Heritage Hotel Manila v.

NUWHRAIN HHMSC
G.R. No. 178296; January 12, 2011; Nachura, J.
Digest by Donna S. Talledo
FACTS

The respondent, NUWHRAIN HHMSC (Union), is a labor organization of the supervisory

employees of Heritage Hotel Manila. The Union filed with the DOLE a petition for
certification election which was granted by the Med-Arbiter. On appeal, the DOLE Sec.
affirmed the Med-Arbiters order and remanded the case for the holding of the preelection
conference.

The preelection conference was not held as initially scheduled and was only resumed three
years later.

Heritage Hotel (Company) discovered thereafter that the Union had failed to submit to the
Bureau of Labor Relations (BLR) its annual financial report for several years and the list of its
members since it filed its registration papers in 1995.

Consequently, the Company filed a Petition for Cancellation of Registration of the Union
on the ground of non-submission of the said documents. It further requested the suspension
of the certification election proceedings.

Barely a month thereafter, the Company reiterated its request by filing a Motion to Dismiss
or Suspend the Certification Election Proceedings arguing that the dismissal or
suspension is warranted considering that the legitimacy of the Union is being challenged in
the petition for cancellation of registration.

The certification election, nevertheless, pushed through and the Union emerged as the
winner.

The Company filed a Protest with Motion to Defer Certification of Election Results
and Winner stating that the certification election was an exercise in futility because, once
the Unions registration is cancelled, it would no longer be entitled to be certified as the
SEBA of the supervisory employees.

In its Answer, the Union averred that the petition was filed primarily to delay the conduct of
the certification elections and prayed for the dismissal of the petition because it has already
complied with the reportorial requirements.

The Med-Arbiter dismissed the Companys protest and certified the Union as the SEBA of all
supervisory employees. The appeal was later dismissed by the DOLE Sec.

Meanwhile, the Reg. Director denied the Petition for Cancellation of Registration. Though the
Union indeed failed to file the required documents for several years, the freedom of
association and the employees right to self organization are more substantive
considerations. He considered the belated submission as sufficient compliance and
considered them as having been submitted on time.
o

The Company appealed the decision to the BLR but the BLR Director inhibited himself from the
case because he had been a former counsel of the Union. Thus, the DOLE Sec. took cognizance
of the appeal which was later dismissed.

The company filed a petition for certiorari with the CA questioning the DOLE Sec.s taking
cognizance of the appeal.

The CA denied the petition holding that the DOLE Sec. may legally assume jurisdiction over an
appeal from the decision of the Reg. Director in the even the BLR Director inhibits himself from
the case. There was also no GAD when the DOLE Sec. affirmed the dismissal of the petition for
cancellation of registration.

ISSUE:

Whether or not the CA erred in affirming the dismissal of the Cancellation Petition despite the
mandatory and unequivocal provisions of the Labor Core and its IRR.
HELD:
NO. The freedom of association and right of the workers to self-organization are more
substantive considerations. The Decision of the CA is affirmed.
RATIO
Petitioner:

Once it is determined that a ground enumerated in Article 239 is present, cancellation of

registration should follow and it becomes the ministerial duty of the Reg. Director to cancel
the registration of the labor organization.

Supreme Court:

Articles 238 and 239 give the Reg. Director ample discretion in dealing with a petition for
cancellation of a unions registration. It is sufficient to give the Reg. Director license to treat
the late fling of required documents as sufficient compliance with the law.

The union members and all the employees belonging to the appropriate bargaining unit
should not be deprived of a bargaining agent, merely because of the negligence of the union
officers who were responsible for the submission of the documents to the BLR

Registration confers upon a union the status of legitimacy and the concomitant rights
and privileges granted by law to a legitimate labor organization, particularly the
right to participate in or ask for a certification election in a bargaining unit.

Thus, the cancellation of a certification of registration is the equivalent of snuffing

out the life of a labor organization. For without such registration, it loses its right under
the Labor Code.

It should be noted that the relevant provisions of the Labor Code has been amended by RA
9481. The last paragraph under Article 242-A now provides that failure to comply with the
reportorial requirements shall not be a ground for cancellation of union registration but shall
subject the erring officers/members to suspension, expulsion from membership, or any
appropriate penalty.

ILO Convention No. 87 provides that workers and employers organizations shall not be
liable to be dissolved or suspended by administrative authority. The cancellation of union
registration by the registrar of labor unions (the BLR) is tantamount to dissolution of the
organization by administrative authority when it would give rise to the loss of legal
personality of the union or loss of advantages necessary to carry out its activities. It is
therefore preferable if such actions were to be taken only as a last resort.

(Minor Issue) DOLE Secretarys assumption of jurisdiction:

Jurisdiction to review the decision of the Reg. Director lies with the BLR. But in this case, the
BLR inhibited himself from the case.

When the Company filed its appeal to the BLR, the latter acquired jurisdiction over the case
and it remained with the BLR despite the BLR Directors inhibition. The DOLE Sec. merely
stepped into the shoes of the BLR Director and performed the function that the latter could
not himself perform. This is pursuant to her power of supervision and control over the
BLR.

The principle of supervision and control, which is incorporated in the Admin. Code (1987), is
defined as including the authority to act directly whenever a specific function is entrusted by
law or regulation to a subordinate.

The Company was not denied the right to due process. It was precisely to ensure fair trial
that moved the BLR Director to inhibit himself from the case and the DOLE Sec. to take over
his function.