employer accrue to its members as well as to non-members. But this alone does not justify the collection of agency fee from nonmembers. The benefits of a CBA are extended to all employees regardless of their membership in the union because to withhold the same from the nonmembers would be to discriminate against them (International Oil Factory Workers Union (FFW) vs. Martinez). Moreover, when a union bids to be the bargaining agent, it voluntarily assumes the responsibility of representing all the employees in the appropriate bargaining unit. - The union further contends that non-members should be made to pay on the principle of quasi contract. But the benefits that accrue to nonmembers can hardly be termed "unjust enrichment" because the same are extended to them precisely to avoid discrimination among employees. Besides, there is no allegation that the amount of P4 represents the expense incurred by the union in representing each employee. For the benefits extended to non-members are merely incidental. - Lastly, it is contended that the collection of agency fee may be justified on the principle of agency. In answer to this point, when a union acts as the bargaining agent, it assumes the responsibility imposed upon it by law to represent not only its members but all employees in the appropriate bargaining unit of which it is the agent. The Civil Code states that agency is presumed to be for compensation unless there is proof to the contrary. (Art. 1875). There can be no better proof that the agency created by law between the bargaining representative and the employees in the unit is without compensation than the fact that these employees in the minority voted against the appellant union. Disposition Orders of the CFI of Manila are AFFIRMED.

RA 9481, SEC 9- Anew provision, Art 245-A is inserted into the Labor Code to read as follows: Art. 245-A.Effect of Inclusion as Members of Employees Outside the Bargaining Unit.- The inclusion as union members of employees outside the bargaining unit shall not be a ground for the cancellation of the registration of the union. Said employees are automatically deemed remove from the list of membership of said union.

BELYCA CORPORATION vs. FERRER-CALLEJA 168 SCRA 184 PARAS; November 29, 1988
NATURE Petition for certiorari and prohibition with preliminary injunction. FACTS - In the instant case, respondent ALU seeks direct certification as the sole and exclusive bargaining agent of all the rank-and-file workers of the livestock and agro division of petitioner BELYCA Corporation engaged in piggery, poultry raising and the planting of agricultural crops such as corn, coffee and various vegetables. But petitioner contends that the bargaining unit must include all the workers in its integrated business concerns ranging from piggery, poultry, to supermarts and cinemas so as not to split an otherwise single bargaining unit into fragmented bargaining units. ISSUE WON the proposed bargaining unit by Belyca is an appropriate bargaining unit. HELD No. - According to Rothenberg, a proper bargaining unit maybe said to be a group of employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective interests of all the employees, consistent with equity to the employer, indicate to be best suited to serve reciprocal rights and duties of the parties under the collective bargaining provisions of the law. - This Court has already taken cognizance of the crucial issue of determining the proper constituency of a collective bargaining unit. - Among the factors considered in Democratic Labor Association v. Cebu Stevedoring Co. Inc. (103 Phil 1103 [1958]) are: "(1) will of employees (Glove Doctrine); (2) affinity and unity of employee's interest, such as substantial similarity of work and duties or similarity of compensation and working conditions; (3) prior collective bargaining history; and (4) employment status, such as temporary, seasonal and probationary employees". - Under the circumstances of that case, the Court stressed the importance of the fourth factor and sustained the trial court's conclusion that two separate bargaining units should be formed in dealing with respondent company, one consisting of regular and permanent employees and another consisting of casual laborers or stevedores. Otherwise stated, temporary employees should be treated separately from permanent employees. But more importantly, this Court laid down the test of proper grouping, which is community and mutuality of interest. Reasoning It is beyond question that the employees of the livestock and agro division of petitioner corporation perform work entirely different from those performed by employees in the supermarts and cinema. Among others, the noted difference are: their working conditions, hours of work, rates of pay, including the categories of their positions and employment status. To lump all the employees of petitioner in its integrated business concerns cannot result in an efficacious bargaining unit comprised of constituents enjoying a community or mutuality of interest. DISPOSITION The petition is DISMISSED for lack of merit.

PART FIVE THE APPROPRIATE BARGAINING UNIT 5.01 DEFINITION AND ROLE IN LAW
ART. 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 labormanagement 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. (As amended by Section 22, Republic Act No. 6715, March 21, 1989).

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5.02 DETERMINATION BARGAINING UNIT OF
1. FACTORS UNIT DETERMINATION A. In General- Standard Test

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D. Size- Composition

- Separation between camps and the different kinds of work in each all militate in favor of the present system since the problem and interest of the worker are peculiar in each camp or department.

UP v FERRER CALLEJA 00 SCRA 00 NARVASA,CJ; July 14, 1992

NATURE Special civil action of certiorari FACTS UP seeks the nullification of the Order of Director Pura Ferrer-Calleja of the Bureau of Labor Relations holding that "professors, associate professors and assistant professors are . . rank-and-file employees . . ;" consequently, they should, together with the so-called non-academic, non-teaching, and all other employees of the University, be represented by only one labor organization. HELD A bargaining unit is a group of employees, comprised of all or less than the entire body of the employees, which the collective interest of all the employees, consistent with equity interest of all the employer, indicate to be the best suited to serve the reciproocal rights and duties of the parties under the collective bargaining provisions of the law. In Democratic Labor Association v Cebu Stevedoring, there are factors which must be considered in determining the proper unit. Rothernberg mentions: 1. Will of the employees. 2. Affinity and unity of the employees interest, such as substantial similarity of works and duties or similarity of compensation and work conditions, 3. Prior collective bargaining history 4. Employment status The test of the grouping is community of mutuality of interests 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. Disposition Wherefore the assailed order is affirmed.

PHILIPPINE DIAMOND HOTEL AND RESORT INC (MANILA DIAMOND HOTEL V MANILA DIAMOND HOTEL EMPLOYEES UNION

494 SCRA 195 CARPIO MORALES; June 30, 2006

FACTS -Union filed a petition for certification election to be declared the exclusive bargaining representative of the Hotels employees. This petition was dismissed by DOLE for lack of legal requirements. -after a few months, Union sent a letter to Hotel informing it of its desire to negotiate for a collective bargaining agreement. This was rejected by the Hotel stating that the Union was not the employees bargaining agent as their petition for certification election was denied. -Union filed a Notice of Strike with the NCMB alleging the Hotel refusal to bargain and for acts of unfair labor practices. NCMB summoned both parties and held series of dialogues. Union however suddenly went on strike -Secretary of DOLE assumed jurisdiction and ordered compulsory arbitration pursuant to art. 263 (g) of LC. And Union members were directed to return to work and for Hotel to accept them back. Hotel refused to accept the employees return. The order was modified (by a different Secretary) such that reinstatement was to be done only in the payroll. -Union filed for certiorari alleging grave abuse of discretion. Case was referred to the CA. CA affirmed that the payroll reinstatement was not a grave abuse of discretion. On appeal, it modified NLRC decision ordering reinstatement with back wages of union members. ISSUE 1) WON the Union can bargain only in behalf of its members and not for all the employees of the Hotel. HELD 1) No. -As provided by art 255 of the LC only the labor organization designated or selected by the majority of the employees in an appropriate collective bargaining unit is the exclusive representative of the employees in such unit for the purpose of collective bargaining. -The Unions petition for certificate election was denied by the DOLE. The union thus is admittedly not the exclusive representative of the majority of the employees of petitioner, hence, it could not demand from petitioner the right to bargain collectively in their behalf -Respondent insists, however, that it could validly bargain in behalf of "its members," relying on Article 242 of the Labor Code. -the CA ruled that what [respondent] will be achieving is to divide the employees, more particularly, the rank-and-file employees of [petitioner] . . . the other workers who are not members are at a serious disadvantage, because if the same shall be allowed, employees who are non-union members will be economically impaired and will not be able to negotiate their terms and conditions of work, thus defeating the very essence and reason of collective bargaining, which is an effective safeguard against the evil schemes of employers in terms and conditions of work - Petitioners refusal to bargain then with respondent can not be considered a ULP to justify the staging of the strike.

B. History

San Miguel Corp v. Laguesma 236 SCRA 595

(pending) C. Geography Location BENGUET CONSOLIDATED v. BOBOK LUMBER JACK ASSN

103 Phil. 1150 May 23, 1958

FACTS Petitioner filed an appeal from the order of CIR holding that it finds no valid reason to change status of petitioners five camps as separate bargaining units ISSUE WON system of having one collective bargaining unit for each camp should be maintained. HELD YES. - The present system had operated satisfactorily. - Prime element in determining whether a group of employees constitute a proper bargaining unit is whether it will, without inequity to the employer, best serve all the employees in the exercise of their bargaining rights.

E. Corporate Entities

INDOPHIL TEXTILE MILLS WORKERS UNION VS

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CALICA (INDOPHIL TEXTILE MILLS, INC) 205 SCRA 697 Padilla, J; January 25, 1991
NATURE Petition for certiorari FACTS - Petitioner is the duly recognized labor union representing the rank and file in Indophil Textile Mills, Inc. In 1987, Indophil Acrylic Manufacturing Corporation was formed with Indophil Textile as the major shareholder. Sometime in July, 1989, the workers of Acrylic unionized and a duly certified collective bargaining agreement was executed. - Petitioner claimed that Indophil Textile Mills violated its CBA as Indophil Acrylic should in fact be considered as a mere extension of the private respondent and therefore employees of Acrylic should be represented by petitioner under Section 1(c), Article 1 of the CBA. To resolve the controversy, both parties agreed to enter into a submission agreement and appointed Calica as voluntary arbitrator. - The arbitrator ruled in favor of the private respondent. Hence this petition to the SC. ISSUE/S WON Indophil Acrylic is a separate and distinct entity from respondent company for purposes of union representation. HELD Yes. In the case at bar, petitioner seeks to pierce the veil of corporate entity of Acrylic, alleging that the creation of the corporation is a devise to evade the application of the CBA between petitioner Union and private respondent Company. While we do not discount the possibility of the similarities of the businesses of private respondent and Acrylic, neither are we inclined to apply the doctrine invoked by petitioner in granting the relief sought. The fact that the businesses of private respondent and Acrylic are related, that some of the employees of the private respondent are the same persons manning and providing for auxilliary services to the units of Acrylic, and that the physical plants, offices and facilities are situated in the same compound, it is our considered opinion that these facts are not sufficient to justify the piercing of the corporate veil of Acrylic. - Acrylic not being an extension or expansion of private respondent, the rank-and-file employees working at Acrylic should not be recognized as part of, and/or within the scope of the petitioner, as the bargaining representative of private respondent. All premises considered, the Court is convinced that the public respondent Voluntary Arbitrator did not commit grave abuse of discretion in its interpretation of Section 1(c), Article I of the CBA that the Acrylic is not an extension or expansion of private respondent.

- May 4, 1989 > the security agencies filed a Consolidated Motion to Dismiss on the grounds that the 721 supporting signatures do not meet the 20% minimum requirement for certification election as the number of employees totals 2374 and that there are no implementing rules yet of R.A. 6715. - May 8, 1989 > the Union filed an Omnibus Reply to Comment and Motion to Dismiss alleging that it is clear that it is seeking a certification election in the three agencies; that the apparent separate personalities of the three agencies were used merely to circumvent the prohibition in R.A. 5847, as amended by P.D. 11 and P.D. 100, that a security agency must not have more than 1,000 guards in its employ; that the three security agencies' administration, management and operations are so intertwined that they can be deemed to be a single entity - May 18, 1989 > the security agencies filed a Rejoinder claiming that there is no violation of R.A. 5487, as amended by P.D. 11 and P.D. 100 since the three agencies were incorporated long before the decrees' issuance; that mere duplication of incorporators does not prove that the three security agencies are actually one single entity - July 6, 1989 > Med-Arbiter Abdullah issued an Order in favor of the labor union finding that PSVSIA, GVM and ASDA should be deemed as a single entity and bargaining unit for the purpose of union organizing and the holding of a certification election. - July 21, 1989 > the security agencies appealed the Med-Arbiter's Order to the Sec of Labor claiming that said Order was issued with grave abuse of discretion - December 15, 1989 > Labor Secretary Drilon denied the appeal for lack of merit while at the same time affirming the Med-Arbiter's Order and ordered the immediate conduct of a certification election. - January 5, 1990 > the security agencies filed a MFR arguing that they were denied their rights to due process - January 26, 1990 > the succeeding Labor Secretary, Torres, likewise denied the MFR for lack of merit and reiterated the directive that a certification election be conducted without further delay. - March 14, 1990 > instant petition was filed - Petitioners claim: that there are three (3) corporations in this petition, each of which has a separate and distinct corporate personality of its own with separate registrations with the SEC and different Articles of Incorporation and By-Laws; with separate sets of corporate officers and directors; and no common business address except for GVM and ASDA in Sampaloc, Manila. ISSUE WON a single petition for certification election or for recognition as the sole and exclusive bargaining agent can be validly or legally be filed by a labor union in 3 corporations each of which has a separate and distinct legal personality instead of filing 3 separate petitions HELD YES - Indeed, the three agencies in the case at bar failed to rebut the fact that they are (1) managed through the Utilities Management Corporation with all of their employees drawing their salaries and wages from said entity; (2) that the agencies have common and interlocking incorporators and officers; (3) that the PSVSIA, GVM and ASDA employees have a single Mutual Benefit System and followed a single system of compulsory retirement; (4) that the security guards of one agency could easily transfer from one agency to another and then back again by simply filling-up a common pro forma slip called "Request for Transfer"; (5) always hold joint yearly ceremonies such as the "PGA Annual Awards Ceremony"; (6) In emergencies, all PSVSIA Detachment Commanders were instructed to get in touch with the officers not only of PSVSIA but also of GVM and ASDA. - Accordingly, the veil of corporate fiction of the three agencies should be lifted for the purpose of allowing the employees of the three agencies to form a single labor union. As a single bargaining unit, the employees therein need not file three separate petitions for certification election. All of these could be covered in a single petition. Disposition Instant petition for certiorari is hereby DISMISSED for utter lack of merit.

Disposition Petition is denied.

PHILIPPINE SCOUT VETERANS SECURITY AND INVESTIGATION AGENCY v. TORRES G.R. No. 92357 NOCON; July 21, 1993
NATURE Petition for certiorari with prayer for preliminary injunction FACTS - April 6, 1989 > PGA Brotherhood Association - Union of Filipino Workers (UFW) filed a petition for Direct Certification/Certification Election among the rank and file employees of Philippine Scout Veterans Security and Investigation Agency (PSVSIA), GVM Security and Investigations Agency, Inc. (GVM) and Abaquin Security and Detective Agency, Inc. (ASDA) collectively referred to by the Union as the "PGA Security Agency," which is actually the first letters of the corporate names of the agencies. - PSVSIA, GVM, ASDA filed a single comment alleging that the three security agencies have separate and distinct corporate personalities while PGA Security Agency is not a business or corporate entity and does not possess any personality

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SAN MIGUEL CORP EMPLOYEES UNION-PTGWO v. CONFESOR 262 SCRA 81 KAPUNAN; September 19,1996
NATURE Petition for certiorari assailing order of the Labor Sec. FACTS - San Miguel Corp (SMC) formerly had 4 business divisions: beer, packaging, feeds and livestock, Magnolia and agri-business. The 3rd and 4th divisions were spun-off in Oct. 1991 and became two separate and distinct corporations: Magnolia Corp and San Miguel Foods Inc (SMFI). - The original CBA, entered into prior to the spin-off, became effective July 1989 (effective until June 1992). This was renegotiated starting July 1992 - the bargaining unit was the petitioner-union until July 1994 - During the negotiations, the labor union insisted that the bargaining unit of SMC should still include the employees of Magnolia and SMFI, and that the renegotiated terms of the CBA be effective only for the remaining period of the existing CBA (for 2 years). SMC, on the other hand, contended that the employees who moved to Magnolia and SMFI automatically ceased to be part of the bargaining unit at the SMC, and that the CBA should be effective for 3 years in accordance to Art. 253-A of LC. - Unable to agree on these issues, a deadlock was declared, and subsequently the Sec of Labor issued the assailed order directing the renegotiated terms of the CBA to be effective for the period of 3 years and that the said CBA should cover only the employees of SMC and not of Magnolia and SMFI (sided with SMC). Hence, this petition. ISSUE/S 1. WON the duration of the renegotiated terms of the CBA is to be effective for 3 years 2. WON the bargaining unit of the SMC includes also the employees of Magnolia and SMFI HELD 1. YES Ratio Art.. 253-A. Terms of a Collective Bargaining Agreement. Any Collective Bargaining Agreement that the parties may enter into shall, insofar as the representation aspect is concerned, be for a term of five (5) years. xxx All other provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its execution. xxx Reasoning The representation aspect refers to the identity and majority status of the union that negotiated the CBA as the exclusive bargaining representative of the appropriate bargaining unit concerned. All other provisions simply refers to the rest of the CBA, economic as well as non economic provisions, except representation. - the law is clear and definite on the duration of the CBA insofar as the representation aspect is concerned, but is quite ambiguous with the terms of the other provisions of the CBA. To resolve this, the court looked into the legislative intent. The framers of the law wanted to maintain industrial peace and stability by having both management and labor work harmoniously together without any disturbance. Thus, no outside union can enter the establishment within 5 years and challenge the status of the incumbent union as the exclusive bargaining agent. Likewise, the terms and conditions of employment (economic and non-economic) can not be questioned by the employers or employees during the period of effectivity of the CBA. - In the instant case, it is not difficult to determine the period of effectivity for the non-representation provisions of the CBA. Taking it from the history of their CBAs, SMC intended to have the terms of the CBA effective for 3 years reckoned from the expiration of the old or previous CBA which was on June 30, 1989 2. NO Ratio In determining an appropriate bargaining unit, the test of grouping is mutuality or commonality of interests. The employees sought to be represented by the collective bargaining agent must have substantial mutual interests in terms of employment and working conditions as evinced by the type of work they performed. Reasoning Considering the spin-offs, the companies would consequently have their respective and distinctive concerns in terms of the nature of

work, wages, hours of work and other conditions of employment. Interests of employees in the different companies perforce differ. SMC is engaged in the business of beer manufacturing. Magnolia is involved in the manufacturing and processing of dairy products while SMFI is involved in the production of feeds and the processing of chicken. The nature of their products and scales of business may require different skills which must necessarily be commensurated by different compensation packages. The different companies may have different volumes of work and different working conditions. For such reason, the employees of the different companies see the need to group themselves together and organize themselves into distinctive and different groups. It would then be best to have separate bargaining units for the different companies where the employees can bargain separately according to their needs and according to their own working conditions. Disposition Petition is DISMISSED for lack of merit.

COMPLEX ELECTRONICS V NLRC 310 SCRA 403 Kapunan;July 19, 1999

Nature Petition for appeal on certiorari Facts Complex Electronics Corporation (Complex) was engaged in the manufacture of electronic products as a subcontractor of electronic products where its customers, who were foreign based companies with different product lines, gave their job orders, sent their own materials and consigned their equipment to it. Thus, there was the AMS Line for the Adaptive Micro System, Inc., the Heril Line for Heril Co., Ltd., the Lite-On Line for the Lite-On Philippines Electronics Co., etc. On March 4, 1992, Complex received a facsimile message from Lite-On Philippines Electronics Co., requiring it to lower its price by 10%. As their price were no longer competitive with that of mainlang China.Complex informed its Lite-On personnel that such request of lowering their selling price by 10% was not feasible as they were already incurring losses at the present prices of their products and thus informed the employees that it was left with no alternative but to close down the operations of the Lite-On Line. Complex filed a notice of closure of the Lite-On Line with the Department of Labor and Employment (DOLE) and the retrenchment of the ninety-seven (97) affected employees. The Union filed a notice of strike. Two days thereafter the Union conducted a strike vote which resulted in a "yes" vote. The machinery, equipment and materials being used for production at Complex were pulled-out from the company premises and transferred to the premises of Ionics Circuit, Inc. (Ionics) at Cabuyao, Laguna. The following day, a total closure of company operation was effected at Complex. Issue WON Ionics is a separate corporate entity, thus Complex is not guilty of unfair labor practice. Held Yes A runaway shop is defined as an industrial plant moved by its owners from one location to another to escape union labor regulations or state laws, but the term is also used to describe a plant removed to a new location in order to discriminate against employees at the old plant because of their union activities. It is one wherein the employer moves its business to another location or it temporarily closes its business for anti-union purposes. A runaway shop in this sense, is a relocation motivated by anti-union animus rather than for business reasons. Reasoning: -Ionics was not set up merely for the purpose of transferring the business of Complex. At the time the labor dispute arose at Complex, Ionics was already existing as an independent company.

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As earlier mentioned, it has been in existence since July 5, 1984. It cannot, therefore, be said that the temporary closure in Complex and its subsequent transfer of business to Ionics was for anti-union purposes. The Union failed to show that the primary reason for the closure of the establishment was due to the union activities of the employees. The mere fact that one or more corporations are owned or controlled by the same or single stockholder is not a sufficient ground for disregarding separate corporate personalities. -Ionics may be engaged in the same business as that of Complex, but this fact alone is not enough reason to pierce the veil of corporate fiction of the corporation. Well-settled is the rule that a corporation has a personality separate and distinct from that of its officers and stockholders. This fiction of corporate entity can only be disregarded in certain cases such as when it is used to defeat public convenience, justify wrong, protect fraud, or defend crime. To disregard said separate juridical personality of a corporation, the wrongdoing must be clearly and convincingly established. Indophil Textile Mill Workers Union vs. Calica 1.The fact that the businesses of private respondent and Acrylic are related, that some of the employees of the private respondent are the same persons manning and providing for auxiliary services to the units of Acrylic, and that the physical plants, offices and facilities are situated in the same compound, it is our considered opinion that these facts are not sufficient to justify the piercing of the corporate veil of Acrylic. 2.Del Rosario vs. National Labor Relations Commission Substantial identity of the incorporators of two corporations does not necessarily imply that there was fraud committed to justify piercing the veil of corporate fiction. 3. Santos vs. National Labor Relations Commission The basic rule is still that which can be deduced from the Courts pronouncement in Sunio vs. National Labor Relations Commission, thus: Mere ownership by a single stockholder or by another corporation of all or nearly all of the capital stock of a corporation is not of itself sufficient ground for disregarding the separate corporate personality.

collective bargaining agreement between Kapisanan and the company bars the subject 3 petitions.3 ISSUE WON CIRs orders are contrary to law HELD NO RATIO -Because of the modern complexity of the relation between both employer and union structure, it becomes difficult to determine from the evidence alone which of the several claimant groups forms a proper bargaining unit. It becomes necessary to give consideration to the express will or desire of the employees - a practice designated as the "Globe doctrine," which sanctions the holding of a series of elections, not for the purpose of allowing the group receiving an over all majority of votes to represent all employees, but for the purpose of permitting the employees in each of the several categories to select the group which each chooses as a bargaining unit. -CIR was simply interested "in the verification of the evidence submitted wherein the workers have signed manifestations of their desire to be separated from the Kapisanan." CIR has the right of full investigation in arriving at a correct finding of fact in order to deny or grant the petitions for certification election. And one way of determining the desire of the employees is what CIR suggested: a plebiscite. A plebiscite and not the certification election itself. The subject orders of CIR do not decide the petitions of the 3 unions.

Mechanical Dept Labor Union v CIR 24 SCRA 925 1968

In view of its findings and the history of union representation in the railway company, indicating that bargaining units had been formed through separation of new units from existing ones whenever plebiscites had shown the workers desires to have their own representatives, and relying on the globe doctrine the employees in the Caloocan shop should be given a chance to vote on whether their group should be separated from that represented by the mechanical department labor union, and ordered a plebiscite held for that purpose. Technically, the appeal was premature since the result of the ordered plebiscite may be adverse to the creation of a separate bargaining unit-- however, MDLU seems to have conceded that the results would favor separation. Plebiscite may be held to determine WON the Employees w/in the dept do want a separate bargaining agent. The CIR found basic differences b/w those in the Rolling Stocks (i.e. Caloocan shops) and those of the others. Those in the Caloocan shops have a community of interests and working conditions. They also perform major repairs of railway rolling stock; the other units do only minor repairs. Also, the workers in Caloocan require special skills in the operation of heavy equipment, the others do not. Hence, the GLOBE DOCTRINE properly applies. Bargaining units had been formed through separation of new units from existing ones whenever plebiscites had shown the workers desire to have their own representatives. (from Barops reviewer) DISINI: A brief explanation of the GLOBE DOCTRINE It is best explained in the context of a market place and the demand of employment on such market place. The GLOBE DOCTRINE usually applies to employees with rare skills or highly technical ones. Example given: Case of Pilots and Stewardess.

2. UNIT SEVERANCE AND GLOBE DOCTRINE INDUSTRIAL /CRAFT UNIONS

KAPISANAN NG MGA MANGGAGAWA SA MANILA RAILROAD (KAPISANAN) v. YARD CREW UNION

109 Phil 1143 Paredes; Oct 31, 1960

FACTS -Kapisanan filed with the Court of Industrial Relations (CIR) a petition praying that it be certified as the exclusive bargaining agent (EBA) in Manila Railroad Company. During the proceeding, 3 appropriate bargaining units (ABUs) were determined by CIR; Kapisanan was eventually certified as the EBA for the remaining-company-personnel unit.2 -After the decision in favor of Kapisanan became final, the Yard Crew Union, the Station Employees' Union, and the Railroad Engineering Department Union, filed their respective petitions, praying that they be defined as separate bargaining units, and that they be certified in the units sought to be separated. CIR ordered a plebiscite among the employees in the 3 proposed groups (i.e. Engineering Department, Station Employees, and Yard Crew Personnel), [t]he employee[s] in the proposed groups [to] vote, in a secret ballot to be conducted by [CIR], whether they desire to be separated from the unit of the rest of the employees being represented by the Kapisanan. -Kapisanan, being the EBA of the ABU from which the 3 unions is petitioning for separate ABUs, now contends that the existence of a

The other 2 ABUs are engine crew unit and train crew unit. The remaining-personnel unit itself excludes supervisors, temporary employees, the members of the Auditing Department, the members of the security guard and professional and technical employees.

In other words, Kapisanan is invoking the CONTRACT BAR RULE in certification elections.
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If ,originally, pilots and stewardesses belong to ONE bargaining unit (unit A) for the purpose of collective bargaining, with the use of the GLOBE DOCTRINE a plebiscite can be held to determine if the pilot employees would want to form a separate bargaining unit (unit B). Illustration: Unit A (original bargaining unit) : 100 Pilots + 200 Stewardesses = 300 employees Unit B (proposed new unit): Pilots = 100 employees. Those in unit B (100 pilots) will vote in a plebiscite. Their choices will be (1) To vote for Unit A: this would mean that they do not wish to separate from the original bargaining unit. (2) To vote for Unit B: This would mean that they would want to form their OWN bargaining unit, composed of pilots only. (3) Neither: They do not want the choices If you have one BIG bargaining unit, most probably you are grouping together DIFFERENT SKILLED workers. Rationale of the Globe Doctrine: highly skilled workers have to separate to increase their market value. Under the Globe Doctrine, will of the employees is the determinative factor.

In fact, the collective bargaining agreement (CBA) which expired last 15 October 1985 provides as follows: ARTICLE I SCOPE Section 1. Appropriate bargaining unit. ? This Agreement covers all regular employees and workers employed by the company at its factory in Malabon, Metro Manila. The words "employee," "laborer" and "workers" when used in this Agreement shall be deemed to refer to those employees within the bargaining unit. Employees who occupy managerial, confidential or technical positions, supervisors, contract employees, monthly-paid employees, security as wen as office personnel are excluded from the appropriate bargaining unit (emphasis supplied). In view of the above, the monthly-paid rank-and-file employees ran form a union of their own, separate and distinct from the existing rank-and-file union composed of daily-paid workers. (Rollo, pp. 1920) Thus, it can be readily seen from the above findings of the Bureau of labor Relations that the members of private respondent are not managerial employees as claimed by petitioners but merely considered as rank-and-file employees who have every right to selforganization or to be heard through a duly certified collective bargaining union. The Supervisory power of the members of private respondent union consists merely in recommending as to what managerial actions to take in disciplinary cases. These members of private respondent union do not fit the definition of managerial employees which We laid down in the case of Bulletin Publishing Corporation v. Sanchez (144 SCRA 628). These members of private respondent union are therefore not prohibited from forming their own collective bargaining unit since it has not been shown by petitioner that "the responsibilities (of these monthly-paid-employees) inherently require the exercise of discretion and independent judgment as supervisors" or that "they possess the power and authority to lay down or exercise management policies." Similarly, he held in the same case that "Members of supervisory unions who do not fall within the definition of managerial employees shall become eligible to loin or assist the rank-and-file labor organization, and if none exists, to form or assist in the forming of such rank-and-file organizations. Perhaps it is unusual for the petitioner to have to deal with two (2) collective bargaining unions but there is no one to blame except petitioner itself for creating the situation it is in. From the beginning of the existence in 1963 of a bargaining limit for the employees up to the present, petitioner had sought to indiscriminately suppress the members of the private respondent"s right to self-organization provided for by law. Petitioner, in justification of its action, maintained that the exclusion of the members of the private respondent from the bargaining union of the rank-and-file or from forming their own union was agreed upon by petitioner corporation with the previous bargaining representatives namely: the General "Rubber Workers Union PTGWO the General Workers Union ? NAFLU and the General Rubber Workers Union (independent). Such posture has no leg to stand on. It has not been shown that private respondent was privy to this agreement. And even if it were so, it can never bind subsequent federations and unions particularly private respondentunion because it is a curtailment of the right to self-organization guaranteed by the labor laws. However, to prevent any difficulty. and to avoid confusion to all concerned and, more importantly, to fulfill the policy of the New Labor Code as well as to be consistent with Our ruling in the Bulletin case, supra, the monthly-paid rank-and-file employees should be allowed to join the union of the daily-paid-rankand-file employees of petitioner so that they can also avail of the CBA benefits or to form their own rank-and-file union, without prejudice to the certification election that has been ordered.

3. EFFECT PRIOR AGREEMENT GENERAL RUBBER AND FOOTWEAR CORP. v. BUREAU OF LABOR RELATIONS NATIONAL ASSOCIATION OF TRADE UNION OF MONTHLY PAID EMPLOYEES-NATU

GR No. 74262 PARAS; October 29, 1987

NATURE Petition for review FACTS Petitioner is a corporation engaged in the business of manufacturing rubber sandals and oilier rubber products. In 1985, the Samahang Manggagawa sa General Rubber Corporation ANGLO was formed by the daily paid rank and file employees as their union for collective bargaining, after the expiration on October 15, 1985 of the collective bargaining agreement previously executed by petitioner with General Rubber Workers Union (Independent) on October 15, 1982. Be it noted however that on July 17, 1985, the monthly paid employees of the petitionercorporation, after forming their own collective bargaining unit the National Association of Trade Unions of Monthly Paid Employees-NATU, filed a petition for direct certification with tile Bureau of Labor Relations which petition was opposed by herein petitioner. On September 2, 1985, the Med-Arbiter issued an Order for the holding of a certification election after finding that a certification election is in order in this case and observing that it is the fairest remedy to determine whether employees of petitioner desire to have a union or not. On appeal, the Bureau of Labor Relations denied both the appeal and motion for reconsideration interposed by petitioner and affirmed the ruling of the Med-Arbiter. Hence, the present petition ISSUE WON The Bureau of Labor Relations committed grave abuse of discretion in holding that supervisors, employees perform- ing managerial, confidential and technical functions and office personnel, who are negotiated by petitioner to be excluded from the existing bargaining unit because they are performing vital functions to management, can form and join a labor organization and be members of the new bargaining unit. HELD It has been the policy of the Bureau to encourage the formation of an employer unit "unless circumstances otherwise require. The proliferation of unions in an employer unit is discouraged as a matter of policy unless there are compelling reasons which would deny a certain class of employees the right to self-organization for purposes of collective bargaining, This case does not fall squarely within the exception. It is undisputed that the monthlies who are rank-and-file have been historically excluded from the bargaining unit composed of daily-paid rank-and-filers that is, since 1963 when the existing rank- and- file union was recognized.

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DLSU v. DLSU EMPLOYEES ASSOCIATION (DLSUEA) 330 SCRA 363 BUENA; April 12, 2000
NATURE Two petitions for certiorari- the first petition with preliminary injunction and/or TRO; the second assailing the decision of voluntary arbitrator Buenaventura Magsalin. These two petitions have been consolidated. FACTS - DLSU and DLSU Employees Association-National Federation of Teachers and Employees Union (DLSUEA-NAFTEU), which is composed of regular non-academic rank and file employees, (hereinafter referred to as UNION) entered into a CBA with a life span of 3 years. - During the freedom period, or 60 days before the expiration of the said CBA, the Union initiated negotiations with the University for a new CBA which, however, turned out to be unsuccessful, hence, the Union filed a Notice of Strike with the National Conciliation and Mediation Board. - After several conciliation-mediation meetings, 5 out of the 11 issues raised in the Notice of Strike were resolved by the parties. A partial CBA was thereafter executed by the parties. - the parties entered into a Submission Agreement, identifying the remaining 6 unresolved issues for arbitration, namely: "(1) scope of the bargaining unit, (2) union security clause, (3) security of tenure, (4) salary increases for the second and third years of the CBA, (5) indefinite union leave, reduction of the union president's workload, special leave, and (6) duration of the agreement." - The parties appointed Magsalin as voluntary arbitrator. He rendered the assailed decision. In the said decision, the voluntary arbitrator, on the first issue ruled that ". . . the Computer Operators assigned at the CSC [Computer Services Center], just like any other Computer Operators in other units, should be included as members of the bargaining unit," after finding that "evidently, the Computer Operators are presently doing clerical and routinary work and had nothing to do with setting of management policies for the University. They may have access to vital information regarding the University's operations but they are not necessarily confidential." Regarding the discipline officers, the voluntary arbitrator ". . . believes that this type of employees belongs to the rankand-file on the basis of the nature of their job." With respect to the employees of the College of St. Benilde, the voluntary arbitrator found that the CSB has a personality separate and distinct from the University and thus, held ". . . that the employees therein are outside the bargaining unit of the University's rank-and-file employees." On the second issue, arbitrator opined that a union shop clause ". . . is not a restriction on the employee's right to freedom of association but rather a valid form of union security while the CBA is in force and in accordance with the Constitutional policy to promote unionism and collective bargaining and negotiations. The parties therefore should incorporate such union shop clause in their CBA." On the third issue the arbitrator upheld the ". . . elementary right and prerogative of the management of the University to select and/or choose its employees, a right equally recognized by the Constitution and the law. The employer, in the exercise of this right, can adopt valid and equitable grounds as basis for lay-off or separation, like performance, qualifications, competence, etc. Similarly, the right to transfer or reassign an employee is an employer's exclusive right and prerogative." On the fourth issue the arbitrator opined that the ". . .proposed budget of the University for SY 1992-93 could not sufficiently cope up with the demand for increases by the Union... he ruled that the University can no longer be required to grant a second round of increase for the school years under consideration and charge the same to the incremental proceeds." On the fifth issue the voluntary arbitrator ruled that unionism ". . . is no valid reason for the reduction of the workload of its President," and that there is ". . . no sufficient justification to grant an indefinite leave." Finding that the Union and the Faculty Association are not similarly situated, technically and professionally, and that "while professional growth is highly encouraged on the part of the rank-and-file employees, this educational advancement would not serve in the same degree as

demanded of the faculty members," the voluntary arbitrator denied the Union's demand for special leave benefits. On the last issue the voluntary arbitrator ruled that ". . . when the parties forged their CBA and signed it, where a provision on duration was explicitly included, the same became a binding agreement between them. Notwithstanding the Submission Agreement, thereby reopening this issue for resolution, this Voluntary Arbitrator is constrained to respect the original intention of the parties. - Subsequently, both parties filed their respective motions for reconsideration which, however, were not entertained by the voluntary arbitrator - University filed with this Court, a petition for certiorari with TRO and/or preliminary injunction assailing the decision of the voluntary arbitrator - the Union also filed a petition for certiorari. - the Solicitor General agreed with the voluntary arbitrator's assailed decision on all points except that involving the employees of the College of St. Benilde. ISSUES 1. WON the computer operators assigned at the University's Computer Services Center and the University's discipline officers may be considered as confidential employees and should therefore be excluded from the bargaining unit which is composed of rank and file employees of the University. 2. WON the employees of the College of St. Benilde should also be included in the same bargaining unit. 3. WON a union shop clause should be included in the parties' CBA, in addition to the existing maintenance of membership clause. Held: 1. NO. Ratio The express exclusion of the computer operators and discipline officers from the bargaining unit of rank-and-file employees in the 1986 CBA does not bar any re-negotiation for the future inclusion of the said employees in the bargaining unit. During the freedom period, the parties may not only renew the existing CBA but may also propose and discuss modifications or amendments thereto. With regard to the alleged confidential nature of the said employees' functions, the said computer operators and discipline officers are not confidential employees. The service record of a computer operator reveals that his duties are basically clerical and non-confidential in nature. As to the discipline officers, we agree with the voluntary arbitrator that based on the nature of their duties, they are not confidential employees and should therefore be included in the bargaining unit of rank-and-file employees. 2. NO. Ratio The employees of the College of St. Benilde should be excluded from the bargaining unit of the rank-and-file employees of DLSU because the two educational institutions have their own separate juridical personality and no sufficient evidence was shown to justify the piercing of the veil of corporate fiction. 3. YES Ratio The right to refrain from joining labor organizations recognized by Section 3 of the Industrial Peace Act is limited. The legal protection granted to such right to refrain from joining is withdrawn by operation of law, where a labor union and an employer have agreed on a closed shop, by virtue of which the employer may employ only members of the collective bargaining union, and the employees must continue to be members of the union for the duration of the contract in order to keep their jobs. Disposition The assailed decision is hereby AFFIRMED with the modification that the issue on salary increases for the second and third years of the CBA be REMANDED to the voluntary arbitrator for definite resolution on the basis of the externally audited financial statements of the University already submitted by the Union before the voluntary arbitrator and forming part of the records.

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San Miguel Corp. v. Mandaue 467 SCRA 107 Tinga ; Aug. 16, 2005
Facts -CA affirmes DOLE Undersecretary for Labor Relations, Rosalinda Dimapilis-Baldoz, ordering the immediate conduct of a certification election among the petitioners rank-and-file employees. - Federation of Free Workers (FFW/ respondent) filed a petition for certification election with the DOLE Regional Office No. VII. It sought to be certified and to represent the permanent rank-and-file monthly paid employees of the petitioner. The following documents were attached to the petition: (1) a Charter Certificate certifying that respondent as of that date was duly certified as a local or chapter of FFW; (2) a copy of the constitution of respondent prepared by its Secretary, Noel T. Bathan and attested by its President, Wilfred V. Sagun; (3) a list of respondents officers and their respective addresses, again prepared by Bathan and attested by Sagun; (4) a certification signifying that respondent had just been organized and no amount had yet been collected from its members, signed by respondents treasurer Chita D. Rodriguez and attested by Sagun; and (5) a list of all the rank-and-file monthly paid employees of the Mandaue Packaging Products Plants and Mandaue Glass Plant prepared by Bathan and attested by Sagun. -SMC (Petitioner) filed a motion to dismiss the petition for certification election on the sole ground that herein respondent is not listed or included in the roster of legitimate labor organizations based on the certification issued by the Officer-In-Charge, Regional Director of the DOLE Regional Office No. VII, Atty. Jesus B. Gabor. -Respondent submitted to the Bureau of Labor Relations the same documents earlier attached to its petition for certification. The accompanying letter, signed by respondents president Sagun, stated that such documents were submitted in compliance with the requirements for the creation of a local/chapter pursuant to the Labor Code and its Implementing Rules; and it was hoped that the submissions would facilitate the listing of respondent under the roster of legitimate labor organizations.The Chief of Labor Relations Division of DOLE Regional Office No. VII issued a Certificate of Creation of Local/Chapter No. ITD. IARFBT-058/98, certifying that from 30 July 1998, respondent has acquired legal personality as a labor organizat ion/workers association, it having submitted all the required documents. Issues 1. WON the inclusion of the two alleged supervisory employees in appellee unions membership amounts to fraud, misrepresentation, or false statement within the meaning of Article 239(a) and (c) of the Labor Code. 2. WON subsequent developments change the disposition of the case Held: 1. No, it does not. - Under the law, a managerial employee is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, layoff, recall, discharge, assign or discipline employees. A supervisory employee is one who, in the interest of the employer, effectively recommends managerial actions if the exercise of such recommendatory authority is not merely routinary or clerical in nature but requires the use of independent judgment. Finally, all employees not falling within the definition of managerial or supervisory employee are considered rank-and-file employees. It is also well-settled that the actual functions of an employee, not merely his job title, are determinative in classifying such employee as managerial, supervisory or rank and file. Good faith is presumed in all representations, an essential element of fraud, false statement and misrepresentation in order for these to be actionable is intent to mislead by the party making the representation. In this case, there is no proof to show that Bathan, or appellee union for that matter, intended to mislead anyone. If this was appellee unions intention, it would have refrained from using a more precise description of the organization instead of declaring that the organization is composed of rank and

file monthlies. Hence, the charge of fraud, false statement or misrepresentation cannot be sustained. - Even if they are supervisory employees, no action can be done that emasculates the right to self-organization and the promotion of free trade unionism. We take administrative notice of the realities in union organizing, during which the organizers must take their chances, oftentimes unaware of the fine distinctions between managerial, supervisory and rank and file employees. The grounds for cancellation of union registration are not meant to be applied automatically, but indeed with utmost discretion. Where a remedy short of cancellation is available, that remedy should be preferred. In this case, no party will be prejudiced if Bathan were to be excluded from membership in the union. The vacancy he will thus create can then be easily filled up through the succession provision of appellee unions constitution and by-laws. What is important is that there is an unmistakeable intent of the members of appellee union to exercise their right to organize. We cannot impose rigorous restraints on such right if we are to give meaning to the protection to labor and social justice clauses of the Constitution. 2. No, it does not affect the case. The allegation that the bargaining unit that respondent sought to represent is no longer the same because of the dynamic nature of petitioners business, a lot of changes having occurred in the work environment, and that four of respondents officers are no longer connected with petitioner have no effect on the Courts ruling that a certification election should be immediately conducted with respondent as one of the available choices. Petitioners bare manifestations adduce no reason why the certification election should not be conducted forthwith. If there are matters that have arisen since the filing of the petition that serve to delay or cancel the election, these can be threshed out during the pre-election conferences. Neither is the fact that some of respondents officers have since resigned from petitioner of any moment. The local/chapter retains a separate legal personality from that of its officers or members that remains viable notwithstanding any turnover in its officers or members. DISPOSITION WHEREFORE, the Petition is DENIED.

5.03 DETERMINING AGENCY

ART. 232. Prohibition on certification election. - The Bureau shall not entertain any petition for certification election or any other action which may disturb the administration of duly registered existing collective bargaining agreements affecting the parties except under Articles 253, 253-A and 256 of this Code. (As amended by Section 15, Republic Act No. 6715, March 21, 1989).

AGENCY AND FINALITY ORDER

FILOIL REFINERY CORPORATION vs. FILOIL SUPERVISORY & CONFIDENTIAL EMPLOYEES ASSOCIATION

46 SCRA 512 TEEHANKEE; Aug 18, 1972

NATURE Appeal from the orders of the Court of Industrial Relations FACTS - Filoil Refinery Corporation executed a collective bargaining agreement with the Filoil Employees & Workers Association (FEWA), a labor association composed of the corporation's rank-and-file employees . This collective bargaining agreement expressly excluded from its coverage petitioner's supervisory and confidential employees, who in turn organized their own labor association, respondent herein.

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- The Corporation filed a motion to dismiss the petition for certification of the respondent association as the sole and exclusive collective bargaining agent of all petitioners supervisory and confidential employees working at its refinery in Rosario, Cavite. Their reason being, since they are part of the management, they do not have the right to bargain collectively although they may organize an organization of their own. Held: Industrial court enjoys a wide discretion in determining the procedure necessary to insure the fair and free choice of bargaining representations by employees, and that its action in deciding upon an appropriate unit for collective bargaining purpose is discretionary and that its judgment in this respect is entitled to almost complete finality, unless its action is arbitrary or capricious and that absent any grave abuse of discretion as to justify the Courts intervention. Action in deciding upon an appropriate unit for collective bargaining purposes is discretionary. Its judgment is entitled to finality, unless its action is arbitrary or capricious.

employers or employers' organisations, shall be deemed to constitute acts of interference within the meaning of this Article. Article 3 Machinery appropriate to national conditions shall be established, where necessary, for the purpose of ensuring respect for the right to organise as defined in the preceding Articles. Article 5 Workers' and employers' organisations shall have the right to establish and join federations and confederations and any such organisation, federation or confederation shall have the right to affiliate with international organisations of workers and employers.

***Note: The ILO C48 in the outline must have been an error because that convention has absolutely nothing to do with selforganization as its title is C48 Maintenance of Migrants' Pension Rights Convention, 1935. Ergo, its not included here.

International Labor Organization C 87 Freedom of Association and Protection of the Right to Organise Convention, 1948
Article 2 Workers and employers, without distinction whatsoever, shall have the right to establish and, subject only to the rules of the organisation concerned, to join organisations of their own choosing without previous authorisation. Article 3 1. Workers' and employers' organisations shall have the right to draw up their constitutions and rules, to elect their representatives in full freedom, to organise their administration and activities and to formulate their programmes. 2. The public authorities shall refrain from any interference which would restrict this right or impede the lawful exercise thereof. Article 7 The acquisition of legal personality by workers' and employers' organisations, federations and confederations shall not be made subject to conditions of such a character as to restrict the application of the provisions of Articles 2, 3 and 4 hereof. Article 8 1. In exercising the rights provided for in this Convention workers and employers and their respective organisations, like other persons or organised collectivities, shall respect the law of the land. 2. The law of the land shall not be such as to impair, nor shall it be so applied as to impair, the guarantees provided for in this Convention. Article 11 Each Member of the International Labour Organisation for which this Convention is in force undertakes to take all necessary and appropriate measures to ensure that workers and employers may exercise freely the right to organise.

C98 Right to Organise and Collective Bargaining Convention, 1949

Article 2 1. Workers' and employers' organisations shall enjoy adequate protection against any acts of interference by each other or each other's agents or members in their establishment, functioning or administration. 2. In particular, acts which are designed to promote the establishment of workers' organisations under the domination of employers or employers' organisations, or to support workers' organisations by financial or other means, with the object of placing such organisations under the control of