001 De La Salle v.

De La Salle University Employees

Association
[G.R. No. 110072. April 12, 2000
TOPIC: Rule Bargaining Unit
PONENTE: Buena, J.:

AUTHOR:
NOTES: (if applicable)
Filed with this Court are two petitions for certiorari, the
first petition with preliminary injunction and/or temporary
restraining order, assailing the decision of voluntary
arbitrator Magsalin, dated January 19, 1993, as having been
rendered with grave abuse of discretion amounting to lack
or excess of jurisdiction.

FACTS: (chronological order)

1. On December 1986, Dela Salle University (hereinafter referred to as UNIVERSITY) and Dela Salle University
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
collective bargaining agreement with a life span of three (3) years, that is, from December 23, 1986 to December
22, 1989.

2. During the freedom period, or 60 days before the expiration of the said collective bargaining agreement, the
Union initiated negotiations with the University for a new collective bargaining agreement which, however, turned
out to be unsuccessful, hence, the Union filed a Notice of Strike with the National Conciliation and Mediation
Board, National Capital Region.

3. After several conciliation-mediation meetings, five (5) out of the eleven (11) issues raised in the Notice of Strike
were resolved by the parties. A partial collective bargaining agreement was thereafter executed by the parties.

4. On March 18, 1991, the parties entered into a Submission Agreement, identifying the remaining six (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 third and fourth years [this should properly read second and third years] of
the collective bargaining agreement, (5) indefinite union leave, reduction of the union presidents workload, special
leave, and finally, (6) duration of the agreement." The parties appointed Magsalin as voluntary arbitrator.

5. On January 19, 1993, the voluntary arbitrator rendered the decision: in the first issue nvolving the scope of the
bargaining unit, 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 "[e]vidently, the Computer Operators are presently doing clerical and routinary work and had nothing to do
with [the] setting of management policies for the University, as [may be] gleaned from the duties and
responsibilities attached to the position and embodied in the CSC [Computer Services Center] brochure. They may
have, as argued by the University, access to vital information regarding the Universitys operations but they are not
necessarily confidential." Regarding the discipline officers, the voluntary arbitrator "believes that this type of
employees belong (sic) to the rank-and-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 College of St. Benilde has a personality
separate and distinct from the University and thus, held "that the employees therein are outside the bargaining unit
of the Universitys rank-and-file employees.
6. the University filed with the Second Division of this Court, a petition for certiorari with temporary restraining
order and/or preliminary injunction assailing the decision of the voluntary arbitrator, as having been rendered "in
excess of jurisdiction and/or with grave abuse of discretion."
Petitioner Contention: the University argues that they are confidential employees and that the Union has already
recognized the confidential nature of their functions According to the University, the Computer Services Center,
where these computer operators work, "processes data that are needed by management for strategic planning and
evaluation of systems. It also houses the Universitys confidential records and information. Moreover, the
Computer Operators are in fact the repository of the Universitys confidential information and data, including those
involving and/or pertinent to labor relations.
As to the discipline officers, the University maintains that "they are likewise excluded from the bargaining unit of the rankand-file employees under the parties 1986 CBA. The Discipline Officers are clearly alter egos of management as they
perform tasks which are inherent in management [e.g. enforce discipline] The University also alleges that "the Discipline
Officers are privy to highly confidential information ordinarily accessible only to management."

With regard to the employees of the College of St. Benilde, the Union, supported by the Solicitor General at this point,
asserts that the veil of corporate fiction should be pierced, thus, according to the Union, the University and the College of
St. Benilde should be considered as only one entity because the latter is but a mere integral part of the University.

ISSUE(S): whether the computer operators assigned at the Universitys Computer Services Center and the Universitys
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, and whether the employees of the College of St. Benilde
should also be included in the same bargaining unit;
HELD: NO.
RATIO:
The Court agrees with the Solicitor General that the express exclusion of the computer operators and discipline officers
from the bargaining unit of rank-and-file employees in the 1986 collective bargaining agreement does not bar any renegotiation for the future inclusion of the said employees in the bargaining unit.
During the freedom period, the parties may not only renew the existing collective bargaining agreement but may also
propose and discuss modifications or amendments thereto.
With regard to the alleged confidential nature of the said employees functions, after a careful consideration of the
pleadings filed before this Court, we rule that the said computer operators and discipline officers are not confidential
employees. As carefully examined by the Solicitor General, 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.
The Court also affirms the findings of the voluntary arbitrator that the employees of the College of St. Benilde should be
excluded from the bargaining unit of the rank-and-file employees of Dela Salle University, 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.
CASE LAW/ DOCTRINE:
DISSENTING/CONCURRING OPINION(S):

002 SAN MIGUEL FOODS, INCORPORATED V. SAN

MIGUEL CORPORATION SUPERVISORS and
EXEMPT UNION
G.R. No. 146206, August 1, 2011
TOPIC: Bargaining unit
PONENTE: PERALTA, J.
FACTS: (Got the facts from Vans previous digest)

AUTHOR:
NOTES: (if applicable)

1. G.R. No. 110399 (SMC Supervisors and Exempt Union v. Laguesma) the Court held that:
a. Even if they handle confidential data regarding technical and internal business operations, supervisory
employees 3 and 4 and the exempt employees of petitioner San Miguel Foods, Inc. (SMFI) are not to be
considered confidential employees, because the same do not pertain to labor relations, particularly,
negotiation and settlement of grievances. THUS, ALLOWED TO FORM AN APPROPRIATE
BARGAINING UNIT (ABU) FOR THE PURPOSE OF COLLECTIVE BARGAINING (CB).
b. Employees belonging to the 3 different plants of SMC Magnolia Poultry Products Plants in Cabuyao, San
Fernando, and Otis, having community or mutuality of interests, constitute a single bargaining unit. They
perform work of the same nature, receive the same wages and compensation, and most importantly, share
a common stake in concerted activities. It was immaterial that the three plants have different locations as
they did not impede the operations of a single bargaining representative.
2. Pursuant to the abovementioned Decision, the DOLE-NCR conducted pre-election conferences. However, there
was a discrepancy in the list of eligible voters.
3. Med Arbiter Daquigan issued an Order directing Election Officer Tolentino to proceed with the conduct of
certification election in accordance with Section 2, Rule XII of DO No. 9.
4. A certification election was conducted.
5. On the date of the election, petitioner questioned the eligibility to vote by some of its employees on the grounds
that some employees do not belong to the bargaining unit which respondent seeks to represent or that there is no
existence of employer-employee relationship with petitioner.
a. That certain employees should not be allowed to vote as they are:
i. confidential employees;
ii. employees assigned to the live chicken operations, which are not covered by the bargaining unit;
iii. employees whose job grade is level 4, but are performing managerial work and scheduled to be
promoted;
iv. employees who belong to the Barrio Ugong plant;
v. non-SMFI employees; and
vi. employees who are members of other unions.
6. Med-Arbiter issued an Order respondent to submit proof showing that the employees in the submitted list are
covered by the original petition for certification election and belong to the bargaining unit it seeks to represent.
7. Respondent averred that:
a. the bargaining unit contemplated in the original petition is the Poultry Division of San Miguel
Corporation, now known as San Miguel Foods, Inc.;
b. it covered the operations in Calamba, Laguna, Cavite, and Batangas and its home base is either in
Cabuyao, Laguna or San Fernando, Pampanga; and
c. it submitted individual and separate declarations of the employees whose votes were challenged in the
election.
8. The certification election was conducted.
9. Med Arbiter Order since the Yes vote received 97% of the valid votes cast, respondent is certified to be the
exclusive bargaining agent of the supervisors and exempt employees of petitioner's Magnolia Poultry Products
Plants in Cabuyao, San Fernando, and Otis.
10. Acting DOLE Undersecretary affirmed Med Arbiters Decision with modification that Matias, Lozano, Delos
Reyes and Pajaron be excluded from the bargaining unit because Matias and Lozano are members of Magnolia
Poultry Processing Plants Monthly Employees Union, while Delos Reyes and Pajaron are employees of San
Miguel Corporation, which is a separate and distinct entity from petitioner. Partial MoR by Petitioners denied!
11. CA affirmed with modification the DOLE Undersecretary, stating that those holding the positions of Human

Resource Assistant and Personnel Assistant are excluded from the bargaining unit. Partial MoR denied
ISSUE(S): WHETHER THE COURT OF APPEALS DEPARTED FROM JURISPRUDENCE WHEN IT EXPANDED
THE SCOPE OF THE BARGAINING UNIT DEFINED BY THIS COURT'S RULING IN G.R. NO. 110399.
HELD: NO. The Court affirms the finding of the CA that there should be only one bargaining unit for the employees in
Cabuyao, San Fernando, and Otis of Magnolia Poultry Products Plant involved in dressed chicken processing and
Magnolia Poultry Farms engaged in live chicken operations. Certain factors, such as specific line of work, working
conditions, location of work, mode of compensation, and other relevant conditions do not affect or impede their
commonality of interest. Although they seem separate and distinct from each other, the specific tasks of each division are
actually interrelated and there exists mutuality of interests which warrants the formation of a single bargaining unit.
DISPOSITIVE PORTION: WHEREFORE, the petition is DENIED. The Decision dated April 28, 2000 and Resolution
dated November 28, 2000 of the Court of Appeals, in CA-G.R. SP No. 55510, which affirmed with modification the
Resolutions dated July 30, 1999 and August 27, 1999 of the Secretary of Labor, are AFFIRMED.
RATIO:
1. In G.R. No. 110399, the Court explained that the employees of San Miguel Corporation Magnolia Poultry
Products Plants of Cabuyao, San Fernando, and Otis constitute a single bargaining unit, which is not contrary to
the one-company, one-union policy. An appropriate bargaining unit is defined as a group of employees of a
given employer, comprised of all or less than all of the entire body of employees, which the collective interest of
all the employees, consistent with equity to the employer, indicate to be best suited to serve the reciprocal rights
and duties of the parties under the collective bargaining provisions of the law.
2. In National Association of Free Trade Unions v. Mainit Lumber Development Company Workers Union United
Lumber and General Workers of the Phils, the Court, taking into account the community or mutuality of interests
test, ordered the formation of a single bargaining unit consisting of the Sawmill Division in Butuan City and the
Logging Division in Zapanta Valley, Kitcharao, Agusan [Del] Norte of the Mainit Lumber Development Company.
It held that while the existence of a bargaining history is a factor that may be reckoned with in determining the
appropriate bargaining unit, the same is not decisive or conclusive. Other factors must be considered. The test of
grouping is community or mutuality of interest. This is so because the basic test of an asserted bargaining units
acceptability is whether or not it is fundamentally the combination which will best assure to all employees the
exercise of their collective bargaining rights. Certainly, there is a mutuality of interest among the employees of the
Sawmill Division and the Logging Division. Their functions mesh with one another. One group needs the other in
the same way that the company needs them both. There may be differences as to the nature of their individual
assignments, but the distinctions are not enough to warrant the formation of a separate bargaining unit.
3. Thus, applying the ruling to the present case, the Court affirms the finding of the CA that there should be only one
bargaining unit for the employees in Cabuyao, San Fernando, and Otis of Magnolia Poultry Products Plant
involved in dressed chicken processing and Magnolia Poultry Farms engaged in live chicken operations. Certain
factors, such as specific line of work, working conditions, location of work, mode of compensation, and other
relevant conditions do not affect or impede their commonality of interest. Although they seem separate and distinct
from each other, the specific tasks of each division are actually interrelated and there exists mutuality of interests
which warrants the formation of a single bargaining unit.
G.R. No. 160352
July 23, 2008
REPUBLIC OF THE PHILIPPINES, represented by
(DOLE) vs.
KAWASHIMA TEXTILE MFG., PHILIPPINES, INC.,

AUTHOR: J. Montino
NOTES: The case traces the history of certification
election of unions and applicable law. It held two
important doctrines. First, a mixture of rank and file
TOPIC: Bargaining Agent, Certification Election and supervisors in a union does not lead to its nullity.
Proceedings
Second, an employer is a mere bystander in
PONENTE: AUSTRIA-MARTINEZ, J.:
certification elections.
FACTS: (chronological order)
1. KFWU filed with DOLE Regional Office No. IV, a Petition for Certification Election to be conducted in the

bargaining unit composed of 145 rank-and-file employees of respondent. Attached to its petition are a Certificate
of Creation of Local/Chapter issued on January 19, 2000 by DOLE Regional Office No. IV, stating that it
[KFWU] submitted to said office a Charter Certificate issued to it by the national federation Phil. Transport &
General Workers Organization (PTGWO), and a Report of Creation of Local/Chapter.
2. Respondent filed a Motion to Dismiss the petition on the ground that KFWU did not acquire any legal
personality because its membership of mixed rank-and-file and supervisory employees violated Article 245 of
the Labor Code, and its failure to submit its books of account contravened the ruling of the Court in Progressive
Development Corporation v. Secretary, Department of Labor and Employment.
3. Med-Arbiter Bactin found KFWUs legal personality defective and dismissed its petition for certification
election.
4. Reason: at least two (2) members of [KFWU], namely: Dany I. Fernandez and Jesus R. Quinto, Jr. are
supervisory employees, having a number of personnel under them. Being supervisory employees, they are
prohibited under Article 245 of the Labor Code, as amended, to join the union of the rank and file employees.
Dany I. Fernandez and Jesus R. Quinto, Jr., Chief Engineers of the Maintenance and Manufacturing Department,
respectively, act as foremen to the line engineers, mechanics and other non-skilled workers and responsible [for]
the preparation and organization of maintenance shop fabrication and schedules, inventory and control of
materials and supplies and tasked to implement training plans on line engineers and evaluate the performance of
their subordinates. The above-stated actual functions of Dany I. Fernandez and Jesus R. Quinto, Jr. are clear
manifestation that they are supervisory employees.
Since petitioners members are mixture of rank and file and supervisory employees, petitioner union, at this
point [in] time, has not attained the status of a legitimate labor organization. Petitioner should first exclude the
supervisory employees from it membership before it can attain the status of a legitimate labor organization. The
above judgment is supported by the decision of the Supreme Court in the Toyota Case.
5. KFWU appealed to the DOLE which remanded the case for immediate conduct of certification election,
subject to the usual pre-election conference, among the rank-and-file employees of Kawashima Textile
Manufacturing Philippines, Inc. with the following choices: Kawashima Free Workers Union-PTGWO Local
Chapter No. 803 and No union.
6. Reason: The DOLE held that Med-Arbiter Bactin's reliance on the decisions of the Court in Toyota Motor
Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union and Dunlop Slazenger, Inc. v.
Secretary of Labor and Employment was misplaced, for while Article 245 declares supervisory employees
ineligible for membership in a labor organization for rank-and-file employees, the provision did not state the
effect of such prohibited membership on the legitimacy of the labor organization and its right to file for
certification election. Neither was such mixed membership a ground for cancellation of its registration. Section
11, Paragraph II, Rule XI of Department Order No. 9 "provides for the dismissal of a petition for certification
election based on lack of legal personality of a labor organization only on the following grounds: (1) [KFWU] is
not listed by the Regional Office or the Bureau of Labor Relations in its registry of legitimate labor
organizations; or (2) [KFWU's] legal personality has been revoked or canceled with finality." The DOLE noted
that neither ground existed; on the contrary, KFWU's legal personality was well-established, for it held a
certificate of creation and had been listed in the registry of legitimate labor organizations.
As to the failure of KFWU to file its books of account, the DOLE held that such omission was not a ground for
revocation of union registration or dismissal of petition for certification election, for under Section 1, Rule VI of
Department Order No. 9, a local or chapter like KFWU was no longer required to file its books of account.
7. However, on appeal by respondent, the CA reversed the August 18, 2000 DOLE Decision, thus: Since
respondent union clearly consists of both rank and file and supervisory employees, it cannot qualify as a
legitimate labor organization imbued with the requisite personality to file a petition for certification election.
This infirmity in union membership cannot be corrected in the inclusion-exclusion proceedings during the preelection conference.

8. The Republic of the Philippines (petitioner) filed the present petition to seek closure on two issues:

ISSUE(S): First, whether a mixed membership of rank-and-file and supervisory employees in a union is a
ground for the dismissal of a petition for certification election in view of the amendment brought about by D.O.
9, series of 1997, which deleted the phraseology in the old rule that "[t]he appropriate bargaining unit of the
rank-and-file employee shall not include the supervisory employees and/or security guards.
Second, whether the legitimacy of a duly registered labor organization can be collaterally attacked in a petition
for a certification election through a motion to dismiss filed by an employer such as Kawashima Textile
Manufacturing Phils., Inc.
HELD: No to both issues.
DISPOSITIVE PORTION: WHEREFORE, the petition is GRANTED. The December 13, 2002 Decision and
October 7, 2003 Resolution of the Court of Appeals and the May 17, 2000 Order of Med-Arbiter Anastacio L.
Bactin are REVERSED and SET ASIDE, while the August 18, 2000 Decision and September 28, 2000
Resolution of the Department of Labor and Employment are REINSTATED.
RATIO:
First Issue:
R.A. No. 9481 took effect only on June 14, 2007; hence, it applies only to labor representation cases filed on or
after said date. As the petition for certification election subject matter of the present petition was filed by KFWU
on January 24, 2000, R.A. No. 9481 cannot apply to it.
Instead, the law and rules in force at the time of the filing by KFWU of the petition for certification election on
January 24, 2000 are R.A. No. 6715, amending Book V of Presidential Decree (P.D.) No. 442 (Labor Code), as
amended, and the Rules and Regulations Implementing R.A. No. 6715, as amended by Department Order No. 9,
series of 1997.
One area of contention has been the composition of the membership of a labor organization, specifically whether
there is a mingling of supervisory and rank-and-file employees and how such questioned mingling affects its
legitimacy.
It was in R.A. No. 875, under Section 3, that such questioned mingling was first prohibited, to wit:
Sec. 3. Employees right to self-organization. Employees shall have the right to self-organization and to form,
join or assist labor organizations of their own choosing for the purpose of collective bargaining through
representatives of their own choosing and to engage in concerted activities for the purpose of collective
bargaining and other mutual aid or protection. Individuals employed as supervisors shall not be eligible for
membership in a labor organization of employees under their supervision but may form separate organizations of
their own. (Emphasis supplied)
Nothing in R.A. No. 875, however, tells of how the questioned mingling can affect the legitimacy of the labor
organization. Under Section 15, the only instance when a labor organization loses its legitimacy is when it
violates its duty to bargain collectively; but there is no word on whether such mingling would also result in loss
of legitimacy.
Then the Labor Code was enacted in 1974 without reproducing Sec. 3 of R.A. No. 875. The provision in the
Labor Code closest to Sec. 3 is Article 290, which is deafeningly silent on the prohibition against supervisory
employees mingling with rank-and-file employees in one labor organization.

Members of supervisory unions who do not fall within the definition of managerial employees shall become
eligible to join or assist the rank and file organization. The determination of who are managerial employees and
who are not shall be the subject of negotiation between representatives of supervisory union and the employer. If
no agreement s reached between the parties, either or both of them ma bring the issue to the nearest Regional
Office for determination. (Emphasis supplied)
The obvious repeal of the last clause of Sec. 3, R.A. No. 875 prompted the Court to declare in Bulletin v.
Sanchez that supervisory employees who do not fall under the category of managerial employees may join or
assist in the formation of a labor organization for rank-and-file employees, but they may not form their own
labor organization.
Effective 1989, R.A. No. 6715 restored the prohibition against the questioned mingling in one labor
organization. Unfortunately, just like R.A. No. 875, R.A. No. 6715 omitted specifying the exact effect any
violation of the prohibition would bring about on the legitimacy of a labor organization.
It was the Rules and Regulations Implementing R.A. No. 6715 (1989 Amended Omnibus Rules) which supplied
the deficiency by introducing the following amendment to Rule II (Registration of Unions):
Sec. 1. Who may join unions. x x x Supervisory employees and security guards shall not be eligible for
membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own; Provided, that those supervisory employees who are included in an existing rankand-file bargaining unit, upon the effectivity of Republic Act No. 6715, shall remain in that unit x x x.
Sec. 1. Where to file. A petition for certification election may be filed with the Regional Office which has
jurisdiction over the principal office of the employer. The petition shall be in writing and under oath.
Sec. 2. Who may file. Any legitimate labor organization or the employer, when requested to bargain
collectively, may file the petition.
The petition, when filed by a legitimate labor organization, shall contain, among others:
xxxx
(c) description of the bargaining unit which shall be the employer unit unless circumstances otherwise require;
and provided further, that the appropriate bargaining unit of the rank-and-file employees shall not include
supervisory employees and/or security guards. (Emphasis supplied)
By that provision, any questioned mingling will prevent an otherwise legitimate and duly registered labor
organization from exercising its right to file a petition for certification election.
Thus, when the issue of the effect of mingling was brought to the fore in Toyota, the Court, citing Article 245 of
the Labor Code, as amended by R.A. No. 6715, held: Clearly, based on this provision, a labor organization
composed of both rank-and-file and supervisory employees is no labor organization at all. It cannot, for any
guise or purpose, be a legitimate labor organization. Not being one, an organization which carries a mixture
of rank-and-file and supervisory employees cannot possess any of the rights of a legitimate labor
organization, including the right to file a petition for certification election for the purpose of collective
bargaining. It becomes necessary, therefore, anterior to the granting of an order allowing a certification election,
to inquire into the composition of any labor organization whenever the status of the labor organization is
challenged on the basis of Article 245 of the Labor Code.
But then, on June 21, 1997, the 1989 Amended Omnibus Rules was further amended by Department Order No.
9, series of 1997 (1997 Amended Omnibus Rules). Specifically, the requirement under Sec. 2(c) of the 1989
Amended Omnibus Rules - that the petition for certification election indicate that the bargaining unit of rank-

and-file employees has not been mingled with supervisory employees - was removed. Instead, what the 1997
Amended Omnibus Rules requires is a plain description of the bargaining unit.
Then came Tagaytay Highlands Intl. Golf Club, Inc. v. Tagaytay Highlands Employees Union-PGTWO in
which the core issue was whether mingling affects the legitimacy of a labor organization and its right to file a
petition for certification election. This time, given the altered legal milieu, the Court abandoned the view in
Toyota and Dunlop and reverted to its pronouncement in Lopez that while there is a prohibition against the
mingling of supervisory and rank-and-file employees in one labor organization, the Labor Code does not provide
for the effects thereof. Thus, the Court held that after a labor organization has been registered, it may exercise all
the rights and privileges of a legitimate labor organization. Any mingling between supervisory and rank-and-file
employees in its membership cannot affect its legitimacy for that is not among the grounds for cancellation of its
registration, unless such mingling was brought about by misrepresentation, false statement or fraud under Article
239 of the Labor Code.
All said, while the latest issuance is R.A. No. 9481, the 1997 Amended Omnibus Rules, as interpreted by the
Court in Tagaytay Highlands, San Miguel and Air Philippines, had already set the tone for it. Toyota and Dunlop
no longer hold sway in the present altered state of the law and the rules.
Consequently, the Court reverses the ruling of the CA and reinstates that of the DOLE granting the petition for
certification election of KFWU.
Second Issue:
Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for
certification election; such proceeding is non-adversarial and merely investigative, for the purpose thereof is to
determine which organization will represent the employees in their collective bargaining with the employer. The
choice of their representative is the exclusive concern of the employees; the employer cannot have any partisan
interest therein; it cannot interfere with, much less oppose, the process by filing a motion to dismiss or an appeal
from it; not even a mere allegation that some employees participating in a petition for certification election are
actually managerial employees will lend an employer legal personality to block the certification election. The
employer's only right in the proceeding is to be notified or informed thereof.
CASE LAW/ DOCTRINE: Mixture of rank-and-file and supervisors does not remove a unions legitimacy.
Also, employers are only bystanders in certification elections. It reiterates another doctrine that only direct
attacks on a unions legitimacy is allowednot collateral ones.
DISSENTING/CONCURRING OPINION(S): none

004 St. James School of QC v. SM of St. James

AUTHOR:
Nov. 23, 2005
Topic: Bargaining Agent, Certification Election Proceedings
FACTS: (chronological order)
1. The respondent union filed a petition for Certification Election to determine the Collective Bargaining
Representative of the motor pool, construction and transportation employees of the petitioner school.
2. Certification Election was granted and it was conducted on June 26, 1999 in the office of the DOLE in Intramuros.
2.1 the total eligible voters were 149, and out of this, 84 voted.
3. The petitioner filed a protest challenging the 84 employees who voted.
3.1 Petitioner alleged that they had 179 rank and file employees and none of those voted in the said election.
3.2 Further, the petitioner argued that those who voted were not their regular employees but rather the

construction workers of their contractor, Arch. Bacoy.

4. Med-Arb. Tomas Falconitin held in favor of the petitioner.
4.1 Holding that at the time of the election the 84 who voted were no longer the employees of the petitioner.
4.2 In support of this ruling, the Med-Arb used the list of eligible employees provided by the petitioner wherein
none of the 84 employees who voted were included.
4.3 It appears that some of the construction projects have already ceased, thus the said employees were no
longer entitled.
4.4 Further, Med-Arb held that even if the 84 workers were to be included in the 179 total employe es of the
petitioner, it would total to 263 and thus the majority requirement is still not met to constitute a valid CE.
5. The respondent appealed to the Secretary of Labor.
6. DOLE: decision of med-Arb reversed.
6.1 DOLE held that union sought to represent the non-teaching staff of the petitioner.
6.2 The Med-Arb erred in including all the employees of the petitioner whether teaching or non-teaching.
6.3 Also, the list submitted by the petitioner contained only the administrative, teaching, and officer personnel.
7. MR of the petitioner denied.
8. The petitioner now files a petition for certiorari under R65 before the CA.
9. CA: petitioner dismissed. DOLE did not commit GAD in reversing the Med-Arb.
10. MR of petitioner with CA also denied.
11. Hence this petition.
11.1
St. James alleges that it has 179 rank and file employees in its Quezon City Campus. When the
certification election was held, none of these qualified rank and file employees cast their votes because they
were all on duty in the school premises. The 84 voters who cast their votes are employees of Architect Bacoy.
11.2
St. James also alleges that it has 570 rank and file employees in all its campuses. Even if the 84 voters
are its employees, the votes do not constitute a majority vote of its rank and file employees because the
quorum should be based on its 570 rank and file employees.
ISSUE(S): Whether or not the CE is valid?
HELD: Yes. Argument of the petitioner finds no merit.
RATIO:
1. The members of Samahang Manggagawa are employees in the Tandang Sora campus. Under its constitution and
by-laws, Samahang Manggagawa seeks to represent the motor pool, construction and transportation employees of
the Tandang Sora campus. Thus, the computation of the quorum should be based on the rank and file motor pool,
construction and transportation employees of the Tandang Sora campus and not on all the employees in St.
James five campuses. x x x
2. The motor pool, construction and transportation employees of the Tandang Sora campus had 149 qualified voters
at the time of the certification election. Hence, the 149 qualified voters should be used to determine the existence
of a quorum. Since a majority or 84 out of the 149 qualified voters cast their votes, a quorum existed in the
certification election.
3. Section 2, Rule XII, Book V of the Omnibus Rules provides:
Section 2. Qualification of voters; inclusion-exclusion proceedings.All employees who are members of the
appropriate bargaining unit sought to be represented by the petitioner at the time of the certification or consent
election shall be qualified to vote. A dis missed employee whose dismissal is being contested in a pending case
shall be allowed to vote in the election.
In case of disagreement over the voters list or over the eligibility of voters, all contested voters shall be allowed to
vote. However, their votes shall be segregated and sealed in individual envelopes in accordance with Section 9 of
these Rules.

005 DHL PHILIPPINES CORPORATION UNITED RANK

AND FILE ASSOCIATION-FEDERATION OF FREE
WORKERS (DHL-URFA-FFW) vs. BUKLOD NG
MANGGAGAWA NG DHL PHILIPPINES
CORPORATION
G.R. No. 152094. July 22, 2004

AUTHOR:

TOPIC: Bargaining Agent, Certification Election

Proceedings
PONENTE: PANGANIBAN, J.:
FACTS:
False statements made by union officers before and during a certification election -- that the union is independent and not
affiliated with a national federation -- are material facts likely to influence the election results. This principle finds
application in the present case in which the majority of the employees clearly wanted an independent union to represent
them. Thus, after the members learned of the misrepresentation, and after a majority of them disaffiliated themselves from
the union and formed another one, a new certification election should be held to enable them to express their true will.
The late filing of the Petition for a new election can be excused under the peculiar facts of this case, considering that the
employees concerned did not sleep on their rights, but promptly acted to protect their prerogatives. Petitioner should not be
permitted to use legal technicalities to perpetrate the betrayal foisted by its officers upon the majority of the employees.
Procedural technicalities should not be allowed to suppress the welfare of labor.
The Facts
On November 25, 1997, a certification election was conducted among the regular rank and file employees in the main
office and the regional branches of DHL Philippines Corporation. The contending choices were petitioner and no union.
On January 19, 1998, on the basis of the results of the certification election, with petitioner receiving 546 votes and no
union garnering 348 votes, the election officer certified the former as the sole and exclusive bargaining agent of the rank
and file employees of the corporation.
Meanwhile, on December 19, 1997, Respondent Buklod ng Manggagawa ng DHL Philippines Corporation (BUKLOD)
filed with the Industrial Relations Division of the Department of Labor and Employment (DOLE) a Petition for the
nullification of the certification election. The officers of petitioner were charged with committing fraud and deceit in the
election proceedings, particularly by misrepresenting to the voter-employees that it was an independent union, when it was
in fact an affiliate of the Federation of Free Workers (FFW).
This misrepresentation was supposedly the basis for their selection of petitioner in the certification election. Allegedly
supporting this claim was the fact that those whom it had misled allegedly withdrew their membership from it and
subsequently formed themselves into an independent union. The latter union, BUKLOD, was issued a Certificate of
Registration by DOLE on December 23, 1997.
On May 18, 1998, Med-Arbiter Tomas F. Falconitin nullified the November 25, 1997 certification election and ordered the
holding of another one with the following contending choices: petitioner, respondent, and no choice.
Setting aside the Decision of Med-Arbiter Falconitin, DOLE Undersecretary Rosalinda Dimapilis-Baldoz held on appeal
that the issue of representation had already been settled with finality in favor of petitioner, and that no petitions for
certification election would be entertained within one year from the time the election officer had issued the Certification
Order.
The CA held that the withdrawal of a great majority of the members of petitioner -- 704 out of 894 of them -- provided a
compelling reason to conduct a certification election anew in order to determine, once and for all, which union reflected

their choice.
The appellate court also held that the election officers issuance of a Certification Order on January 19, 1998 was
precipitate because, prior thereto, respondent had filed with the med-arbiter a Petition for nullification of the election.
Furthermore, the Certification was not in accordance with Department Order No. 9 (DO 9), Series of 1997. The charges of
fraud and deceit, lodged immediately after the election by petitioners former members against their officers, should have
been treated as protests or issues of eligibility within the meaning of Section 13 of DO 9.
ISSUE(S): whether or not the certification election is valid.

HELD: No, The circumstances in the present case show that the employees did not sleep on their rights. Hence, their
failure to follow strictly the procedural technicalities regarding the period for filing their protest should not be taken
against them. Mere technicalities should not be allowed to prevail over the welfare of the workers. What is essential is that
they be accorded an opportunity to determine freely and intelligently which labor organization shall act on their behalf.
Having been denied this opportunity by the betrayal committed by petitioners officers in the present case, the employees
were prevented from making an intelligent and independent choice.
RATIO:
Under Section 13 of the Rules Implementing Book V (Labor Relations) of the Labor Code, as amended, the election
officers authority to certify the results of the election is limited to situations in which there has been no protest filed; or if
there has been any, it has not been perfected or formalized within five days from the close of the election proceedings.
Further, Section 14 of the same Rules provides that when a protest has been perfected, only the med-arbiter can proclaim
and certify the winner. Clearly, this rule is based on the election officers function, which is merely to conduct and
supervise certification elections. It is the med-arbiter who is authorized to hear and decide representation cases.
Consequently, the decision whether to certify the results of an election or to set them aside due to incidents occurring
during the campaign is within the med-arbiters discretion.
Petitioner argues that the CA gravely erred in rendering its assailed Decision, considering that no protest or challenge had
been formalized within five days, or raised during the election proceedings and entered in the minutes thereof. Petitioner
adds that respondent did not file any protest, either, against the alleged fraud and misrepresentation by the formers officers
during the election.
We disagree. When the med-arbiter admitted and gave due course to respondents Petition for nullification of the election
proceedings, the election officer should have deferred issuing the Certification of the results thereof. Section 13 of the
Implementing Rules cannot strictly be applied to the present case.
Respondents contention is that a number of employees were lured by their officers into believing that petitioner was an
independent union. Since the employees had long desired to have an independent union that would represent them in
collective bargaining, they voted yes in favor of petitioner. Having been misled, a majority of them eventually disaffiliated
themselves from it and formed an independent union, respondent herein, which thereafter protested the conduct of the
election. Having been formed just after such exercise by the defrauded employees who were former members of petitioner,
respondent could not have reasonably filed its protest within five days from the close of the election proceedings.
Notably, after it had applied for registration with the Bureau of Labor Relations (BLR), respondent filed its Petition to
nullify the certification election. Petitioner insistently opposed the Petition, as respondent had not yet been issued a
certificate of registration at the time. Because such certificate was issued in favor of the latter four days after the filing of
the Petition, on December 23, 1997, the misgivings of the former were brushed aside by the med-arbiter. Indeed, the fact
that respondent was not yet a duly registered labor organization when the Petition was filed is of no moment, absent any
fatal defect in its application for registration.

False Statements of Union Officers

The making of false statements or misrepresentations that interfere with the free choice of the employees is a valid ground
for protest. A certification election may be set aside for misstatements made during the campaign, where 1) a material fact
has been misrepresented in the campaign; 2) an opportunity for reply has been lacking; and 3) the misrepresentation has
had an impact on the free choice of the employees participating in the election. A misrepresentation is likely to have an
impact on their free choice, if it comes from a party who has special knowledge or is in an authoritative position to know
the true facts. This principle holds true, especially when the employees are unable to evaluate the truth or the falsity of the
assertions.
The fact that the officers of petitioner especially its president, misrepresented it to the voting employees as an independent
union constituted a substantial misrepresentation of material facts of vital concern to those employees. The materiality of
such misrepresentation is self-evident. The employees wanted an independent union to represent them in collective
bargaining, free from outside interference. Thus, upon knowing that petitioner was in fact an affiliate of the FFW, the
members disaffiliated from petitioner and organized themselves into an independent union. Additionally, the
misrepresentation came from petitioners recognized representative, who was clearly in a position to hold himself out as a
person who had special knowledge and was in an authoritative position to know the true facts.
We are not easily persuaded by the argument of petitioner that the employees had sufficient time between the
misrepresentation and the election to check the truth of its claims. They could hardly be expected to verify the accuracy of
any statement regarding petitioner, made to them by its officers. No less than its president stated that it was an independent
union. At the time, the employees had no reason to doubt him.
We sustain the following findings of Med-Arbiter Falconitin:
x x x It must be noted at the outset that [respondent] has charged [petitioners] officers, agents and representative with fraud
or deception in encouraging its members to form or join and vote for DHL Philippines Corporation United Rank-and-File
Association which they represented as an independent labor union not affiliated with any labor federation or national
union. Such serious allegations, supported with affidavits under oath executed by no less than seven hundred four (704)
DHL Philippines Corporations employees nationwide, cannot just be ignored.x x x
This finding of fact of a quasi-judicial agency of DOLE is persuasive upon the courts.
Although petitioner won in the election, it is now clear that it does not represent the majority of the bargaining employees,
owing to the affiliation of its members with respondent. The present uncertainty as to which union has their support to
represent them for collective bargaining purposes is a salient factor that this Court has seriously considered.
The bargaining agent must be truly representative of the employees. At the time of the filing by respondent of the Petition
for nullification, allegiances and loyalties of the employees were like shifting sands that radically affected their choice of
an appropriate bargaining representative. The polarization of a good number of them followed their discovery of the fraud
committed by the officers of petitioner. At any rate, the claim that 704 of the employees are affiliated with respondent is
not sufficiently rebutted by any evidence on record.
The purpose of a certification election is precisely to ascertain the majority of the employees choice of an appropriate
bargaining unit -- to be or not to be represented by a labor organization and, in the affirmative case, by which one.
Once disaffiliation has been demonstrated beyond doubt, a certification election is the most expeditious way of
determining which union should be the exclusive bargaining representative of the employees.
CASE LAW/ DOCTRINE:
DISSENTING/CONCURRING OPINION(S):

06
STA.
LUCIA
EAST
COMMERCIAL
CORPORATION, Petitioner v. HON. SECRETARY OF
LABOR AND EMPLOYMENT and
STA. LUCIA EAST COMMERCIAL
CORPORATION WORKERS ASSOCIATION (CLUP
LOCAL CHAPTER), Respondents
G.R. No. 162355, August 14, 2009
TOPIC:
PONENTE: CARPIO, J.

AUTHOR:
NOTES: (if applicable)

FACTS:

On 2001, Confederated Labor Union of the Philippines (CLUP) instituted a petition for certification election
among the regular rank- and-file employees of Sta. Lucia East Commercial Corporation (THE
CORPORATION) and its Affiliates. The affiliate companies included in the petition were SLE Commercial,
SLE Department Store, SLE Cinema, Robsan East Trading, Bowling Center, Planet Toys, Home Gallery and
Essentials.
On August 2001, Med-Arbiter Bactin ordered the dismissal of the petition due to inappropriateness of the
bargaining unit.
Later CLUP in its local chapter under THE CORPORATION reorganized itself and re- registered as CLUP-Sta.
Lucia East Commercial Corporation Workers Association (herein THE UNION), limiting its membership to the
rank- and-file employees of Sta. Lucia East Commercial Corporation.
On the same date, THE UNION filed the instant petition for certification election. It claimed that no certification
election has been held among them within the last 12 months prior to the filing of the petition, and while there is
another union registered covering the same employees, namely Samahang Manggawa sa SLEC [SMSLEC], it
has not been recognized as the exclusive bargaining agent of [THE CORPORATIONs] employees.
On November 2001, THE CORPORATION or THE CORPORATION filed a motion to dismiss the petition. It
averred that it has voluntarily recognized SMSLEC as the exclusive bargaining agent of its regular rank-and-file
employees, and that collective bargaining negotiations already commenced between them. THE
CORPORATION argued that the petition should be dismissed for violating the one year and negotiation bar
rules under the Omnibus Rules Implementing the Labor Code.
The CBA between SMSLEC and the corporation was ratified by its rank-and-file employees and registered with
DOLE.
In the meantime, on December 2001, the union filed its Opposition to THE CORPORATIONS Motion to
Dismiss questioning the validity of the voluntary recognition of [SMSLEC] by [THE CORPORATION] and
their consequent negotiations and execution of a CBA. According to [THE UNION], the voluntary recognition
of [SMSLEC] by [THE CORPORATION] violated the requirements for voluntary recognition, i.e., nonexistence of another labor organization in the same bargaining unit. It pointed out that the time of the voluntary
recognition on 20 July 2001, appellants registration which covers the same group of employees covered by
Samahang Manggagawa sa Sta. Lucia East Commercial, was existing and has neither been cancelled or
abandoned.
The Med-Arbiters Ruling
Med-Arbiter Bactin dismissed THE UNIONs petition for direct certification on the ground of contract bar rule.
The prior voluntary recognition of SMSLEC and the CBA between THE CORPORATION and SMSLEC bars
the filing of THE UNIONs petition for direct certification.

THE UNION raised the matter to the Secretary.

The Ruling of the Secretary of Labor and Employment
The Secretary held that the subsequent negotiations and registration of a CBA executed by THE
CORPORATION with SMSLEC could not bar THE UNIONs petition. THE UNION constituted a registered
labor organization at the time of THE CORPORATIONs voluntary recognition of SMSLEC.
THE CORPORATION then filed a petition for certiorari before the appellate court.
The Ruling of the Appellate Court
The appellate court affirmed the ruling of the Secretary
ISSUE(S): Whether THE CORPORATIONs voluntary recognition of SMSLEC was done while a legitimate labor
organization was in existence in the bargaining unit.
HELD: (YES/NO, and a short explanation)
Petition has no merit.
RATIO:

Legitimate Labor Organization

Article 212(g) of the Labor Code defines a labor organization as "any union or association of employees which
exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms
and conditions of employment." Upon compliance with all the documentary requirements, the Regional Office
or Bureau shall issue in favor of the applicant labor organization a certificate indicating that it is included in the
roster of legitimate labor organizations.6 Any applicant labor organization 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.7
Bargaining Unit
The concepts of a union and of a legitimate labor organization are different from, but related to, the concept of a
bargaining unit.
A bargaining unit is a "group of employees of a given employer, comprised of all or less than all of the entire
body of employees, consistent with equity to the employer, indicated to be the best suited to serve the reciprocal
rights and duties of the parties under the collective bargaining provisions of the law."
The fundamental factors in determining the appropriate collective bargaining unit are: (1) the will of the
employees (Globe Doctrine); (2) affinity and unity of the employees interest, such as substantial similarity of
work and duties, or similarity of compensation and working conditions (Substantial Mutual Interests Rule); (3)
prior collective bargaining history; and (4) similarity of employment status.
(eto yung important) The UNIONS initial problem was that they constituted a legitimate labor organization
representing a non- appropriate bargaining unit. However, The union subsequently re-registered as THE
UNION, limiting its members to the rank-and- file of THE CORPORATION. THE CORPORATION cannot
ignore the union was a legitimate labor organization at the time of THE CORPORATIONs voluntary
recognition of SMSLEC. THE CORPORATION and SMSLEC cannot, by themselves, decide whether CLUPTHE CORPORATION and its Affiliates Workers Union represented an appropriate bargaining unit.
The inclusion in the union of disqualified employees is not among the grounds for cancellation of registration,
unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances The union
having been validly issued a certificate of registration, should be considered as having acquired juridical
personality which may not be attacked collaterally. The proper procedure for THE CORPORATION is to file a
petition for cancellation of certificate of registration of CLUP-THE CORPORATION and its Affiliates Workers
Union and not to immediately commence voluntary recognition proceedings with SMSLEC.
WHEREFORE, we DENY the petition. We AFFIRM the Decision promulgated on 14 August 2003 as well as

the Resolution promulgated on 24 February 2004 of the Court of Appeals in CA-G.R. SP No. 77015.
CASE LAW/ DOCTRINE:
DISSENTING/CONCURRING OPINION(S):

007 Samahan Ng Mga Manggagawa Sa Samma

Lakas Sa Industriya Ng Kapatirang Haligi Ng Alyansa
(SammaLikha) v. Samma Corporation,
G.R. No. 167141 - March 13, 2009
TOPIC:
Bargaining
Proceedings

Agent,

Certification

AUTHOR: Rikki Dela Paz

NOTES:

Election

PONENTE: J. Brion (First Division)

Facts:

Petitioner Samahan ng mga Manggagawa sa Samma Lakas sa Industriya ng Kapatirang Haligi ng Alyansa
(SAMMA-LIKHA) filed a petition for certification election on July 24, 2001 in the Department of Labor and
Employment (DOLE), Regional Office IV.[4]
o It claimed that: (1) it was a local chapter of the LIKHA Federation, a legitimate labor organization
registered with the DOLE; (2) it sought to represent all the rank-and-file employees of respondent Samma
Corporation; (3) there was no other legitimate labor organization representing these rank-and-file
employees; (4) respondent was not a party to any collective bargaining agreement and (5) no certification
or consent election had been conducted within the employer unit for the last 12 months prior to the filing of
the petition.
Respondent moved for the dismissal of the petition arguing that (1) LIKHA Federation failed to establish its legal
personality; (2) petitioner failed to prove its existence as a local chapter; (3) it failed to attach the certificate of
non-forum shopping and (4) it had a prohibited mixture of supervisory and rank-and-file employees.
In an order dated November 12, 2002, Med-Artbiter Arturo Cosuco DISMISSED the petition for certification
election due to: (1) lack of legal personality for failure to attach the certificate of registration purporting to show its
legal personality; (2) prohibited mixture of rank-and-file and supervisory employees and (3) failure to submit a
certificate of non-forum shopping.
On January 17, 2003, Acting Secretary Manuel G. Imson, treating the motion for reconsideration as an appeal,
rendered a decision reversing the order of the med-arbiter. He ruled that the legal personality of a union cannot be
collaterally attacked but may only be questioned in an independent petition for cancellation of registration. Thus,
he directed the holding of a certification election among the rank-and-file employees of respondent, subject to the
usual pre-election conference and inclusion-exclusion proceedings.
Meanwhile, on April 14, 2003, Crispin D. Dannug, Jr., Officer-in-Charge/Regional Director of DOLE Regional Office
IV, issued a resolution revoking the charter certificate of petitioner as local chapter of LIKHA Federation on the
ground of prohibited mixture of supervisory and rank-and-file employees and non-compliance with the attestation
clause under paragraph 2 of Article 235 of the Labor Code. [11] On May 6, 2003, petitioner moved for the
reconsideration of this resolution.
Respondent filed a petition for certiorari[13] in the CA assailing the January 17, 2003 decision and April 3, 2003
resolution of the Secretary of Labor. In a decision dated August 31, 2004, the CA reversed the same. [14] It denied
reconsideration in a resolution dated February 15, 2005.
o It held that Administrative Circular No. 04-94 which required the filing of a certificate of non-forum
shopping applied to petitions for certification election. It also ruled that the Secretary of Labor erred in
granting the appeal despite the lack of proof of service on respondent. Lastly, it found that petitioner had
no legal standing to file the petition for certification election because its members were a mixture of
supervisory and rank-and-file employees.

ISSUE(S): (1) whether a certificate for non-forum shopping is required in a petition for certification election
(2) whether petitioners motion for reconsideration which was treated as an appeal by the Secretary of Labor should not
have been given due course for failure to attach proof of service on respondent and
(3) whether petitioner had the legal personality to file the petition for certification election.

HELD: (1) NO; a certificate of Non-Forum Shopping is NOT REQUIRED in a petition for Certification Election; (3)
Petitioner has LEGAK PERSONALITY to file the petition for certification election.
DISPOSITIVE PORTION: WHEREFORE, the petition is hereby GRANTED. Let the records of the case be remanded to
the office of origin, the Regional Office IV of the Department of Labor and Employment, for determination of the status of
petitioners legal personality. If petitioner is still a legitimate labor organization, then said office shall conduct a certification
election subject to the usual pre-election conference.
RATIO:
The requirement for a certificate of non-forum shopping refers to complaints, counter-claims, cross-claims,
petitions or applications where contending parties litigate their respective positions regarding the claim for relief of
the complainant, claimant, petitioner or applicant. A certification proceeding, even though initiated by a
petition, is not a litigation but an investigation of a non-adversarial and fact-finding character.
Such proceedings are not predicated upon an allegation of misconduct requiring
relief, but, rather, are merely of an inquisitorial nature. The Board's functions are not judicial in
nature, but are merely of an investigative character. The object of the proceedings is not the
decision of any alleged commission of wrongs nor asserted deprivation of rights but is merely the
determination of proper bargaining units and the ascertainment of the will and choice of the
employees in respect of the selection of a bargaining representative. The determination of the
proceedings does not entail the entry of remedial orders to redress rights, but culminates solely in
an official designation of bargaining units and an affirmation of the employees' expressed choice
of bargaining agent.[19](Emphasis supplied)

The same situation holds true for a petition for certification election. Under the omnibus rules implementing the
Labor Code as amended by D.O. No. 9, [22] it is supposed to be filed in the Regional Office which has jurisdiction
over the principal office of the employer or where the bargaining unit is principally situated. [23]
The rules further provide that where two or more petitions involving the same bargaining unit are filed in one
Regional Office, the same shall be automatically consolidated. [24] Hence, the filing of multiple suits and the
possibility of conflicting decisions will rarely happen in this proceeding and, if it does, will be easy to discover.
Notably, under the Labor Code and the rules pertaining to the form of the petition for certification election, there is
no requirement for a certificate of non-forum shopping either in D.O. No. 9, series of 1997 or in D.O. No. 40-03,
series of 2003 which replaced the former.[25]
Considering the nature of a petition for certification election and the rules governing it, we therefore hold that the
requirement for a certificate of non-forum shopping is inapplicable to such a petition.
LEGAL PERSONALITY OF PETITIONER

Petitioner argues that the erroneous inclusion of one supervisory employee in the union of rank-and-file employees
was not a ground to impugn its legitimacy as a legitimate labor organization which had the right to file a petition for
certification election.
LIKHA was granted legal personality as a federation under certificate of registration no. 92-1015-032-11638-FEDLC. Subsequently, petitioner as its local chapter was issued its charter certificate no. 2-01. [29] With certificates of
registration issued in their favor, they are clothed with legal personality as legitimate labor organizations:
Section 5. Effect of registration. The labor organization or workers association shall be deemed registered
and vested with legal personality on the date of issuance of its certificate of registration. Such legal
personality cannot thereafter be subject to collateral attack, but may be questioned only in an independent
petition for cancellation in accordance with these Rules. [30]

Section 3. Acquisition of legal personality by local chapter. - A local/chapter constituted in accordance with
Section 1 of this Rule shall acquire legal personality from the date of filing of the complete documents
enumerated therein. Upon compliance with all the documentary requirements, the Regional Office or
Bureau of Labor Relations shall issue in favor of the local/chapter a certificate indicating that it is included
in the roster of legitimate labor organizations.[31]

Such legal personality cannot thereafter be subject to collateral attack, but may be questioned only in an independent
petition for cancellation of certificate of registration.[32] Unless petitioners union registration is cancelled in independent
proceedings, it shall continue to have all the rights of a legitimate labor organization, including the right to petition for
certification election.
Furthermore, the grounds for dismissal of a petition for certification election based on the lack of legal personality of a
labor organization are the following: (a) petitioner is not listed by the Regional Office or the Bureau of Labor Relations
in its registry of legitimate labor organizations or (b) its legal personality has been revoked or cancelled with finality in
accordance with the rules.[33]

As mentioned, respondent filed a petition for cancellation of the registration of petitioner on December 14, 2002. In a
resolution dated April 14, 2003, petitioners charter certificate was revoked by the DOLE. But on May 6, 2003, petitioner
moved for the reconsideration of this resolution. Neither of the parties alleged that this resolution revoking petitioners
charter certificate had attained finality. However, in this petition, petitioner prayed that its charter certificate be
reinstated in the roster of active legitimate labor [organizations]. [34] This cannot be granted here.

To repeat, the proceedings on a petition for cancellation of registration are independent of those of a petition for
certification election. This case originated from the latter. If it is shown that petitioners legal personality had already
been revoked or cancelled with finality in accordance with the rules, then it is no longer a legitimate labor organization
with the right to petition for a certification election.

Supreme Courts FINAL NOTE: Respondent, as employer, had been the one opposing the holding of a certification
election among its rank-and-file employees. This should not be the case. We have already declared that, in
certification elections, the employer is a bystander; it has no right or material interest to assail the certification election

008 Chris Garments Corporation v. Hon. Patricia

A. Sto. Tomas and Chris Garments Workers Union
PTGWO
G.R. No. 167426 January 12, 2009

AUTHOR:

TOPIC:
PONENTE: Quisumbing J.
FACTS:
1. Petitioner assails the CA Resolutions which dismissed its petition for certiorari due to its failure to file a motion for
reconsideration from the SOLE Decision before filing the petition.
2. Petitioner Chris Garments Corporation is engaged in the manufacture and export of quality garments and apparel.
3. On February 8, 2002, respondent Chris Garments Workers Union PTGWO, Local Chapter No. 832, filed a petition
for certification election with the Med-Arbiter.
4. The union sought to represent petitioners rank-and-file employees not covered by its Collective Bargaining
Agreement (CBA) with the Samahan Ng Mga Manggagawa sa Chris Garments CorporationSolidarity of Union in
the Philippines for Empowerment and Reforms (SMCGC-SUPER), the certified bargaining agent of the rank-andfile employees.
5. The union alleged that it is a legitimate labor organization with a Certificate of Creation of Local/Chapter No.
PTGWO-832 issued by the Bureau of Labor Relations.
6. Petitioner moved to dismiss the petition.
- It argued that it has an existing CBA from July 1, 1999 to June 30, 2004 with SMCGC-SUPER which bars any
petition for certification election prior to the 60-day freedom period.
- It also contended that the union members are not its regular employees since they are direct employees of qualified
and independent contractors.
7. The union countered that its members are regular employees of petitioner since:
(1) they are engaged in activities necessary and desirable to its main business although they are called agency
employees;

(2) their length of service have spanned an average of four years;

(3) petitioner controlled their work attitude and performance; and
(4) petitioner paid their salaries. The union added that while there is an existing CBA between petitioner and
SMCGC-SUPER, there are other rank-and-file employees not covered by the CBA who seek representation for
collective bargaining purposes. It also contended that the contract bar rule does not apply.
[MED ARBITER]

The Med-Arbiter dismissed the petition.

The Med-Arbiter ruled that there was no employer-employee relationship between the parties since the union
itself admitted that its members are agency employees.
- The Med-Arbiter also held that even if the union members are considered direct employees of petitioner, the
petition for certification election will still fail due to the contract bar rule under Article 232 of the Labor
Code. Hence, a petition could only be filed during the 60-day freedom period of the CBA or from May 1,
2004 to June 30, 2004.
- Nevertheless, the Med-Arbiter ruled that the union may avail of the CBA benefits by paying agency fees to
SMCGC-SUPER.
[SOLE RULING]
- In a Resolution[10] dated December 27, 2002, the Secretary of Labor and Employment affirmed the decision of
the Med-Arbiter.
- She ruled that petitioner failed to prove that the union members are employees of qualified and independent
contractors with substantial capital or investment and added that petitioner had the right to control the
performance of the work of such employees.
- She also noted that the union members are garment workers who performed activities directly related to
petitioners main business.
- Thus, the union members may be considered part of the bargaining unit of petitioners rank-and-file
employees.
- However, she held that the petition could not be entertained except during the 60-day freedom period. She also
found no reason to split petitioners bargaining unit.
2nd Filing of PCE
- On May 16, 2003, the union filed a second petition for certification election. The Med-Arbiter dismissed the
petition on the ground that it was barred by a prior judgment.
- On appeal, the Secretary of Labor and Employment affirmed the decision of the Med-Arbiter.
3rd Filing of PCE
- On June 4, 2004, the union filed a third petition for certification election.
- The Med-Arbiter dismissed the petition on the grounds that no employer-employee relationship exists between
the parties and that the case was barred by a prior judgment.
- On appeal, the Secretary of Labor and Employment granted the petition in a Decision (Granted the appeal filed
by Chris Garments Workers Union PTGWO. Med Arbiter Ruling is Reversed and Set aside . Case
REMANDED to Regional ffoc of origin for the immediate conduct of certification election. Pursuant to
Section 13(e), Rule VIII of Department Order No. 40-03, the employer is hereby directed to submit to the
office of origin, within ten (10) days from receipt hereof, the certified list of its employees in the bargaining
unit or when necessary a copy of its payroll covering the same employees for the last three (3) months
preceding the issuance of this Decision.
[CA Ruling]
- Petitioner received a copy of the decision on January 25, 2005.
- On February 4, 2005, petitioner filed a petition for certiorari with the Court of Appeals which was dismissed
due to its failure to file a motion for reconsideration of the decision before filing the petition.

Incidentally, a certification election was conducted on June 21, 2005 among petitioners rank-and-file
employees where SMCGC-SUPER emerged as the winning union.
On January 20, 2006, the Med-Arbiter certified SMCGC-SUPER as the sole and exclusive bargaining agent of
all the rank-and-file employees of petitioner.

ISSUE:
(1) Is a motion for reconsideration necessary before a party can file a petition for certiorari from the decision of the
Secretary of Labor and Employment?
(2) Is the case barred by res judicata or conclusiveness of judgment? and
(3) Is there an employer-employee relationship between petitioner and the union members?
HELD:
(1) No. It is settled that the filing of a motion for reconsideration is a prerequisite to the filing of a special civil action for
certiorari to give the lower court the opportunity to correct itself. This rule, however, admits of exceptions, such as when a
motion for reconsideration would be useless under the circumstances
(2) No.
Instant case is DENIED due to lack of merit.

RATIO:

(1) It is settled that the filing of a motion for reconsideration is a prerequisite to the filing of a special civil action for
certiorari to give the lower court the opportunity to correct itself. [17] This rule, however, admits of exceptions, such
as when a motion for reconsideration would be useless under the circumstances.
- Under Department Order No. 40-03, Series of 2003, the decision of the Secretary of Labor and Employment
shall be final and executory after ten days from receipt thereof by the parties and that it shall not be subject of
a motion for reconsideration.
- In this case, the Decision dated January 18, 2005 of the Secretary of Labor and Employment was received by
petitioner on January 25, 2005. It would have become final and executory on February 4, 2005, the tenth day
from petitioners receipt of the decision. However, petitioner filed a petition for certiorari with the Court of
Appeals on even date. Clearly, petitioner availed of the proper remedy since Department Order No. 40-03
explicitly prohibits the filing of a motion for reconsideration. Such motion becomes dispensable and not at
all necessary.

(2) The doctrine of res judicata provides that a final judgment or decree on the merits by a court of competent
jurisdiction is conclusive of the rights of the parties or their privies in all later suits on points and matters
determined in the former suit.[20] The elements of res judicata are: (1) the judgment sought to bar the new action
must be final; (2) the decision must have been rendered by a court having jurisdiction over the subject matter and
the parties; (3) the disposition of the case must be a judgment on the merits; and (4) there must be as between the
first and second action, identity of parties, subject matter, and causes of action. [21]
- Res judicata has a dual aspect: first, bar by prior judgment which is provided in Rule 39, Section 47(b) [22] of
the 1997 Rules of Civil Procedure and second, conclusiveness of judgment which is provided in Section 47(c)
[23]
of the same Rule.
- In the instant case, there is no dispute as to the presence of the first three elements of res judicata. The
Resolution dated December 27, 2002 of the Secretary of Labor and Employment on the first petition for
certification election became final and executory. It was rendered on the merits and the Secretary of Labor and
Employment had jurisdiction over the case. Now, is the fourth element identity of parties, subject matter, and
causes of action between the first and third petitions for certification election present? We hold in the negative.
- The Secretary of Labor and Employment dismissed the first petition as it was filed outside the 60-day freedom
period. At that time therefore, the union has no cause of action since they are not yet legally allowed to challenge
openly and formally the status of SMCGC-SUPER as the exclusive bargaining representative of the bargaining
unit. Such dismissal, however, has no bearing in the instant case since the third petition for certification election
was filed well within the 60-day freedom period. Otherwise stated, there is no identity of causes of action to
speak of since in the first petition, the union has no cause of action while in the third, a cause of action
already exists for the union as they are now legally allowed to challenge the status of SMCGC-SUPER as

exclusive bargaining representative.

(3) The matter of employer-employee relationship has been resolved with finality by the Secretary of Labor and
Employment in the Resolution dated December 27, 2002. Since petitioner did not appeal this factual finding, then,
it may be considered as the final resolution of such issue. To reiterate, conclusiveness of judgment has the effect of
preclusion of issues
CASE LAW/ DOCTRINE:
[Motion for Reconsideration]
-

In this case, the Decision dated January 18, 2005 of the Secretary of Labor and Employment was received by petitioner
on January 25, 2005. It would have become final and executory on February 4, 2005, the tenth day from petitioners
receipt of the decision. However, petitioner filed a petition for certiorari with the Court of Appeals on even date. Clearly,
petitioner availed of the proper remedy since Department Order No. 40-03 explicitly prohibits the filing of a motion for
reconsideration. Such motion becomes dispensable and not at all necessary

[Cause of Action]

The Secretary of Labor and Employment dismissed the first petition as it was filed outside the 60-day freedom period. At
that time therefore, the union has no cause of action since they are not yet legally allowed to challenge openly and
formally the status of SMCGC-SUPER as the exclusive bargaining representative of the bargaining unit. Such dismissal,
however, has no bearing in the instant case since the third petition for certification election was filed well within the 60day freedom period. Otherwise stated, there is no identity of causes of action to speak of since in the first petition, the
union has no cause of action while in the third, a cause of action already exists for the union as they are now legally
allowed to challenge the status of SMCGC-SUPER as exclusive bargaining representative

[Conclusiveness of Judgment]
-

The matter of employer-employee relationship has been resolved with finality by the Secretary of Labor and Employment
in the Resolution dated December 27, 2002. Since petitioner did not appeal this factual finding, then, it may be considered
as the final resolution of such issue. To reiterate, conclusiveness of judgment has the effect of preclusion of issues

009 NUWHRAIN-Manila Pavilion Hotel Chapter v.

Secretary
G.R. No. 181531July 31, 2009
TOPIC:
PONENTE: Carpio Morales J.

AUTHOR:

FACTS:
1. National Union of Workers in Hotels, Restaurants and Allied Industries Manila Pavilion Hotel Chapter
(NUWHRAIN-MPHC), herein petitioner, seeks the reversal of the CA Decision and of the Secretary of Labor and
Employments Resolution which affirmed the Med-Arbiters Resolutions
2. A certification election was conducted on June 16, 2006 among the rank-and-file employees of respondent Holiday
Inn Manila Pavilion Hotel (the Hotel) with the following results:
EMPLOYEES IN VOTERS LIST = 353
TOTAL VOTES CAST = 346
NUWHRAIN-MPHC = 151
HIMPHLU = 169
NO UNION = 1
SPOILED = 3
SEGREGATED = 22

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

(Gatbonton), a probationary employee, was counted.

4. By Order of August 22, 2006, Med-Arbiter Calabocal ruled for the opening of 17 out of the 22 segregated votes,
specially those cast by the 11 dismissed employees and those cast by the six supposedly supervisory employees of
the Hotel.
5. Petitioner, which garnered 151 votes, appealed to the Secretary of Labor and Employment (SOLE), arguing that
the votes of the probationary employees should have been opened considering that probationary employee
Gatbontons vote was tallied. And petitioner averred that respondent HIMPHLU, which garnered 169 votes,
should not be immediately certified as the bargaining agent, as the opening of the 17 segregated ballots would
push the number of valid votes cast to 338 (151 + 169 + 1 + 17), hence, the 169 votes which HIMPHLU garnered
would be one vote short of the majority which would then become 169.
SOLE RULING:

By the assailed Resolution, (SOLE), through then Acting Secretary Luzviminda Padilla, affirmed the Med-Arbiters Order. It held that
pursuant to Section 5, Rule IX of the Omnibus Rules Implementing the Labor Code on exclusion and inclusion of voters in a
certification election, the probationary employees cannot vote, as at the time the Med-Arbiter issued the Order granting the petition for the
conduct of the certification election, the six probationary employees were not yet hired, hence, they could not vote.
It further held that, with respect to the votes cast by the 11 dismissed employees, they could be considered since their dismissal was still
pending appeal.
As to the votes cast by the six alleged supervisory employees, the SOLE held that their votes should be counted since their promotion took
effect months after the issuance of the above-said August 9, 2005 Order of the Med-Arbiter, hence, they were still considered as rank-andfile.
Respecting Gatbontons vote, the SOLE ruled that the same could be the basis to include the votes of the other probationary employees, as
the records show that during the pre-election conferences, there was no disagreement as to his inclusion in the voters list, and neither was it
timely challenged when he voted on election day, hence, the Election Officer could not then segregate his vote.
The SOLE further ruled that even if the 17 votes of the dismissed and supervisory employees were to be counted and presumed to be in
favor of petitioner, still, the same would not suffice to overturn the 169 votes garnered by HIMPHLU.
SOLE concluded that the certification of HIMPHLU as the exclusive bargaining agent was proper.
Petitioners motion for reconsideration having been denied by the SOLE by Resolution, it appealed to the Court of Appeals.

CA Ruling:
It affirmed the ruling of the SOLE. It held that, contrary to petitioners assertion, the ruling in Airtime Specialist, Inc. v. Ferrer Calleja stating
that in a certification election, all rank-and-file employees in the appropriate bargaining unit, whether probationary or permanent, are
entitled to vote, is inapplicable to the case at bar. For, the appellate court continued, the six probationary employees were not yet employed
by the Hotel at the time the August 9, 2005 Order granting the certification election was issued. It thus held that Airtime Specialist applies
only to situations wherein the probationary employees were already employed as of the date of filing of the petition for certification
election.
Respecting Gatbontons vote, the appellate court upheld the SOLEs finding that since it was not properly challenged, its inclusion could no
longer be questioned, nor could it be made the basis to include the votes of the six probationary employees.
brushed aside petitioners contention that the opening of the 17 segregated votes would materially affect the results of the election as there
would be the likelihood of a run-off election in the event none of the contending unions receive a majority of the valid votes cast.
It held that the majority contemplated in deciding which of the unions in a certification election is the winner refers to the majority
of valid votes cast, not the simple majority of votes cast, hence, the SOLE was correct in ruling that even if the 17 votes were in favor of
petitioner, it would still be insufficient to overturn the results of the certification election.

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

Inclusion of Jose Gatbontons vote but excluding the vote of the six other probationary employees violated the principle of equal protection
and is not in accord with the ruling in Airtime Specialists, Inc. v. Ferrer-Calleja;
The time of reckoning for purposes of determining when the probationary employees can be allowed to vote is not August 9, 2005 the date
of issuance by Med-Arbiter Calabocal of the Order granting the conduct of certification elections, but March 10, 2006 the date the SOLE
Order affirmed the Med-Arbiters Order.
Even if the votes of the six probationary employees were included, still, HIMPHLU could not be considered as having obtained a majority
of the valid votes cast as the opening of the 17 ballots would increase the number of valid votes from 321 to 338, hence, for HIMPHLU to
be certified as the exclusive bargaining agent, it should have garnered at least 170, not 169, votes.
Petitioner justifies its not challenging Gatbontons vote because it was precisely its position that probationary employees should be allowed
to vote. It thus avers that justice and equity dictate that since Gatbontons vote was counted, then the votes of the 6 other probationary
employees should likewise be included in the tally.
Petitioner goes on to posit that the word order in Section 5, Rule 9 of Department Order No. 40-03 reading [A]ll employees who are
members of the appropriate bargaining unit sought to be represented by the petitioner at the time of the issuance of the order granting the
conduct of certification election shall be allowed to vote refers to an order which has already become final and executory, in this case the
March 10, 2002 Order of the SOLE.

Petitioner thus concludes that if March 10, 2006 is the reckoning date for the determination of the eligibility of workers, then all the
segregated votes cast by the probationary employees should be opened and counted, they having already been working at the Hotel on such
date.
Respecting the certification of HIMPHLU as the exclusive bargaining agent, petitioner argues that the same was not proper for if the 17
votes would be counted as valid, then the total number of votes cast would have been 338, not 321, hence, the majority would be 170; as
such, the votes garnered by HIMPHLU is one vote short of the majority for it to be certified as the exclusive bargaining agent.

ISSUE:

(1) whether employees on probationary status at the time of the certification elections should be allowed to vote, and
(2) whether HIMPHLU was able to obtain the required majority for it to be certified as the exclusive bargaining agent.
HELD:

(1) The Court rules in the affirmative.

(2) As to whether HIMPHLU should be certified as the exclusive bargaining agent, the Court rules in the negative. It
is well-settled that under the so-called double majority rule, for there to be a valid certification election, majority
of the bargaining unit must have voted AND the winning union must have garnered majority of the valid votes
cast.
RATIO:
(1) First Issue:
The inclusion of Gatbontons vote was proper not because it was not questioned but because probationary
employees have the right to vote in a certification election. The votes of the six other probationary
employees should thus also have been counted. As Airtime Specialists, Inc. v. Ferrer-Calleja holds:
In a certification election, all rank and file employees in the appropriate bargaining unit, whether probationary or permanent are entitled to vote. This
principle is clearly stated in Art. 255 of the Labor Code which states that the labor organization designated or selected by the majority of the
employees in an appropriate bargaining unit shall be the exclusive representative of the employees in such unit for purposes of collective bargaining.
Collective bargaining covers all aspects of the employment relation and the resultant CBA negotiated by the certified union binds all employees in the
bargaining unit. Hence, all rank and file employees, probationary or permanent, have a substantial interest in the selection of the bargaining
representative. The Code makes no distinction as to their employment status as basis for eligibility in supporting the petition for certification election.
The law refers to all the employees in the bargaining unit. All they need to be eligible to support the petition is to belong to the bargaining unit.

Rule II, Sec. 2 of Department Order No. 40-03, series of 2003, which amended Rule XI of the Omnibus
Rules Implementing the Labor Code
All other workers, including ambulant, intermittent and other workers, the self-employed, rural workers
and those without any definite employers may form labor organizations for their mutual aid and protection
and other legitimate purposes except collective bargaining. (Emphasis supplied)
The provision in the CBA disqualifying probationary employees from voting cannot override the
Constitutionally-protected right of workers to self-organization, as well as the provisions of the Labor
Code and its Implementing Rules on certification elections and jurisprudence thereon.
A law is read into, and forms part of, a contract. Provisions in a contract are valid only if they are not
contrary to law, morals, good customs, public order or public policy
Rule XI, Sec. 5 of D.O. 40-03, on which the SOLE and the appellate court rely to support their position
that probationary employees hired after the issuance of the Order granting the petition for the conduct of
certification election must be excluded, should not be read in isolation and must be harmonized with the
other provisions of D.O. Rule XI, Sec. 5 of D.O. 40-03,
Prescinding from the principle that all employees are, from the first day of their employment, eligible for
membership in a labor organization, it is evident that the period of reckoning in determining who shall be
included in the list of eligible voters is, in cases where a timely appeal has been filed from the Order of the
Med-Arbiter, the date when the Order of the Secretary of Labor and Employment, whether affirming or
denying the appeal, becomes final and executory.
The filing of an appeal to the SOLE from the Med-Arbiters Order stays its execution, in accordance with
Sec. 21, and rationally, the Med-Arbiter cannot direct the employer to furnish him/her with the list of
eligible voters pending the resolution of the appeal.
During the pendency of the appeal, the employer may hire additional employees. To exclude the
employees hired after the issuance of the Med-Arbiters Order but before the appeal has been resolved
would violate the guarantee that every employee has the right to be part of a labor organization from the

first day of their service.

In the present case, records show that the probationary employees, including Gatbonton, were included in
the list of employees in the bargaining unit submitted by the Hotel on May 25, 2006 in compliance with
the directive of the Med-Arbiter after the appeal and subsequent motion for reconsideration have been
denied by the SOLE, rendering the Med-Arbiters Order final and executory 10 days after the March 22,
2007 Resolution (denying the motion for reconsideration of the January 22 Order denying the appeal), and
rightly so. Because, for purposes of self-organization, those employees are, in light of the discussion
above, deemed eligible to vote.
A certification election is the process of determining the sole and exclusive bargaining agent of the
employees in an appropriate bargaining unit for purposes of collective bargaining. Collective bargaining,
refers to the negotiated contract between a legitimate labor organization and the employer concerning
wages, hours of work and all other terms and conditions of employment in a bargaining unit.
Even if the Implementing Rules gives the SOLE 20 days to decide the appeal from the Order of the MedArbiter, experience shows that it sometimes takes months to be resolved. To rule then that only those
employees hired as of the date of the issuance of the Med-Arbiters Order are qualified to vote would
effectively disenfranchise employees hired during the pendency of the appeal. More importantly,
reckoning the date of the issuance of the Med-Arbiters Order as the cut-off date would render inutile the
remedy of appeal to the SOLE.
But while the Court rules that the votes of all the probationary employees should be included, under the
particular circumstances of this case and the period of time which it took for the appeal to be decided, the
votes of the six supervisory employees must be excluded because at the time the certification elections
was conducted, they had ceased to be part of the rank and file, their promotion having taken effect two
months before the election.

(2) Second Issue

Prescinding from the Courts ruling that all the probationary employees votes should be deemed valid votes while
that of the supervisory employees should be excluded, it follows that the number of valid votes cast would increase
from 321 to 337.
Under Art. 256 of the Labor Code, the union obtaining the majority of the valid votes cast by the eligible voters
shall be certified as the sole and exclusive bargaining agent of all the workers in the appropriate bargaining
unit. This majority is 50% + 1. Hence, 50% of 337 is 168.5 + 1 or at least 170.
HIMPHLU obtained 169 while petitioner received 151 votes. Clearly, HIMPHLU was not able to obtain a majority
vote. The position of both the SOLE and the appellate court that the opening of the 17 segregated ballots will not
materially affect the outcome of the certification election as for, so they contend, even if such member were all in
favor of petitioner, still, HIMPHLU would win, is thus untenable.
It bears reiteration that the true importance of ascertaining the number of valid votes cast is for it to serve as basis
for computing the required majority, and not just to determine which union won the elections. The opening of the
segregated but valid votes has thus become material. To be sure, the conduct of a certification election has a
two-fold objective: to determine the appropriate bargaining unit and to ascertain the majority
representation of the bargaining representative, if the employees desire to be represented at all by anyone. It
is not simply the determination of who between two or more contending unions won, but whether it effectively
ascertains the will of the members of the bargaining unit as to whether they want to be represented and which
union they want to represent them.
Having declared that no choice in the certification election conducted obtained the required majority, it follows
that a run-off election must be held to determine which between HIMPHLU and petitioner should represent the
rank-and-file employees.
A run-off election refers to an election between the labor unions receiving the two (2) highest number of votes in
a certification or consent election with three (3) or more choices, where such a certified or consent election results
in none of the three (3) or more choices receiving the majority of the valid votes cast; provided that the total
number of votes for all contending unions is at least fifty percent (50%) of the number of votes cast. With 346
votes cast, 337 of which are now deemed valid and HIMPHLU having only garnered 169 and petitioner having
obtained 151 and the choice NO UNION receiving 1 vote, then the holding of a run-off election between
HIMPHLU and petitioner is in order.

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

Probationary employees can join a union and can vote in a CE

Any employee, whether employed for a definite period or not, shall beginning on the first day of his/her service, be eligible for membership
in any labor organization. In a certification election for the bargaining unit of rank and file employees, all rank and file employees, whether
probationary or permanent are entitled to vote. As long as probationary employees belong to the defined bargaining unit, they are eligible to
support the petition for certification election.

DISSENTING/CONCURRING OPINION(S):
AUTHOR:
004 Eagle Ridge Golf & Country Club v. CA
NOTES: (if applicable)
G.R. No. 178989 March 18, 2010
TOPIC:
PONENTE: VELASCO, JR., J.:
NATURE: petition for certiorari
FACTS:
1. Eagle Ridge = corporation engaged in maintaining golf courses.
a. At the end of 2005 it had around 112 rank-and-file employees.
2. The instant case is an off-shot of the desire of a number of these employees to organize themselves as a legitimate
labor union and their employers opposition to their aspiration.
3. Dec 6, 2005 - at least 20% of Eagle Ridges rank-and-file employees
a. (percentage threshold required in Labor Code for union registration)
b. they had a meeting where they organized themselves into an independent labor union, named Eagle Ridge
Employees Union (EREU or Union), elected officers, and ratified their constitution & by-laws.
4. Dec 19 - EREU formally applied for registration and filed BLR Reg. Form No. I-LO, s. 1998 before the DOLE Regional
Office IV (RO IV).
a. In time, DOLE RO IV granted the application and issued EREU Registration Certificate (Reg. Cert.)
5. The EREU then filed a petition for certification election in Eagle Ridge Golf & Country Club.
a. Eagle Ridge opposed this petition, followed by its filing of a petition for the cancellation of Reg. Cert.
b. Eagle Ridges petition ascribed misrepresentation, false statement, or fraud to EREU in connection with the
adoption of its constitution and by-laws, the numerical composition of the Union, and the election of its
officers.
6. Eagle Ridge alleged
a.
b.
c.

EREU declared in its application for registration having 30 members, when the minutes of its Dec 6, organizational
meeting showed it only had 26 members.
The misrepresentation = discrepancy between the certification issued by the Union secretary and president that 25
members actually ratified the constitution and by-laws, 26 signed the documents, making one a forgery.
5 employees who attended the organizational meeting had manifested the desire to withdraw from the union.
i. executed individual affidavits or Sinumpaang Salaysay on Feb 15, attesting that they arrived late to the meeting
which they claimed to be drinking spree; they did not know that the documents they signed on that occasion
pertained to the organization of a union; and that they now wanted to be excluded from the Union.
1. The withdrawal of the 5, Eagle Ridge maintained, effectively reduced the union membership to 20 or
21, either of which is below the mandatory minimum 20% out of 112 (should be 22-23).

EREU argued
d.
e.
f.
g.

the petition for cancellation was procedurally deficient

i. no certification against forum shopping and that the same was verified by one not duly authorized by Eagle
Ridges board;
the alleged discrepancies are not real for before filing of its application on Dec 19, 4 additional employees joined the
union on Dec 8, raising the union membership to 30.
the understatement by one member who ratified the constitution and by-laws was a typographical error, which does not
make it either grave or malicious warranting the cancellation of the unions registration;
the retraction of 5 union members should not be given any credence for the reasons that:
i. (a) the sworn statements of the five retracting union members sans other affirmative evidence presented hardly
qualify as clear and credible evidence considering the joint affidavits of the other members attesting to the
orderly conduct of the organizational meeting;
ii. (b) the retracting members did not deny signing the union documents;
iii. (c) following, Belyca Corporation v. Ferrer-Calleja and Oriental Tin Can Labor Union v. Secretary of Labor and
Employment, it can be presumed that duress, coercion or valuable consideration was brought to bear on the
retracting members; and
iv. (d) citing La Suerte Cigar and Cigarette Factory v. Director of Bureau of Labor Relations,
Belyca Corporation and Oriental Tin Can Labor Union, where the Court ruled that once the required percentage
requirement has been reached, the employees withdrawal from union membership taking place after the filing
of the petition for certification election will not affect the petition, it asserted the applicability of said ruling as
the petition for certification election was filed on Jan 10, 2006 or long before Feb 15, 2006 when the affidavits of
retraction were executed by the five union members, thus contending that the retractions do not affect nor be
deemed compelling enough to cancel its certificate of registration.

7.

The Union presented the duly accomplished union membership forms dated Dec 8, 2005 of 4 additional members.
a. And to rebut the allegations in the affidavits of retraction of the 5 union members, it presented the SamaSamang Sinumpaang Salaysay dated March 20, 2006 of 8 union members; another Sama-Samang
Sinumpaang Salaysay, also bearing date March 20, of 4 other union members; and the Sworn Statement
dated March 16, 2006 of the Unions legal counsel, Atty. Domingo T. Aonuevo. These affidavits attested to
the orderly and proper proceedings of the organizational meeting on December 6, 2005.
8. Eagle Ridge
a. asserted further that the 4 additional members were fraudulently admitted into the Union.
b. claimed, the applications of the 4 neither complied with the requirements under Section 2, Art. IV of the
unions constitution and by-laws nor were they shown to have been duly received, issued receipts for
admission fees, processed with recommendation for approval, and approved by the union president.
c. presented another Sinumpaang Salaysay of retraction dated March 15, 2006 of another union member.
i. The membership of EREU had thus been further reduced to only 19 or 20.
ii. This same member was listed in the first Sama-Samang Sinumpaang Salaysay presented by
the Union but did not sign it.
DOLE Regional Dirsctor
9. Decided in favor of Eagle Ridge, and granted its petition to cancel the Reg. Cert. being granted and EREU being
delisted from the roster of legitimate labor organizations.
BLR (on the unions appeal)
10. Initially, headed by the OIC, affirmed the appealed order.; MR granted.
a. In finding for the Union, the BLR Director eschewed procedural technicalities.
b. found as without basis allegations of misrepresentation or fraud as ground for cancellation of EREUs
registration.
CA 11. dismissed the petition for certiorari.; MR - denied
ISSUE(S): WON there was fraud in the application to merit the cancellation of the EREUs registration
HELD: NO.
DISPOSITIVE PORTION: WHEREFORE, premises considered, we DISMISS the instant petition for lack of merit.
RATIO:
Procedural Issue: Lack of Authority
1. Certiorari is an extraordinary, prerogative remedy and is never issued as a matter of right. Accordingly, the party
who seeks to avail of it must strictly observe the rules laid down by law.
2. Petitions for certiorari under Rule 65 of the Rules of Court require a sworn certification of non-forum shopping.
3. Evidently, the Rules requires the petitioner, not his counsel, to sign under oath the requisite certification against
non-forum shopping. Such certification is a peculiar personal representation on the part of the principal party, an
assurance to the court that there are no other pending cases involving basically the same parties, issues, and
cause of action.
4. In the instant case, the sworn verification and certification of non-forum shopping in the petition for certiorari of
Eagle Ridge filed before the CA carried the signature of its counsel without the requisite authority.
a. Eagle Ridge tried to address its faux pas by submitting its board secretarys Certificate dated May 15, 2007,
attesting to the issuance on May 10, 2007 of Board Resolution No. ERGCCI 07/III-01 that authorized its
counsel of record, Atty. Luna C. Piezas, to represent it before the appellate court.
5. The CA, however, rejected Eagle Ridges virtual plea for the relaxation of the rules on the signing of the verification
and certification against forum shopping, observing that the board resolution adverted to was approved after Atty.
Piezas has signed and filed for Eagle Ridge the petition for certiorari.
6. The appellate courts assailed action is in no way tainted with grave abuse of discretion, as Eagle Ridge would have
this Court believed. Indeed, a certification of non-forum shopping signed by counsel without the proper
authorization is defective and constitutes a valid cause for dismissal of the petition.
7. As with most rules of procedure, however, exceptions are invariably recognized and the relaxation of procedural
rules on review has been effected to obviate jeopardizing substantial justice.
8. To us, Eagle Ridge has not satisfactorily explained its failure to comply. It may be true, as Eagle Ridge urges, that its
counsels authority to represent the corporation was never questioned before the DOLE regional office and agency.
But EREUs misstep could hardly lend Eagle Ridge comfort. And obviously, Eagle Ridge and its counsel erred in
equating the latters representation as legal counsel with the authority to sign the verification and the certificate of
non-forum shopping in the formers behalf. We note that the authority to represent a client before a court or quasijudicial agency does not require an authorizing board resolution, as the counsel-client relationship is presumed by
the counsels representation by the filing of a pleading on behalf of the client. In filing a pleading, the counsel
affixes his signature on it, but it is the client who must sign the verification and the certification against forum
shopping, save when a board resolution authorizes the former to sign so.
9. It is entirely a different matter for the counsel to sign the verification and the certificate of non-forum
shopping. The attestation or certification in either verification or certification of non-forum shopping requires the
act of the principal party. As earlier indicated, Sec. 3 of Rule 46 exacts this requirement; so does the first paragraph
of Sec. 5 of Rule 7.
10. It is, thus, clear that the counsel is not the proper person to sign the certification against forum shopping. If, for any
reason, the principal party cannot sign the petition, the one signing on his behalf must have been duly authorized.
a. In addition, Eagle Ridge maintains that the submitted board resolution, albeit passed after the filing of the
petition was filed, should be treated as a ratificatory medium of the counsels act of signing the sworn
certification of non-forum shopping.

11. We are not inclined to grant the desired liberality owing to Eagle Ridges failure to sufficiently explain its failure to
follow the clear rules.
12. If for the foregoing considerations alone, the Court could very well dismiss the instant petition. Nevertheless, the
Court will explore the merits of the instant case to obviate the inequity that might result from the outright denial of
the petition.
Substantive Issue: No Fraud in the Application
13. Eagle Ridge cites the grounds provided under Art. 239(a) and (c) of the Labor Code for its petition for cancellation
of the EREUs registration.
14. On the other hand, the Union asserts bona fide compliance with the registration requirements under Art. 234 of the
Code, explaining the seeming discrepancies between the number of employees who participated in the
organizational meeting and the total number of union members at the time it filed its registration, as well as the
typographical error in its certification which understated by one the number of union members who ratified the
unions constitution and by-laws.
15. A scrutiny of the records fails to show any misrepresentation, false statement, or fraud committed by EREU to merit
cancellation of its registration.
a.

b.

c.

d.

e.

f.

First. The Union submitted the required documents attesting to the facts of the organizational meeting on December 6,
2005, the election of its officers, and the adoption of the Unions constitution and by-laws. It submitted before the DOLE
Regional Office with its Application for Registration and the duly filled out BLR Reg. Form No. I-LO, s. 1998, the following
documents, to wit:
1. the minutes of its organizational meeting held on December 6, 2005 showing 26 founding members
who elected its union officers by secret ballot;
2. the list of rank-and-file employees of Eagle Ridge who attended the organizational meeting and the
election of officers with their individual signatures;
3. the list of rank-and-file employees who ratified the unions constitution and by-laws showing the very
same list as those who attended the organizational meeting and the election of officers with their
individual signatures except the addition of four employees without their signatures, i.e.,
Cherry Labajo, Grace Pollo, Annalyn Poniente and Rowel Dolendo;
4. the unions constitution and by-laws as approved on December 6, 2005;
5. the list of officers and their addresses;
6. the list of union members showing a total of 30 members; and
7. the Sworn Statement of the unions elected president and secretary. All the foregoing documents except
the sworn statement of the president and the secretary were accompanied by Certifications by the
union secretary duly attested to by the union president.
Second. The members of the EREU totaled 30 employees when it applied on December 19, 2005 for registration.
The Union thereby complied with the mandatory minimum 20% membership requirement under Art. 234(c). Of note is
the undisputed number of 112 rank-and-file employees in Eagle Ridge, as shown in the Sworn Statement of the Union
president and secretary and confirmed by Eagle Ridge in its petition for cancellation.
Third. The Union has sufficiently explained the discrepancy between the number of those who attended the
organizational meeting showing 26 employees and the list of union members showing 30. The difference is due to the
additional four members admitted two days after the organizational meeting as attested to by their duly accomplished
Union Membership forms. Consequently, the total number of union members, as of December 8, 2005, was 30, which
was truthfully indicated in its application for registration on December 19, 2005.
i. As aptly found by the BLR Director, the Union already had 30 members when it applied for registration, for the
admission of new members is neither prohibited by law nor was it concealed in its application for
registration. Eagle Ridges contention is flawed when it equated the requirements under Art. 234(b) and (c) of
the Labor Code. Par. (b) clearly required the submission of the minutes of the organizational meetings and the
list of workers who participated in the meetings, while par. (c) merely required the list of names of all the union
members comprising at least 20% of the bargaining unit. The fact that EREU had 30 members when it applied
for registration on December 19, 2005 while only 26 actually participated in the organizational meeting is borne
by the records.
Fourth. In its futile attempt to clutch at straws, Eagle Ridge assails the inclusion of the additional four members
allegedly for not complying with what it termed as the sine qua non requirements for union member applications under
the Unions constitution and by-laws, specifically Sec. 2 of Art. IV. We are not persuaded. Any seeming infirmity in the
application and admission of union membership, most especially in cases of independent labor unions, must be viewed in
favor of valid membership.
i. The right of employees to self-organization and membership in a union must not be trammeled by undue
difficulties. In this case, when the Union said that the four employee-applicants had been admitted as union
members, it is enough to establish the fact of admission of the four that they had duly signified such desire by
accomplishing the membership form. The fact, as pointed out by Eagle Ridge, that the Union, owing to its scant
membership, had not yet fully organized its different committees evidently shows the direct and valid
acceptance of the four employee applicants rather than deter their admissionas erroneously asserted by Eagle
Ridge.
Fifth. The difference between the number of 26 members, who ratified the Unions constitution and by-laws, and the 25
members shown in the certification of the Union secretary as having ratified it, is, as shown by the factual antecedents, a
typographical error. It was an insignificant mistake committed without malice or prevarication. The list of those who
attended the organizational meeting shows 26 members, as evidenced by the signatures beside their handwritten
names. Thus, the certifications understatement by one member, while not factual, was clearly an error, but neither a
misleading one nor a misrepresentation of what had actually happened.
Sixth. In the more meaty issue of the affidavits of retraction executed by six union members, we hold that the probative
value of these affidavits cannot overcome those of the supporting affidavits of 12 union members and their counsel as to
the proceedings and the conduct of the organizational meeting on December 6, 2005. The DOLE Regional Director and
the BLR OIC Director obviously erred in giving credence to the affidavits of retraction, but not according the same
treatment to the supporting affidavits.
i. The six affiants of the affidavits of retraction were not presented in a hearing before the Hearing Officer (DOLE
Regional Director), as required under the Rules Implementing Book V of the Labor Code covering Labor

g.

h.

Relations. Said Rules is embodied in Department Order No. (DO) 40-03 which was issued on February 17, 2003
and took effect on March 15, 2003 to replace DO 9 of 1997. Sec. 11, Rule XI of DO 40-03 specifically requires:
1. Section 11. Affirmation of testimonial evidence. Any affidavit submitted by a party to prove
his/her claims or defenses shall be re-affirmed by the presentation of the affiant before
the Med-Arbiter or Hearing Officer, as the case may be. Any affidavit submitted without the reaffirmation of the affiant during a scheduled hearing shall not be admitted in evidence,
except when the party against whom the affidavit is being offered admits all allegations therein and
waives the examination of the affiant.
ii. It is settled that affidavits partake the nature of hearsay evidence, since they are not generally prepared by the
affiant but by another who uses his own language in writing the affiants statement, which may thus be either
omitted or misunderstood by the one writing them. The above rule affirms the general requirement in
adversarial proceedings for the examination of the affiant by the party against whom the affidavit is offered. In
the instant case, it is required for affiants to re-affirm the contents of their affidavits during the hearing of the
instant case for them to be examined by the opposing party, i.e., the Union.
iii. For their non-presentation and consonant to the above-quoted rule, the six affidavits of retraction are
inadmissible as evidence against the Union in the instant case. Moreover, the affidavit and joint-affidavits
presented by the Union before the DOLE Regional Director were duly re-affirmed in the hearing of March 20,
2006 by the affiants. Thus, a reversible error was committed by the DOLE Regional Director and the BLR OIC
Director in giving credence to the inadmissible affidavits of retraction presented by Eagle Ridge while not giving
credence to the duly re-affirmed affidavits presented by the Union.
iv. Evidently, the allegations in the six affidavits of retraction have no probative value and at the very least cannot
outweigh the rebutting attestations of the duly re-affirmed affidavits presented by the Union.
Seventh. The fact that six union members, indeed, expressed the desire to withdraw their membership through their
affidavits of retraction will not cause the cancellation of registration on the ground of violation of Art. 234(c) of the Labor
Code requiring the mandatory minimum 20% membership of rank-and-file employees in the employees union.
i. The six retracting union members clearly severed and withdrew their union membership. The query is whether
such separation from the Union can detrimentally affect the registration of the Union.
ii. We answer in the negative.
iii. Twenty percent (20%) of 112 rank-and-file employees in Eagle Ridge would require a union membership of at
least 22 employees (112 x 205 = 22.4). When the EREU filed its application for registration on December 19,
2005, there were clearly 30 union members. Thus, when the certificate of registration was granted, there is no
dispute that the Union complied with the mandatory 20% membership requirement.
iv. Besides, it cannot be argued that the six affidavits of retraction retroact to the time of the application of
registration or even way back to the organizational meeting. Prior to their withdrawal, the six employees in
question were bona fide union members. More so, they never disputed affixing their signatures beside their
handwritten names during the organizational meetings. While they alleged that they did not know what they
were signing, it bears stressing that their affidavits of retraction were not re-affirmed during the hearings of the
instant case rendering them of little, if any, evidentiary value.
v. With the withdrawal of six union members, there is still compliance with the mandatory membership
requirement under Art. 234(c), for the remaining 24 union members constitute more than the 20% membership
requirement of 22 employees.
vi. Eagle Ridge further argues that the list of union members includes a supervisory employee. This is a factual
issue which had not been raised at the first instance before the DOLE Regional Director and cannot be
appreciated in this proceeding. To be sure, Eagle Ridge knows well who among its personnel belongs or does not
belong to the supervisory group. Obviously, its attempt to raise the issue referred to is no more than an
afterthought and ought to be rejected.
Eighth. Finally, it may not be amiss to note, given the factual antecedents of the instant case, that Eagle Ridge has
apparently resorted to filing the instant case for cancellation of the Unions certificate of registration to bar the holding of
a certification election. This can be gleaned from the fact that the grounds it raised in its opposition to the petition for
certification election are basically the same grounds it resorted to in the instant case for cancellation of EREUs certificate
of registration. This amounts to a clear circumvention of the law and cannot be countenanced.

16. Evidently, as the Union persuasively argues, the withdrawal of six member-employees from the Union will affect
neither the Unions registration nor its petition for certification election, as their affidavits of retraction were
executed after the Unions petition for certification election had been filed. The initial five affidavits of retraction
were executed on February 15, 2006; the sixth, on March 15, 2006. Indisputably, all six were executed way after
the filing of the petition for certification election on January 10, 2006.
17. In Eastland Manufacturing Company, Inc. v. Noriel - even if there were less than 30% [the required percentage of
minimum membership then] of the employees asking for a certification election, that of itself would not be a bar to
respondent Director ordering such an election provided, of course, there is no grave abuse of discretion.
a.

Citing Philippine Association of Free Labor Unions v. Bureau of Labor Relations, the Court emphasized that a certification
election is the most appropriate procedure for the desired goal of ascertaining which of the competing organizations
should represent the employees for the purpose of collective bargaining.

18. Indeed, where the company seeks the cancellation of a unions registration during the pendency of a petition for
certification election, the same grounds invoked to cancel should not be used to bar the certification election. A
certification election is the most expeditious and fairest mode of ascertaining the will of a collective bargaining unit
as to its choice of its exclusive representative. It is the fairest and most effective way of determining which labor
organization can truly represent the working force. It is a fundamental postulate that the will of the majority, if
given expression in an honest election with freedom on the part of the voters to make their choice, is controlling.
19. S.S. Ventures International, Inc. v. S.S. Ventures Labor Union (SSVLU) (on the effect of the withdrawal from union
membership right before or after the filing of a petition for certification election) a. We are not persuaded. As aptly noted by both the BLR and CA, these mostly undated written statements submitted by
Ventures on March 20, 2001, or seven months after it filed its petition for cancellation of registration, partake of the
nature of withdrawal of union membership executed after the Unions filing of a petition for certification election on March
21, 2000. We have in precedent cases said that the employees withdrawal from a labor union made before
the filing of the petition for certification election is presumed voluntary, while withdrawal after the filing of

such petition is considered to be involuntary and does not affect the same. Now then, if a withdrawal from
union membership done after a petition for certification election has been filed does not vitiate such
petition, is it not but logical to assume that such withdrawal cannot work to nullify the registration of the
union? Upon this light, the Court is inclined to agree with the CA that the BLR did not abuse its discretion nor gravely err
when it concluded that the affidavits of retraction of the 82 members had no evidentiary weight.
Before their amendment by Republic Act No. 9481 on June 15, 2007, the then governing Art. 234 (on the requirements of registration
of a labor union) and Art. 239 (on the grounds for cancellation of union registration) of the Labor Code respectively provided as
follows:
ART. 234. REQUIREMENTS OF REGISTRATION. Any applicant labor organization, association or group of unions or workers
shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor
organizations upon issuance of the certificate of registration based on the following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the
organizational meetings and the list of workers who participated in such meetings;
(c) The names of all its members comprising at least twenty percent (20%) of all the employees in the
bargaining unit where it seeks to operate;
xxxx
(e) Four copies (4) of the constitution and by-laws of the applicant union, minutes of its adoption or
ratification and the list of the members who participated in it.
xxxx
ART. 239. GROUNDS FOR CANCELLATION OF UNION REGISTRATION. The following shall constitute grounds for cancellation of
union registration:
Misrepresentation, false statements or fraud in connection with the adoption or ratification of the
constitution and by-laws or amendments thereto, theminutes of ratification, and the list of members
who took part in the ratification;
xxxx
(c) Misrepresentation, false statements or fraud in connection with the election of officers , minutes
of the election of officers, the list of voters, or failure to submit these documents together with the list of
the newly elected/appointed officers and their postal addresses within thirty (30) days from election.

011 PICOP Resources, Inc. v. Taeca

AUTHOR:
August 9, 2010 G.R. No. 160828
PONENTE: Peralta, J.
FACTS:
1. Feb 13, 2001 - respondents Anacleto Taeca, Loreto Uriarte, Joseph Balgoa, Jaime Campos, Geremias Tato,
Martiniano Magayon, Manuel Abucay and fourteen (14) others filed a Complaint for ULP, illegal dismissal and
money claims against petitioner PICOP Resources, Incorporated (PRI), Wilfredo Fuentes (in his capacity as PRI's Vice
President/Resident Manager), Atty. Romero Boniel (in his capacity as PRI's Manager of Legal/Labor), Southern
Philippines Federation of Labor (SPFL), Atty. Wilbur T. Fuentes (in his capacity as Secretary General of SPFL),
Pascasio Trugillo (in his capacity as Local President of Nagkahiusang Mamumuo sa PICOP Resources, Inc.- SPFL
[NAMAPRI-SPFL]) and Atty. Proculo Fuentes, Jr. (in his capacity as National President of SPFL).
2. Respondents were regular rank-and-file employees of PRI and bona fide members of Nagkahiusang Mamumuo
sa PRI Southern Philippines Federation of Labor (NAMAPRI-SPFL), which is the collective bargaining agent for the
rank-and-file employees of petitioner PRI.
3. PRI has a CBA with NAMAPRI-SPFL for a period of five (5) years from May 22, 1995 until May 22, 2000.
a. The CBA contained the following union security provisions:

4.

5.

Article II- Union Security and Check-Off

Section 6. Maintenance of membership.
6.1 All employees within the appropriate bargaining unit who are members of the UNION at the
time of the signing of this AGREEMENT shall, as a condition of continued employment by the
COMPANY, maintain their membership in the UNION in good standing during the effectivity of
this AGREEMENT.
6.2 Any employee who may hereinafter be employed to occupy a position covered by the bargaining unit
shall be advised by the COMPANY that they are required to file an application for membership with the
UNION within thirty (30) days from the date his appointment shall have been made regular.
6.3 The COMPANY, upon the written request of the UNION and after compliance with the
requirements of the New Labor Code, shall give notice of termination of services of any
employee who shall fail to fulfill the condition provided in Section 6.1 and 6.2 of this Article, but
it assumes no obligation to discharge any employee if it has reasonable grounds to believe either that
membership in the UNION was not available to the employee on the same terms and conditions generally
applicable to other members, or that membership was denied or terminated for reasons other than
voluntary resignation or non-payment of regular union dues. Separation under the Section is understood to
be for cause, consequently, the dismissed employee is not entitled to separation benefits provided under
the New Labor Code and in this AGREEMENT.

May 16, 2000 - Atty. Proculo P. Fuentes (Atty. Fuentes) sent a letter to the management of PRI demanding the
termination of employees who allegedly campaigned for, supported and signed the Petition for Certification Election
of the Federation of Free Workers Union (FFW) during the effectivity of the CBA.NAMAPRI-SPFL considered said act
of campaigning for and signing the petition for certification election of FFW as an act of disloyalty and a valid basis
for termination for a cause in accordance with its Constitution and By-Laws, and the terms and conditions of the
CBA, specifically Article II, Sections 6.1 and 6.2 on Union Security Clause.
May 23; letter - Mr. Pascasio Trugillo requested the management of PRI to investigate those union members who

signed the Petition for Certification Election of FFW during the existence of their CBA. NAMAPRI-SPFL, likewise,
furnished PRI with machine copy of the authorization letters dated March 19, 20 and 21, 2000, which contained the
names and signatures of employees.
6. Acting on the letters of the NAMAPRI-SPFL - Atty. Romero A. Boniel issued a memorandum addressed to
the concerned employees to explain in writing within 72 hours why their employment should not be terminated due
to acts of disloyalty as alleged by their Union.
a. Within the period from May 26 to June 2, 2000, a number of employees who were served explanation
memorandum submitted their explanation, while some did not.
b. June 2; letter - Atty. Boniel endorsed the explanation letters of the employees to Atty. Fuentes for evaluation
and final disposition in accordance with the CBA.
7. After evaluation - Atty. Fuentes advised the management of PRI that the Union found the member's explanations to
be unsatisfactory. He reiterated the demand for termination, but only of 46 member-employees, including
respondents.
8. Oct 16 - PRI served notices of termination for causes to the 31 out of the 46 employees whom NAMAPRIL-SPFL
sought to be terminated on the ground of acts of disloyalty committed against it when respondents allegedly
supported and signed the Petition for Certification Election of FFW before the freedom period during the effectivity
of the CBA.
a. A Notice dated October 21, 2000 was also served on the Department of Labor and Employment Office
(DOLE), Caraga Region.
9. Respondents then accused PRI of Unfair Labor Practice punishable under Article 248 (a), (b), (c), (d) and (e) of the
Labor Code, while Atty. Fuentes and Wilbur T. Fuentes and Pascasio Trujillo were accused of violating Article 248 (a)
and (b) of the Labor Code.
10. Respondents a.
b.
c.
d.
e.
f.
g.

h.
i.

Alleged none of them ever withdrew their membership from NAMAPRI-SPFL or submitted to PRI any union dues and
check-off disauthorizations against NAMAPRI-SPFL.
claimed that they continue to remain on record as bona fide members of NAMAPRI-SPFL.
pointed out that a patent manifestation of ones disloyalty would have been the explicit resignation or withdrawal of
membership from the Union accompanied by an advice to management to discontinue union dues and check-off
deductions.
insisted that mere affixation of signature on such authorization to file a petition for certification election was not per
se an act of disloyalty.
claimed that while it may be true that they signed the said authorization before the start of the freedom period, the
petition of FFW was only filed with the DOLE on May 18, 2000, or 58 days after the start of the freedom period.
maintained that their acts of signing the authorization signifying support to the filing of a Petition for Certification
Election of FFW was merely prompted by their desire to have a certification election among the rank-and-file employees
of PRI with hopes of a CBA negotiation in due time; and not to cause the downfall of NAMAPRI-SPFL.
contended that there was lack of procedural due process. Both the letter dated May 16, 2000 of Atty. Fuentes and the
follow-up letter dated May 23, 2000 of Trujillo addressed to PRI did not mention their names. Respondents stressed that
NAMAPRI-SPFL merely requested PRI to investigate union members who supported the Petition for Certification Election
of FFW. Respondents claimed that they should have been summoned individually, confronted with the accusation and
investigated accordingly and from where the Union may base its findings of disloyalty and, thereafter, recommend to
management the termination for causes.
argued that at the time NAMAPRI-SPFL demanded their termination, it was no longer the bargaining representative of the
rank-and-file workers of PRI, because the CBA had already expired on May 22, 2000. Hence, there could be no
justification in PRIs act of dismissing respondents due to acts of disloyalty.
asserted that the act of PRI, Wilfredo Fuentes and Atty. Boniel in giving in to the wishes of the Union in discharging them
on the ground of disloyalty to the Union amounted to interference with, restraint or coercion of respondents exercise of
their right to self-organization. The act indirectly required petitioners to support and maintain their membership with
NAMAPRI-SPFL as a condition for their continued employment. The acts of NAMAPRI-SPFL, Atty. Fuentes and Trujillo
amounted to actual restraint and coercion of the petitioners in the exercise of their rights to self-organization and
constituted acts of unfair labor practice.

11. Labor Arbiter - declared the respondents dismissal to be illegal and ordered PRI to reinstate respondents to their
former or equivalent positions without loss of seniority rights and to jointly and solidarily pay their backwages.
12. NLRC - reversed the decision of the Labor Arbiter; thus, declaring the dismissal of respondents from employment as
legal. MR denied.
13. CA - reversed and set aside the assailed Resolutions of the NLRC and reinstated the Labor Arbiters decision.
ISSUE(S): Whether an existing CBA can be given its full force and effect in all its terms and condition including its
union security clause, even beyond the 5-year period when no new cba has yet been entered into.
RATIO:
NLRC; review of decisions. The power of the Court of Appeals to review NLRC decisions via Rule 65 or Petition
for Certiorari has been settled as early as in our decision in St. Martin Funeral Home v. National Labor Relations
Commission. This Court held that the proper vehicle for such review was a Special Civil Action for Certiorari under Rule
65 of the Rules of Court, and that this action should be filed in the Court of Appeals in strict observance of the doctrine
of the hierarchy of courts. Moreover, it is already settled that under Sec. 9 of B.P. 129, as amended, the Court of
Appeals pursuant to the exercise of its original jurisdiction over Petitions for Certiorari is specifically given the power
to pass upon the evidence, if and when necessary, to resolve factual issues.
We now come to the main issue of whether there was just cause to terminate the employment of respondents.
1. PRI argued that the dismissal of the respondents was valid and legal. It claimed to have acted in good faith at the
instance of the incumbent union pursuant to the Union Security Clause of the CBA.
2. Citing Article 253 of the Labor Code, PRI contends that as parties to the CBA, they are enjoined to keep the status
quo and continue in full force and effect the terms and conditions of the existing CBA during the 60-day period

3.
4.

5.

6.

7.
8.
9.

10.
11.

12.

13.

14.

and/or until a new agreement is reached by the parties.

Petitioner's argument is untenable.
Union security" is a generic term, which is applied to and comprehends "closed shop," union shop," "maintenance
of membership," or any other form of agreement which imposes upon employees the obligation to acquire or retain
union membership as a condition affecting employment. There is union shop when all new regular employees are
required to join the union within a certain period as a condition for their continued employment. There is
maintenance of membership shop when employees, who are union members as of the effective date of the
agreement, or who thereafter become members, must maintain union membership as a condition for continued
employment until they are promoted or transferred out of the bargaining unit, or the agreement is terminated. A
closed shop, on the other hand, may be defined as an enterprise in which, by agreement between the employer
and his employees or their representatives, no person may be employed in any or certain agreed departments of
the enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member in good
standing of a union entirely comprised of or of which the employees in interest are a part.
However, in terminating the employment of an employee by enforcing the union security clause, the employer
needs to determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the
enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to support the decision
of the union to expel the employee from the union. These requisites constitute just cause for terminating an
employee based on the union security provision of the CBA.
As to the first requisite, there is no question that the CBA between PRI and respondents included a union security
clause, specifically, a maintenance of membership as stipulated in Sections 6 of Article II, Union Security and
Check-Off. Following the same provision, PRI, upon written request from the Union, can indeed terminate the
employment of the employee who failed to maintain its good standing as a union member.
Secondly, it is likewise undisputed that NAMAPRI-SPFL, in two (2) occasions demanded from PRI, in their letters
dated May 16 and 23, 2000, to terminate the employment of respondents due to their acts of disloyalty to the
Union.
However, as to the third requisite, we find that there is no sufficient evidence to support the decision of PRI to
terminate the employment of the respondents.
PRI alleged that respondents were terminated from employment based on the alleged acts of disloyalty they
committed when they signed an authorization for the Federation of Free Workers (FFW) to file a Petition for
Certification Election among all rank-and-file employees of PRI. It contends that the acts of respondents are a
violation of the Union Security Clause, as provided in their Collective Bargaining Agreement.
We are unconvinced.
We are in consonance with the Court of Appeals when it held that the mere signing of the authorization in support
of the Petition for Certification Election of FFW on March 19, 20 and 21, or before the freedom period, is not
sufficient ground to terminate the employment of respondents inasmuch as the petition itself was actually filed
during the freedom period. Nothing in the records would show that respondents failed to maintain their
membership in good standing in the Union. Respondents did not resign or withdraw their membership from the
Union to which they belong. Respondents continued to pay their union dues and never joined the FFW.
Significantly, petitioner's act of dismissing respondents stemmed from the latter's act of signing an authorization
letter to file a petition for certification election as they signed it outside the freedom period. However, we are
constrained to believe that an authorization letter to file a petition for certification election is different from an
actual Petition for Certification Election. Likewise, as per records, it was clear that the actual Petition for
Certification Election of FFW was filed only on May 18, 2000. [17] Thus, it was within the ambit of the freedom period
which commenced from March 21, 2000 until May 21, 2000. Strictly speaking, what is prohibited is the filing of a
petition for certification election outside the 60-day freedom period. [18] This is not the situation in this case. If at all,
the signing of the authorization to file a certification election was merely preparatory to the filing of the petition for
certification election, or an exercise of respondents right to self-organization.
Moreover, PRI anchored their decision to terminate respondents employment on Article 253 of the Labor Code
which states that it shall be the duty of both parties to keep the status quo and to continue in full force
and effect the terms and conditions of the existing agreement during the 60-day period and/or until a
new agreement is reached by the parties. It claimed that they are still bound by the Union Security Clause of
the CBA even after the expiration of the CBA; hence, the need to terminate the employment of respondents.
Petitioner's reliance on Article 253 is misplaced.
The provision of Article 256 of the Labor Code is particularly enlightening. It reads:
Article 256. Representation issue in organized establishments. - In organized establishments, when a verified
petition questioning the majority status of the incumbent bargaining agent is filed before the Department of Labor
and Employment within the sixty-day period before the expiration of a collective bargaining agreement, the MedArbiter shall automatically order an election by secret ballot when the verified petition is supported by the written
consent of at least twenty-five percent (25%) of all the employees in the bargaining unit to ascertain the will of the
employees in the appropriate bargaining unit. To have a valid election, at least a majority of all eligible voters in the
unit must have cast their votes. The labor union receiving the majority of the valid votes cast shall be certified as the
exclusive bargaining agent of all the workers in the unit. When an election which provides for three or more choices
results in no choice receiving a majority of the valid votes cast, a run-off election shall be conducted between the
labor unions receiving the two highest number of votes: Provided, That the total number of votes for all contending
unions is at least fifty per cent (50%) of the number of votes cast.
At the expiration of the freedom period, the employer shall continue to recognize the majority status of
the incumbent bargaining agent where no petition for certification election is filed.

15. Applying the same provision, it can be said that while it is incumbent for the employer to continue to recognize the
majority status of the incumbent bargaining agent even after the expiration of the freedom period, they could only
do so when no petition for certification election was filed. The reason is, with a pending petition for certification,

16.

17.

18.

19.

any such agreement entered into by management with a labor organization is fraught with the risk that such a
labor union may not be chosen thereafter as the collective bargaining representative. The provision
for status quo is conditioned on the fact that no certification election was filed during the freedom period.Any other
view would render nugatory the clear statutory policy to favor certification election as the means of ascertaining
the true expression of the will of the workers as to which labor organization would represent them.
In the instant case, four (4) petitions were filed as early as May 12, 2000. In fact, a petition for certification election
was already ordered by the Med-Arbiter of DOLE Caraga Region on August 23, 2000. Therefore, following Article
256, at the expiration of the freedom period, PRI's obligation to recognize NAMAPRI-SPFL as the incumbent
bargaining agent does not hold true when petitions for certification election were filed, as in this case.
Moreover, the last sentence of Article 253 which provides for automatic renewal pertains only to the economic
provisions of the CBA, and does not include representational aspect of the CBA. An existing CBA cannot constitute a
bar to a filing of a petition for certification election. When there is a representational issue, thestatus quo provision
in so far as the need to await the creation of a new agreement will not apply. Otherwise, it will create an absurd
situation where the union members will be forced to maintain membership by virtue of the union security clause
existing under the CBA and, thereafter, support another union when filing a petition for certification election. If we
apply it, there will always be an issue of disloyalty whenever the employees exercise their right to self-organization.
The holding of a certification election is a statutory policy that should not be circumvented, or compromised.
Time and again, we have ruled that we adhere to the policy of enhancing the welfare of the workers. Their freedom
to choose who should be their bargaining representative is of paramount importance. The fact that there already
exists a bargaining representative in the unit concerned is of no moment as long as the petition for certification
election was filed within the freedom period. What is imperative is that by such a petition for certification election
the employees are given the opportunity to make known of who shall have the right to represent them thereafter.
Not only some, but all of them should have the right to do so. What is equally important is that everyone be given a
democratic space in the bargaining unit concerned.
We will emphasize anew that the power to dismiss is a normal prerogative of the employer. This, however, is not
without limitations. 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.
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, therefore, respect and
protect the rights of their employees, which include the right to labor.
a. An employee who is illegally dismissed is entitled to the twin reliefs of full backwages and reinstatement. If

reinstatement is not viable, separation pay is awarded to the employee. In awarding separation pay to an illegally
dismissed employee, in lieu of reinstatement, the amount to be awarded shall be equivalent to one month salary for
every year of service. Under Republic Act No. 6715, employees who are illegally dismissed are entitled to full backwages,
inclusive of allowances and other benefits, or their monetary equivalent, computed from the time their actual
compensation was withheld from them up to the time of their actual reinstatement. But if reinstatement is no longer
possible, the backwages shall be computed from the time of their illegal termination up to the finality of the
decision. Moreover, respondents, having been compelled to litigate in order to seek redress for their illegal dismissal, are
entitled to the award of attorneys fees equivalent to 10% of the total monetary award.
DISPOSITION: WHEREFORE, the petition is DENIED. The Decision dated July 25, 2003 and the Resolution dated October 23, 2003 of the Court of
Appeals in CA-G.R. SP No. 71760, which set aside the Resolutions dated October 8, 2001 and April 29, 2002 of the National Labor Relations Commission in
NLRC CA No. M-006309-2001, are AFFIRMED accordingly. Respondents are hereby awarded full backwages and other allowances, without qualifications
and diminutions, computed from the time they were illegally dismissed up to the time they are actually reinstated. Let this case be remanded to the
Labor Arbiter for proper computation of the full backwages due respondents, in accordance with Article 279 of the Labor Code, as expeditiously as
possible.

Dismissal; union security. In terminating the employment of an employee by enforcing the union security clause, the employer needs
to determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the enforcement of the union
security provision in the CBA; and (3) there is sufficient evidence to support the decision of the union to expel the employee from the
union. These requisites constitute just cause for terminating an employee based on the union security provision of the CBA.
The petitioner failed to satisfy the third requirement since nothing in the records would show that respondents failed to maintain their
membership in good standing in the union. Significantly, petitioners act of dismissing respondents stemmed from the latters act of
signing an authorization letter to file a petition for certification election as they signed it outside the freedom period. The mere signing
of an authorization letter before the freedom period is not sufficient ground to terminate the employment of respondents inasmuch as
the petition itself was actually filed during the freedom period. The court emphasizes anew that 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.

012 Legend International Resorts v. Kilusang Manggagawa ng Legend

Author: Pat
February 23, 2011 G.R. No. 169754
Topic: Bargaining Agent, Certification Election Proceedings
Ponente: Del Castillo, J.
FACTS:
1. June 6, 2001: KML filed with the Med-Arbitration Unit of the DOLE Pampanga a Petition for Certification Election.
2. KML alleged:
a. that it is a legitimate labor organization of the rank and file employees of Legend International Resorts Limited (LEGEND).
b. that it was issued its Certificate of Registration by the DOLE on May 18, 2001.
3. LEGEND moved to dismiss the petition.
4. LEGEND alleged:
a. that KML is not a legitimate labor organization because its membership is a mixture of rank and file and supervisory employees

b.
5.

that KML committed acts of fraud and misrepresentation when it made it appear that certain employees attended its general membership
meeting on April 5, 2001 when in reality some of them were either at work; have already resigned as of March 2001; or were abroad.
In its Comment, KML argued:
a. that even if 41 of its members are indeed supervisory employees and therefore excluded from its membership, the certification election
could still proceed because the required number of the total rank and file employees necessary for certification purposes is still sustained.
b. that its legitimacy as a labor union could not be collaterally attacked in the certification election proceedings but only through a separate
and independent action for cancellation of union registration.
c. KML asserted that LEGEND failed to substantiate its claim of fraud and misrepresentation.

Ruling of the Med-Arbiter

a. rendered judgment dismissing for lack of merit the petition for certification election.
b. there were several supervisory employees in KMLs membership in violation of Article 245 of Labor Code. KML is not a legitimate
labor organization.
c. KML was also found to have fraudulently procured its registration certificate by misrepresenting that 70 employees were among those
who attended its organizational meeting on April 5, 2001 when in fact they were either at work or elsewhere.
Ruling of the Office of the Secretary of DOLE
a. granting KMLs appeal thereby reversing and setting aside the Med-Arbiters Decision.
b. held that KMLs legitimacy as a union could not be collaterally attacked
a. opined that Article 245 of the Labor Code merely provides for the prohibition on managerial employees to form or join a union and the
ineligibility of supervisors to join the union of the rank and file employees and vice versa.
b. It declared that any violation of the provision of Article 245 does not ipso facto render the existence of the labor organization illegal.
c. grounds for dismissal of a petition for certification election does not include mixed membership in one union.
6.

LEGEND filed its Motion for Reconsideration. It also alleged that on August 24, 2001, it filed a Petition for Cancellation of Union
Registration of KML which was granted by the DOLE Regional Office
7. Office of the Secretary of DOLE denied LEGENDs motion for reconsideration. It opined that Section 11, paragraph II(a), Rule XI of
Department Order No. 9 requires a final order of cancellation before a petition for certification election may be dismissed on the ground of lack
of legal personality. Besides, it noted that the November 7, 2001 Decision of DOLE Regional Office No. III of San Fernando, Pampanga in a
case was reversed by the Bureau of Labor Relations in a Decision dated March 26, 2002.
8. LEGEND filed a Petition for Certiorari with the Court of. LEGEND alleged that the Office of the Secretary of DOLE gravely abused its
discretion in reversing and setting aside the Decision of the Med-Arbiter despite substantial and overwhelming evidence against KML.
9. KML alleged that the Decision dated March 26, 2002 of the BLR denying LEGENDs petition for cancellation and upholding KMLs
legitimacy as a labor organization has already become final and executory, entry of judgment having been made on August 21, 2002.
10. The Office of the Secretary of DOLE also filed its Comment asserting that KMLs legitimacy cannot be attacked collaterally. Finally, the Office
of the Secretary of DOLE stressed that LEGEND has no legal personality to participate in the certification election proceedings.
Ruling of the Court of Appeals
a. finding no grave abuse of discretion on the part of the Office of the Secretary of DOLE.
b. the issue on the legitimacy of KML as a labor organization has already been settled with finality.
c. The March 26, 2002 Decision of the Bureau of Labor Relations upholding the legitimacy of KML as a labor organization had long
become final and executory for failure of LEGEND to appeal the same.
d. Thus, having already been settled that KML is a legitimate labor organization, the latter could properly file a petition for certification
election. There was nothing left for the Office of the Secretary of DOLE to do but to order the holding of such certification election.
11. LEGEND filed a Motion for Reconsideration alleging, among others, that it has appealed to the Court of Appeals the March 26, 2002
Decision in Case No. RO300-0108-CP-001 denying its petition for cancellation and that it is still pending resolution.
12. CA denied LEGENDs motion for reconsideration.
13. PETITIONERS ARGUMENTS:
a. LEGEND submits that the Court of Appeals grievously erred in ruling that the March 26, 2002 Decision denying its Petition for
Cancellation of KMLs registration has already become final and executory. It asserts that it has seasonably filed a Petition for Certiorari
before the CA docketed as CA-G.R. SP No. 72659 assailing said Decision. In fact, on June 30, 2005, the Court of Appeals granted the
petition, reversed the March 26, 2002 Decision of the Bureau of Labor Relations and reinstated the November 7, 2001 Decision of the
DOLE Regional Office III ordering the cancellation of KMLs registration.
b. Finally, LEGEND posits that the cancellation of KMLs certificate of registration should retroact to the time of its issuance. It thus claims
that the petition for certification election and all of KMLs activities should be nullified because it has no legal personality to file the same,
much less demand collective bargaining with LEGEND.
c. LEGEND thus prays that the September 20, 2001 Decision of the Med-Arbiter dismissing KMLs petition for certification election be
reinstated.
14. RESPONDENTS ARGUMENTS:
a. In its Comment filed before this Court dated March 21, 2006, KML insists that the Decision of the Bureau of Labor Relations upholding
its legitimacy as a labor organization has already attained finality hence there was no more hindrance to the holding of a certification

election. Moreover, it claims that the instant petition has become moot because the certification election sought to be prevented had
already been conducted.
ISSUE/HELD:
WON the cancellation of KMLs certificate of registration should retroact to the time of its issuance. NO!

RATIO:
1.
2.

LEGEND has timely appealed the March 26, 2002 Decision of the Bureau of Labor Relations to the Court of Appeals.
The cancellation of KMLs certificate of registration should not retroact to the time of its issuance.

Notwithstanding the finality of the Decision canceling the certificate of registration of KML, we cannot subscribe to LEGENDs
proposition that the cancellation of KMLs certificate of registration should retroact to the time of its issuance. LEGEND claims that KMLs petition
for certification election filed during the pendency of the petition for cancellation and its demand to enter into collective bargaining agreement with
LEGEND should be dismissed due to KMLs lack of legal personality.

At any rate, the Court applies the established rule correctly followed by the public respondent that an order to hold a certification election is
proper despite the pendency of the petition for cancellation of the registration certificate of the respondent union. The rationale for this is
that at the time the respondent union filed its petition, it still had the legal personality to perform such act absent an order directing the
cancellation.
That there is a pending cancellation proceedings against the respondent Union is not a bar to set in motion the mechanics of collective
bargaining. If a certification election may still be ordered despite the pendency of a petition to cancel the unions registration certificate x x x
more so should the collective bargaining process continue despite its pendency.
an order to hold a certification election is proper despite the pendency of the petition for cancellation of the registration certificate of the
respondent union. The rationale for this is that at the time the respondent union filed its petition, it still had the legal personality to perform
such act absent an order directing a cancellation.
a certification election can be conducted despite pendency of a petition to cancel the union registration certificate. For the fact is that at the
time the respondent union filed its petition for certification, it still had the legal personality to perform such act absent an order directing its
cancellation.

Based on the foregoing jurisprudence, it is clear that a certification election may be conducted during the pendency of the cancellation
proceedings. This is because at the time the petition for certification was filed, the petitioning union is presumed to possess the legal personality to
file the same. There is therefore no basis for LEGENDs assertion that the cancellation of KMLs certificate of registration should retroact to the time
of its issuance or that it effectively nullified all of KMLs activities, including its filing of the petition for certification election and its demand to
collectively bargain.
3.

The legitimacy of the legal personality of KML cannot be collaterally attacked in a petition for certification election.
The legal personality of a legitimate labor organization cannot be subject to a collateral attack. The law is very clear on this matter. The
Implementing Rules stipulate that a labor organization shall be deemed registered and vested with legal personality on the date of issuance of
its certificate of registration. Once a certificate of registration is issued to a union, its legal personality cannot be subject to a collateral attack. In
may be questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V, Book V of the Implementing
Rules.

13 Samahang Manggagawa Sa Charter Chemical v.

Charter Chemical and Coating Corp.
G.R. No. 169717
March 16, 2011
Topic: Bargaining Agent, Certification Election
Proceedings
Ponente: DEL CASTILLO, J.:

Author: (Lifted from Pats digest)

The legal personality of petitioner union cannot be collaterally attacked by
respondent company in the certification election proceedings. The employer
is a mere by stander in a petition for certification election and is only entitled
to be notified of the proceeding.

FACTS:
1.

February 19, 1999, Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Philippines for Empowerment and
Reforms (PETITIONER UNION) filed a petition for certification election among the regular rank-and-file employees of Charter
Chemical and Coating Corporation (RESPONDENT COMPANY) with the Mediation Arbitration Unit of the DOLE, NCR

2.

Respondent company filed an Answer with Motion to Dismiss on the ground that petitioner union is not a LLO because of: (1)
failure to comply with the documentation requirements, and (2) the inclusion of supervisory employees within petitioner union.

Med-Arbiters Ruling

(a) Dismissed the petition for certification election.

(b) petitioner union is not a LLO because the Charter Certificate, "Sama-samang Pahayag ng Pagsapi at Authorization," and
"Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas" were not executed
under oath and certified by the union secretary and attested to by the union president as required by Section 235 of the Labor
Code in relation to Section 1, Rule VI of Department Order (D.O.) No. 9, series of 1997.
(c) that the list of membership of petitioner union consisted of 12 batchman, mill operator and leadman who performed supervisory
functions. Under Article 245 of the Labor Code, said supervisory employees are prohibited from joining petitioner union
(d) not being a LLO, petitioner union has no right to file a petition for certification election for the purpose of collective bargaining.

DOLEs Ruling
(a) dismissing petitioner unions appeal on the ground that the latters petition for certification election was filed out of time.
(b) Although the DOLE ruled, contrary to the findings of the Med-Arbiter, that the charter certificate need not be verified and that there
was no independent evidence presented to establish respondent companys claim that some members of petitioner union were
holding supervisory positions, the DOLE sustained the dismissal of the petition for certification after it took judicial notice that
another union, i.e., Pinag-isang Lakas Manggagawa sa Charter Chemical and Coating Corporation, previously filed a petition for
certification election on January 16, 1998.
(c) The Decision granting the said petition became final and executory on September 16, 1998 and was remanded for immediate
implementation. Under Section 7, Rule XI of D.O. No. 9, series of 1997, a motion for intervention involving a certification election
in an unorganized establishment should be filed prior to the finality of the decision calling for a certification election. Considering
that petitioner union filed its petition only on February 14, 1999, the same was filed out of time.

On motion for reconsideration, however, the DOLE reversed its earlier ruling.
(a) no certification election was previously conducted in respondent company.
(b) prior certification election filed by Pinag-isang Lakas Manggagawa sa Charter Chemical and Coating Corporation was, likewise,
denied by the Med-Arbiter and, on appeal, was dismissed by the DOLE for being filed out of time.

Court of Appeals Ruling

(a) Nullifying the decision of DOLE, held that petitioner union failed to comply with the documentation requirements
(b) that petitioner union consisted of both rank-and-file and supervisory employees.
(c) that the issues as to the legitimacy of petitioner union may be attacked collaterally in a petition for certification election and the
infirmity in the membership of petitioner union cannot be remedied through the exclusion-inclusion proceedings in a pre-election
conference pursuant to the ruling in Toyota Motor Philippines v. Toyota Motor Philippines Corporation Labor Union.
(d)

that petitioner union is not a LLO, it has no legal right to file a petition for certification election.

Petitioner Unions Arguments

(a) that the litigation of the issue as to its legal personality to file the subject petition for certification election is barred by the July 16,
1999 Decision of the DOLE. In this decision, the DOLE ruled that petitioner union complied with all the documentation
requirements and that there was no independent evidence presented to prove an illegal mixture

(b) that the lack of verification of its charter certificate and the alleged illegal composition of its membership are not grounds for the
dismissal of a petition for certification election under Section 11, Rule XI of D.O. No. 9, series of 1997, as amended, nor are they
grounds for the cancellation of a unions registration under Section 3, Rule VIII of said issuance.
(c) that what is required to be certified under oath by the local unions secretary or treasurer and attested to by the local unions
president are limited to the unions constitution and by-laws, statement of the set of officers, and the books of accounts.
(d) legal personality of pet. union cannot be collaterally attacked & may be questioned only in independent petition for cancellation
ISSUE:
1.

WON the alleged mixture of rank-and-file and supervisory employee of petitioner [unions] membership is ground for the
cancellation of petitioner [unions] legal personality and dismissal of petition for certification election. NO!

2.

WON the alleged failure to certify under oath the local charter certificate issued by its mother federation and list of the union
membership attending the organizational meeting [is a ground] for the cancellation of petitioner [unions] legal personality as a
labor organization and for the dismissal of the petition for certification election. NO!

3.

WON the legal personality of the union can be collateraly attacked in a petition for certification election. NO! (TOPIC)

HELD: CA is set aside. DOLE first decision is reinstated.

RATIO:
1.

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

While this ruling was based on the interpretation of the previous Implementing Rules provisions which were supplanted by the
1997 amendments, we believe that the same doctrine obtains in this case. Considering that the charter certificate is prepared and
issued by the national union and not the local/chapter, it does not make sense to have the local/chapters officers x x x certify or
attest to a document which they had no hand in the preparation of.

Petitioner unions charter certificate need not be executed under oath. Consequently, it validly acquired the status of a LLO upon
submission of (1) its charter certificate, (2) the names of its officers, their addresses, and its principal office, and (3) its constitution
and by-laws the last two requirements having been executed under oath by the proper union officials as borne out by the
records.

2.

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

Preliminarily, the petitioner union questions the factual findings of the Med-Arbiter, as upheld by the appellate court, that 12 of its
members, consisting of batchman, mill operator and leadman, are supervisory employees.

However, petitioner union failed to present any rebuttal evidence in the proceedings below after respondent company submitted in
evidence the job descriptions of the aforesaid employees. The job descriptions indicate that the aforesaid employees exercise
recommendatory managerial actions which are not merely routinary but require the use of independent judgment, hence, falling
within the definition of supervisory employees under Article 212 of the Labor Code.

For this reason, the court ruled that petitioner union consisted of both rank-and-file and supervisory employees. Nonetheless, the
inclusion of the aforesaid supervisory employees in petitioner union does not divest it of its status as a LLO.

the Court held that after a labor organization has been registered, it may exercise all the rights and privileges of a LLO. Any
mingling between supervisory and rank-and-file employees in its membership cannot affect its legitimacy for that is not among the
grounds for cancellation of its registration, unless such mingling was brought about by misrepresentation, false statement or fraud
under Article 239 of the Labor Code (Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay Highlands Employees Union-PGTWO).

3.

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

Petitioner union correctly argues that its legal personality cannot be collaterally attacked in the certification election proceedings. As
we explained in Kawashima:
Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for certification election; such
proceeding is non-adversarial and merely investigative, for the purpose thereof is to determine which organization will represent the
employees in their collective bargaining with the employer. The choice of their representative is the exclusive concern of the
employees; the employer cannot have any partisan interest therein; it cannot interfere with, much less oppose, the process by filing a
motion to dismiss or an appeal from it; not even a mere allegation that some employees participating in a petition for certification
election are actually managerial employees will lend an employer legal personality to block the certification election. The employer's
only right in the proceeding is to be notified or informed thereof.
WHEREFORE, the petition is GRANTED. The March 15, 2005 Decision and September 16, 2005 Resolution of the Court of Appeals
in CA-G.R. SP No. 58203 are REVERSED and SET ASIDE. The January 13, 2000 Decision of the Department of Labor and
Employment in OS-A-6-53-99 (NCR-OD-M-9902-019) is REINSTATED.

014 STA. LUCIA EAST COMMERCIAL CORPORATION, Petitioner,

vs.
HON. SECRETARY OF LABOR AND EMPLOYMENT and STA. LUCIA
EAST COMMERCIAL CORPORATION WORKERS ASSOCIATION
(CLUP LOCAL CHAPTER), Respondents.
G.R. No. 162355
August 14, 2009
TOPIC: Voluntary recognition
PONENTE: CARPIO, J.:
FACTS:
14. On 2001, Confederated Labor Union of the Philippines (CLUP) instituted a petition for certification election among
the regular rankand-file employees of Sta. Lucia East Commercial Corporation (THE CORPORATION) and its
Affiliates. The affiliate companies included in the petition were SLE Commercial, SLE Department Store, SLE
Cinema, Robsan East Trading, Bowling Center, Planet Toys, Home Gallery and Essentials. On August 2001, MedArbiter Bactin ordered the dismissal of the petition due to inappropriateness of the bargaining unit. Later CLUP in its
local chapter under THE CORPORATION reorganized itself and reregistered as CLUP-Sta. Lucia East Commercial
Corporation Workers Association (herein THE UNION), limiting its membership to the rankand-file employees of Sta.
Lucia East Commercial Corporation. On the same date, THE UNION or THE UNION filed the instant petition for
certification election. It claimed that no certification election has been held among them within the last 12 months
prior to the filing of the petition, and while there is another union registered covering the same employees, namely
Samahang Manggawa sa SLEC [SMSLEC], it has not been recognized as the exclusive bargaining agent of [THE
CORPORATIONs] employees.
15. On November 2001, THE CORPORATION or THE CORPORATION filed a motion to dismiss the petition. It averred that
it has voluntarily recognized SMSLEC as the exclusive bargaining agent of its regular rank-and-file employees, and
that collective bargaining negotiations already commenced between them. THE CORPORATION argued that the
petition should be dismissed for violating the one year and negotiation bar rules under the Omnibus Rules
Implementing the Labor Code. The CBA between SMSLEC and the corporation was ratified by its rank-and-file
employees and registered with DOLE. In the meantime, on December 2001, the union filed its Opposition to THE
CORPORATIONS Motion to Dismiss questioning the validity of the voluntary recognition of [SMSLEC] by [THE
CORPORATION] and their consequent negotiations and execution of a CBA. According to [THE UNION], the voluntary
recognition of [SMSLEC] by [THE CORPORATION] violated the requirements for voluntary recognition, i.e., nonexistence of another labor organization in the same bargaining unit. It pointed out that the time of the voluntary
recognition on 20 July 2001, appellants registration which covers the same group of employees covered by
Samahang Manggagawa sa Sta. Lucia East Commercial, was existing and has neither been cancelled or abandoned.
The Med-Arbiters Ruling Med-Arbiter Bactin dismissed THE UNIONs petition for direct certification on the ground of
contract bar rule. The prior voluntary recognition of SMSLEC and the CBA between THE CORPORATION and SMSLEC
bars the filing of THE UNIONs petition for direct certification
16.
17. THE UNION raised the matter to the Secretary. The Ruling of the Secretary of Labor and Employment The Secretary
held that the subsequent negotiations and registration of a CBA executed by THE CORPORATION with SMSLEC could
not bar THE UNIONs petition. THE UNION constituted a registered labor organization at the time of THE
CORPORATIONs voluntary recognition of SMSLEC. THE CORPORATION then filed a petition for certiorari before the
appellate court. The Ruling of the Appellate Court The appellate court affirmed the ruling of the Secretary
ISSUE(S): Whether THE CORPORATIONs voluntary recognition of SMSLEC was done while a legitimate labor
organization was in existence in the bargaining unit.
HELD: NO. We resolve to deny the petition for lack of merit.
RATIO:
20. Legitimate Labor Organization Article 212(g) of the Labor Code defines a labor organization as "any union or

association of employees which exists in whole or in part for the purpose of collective bargaining or of dealing with
employers concerning terms and conditions of employment." Upon compliance with all the documentary
requirements, the Regional Office or Bureau shall issue in favor of the applicant labor organization a certificate
indicating that it is included in the roster of legitimate labor organizations.6 Any applicant labor organization 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.7 Bargaining Unit The concepts of a union and of a
legitimate labor organization are different from, but related to, the concept of a bargaining unit. A bargaining unit is
a "group of employees of a given employer, comprised of all or less than all of the entire body of employees,
consistent with equity to the employer, indicated to be the best suited to serve the reciprocal rights and duties of
the parties under the collective bargaining provisions of the law." The fundamental factors in determining the
appropriate collective bargaining unit are: (1) the will of the employees (Globe Doctrine); (2) affinity and unity of
the employees interest, such as substantial similarity of work and duties, or similarity of compensation and
working conditions (Substantial Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of
employment status.
21. The

UNIONS initial problem was that they constituted a legitimate labor organization representing a
nonappropriate bargaining unit. However, The union subsequently re-registered as THE UNION, limiting its
members to the rank-andfile of THE CORPORATION. THE CORPORATION cannot ignore the union was a legitimate
labor organization at the time of THE CORPORATIONs voluntary recognition of SMSLEC. THE CORPORATION and
SMSLEC cannot, by themselves, decide whether CLUP-THE CORPORATION and its Affiliates Workers Union
represented an appropriate bargaining unit. The inclusion in the union of disqualified employees is not among the
grounds for cancellation of registration, unless such inclusion is due to misrepresentation, false statement or fraud
under the circumstances The union having been validly issued a certificate of registration, should be considered as
having acquired juridical personality which may not be attacked collaterally. The proper procedure for THE
CORPORATION is to file a petition for cancellation of certificate of registration of CLUP-THE CORPORATION and its
Affiliates Workers Union and not to immediately commence voluntary recognition proceedings with SMSLEC.
SLECCs Voluntary Recognition of SMSLEC

22. The employer may voluntarily recognize the representation status of a union in unorganized establishments.12 SLECC was not an
unorganized establishment when it voluntarily recognized SMSLEC as its exclusive bargaining representative on 20 July 2001.
CLUP-SLECC and its Affiliates Workers Union filed a petition for certification election on 27 February 2001 and this petition
remained pending as of 20 July 2001. Thus, SLECCs voluntary recognition of SMSLEC on 20 July 2001, the subsequent
negotiations and resulting registration of a CBA executed by SLECC and SMSLEC are void and cannot bar CLUP-SLECCWAs present
petition for certification election.
Employers Participation in a Petition for Certification Election
23. We find it strange that the employer itself, SLECC, filed a motion to oppose CLUP-SLECCWAs petition for certification election. In
petitions for certification election, the employer is a mere bystander and cannot oppose the petition or appeal the Med-Arbiters
decision. The exception to this rule, which happens when the employer is requested to bargain collectively, is not present in the
case before us.13
24. WHEREFORE, we DENY the petition. We AFFIRM the Decision promulgated on 14 August 2003 as well as the Resolution
promulgated on 24 February 2004 of the Court of Appeals in CA-G.R. SP No. 77015.

DISPOSITION:

015 COASTAL SUBIC BAY TERMINAL, INC. v AUTHOR: Aiyu

DOLE
G.R. No. 157117. November 20, 2006
TOPIC: Bargaining unit;
PONENTE: Quisumbing, J.
FACTS:
PARTIES
o PETITIONER CSBTCI (COMPANY)
o RESPONDENTS:
CSBTI-RFU (rank and file)
CSBTI-SU-APSOTEU (supervisory)
8 July 1998 CSBTI-RFU and CSBTI-SU filed separate petitions for certification election
before Med-Arbiter
o CSBTI-RFU insists that it is a legitimate labor organization (LLO) chartered by the
Associated Labor Union (ALU), and
o CSBTI-SU-APSOTEU insists that it is an LLO; chartered by Associated Professional,
Supervisory, Office and Technical Employees Union (APSOTEU).

CSBTI opposed both petitions for certification election;

o GROUND: BOTH not LLO and that the proposed bargaining units were not particularly
described.
MED-ARBITER dismissed the petitions (without ruling on the legitimacy of the respondent
unions) but without prejudice to refiling both petitions for certification election.
o RATIO: ALU and APSOTEU are one and the same federation having a common set of
officers. Thus, both unions are affiliated to the same federation
Both parties appealed to the Secretary of Labor and Employment (SOLE);
SOLE Decision reversed the decision of the Med-Arbiter.
o CSBTI-SU and CSBTI-RFU have separate legal personalities to file separate petitions for
certification election.
o APSOTEU is a legitimate labor organization because it was properly registered pursuant
to the 1989 Revised Rules and Regulations implementing Republic Act No. 6715, the rule
applicable at the time of its registration.
o ALU and APSOTEU are separate and distinct labor unions having separate certificates of
registration from the DOLE with different set of locals. They also have different sets of
locals.
o CSBTI-RFU and CSBTI-SU are legitimate labor organizations having been chartered
respectively by ALU and APSOTEU after submitting all the requirements with the Bureau
of Labor Relations (BLR).
o The Secretary ordered the holding of separate certification election.
o The latest payroll of the employer, including its payrolls for the last 3 months
immediately preceding the issuance of this decision, shall be the basis for determining
the qualified list of voters.
CSBTIs MR was also denied.
On appeal, the CA affirmed the decision of the Secretary; MR DENIED
HENCE, SC
CONTENTION OF CSBTCI:
o that APSOTEU improperly secured its registration from the DOLE Regional Director and
not from the BLR; that it is the BLR that is authorized to process applications and issue
certificates of registration in accordance with our ruling in Phil. Association of Free Labor
Unions v. Secretary of Labor;12 that the certificates of registration issued by the DOLE
Regional Director pursuant to the rules are questionable, and possibly even void ab initio
for being ultra vires; and that the Court of Appeals erred when it ruled that the law
applicable at the time of APSOTEUs registration was the 1989 Revised Implementing
Rules and Regulations of Rep. Act No. 6715.
o that APSOTEU lacks legal personality, and its chartered affiliate CSBTI-SU cannot attain
the status of a legitimate labor organization to file a petition for certification election. It
relies on Villar v. Inciong,13 where we held therein that Amigo Employees Union was not a
duly registered independent union absent any record of its registration with the Bureau.
ISSUES : WON supervisory and the rank-and-file unions CAN file separate petitions for certification
election. NO
HELD : NO
DISPOSITIVE: WHEREFORE, the petition is GRANTED. The Court of Appeals Decision dated
August 31, 2001, in CA-G.R. SP No. 54128 and the Resolution dated February 5, 2003 are SET
ASIDE. The decision of the Med-Arbiter is hereby AFFIRMED. SO ORDERED.
RATIO:
The issue on the status of the supervisory union CSBTI-SU DEPENDS on the status of APSOTEU,
its mother federation.
Pertinent is Article 235 of the Labor Code which provides that applications for registration shall
be acted upon by the Bureau. "Bureau" as defined under the Labor Code means the BLR and/or
the Labor Relations Division in the Regional Offices of the Department of Labor.
Further, Section 2, Rule II, Book V of the 1989 Revised IRR of the Labor Code provides that:
o Section 2. Where to file application; procedure Any national labor organization or labor
federation or local union may file an application for registration with the Bureau or the
Regional Office where the applicants principal offices is located. The Bureau or the
Regional Office shall immediately process and approve or deny the application. In case of
approval, the Bureau or the Regional Office shall issue the registration certificate within
thirty (30) calendar days from receipt of the application, together with all the
requirements for registration as hereinafter provided.

The Implementing Rules specifically Section 1, Rule III of Book V, as amended by Department
Order No. 9 provides that:
o SECTION 1. Where to file applications. The application for registration of any
federation, national or industry union or trade union center shall be filed with the Bureau.
Where the application is filed with the Regional Office, the same shall be immediately
forwarded to the Bureau within forty-eight (48) hours from filing thereof, together with all
the documents supporting the registration.
The applications for registration of an independent union shall be filed with and acted
upon by the Regional Office where the applicants principal office is located . x x x x

The DOLE issued Department Order No. 40-03, which took effect on March 15, 2003, further
amending Book V of the above implementing rules. The new implementing rules explicitly
provide that applications for registration of labor organizations shall be filed either with the
Regional Office or with the BLR.

Records show that APSOTEU was registered on 1 March 1991.The law applicable at that time
was Section 2, Rule II, Book V of the Implementing Rules, and not Department Order No.
9 which took effect only on 21 June 1997.

Considering further that APSOTEUs principal office is located in Diliman, Quezon City, and its
registration was filed with the NCR Regional Office, the certificate of registration is valid.

Villar v Inciong was misapplied the union in question in this case has no record in the BLR.

The CA did not err in its application of stare decisis when it upheld the Secretarys ruling
that APSOTEU is a legitimate labor organization and its personality cannot be assailed unless in
an independent action for cancellation of registration certificate.
o

Section 5, Rule V, Book V of the Implementing Rules states: Section 5. Effect of

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

APSOTEU is a legitimate labor organization and has authority to issue charter to its
affiliates. It may issue a local charter certificate to CSBTI-SU and correspondingly, CSBTISU is legitimate.

The petitioner contends that applying by analogy, the doctrine of piercing the veil of corporate
fiction, APSOTEU and ALU are the same federation. Private respondents disagree. Again,
petitioners are not correct.

Once a labor union attains the status of a legitimate labor organization, it continues as such
until its certificate of registration is cancelled or revoked in an independent action for
cancellation.

The legal personality of a labor organization cannot be collaterally attacked. Thus, when the
personality of the labor organization is questioned in the same manner the veil of corporate
fiction is pierced, the action partakes the nature of a collateral attack.

Hence, in the absence of any independent action for cancellation of registration

against either APSOTEU or ALU, and unless and until their registrations are
cancelled, each continues to possess a separate legal personality. The CSBTI-RFU and
CSBTI-SU are therefore affiliated with distinct and separate federations, despite the
commonalities of APSOTEU and ALU.

Under the rules implementing the Labor Code, a chartered local union acquires legal personality

through the charter certificate issued by a duly registered federation or national union, and
reported to the Regional Office in accordance with the rules implementing the Labor Code.

A local union does not owe its existence to the federation with which it is affiliated. It
is a separate and distinct voluntary association owing its creation to the will of its
members. Mere affiliation does not divest the local union of its own personality,
neither does it give the mother federation the license to act independently of the
local union. It only gives rise to a contract of agency, where the former acts in
representation of the latter.

Hence, local unions are considered principals while the federation is deemed to be merely their
agent. As such principals, the unions are entitled to exercise the rights and privileges of a
legitimate labor organization, including the right to seek certification as the sole and exclusive
bargaining agent in the appropriate employer unit.1wphi1

Caution: Under Article 245 of the Labor Code, supervisory employees are not eligible for
membership in a labor union of rank-and-file employees. The supervisory employees are
allowed to form their own union but they are not allowed to join the rank-and-file
union because of potential conflicts of interest.
o

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

The limitation is not confined to a case of supervisors wanting to join a rank-and-file

union. The prohibition extends to a supervisors local union applying for membership in a
national federation the members of which include local unions of rank-and-file
employees.

In the case of De La Salle University Medical Center and College of Medicine v.

Laguesma, the Court ruled that for the prohibition to apply, it is not enough that the
supervisory union and the rank-and-file union are affiliated with a single federation. In
addition, the supervisors must have direct authority over the rank-and-file employees.

In the instant case, the national federations that exist as separate entities to which the
rank-and-file and supervisory unions are separately affiliated with, do have a common
set of officers. In addition, APSOTEU, the supervisory federation, actively participates in
the CSBTI-SU while ALU, the rank-and-file federation, actively participates in the CSBTIRFU, giving occasion to possible conflicts of interest among the common officers of the
federation of rank-and-file and the federation of supervisory unions.

For as long as they are affiliated with the APSOTEU and ALU, the supervisory
and rank-and-file unions both do not meet the criteria to attain the status of
legitimate labor organizations, and thus could not separately petition for
certification elections.1wphi1

The PURPOSE of affiliation of the local unions into a common enterprise is to increase
the collective bargaining power in respect of the terms and conditions of labor.

When there is commingling of officers of a rank-and-file union with a supervisory union,

the constitutional policy on labor is circumvented. Labor organizations should ensure the
freedom of employees to organize themselves for the purpose of leveling the bargaining
process but also to ensure the freedom of workingmen and to keep open the corridor of
opportunity to enable them to do it for themselves.

016 Union of Filipro Employees v. Nestle Phils.,

G.R. Nos. 158930-31 March 3, 2008
TOPIC: Collective Bargaining
PONENTE: CHICO-NAZARIO, J.

AUTHOR:
NOTES: (if applicable)

FACTS:
UFE-DFA-KMU was the sole and exclusive bargaining agent of the rank-and-file employees of Nestl belonging to the latters Alabang and Cabuyao
plants. On 4 April 2001, as the existing collective bargaining agreement (CBA) between Nestl and UFE-DFA-KMU was to end on 5 June 2001, the
Presidents of the Alabang and Cabuyao Divisions of UFE-DFA-KMU informed Nestl of their intent to "open new Collective Bargaining Negotiation
for the year 2001-2004 as early as June 2001. In response thereto, Nestl informed them that it was also preparing its own counter-proposal and
proposed ground rules to govern the impending conduct of the CBA negotiations.
On 29 May 2001, in another letter to the UFE-DFA-KMU (Cabuyao Division only), Nestl reiterated its stance that "unilateral grants, one-time
company grants, company-initiated policies and programs, which include, but are not limited to the Retirement Plan, Incidental Straight Duty Pay and
Calling Pay Premium, are by their very nature not proper subjects of CBA negotiations and therefore shall be excluded therefrom."
Dialogue between the company and the union thereafter ensued.
On 14 August 2001, however, Nestl requested the National Conciliation and Mediation Board (NCMB), Regional Office No. IV, Imus, Cavite, to
conduct preventive mediation proceedings between it and UFE-DFA-KMU owing to an alleged impasse in said dialogue; i.e., that despite fifteen (15)
meetings between them, the parties failed to reach any agreement on the proposed CBA.
Conciliation proceedings proved ineffective, though, and the UFE-DFA-KMU filed a Notice of Strike on 31 October 2001 with the NCMB,
complaining, in essence, of a bargaining deadlock pertaining to economic issues, i.e., "retirement (plan), panel composition, costs and attendance, and
CBA". On 07 November 2001, another Notice of Strike was filed by the union, this time predicated on Nestls alleged unfair labor practices, that is,
bargaining in bad faith by setting pre-conditions in the ground rules and/or refusing to include the issue of the Retirement Plan in the CBA
negotiations. The result of a strike vote conducted by the members of UFE-DFA-KMU yielded an overwhelming approval of the decision to hold a
strike.
On 26 November 2001, prior to holding the strike, Nestl filed with the DOLE a Petition for Assumption of Jurisdiction, praying for the Secretary of
the DOLE, Hon. Patricia A. Sto. Tomas, to assume jurisdiction over the current labor dispute in order to effectively enjoin any impending strike by the
members of the UFE-DFA-KMU at the Nestls Cabuyao Plant in Laguna.
On 29 November 2001, Sec. Sto. Tomas issued an Order assuming jurisdiction over the subject labor dispute. The parties are further directed to meet
and convene for the discussion of the union proposals and company counter-proposals before the National Conciliation and Mediation Board (NCMB)
who is hereby designated as the delegate/facilitator of this Office for this purpose. The NCMB shall report to this Office the results of this attempt at
conciliation and delimitation of the issues within thirty (30) days from the parties receipt of this Order, in no case later than December 31, 2001. If no
settlement of all the issues is reached, this Office shall thereafter define the outstanding issues and order the filing of position papers for a ruling on the
merits.
On 7 February 2002, Nestl and UFE-DFA-KMU filed their respective position papers. Nestl addressed several issues concerning economic
provisions of the CBA as well as the non-inclusion of the issue of the Retirement Plan in the collective bargaining negotiations. On the other hand,
UFE-DFA-KMU limited itself to the issue of whether or not the retirement plan was a mandatory subject in its CBA negotiations.
UFE-DFA-KMU, instead of filing the above-mentioned supplement, filed several pleadings, one of which was a Manifestation with Motion for
Reconsideration of the Order dated February 11, 2002 assailing the Order of February 11, 2002 for supposedly being contrary to law, jurisprudence
and the evidence on record. The union posited that Sec. Sto. Tomas "could only assume jurisdiction over the issues mentioned in the notice of strike
subject of the current dispute," and that the Amended Notice of Strike it filed did not cite, as one of the grounds, the CBA deadlock.
On 8 March 2002, Sec. Sto. Tomas denied the motion for reconsideration of UFE-DFA-KMU.
Thereafter, UFE-DFA-KMU filed a Petition for Certiorari before the Court of Appeals, alleging that Sec. Sto. Tomas committed grave abuse of
discretion amounting to lack or excess of jurisdiction when she issued the Orders of 11 February 2002 and 8 March 2002.
In the interim, in an attempt to finally resolve the crippling labor dispute between the parties, then Acting Secretary of the DOLE, Hon. Arturo D.
Brion, came out with an Order dated 02 April 2002, ruling that:
a. we hereby recognize that the present Retirement Plan at the Nestl Cabuyao Plant is a unilateral grant that the parties have expressly so recognized
subsequent to the Supreme Courts ruling in Nestl, Phils. Inc. vs. NLRC, G.R. No. 90231, February 4, 1991, and is therefore not a mandatory subject
for bargaining;
b. the Unions charge of unfair labor practice against the Company is hereby dismissed for lack of merit;
c. the parties are directed to secure the best applicable terms of the recently concluded CBSs between Nestl Phils. Inc. and it eight (8) other
bargaining units, and to adopt these as the terms and conditions of the Nestl Cabuyao Plant CBA;
d. all union demands that are not covered by the provisions of the CBAs of the other eight (8) bargaining units in the Company are hereby denied;
e. all existing provisions of the expired Nestl Cabuyao Plant CBA without any counterpart in the CBAs of the other eight bargaining units in the
Company are hereby ordered maintained as part of the new Nestl Cabuyao Plant CBA;
f. the parties shall execute their CBA within thirty (30) days from receipt of this Order, furnishing this Office a copy of the signed Agreement;
g. this CBA shall, in so far as representation is concerned, be for a term of five (5) years; all other provisions shall be renegotiated not later than three
(3) years after its effective date which shall be December 5, 2001 (or on the first day six months after the expiration on June 4, 2001 of the superceded
CBA).

ISSUE(S):
(1) Whether or not Nestle is guilty of unfair labor practice
(2) Whether or not the DOLE Secretary has jurisdiction under the amended Notice of Strike
HELD:
(1) No. (2) Yes.
RATIO:
(1) UFE-DFA-KMU argues therein that Nestls "refusal to bargain on a very important CBA economic provision constitutes unfair labor practice. It explains that
Nestl set as a precondition for the holding of collective bargaining negotiations the non-inclusion of the issue of Retirement Plan. In its words, "respondent Nestl
Phils., Inc. insisted that the Union should first agree that the retirement plan is not a bargaining issue before respondent Nestl would agree to discuss other issues in the
CBA." It then concluded that "the Court of Appeals committed a legal error in not ruling that respondent company is guilty of unfair labor practice. It also committed a
legal error in failing to award damages to the petitioner for the ULP committed by the respondent." 25
We are unconvinced still.
the purpose of collective bargaining is the reaching of an agreement resulting in a contract binding on the parties; but the failure to reach an agreement after negotiations
have continued for a reasonable period does not establish a lack of good faith. The statutes invite and contemplate a collective bargaining contract, but they do not compel
one. The duty to bargain does not include the obligation to reach an agreement.
The crucial question, therefore, of whether or not a party has met his statutory duty to bargain in good faith typically turns on the facts of the individual case. As we have
said, there is no per se test of good faith in bargaining. Good faith or bad faith is an inference to be drawn from the facts. To some degree, the question of good faith may
be a question of credibility. The effect of an employers or a unions individual actions is not the test of good-faith bargaining, but the impact of all such occasions or
actions, considered as a whole, and the inferences fairly drawn therefrom collectively may offer a basis for the finding of the NLRC.
For a charge of unfair labor practice to prosper, it must be shown that Nestl was motivated by ill will, "bad faith, or fraud, or was oppressive to labor, or done in a
manner contrary to morals, good customs, or public policy, and, of course, that social humiliation, wounded feelings, or grave anxiety resulted x x x in disclaiming
unilateral grants as proper subjects in their collective bargaining negotiations. While the law makes it an obligation for the employer and the employees to bargain
collectively with each other, such compulsion does not include the commitment to precipitately accept or agree to the proposals of the other. All it contemplates is that
both parties should approach the negotiation with an open mind and make reasonable effort to reach a common ground of agreement.
Herein, the union merely bases its claim of refusal to bargain on a letter 28 dated 29 May 2001 written by Nestl where the latter laid down its position that "unilateral
grants, one-time company grants, company-initiated policies and programs, which include, but are not limited to the Retirement Plan, Incidental Straight Duty Pay and
Calling Pay Premium, are by their very nature not proper subjects of CBA negotiations and therefore shall be excluded therefrom." But as we have stated in this Courts
Decision, said letter is not tantamount to refusal to bargain. In thinking to exclude the issue of Retirement Plan from the CBA negotiations, Nestl, cannot be faulted for
considering the same benefit as unilaterally granted, considering that eight out of nine bargaining units have allegedly agreed to treat the Retirement Plan as a unilaterally
granted benefit. This is not a case where the employer exhibited an indifferent attitude towards collective bargaining, because the negotiations were not the unilateral
activity of the bargaining representative. Nestls desire to settle the dispute and proceed with the negotiation being evident in its cry for compulsory arbitration is proof
enough of its exertion of reasonable effort at good-faith bargaining.
In the case at bar, Nestle never refused to bargain collectively with UFE-DFA-KMU. The corporation simply wanted to exclude the Retirement Plan from the issues to be
taken up during CBA negotiations, on the postulation that such was in the nature of a unilaterally granted benefit. An employers steadfast insistence to exclude a
particular substantive provision is no different from a bargaining representatives perseverance to include one that they deem of absolute necessity. Indeed, an adamant
insistence on a bargaining position to the point where the negotiations reach an impasse does not establish bad faith.[fn24 p.10] It is but natural that at negotiations,
management and labor adopt positions or make demands and offer proposals and counter-proposals. On account of the importance of the economic issue proposed by
UFE-DFA-KMU, Nestle could have refused to bargain with the former but it did not. And the managements firm stand against the issue of the Retirement Plan did not
mean that it was bargaining in bad faith. It had a right to insist on its position to the point of stalemate.
Herein, Nestl is accused of violating its duty to bargain collectively when it purportedly imposed a pre-condition to its agreement to discuss and engage in collective
bargaining negotiations with UFE-DFA-KMU.
A meticulous review of the record and pleadings of the cases at bar shows that, of the two notices of strike filed by UFE-DFA-KMU before the NCMB, it was only on the
second that the ground of unfair labor practice was alleged. Worse, the 7 November 2001 Notice of Strike merely contained a general allegation that Nestl committed
unfair labor practice by bargaining in bad faith for supposedly "setting pre-condition in the ground rules (Retirement issue)." In contrast, Nestl, in its Position Paper, did
not confine itself to the issue of the non-inclusion of the Retirement Plan but extensively discussed its stance on other economic matters pertaining to the CBA. It is UFEDFA-KMU, therefore, who had the burden of proof to present substantial evidence to support the allegation of unfair labor practice.
A perusal of the allegations and arguments raised by UFE-DFA-KMU in the Memorandum (in G.R. Nos. 158930-31) will readily disclose the need for the presentation of
evidence other than its bare contention of unfair labor practice in order to make certain the propriety or impropriety of the ULP charge hurled against Nestl. Under Rule
XIII, Sec. 4, Book V of the Implementing Rules of the Labor Code:
x x x. In cases of unfair labor practices, the notice of strike shall as far as practicable, state the acts complained of and the efforts to resolve the dispute amicably."
(Emphasis supplied.)
In the case at bar, except for the assertion put forth by UFE-DFA-KMU, neither the second Notice of Strike nor the records of these cases substantiate a finding of unfair
labor practice. It is not enough that the union believed that the employer committed acts of unfair labor practice when the circumstances clearly negate even a prima facie
showing to warrant such a belief. (Tiu v. National Labor Relations Commission, G.R. No. 123276, 18 August 1997, 277 SCRA 681, 688.)
Employers are accorded rights and privileges to assure their self-determination and independence and reasonable return of capital. (Capitol Medical Center, Inc. v. Meris,
G.R. No. 155098, 16 September 2005, 470 SCRA 125, 136.) This mass of privileges comprises the so-called management prerogatives. (Capitol Medical Center, Inc. v.
Meris, G.R. No. 155098, 16 September 2005, 470 SCRA 125, 136.) In this connection, the rule is that good faith is always presumed. As long as the companys exercise
of the same is in good faith to advance its interest and not for purpose of defeating or circumventing the rights of employees under the law or a valid agreement, such
exercise will be upheld. (Capitol Medical Center, Inc. v. Meris, G.R. No. 155098, 16 September 2005, 470 SCRA 125, 136.)
There is no per se test of good faith in bargaining. (Hongkong Shanghai Banking Corporation Employees Union v. National Labor Relations Commission, G.R. No.
125038, 6 November 1997, 281 SCRA 509, 518.) Good faith or bad faith is an inference to be drawn from the facts. (Hongkong Shanghai Banking Corporation
Employees Union v. National Labor Relations Commission, G.R. No. 125038, 6 November 1997, 281 SCRA 509, 518.) Herein, no proof was presented to exemplify bad
faith on the part of Nestl apart from mere allegation. Construing arguendo that the content of the aforequoted letter of 29 May 2001 laid down a pre-condition to its
agreement to bargain with UFE-DFA-KMU, Nestls inclusion in its Position Paper of its proposals affecting other matters covered by the CBA negates the claim of
refusal to bargain or bargaining in bad faith. Accordingly, since UFE-DFA-KMU failed to proffer substantial evidence that would overcome the legal presumption of good
faith on the part of Nestl, the award of moral and exemplary damages is unavailing.

(2) This Court is not convinced by the argument raised by UFE-DFA-KMU that the DOLE Secretary should not
have gone beyond the disagreement on the ground rules of the CBA negotiations. The union doggedly asserts that
the entire labor dispute between herein parties concerns only the ground rules.
Lest it be forgotten, it was UFE-DFA-KMU which first alleged a bargaining deadlock as the basis for the filing of
its Notice of Strike; and at the time of the filing of the first Notice of Strike, several conciliation conferences had
already been undertaken where both parties had already exchanged with each other their respective CBA
proposals. In fact, during the conciliation meetings before the NCMB, but prior to the filing of the notices of
strike, the parties had already delved into matters affecting the meat of the collective bargaining agreement.
This Court maintains its original position in the Decision that, based on the Notices of Strike filed by UFE-DFAKMU, the Secretary of the DOLE rightly decided on matters of substance. That the union later on changed its
mind is of no moment because to give premium to such would make the legally mandated discretionary power of
the Dole Secretary subservient to the whims of the parties.

DISSENTING/CONCURRING OPINION(S):

PAL v PALEA
GR 142399 March 12, 2008
FACTS: (In chronological order)
1. PAL and PALEA entered into a CBA covering the period of 1986-1989.
2. Part of said agreement required PAL to pay its rank and file employees the following bonuses:
a. 13th Month Pay (Mid-Year Bonus); and
b. Christmas Bonus
3. Prior to the payment of the 13th month pay (mid-year bonus), PAL released a guideline implementing the provision, to wit:
1) Eligibility
a)
Ground employees in the general payroll who are regular as of April 30, 1988;
b)
Other ground employees in the general payroll, not falling within category a) above shall receive their 13th
Month Pay on or before December 24, 1988;
2) Amount
a)
For category a) above, one month basic salary as of April 30, 1988;
b)
Employees covered under 1 b) above shall be paid not less than 1/12 of their
basic salary for every
month of service within the calendar year.
3) Payment Date: May 9, 1988 for category 1 a) above.
4. PALEA assailed the implementation of the foregoing guideline on the ground that all employees of PAL, regular or non-regular,
must be paid their 13th month pay. In fact, in a letter, PALEA, through Herbert C. Baldovino, informed PAL that several regular
employees failed to receive their 13th Month Pay.
5. In response thereto, PAL informed PALEA that rank and file employees who were regularized after 30 April 1988 were not entitled to
the 13th month pay as they were already given their Christmas bonuses on 9 December 1988 per the Implementing Rules of PD 851.
6. Disagreeing with PAL, PALEA filed a labor complaint for unfair labor practice against petitioner PAL before the NLRC. The complaint
interposed that the cut-off period for regularization should not be used as the parameter for granting the 13th month pay considering
that the law does not distinguish the status of employment; instead, the law covers all employees.
7. PAL countered that those rank and file employees who were not regularized by 30 April of a particular year are, in principle, not
denied their 13th month pay considering they receive said mandatory bonus in the form of the Christmas Bonus; that the Christmas
Bonus given to all its employees is deemed a compliance with Presidential Decree No. 851 and the latters implementing rules; and
that the foregoing has been the practice formally adopted in previous CBAs as early as 1970.
8. LA: Dismissed PALEAs complaint for lack of merit. PAL was not guilty of ULP in withhoulding the grant of the 13 th Month Pay/Mid
Year Bonus to the concerned employees. The giving of the particular bonus was said to be merely an additional practice made in the
past, such being the case, it violated no agreement or existing practice or committed ULP, as charged. MOR to the NLRC.
9. NLRC: GRANTED the MOR. It reversed and set aside this and ORDERED PAL to pay the 13 th month pay/mid-year bonus of the
members. It held that after going through the documents submitted by PALEA in support of its contention, the Commission is
convinced that the 13th month pay or mid-year bonus is distinct from the Christmas Bonus, and although PAL already paid its
employees the latter, it must likewise pay them the former. MOR denied!
10. PAL went directly to this Court (SC) via a Petition for Review on Certiorari. However, SC referred this Petition to the CA for proper
disposition.
11. CA: Dismissed PALs petition and affirmed NLRC. From the provision of the said inter-office memo, employees who are regular as
of 30 April 1988 and those regularized thereafter, are entitled for payment of the non-regular employees as provided for under letter
(c) of the Guidelines issued. If the intention is not to include employees regularized beyond 30 April 1988, they would not have placed
letter (c). Well-settled is the rule that all doubts should be resolved in favor of labor. To rule otherwise is a betrayal of our zealous
commitment to uphold the constitutional provision affording protection to labor. MOR denied!
12. PAL filed a Petition for Review on Certiorari under R45 before the SC.
13. PALs arguments:

1) the CBA does not apply to non-regular employees such that any benefits arising from said agreement cannot be made to
apply to them, including the mid-year bonus; and
2) it has always been the company practice not to extend the mid-year bonus to those employees who have not attained
regular status prior to the month of May, when payment of the particular bonus accrues.
14. PALEA counters:
1) benefits to all employees in the collective bargaining unit, including those who do not belong to the chosen bargaining
labor organization, applies;
2) Anent the supposed company practice of PAL not to extend the payment of the 13th month pay or mid-year bonus to
non-regular employees, PALEA contends that non-payment of said benefit is considered a diminution of privileges or benefits
proscribed by PD 851;
3) that petitioner PAL misrepresented that the 13th month pay or mid-year bonus is the same as the Christmas bonus when,
in actuality, the latter is entirely different as it is a benefit paid under the provisions of the CBA, while the former is one
mandated by law, PD 851, in particular.
ISSUE: Whether or not the Court of Appeals committed reversible error in affirming the order of the NLRC for the payment of the 13th
month pay or mid-year bonus to its employees regularized after 30 April 1988. NO!
HELD:

APPLICABILITY OF THE CBA

A cursory reading of the 1986-1989 CBA of the parties herein will instantly reveal that Art. I, Sec. 3 of said agreement made its
provision applicable to all employees in the bargaining unit. The particular section specifically defined the scope of application
of the CBA without distinguishing between regular and non-regular employees.
It is a well-settled doctrine that the benefits of a CBA extend to the laborers and employees in the collective bargaining unit, including
those who do not belong to the chosen bargaining labor organization. Otherwise, it would be a clear case of discrimination.
Hence, to be entitled to the benefits under the CBA, the employees must be members of the bargaining unit, but not
necessarily of the labor organization designated as the bargaining agent. A bargaining unit has been defined as a group of
employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective interest of all
the employees, consistent with equity to the employer, indicates to be the best suited to serve the reciprocal rights and duties of the
parties under the collective bargaining provisions of the law.
At this point, the allegation of PAL that the non-regular employees do not belong to the collective bargaining unit and are thus not
covered by the CBA is unjustified and unsubstantiated. It is apparent that PAL excludes certain employees from the benefits of the
CBA only because they have not yet achieved regular status by the cut-off date, 30 April 1988. There is no showing that the nonregular status of the concerned employees by said cut-off date sufficiently distinguishes their interests from those of the regular
employees so as to exclude them from the collective bargaining unit and the benefits of the CBA.
13TH MONTH PAY NOT EQUIVALENT TO MID-YEAR BONUS. BOTH MUST BE GIVEN
As far as non-regular employees are concerned, PAL alleges that their 13th month pay shall be the same as their Christmas bonus
and will be paid according to the terms governing the latter. SC: wrong!
From the facts of the present Petition, it is crystal clear that PAL is claiming an exemption from payment of the 13th month pay or
mid-year bonus provided in the CBA under the guise of paying the Christmas bonus which it claims to be the equivalent of the 13th
month pay under PD 851.
PD 851 mandates that all employers must pay all their employees receiving a basic salary of not more than P1,000.00
a month, regardless of the nature of the employment, a 13th month pay not later than 24 December of every year.
Memorandum Order No. 28, dated 13 August 1986, removed the salary ceiling, generally making all employees entitled to the 13th
month pay regardless of the amount of their basic salary, designation or employment status, and irrespective of the method by which
their wages are paid, provided that they have worked for at least one (1) month during a calendar year. Presidential Decree No. 851,
as amended, does admit of certain exceptions or exclusions from its coverage, among which is:
Sec. 3(c). Employers already paying their employees 13-month pay or more in a calendar year or its equivalent at the time of this
issuance.
While employers already paying their employees a 13th month pay or more in a calendar year or its equivalent at the time of the
issuance of PD 851 are already exempted from the mandatory coverage of said law, PAL cannot escape liability in this case by virtue
thereof.
It must be stressed that in the 1986-1989 CBA, petitioner PAL agreed to pay its employees 1) the 13th month pay or the mid-year
bonus, and 2) the Christmas bonus. The 13th month pay, guaranteed by PD 851, is explicitly covered or provided for as the mid-year
bonus in the CBA, while the Christmas bonus is evidently and distinctly a separate benefit.
PAL may not be allowed to brush off said distinction, and unilaterally and arbitrarily declare that for non-regular employees, their
Christmas bonus is the same as or equivalent to the 13th month pay.
The Christmas bonus in this case is, although, by virtue of its incorporation into the CBA, has become more than just an act of
generosity on the part of petitioner PAL, but a contractual obligation it has undertaken.
Accordingly, if PAL truly intended that the Christmas bonus be treated as the equivalent of the 13th month pay required by law, then
said intention should have been expressly declared in their 1986-1989 CBA, or the separate provision therein on the Christmas bonus
should have been removed because it would only be superfluous. The intention is clear therefore that the bonus provided in the CBA
was meant to be in addition to the legal requirement. x x x A bonus under the CBA is an obligation created by the contract between
the management and workers while the 13th month pay is mandated by the law (P.D. 851).
The non-regular rank and file employees of petitioner PAL as of 30 April 1988, are not actually seeking more benefits than what the
other member-employees of the same bargaining unit are already enjoying. They are only requesting that all members of the
bargaining unit be treated equally and afforded the same privileges and benefits as agreed upon between PALEA and PAL in the CBA.
PAL is committing a patent act of inequity that is grossly prejudicial to the non-regular rank and file employees there
being no rational basis for withholding from the latter the benefit of a Christmas bonus besides the 13th month pay or mid-year
bonus, while the same is being granted to the other rank and file employees of petitioner PAL who have been regularized as of 30
April 1988, although both types of employees are members of the same bargaining unit. As it had willfully and intentionally agreed to
under the terms of the CBA, r PAL must pay its regular and non-regular employees who are members of the bargaining unit
represented by respondent PALEA their 13th month pay or mid-year bonus separately from and in addition to their Christmas bonus.

018
SAN
MIGUEL
FOODS,
INC., petitioner,
vs.
SAN MIGUEL CORPORATION EMPLOYEES UNIONPTWGO, respondent.
[G.R. NO. 168569; October 5, 2007]
TOPIC: Collective Bargaining
PONENTE: Carpio Morales

AUTHOR: Nikki A
NOTES: (if applicable)

FACTS:
San Miguel Corporation Employees Union PTWGO (the Union), was the sole bargaining agent of all the
monthly paid employees of San Miguel Foods, Inc. (SMFI).
On November 9, 1992, some employees of SMFIs Finance Dept., through the Union represented by Moraleda,
brough a grievance against Finance Manager Montesa for discrimination, favoritism, ULP, not flexible, harassment,
promoting divisiveness and sectarianism before SMFI Plant Operations Manager Nava in accordance with Step 1 of the
grievance machinery adopted in the Collective Bargaining Agreement (CBA) forged by SMFI and the Union. The Union
sought the following: (1) review, evaluation & upgrading of Finance staff and (2) promotion of Montesa to other SMC
affiliates & subsidiaries.
At the grievance meeting held on January 14, 1993, SMFI informed the union that it planned to address the
grievance through a work management review which would be completed by March 1993. On October 6, 1993, SMFI
rendered a decision stating that it was still in the process of completing the work management review hence, the Unions
requests could not be granted.
On October 20, 1993, the Union filed a complaint before the NLRC Arbitration Branch against SMFI, President
Veloso and Finance Manager Montesa for ULP, unjust discrimination in matters of promotion. Instead of filing a position
paper as required by the labor Arbiter, SMFI filed a motion to dismiss contending that the issues raised in the complaint
were grievance issues and therefore, should be resolved in the grievance machinery provided in the CBA of the parties or
in the mandated provisions of voluntary arbitration which is also provided in the CBA. The Unions position paper
specified the acts of ULP of SMFI under Art. 248 (e) and (i) of the Labor Code:
Art. 248. Unfair labor practices of employers. It shall be unlawful for an employer to commit any of the following unfair labor
practices:
(e) 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.xxx
(i) to violate a collective bargaining agreement.

By order of February 18, 1994, the Labor Arbiter granted SMFIs motion to dismiss and ordered the remand of the
case to the grievance machinery for completion of the proceedings. Upon the Unions filing of Motion for
Reconsideration/Appeal to the NLRC, this motion was granted and the Labor Arbiter was ordered to continue the
proceedings of the Unions complaint. SMFI filed a petition for certiorari with the SC but was referred to the Court of
Appeals. The CA denied SMFIs petition for certiorari, it holding that the Labor Arbiter has jurisdiction over the complaint
of the Union, they having violated the seniority rule under the CBA by appointing and promoting certain employees which
amounted to ULP. Hence, this petition for review on certiorari.
ISSUE(S):
1. WON the Labor Arbiter has jurisdiction over the complaint of the Union.
2. WON SMFIs alleged violation of the CBA constitutes ULP.
HELD: (YES/NO, and a short explanation)
1. No. For an ULP case to be cognizable by the LA, and the NLRC to exercise its appellate jurisdiction, the
allegations in the complaint should show prima facie the concurrence of the two requirements of: (1) gross
violation of CBA, and (2) the violation pertains to the economic provisions of the CBA.
2. No, the alleged acts were not gross violations of the CBA and the violation did not pertain to an economic
provision of the CBA.
RATIO:
On the questioned promotions, the Union did not allege that they were done to encourage or discourage membership in a labor
organization. In fact, those promoted were members of the complaining Union. The promotions do not thus amount to ULP under
Article 248(e) of the Labor Code.
As for the alleged ULP committed under Article 248(i), for violation of a CBA, this Article is qualified by Article 261 of the Labor

Code, the pertinent portion of which latter Article reads:

x x x violations of a Collective Bargaining Agreement, except those which are gross in character, shall no longer be
treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining Agreement. For purposes
of this article, gross violations of Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to
comply with the economic provisions of such agreement. (Emphasis and underscoring supplied)
Silva v. NLRC instructs that for a
ULP case to be cognizable by the Labor Arbiter, and the NLRC to exercise its appellate jurisdiction, the allegations in the
complaint should show prima facie the concurrence of two things, namely: (1) gross violation of the CBA; AND (2) the
violation pertains to the economic provisions of the CBA.17 (Emphasis and underscoring supplied)
As reflected in the above-quoted allegations of the Union in its Position Paper, the Union charges SMFI to have violated the grievance
machinery provision in the CBA. The grievance machinery provision in the CBA is not an economic provision, however, hence, the
second requirement for a Labor Arbiter to exercise jurisdiction of a ULP is not present.

DISSENTING/CONCURRING OPINION(S):
CASE LAW/ DOCTRINE:
ULP case to be cognizable by the Labor Arbiter, and the NLRC to exercise its appellate jurisdiction, the allegations in the complaint
should show prima facie the concurrence of two things, namely:
(1) gross violation of the CBA; AND
(2) the violation pertains to the economic provisions of the CBA.
019 CAPITOL MEDICAL CENTER v. TRAJANO
GR 155690 June 30, 2005
TOPIC: Collective Bargaining
PONENTE: Sandoval-Gutierrez, J.
FACTS:

AUTHOR:

1. Capitol Medical Center Employees Association-Alliance of Filipino Workers, respondent, is a duly registered labor union acting as the certified
collective bargaining agent of the rank-and-file employees of petitioner hospital Capitol Medical Center, Inc.
2. Respondent union, through its president Jaime N. Ibabao, sent petitioner a letter requesting a negotiation of their Collective Bargaining Agreement
(CBA).
3. In its reply, petitioner, challenging the unions legitimacy, refused to bargain with respondent. Subsequently, petitioner filed with the Bureau of
Labor Relations (BLR), Department of Labor and Employment, a petition for cancellation of respondents certificate of registration, docketed as NCROD-9710-006-IRD.
4. For its part, respondent filed with the National Conciliation and Mediation Board (NCMB), National Capital Region, a notice of strike, docketed as
NCMB-NCR-NS-10-453-97. Respondent alleged that petitioners refusal to bargain constitutes unfair labor practice. Despite several conferences and
efforts of the designated conciliator-mediator, the parties failed to reach an amicable settlement.
5. Thereafter, respondent staged a strike.
6. Former Labor Secretary Leonardo A. Quisumbing then issued an Order assuming jurisdiction over the labor dispute and ordering all striking
workers to return to work and the management to resume normal operations.
7. Petitioner then filed a motion for reconsideration but was denied in an Order.
8. Petitioner filed with this Court a petition for certiorari assailing the Labor Secretarys Orders. Pursuant to our ruling in St. Martin Funeral Home
vs.The National Labor Relations Commission, et al., we referred the petition to the Court of Appeals for its appropriate action and disposition.
9. Meantime, the Regional Director, in NCR-OD-9710-006-IRD, issued an Order denying the petition for cancellation of respondent unions
certificate of registration.[5]
10. The Appellate Court rendered a Decision affirming the Orders of the Secretary of Labor.

11. The Court of Appeals issued a Resolution denying petitioners motion for reconsideration.
12. Hence, this petition for review on certiorari.
13. Petitioner contends that its petition for the cancellation of respondent unions certificate of registration involves a prejudicial question that should
first be settled before the Secretary of Labor could order the parties to bargain collectively.
ISSUE:
Whether or not the pendency of a petition for cancellation of union registration precludes collective bargaining
HELD:
No.
RATIO:
1. As aptly stated by the Solicitor General in his comment on the petition, the Secretary of Labor correctly ruled that the pendency of a petition for
cancellation of union registration does not preclude collective bargaining, thus:
That there is a pending cancellation proceedings against the respondent Union is not a bar to set in motion the
mechanics of collective bargaining. If a certification election may still be ordered despite the pendency of a
petition to cancel the unions registration certificate (National Union of Bank Employees vs. Minister of Labor,
110 SCRA 274), more so should the collective bargaining process continue despite its pendency. We must
emphasize that the majority status of the respondent Union is not affected by the pendency of the Petition for
Cancellation pending against it. Unless its certificate of registration and its status as the certified bargaining
agent are revoked, the Hospital is, by express provision of the law, duty bound to collectively bargain with the
Union. Indeed, no less than the Supreme Court already ordered the Hospital to collectively bargain with the
Union when it affirmed the resolution of this Office dated November 18, 1994 directing the management of
the Hospital to negotiate a collective bargaining agreement with the Union. That was the categorical directive
of the High Court in its Resolution dated February 4, 1997 in Capitol Medical Center Alliance of Concerned
Employees-United Filipino Service Worker vs. Hon. Bienvenido E. Laguesma, et al., G.R. No. L-118915.
2. Moreover, as mentioned earlier, during the pendency of this case before the Court of Appeals, the Regional Director, in NCR-OD-9710-006-IRD,
issued an Order on October 1, 1998 denying the petition for cancellation of respondents certificate of registration. This Order became final and
executory and recorded in the BLRs Book of Entries of Judgments on June 3, 1999.
3. Petitioner also maintains that the Secretary of Labor cannot exercise his powers under Article 263 (g) of the Labor Code without observing the
requirements of due process.
Article 263 (g) of the Labor Code, as amended, provides:
ART. 263. Strikes, Picketing and Lockouts.
xxxxxx
(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest,
the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory
arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in
the assumption or certification order. If one has already taken place at the time of assumption or certification, all striking or locked out employees
shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. The
Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure compliance with this
provision as well as with such orders as he may issue to enforce the same.
x x x. In labor disputes adversely affecting the continued operation of such hospitals, clinics or medical institutions, it shall be the duty of the striking
union or locking-out employer to provide and maintain an effective skeletal workforce of medical and other health personnel, whose movement and
services shall be unhampered and unrestricted, as are necessary to insure the proper and adequate protection of the life and health of its patients, most
especially emergency cases, for the duration of the strike or lockout. In such cases, therefore, the Secretary of Labor and Employment is
mandated to immediately assume, within twenty-four (24) hours from knowledge of the occurrence of such a strike or lockout, jurisdiction
over the same or certify it to the Commission for compulsory arbitration. For this purpose, the contending parties are strictly enjoined to comply
with such orders, prohibitions and/or injunctions as are issued by the Secretary of Labor and Employment or the Commission, under pain of
immediate disciplinary action, including dismissal or loss of employment status or payment by the locking-out employer of backwages, damages and
other affirmative relief, even criminal prosecution against either or both of them.
The foregoing notwithstanding, the President of the Philippines shall not be precluded from determining the industries that, in his opinion, are
indispensable to the national interest, and from intervening at any time and assuming jurisdiction over any such labor dispute in order to settle or

terminate the same.

x x x x x x.
4. In Magnolia Poultry Employees Union vs. Sanchez,[6] we held that the discretion to assume jurisdiction may be exercised by the Secretary of Labor
and Employment without the necessity of prior notice or hearing given to any of the parties. The rationale for his primary assumption of jurisdiction
can justifiably rest on his own consideration of the exigency of the situation in relation to the national interests.
In sum, petitioners submissions are bereft of merit.
CASE LAW/ DOCTRINE:
DISSENTING/CONCURRING OPINION(S):

Standard Chartered Bank Employees Union vs. Confessor

GR No. 114974
June 16, 2004
Callejo, Sr.
Facts:
Parties:
- Standard Chartered Bank (Bank): foreign banking corporation doing
business in the Philippines
- Standard Chartered Bank Employees Union (Union): exclusive
bargaining agent of the Bank
Sometime in August 1990, the Bank and Union signed a five-year CBA
with a provision to re-negotiate the terms on the third year.
Before the expiration of the three-year period and within the 60-day
freedom period, the Union, thru its president Eddie Divinagracia,
initiated the negotiations and sent a letter containing the Unions
proposals covering political provisions and 34 economic provisions.
The bank, thru its country manager Peter Harris, attached counterproposals. Eventually, both parties agreed to set meetings to negotiate
the CBA.
Before the start of the negotiations, the Union suggested that the
Banks lawyers should be excluded from the negotiating team.
Consequently, Cielito Diokno, head of the negotiating panel
suggested to the Unions president to exclude Jose Umali, president of
the National Union of Bank Employees (NUBE), the federation to which
the Union was affiliated, from the Unions negotiating panel. However,
Umali was retained a member.
During the negotiations, there were certain provisions, which both
parties could not agree.
Towards the end of the meeting, the Union manifested that the same
should be changed to "DEADLOCKED" to indicate that such items
remained unresolved. Both parties agreed to place the notation
"DEFERRED/DEADLOCKED.
On May 18, 1993, the negotiations for the economic provisions
commenced. Both parties presented their basis for the economic
proposals. Both parties still could not agree on the economic
provisions.
Banks proposal:
- Wage Increase : 1st Year from P1,000 to P1,050.00

2nd Year P800.00 no change

Group Hospitalization Insurance
From: P35,000.00 per illness To : P35,000.00 per illness per year
- Death Assistance For employee
From: P20,000.00 To : P25,000.00
- Dental Retainer Original offer remains the same
Unions proposal:
- Wage Increase: 1st Year - 40%
- 2nd Year - 19.5%

Group Hospitalization InsuranceFrom: P60,000.00 per year to : P50,000.00

per year

Dental:

Temporary Filling/ P150.00

Tooth Extraction

Permanent Filling 200.00

Prophylaxis 250.00

Root Canal From P2,000 per tooth to: 1,800.00 per tooth

Death Assistance:

For Employees: From P45,000.00 to P40,000.00

For Immediate Family Member: From P25,000.00 to P20,000.00

After negotiations, the Union and the Bank failed to agree on the
remaining economic provisions of the CBA. The Union declared a
deadlock and filed a Notice of Strike before the National Conciliation
and Mediation Board (NCMB).
Thereafter, the Bank filed a complaint for ULP and Damages before the
Arbitration Branch of the NLRC in Manila against the Union. Allegations
of the Bank includes:
- Union violated its duty to bargain, as it did not bargain in good faith
- the Union demanded "sky high economic demands," indicative of
blue-sky bargaining
- the Union violated its no strike- no lockout clause by filing a notice
of strike before the NCMB
- as a consequence of the illegal act, the Bank suffered nominal and
actual damages and was forced to litigate and hire the services of
the lawyer
Secretary of Labor and Employment (SOLE) Nieves Confesor issued
an Order assuming jurisdiction over the labor dispute at the Bank. After
the parties submitted their position papers, SOLE issued an Order on
Oct. 29, 1993 dismissing both the Bank and Unions ULP complaint for
lack of merit and that both parties failed to substantiate their claims.

The SOLE also gave the following economic rewards:

Wage Increase:
a) To be incorporated to present salary rates
Fourth year : 7% of basic monthly salary
Fifth year : 5% of basic monthly salary based on the 4th year
adjusted salary
b) Additional fixed amount:
Fourth year : P600.00 per month
Fifth year : P400.00 per month
2. Group Insurance
a) Hospitalization : P45,000.00
b) b) Life : P130,000.00
c) c) Accident : P130,000.00
3. Medicine Allowance
Fourth year : P5,500.00
Fifth year : P6,000.00
4. Dental Benefits: Provision of dental retainer as proposed by the Bank,
but without diminishing existing benefits
5. Optical Allowance
Fourth year: P2,000.00
Fifth year : P2,500.00
6. Death Assistance
a) Employee : P30,000.00
b) Immediate Family Member : P5,000.00
7. Emergency Leave Five (5) days for each contingency
8. Loans
a) Car Loan : P200,000.00
b) Housing Loan : It cannot be denied that the costs attendant to
having ones own home have tremendously gone up. The need,
therefore, to improve on this benefit cannot be overemphasized. Thus,
the management is urged to increase the existing and allowable
housing loan that the Bank extends to its employees to an amount that
will give meaning and substance to this CBA benefit
Both parties filed MR, which were denied by Confesor
On March 22, 1994, the Bank and Union signed the CBA. The wage
increase took effect and the signing bonuses were given to the
employees covered by the CBA
Thereafter, the Union filed a petition for certiorari under Rule 65 for
failure of the SOLE to rule on the ULP charge. They alleged that:
- The Bank interfered with the Unions choice of negotiator, thereby
committing ULP
- Dioknos suggestion that the negotiation be limited as a "family
affair" was tantamount to suggesting that Federation President Jose
Umali, Jr. be excluded from the Unions negotiating panel
- The Bank committed surface bargaining when the Bank merely went
through the motions of collective bargaining without the intent to
reach an agreement, and made bad faith proposals when it
announced that the parties should begin from a clean slate
Issue: WON the Union was able to substantiate its claim of unfair labor
practice against the Bank arising from the latters alleged "interference" with
its choice of negotiator; surface bargaining; making bad faith non-economic
1.

proposals; and refusal to furnish the Union with copies of the relevant data
Held: The petition is bereft of merit.
Dispositive Portion: IN LIGHT OF THE FOREGOING, the October 29,
1993 Order and December 16, 1993 and February 10, 1994 Resolutions of
then Secretary of Labor Nieves R. Confesor are AFFIRMED. The Petition is
hereby DISMISSED.
Ratio:
On interference under Article 248(a) of the Labor Code
Under the International Labor Organization Convention (ILO) No. 87
FREEDOM OF ASSOCIATION AND PROTECTION OF THE RIGHT TO
ORGANIZE to which the Philippines is a signatory, "workers and
employers, without distinction whatsoever, shall have the right to
establish and, subject only to the rules of the organization concerned,
to job organizations of their own choosing without previous
authorization
Said provision was incorporated in Article 243 of the Labor Code and in
the Constitution wherein an entire section was devoted emphasizing its
mandate to afford protection to labor, and highlights "the principle of
shared responsibility" between workers and employers to promote
industrial peace.
Article 248(a) of the Labor Code, considers it an unfair labor
practice when an employer interferes, restrains or coerces employees
in the exercise of their right to self-organization or the right to form
association. The right to self-organization necessarily includes the right
to collective bargaining.
If an employer interferes in the selection of its negotiators or coerces
the Union to exclude from its panel of negotiators a representative of
the Union, and if it can be inferred that the employer adopted the said
act to yield adverse effects on the free exercise to right to selforganization or on the right to collective bargaining of the employees,
ULP under Article 248(a) in connection with Article 243 of the Labor
Code is committed. However, substantial evidence or relevant
evidence as a reasonable mind might accept as adequate to support a
conclusion is required to support the claim.
In this case, the Union based their allegations on the suggestions of
Diokno to exclude Umali from the negotiating panel. However, records
show that after the initiation of the collective bargaining process, with
the inclusion of Umali in the Unions negotiating panel, the
negotiations pushed through. The complaint was made only after a
deadlock was declared by the Union.
It is clear that such ULP charge was merely an afterthought. The
accusation occurred after the arguments and differences over the
economic provisions became heated and the parties had become
frustrated. It happened after the parties started to involve personalities
On the duty to bargain collectively
Surface bargaining is defined as "going through the motions of

negotiating" without any legal intent to reach an agreement. It

involves the question of the intent of the party in question, and usually
such intent can only be inferred from the totality of the challenged
partys conduct both at and away from the bargaining table. It involves
the question of whether an employers conduct demonstrates an
unwillingness to bargain in good faith or is merely hard bargaining
Based on the minutes of the meetings, there is no showing that the
Bank had any intention of violating its duty to bargain with the Union.
The Bank even sent its counter-proposals and the meetings were set
for the settlement of their differences. The minutes of the meetings
show that both the Bank and the Union exchanged economic and noneconomic proposals and counter-proposals.
In other words, the Union was not able to show that the Bank did not
want to reach a agreement with the Union or settle their differences
The duty to bargain "does not compel either party to agree to a
proposal or require the making of a concession. Hence, the parties
failure to agree did not amount to ULP under Article 248(g) for violation
of the duty to bargain.
The approval of the CBA and the release of signing bonus do not
necessarily mean that the Union waived its ULP claim against the Bank
during the past negotiations
the Union failed to substantiate its claim that the Bank refused to
furnish the information it needed to validate the guestimates on the
data of rank and file. However, Umali failed to put his request in writing
as provided for in Article 242(c) of the Labor Code, which states
that
To be furnished by the employer, upon written request, with the annual
audited financial statements, including the balance sheet and the
profit and loss statement, within thirty (30) calendar days from the
date of receipt of the request, after the union has been duly
recognized by the employer or certified as the sole and exclusive
bargaining representatives of the employees in the bargaining unit, or
within sixty (60) calendar days before the expiration of the existing
collective bargaining agreement, or during the collective negotiation

On blue-sky bargaining
The Union is not guilty of ULP for engaging in blue-sky bargaining or
making exaggerated or unreasonable proposals.
The Bank failed to show that the economic demands made by the
Union were exaggerated or unreasonable. The minutes of the meeting
show that the Union based its economic proposals on data of rank and
file employees and the prevailing economic benefits received by bank
employees from other foreign banks doing business in the Philippines
and other branches of the Bank in the Asian region.
Case Law / Doctrine
Dissenting / Concurring
021 General Milling Corp. vs CA
G.R. No. 146728. February 11, 2004
TOPIC: Collective Bargaining
PONENTE: Quisumbing, J.:

AUTHOR:
NOTES: (if applicable)

FACTS: (chronological order)

1. In its two plants located at Cebu City and Lapu-Lapu City, petitioner General Milling Corporation (GMC)
employed 190 workers. They were all members of private respondent General Milling Corporation Independent
Labor Union (union, for brevity), a duly certified bargaining agent.

2. On April 28, 1989, GMC and the union concluded a CBA which included the issue of representation effective for a
term of three years. The CBA was effective for three years retroactive to December 1, 1988. Hence, it would
expire on November 30, 1991.

3. On November 29, 1991, a day before the expiration of the CBA, the union sent GMC a proposed CBA, with a
request that a counter-proposal be submitted within 10 days.

4. As early as October 1991, however, GMC had received collective and individual letters from workers who stated
that they had withdrawn from their union membership, on grounds of religious affiliation and personal
differences. Believing that the union no longer had standing to negotiate a CBA, GMC did not send any counterproposal.

5. On December 16, 1991, GMC wrote a letter to the unions officers, Rito Mangubat and Victor Lastimoso. The letter
stated that it felt there was no basis to negotiate with a union which no longer existed, but that management was
nonetheless always willing to dialogue with them on matters of common concern and was open to suggestions on
how the company may improve its operations.

6. In answer, the union officers wrote a letter dated December 19, 1991 disclaiming any massive disaffiliation or
resignation from the union and submitted a manifesto, signed by its members, stating that they had not withdrawn
from the union.

7. On January 13, 1992, GMC dismissed Marcia Tumbiga, a union member, on the ground of incompetence. The
union protested and requested GMC to submit the matter to the grievance procedure provided in the CBA. GMC,
however, advised the union to refer to our letter dated December 16, 1991.

8. Thus, the union filed, on July 2, 1992, a complaint against GMC with the NLRC. The complaint alleged unfair
labor practice on the part of GMC for: (1) refusal to bargain collectively; (2) interference with the right to selforganization; and (3) discrimination.

9. The labor arbiter dismissed the case with the recommendation that a petition for certification election be held to
determine if the union still enjoyed the support of the workers.The union appealed to the NLRC.

10. On January 30, 1998, the NLRC set aside the labor arbiters decision. Citing Article 253-A of the Labor Code, as
amended by Rep. Act No. 6715, which fixed the terms of a collective bargaining agreement, the NLRC ordered
GMC to abide by the CBA draft that the union proposed for a period of two (2) years beginning December 1,
1991, the date when the original CBA ended, to November 30, 1993. With respect to the unions claim of
discrimination, the NLRC found the claim unsupported by substantial evidence.

11. On GMCs motion for reconsideration, the NLRC set aside its decision of January 30, 1998, through a resolution
dated October 6, 1998. It found GMCs doubts as to the status of the union justified and the allegation of coercion
exerted by GMC on the unions members to resign unfounded.

12. On July 19, 2000, the appellate court rendered a decision: petition is hereby GRANTED. The NLRC Resolution
of October 6, 1998 is hereby SET ASIDE, and its decision of January 30, 1998 is, except with respect to the award
of attorneys fees which is hereby deleted, REINSTATED
ISSUE(S): whether or not the CA acted with grave abuse of discretion amounting to lack or excess of jurisdiction in
finding GMC guilty of unfair labor practice for violating the duty to bargain collectively and/or interfering with the right of

its employees to self-organization. NO

did the CA gravely abuse its discretion when it imposed on GMC the draft CBA proposed by the union for two years
commencing from the expiration of the original CBA? NO
HELD:
RATIO:
The law mandates that the representation provision of a CBA should last for five years. The relation between labor
and management should be undisturbed until the last 60 days of the fifth year. Hence, it is indisputable that when the union
requested for a renegotiation of the economic terms of the CBA on November 29, 1991, it was still the certified collective
bargaining agent of the workers, because it was seeking said renegotiation within five (5) years from the date of effectivity
of the CBA on December 1, 1988. The unions proposal was also submitted within the prescribed 3-year period from the
date of effectivity of the CBA, albeit just before the last day of said period. It was obvious that GMC had no valid reason
to refuse to negotiate in good faith with the union. For refusing to send a counter-proposal to the union and to bargain
anew on the economic terms of the CBA, the company committed an unfair labor practice under Article 248 of the Labor
Code (g) To violate the duty to bargain collectively as prescribed by this Code.
Article 252 of the Labor Code elucidates the meaning of the phrase duty to bargain collectively, thus:The duty to
bargain collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in
good faith for the purpose of negotiating an agreement....
We have held that the crucial question whether or not a party has met his statutory duty to bargain in good faith
typically turns on the facts of the individual case. There is no per setest of good faith in bargaining. Good faith or bad faith
is an inference to be drawn from the facts. The effect of an employers or a unions actions individually is not the test of
good-faith bargaining, but the impact of all such occasions or actions, considered as a whole.
Under Article 252 abovecited, both parties are required to perform their mutual obligation to meet and convene
promptly and expeditiously in good faith for the purpose of negotiating an agreement. The union lived up to this obligation
when it presented proposals for a new CBA to GMC within three (3) years from the effectivity of the original CBA. But
GMC failed in its duty under Article 252. What it did was to devise a flimsy excuse, by questioning the existence of the
union and the status of its membership to prevent any negotiation.
It bears stressing that the procedure in collective bargaining prescribed by the Code is mandatory because of the basic
interest of the state in ensuring lasting industrial peace.
GMCs failure to make a timely reply to the proposals presented by the union is indicative of its utter lack of interest in
bargaining with the union. Its excuse that it felt the union no longer represented the workers, was mainly dilatory as it
turned out to be utterly baseless.
We hold that GMCs refusal to make a counter-proposal to the unions proposal for CBA negotiation is an indication of
its bad faith. Where the employer did not even bother to submit an answer to the bargaining proposals of the union, there is
a clear evasion of the duty to bargain collectively.
Failing to comply with the mandatory obligation to submit a reply to the unions proposals, GMC violated its duty to
bargain collectively, making it liable for unfair labor practice. Perforce, the Court of Appeals did not commit grave abuse
of discretion amounting to lack or excess of jurisdiction in finding that GMC is, under the circumstances, guilty of unfair
labor practice.
did the CA gravely abuse its discretion when it imposed on GMC the draft CBA proposed by the union for two years
commencing from the expiration of the original CBA?NO
ART. 253. Duty to bargain collectively when there exists a collective bargaining agreement. ....It shall be the duty of
both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing
agreement during the 60-day period [prior to its expiration date] and/or until a new agreement is reached by the parties.
(Underscoring supplied.)

The provision mandates the parties to keep the status quo while they are still in the process of working out their
respective proposal and counter proposal. The general rule is that when a CBA already exists, its provision shall continue
to govern the relationship between the parties, until a new one is agreed upon. The rule necessarily presupposes that all
other things are equal. That is, that neither party is guilty of bad faith. However, when one of the parties abuses this grace
period by purposely delaying the bargaining process, a departure from the general rule is warranted.
it would be unfair to the union and its members if the terms and conditions contained in the old CBA would continue
to be imposed on GMCs employees for the remaining two (2) years of the CBAs duration. We are not inclined to gratify
GMC with an extended term of the old CBA after it resorted to delaying tactics to prevent negotiations. Since it was GMC
which violated the duty to bargain collectively, based on Kiok Loy and Divine Word University of Tacloban, it had lost its
statutory right to negotiate or renegotiate the terms and conditions of the draft CBA proposed by the union.
CASE LAW/ DOCTRINE:
DISSENTING/CONCURRING OPINION(S):
022 FVC Labor Union-Philippine Transport and AUTHOR:
General Workers Organization (FVCLU-PTGWO) v. NOTES: (if applicable)
Sama-Samang Nagkakaisang Manggagawa Sa FVCSolidarity Of Independent And General Labor
Organizations (SANAMA-FVC-SIGLO)
G.R. No. 176249, November 27, 2009
TOPIC: Collective Bargaining
PONENTE: BRION, J.
FACTS:
12. December 22, 1997, the petitioner FVCLU-PTGWO the recognized bargaining agent of the rank-and-file
employees of the FVC Philippines, Incorporated (company) signed a five-year collective bargaining agreement
(CBA) with the company. The five-year CBA period was from February 1, 1998 to January 30, 2003.
13. At the end of the 3rd year of the five-year term and pursuant to the CBA, FVCLU-PTGWO and the company
entered into the renegotiation of the CBA and modified, among other provisions, the CBAs duration. Article XXV,
Section 2 of the renegotiated CBA provides that this re-negotiation agreement shall take effect beginning
February 1, 2001 and until May 31, 2003 thus extending the original five-year period of the CBA by four (4)
months
14. January 21, 2003, nine (9) days before the January 30, 2003 expiration of the originally-agreed five-year CBA
term (and four [4] months and nine [9] days away from the expiration of the amended CBA period), the
respondent Sama-Samang Nagkakaisang Manggagawa sa FVC-Solidarity of Independent and General Labor
Organizations (SANAMA-SIGLO) filed before the Department of Labor and Employment (DOLE) a petition for
certification election for the same rank-and-file unit covered by the FVCLU-PTGWO CBA.
15. FVCLU-PTGWO moved to dismiss the petition on the ground that the certification election petition was filed
outside the freedom period or outside of the sixty (60) days before the expiration of the CBA on May 31, 2003.
16. June 17, 2003, Med-Arbiter Arturo V. Cosuco dismissed the petition on the ground that it was filed outside the 60day period counted from the May 31, 2003 expiry date of the amended CBA -> respondent appealed to DOLE
Secretary.
17. DOLE Secretary Patricia A. Sto. Tomas sustained SANAMA-SIGLOs position, thereby setting aside the decision
of the Med-Arbiter. She ordered the conduct of a certification election in the company. FVCLU-PTGWO moved
for the reconsideration of the Secretarys decision
18. November 6, 2003, DOLE Acting Secretary Manuel G. Imson granted the motion; he set aside the August 6, 2003
DOLE decision and dismissed the petition as the Med-Arbiters Order of June 17, 2003 did. The amended CBA
(which extended the representation aspect of the original CBA by 4 months) had been ratified by members of the
bargaining unit some of whom later organized themselves as SANAMA-SIGLO, the certification election
applicant. Since these SANAMA-SIGLO members fully accepted and in fact received the benefits arising from the
amendments, the Acting Secretary rationalized that they also accepted the extended term of the CBA and cannot
now file a petition for certification election based on the original CBA expiration date. -> Respondent filed a MR
-> denied -> sought relief from the CA through a petition for certiorari under Rule 65 of the Rules of Court based

on the grave abuse of discretion the Labor Secretary committed when she reversed her earlier decision calling for a
certification election.
19. CA: in favor of respondent - while the parties may renegotiate the other provisions (economic and non-economic)
of the CBA, this should not affect the five-year representation aspect of the original CBA. If the duration of the
renegotiated agreement does not coincide with but rather exceeds the original five-year term, the same will not
adversely affect the right of another union to challenge the majority status of the incumbent bargaining agent
within sixty (60) days before the lapse of the original five (5) year term of the CBA. In the event a new union wins
in the certification election, such union is required to honor and administer the renegotiated CBA throughout the
excess period.
Petitioners Argument
- CA erred in strictly applying Section 11 (11b), Rule XI, Book V of the Omnibus Rules Implementing the Labor
Code, as amended by Department Order No. 9, s. 1997.
- peculiar circumstances the FVCLU-PTGWO referred to relate to the economic and other provisions of the
February 1, 1998 to January 30, 2003 CBA that it renegotiated with the company. The renegotiated CBA changed
the CBAs remaining term from February 1, 2001 to May 31, 2003. To FVCLU-PTGWO, this extension of the
CBA term also changed the unions exclusive bargaining representation status and effectively moved the reckoning
point of the 60-day freedom period from January 30, 2003 to May 30, 2003. FVCLU-PTGWO thus moved to
dismiss the petition for certification election filed on January 21, 2003 (9 days before the expiry date on January
30, 2003 of the original CBA) by SANAMA-SIGLO on the ground that the petition was filed outside the
authorized 60-day freedom period.
-Respondent is estopped from questioning the extension of the CBA term under the amendments because its
members are the very same ones who approved the amendments, including the expiration date of the CBA, and
who benefited from these amendments.
- the representation petition had been rendered moot by a new CBA it entered into with the company covering the
period June 1, 2003 to May 31, 2008.
Respondents Side
- manifested on October 10, 2007 that: since the promulgation of the CA decision on July 25, 2006 or three
years after the petition for certification election was filed, the local leaders of SANAMA-SIGLO had stopped
reporting to the federation office or attending meetings of the council of local leaders; the SANAMA-SIGLO
counsel, who is also the SIGLO national president, is no longer in the position to pursue the present case
because the local union and its leadership, who are principals of SIGLO, had given up and abandoned their
desire to contest the representative status of FVCLU-PTGWO; and a new CBA had already been signed by
FVCLU-PTGWO and the company
- pursuing the case has become futile, and accordingly simply adopted the CA decision of July 25, 2006 as its
position; its counsel likewise asked to be relieved from filing a comment in the case. We granted the request
for relief and dispensed with the filing of a comment.
ISSUE(S): What is the effect of the amended or extended term of the CBA on the exclusive representation status of the
collective bargaining agent and the right of another union to ask for certification as exclusive bargaining agent.
HELD: Despite an agreement for a CBA with a life of more than five years, either as an original provision or by
amendment, the bargaining unions exclusive bargaining status is effective only for five years and can be challenged within
sixty (60) days prior to the expiration of the CBAs first five years.
DISPOSITIVE PORTION: WHEREFORE, premises considered, we AFFIRM the correctness of the challenged
Decision and Resolution of the Court of Appeals and accordingly DISMISS the petition, but nevertheless DECLARE that
no certification election, pursuant to the underlying petition for certification election filed with the Department of Labor
and Employment, can be enforced as this petition has effectively been abandoned.
RATIO:
4.

FVCLU-PTGWO has taken the view that its exclusive representation status should fully be in step with the term
of the CBA and that this status can be challenged only within 60 days before the expiration of this term. Thus,
when the term of the CBA was extended, its exclusive bargaining status was similarly extended so that the
freedom period for the filing of a petition for certification election should be counted back from the expiration of
the amended CBA term.
5. We hold this FVCLU-PTGWO position to be correct, but only with respect to the original five-year term of the

CBA which, by law, is also the effective period of the unions exclusive bargaining representation status. While the
parties may agree to extend the CBAs original five-year term together with all other CBA provisions, any such
amendment or term in excess of five years will not carry with it a change in the unions exclusive collective
bargaining status. By express provision of the above-quoted Article 253-A, the exclusive bargaining status cannot
go beyond five years and the representation status is a legal matter not for the workplace parties to agree upon. In
other words, despite an agreement for a CBA with a life of more than five years, either as an original provision or
by amendment, the bargaining unions exclusive bargaining status is effective only for five years and can be
challenged within sixty (60) days prior to the expiration of the CBAs first five years.
6. In the present case, the CBA was originally signed for a period of five years, i.e., from February 1, 1998 to January
30, 2003, with a provision for the renegotiation of the CBAs other provisions at the end of the 3 rd year of the fiveyear CBA term. Thus, prior to January 30, 2001 the workplace parties sat down for renegotiation but instead of
confining themselves to the economic and non-economic CBA provisions, also extended the life of the CBA for
another four months, i.e., from the original expiry date on January 30, 2003 to May 30, 2003.
7. As discussed above, this negotiated extension of the CBA term has no legal effect on the FVCLU-PTGWOs
exclusive bargaining representation status which remained effective only for five years ending on the original
expiry date of January 30, 2003. Thus, sixty days prior to this date, or starting December 2, 2002, SANAMASIGLO could properly file a petition for certification election. Its petition, filed on January 21, 2003 or nine (9)
days before the expiration of the CBA and of FVCLU-PTGWOs exclusive bargaining status, was seasonably
filed.
8. We thus find no error in the appellate courts ruling reinstating the DOLE order for the conduct of a certification
election. If this ruling cannot now be given effect, the only reason is SANAMA-SIGLOs own desistance; we
cannot disregard its manifestation that the members of SANAMA themselves are no longer interested in contesting
the exclusive collective bargaining agent status of FVCLU-PTGWO. This recognition is fully in accord with the
Labor Codes intent to foster industrial peace and harmony in the workplace.

G.R. No. 162324

February 4, 2009
AUTHOR:
RFM CORPORATION-FLOUR DIVISION and Short case. Deals with CBA interpretation.
SFI FEEDS DIVISION vs. KASAPIAN NG
MANGGA-GAWANG
PINAGKAISA-RFM
(KAMPI-NAFLU-KMU) and SANDIGAN AT
UGNAYAN
NG
MANGGAGAWANG
PINAGKAISA-SFI (SUMAPI-NAFLU-KMU)
TOPIC: Collective Bargaining
PONENTE: Carpio-Morales
FACTS:
1. Sometime in 2000, RFMs Flour Division and SFI Feeds Division entered into collective bargaining
agreements (CBAs) with their respective labor unions, the Kasapian ng Manggagawang Pinagkaisa-RFM
(KAMPI-NAFLU-KMU) for the Flour Division, and Sandigan at Ugnayan ng Manggagawang Pinagkaisa-SFI
(SUMAPI-NAFLU-KMU) for the Feeds Division (respondents). The CBAs, which contained similar provisions,
were effective for five years, from July 1, 2000 up to June 30, 2005.
2. Sec. 3, Art. XVI of each of the CBAs reads:
Section. 3. Special Holidays with Pay The COMPANY agrees to make payment to all daily paid employees, in
respect of any of the days enumerated hereunto if declared as special holidays by the national government:
a) Black Saturday
b) November 1
c) December 31
The compensation rate shall be the regular rate. Any work beyond eight (8) hours shall be paid the standard
ordinary premium. (Emphasis and underscoring supplied)
3. During the first year of the effectivity of the CBAs in 2000, December 31 which fell on a Sunday was

declared by the national government as a special holiday. Respondents thus claimed payment of their members
salaries, invoking the above-stated CBA provision. Petitioner refused the claims for payment, averring that
December 31, 2000 was not compensable as it was a rest day. The controversy resulted in a deadlock, drawing
the parties to submit the same for voluntary arbitration.
4. Voluntary Arbitrator (VA) Bernardino M. Volante declared that the above-quoted provision of the CBA is
clear. It accordingly ruled in favor of respondents and ordered petitioner to pay the salaries of respondents
members for December 31, 2000, and to pay attorneys fees to respondents equivalent to 10% of the monetary
award.
5. Petitioner appealed to the CA which affirmed the VA.
The appellate court held that if it was indeed petitioners intent to pay the salaries of daily-paid employees
during a special holiday, even if unworked, only if such special holiday fell on weekdays, then it should have
been clearly and expressly stipulated in the CBAs. And it held inapplicable Kimberly Clark Philippines v.
Lorredo cited by petitioner which case held that whenever there is a conflict between the words in the CBA and
the evident intention of the parties, the latter prevails. For, so the appellate court explained, there were no words
or provisions in the CBAs which would result in an absurd interpretation vis a vis the parties true intention.
In sustaining the award of attorneys fees, the appellate court ruled that respondents were entitled thereto as they
were compelled to engage a lawyer to pursue their claims.
RFM appeals to the SC.
ISSUE (S): First: RFM insists that the CBA provision in question was intended to protect the employees from
reduction of their take - home pay, hence, it was not meant to remunerate them on Sundays, which are rest days,
or to increase their salaries.
Second: On the award of attorneys fees, petitioner argues that it is not warranted as it did not arbitrarily refuse
to pay respondents demands.
HELD: Both issues lack merit.
DISPOSITIVE PORTION: Petition denied.
RATIO:
First Issue:
If the terms of a CBA are clear and have no doubt upon the intention of the contracting parties, as in the herein
questioned provision, the literal meaning thereof shall prevail. That is settled. As such, the daily-paid employees
must be paid their regular salaries on the holidays which are so declared by the national government, regardless
of whether they fall on rest days.
Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford
protection to labor. Its purpose is not merely "to prevent diminution of the monthly income of the workers on
account of work interruptions. In other words, although the worker is forced to take a rest, he earns what he
should earn, that is, his holiday pay."(Emphasis and underscoring supplied)
The CBA is the law between the parties; they are obliged to comply with its provisions. Indeed, if petitioner and
respondents intended the provision in question to cover payment only during holidays falling on work or
weekdays, it should have been so incorporated therein.

Petitioner maintains, however, that the parties failed to foresee a situation where the special holiday would fall
on a rest day. The Court is not persuaded. The Labor Code specifically enjoins that in case of doubt in the
interpretation of any law or provision affecting labor, it should be interpreted in favor of labor.
Second Issue:
Respondents having been compelled to litigate as a result of petitioners failure to satisfy their valid claim, the
Court deems it just and equitable to sustain the award of attorneys fees.
CASE LAW/ DOCTRINE: If the CBA is clear and has no doubts in the contracting parties intentions, literal
meaning must prevail. In cases of doubt, the interpretation favors labor.
DISSENTING/CONCURRING OPINION(S): none

024 Farley Fulache, Manolo Jabonero, David Castillo,

Jeffrey Lagunzad, Atinen v. ABS-CBN
Topic: Collective Bargaining

AUTHOR:

FACTS: (chronological order)

Regularization Issue
1. The petitioners filed 2 separate complaints for regularization, ULP, and several money claims against ABS-CBN
Cebu.
1.1 The petitioners were drivers, cameramen, editors, and Teleprompters.
1.2 The petitioners alleged that on Dec. 17, 1999, that the ABSCBN-EU and the respondent entered into a CBA
effective from 12/11/99 to 12/10/2002;
1.3 And upon learning of the CBA, they discovered that they were excluded from the coverage because the
respondent considers them as temporary employees.
1.4 They also allege that they must be considered regular employees because they are employees of the
respondent for over a year now, thus should be considered as regular employees.
2. On the part of the respondent, it countered that:
2.1 ABS-CBN claimed that to cope with fluctuating business conditions, it contracts on a case-to-case basis the
services of persons who possess the necessary talent, skills, training, expertise or qualifications to meet the
requirements of its programs and productions. These contracted persons are called talents and are
considered independent contractors who offer their services to broadcasting companies.
2.2 Instead of salaries, ABS-CBN pointed out that talents are paid a pre-arranged consideration called talent fee
taken from the budget of a particular program and subject to a ten percent (10%) withholding tax. Talents do
not undergo probation. Their services are engaged for a specific program or production, or a segment thereof.
Their contracts are terminated once the program, production or segment is completed.
2.3 ABS-CBN alleged that the petitioners services were contracted on various dates by its Cebu station as
independent contractors/off camera talents, and they were not entitled to regularization in these capacities.
3. The 2 complaints were consolidated and assigned to Labor Arbiter Rendoque.
4. Labor Arb. Rendoque: the employees are regular employees of the respondent.
5. ABSCBN appealed to the NLRC alleging that the petitioners are independent contractors.
Illegal Dismissal Issue
6. Meanwhile, pending appeal with the NLRC, the petitioners were dismissed due to their refusal to sign contracts of
employment with Able Services.
7. The petitioners filed a case for illegal dismissal.

8. The respondents countered:

8.1 The respondent reviewed its structure and organizational requirements and concluded that the roles occupied
by the petitioners (ie messengerial, janitorial, utility, makeup, wardrobe, etc.) were better handled by legitimate
service contractors.
8.2 Also, the respondent contends that assuming they were indeed illegally dismissed, their relationship was so
strained and that one of the petitioners (Atinen) already executed a quitclaim and release.
9. The case was also handled by Labor Arbiter Rendoque.
10. Labor Arb.: the contracting out of the roles mentioned are valid.
10.1
LA also held that the roles of the petitioners were redundant.
10.2
However, LA awarded the petitioners 1 months salary for every year of service.
11. The respondent appealed he award of the LA to the NLRC.
NLRC decision on Regularization and Illegal Dismissal Issue
12. NLRC:
12.1
On regularization issue (LA affirmed)
12.1.1 There was an employer-employee relationship because the respondent exercised control over the
petitioners.
12.1.2 Further the NLRC held that the petitioners are regular workers because they work they did was usually
necessary or desirable in the trade or business of the respondent.
12.1.3 The petitioners couldnt be considered contractual because they werent paid for the result of their
work, but rather they were paid on a monthly basis.
12.2
On illegal dismissal issue (LA reversed)
12.2.1 the petitioners were illegally dismissed
12.2.2 backwages and separation pay must be paid instead of reinstatement.
13. The petitioners filed their MR alleging:
13.1
Fulache, Jabonero, Castillo, and Lagunzad are entitled to reinstatement, backwages, salary increase,
other CBA benefits, etc.
14. The respondents also filed their own MR alleging:
14.1
Fulache, Jabonero, Castillo, and Lagunzad were independent contractors whose services were
terminated due to redundacncy thus no backwages should be paid.
14.2
Also, the petitioners are not entitled to CBA benefits because they never claimed benefits to such in their
position paper filed before the LA, and also the NLRC failed to make a clear finding theyre aprt of the
bargaining unit.
15. NLRC on MR:
15.1
on regularization issue: (LA decision reinstated)
15.1.1 petitioners are regular employees entitled to the benefits of such.
15.2
On illegal dismissal issue: (LA decision reinstated)
15.2.1 despite the petitioners being recognized as regulars, they are still redundant.
16. Second MR of the petitioners denied being a prohibited pleading.
17. Petitioners filed petitioner under R65 with the CA alleging:
17.1
NLRC acted with GAD in denying them CBA benefits, finding that theyre not part of the bargaining unit,
and not granting reinstatement.
18. The respondent questioned the propriety of the R65 petition.
18.1
Respondent argued that proper remedy was to appeal the reinstated decision of the LA.
19. CA: ruled against the respondent holding that the petitioner under R65 was jusitified because there being no plain,
adequate, and speedy remedy.
19.1
On the merits, CA held that the petitioners failed to prove theyre entitled to CBA benefits.
19.2
CA also held that the NLRC was correct in reinstating the decision of the LA holding that the petitioners
ere not illegally dismissed because the petitioners positions were redundant.
19.3
Except for separation pay, CA did not grant backwages, damages, and attorneys fees as prayed for.
20. MR of the petitioners with the CA denied.

21. Hence this petition. SA WAKAS!

21.1
Petitioner contends that the CA erred in not considering the evidence they submitted to bolster their claim
that theyre part of the bargaining unit.
21.2
That the CA also erred in not ordering the respondent to pay salaries, allowances, CBA benefits despite
the declaration of the NLRC that theyre regular employees.
21.3
That the CA erred in declaring that drivers are redundant contrary to jurisprudence.

ISSUE(S):
Whether or not the CA erred in holding that theyre not entitled to CBA benefits?
HELD:
RATIO:
1. The petitioners are members of the appropriate bargaining unit because they are regular rank-and-file
employees and do not belong to any of the excluded categories. Specifically, nothing in the records shows
that they are supervisory or confidential employees; neither are they casual nor probationary employees. Most
importantly, the labor arbiters decision of January 17, 2002affirmed all the way up to the CA levelruled against
ABS-CBNs submission that they are independent contractors. Thus, as regular rank-and-file employees, they fall
within CBA coverage under the CBAs express terms and are entitled to its benefits.
2. We see no merit in ABS-CBNs arguments that the petitioners are not entitled to CBA benefits because:
2.1 they did not claim these benefits in their position paper;
2.2 the NLRC did not categorically rule that the petitioners were members of the bargaining unit; and
2.3 there was no evidence of this membership.
3. To further clarify what we stated above, CBA coverage is not only a question of fact, but of law and
contract.>> The factual issue is whether the petitioners are regular rank-and-file employees of ABS-CBN.>> The
tribunals below uniformly answered this question in the affirmative.>> From this factual finding flows legal effects
touching on the terms and conditions of the petitioners regular employment.>> This was what the labor arbiter
meant when he stated in his decision that henceforth they are entitled to the benefits and privileges attached to
regular status of their employment.
4. By law, illegally dismissed employees are entitled to reinstatement without loss of seniority rights and other
privileges and to full backwages, inclusive of allowances, and to other benefits or their monetary equivalent from
the time their compensation was withheld from them up to the time of their actual reinstatement. The four
dismissed drivers deserve no less.

AUTHOR:
025 EMPLOYEES UNION OF BAYER PHILS., FFW
vs.BAYER PHILIPPINES, INC
G.R. No. 162943

December 6, 2010

TOPIC: ULP Labor Code:

Arts. 247-249, 261

PONENTE: VILLARAMA, JR., J.:

FACTS: Petitioner Employees Union of Bayer Philippines (EUBP) is the exclusive bargaining agent of all rankand-file employees of Bayer Philippines (Bayer), and is an affiliate of the Federation of Free Workers (FFW).
In 1997, EUBP, headed by its president Juanito S. Facundo (Facundo), negotiated with Bayer for the signing of a collective bargaining

agreement (CBA). During the negotiations, EUBP rejected Bayers 9.9% wage-increase proposal resulting in a bargaining deadlock.
Subsequently, EUBP staged a strike, prompting the Secretary of the Department of Labor and Employment (DOLE) to assume
jurisdiction over the dispute.
In November 1997, pending the resolution of the dispute, respondent Avelina Remigio (Remigio) and 27 other union members, without
any authority from their union leaders, accepted Bayers wage-increase proposal. EUBPs grievance committee questioned Remigios
action and reprimanded Remigio and her allies.
On January 7, 1998, the DOLE Secretary issued an arbitral award ordering EUBP and Bayer to execute a CBA retroactive to January 1,
1997 and to be made effective until December 31, 2001. The said CBA was registered on July 8, 1998 with the Industrial Relations
Division of the DOLE-National Capital Region (NCR).
Meanwhile, the rift between Facundos leadership and Remigios group broadened. On August 3, 1998, barely six months from the
signing of the new CBA, during a company-sponsored seminar, Remigio solicited signatures from union members in support of a
resolution containing the decision of the signatories to: (1) disaffiliate from FFW, (2) rename the union as Reformed Employees Union
of Bayer Philippines (REUBP), (3) adopt a new constitution and by-laws for the union, (4) abolish all existing officer positions in the
union and elect a new set of interim officers, and (5) authorize REUBP to administer the CBA between EUBP and Bayer. The said
resolution was signed by 147 of the 257 local union members. A subsequent resolution was also issued affirming the first resolution.
A tug-of-war then ensued between the two rival groups, with both seeking recognition from Bayer and demanding remittance of the
union dues collected from its rank-and-file members. On September 8, 1998, Remigios splinter group wrote Facundo, FFW and Bayer
informing them of the decision of the majority of the union members to disaffiliate from FFW. This was followed by another letter
informing Facundo, FFW and Bayer that an interim set of REUBP executive officers and board of directors had been appointed, and
demanding the remittance of all union dues to REUBP. Remigio also asked Bayer to desist from further transacting with EUBP.
Facundo, meanwhile, sent similar requests to Bayer requesting for the remittance of union dues in favor of EUBP and accusing the
company of interfering with purely union matters. Bayer responded by deciding not to deal with either of the two groups, and by
placing the union dues collected in a trust account until the conflict between the two groups is resolved.
On September 15, 1998, EUBP filed a complaint for unfair labor practice (first ULP complaint) against Bayer for non-remittance of
union dues.
EUBP later sent a letter dated November 5, 1998 to Bayer asking for a grievance conference. The meeting was conducted by the
management on November 11, 1998, with all REUBP officers including their lawyers present. Facundo did not attend the meeting, but
sent two EUBP officers to inform REUBP and the management that a preventive mediation conference between the two groups has
been scheduled on November 12, 1998 before the National Conciliation and Mediation Board (NCMB).
Apparently, the two groups failed to settle their issues as Facundo again sent respondent Dieter J. Lonishen two more letters, dated
January 14, 1999 and September 2, 1999, asking for a grievance meeting with the management to discuss the failure of the latter to
comply with the terms of their CBA. Both requests remained unheeded.
Aggrieved by the said development, EUBP lodged a complaint on March 4, 1999 against Remigios group before the Industrial
Relations Division of the DOLE praying for their expulsion from EUBP for commission of "acts that threaten the life of the union."
On June 18, 1999, Labor Arbiter Jovencio Ll. Mayor, Jr. dismissed the first ULP complaint for lack of jurisdiction. The Arbiter
explained that the root cause for Bayers failure to remit the collected union dues can be traced to the intra-union conflict between
EUBP and Remigios group and that the charges imputed against Bayer should have been submitted instead to voluntary arbitration.
EUBP did not appeal the said decision.
On December 14, 1999, petitioners filed a second ULP complaint against herein respondents docketed as NLRC-RAB-IV Case No. 1211813-99-L. Three days later, petitioners amended the complaint charging the respondents with unfair labor practice committed by
organizing a company union, gross violation of the CBA and violation of their duty to bargain. Petitioners complained that Bayer
refused to remit the collected union dues to EUBP despite several demands sent to the management. They also alleged that
notwithstanding the requests sent to Bayer for a renegotiation of the last two years of the 1997-2001 CBA between EUBP and Bayer,
the latter opted to negotiate instead with Remigios group.
On even date, REUBP and Bayer agreed to sign a new CBA. Remigio immediately informed her allies of the managements decision.
In response, petitioners immediately filed an urgent motion for the issuance of a restraining order/injunction before the National Labor
Relations Commission (NLRC) and the Labor Arbiter against respondents. Petitioners asserted their authority as the exclusive

bargaining representative of all rank-and-file employees of Bayer and asked that a temporary restraining order be issued against
Remigios group and Bayer to prevent the employees from ratifying the new CBA. Later, petitioners filed a second amended complaint
to include in its complaint the issue of gross violation of the CBA for violation of the contract bar rule following Bayers decision to
negotiate and sign a new CBA with Remigios group.
Meanwhile, on January 26, 2000, the Regional Director of the Industrial Relations Division of DOLE issued a decision dismissing the
issue on expulsion filed by EUBP against Remigio and her allies for failure to exhaust reliefs within the union and ordering the conduct
of a referendum to determine which of the two groups should be recognized as union officers. EUBP seasonably appealed the said
decision to the Bureau of Labor Relations (BLR). On June 16, 2000, the BLR reversed the Regional Directors ruling and ordered the
management of Bayer to respect the authority of the duly-elected officers of EUBP in the administration of the prevailing CBA.
Unfortunately, the said BLR ruling came late since Bayer had already signed a new CBA with REUBP on February 21, 2000. The said
CBA was eventually ratified by majority of the bargaining unit.
On June 2, 2000, Labor Arbiter Waldo Emerson R. Gan dismissed EUBPs second ULP complaint for lack of jurisdiction. Aggrieved
by the Labor Arbiters decision to dismiss the second ULP complaint, petitioners appealed the said decision, but the NLRC denied the
appeal. EUBPs motion for reconsideration was likewise denied.
Thus, petitioners filed a Rule 65 petition to the CA. On December 15, 2003, the CA sustained both the Labor Arbiter and the NLRCs
rulings.
Undaunted, petitioners filed this Rule 45 petition before this Court. Initially, the said petition was denied for having been filed out of
time and for failure to comply with the requirements provided in the 1997 Rules of Civil Procedure, as amended. Upon petitioners
motion, however, we decided to reinstate their appeal.
ISSUE(S): whether the act of the management of Bayer in dealing and negotiating with Remigios splinter
group despite its validly existing CBA with EUBP can be considered unfair labor practice
HELD: Yes, It must be remembered that a CBA is entered into in order to foster stability and mutual
cooperation between labor and capital. An employer should not be allowed to rescind unilaterally its CBA
with the duly certified bargaining agent it had previously contracted with, and decide to bargain anew with
a different group if there is no legitimate reason for doing so and without first following the proper
procedure.
RATIO: An intra-union dispute refers to any conflict between and among union members, including
grievances arising from any violation of the rights and conditions of membership, violation of or
disagreement over any provision of the unions constitution and by-laws, or disputes arising from chartering
or disaffiliation of the union.Sections 1 and 2, Rule XI of Department Order No. 40-03, Series of 2003 of the
DOLE enumerate the circumstances as inter/intra-union disputes. (read the DO) It is clear from the
foregoing that the issues raised by petitioners do not fall under any of the circumstances constituting an
intra-union dispute.
Petitioners ULP complaint cannot prosper as against respondents Remigio and Villareal because the issue, as against them, essentially
involves an intra-union dispute based on Section 1 (n) of DOLE Department Order No. 40-03. To rule on the validity or illegality of
their acts, the Labor Arbiter and the NLRC will necessarily touch on the issues respecting the propriety of their disaffiliation and the
legality of the establishment of REUBP issues that are outside the scope of their jurisdiction. Accordingly, the dismissal of the
complaint was validly made, but only with respect to these two respondents.
But are Bayer, Lonishen and Amistoso liable for unfair labor practice? On this score, we find that the evidence supports an answer in
the affirmative.
It must be remembered that a CBA is entered into in order to foster stability and mutual cooperation between labor and capital. An
employer should not be allowed to rescind unilaterally its CBA with the duly certified bargaining agent it had previously contracted
with, and decide to bargain anew with a different group if there is no legitimate reason for doing so and without first following the
proper procedure. If such behavior would be tolerated, bargaining and negotiations between the employer and the union will never be
truthful and meaningful, and no CBA forged after arduous negotiations will ever be honored or be relied upon. Article 253 of the Labor
Code, as amended, plainly provides:
ART. 253. Duty to bargain collectively when there exists a collective bargaining agreement. Where there is a collective
bargaining agreement, the duty to bargain collectively shall also mean that neither party shall terminate or modify such
agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least
sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the status quo and to continue in full

force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is
reached by the parties. (Emphasis supplied.)
This is the reason why it is axiomatic in labor relations that a CBA entered into by a legitimate labor organization that has been duly
certified as the exclusive bargaining representative and the employer becomes the law between them. Additionally, in the Certificate of
Registration issued by the DOLE, it is specified that the registered CBA serves as the covenant between the parties and has the force
and effect of law between them during the period of its duration. Compliance with the terms and conditions of the CBA is mandated by
express policy of the law primarily to afford protection to labor and to promote industrial peace. Thus, when a valid and binding CBA
had been entered into by the workers and the employer, the latter is behooved to observe the terms and conditions thereof bearing on
union dues and representation. If the employer grossly violates its CBA with the duly recognized union, the former may be held
administratively and criminally liable for unfair labor practice.
Respondents Bayer, Lonishen and Amistoso, contend that their acts cannot constitute unfair labor practice as the same did not involve
gross violations in the economic provisions of the CBA, citing the provisions of Articles 248 (1) and 261 of the Labor Code, as
amended. Their argument is, however, misplaced.
Indeed, in Silva v. National Labor Relations Commission, we explained the correlations of Article 248 (1) and Article 261 of the Labor
Code to mean that for a ULP case to be cognizable by the Labor Arbiter, and for the NLRC to exercise appellate jurisdiction thereon,
the allegations in the complaint must show prima facie the concurrence of two things, namely: (1) gross violation of the CBA; and (2)
the violation pertains to the economic provisions of the CBA.
This pronouncement in Silva, however, should not be construed to apply to violations of the CBA which can be considered as gross
violations per se, such as utter disregard of the very existence of the CBA itself, similar to what happened in this case. When an
employer proceeds to negotiate with a splinter union despite the existence of its valid CBA with the duly certified and exclusive
bargaining agent, the former indubitably abandons its recognition of the latter and terminates the entire CBA.
Respondents cannot claim good faith to justify their acts. They knew that Facundos group represented the duly-elected officers of
EUBP. Moreover, they were cognizant of the fact that even the DOLE Secretary himself had recognized the legitimacy of EUBPs
mandate by rendering an arbitral award ordering the signing of the 1997-2001 CBA between Bayer and EUBP. Respondents were
likewise well-aware of the pendency of the intra-union dispute case, yet they still proceeded to turn over the collected union dues to
REUBP and to effusively deal with Remigio. The totality of respondents conduct, therefore, reeks with anti-EUBP animus.
Bayer, Lonishen and Amistoso argue that the case is already moot and academic following the lapse of the 1997-2001 CBA and their
renegotiation with EUBP for the 2006-2007 CBA. They also reason that the act of the company in negotiating with EUBP for the 20062007 CBA is an obvious recognition on their part that EUBP is now the certified collective bargaining agent of its rank-and-file
employees.
We do not agree. First, a legitimate labor organization cannot be construed to have abandoned its pending claim against the
management/employer by returning to the negotiating table to fulfill its duty to represent the interest of its members, except when the
pending claim has been expressly waived or compromised in its subsequent negotiations with the management. To hold otherwise
would be tantamount to subjecting industrial peace to the precondition that previous claims that labor may have against capital must
first be waived or abandoned before negotiations between them may resume. Undoubtedly, this would be against public policy of
affording protection to labor and will encourage scheming employers to commit unlawful acts without fear of being sanctioned in the
future.
Second, that the management of Bayer decided to recognize EUBP as the certified collective bargaining agent of its rank-and-file
employees for purposes of its 2006-2007 CBA negotiations is of no moment. It did not obliterate the fact that the management of Bayer
had withdrawn its recognition of EUBP and supported REUBP during the tumultuous implementation of the 1997-2001 CBA. Such act
of interference which is violative of the existing CBA with EUBP led to the filing of the subject complaint.
CASE LAW/ DOCTRINE:
DISSENTING/CONCURRING OPINION(S):

026 General Milling Corp. Independent Labor Union v.

General Milling,
G.R. No. 183122, June 15, 2011
TOPIC:
PONENTE: PEREZ, J.

AUTHOR:
NOTES: (if applicable)

Sorry Mahaba and Magulo talaga yung case.

NLRC- Initially dismissed the unions complaint for

ULP for the corporations refusal to bargain due to
lack of Merit. Upon appeal, dismissal was reversed.
Upon MR of the appeal, the decision was again
reversed.
CA- In a decision dated 19 July 2000, the then
Fourteenth Division of the CA reversed and set aside
the NLRCs MR decision and reinstated the appeal
decision.
SC - The CAs decision was affirmed.
The issue lies in the execution of the decision.
Whether the computation of the benefits should be
based on the proposed CBA terms(which was not
negotiated) or the previous CBA terms.
FACTS: (chronological order)

Foreplay muna:
On 28 April 1989, GMC and the Union entered into a collective bargaining agreement (CBA) which provided,
among other terms, the latters representation of the collective bargaining unit for a three-year term made to
retroact to 1 December 1988. On 29 November 1991 or one day before the expiration of the subject CBA, the
Union sent a draft CBA proposal to GMC, with a request for counter-proposals from the latter, for the purpose of
renegotiating the existing CBA between the parties. In view of GMCs failure to comply with said request, the
Union commenced the complaint for unfair labor practice which was dismissed for lack of merit in a decision
dated 21 December 1993 issued by the NLRC.[7] On appeal, however, said dismissal was reversed and set aside
in the 30 January 1998 decision rendered by the Fourth Division of the NLRC.
NLRC- Initially dismissed due to lack of Merit. Upon appeal, dismissal was reversed. Upon MR of the appeal,
the decision was again reversed.
With the reconsideration and setting aside of the foregoing decision in the NLRCs resolution dated 6 October
1998, the Union filed the petitions for certiorari docketed before the CA.
CA- In a decision dated 19 July 2000, the then Fourteenth Division of the CA reversed and set aside the NLRCs
6 October 1998 resolution and reinstated the aforesaid 30 January 1998 decision.
Aggrieved by the CAs 26 October 2000 resolution denying its motion for reconsideration, GMC elevated the
case to the SC via the petition for review on certiorari.
SC - The CAs 30 January 1998 decision and 26 October 2000 resolution were affirmed.
Eto na yung main set of facts:
With the ensuing finality of the foregoing decision, the Union filed a motion for issuance of a writ of execution
dated 21 March 2005, to enforce the claims of the covered employees which it computed in the sum of
P433,786,786.36 and to require GMC to produce said employees time cards for the purpose of computing their
overtime pay, night shift differentials and labor standard benefits for work rendered on rest days, legal holidays

and special holidays.

GMC opposed said motion on the ground, among other matters, that the bargaining unit no longer exist in view
of the resignation, retrenchment, retirement and separation from service of workers who have additionally
executed waivers and quitclaims acknowledging full settlement of their claims; that the covered employees have
already received salary increases and benefits for the period 1991 to 1993; and, that aside from the aforesaid
supervening events which precluded the enforcement thereof, the decision rendered in the case simply called for
the execution of a CBA incorporating the Unions proposal, not the outright computation of benefits thereunder.
GMC further manifested that the Union membership in the bargaining unit did not exceed 286 and that
following employees should be excluded from the coverage of the decision sought to be enforced:
(a) 47 employees who were hired after 1992;
(b) 234 employees who had been separated from the service;
(c) 37 employees who, as daily paid rank and file employees, were represented by another union and covered by
a different CBA; and,
(d) 41 workers holding managerial/supervisory/confidential positions.
The Union argued that the benefits derived from its proposed CBA extended to both union members and nonmembers; that the newly hired employees were entitled to the benefits accruing after their employment by GMC;
that the employees who had, in the meantime, been separated from service could not have validly waived the
benefits which were only determined with finality in the 11 February 2004 decision rendered in G.R. No.
146728; that the CBA benefits can be extended the daily paid employees upon their re-classification as monthly
paid employees as well as to GMCs managerial and supervisory employees, prior to their promotion; and, that
the imposition of its CBA proposals necessarily calls for the computation of the benefits therein provided.
Executive Labor Arbiter Decision
Acting on the memoranda the parties filed in support of their respective positions,[18] Executive Labor Arbiter
Violeta Ortiz-Bantug issued the 27 October 2005 order, limiting the computation of the benefits of the Unions
CBA proposal to the remaining two years of the duration of the original CBA or from 1 December 1991 up to 30
November 1993. The computation covered the 436 employees included in the Unions list, less the following:
(a) 77 employees who were hired or regularized after 30 November 1993;
(b) 36 daily paid rank and file employees who were covered by a separate CBA;
(c) 41 managerial/supervisory employees; and
(d) 1 employee for whom no salary-rate information was submitted in the premises.
Aggrieved, the Union Appealed the computation to the NLRC.
NLRC- Affirmed ELA decision.
Finding that the duty to maintain the status quo and to continue in full force and effect the terms of the existing
agreement under Article 253 of the Labor Code of the Philippines applies only when the parties agreed to the
terms and conditions of the CBA, the NLRC upheld the Executive Labor Arbiters computation on the ground,
among others, that the decision sought to be enforced covered only the remaining two years of the duration of
the original CBA.
Dissatisfied with the decision The Union and GMC filed an appeal to the CA
CA- Partially granted the Union appeal, and denied the GMC appeal for lack of merit.
CA- the Unions petition was partially granted in the 10 October 2007 decision rendered in the case,[26] upon the
finding that the parties old CBA was superseded by the imposed CBA which provided a term of five years from
1 December 1991 and remained in force until a new CBA is concluded between the parties. Brushing aside the
Executive Labor Arbiters computation of the benefits as too sweeping and inaccurate, the CA ruled that:

(a) employees hired after the effectivity of the imposed CBA are entitled to its benefits on their first day of work;
(b) daily paid employees are entitled to said benefits from the first day they became regular monthly paid
employees;
(c) managerial and supervisory employees are entitled to the same benefits until their promotion as such;
(d) employees for whom no information as to salary rate were submitted are entitled to the CBA benefits upon
submission of proof in respect thereto; and,
(e) employees who signed Deeds of waiver, release and quitclaim are no longer entitled to said benefits.
the CA went on to take appropriate note of the fact that no proof was submitted by the Union to justify the grant
of said benefits. While ruling that the imposed CBA had the same force and effect as a negotiated CBA, the CA,
however, faulted the Union for its hasty and premature filing of its motion for issuance of a writ of execution,
instead of first demanding the enforcement of the imposed CBA from GMC and, failing the same, referring the
matter to the grievance machinery or voluntary arbitration provided under the imposed CBA, in accordance with
Articles 260 and 261 of the Labor Code.
GMC Appeal was denied for lack of merit.
Hence, this appeal. Note that both parties filed an appeal to the SC
ISSUE(S): Whether the imposed CBA has full force and effect considering that it was not agreed upon by the Union and
GMC.
HELD: (YES/NO, and a short explanation)
NO
RATIO:

Anent its period of effectivity, Article XIV of the imposed CBA provides that "(t)his Agreement shall be in full
force and effect for a period of five (5) years from 1 December 1991, provided that sixty (60) days prior to the
lapse of the third year of effectivity hereof, the parties shall open negotiations on economic aspect for the fourth
and fifth years effectivity of this Agreement." Considering that no new CBA had been, in the meantime, agreed
upon by GMC and the Union, we find that the CA correctly ruled in CA-G.R. CEB-SP No. 02226 that, pursuant
to Article 253 of the Labor Code, the provisions of the imposed CBA continues to have full force and effect until
a new CBA has been entered into by the parties. Article 253 mandates the parties to keep the status quo and to
continue in full force and effect the terms and conditions of the existing agreement during the 60-day period
prior to the expiration of the old CBA and/or until a new agreement is reached by the parties. In the same manner
that it does not provide for any exception nor qualification on which economic provisions of the existing
agreement are to retain its force and effect, the law does not distinguish between a CBA duly agreed upon by the
parties and an imposed CBA like the one under consideration.
The foregoing disquisition notwithstanding, it bears emphasizing, however, that the dispositive portion of the 30
January 1998 decision rendered by the Fourth Division of the NLRC in NLRC Case No. V-0112-94 specifically
ordered the imposition upon [GMC] of the [Unions] draft CBA proposal for the remaining two years duration of
the original CBA which is from 1 December 1991 to 30 November 1993.[48] Initially set aside in the 6 October
1998 resolution issued in the same case by the NLRC[49] and reinstated in the 19 July 2000 decision rendered
by the CAs then Fourteenth Division in CA-G.R. SP Nos. 50383 and 51763,[50] said 30 January 1998 decision
was upheld in the 11 February 2004 decision rendered by this Court in G.R. No. 146728 which, in turn, affirmed
the CAs 19 July 2000 decision as aforesaid.[51] Considering that the 30 January 1998 decision sought to be
enforced confined the application of the imposed CBA to the remaining two-year duration of the original CBA,
we find that the computation of the benefits due GMCs covered employees was correctly limited to the period 1
December 1991 to 30 November 1993 in the 27 October 2005 order issued by Executive Labor Arbiter Violeta
Ortiz-Bantug and the 20 July 2006 decision rendered by the NLRC in NLRC Case No. V-000632-2005.
Consequently, insofar as the execution of the 30 January 1998 decision is concerned, the Union is out on a limb
in espousing a computation which extends the benefits of the imposed CBA beyond the remaining two-year
duration of the original CBA. The rule is, after all, settled that an order of execution which varies the tenor of the

judgment or exceeds the terms thereof is a nullity.[52] Since execution not in harmony with the judgment is
bereft of validity,[53] it must conform, more particularly, to that ordained or decreed in the dispositive portion of
the decision sought to be enforced. Considering that the decision sought to be enforced pertains to the period 1
December 1991 to 30 November 1993, it necessarily follows that the computation of benefits under the imposed
CBA should be limited to covered employees who were in GMCs employ during said period of time. While it is
true that the provisions of the imposed CBA extend beyond said remaining two-year duration of the original
CBA in view of the parties admitted failure to conclude a new CBA, the corresponding computation of the
benefits accruing in favor of GMCs covered employees after the term of the original CBA was correctly
excluded in the aforesaid 27 October 2005 order issued in RAB VII-06-0475-1992. Rather than the abbreviated
pre-execution proceedings before Executive Labor Arbiter Violeta Ortiz-Bantug, the computation of the same
benefits beyond 30 November 1993 should, instead, be threshed out by GMC and the Union in accordance with
the Grievance Procedure outlined as follows under Article XII of the imposed CBA.
WHEREFORE, premises considered the assailed decisions dated 10 October 2007 and 16 November 2007 are
REVERSED and SET ASIDE. In lieu thereof, the 27 October 2005 order issued by Labor Arbiter Violeta OrtizBantug is ordered REINSTATED and MODIFIED to further exclude the 234 employees who have executed
deeds of waiver, release and quitclaim from the computation of the benefits for the remaining term of the
original CBA.
CASE LAW/ DOCTRINE:

Article 253 of the Labor Code mandates the parties to keep the status quo and to continue in full force and effect
the terms and conditions of the existing agreement during the 60-day period prior to the expiration of the old
CBA and/or until a new agreement is reached by the parties. The law does not provide for any exception nor
qualification on which economic provisions of the existing agreement are to retain its force and effect. Likewise,
the law does not distinguish between a CBA duly agreed upon by the parties and an imposed CBA like the one in
the present case. Hence, considering that no new CBA had been, in the meantime, agreed upon by respondent
GMC and the Union, the provisions of the imposed CBA continues to have full force and effect until a new CBA
is entered into by the parties.
DISSENTING/CONCURRING OPINION(S):

027 Malayan
Insurance Co.

Employees

Association

v.

Malayan

AUTHOR: Rikki Dela Paz

NOTES:

TOPIC: Collective Bargaining

PONENTE: J. Brion (Second Division)

Facts:

The Malayan Employees Association-FFW (union) is the exclusive bargaining agent of the rank-and-file
employees of the company. A provision in the unions collective bargaining agreement (CBA) with the company
allows union officials to avail of union leaves with pay for a total of ninety-man days per year for the purpose of
attending grievance meetings, Labor-Management Committee meetings, annual National Labor Management
Conferences, labor education programs and seminars, and other union activities.
The company issued a rule in November 2002 requiring not only the prior notice that the CBA expressly requires,
but prior approval by the department head before the union and its members can avail of union leaves. The rule
was placed into effect in November 2002 without any objection from the union until a union officer, Rodolfo
Mangalino, filed union leave applications in January and February, 2004. His department head disapproved the
applications because the department was undermanned at that time.
Despite the disapproval, Mangalino proceeded to take the union leave. He said he believed in good faith that he
had complied with the existing company practice and with the procedure set forth in the CBA. The company

responded by suspending him for one week and, thereafter, for a month, for his second offense in February 2004.
The union raised the suspensions as a grievance issue and went through all the grievance processes, including
the referral of the matter to the companys president, Yvonne Yuchengco. After all internal remedies failed, the
union went to the National Conciliation and Mediation Board for preventive mediation. When this recourse also
failed, the parties submitted the dispute to voluntary arbitration[4] on the following issues:
o Whether or not Mangalinos suspensions were valid; and
o Whether or not Mangalino should be paid backwages for the duration of the suspensions.
Voluntary Arbitrators decided Mangalinos availment of union leave is invalid; while his second suspension was
valid. In view thereof, this Honorable Office reduced the suspension from thirty seven (37) days to ten (10) days
only.
Notably, the decision was not unanimous. Voluntary Arbitrator dela Fuente submitted the following dissent:[6]
o The act of any employee that can only be interpreted to be an open and utter display of arrogance and
unconcern for the welfare of his Company thru the use of what he pretends to believe to be an unbridled
political right cannot be allowed to pass without sanction lest the employer desires anarchy and chaos to
reign in its midst.
o Hence, having failed to comply with the requirements for availment of union leaves and for going on such
leave despite the express disapproval of his superior, Mr. Mangalinos two suspensions are valid and he is
not entitled to any backwages for the duration of his suspensions.
The company appealed the decision to the CA on May 12, 2005 through a petition for review under Rule 43 of the
Rules of Court (Rules). In a decision promulgated on June 26, 2007, the CA granted the companys petition and
upheld the validity of Mangalinos suspension on the basis of the companys prerogative to prescribe reasonable
rules to regulate the use of union leaves.[7]
The union moved for the reconsideration of the CA decision and received the CAs denial (through its resolution of
November 29, 2007) on December 8, 2007.[8]
The company mainly contended that the regulation of the use of union leaves is within the companys
management prerogative, and the company was simply exercising its management prerogative when it required its
employees to first obtain the approval of either the department head or the human resource manager before
making use of any union leave. Thus, Mangalino committed acts of insubordination when he insisted on going on
leave despite the disapproval of his leave applications.
The union posited as well that any unilateral change in the CBA terms violates Article 255 of the Labor Code,
which guarantees the right of employees to participate in the companys policy and decision-making processes on
matters directly affecting their interests. It argued against the company position that it had not objected to the
company rule and is now in estoppel.

ISSUE: Was Mangalino validly suspended?

HELD: YES
DISPOSITIVE PORTION: WHEREFORE, premises considered, we DENY the petition for lack of merit. Costs against
the petitioners.
RATIO:
While it is true that the union and its members have been granted union leave privileges under the CBA, the grant
cannot be considered separately from the other provisions of the CBA, particularly the provision on management
prerogatives where the CBA reserved for the company the full and complete authority in managing and running its
business.[18]
We see nothing in the wordings of the union leave provision that removes from the company the right to prescribe
reasonable rules and regulations to govern the manner of availing of union leaves, particularly the prerogative to
require prior approval. Precisely, prior notice is expressly required under the CBA so that the company can
appropriately respond to the request for leave. In this sense, the rule requiring prior approval only made express
what is implied in the terms of the CBA.
In any event, any doubt in resolving any interpretative conflict is settled by subsequent developments in the course
of the parties implementation of the CBA, specifically, by the establishment of the company regulation in November
2002 requiring prior approval before the union leave can be used.
The union accepted this regulation without objection since its promulgation (or more than a year before the present
dispute arose), and the rule on its face is not unreasonable, oppressive, nor violative of CBA terms. Ample

evidence exists in the records indicating the unions acquiescence to the rule. [19] Notably, no letter from the union
complaining about the unilateral change in policy or any request for a meeting to discuss this policy appears on
record. The union and its members have willingly applied for approval as the rule requires. [20]
Even Mangalino himself, in the past, had filed applications for union leave with his department manager, and
willingly complied with the disapproval without protest of any kind. [21] Thus, when Mangalino asserted his right to
take a leave without prior approval, the requirement for prior approval was already in place and established, and
could no longer be removed except with the companys consent or by negotiation and express agreement in future
CBAs.
The prior approval policy fully supported the validity of the suspensions the company imposed on Mangalino. We
point out additionally that as an employee, Mangalino had the clear obligation to comply with the management
disapproval of his requested leave while at the same time registering his objection to the company regulation and
action.
That he still went on leave, in open disregard of his superiors orders, rendered Mangalino open to the charge of
insubordination, separately from his absence without official leave.[22] This charge, of course, can no longer
prosper even if laid today, given the lapse of time that has since transpired.

028 Santuyo v. Remerco Garments

AUTHOR:
March 22, 2010 G.R. No. 174420
TOPIC:
PONENTE: Corono J.
FACTS:
1. From 1992 to 1994, due to a serious industrial dispute, the Kaisahan ng Manggagawa sa Remerco Garments
Manufacturing Inc.- KMM Kilusan (union) staged a strike against respondent Remerco Garments
Manufacturing, Inc. (RGMI).
2. Because the strike was subsequently declared illegal, all union officers were dismissed.
3. Employees who wanted to sever their employment were paid separation pay while those who wanted to resume
work were recalled on the condition that they would no longer be paid a daily rate but on a piece-rate basis.
4. Petitioners, who had been employed as sewers, were among those recalled.
5. Without allowing RGMI to normalize its operations, the union filed a notice of strike in the National Conciliation
and Mediation Board (NCMB) on August 8, 1995
6. [UNION]
-

According to the union, RGMI conducted a time and motion study and changed the salary scheme from a daily rate to piece-rate basis
without consulting it.
RGMI therefore not only violated the existing collective bargaining agreement (CBA) but also diminished the salaries agreed upon.
It therefore committed an unfair labor practice.

7. On August 24, 1995, RGMI filed a notice of lockout in the NCMB. [3]
8. On November 11, 1995, while the union and RGMI were undergoing conciliation in the NCMB, RGMI
transferred its factory site.
9. On November 13, 1995, the union went on strike and blocked the entry to RGMIs (new) premises.
10. [SOLE RULING] In an order dated November 21, 1995,[4] the Secretary of Labor assumed jurisdiction
- pursuant to Article 263(g) of the Labor Code[5] and ordered RGMIs striking workers to return to work
immediately.
- He likewise ordered the union and RGMI to submit their respective position papers.
[UNION POSITION PAPER]
- In its position paper, the union denied going on strike and blocking entries (and exits) at RGMIs premises.
- Furthermore, the union enumerated RGMIs alleged unfair labor practices.
- RGMI not only changed its salary scheme but also refused to pay wages to its employees for three weeks and
transferred the plant to a new site.
- The union therefore asked for the reinstatement of all employees to their former positions at the old worksite

and payment of their unpaid salaries based on the daily rate (as provided in the CBA).
[EMPLOYER]
- RGMI, on the other hand, insisted that its employees refused to obey the November 21, 1995 order.
- Thus, it prayed that the strike be declared illegal and that all union officers and those employees who refused
to return to work be declared to have abandoned their employment.
[SOLE RULING]
- After evaluating the respective arguments of the union and RGMI, the Secretary of Labor held that RGMI did
not lock out its employees inasmuch as it informed them of the transfer of the worksite.
- However, he did not rule on the legality of the strike.
- SOLE found that the employees would receive higher wages if they were paid on a piece-rate rather than on a
daily rate basis.
- Hence, the new salary scheme would be more advantageous to the employees. For this reason, despite the
provisions of the CBA, the change in salary scheme was validated.
- SOLE ordered all employees to return to work and RGMI to pay its employees their unpaid salaries (from
September 25, 1995 to October 14, 1995) on the piece-rate basis. Neither the union nor RGMI appealed the
aforementioned order.
On October 18, 1995, while the conciliation proceedings between the union and respondent were pending, petitioners
filed a complaint for illegal dismissal against RGMI and respondent Victoria Reyes, accusing the latter of
harassment. Petitioners subsequently amended their complaint, demanding payment of their accrued salaries from
September 25 to October 14, 1995 (computed at the daily rate of P145 plus the CBA-decreed increase of P11 per day) and
the monetary equivalent of benefits they were entitled to under the CBA but allegedly withheld by RGMI. Later,
petitioners again amended their complaint, stating that respondents suspended them for questioning their decision to pay
salaries on a piece-rate basis.
Respondents, on the other hand, moved to dismiss the complaint in view of the pending conciliation proceedings (which
involved the same issue) in the NCMB. Moreover, alleged violations of the CBA should be resolved according to the
grievance procedure laid out therein.[10] Thus, the labor arbiter had no jurisdiction over the complaint.
[LABOR ARBITER]
The labor arbiter found that respondents did not pay petitioners their salaries and deprived them of the
benefits they were entitled to under the CBA. Thus, in a decision dated July 15, 1999, [11] he ordered respondents to pay
petitioners their unpaid salaries according to their daily rate with the corresponding increase provided in the CBA and
benefits, separation pay and attorneys fees.
Respondents appealed the decision of the labor arbiter in the National Labor Relations Commission (NLRC) [12] but it was
denied.
[CA RULING]
- Aggrieved, respondents filed a petition for certiorari in the Court of Appeals (CA) claiming that the NLRC
acted with grave abuse of discretion in affirming the decision of the labor arbiter. They argued that since the
complaint involved the implementation of the CBA, the labor arbiter had no jurisdiction over it.
- REVERSED and set aside the decision of the NLRC on the ground that the labor arbiter had no jurisdiction
over the complaint.
- Petitioners moved for reconsideration but it was denied.
Petitioners insist that the labor arbiter had jurisdiction inasmuch as the complaint was for illegal dismissal. Furthermore,
they claim that the September 18, 1996 order of the Secretary of Labor was inapplicable to them. Despite being members
of the union, they were not among those who went on strike.
ISSUE:
1. Did the
labor
arbiter
have
jurisdiction over
the
complaint
filed by
2. Was the labor arbiter barred by prior judgment from assuming jurisdiction over the complaint?
HELD:

the

petitioners?

1st Issue:
-

2nd Issue:
-

No, the labor arbiter did not have jurisdiction over the complaint. Petitioners clearly and consistently questioned the
legality of RGMIs adoption of the new salary scheme (i.e., piece-rate basis), asserting that such action, among others,
violated the existing CBA.
The controversy was not a simple case of illegal dismissal but a labor dispute involving the manner of ascertaining
employees salaries, a matter which was governed by the existing CBA. Article 217 of the Labor Code provides that
[c]ases arising from the interpretation or implementation of collective bargaining agreements and those arising from the
interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring the
same to the grievance machinery and voluntary arbitration as may be provided in said agreements.
This provision requires labor arbiters to refer cases involving the implementation of CBAs to the grievance machinery
provided therein and to voluntary arbitration.
Moreover, Article 260 of the Labor Code clarifies that such disputes must be referred first to the grievance machinery
and, if unresolved within seven days, they shall automatically be referred to voluntary arbitration. Thus, under Article 261
of the Labor Code, voluntary arbitrators have original and exclusive jurisdiction over matters which have not been
resolved by the grievance machinery. Pursuant to Articles 217 in relation to Articles 260 and 261 of the Labor Code, the
labor arbiter should have referred the matter to the grievance machinery provided in the CBA. Because the labor arbiter
clearly did not have jurisdiction over the subject matter, his decision was void.
Yes, the labor arbiter was barred by prior judgment from assuming jurisdiction over the complaint. The Secretary of
Labor resolved the labor dispute between the union and RGMI in his September 18, 1996 order. Since neither the union
nor RGMI appealed the said order, it became final and executory. Article 263(g) of the Labor Code gives the Secretary of
Labor discretion to assume jurisdiction over a labor dispute likely to cause a strike or a lockout in an industry
indispensable to the national interest and to decide the controversy or to refer the same to the NLRC for compulsory
arbitration.
In doing so, the Secretary of Labor shall resolve all questions and controversies in order to settle the dispute. The
Secretary of Labor assumed jurisdiction over the controversy because RGMI had a substantial number of employees and
was a major exporter of garments to the United States and Canada
Settled is the rule that unions are the agent of its members for the purpose of securing just and fair wages and good
working conditions. Since petitioners were part of the bargaining unit represented by the union and members thereof, the
September 18, 1996 order of the Secretary of Labor applies to them.
Furthermore, since the union was the bargaining agent of petitioners, the complaint was barred under the principle of
conclusiveness of judgments. The parties to a case are bound by the findings in a previous judgment with respect to
matters actually raised and adjudged therein. Hence, the labor arbiter should have dismissed the complaint on the ground
of res judicata.

RATIO:
1. The petition has no merit.
2. Petitioners clearly and consistently questioned the legality of RGMIs adoption of the new salary scheme
(i.e., piece-rate basis), asserting that such action, among others, violated the existing CBA. Indeed, the controversy
was not a simple case of illegal dismissal but a labor dispute [18] involving the manner of ascertaining employees
salaries, a matter which was governed by the existing CBA.
3. Article 217(c) of the Labor Code (as to the jurisdiction over subject matter)
- (c) Cases arising from the interpretation or implementation of collective bargaining agreements and those
arising from the interpretation or enforcement of company personnel policies shall be disposed of by the
Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be
provided in said agreements
4. This provision requires labor arbiters to refer cases involving the implementation of CBAs to the grievance
machinery provided therein and to voluntary arbitration.
5. Moreover, Article 260 of the Labor Code clarifies that such disputes must be referred first to the grievance
machinery and, if unresolved within seven days, they shall automatically be referred to voluntary arbitration.
6. Voluntary arbitrators have original and exclusive jurisdiction over matters which have not been resolved by the
grievance machinery. Pursuant to Articles 217 in relation to Articles 260 and 261 of the Labor Code, the labor
arbiter should have referred the matter to the grievance machinery provided in the CBA. Because the labor arbiter
clearly did not have jurisdiction over the subject matter, his decision was void.
7. Nonetheless, the Secretary of the Labor assumed jurisdiction over the labor dispute between the union and RGMI
and resolved the same in his September 18, 1996 order.
8. Article 263(g) of the Labor Code gives the Secretary of Labor discretion to assume jurisdiction over a labor
dispute likely to cause a strike or a lockout in an industry indispensable to the national interest and to decide the
controversy or to refer the same to the NLRC for compulsory arbitration. In doing so, the Secretary of Labor shall
resolve all questions and controversies in order to settle the dispute. His power is therefore plenary and

discretionary in nature to enable him to effectively and efficiently dispose of the issue.
9. The SOLE assumed jurisdiction over the controversy because RGMI had a substantial number of employees and
was a major exporter of garments to the United States and Canada.[23]
10. SOLE resolved the labor dispute between the union and RGMI in his September 18, 1996 order. [24] Since neither
the union nor RGMI appealed the said order, it became final and executory.
11. Settled is the rule that unions are the agent of its members for the purpose of securing just and fair wages and good
working conditions.[25] Since petitioners were part of the bargaining unit represented by the union and members
thereof, the September 18, 1996 order of the Secretary of Labor applies to them.
12. Since the union was the bargaining agent of petitioners, the complaint was barred under the principle of
conclusiveness of judgments. The parties to a case are bound by the findings in a previous judgment with respect
to matters actually raised and adjudged therein. [26] Hence, the labor arbiter should have dismissed the complaint on
the ground of res judicata.
WHEREFORE, the petition is hereby DENIED
CASE LAW/ DOCTRINE:
Subject matter of grievance
- Art. 217(c) of the Labor Code provides that cases arising from the interpretation or implementation of collective
bargaining agreements and those arising from the interpretation or enfocement of company personnel policies shall be
disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be
provided in said agreements.
- This provision requires labor arbiters to refer cases involving the implementation of CBAs to the grievance machinery
provided therein and to voluntary arbitration. Moreover, Art. 260 of the Labor Code clarifies that such disputes must be
referred first to the grievance machinery and, if unresolved within seven days, they shall automatically be referred to
voluntary arbitration.

Under Art. 261, violations of a CBA, except those which are gross in character, shall no longer be treated as unfair labor
practice and shall be resolved as grievances under the CBA. Under this provision, voluntary arbitrators have original and
exclusive jurisdiction over matters which have not been resolved by the grievance machinery. Pursuant to Articles 217 in
relation to Articles 260 and 261 of the Labor Code, the labor arbiter should have referred the matter to the grievance
machinery provided in the CBA. Because the labor arbiter did not have jurisdiction over the subject matter, his decision
was void.

029 INSULAR HOTEL VS WATERFRONT

G.R. Nos. 174040-41

September 22, 2010

INSULAR HOTEL EMPLOYEES UNION-NFL, Petitioner, vs. WATERFRONT INSULAR HOTEL

DAVAO, Respondent.
FACTS:
respondent Waterfront Insular Hotel Davao filed a notice of suspension to the DOLE.
During the period of the suspension, Domy R. Rojas (Rojas), the President of Davao Insular Hotel Free Employees
Union (DIHFEU-NFL), the recognized labor organization in Waterfront Davao, sent respondent a number of letters
asking management to reconsider its decision.
Rojas sent numerous letters to respondent expressing their intent to help respondent regarding their financial crisis.
Later, Rojas once again appealed to respondent for it to consider their proposals and to re-open the hotel. In said
letter,

Finally, sometime in January 2001, DIHFEU-NFL, through Rojas, submitted to respondent a Manifesto 13concretizing
their earlier proposals.
After series of negotiations, respondent and DIHFEU-NFL, represented by its President, Rojas, and VicePresidents, Exequiel J. Varela Jr. and Avelino C. Bation, Jr., signed a Memorandum of Agreement 14 (MOA) wherein
respondent agreed to re-open the hotel subject to certain concessions offered by DIHFEU-NFL in its Manifesto.
Accordingly, respondent downsized its manpower structure to 100 rank-and-file employees as set forth in the terms
of the MOA. Moreover, as agreed upon in the MOA, a new pay scale was also prepared by respondent.
On June 15, 2001, respondent resumed its business operations.
JOVES and PLANAS filed a notice of mediation before the NCMB, they claim to be officers of the National
Federation of labor.
The issue raised in said Notice was the "Diminution of wages and other benefits through unlawful Memorandum of
Agreement."
The parties agreed to submit the issue of whether or not there was a diminution of wages and other benefits through
an unlawful MOA before the voluntary arbitrator. In support of his authority to file the complaint, Joves, assisted by
Atty. Danilo Cullo (Cullo), presented several Special Powers of Attorney (SPA) which were, however, undated and
unnotarized.
Respondent filed with the NCMB a motion for second preliminary conference arguing the ff:
1) The persons who filed the instant complaint in the name of the Insular Hotel Employees Union-NFL have
no authority to represent the Union;
2) The individuals who executed the special powers of attorney in favor of the person who filed the instant
complaint have no standing to cause the filing of the instant complaint; and
3) The existence of an intra-union dispute renders the filing of the instant case premature. 19
On September 16, 2002, a second preliminary conference was conducted in the NCMB, where Cullo denied any
existence of an intra-union dispute among the members of the union. Cullo, however, confirmed that the case was
filed not by the IHEU-NFL but by the NFL. When asked to present his authority from NFL, Cullo admitted that the
case was, in fact, filed by individual employees named in the SPAs. The hearing officer directed both parties to
elevate the aforementioned issues to AVA Olvida.20
The case was docketed as Case No. AC-220-RB-11-09-022-02 and referred to AVA Olvida.
RESPONDENTS OBJECTIONS:
a)

the persons who signed the complaint were not the authorized representatives of the Union indicated in the
Submission Agreement nor were they parties to the MOA.

AVA Olvida directed respondent to file a formal motion to withdraw its submission to voluntary arbitration.
Respondent filed a motion to withdraw.
Cullo filed an opposition.
In said Opposition, Cullo reiterated that the complainants were not representing IHEU-NFL, to wit:
xxxx

2. Respondent must have been lost when it said that the individuals who executed the SPA have no
standing to represent the union nor to assail the validity of Memorandum of Agreement (MOA). What
is correct is that the individual complainants are not representing the union but filing the
complaint through their appointed attorneys-in-fact to assert their individual rights as workers who
are entitled to the benefits granted by law and stipulated in the collective bargaining agreement. 23
Olvida denied the Motion to withdraw of respondents.
Respondents filed a motion for reconsideration arguing:
a) Submission agreement was void for lack of consent of the union
b) No resolution was issued authorizing the employees to file a notice of mediation
Cullos comment:
a) The case was initiated not in behalf of the union
b) the case is initiated by the individual workers and National Federation of Labor, not by the local union. The
local union was not included as party-complainant considering that it was a party to the assailed MOA.
AVAs resolution:
a) denying respondent's Motion for Reconsideration.
b) He, however, ruled that respondent was correct when it raised its objection to NFL as proper partycomplainant, thus:
The proper party-complainant is INSULAR HOTEL EMPLOYEES UNION-NFL, the recognized and incumbent
bargaining agent of the rank-and-file employees of the respondent hotel. In the submission agreement of the
parties dated August 29, 2002, the party complainant written is INSULAR HOTEL EMPLOYEES UNION-NFL
and not the NATIONAL FEDERATION OF LABOR and 79 other members.
However, since the NFL is the mother federation of the local union, and signatory to the existing CBA, it can
represent the union, the officers, the members or union and officers or members, as the case may be, in all
stages of proceedings in courts or administrative bodies provided that the issue of the case will involve labormanagement relationship like in the case at bar.

Respondent filed its Position

A) Questioning the jurisdiction of the NCMB and AVA Olvida and;
B) the standing of the persons who filed the notice of mediation.
Cullo, now using the caption "Insular Hotel Employees Union-NFL, Complainant," filed a comment
Respondent filed a motion for inhibition, which was granted.
NCMB issued a notice for the selection of a new arbitrator.
Respondent reiterated its stand that NCMB has no jurisdiction. AVA montejo was appointed ex parte at the instance
of Cullo.
AVA Montejo rendered a Decision37 ruling in favor of Cullo, the dispositive portion of which reads:
WHEREOF, in view of the all the foregoing, judgment is hereby rendered:
1. Declaring the Memorandum of Agreement in question as invalid as it is contrary to law and public policy;

2. Declaring that there is a diminution of the wages and other benefits of the Union members and officers
under the said invalid MOA.
3. Ordering respondent management to immediately reinstate the workers wage rates and other benefits
that they were receiving and enjoying before the signing of the invalid MOA;
4. Ordering the management respondent to pay attorneys fees in an amount equivalent to ten percent
(10%) of whatever total amount that the workers union may receive representing individual wage
differentials.
As to the other claims of the Union regarding diminution of other benefits, this accredited voluntary arbitrator is of
the opinion that she has no authority to entertain, particularly as to the computation thereof.
BOTH PARTIES APPEALED.
CULLO assails the ff:
a) as it did not categorically order respondent to pay the covered workers their differentials in wages reckoned
from the effectivity of the MOA up to the actual reinstatement of the reduced wages and benefits
RESPONDENT:
a) jurisdiction of NCMB
b) MOA is valid
Court of appeals granted the appeal of respondent
CULLO filed a motion for reconsideration --- denied
ISSUES:
I.
WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERRORS IN FINDING
THAT THE ACCREDITED VOLUNTARY ARBITRATOR HAS NO JURISDICTION OVER THE CASE SIMPLY
BECAUSE THE NOTICE OF MEDIATION DOES NOT MENTION THE NAME OF THE LOCAL UNION BUT ONLY
THE AFFILIATE FEDERATION THEREBY DISREGARDING THE SUBMISSION AGREEMENT DULY SIGNED BY
THE PARTIES AND THEIR LEGAL COUNSELS THAT MENTIONS THE NAME OF THE LOCAL UNION.
II.
WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR BY
DISREGARDING THE PROVISIONS OF THE CBA SIMPLY BECAUSE IT BELIEVED THE UNPROVEN
ALLEGATIONS OF RESPONDENT HOTEL THAT IT WAS SUFFERING FROM FINANCIAL CRISIS.
III.
THE HONORABLE COURT OF APPEALS MUST HAVE SERIOUSLY ERRED IN CONCLUDING THAT ARTICLE
100 OF THE LABOR CODE APPLIES ONLY TO BENEFITS ENJOYED PRIOR TO THE ADOPTION OF THE
LABOR CODE WHICH, IN EFFECT, ALLOWS THE DIMINUTION OF THE BENEFITS ENJOYED BY EMPLOYEES
FROM ITS ADOPTION HENCEFORTH.42
The petition is not meritorious.

1st issue:
CULLOs arguments:
a) CA erred when it overlooked the fact that before the case was submitted to voluntary arbitration, the parties
signed a Submission Agreement which mentioned the name of the local union and not only NFL.
b) CA committed error when it ruled that the voluntary arbitrator had no jurisdiction over the case simply
because the Notice of Mediation did not state the name of the local union thereby disregarding the
Submission Agreement which states the names of local union as Insular Hotel Employees Union-NFL. 43
RESPONDENTSs ARGUMENTS:
a) NCMB and Voluntary Arbitrators had no jurisdiction over the complaint.
b) IHEU-NFL is a non-entity since it is DIHFEU-NFL which is considered by the DOLE as the only registered
union in Waterfront Davao.45
c) the Submission Agreement does not name the local union DIHFEU-NFL and that it had timely withdrawn its
consent to arbitrate by filing a motion to withdraw.
SC:
A review of the development of the case shows that there has been much confusion as to the identity of the party
which filed the case against respondent. In the Notice of Mediation 46 filed before the NCMB, it stated that the union
involved was "DARIUS JOVES/DEBBIE PLANAS ET. AL., National Federation of Labor." In the Submission
Agreement,47 however, it stated that the union involved was "INSULAR HOTEL EMPLOYEES UNION-NFL."
Furthermore, a perusal of the records would reveal that after signing the Submission Agreement, respondent
persistently questioned the authority and standing of the individual employees to file the complaint. Cullo then
clarified in subsequent documents captioned as "National Federation of Labor and 79 Individual Employees, Union
Members, Complainants" that the individual complainants are not representing the union, but filing the complaint
through their appointed attorneys-in-fact. 48 AVA Olvida, however, in a Resolution dated March 18, 2003, agreed with
respondent that the proper party-complainant should be INSULAR HOTEL EMPLOYEES UNION-NFL, to wit:
x x x In the submission agreement of the parties dated August 29, 2002, the party complainant written is INSULAR
HOTEL EMPLOYEES UNION-NFL and not the NATIONAL FEDERATION OF LABOR and 79 other members. 49
After the March 18, 2003 Resolution of AVA Olvida, Cullo adopted "Insular Hotel Employees Union-NFL et.
al.,Complainant" as the caption in all his subsequent pleadings. Respondent, however, was still adamant that
neither Cullo nor the individual employees had authority to file the case in behalf of the Union.
While it is undisputed that a submission agreement was signed by respondent and "IHEU-NFL," then represented
by Joves and Cullo, this Court finds that there are two circumstances which affect its validity: first, the Notice of
Mediation was filed by a party who had no authority to do so; second, that respondent had persistently voiced out its
objection questioning the authority of Joves, Cullo and the individual members of the Union to file the complaint
before the NCMB.
Procedurally, the first step to submit a case for mediation is to file a notice of preventive mediation with the NCMB. It
is only after this step that a submission agreement may be entered into by the parties concerned.
Section 3, Rule IV of the NCMB Manual of Procedure provides who may file a notice of preventive mediation, to wit:
Who may file a notice or declare a strike or lockout or request preventive mediation. Any certified or duly recognized bargaining representative may file a notice or declare a strike or request for
preventive mediation in cases of bargaining deadlocks and unfair labor practices. The employer may file a
notice or declare a lockout or request for preventive mediation in the same cases. In the absence of a certified or
duly recognized bargaining representative, any legitimate labor organization in the establishment may file a notice,
request preventive mediation or declare a strike, but only on grounds of unfair labor practice.

From the foregoing, it is clear that only a certified or duly recognized bargaining agent may file a notice or
request for preventive mediation. It is curious that even Cullo himself admitted, in a number of pleadings, that the
case was filed not by the Union but by individual members thereof. Clearly, therefore, the NCMB had no jurisdiction
to entertain the notice filed before it.
Even though respondent signed a Submission Agreement, it had, however, immediately manifested its desire to
withdraw from the proceedings after it became apparent that the Union had no part in the complaint. As a matter of
fact, only four days had lapsed after the signing of the Submission Agreement when respondent called the attention
of AVA Olvida in a "Manifestation with Motion for a Second Preliminary Conference" 51 that the persons who filed the
instant complaint in the name of Insular Hotel Employees Union-NFL had no authority to represent the Union.
The question to be resolved then is, do the individual members of the Union have the requisite standing to question
the MOA before the NCMB?
Apropos is this Courts pronouncement in Atlas Farms, Inc. v. National Labor Relations Commission, viz:
x x x Pursuant to Article 260 of the Labor Code, the parties to a CBA shall name or designate their
respective representatives to the grievance machinery and if the grievance is unsettled in that level, it shall
automatically be referred to the voluntary arbitrators designated in advance by parties to a CBA.
Consequently, only disputes involving the union and the company shall be referred to the grievance
machinery or voluntary arbitrators.

If the individual members of the Union have no authority to file the case, does the federation to which the local union
is affiliated have the standing to do so?
On this note, Coastal Subic Bay Terminal, Inc. v. Department of Labor and Employment 56 is enlightening, thus:
x x x A local union does not owe its existence to the federation with which it is affiliated. It is a separate and
distinct voluntary association owing its creation to the will of its members. Mere affiliation does not divest
the local union of its own personality, neither does it give the mother federation the license to act
independently of the local union. It only gives rise to a contract of agency, where the former acts in
representation of the latter. Hence, local unions are considered principals while the federation is deemed to
be merely their agent. x x x57
Based on the foregoing, this Court agrees with approval with the disquisition of the CA when it ruled that NFL had no
authority to file the complaint in behalf of the individual employees, to wit:
Anent the first issue, We hold that the voluntary arbitrator had no jurisdiction over the case. Waterfront
contents that the Notice of Mediation does not mention the name of the Union but merely referred to the
National Federation of Labor (NFL) with which the Union is affiliated. In the subsequent pleadings, NFL's
legal counsel even confirmed that the case was not filed by the union but by NFL and the individual
employees named in the SPAs which were not even dated nor notarized.
Even granting that petitioner Union was affiliated with NFL, still the relationship between that of the local
union and the labor federation or national union with which the former was affiliated is generally understood
to be that of agency, where the local is the principal and the federation the agency. Being merely an agent of
the local union, NFL should have presented its authority to file the Notice of Mediation. While We commend
NFL's zealousness in protecting the rights of lowly workers, We cannot, however, allow it to go beyond what
it is empowered to do.
As provided under the NCMB Manual of Procedures, only a certified or duly recognized bargaining
representative and an employer may file a notice of mediation, declare a strike or lockout or request
preventive mediation. The Collective Bargaining Agreement (CBA), on the other, recognizes that DIHFEUNFL is the exclusive bargaining representative of all permanent employees. The inclusion of the word "NFL"
after the name of the local union merely stresses that the local union is NFL's affiliate. It does not, however,

mean that the local union cannot stand on its own. The local union owes its creation and continued
existence to the will of its members and not to the federation to which it belongs. The spring cannot rise
higher than its source, so to speak.58
In its Memorandum, respondent contends that IHEU-NFL is a non-entity and that DIHFEU-NFL is the only
recognized bargaining unit in their establishment.
While the November 16, 2006 Certification 59 of the DOLE clearly states that "IHEU-NFL" is not a registered labor
organization, this Court finds that respondent is estopped from questioning the same as it did not raise the said
issue in the proceedings before the NCMB and the Voluntary Arbitrators. A perusal of the records reveals that the
main theory posed by respondent was whether or not the individual employees had the authority to file the
complaint notwithstanding the apparent non-participation of the union. Respondent never put in issue the fact that
DIHFEU-NFL was not the same as IHEU-NFL. Consequently, it is already too late in the day to assert the same.
Anent the second issue raised by Cullo, the same is again without merit.
Cullo contends that respondent was not really suffering from serious losses as found by the CA. Cullo anchors his
position on the denial by the Wage Board of respondent's petition for exemption from Wage Order No. RTWPB-X108 on the ground that it is a distressed establishment.60 In said denial, the Board ruled:
A careful analysis of applicant's audited financial statements showed that during the period ending December 31,
1999, it registered retained earnings amounting to P8,661,260.00. Applicant's interim financial statements for
the quarter ending June 30, 2000 cannot be considered, as the same was not audited . Accordingly, this Board
finds that applicant is not qualified for exemption as a distressed establishment pursuant to the aforecited criteria. 61
LASTLY Cullo argues that the CA must have erred in concluding that Article 100 of the Labor Code applies only to
benefits already enjoyed at the time of the promulgation of the Labor Code.
Article 100 of the Labor Code provides:
PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS- Nothing in this Book shall be construed
to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of the
promulgation of this Code.
On this note, Apex Mining Company, Inc. v. NLRC65 is instructive, to wit:
Clearly, the prohibition against elimination or diminution of benefits set out in Article 100 of the Labor Code is
specifically concerned with benefits already enjoyed at the time of the promulgation of the Labor Code. Article 100
does not, in other words, purport to apply to situations arising after the promulgation date of the Labor Code x x x. 66
Even assuming arguendo that Article 100 applies to the case at bar, this Court agrees with respondent that the
same does not prohibit a union from offering and agreeing to reduce wages and benefits of the employees. In Rivera
v. Espiritu,67 this Court ruled that the right to free collective bargaining, after all, includes the right to suspend it, thus:
A CBA is "a contract executed upon request of either the employer or the exclusive bargaining
representative incorporating the agreement reached after negotiations with respect to wages, hours of work
and all other terms and conditions of employment, including proposals for adjusting any grievances or
questions arising under such agreement." The primary purpose of a CBA is the stabilization of labormanagement relations in order to create a climate of a sound and stable industrial peace. In construing a
CBA, the courts must be practical and realistic and give due consideration to the context in which it is
negotiated and the purpose which it is intended to serve.
The assailed PAL-PALEA agreement was the result of voluntary collective bargaining negotiations
undertaken in the light of the severe financial situation faced by the employer, with the peculiar and
unique intention of not merely promoting industrial peace at PAL, but preventing the latters
closure. We find no conflict between said agreement and Article 253-A of the Labor Code. Article 253-A has
a two-fold purpose. One is to promote industrial stability and predictability. Inasmuch as the agreement

sought to promote industrial peace at PAL during its rehabilitation, said agreement satisfies the first purpose
of Article 253-A. The other is to assign specific timetables wherein negotiations become a matter of right
and requirement. Nothing in Article 253-A, prohibits the parties from waiving or suspending the mandatory
timetables and agreeing on the remedies to enforce the same.
1awphi1

In the instant case, it was PALEA, as the exclusive bargaining agent of PALs ground employees, that
voluntarily entered into the CBA with PAL. It was also PALEA that voluntarily opted for the 10-year
suspension of the CBA. Either case was the unions exercise of its right to collective bargaining. The right
to free collective bargaining, after all, includes the right to suspend it.68
Lastly, this Court is not unmindful of the fact that DIHFEU-NFL's Constitution and By-Laws specifically provides that
"the results of the collective bargaining negotiations shall be subject to ratification and approval by majority vote of
the Union members at a meeting convened, or by plebiscite held for such special purpose." 69 Accordingly, it is
undisputed that the MOA was not subject to ratification by the general membership of the Union. The question to be
resolved then is, does the non-ratification of the MOA in accordance with the Union's constitution prove fatal to the
validity thereof?
It must be remembered that after the MOA was signed, the members of the Union individually signed contracts
denominated as "Reconfirmation of Employment." 70 Cullo did not dispute the fact that of the 87 members of the
Union, who signed and accepted the "Reconfirmation of Employment," 71 are the respondent employees in the case
at bar. Moreover, it bears to stress that all the employees were assisted by Rojas, DIHFEU-NFL's president, who
even co-signed each contract.
Stipulated in each Reconfirmation of Employment were the new salary and benefits scheme. In addition, it bears to
stress that specific provisions of the new contract also made reference to the MOA. Thus, the individual members of
the union cannot feign knowledge of the execution of the MOA. Each contract was freely entered into and there is
no indication that the same was attended by fraud, misrepresentation or duress. To this Court's mind, the signing of
the individual "Reconfirmation of Employment" should, therefore, be deemed an implied ratification by the Union
members of the MOA.
In Planters Products, Inc. v. NLRC,71 this Court refrained from declaring a CBA invalid notwithstanding that the same
was not ratified in view of the fact that the employees had enjoyed benefits under it, thus:
Under Article 231 of the Labor Code and Sec. 1, Rule IX, Book V of the Implementing Rules, the parties to a
collective [bargaining] agreement are required to furnish copies of the appropriate Regional Office with
accompanying proof of ratification by the majority of all the workers in a bargaining unit. This was not done
in the case at bar. But we do not declare the 1984-1987 CBA invalid or void considering that the employees
have enjoyed benefits from it. They cannot receive benefits under provisions favorable to them and later
insist that the CBA is void simply because other provisions turn out not to the liking of certain employees. x x
x. Moreover, the two CBAs prior to the 1984-1987 CBA were not also formally ratified, yet the employees are
basing their present claims on these CBAs. It is iniquitous to receive benefits from a CBA and later on
disclaim its validity.72
Applied to the case at bar, while the terms of the MOA undoubtedly reduced the salaries and certain benefits
previously enjoyed by the members of the Union, it cannot escape this Court's attention that it was the execution of
the MOA which paved the way for the re-opening of the hotel, notwithstanding its financial distress. More
importantly, the execution of the MOA allowed respondents to keep their jobs. It would certainly be iniquitous for the
members of the Union to sign new contracts prompting the re-opening of the hotel only to later on renege on their
agreement on the fact of the non-ratification of the MOA.
In addition, it bears to point out that Rojas did not act unilaterally when he negotiated with respondent's
management. The Constitution and By-Laws of DIHFEU-NFL clearly provide that the president is authorized to
represent the union on all occasions and in all matters in which representation of the union may be agreed or
required.73 Furthermore, Rojas was properly authorized under a Board of Directors Resolution 74 to negotiate with
respondent,

WHEREFORE, premises considered, the petition is DENIED. The Decision dated October 11, 2005, and the
Resolution dated July 13, 2006 of the Court of Appeals in consolidated labor cases docketed as CA-G.R. SP No.
83831 and CA-G.R. SP No. 83657, are AFFIRMED.
SO ORDERED.
DIOSDADO
Associate Justice

M.

PERALTA

WE CONCUR:

030 Cirtek Employees Labor Union v. Cirtek Electronics AUTHOR:

G.R. No. 190515, November 15, 2010
NOTES: (if applicable)
TOPIC: Collective Bargaining
PONENTE: CARPIO MORALES, J.:
FACTS:
1. Cirtek Electronics, Inc. (respondent), an electronics and semi-conductor firm situated inside the Laguna
Technopark, had an existing (CBA) with Cirtek Employees Labor Union-Federation of Free Workers (petitioner) for
the period January 1, 2001 up to December 31, 2005.
2. Prior to the 3rd year of the CBA, the parties renegotiated its economic provisions but failed to reach a settlement,
particularly on the issue of wage increases. Petitioner thereupon declared a bargaining deadlock and filed a Notice
of Strike with the NCMB-RO IV. Respondent, upon the other hand, filed a Notice of Lockout on June 16, 2004.
3. While the conciliation proceedings were ongoing, respondent placed seven union officers including the President,
a Vice President, the Secretary and the Chairman of the Board of Directors under preventive suspension for
allegedly spearheading a boycott of overtime work. The officers were eventually dismissed from employment,
prompting petitioner to file another Notice of Strike which was, after conciliation meetings, converted to a voluntary
arbitration case. The dismissal of the officers was later found to be legal, hence, petitioner appealed.
4. In the meantime, as amicable settlement of the CBA was deadlocked, petitioner went on strike on June 20, 2005.
By Order dated June 23, 2005, the Secretary of Labor assumed jurisdiction over the controversy and issued a
Return to Work Order which was complied with.
5. Before the Secretary of Labor could rule on the controversy, respondent created a Labor Management Council
(LMC) through which it concluded with the remaining officers of petitioner a Memorandum of Agreement (MOA)
providing for daily wage increases of P6.00 per day effective January 1, 2004 and P9.00 per day effective January
1, 2005.
6. Petitioner submitted the MOA via Motion and Manifestation to the Secretary of Labor, alleging that the remaining
officers signed the MOA under respondents assurance that should the Secretary order a higher award of wage
increase, respondent would comply.
7. The Secretary of Labor resolved the CBA deadlock by awarding a wage increase of from P6.00 to P10.00 per
day effective January 1, 2004 and from P9.00 to P15.00 per day effective January 1, 2005, and adopting all other
benefits as embodied in the MOA.
8. Respondent moved for a reconsideration of the Decision as petitioners vice-president submitted a Muling
Pagpapatibay ng Pagsang-ayon sa Kasunduan na may Petsang ika-4 ng Agosto 2005, stating that the union
members were waiving their rights and benefits under the Secretarys Decision. Reconsideration of the Decision
was denied by Resolution of August 12, 2008, hence, respondent filed a petition for certiorari before the Court of
Appeals.
9. CA - ruled in favor of respondent and accordingly set aside the Decision of the Secretary of Labor. It held that the
Secretary of Labor gravely abused his discretion in not respecting the MOA. It did not give credence to the minutes
of the meeting hat attended the forging of the MOA as it was not verified, nor to the Paliwanag submitted by
respondent union members explaining why they signed the MOA as it was not notarized.
10. Respondent Unions Contention maintained that he Secretary of Labors award is in order, being in accord with
the parties CBA history respondent having already granted P15.00 per day for 2001, P10.00 per day for 2002,
and P10.00 per day for 2003, and that the Secretary has the power to grant awards higher than what are stated in
the CBA. Respecting the MOA, petitioner posits that it was surreptitiously entered into [in] bad faith, it having been
forged without the assistance of the Federation of Free Workers or counsel, adding that respondent could have
waited for the Secretarys resolution of the pending CBA deadlock or that the MOA could have been concluded
before representatives of the Secretary of Labor.
ISSUE(S):
1. Whether the Secretary of Labor is authorized to give an award higher than that agreed upon in the MOA
2. Whether the MOA was entered into and ratified by the remaining officers of petitioner under the condition, which
was not incorporated in the MOA, that respondent would honor the Secretary of Labors award in the event that it is

higher.
HELD: 1. Yes; 2. Yes.
RATIO:
1. It is well-settled that the Secretary of Labor, in the exercise of his power to assume jurisdiction under Art. 263 (g) of
the Labor Code, may resolve all issues involved in the controversy including the award of wage increases and
benefits. While an arbitral award cannot per se be categorized as an agreement voluntarily entered into by the
parties because it requires the intervention and imposing power of the State thru the Secretary of Labor when he
assumes jurisdiction, the arbitral award can be considered an approximation of a collective bargaining agreement
which would otherwise have been entered into by the parties, hence, it has the force and effect of a valid contract
obligation.
2. That the arbitral award was higher than that which was purportedly agreed upon in the MOA is of no moment. For
the Secretary, in resolving the CBA deadlock, is not limited to considering the MOA as basis in computing the wage
increases. He could, as he did, consider the financial documents submitted by respondent as well as the parties
bargaining history and respondents financial outlook and improvements as stated in its website.
3. It bears noting that since the filing and submission of the MOA did not have the effect of divesting the
Secretary of his jurisdiction, or of automatically disposing the controversy, then neither should the
provisions of the MOA restrict the Secretarys leeway in deciding the matters before him.
4. The appellate courts brushing aside of the Paliwanag and the minutes of the meeting that resulted in the
conclusion of the MOA because they were not verified and notarized, thus violating, so the appellate court
reasoned, the rules on parol evidence, does not lie. Like any other rule on evidence, parol evidence should not be
strictly applied in labor cases.
The reliance on the parol evidence rule is misplaced. In labor cases pending before the Commission or the Labor Arbiter, the rules of evidence
prevailing in courts of law or equity are not controlling. Rules of procedure and evidence are not applied in a very rigid and technical sense in
labor cases. Hence, the Labor Arbiter is not precluded from accepting and evaluating evidence other than, and even contrary to, what is stated
in the CBA.

5. While a contract constitutes the law between the parties, this is so in the present case with respect to the CBA, not
to the MOA in which even the unions signatories had expressed reservations thereto. But even assuming
arguendo that the MOA is treated as a new CBA, since it is imbued with public interest, it must be construed
liberally and yield to the common good.
While the terms and conditions of a CBA constitute the law between the parties, it is not, however, an ordinary contract to which is
applied the principles of law governing ordinary contracts. A CBA, as a labor contract within the contemplation of Article 1700 of the Civil
Code of the Philippines which governs the relations between labor and capital, is not merely contractual in nature but impressed with
public interest, thus, it must yield to the common good. As such, it must be construed liberally rather than narrowly and technically, and the
courts must place a practical and realistic construction upon it, giving due consideration to the context in which it is negotiated and purpose
which it is intended to serve.

6. WHEREFORE, the petition is GRANTED. The Decision dated September 24, 2009 and the Resolution dated
December 2, 2009 of the Court of Appeals are REVERSED and SET ASIDE and the Order dated March 16, 2006
and Resolution dated August 12, 2008 of the Secretary of Labor are REINSTATED.
CASE LAW/ DOCTRINE:
DISSENTING/CONCURRING OPINION(S):
031 LEPANTO CERAMICS, INC. v. LEPANTO CERAMICS
AUTHOR:
EMPLOYEES ASSOCIATION
G.R. No. 180866 March 2, 2010
PEREZ, J.:
FACTS:
18. Petitioner Lepanto Ceramics, Incorporated is a duly organized corporation existing and operating by virtue of
Philippine Laws.
a. Its business is primarily to manufacture, make, buy and sell, on wholesale basis, among others, tiles,
marbles, mosaics and other similar products.
19. Respondent Lepanto Ceramics Employees Association (respondent Association) is a legitimate labor organization
duly registered with the Department of Labor and Employment. It is the sole and exclusive bargaining agent in the
establishment of petitioner.
20. December 1998 - petitioner gave a P3k bonus to its employees, members of the respondent Association.
21. September 1999 - petitioner and respondent Association entered into a CBA which provides for, among others, the
grant of a Christmas gift package/bonus to the members of the respondent Association.
a. The Christmas bonus was one of the enumerated existing benefit, practice of traditional rights which shall
remain in full force and effect.
b. The text reads:

i.

22.

23.
24.
25.

26.

27.

28.
29.

Section 8. All other existing benefits, practice of traditional rights consisting of

Christmas Gift package/bonus, reimbursement of transportation expenses in case of
breakdown of service vehicle and medical services and safety devices by virtue of
company policies by the UNION and employees shall remain in full force and effect.
ii. Section 1. EFFECTIVITY
iii. This agreement shall become effective on September 1, 1999 and shall remain in full
force and effect without change for a period of four (4) years or up to August 31,
2004 except as to the representation aspect which shall be effective for a period of five
(5) years. It shall bind each and every employee in the bargaining unit including the
present and future officers of the Union.
In the succeeding years, 1999, 2000 and 2001, the bonus was not in cash.
a. Instead, petitioner gave each of the members of respondent Association Tile Redemption Certificates
equivalent to P3,000.00. The bonus for the year 2002 is the root of the present dispute. Petitioner gave a
year-end cash benefit of Six Hundred Pesos (P600.00) and offered a cash advance to interested employees
equivalent to one (1) month salary payable in one year. The respondent Association objected to theP600.00
cash benefit and argued that this was in violation of the CBA it executed with the petitioner.
The parties failed to amicably settle the dispute.
The respondent Association filed a Notice of Strike with the National Conciliation Mediation Board, Regional Branch
No. IV, alleging the violation of the CBA. The case was placed under preventive mediation. The efforts to conciliate
failed. The case was then referred to the Voluntary Arbitrator.
Respondent Association
a. insisted that it has been the traditional practice of the company to grant its members Christmas bonuses
during the end of the calendar year, each in the amount of P3,000.00 as an expression of gratitude to the
employees for their participation in the companys continued existence in the market. The bonus was either
in cash or in the form of company tiles. In 2002, in a speech during the Christmas celebration, one of the
companys top executives assured the employees of said bonus. However, the Human Resources
Development Manager informed them that the traditional bonus would not be given as the companys
earnings were intended for the payment of its bank loans. Respondent Association argued that this was in
violation of their CBA.
Petitioner
a. Averred that the complaint for nonpayment of the 2002 Christmas bonus had no basis as the same was not
a demandable and enforceable obligation.It argued that the giving of extra compensation was based on the
companys available resources for a given year and the workers are not entitled to a bonus if the company
does not make profits.
b. adverted to the fact that it was debt-ridden having incurred net losses for the years 2001 and 2002 totaling
to P1.5 billion; and since 1999, when the CBA was signed, the companys accumulated losses amounted to
over P2.7 billion.
c. argued that the grant of a one (1) month salary cash advance was not meant to take the place of a bonus
but was meant to show the companys sincere desire to help its employees despite its precarious financial
condition.
d. averred that the CBA provision on a Christmas gift/bonus refers to alternative benefits.
e. emphasized that even if the CBA contained an unconditional obligation to grant the bonus to the
respondent Association, the present difficult economic times had already legally released it therefrom
pursuant to Article 1267 of the Civil Code.
Voluntary Arbitrator - declared that petitioner is bound to grant each of its workers a Christmas bonus of P3,000.00
for the reason that the bonus was given prior to the effectivity of the CBA between the parties and that the financial
losses of the company is not a sufficient reason to exempt it from granting the same. It stressed that the CBA is a
binding contract and constitutes the law between the parties. The Voluntary Arbitrator further expounded that since
the employees had already been given P600.00 cash bonus, the same should be deducted from the claimed
amount of P3,000.00, thus leaving a balance ofP2,400.00.
MR denied.
CA - affirmed in toto the decision of the Voluntary Arbitrator. MR- denied.
a.

In affirming respondent Associations right to the Christmas bonus, the Court of Appeals held:
i. In the case at bar, it is indubitable that petitioner offered private respondent a Christmas bonus/gift in 1998 or
before the execution of the 1999 CBA which incorporated the said benefit as a traditional right of the
employees. Hence, the grant of said bonus to private respondent can be deemed a practice as the same has not
been given only in the 1999 CBA. Apparently, this is the reason why petitioner specifically recognized the grant
of a Christmas bonus/gift as a practice or tradition as stated in the CBA. x x x.
ii. Evidently, the argument of petitioner that the giving of a Christmas bonus is a management prerogative holds
no water. There were no conditions specified in the CBA for the grant of said benefit contrary to the claim of
petitioner that the same is justified only when there are profits earned by the company. As can be gleaned from
the CBA, the payment of Christmas bonus was not contingent upon the realization of profits. It does not state
that if the company derives no profits, there are no bonuses to be given to the employees. In fine, the payment
thereof was not related to the profitability of business operations.
iii. Moreover, it is undisputed that petitioner, aside from giving the mandated 13 th month pay, has further been
giving its employees an additional Christmas bonus at the end of the year since 1998 or before the effectivity of
the CBA in September 1999. Clearly, the grant of Christmas bonus from 1998 up to 2001, which brought about
the filing of the complaint for alleged non-payment of the 2002 Christmas bonus does not involve the exercise
of management prerogative as the same was given continuously on or about Christmas time pursuant to the
CBA. Consequently, the giving of said bonus can no longer be withdrawn by the petitioner as this would amount

to a diminution of the employees existing benefits.

ISSUE(S): WON the Court of Appeals erred in affirming the ruling of the voluntary arbitrator that the petitioner is
obliged to give the members of the respondent Association a Christmas bonus in the amount of P3,000.00 in 2002.
NO.
RATIO:
25. We uphold the rulings of the voluntary arbitrator and of the Court of Appeals. Findings of labor officials, who are
deemed to have acquired expertise in matters within their respective jurisdictions, are generally accorded not only
respect but even finality, and bind us when supported by substantial evidence. This is the rule particularly where
the findings of both the arbitrator and the Court of Appeals coincide.
26. As a general proposition, an arbitrator is confined to the interpretation and application of the CBA. He does not sit
to dispense his own brand of industrial justice: his award is legitimate only in so far as it draws its essence from the
CBA. That was done in this case.
27. By definition, a bonus is a gratuity or act of liberality of the giver. It is something given in addition to what is
ordinarily received by or strictly due the recipient. A bonus is granted and paid to an employee for his industry and
loyalty which contributed to the success of the employers business and made possible the realization of profits.
28. A bonus is also granted by an enlightened employer to spur the employee to greater efforts for the success of the
business and realization of bigger profits.
29. Generally, a bonus is not a demandable and enforceable obligation. For a bonus to be enforceable, it must have
been promised by the employer and expressly agreed upon by the parties. Given that the bonus in this case is
integrated in the CBA, the same partakes the nature of a demandable obligation. Verily, by virtue of its
incorporation in the CBA, the Christmas bonus due to respondent Association has become more than just an act of
generosity on the part of the petitioner but a contractual obligation it has undertaken.
30. A CBA refers to a negotiated contract between a legitimate labor organization and the employer, concerning wages,
hours of work and all other terms and conditions of employment in a bargaining unit. As in all other contracts, the
parties to a CBA may establish such stipulations, clauses, terms and conditions as they may deem convenient,
provided these are not contrary to law, morals, good customs, public order or public policy.
31. It is a familiar and fundamental doctrine in labor law that the CBA is the law between the parties and they are
obliged to comply with its provisions. This principle stands strong and true in the case at bar.
32. A reading of the provision of the CBA reveals that the same provides for the giving of a Christmas gift
package/bonus without qualification. Terse and clear, the said provision did not state that the Christmas package
shall be made to depend on the petitioners financial standing. The records are also bereft of any showing that the
petitioner made it clear during CBA negotiations that the bonus was dependent on any condition. Indeed, if the
petitioner and respondent Association intended that theP3,000.00 bonus would be dependent on the company
earnings, such intention should have been expressed in the CBA.
33. It is noteworthy that in petitioners 1998 and 1999 Financial Statements, it took note that the 1997 financial crisis in
the Asian region adversely affected the Philippine economy. [25]
34. From the foregoing, petitioner cannot insist on business losses as a basis for disregarding its undertaking. It is
manifestly clear that petitioner was very much aware of the imminence and possibility of business losses owing to
the 1997 financial crisis. In 1998, petitioner suffered a net loss of P14,347,548.00.[26] Yet it gave aP3,000.00 bonus
to the members of the respondent Association. In 1999, when petitioners very own financial statement reflected
that the positive developments in the economy have yet to favorably affect the operations of the company, [27] and
reported a loss of P346,025,733.00,[28] it entered into the CBA with the respondent Association whereby it
contracted to grant a Christmas gift package/bonus to the latter. Petitioner supposedly continued to incur losses in
the years 2000[29] and 2001. Still and all, this did not deter it from honoring the CBA provision on Christmas bonus
as it continued to give P3,000.00 each to the members of the respondent Association in the years 1999, 2000 and
2001.
35. All given, business losses are a feeble ground for petitioner to repudiate its obligation under the CBA. The rule is
settled that any benefit and supplement being enjoyed by the employees cannot be reduced, diminished,
discontinued or eliminated by the employer. The principle of non-diminution of benefits is founded on the
constitutional mandate to protect the rights of workers and to promote their welfare and to afford labor full
protection.[30]
36. Hence, absent any proof that petitioners consent was vitiated by fraud, mistake or duress, it is presumed that it
entered into the CBA voluntarily and had full knowledge of the contents thereof and was aware of its commitments
under the contract.
37. The Court is fully aware that implementation to the letter of the subject CBA provision may further deplete
petitioners resources. Petitioners remedy though lies not in the Courts invalidation of the provision but in the
parties clarification of the same in subsequent CBA negotiations.
38. Article 253 of the Labor Code is relevant:
a. Art. 253. Duty to bargain collectively when there exists a collective bargaining agreement. When there is a collective bargaining agreement, the duty to bargain collectively shall also
mean that neither party shall terminate nor modify such agreement during its lifetime.
However, either party can serve a written notice to terminate or modify the agreement at least
sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the
status quo and to continue in full force and effect the terms and conditions of the existing
agreement during the sixty (60)-day period and/or until a new agreement is reached by the
parties.
DISPOSITION: WHEREFORE, Premises considered, the petition is DENIED for lack of merit. The Decision of the Court of Appeals
dated 5 April 2006 and the Resolution of the same court dated 13 December 2007 in CA-G.R. SP No. 78334 are AFFIRMED.

032 PNCC Skyway Traffic Management & Security Division Workers Author: Pat
Organization v. PNCC Skyway Corp.,
February 17, 2010 G.R. No. 171231
Topic: COLLECTIVE BARGAINING
Ponente: Peralta, J.
FACTS:
1. Petitioner PNCC Skyway Corporation Traffic Management and Security Division Workers' Organization (PSTMSDWO) is a
labor union duly registered with the (DOLE). Respondent PNCC Skyway Corporation.
2. Petitioner and respondent entered into a (CBA) which included vacation leave and expenses for security license provisions.
ARTICLE VIII
Section 1. Vacation Leave.
[a] Regular Employees covered by the bargaining unit who have completed at least one [1] year of continuous
service shall be entitled to vacation leave with pay depending on the length of service as follows:
1-9 years of service
- 15 working days
10-15 years of service
- 16 working days
16-20 years of service
- 17 working days
21-25 years of service
- 18 working days
26 and above years of service
- 19 working days.
[b] The company shall schedule the vacation leave of employees during the year taking into consideration the
request of preference of the employees.(emphasis supplied)
[c] Any unused vacation leave shall be converted to cash and shall be paid
Section 6. Security License All covered employees must possess a valid License [Security Guard License]
issued by the Chief, Philippine National Police or his duly authorized representative, to perform his duties as
security guard. All expenses of security guard in securing/renewing their licenses shall be for their personal
account. Guards, securing/renewing their license must apply for a leave of absence and/or a change of schedule.
Any guard who fails to renew his security guard license should be placed on forced leave until such time that he
can present a renewed security license.
3.

In a Memorandum, respondent's Head of the Traffic Management and Security Department (TMSD) published the scheduled
vacation leave of its TMSD personnel for the year 2004. Thereafter, the Head of the TMSD issued a Memorandu.
SCHEDULED VACATION LEAVE WITH PAY.
The 17 days (15 days SVL plus 2-day-off) scheduled vacation leave (SVL) with pay for the year 2004 had
been published for everyone to take a vacation with pay which will be our opportunity to enjoy quality time with
our families and perform our other activities requiring our personal attention and supervision. Swapping of SVL
schedule is allowed on a one-on-one basis by submitting a written request at least 30 days before the actual
schedule of SVL duly signed by the concerned parties. However, the undersigned may consider the re-scheduling
of the SVL upon the written request of concerned TMSD personnel at least 30 days before the scheduled SVL. Rescheduling will be evaluated taking into consideration the TMSDs operational requirement.

4.

Petitioner objected to the implementation of the said memorandum. It insisted that the individual members of the union have the
right to schedule their vacation leave. It opined that the unilateral scheduling of the employees' vacation leave was done to avoid
the monetization of their vacation leave in December 2004.
5. Petitioner also demanded that the expenses for the required in-service training of its member security guards, as a requirement
for the renewal of their license, be shouldered by the respondent. However, the respondent did not accede to petitioner's
demands and stood firm on its decision to schedule all the vacation leave of petitioner's members.
6. Petitioner elevated the matter to the DOLE-NCMB for preventive mediation. For failure to settle the issue amicably, the parties
agreed to submit the issue before the voluntary arbitrator.
7. The voluntary arbitrator issued a Decision:
o The scheduling of all vacation leaves under Article VIII, Section 6, thereof, shall be under the discretion of the union
members, and the management to convert them into cash all the leaves which the management compelled them to use.
o To pay the expenses for the in-service-training of the company security guards, as a requirement for renewal of licenses,
shall not be their personal account but that of the company.
8. Respondent filed a MR, which the voluntary arbitrator denied
9. Respondent filed a Petition for Certiorari with Prayer for Temporary Restraining Order and/or Writ of Preliminary Injunction
with the CA, and the CA rendered a Decision, annulling and setting aside the decision and order of the voluntary arbitrator.
10. Petitioner filed a MR, which the CA denied
11. PETITIONERS CONTENTIONS:

that their union members have the preference in scheduling their vacation leave. On the other hand, respondent argued that
Article VIII, Section 1 (b) gives the management the final say regarding the vacation leave schedule of its employees.
Respondent may take into consideration the employees' preferred schedule, but the same is not controlling.
the respondent to provide and/or shoulder the expenses for the in-service training of their members as a requirement for the
renewal of the security guards' license. Respondent did not accede to the union's request invoking the CBA provision which
states that all expenses of security guards in securing /renewing their license shall be for their personal account.
any doubts or ambiguity in the interpretation of the CBA should be resolved in favor of the laborer
ISSUE/HELD:
1. WON MANAGEMENT HAS THE SOLE DISCRETION TO SCHEDULE THE VACATION LEAVE OF PETITIONER.
2. WON THE MANAGEMENT IS LIABLE FOR THE IN-SERVICE-TRAINING OF THE SECURITY GUARDS. Yes.
RATIO:
I
In the case at bar, the contested provision of the CBA is clear and unequivocal. Article VIII, Section 1 (b) of the CBA
categorically provides that the scheduling of vacation leave shall be under the option of the employer. The preference requested by
the employees is not controlling because respondent retains its power and prerogative to consider or to ignore said request. Thus, if
the terms of a CBA are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulation
shall prevail. In fine, the CBA must be strictly adhered to and respected if its ends have to be achieved, being the law between the
parties.
Although the preferred vacation leave schedule of petitioner's members should be given priority, they cannot demand, as a
matter of right, that their request be automatically granted by the respondent. If the petitioners were given the exclusive right to
schedule their vacation leave then said right should have been incorporated in the CBA. In the absence of such right and in view of
the mandatory provision in the CBA giving respondent the right to schedule the vacation leave of its employees, compliance
therewith is mandated by law.
In the grant of vacation leave privileges to an employee, the employer is given the leeway to impose conditions on the
entitlement to and commutation of the same, as the grant of vacation leave is not a standard of law, but a prerogative of management.
It is a mere concession or act of grace of the employer and not a matter of right on the part of the employee.. Thus, it is well within
the power and authority of an employer to impose certain conditions, as it deems fit, on the grant of vacation leaves, such as having
the option to schedule the same. Accordingly, the vacation leave privilege was not intended to serve as additional salary, but as a nonmonetary benefit. To give the employees the option not to consume it with the aim of converting it to cash at the end of the year
would defeat the very purpose of vacation leave.
II
Although it is a rule that a contract freely entered into between the parties should be respected, since a contract is the law
between the parties, there are, however, certain exceptions to the rule, specifically Article 1306 of the Civil Code, which provides:
The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they
are not contrary to law, morals, good customs, public order, or public policy.
Moreover, the relations between capital and labor are not merely contractual. They are so impressed with public interest that
labor contracts must yield to the common good. The supremacy of the law over contracts is explained by the fact that labor contracts
are not ordinary contracts; they are imbued with public interest and therefore are subject to the police power of the state. However, it
should not be taken to mean that provisions agreed upon in the CBA are absolutely beyond the ambit of judicial review and
nullification. If the provisions in the CBA run contrary to law, public morals, or public policy, such provisions may very well be
voided.
In the present case, Article XXI, Section 6 of the CBA provides that All expenses of security guards in securing /renewing
their licenses shall be for their personal account. A reading of the provision would reveal that it encompasses all possible expenses a
security guard would pay or incur in order to secure or renew his license. In-service training is a requirement for the renewal of a
security guards license. Hence, following the aforementioned CBA provision, the expenses for the same must be on the personal
account of the employee. However, the 1994 Revised Rules and Regulations Implementing Republic Act No. 5487 provides the
primary responsibility of operators of company security forces to maintain and upgrade the standards of efficiency, discipline,
performance and competence of their personnel, it follows that the expenses to be incurred therein shall be for the personal account
of the company. Further, the intent of the law to impose upon the employer the obligation to pay for the cost of its employees training
is manifested in the aforementioned laws provision that Where the quality of training is better served by centralization, the CFSD
Directors may activate a training staff from local talents to assist. The cost of training shall be pro-rated among the participating
agencies/private companies. It can be gleaned from the said provision that cost of training shall be pro-rated among participating
agencies and companies if the training is best served by centralization. The law mandates pro-rating of expenses because it would be
impracticable and unfair to impose the burden of expenses suffered by all participants on only one participating agency or company.
Thus, it follows that if there is no centralization, there can be no pro-rating, and the company that has its own security forces shall
shoulder the entire cost for such training. If the intent of the law were to impose upon individual employees the cost of training, the
provision on the pro-rating of expenses would not have found print in the law.

Further, petitioner alleged that prior to the inking of the CBA, it was the respondent company providing for the in-service
training of the guards. Respondent never controverted the said allegation and is thus deemed to have admitted the same. Implicit
from respondent's actuations was its acknowledgment of its legally mandated responsibility to shoulder the expenses for in-service
training.

33 SUPREME STEEL CORPORATION vs. NAGKAKAISANG

MANGGAGAWA NG SUPREME INDEPENDENT UNION
(NMS-IND-APL)
G.R. No. 185556
March 28, 2011
TOPIC: Collective Bargaining
PONENTE: NACHURA

The case is long bec of the details but this is the jist - Company
violated CBA provision on contracting-out labor. It reasoned that it
is management prerogative to do so to cope with seasonal
increase in job orders. SC: The exercise of management
prerogative is not unlimited. Managerial prerogatives are subject
to limitations provided by law, collective bargaining agreements,
and general principles of fair play and justice. The CBA is the norm
of conduct between the parties and, as previously stated,
compliance therewith is mandated by the express policy of the
law.

FACTS:

1.

2.
3.
4.

Petitioner Supreme Steel Pipe Corporation is a domestic corporation engaged in the business of manufacturing steel pipes
for domestic and foreign markets. Respondent Nagkakaisang Manggagawa ng Supreme Independent Union is the certified
bargaining agent of petitioners rank-and-file employees. The CBA in question was executed by the parties to cover the
period from June 1, 2003 to May 31, 2008.
On July 27, 2005, respondent filed a notice of strike with the NCMB on the ground that petitioner violated certain provisions
of the CBA.
The parties failed to settle their dispute. Consequently, the Secretary of Labor certified the case to the NLRC for
compulsory arbitration.
The alleged 11 violations: ((ii) is IMPORTANT the others you dont really have to read, just in case lang.)

(i)

(ii)

(iii)
(iv)

(v)

(vi)
(vii)

(viii)

(ix)

(x)

Denial to four employees of the CBA-provided wage increase (Art. 12, Sec. 1 of CBA). According to
respondent, petitioner gives an anniversary increase to its employees upon reaching their first year of
employment. The four employees received their respective anniversary increases and petitioner used such
anniversary increase to justify the denial of their CBA increase for the year.
Contracting-out labor (Art. 2, Sec. 6 of CBA). Respondent claimed that petitioner hired temporary workers for
five months based on uniformly worded employment contracts, renewable for five months, and assigned them to
almost all of the departments in the company contrary to the subject provision (refer to full text of the case for
provisions). It pointed out that, under the CBA, temporary workers are allowed only in the Warehouse and Packing
Section; consequently, employment of contractual employees outside this section, whether direct or agency-hired,
was absolutely prohibited. Worse, petitioner never regularized them even if the position they occupied and the
services they performed were necessary and desirable to its business. Petitioner admits having hired temporary
employees, but it maintains that it was an exercise of management prerogative, necessitated by the increase in
demand for its product. It purportedly did so to cope with the seasonal increase of the job orders from abroad. In
order to comply with the job orders, petitioner hired temporary workers to help the regular worked in the
production of steel pipes. (TOPIC!!!)
Failure to provide shuttle service (Art. 14, Sec. 7). Respondent claimed that the company vehicle which would
be used as shuttle service for its employees has not been reconditioned by petitioner since the signing of the
CBA.
Refusal to answer for the medical expenses incurred by three employees (Art. 8, Sec. 4). According to
respondent, petitioners definition of what constitutes first aid service is limited to the bare minimum of treating
injured employees while still within the company premises and referring the injured employee to the Chinese
General Hospital for treatment, but the travel expense in going to the hospital is charged to the employee.
Failure to comply with the time-off with pay provision (Art. 2, Sec. 8 of CBA). Respondent contended that
under the said provision, petitioner was obliged to grant a paid time-off to respondents duly authorized
representative or to any employee who was on duty, when summoned by respondent to testify or when the
employees presence was necessary in the grievance hearings, meetings, or investigations. However, petitioner
asserted that it is not liable to pay the wages of the union officers when the meetings are held beyond company
time (3:00 p.m.). It claimed that time-off with pay is allowed only if the venue of the meeting is outside company
premises and the meeting involves the implementation and interpretation of the CBA. In reply, respondent averred
that the above quoted provision does not make a qualification that the meetings should be held during office hours
(7:00 a.m. to 3:00 p.m.); hence, for as long as the presence of the employee is needed, time spent during the
grievance meeting should be paid.
Visitors free access to company premises (Art. 2, Section 7 of the CBA).
Failure to comply with reporting time-off provision (Article 12, Section 3 of the CBA). Respondent averred
that petitioner paid the employees salaries for one hour only of the four-hour brownout that occurred on July 25,
2005 and refused to pay for the remaining three hours. In defense, petitioner simply insisted that brownouts are
not included in the above list of emergencies.
Illegal dismissal of Diosdado Madayag. Respondent contended that Madayags dismissal from employment is
illegal because petitioner failed to obtain a certification from a competent public authority that his disease is of
such nature or at such stage that it cannot be cured within six months even after proper medical treatment.
Petitioner also failed to prove that Madayags continued employment was prejudicial to his health or that of his
colleagues.
Denial of paternity leave benefit to two employees (Article 15, Section 2 of the CBA). Respondent argued
that petitioner is relying on technicalities by insisting that the denial was due to the two employees failure to notify
it of the pregnancy of their respective spouses. It maintained that the notification requirement runs counter to the
spirit of the law. Respondent averred that, on grounds of social justice, the oversight to notify petitioner should not
be dealt with severely by denying the two claimants this benefit.
Discrimination and harassment. According to respondent, petitioner was contemptuous over union officers for
protecting the rights of union members. In an affidavit executed by Chito Guadaa, union secretary, he narrated
that Alfred Navarro, Officer-in-Charge of the Packing Department, had been harsh in dealing with his fellow

034 HALAGUEA vs. PHILIPPINE AIRLINES

INCORPORATED
G.R. No. 172013

AUTHOR:
NOTES:

October 2, 2009

TOPIC:
PONENTE: PERALTA, J.:
FACTS: (chronological order)
1. Patricia Halaguea, et. al, (Halaguea) are flight attendants employed by Philippine Airlines Inc. (PAL) as well as
members of Flight Attendants and Stewards Association of the Philippines (FASAP), the exclusive bargaining
agent of flight attendants, flight stewards and pursers of PAL.

2. On July 11, 2001, respondent and FASAP entered into a Collective Bargaining Agreement incorporating the terms
and conditions of their agreement for the years 2000 to 2005, hereinafter referred to as PAL-FASAP CBA.
Section 144, Part A of the PAL-FASAP CBA, provides that:
A. For the Cabin Attendants hired before 22 November
xxxx
3.

3.

1996:

Compulsory Retirement

Subject to the grooming standards provisions of this Agreement, compulsory retirement shall be fifty-five (55)
for females and sixty (60) for males. x x x.

4. In a letter dated July 22, 2003, petitioners and several female cabin crews manifested that the aforementioned CBA
provision on compulsory retirement is discriminatory, and demanded for an equal treatment with their male
counterparts. This demand was reiterated in a letter by petitioners' counsel addressed to respondent demanding the
removal of gender discrimination provisions in the coming re-negotiations of the PAL-FASAP CBA.

5. Halaguea assails Sec. 144 of the CBA entered into by PAL-FASAP and FASAP, which provides for a younger
retirement age for female cabin attendants than those of their male counterparts, to be unconstitutional.

6. Due to Halagueas claim, Robert D. Anduiza, President of FASAP submitted their 2004-2005 CBA proposals and
manifested their willingness to commence the collective bargaining negotiations between the management and the
association, at the soonest possible time.

7. Halaguea also filed before the RTC of Makati, Branch 147 a Special Civil Action for Declaratory Relief with
Prayer for the Issuance of Temporary Restraining Order and Writ of Preliminary Injunction against PAL for the
invalidity of the assailed provision of the CBA. The RTC eventually granted such petition.

8. Aggrieved, PAL, filed a Petition for Certiorari and Prohibition with Prayer for a Temporary Restraining Order and
Writ of Preliminary Injunction with the Court of Appeals praying that the order of the RTC, which denied its
objection to its jurisdiction, be annulled and set aside for having been issued without and/or with grave abuse of
discretion amounting to lack of jurisdiction.

9. The CA granted PALs petition on the ground that the RTC has no jurisdiction over a labor dispute, hence the case
at bar.
ISSUE(S)

Whether or not the RTC has jurisdiction over the petitioners action challenging the legality or constitutionality
of the provisions on the compulsory retirement age contained in the CBA between respondent PAL and FASAP.
HELD: Yes.

RATIO:
Jurisdiction of the court is determined on the basis of the material allegations of the complaint and the character of the
relief prayed for irrespective of whether plaintiff is entitled to such relief.
The said issue cannot be resolved solely by applying the Labor Code. Rather, it requires the application of the
Constitution, labor statutes, law on contracts and the Convention on the Elimination of All Forms of Discrimination
Against Women, and the power to apply and interpret the constitution and CEDAW is within the jurisdiction of trial courts,
a court of general jurisdiction.
In Georg Grotjahn GMBH & Co. v. Isnani, this Court held that not every dispute between an employer and employee
involves matters that only labor arbiters and the NLRC can resolve in the exercise of their adjudicatory or quasi-judicial
powers. The jurisdiction of labor arbiters and the NLRC under Article 217 of the Labor Code is limited to disputes arising
from an employer-employee relationship which can only be resolved by reference to the Labor Code, other labor statutes,
or their collective bargaining agreement.
Where the principal relief sought is to be resolved not by reference to the Labor Code or other labor relations statute or a
collective bargaining agreement but by the general civil law, the jurisdiction over the dispute belongs to the regular courts
of justice and not to the labor arbiter and the NLRC. In such situations, resolution of the dispute requires expertise, not in
labor management relations or in wage structures and other terms and conditions of employment, but rather in the
application of the general civil law. Clearly, such claims fall outside the area of competence or expertise ordinarily ascribed
to labor arbiters and the NLRC and the rationale for granting jurisdiction over such claims to these agencies disappears
CASE LAW/ DOCTRINE:

DISSENTING/CONCURRING OPINION(S):

035 PASSI v. Boclot

AUTHOR: Aiyu

G.R. No. 173849. September 28, 2007

TOPIC: Collective Bargaining
PONENTE: Chico-Nazario, J.
FACTS:

PARTIES
o PETITIONER Pier 8 Arrastre and Stevedoring Services, Inc. (PASSI) ; COMPANY engaged
in arrastre and stevedoring service; employer
o RESPONDENT Jeff Boclot, stevedore
Boclot was hired to render actual service by PASSI starting 20 September 1999
Boclot filed a complaint for payment of service incentive leave, 13 th month pay,
exemplary and moral damages
o Allegations:
that he was hired by PASSI in October 1999 and was issued company ID No. 304,
a PPA Pass and SSS documents.
that he became a regular employee by April 2000, since it was his sixth
continuous month in service in PASSIs regular course of business.
ARGUED on the basis of Articles 280 and 281 of the Labor Code.
that under paragraph 2 of Article 280, he should be deemed a regular
employee having rendered at least one year of service with the company.
That he was denied the rights and privileges of a regular employee, including
those granted under the Collective Bargaining Agreement (CBA) such as wage
increase; medical, dental and hospitalization benefits; vacation and sick leaves;
uniforms, Christmas gifts, productivity bonus, accident insurance, special
separation pays, and others.

Boclot relied on Article XXV of the companys existing CBA, which

states the following:
The Company agrees to convert to regular status all incumbent
probationary or casual employees and workers in the Company who have
served the Company for an accumulated service term of employment of
not less than six (6) months from his original date of hiring
The probationary period for all future workers or employees shall be the
following:
o a. All skilled workers such as crane operator, mechanic, carpenter,
winchman, signalman and checkers shall become regular after
three (3) months continuous employment;
o b. All semi-skilled personnel shall become regular after four (4)
months of continuous employment;
o c. All non-skilled personnel shall be regular after six (6) months
continuous employment.
LA decision DISMISSED petition;
o Ratio:
Boclot is nothing more than an EXTRA worker, who is called upon in the absence
of regular stevedores at a certain shift
Art 280 and 281 of Labor Code is N/A because it speaks of probationary or casual
employee; here, Boclot is a reliever
Assuming Boclot is a regular employee, Boclot only rendered service for 228.5
days, less than what the law provides (365 days) to qualify for benefit
NLRC decision MODIFIED LA DECISION;
o GRANTED Boclot is a regular employee; RATIO: PASSI failed to present proof
of absences of regular stevedores
o DISMISSED claim for benefits dismissed for lack pf jurisdiction and lack of merit
Hence, CA certiorari
CA decision DISMISSED petition for certiorari
o RATIO: doctrine in de Leon v. NLRC:
Test of regular employment: WON the work is usually necessary or desirable in
the business of the employer
HENCE, SC

ISSUES : WON Boclot is a regular employee.

HELD : YES, BUT ON A DIFFERENT BASIS TO THAT OF THE CA
DISPOSITIVE: WHEREFORE, the petition is GRANTED. The Court of Appeals Decision dated
August 31, 2001, in CA-G.R. SP No. 54128 and the Resolution dated February 5, 2003 are SET
ASIDE. The decision of the Med-Arbiter is hereby AFFIRMED. SO ORDERED.
RATIO:

Based on jurisprudence, the test of determining the nature of employment is the

reasonable connection between the particular activity performed by the employee
in relation to the usual business or trade of the employer (de Leon v. NLRC)
o WON the work is usually necessary or desirable in the business of the
employer.
NONETHELESS, in this case, SC agreed with PASSI THAT Boclot worked as a reliever
stevedore due to the absence of a regular stevedore; that he performed tasks that are
usually necessary and desirable to their business. HOWEVER, this in itself does not make
him a regular stevedore, postulating that the hiring of Boclot as a reliever is akin to a
situation in which a worker goes on vacation leave, sick leave, maternity leave or paternity
leave; and the employer is constrained to hire another worker from outside the
establishment to ensure the smooth flow of its operations.
o SC took judicial notice of the fact that it is an industry practice in port services
to hire "reliever" stevedores in order to ensure smooth-flowing 24-hour stevedoring
and arrastre operations in the port area.
o Moreover, Boclot did not contest that:
he was well aware that he would only be given work when there are absent or
unavailable employees;

he was disallowed or prevented from offering his services to other cargo

handlers in the other piers at the North Harbor other than PASSI.
As aforestated, the situation of Boclot is akin to that of a seasonal or project or
term employee, albeit on a daily basis.
SO WHAT IS THE BASIS OF REGULAR EMPLOYMENT OF BOCLOT?
o The abovementioned provisions under the existing CBA
o PASSI was crucified on this argument raised by Boclot. The union which
negotiated the existing CBA is the sole and exclusive bargaining
representative of all the stevedores, dock workers, gang bosses, rank and
file employees working at Pier 8, and its offices. The NLRC ruled that
Boclots reliance on the CBA to show that he has become a regular
employee is misplaced for the reason that the CBA applies only to regular
workers of the company. Boclot assents that he is not a member of the
union, as he was not recognized by PASSI as its regular employee, but SC
notes that PASSI adopts a union-shop agreement, culling from Article II of
the CBA which stipulates:
The Union and the Company (PASSI) hereby agree to adopt the "Union Shop"
as a condition of employment to the position (sic) covered by this Agreement.
o Under a union-shop agreement, although nonmembers may be hired, an employee is
required to become a union member after a certain period, in order to retain
employment. This requirement applies to present and future employees. The same
article of the CBA stipulates that employment in PASSI cannot be obtained without
prior membership in the union.
o Hence, Boclot should be considered a regular employee after six months of
accumulated service. It is clearly stipulated therein that PASSI shall agree to convert
to regular status all incumbent probationary or casual employees and workers in
PASSI who have served for an accumulated service term of employment of not less
than six months from the original date of hiring. Having rendered 228.5 days, or eight
months of service to PASSI since 1999, then Boclot is entitled to regularization by
virtue of the said CBA provisions.

036 EMPLOYEES UNION OF BAYER PHILS., AUTHOR:

FFW and JUANITO S. FACUNDO vs. BAYER NOTES: (if applicable)
PHILIPPINES, INC., ET AL.
G.R. No. 162943 December 6, 2010
TOPIC: Collective Bargaining
PONENTE:VILLARAMA, JR., J.

FACTS:
Petitioner EUBP is the exclusive bargaining agent of all rank-and-file employees of Bayer Philippines, and is an affiliate of the Federation of Free
Workers. EUBP, headed by its president Juanito S. Facundo, negotiated with Bayer for the signing of CBA.
Pending the resolution of the dispute, respondent Avelina Remigio and 27 other union members, without any authority from their union leaders,
accepted Bayers wage-increase proposal. EUBPs grievance committee questioned Remigios action and reprimanded Remigio and her allies.
Eventually, the DOLE Secretary issued an arbitral award ordering EUBP and Bayer to execute a CBA retroactive to January 1, 1997 and to be made
effective until December 31, 2001.
Barely six months from the signing of the new CBA, during a company-sponsored seminar, Remigio solicited signatures from union members in
support of a resolution containing the decision of the signatories to: (1) disaffiliate from FFW, (2) rename the union as Reformed Employees Union of
Bayer Philippines (REUBP), (3) adopt a new constitution and by-laws for the union, (4) abolish all existing officer positions in the union and elect a
new set of interim officers, and (5) authorize REUBP to administer the CBA between EUBP and Bayer. The said resolution was signed by 147 of the
257 local union members. A subsequent resolution was also issued affirming the first resolution.
A tug-of-war then ensued between the two rival groups, with both seeking recognition from Bayer and demanding remittance of the union dues
collected from its rank-and-file members. Bayer responded by deciding not to deal with either of the two groups, and by placing the union dues
collected in a trust account until the conflict between the two groups is resolved.
EUBP filed a complaint for unfair labor practice (first ULP complaint) against Bayer for non-remittance of union dues. While the first ULP case was
still pending and despite EUBPs repeated request for a grievance conference, Bayer decided to turn over the collected union dues amounting to
P254,857.15 to the Treasurer of REUBP.
Aggrieved by the said development, EUBP lodged a complaint against Remigios group before the Industrial Relations Division of the DOLE praying
for their expulsion from EUBP for commission of acts that threaten the life of the union.
Labor Arbiter Jovencio Ll. Mayor, Jr. dismissed the first ULP complaint for lack of jurisdiction because the root cause for Bayers failure to remit the
collected union dues can be traced to the intra-union conflict between EUBP and Remigios group and that the charges imputed against Bayer should
have been submitted instead to voluntary arbitration. EUBP did not appeal the said decision.
Petitioners filed a second ULP complaint against respondents. Three days later, petitioners amended the complaint charging the respondents with unfair
labor practice committed by organizing a company union, gross violation of the CBA and violation of their duty to bargain. Petitioners complained that
Bayer refused to remit the collected union dues to EUBP despite several demands sent to the management. They also alleged that notwithstanding the
requests sent to Bayer for a renegotiation of the last two years of the 1997-2001 CBA between EUBP and Bayer, the latter opted to negotiate instead
with Remigios group.
On even date, REUBP and Bayer agreed to sign a new CBA.
Later, petitioners filed a second amended complaint to include in its complaint the issue of gross violation of the CBA for violation of the contract bar
rule following Bayers decision to negotiate and sign a new CBA with Remigios group.
Meanwhile, the Regional Director of the Industrial Relations Division of DOLE issued a decision dismissing the issue on expulsion filed by EUBP
against Remigio and her allies. EUBP seasonably appealed the said decision to the Bureau of Labor Relations (BLR) which reversed the Regional
Directors ruling and ordered the management of Bayer to respect the authority of the duly-elected officers of EUBP in the administration of the
prevailing CBA.
Unfortunately, the said BLR ruling came late since Bayer had already signed a new CBA with REUBP. The said CBA was eventually ratified by
majority of the bargaining unit.
Labor Arbiter Waldo Emerson R. Gan dismissed EUBPs second ULP complaint for lack of jurisdiction and observed that the case involves intra-union
disputes and thus is bereft of any jurisdiction pursuant to Article 226 of the LC.
On June 28, 2000, the NLRC resolved to dismiss petitioners motion for a restraining order and/or injunction stating that the subject matter involved an
intra-union dispute, over which the said Commission has no jurisdiction.
Aggrieved by the Labor Arbiters decision to dismiss the second ULP complaint, petitioners appealed the said decision, but the NLRC denied the
appeal. EUBPs motion for reconsideration was likewise denied.

ISSUE: Whether or not the LABOR ARBITER and THE NLRC correctly rule on the second ULP case that they
are bereft of jurisdiction for it is the BLR who should take cognizance of the case, it being an intra-union conflict
HELD: NO. It is not an intra-union dispute.
RATIO:
An intra-union dispute refers to any conflict between and among union members, including grievances arising
from any violation of the rights and conditions of membership, violation of or disagreement over any provision
of the unions constitution and by-laws, or disputes arising from chartering or disaffiliation of the union.
Sections 1 and 2, Rule XI of Department Order No. 40-03, Series of 2003 of the DOLE enumerate the following
circumstances as inter/intra-union disputes.
It is clear from the foregoing that the issues raised by petitioners do not fall under any of the aforementioned
circumstances constituting an intra-union dispute. More importantly, the petitioners do not seek a determination
of whether it is the Facundo group (EUBP) or the Remigio group (REUBP) which is the true set of union
officers. Instead, the issue raised pertained only to the validity of the acts of management in light of the fact that
it still has an existing CBA with EUBP. Thus as to Bayer, Lonishen and Amistoso the question was whether
they were liable for unfair labor practice, which issue was within the jurisdiction of the NLRC. The
dismissal of the second ULP complaint was therefore erroneous.
However, as to respondents Remigio and Villareal, we find that petitioners complaint was validly
dismissed.
Petitioners ULP complaint cannot prosper as against respondents Remigio and Villareal because the issue, as
against them, essentially involves an intra-union dispute based on Section 1 (n) of DOLE Department Order No.
40-03. To rule on the validity or illegality of their acts, the Labor Arbiter and the NLRC will necessarily touch on
the issues respecting the propriety of their disaffiliation and the legality of the establishment of REUBP issues
that are outside the scope of their jurisdiction. Accordingly, the dismissal of the complaint was validly made, but
only with respect to these two respondents.

CASE LAW/ DOCTRINE:

An intra-union dispute refers to any conflict between and among union members, including grievances arising
from any violation of the rights and conditions of membership, violation of or disagreement over any provision
of the unions constitution and by-laws, or disputes arising from chartering or disaffiliation of the union.
DISSENTING/CONCURRING OPINION(S):
037 PRINCE TRANSPORT, INC. and MR. RENATO CLAROS,
- versus DIOSDADO GARCIA, LUISITO GARCIA, RODANTE ROMERO, REX BARTOLOME, FELICIANO GASCO, JR., DANILO ROJO,
EDGAR SANFUEGO, AMADO GALANTO, EUTIQUIO LUGTU, JOEL GRAMATICA, MIEL CERVANTES, TERESITA CABANES, ROE
DELA CRUZ, RICHELO BALIDOY, VILMA PORRAS, MIGUELITO SALCEDO, CRISTINA GARCIA, MARIO NAZARENO, DINDO
TORRES, ESMAEL RAMBOYONG, ROBETO* MANO, ROGELIO BAGAWISAN, ARIEL SNACHEZ, ESTAQULO VILLAREAL,
NELSON MONTERO, GLORIA ORANTE, HARRY TOCA, PABLITO MACASAET and RONALD GARCITA
G.R. No. 167291
January 12, 2011
FACTS:
1. Respondents alleged that:
- they were employees of Prince Transport, Inc. (PTI), a company engaged in the business of transporting passengers by
land;

- respondents were hired either as drivers, conductors, mechanics or inspectors, except for respondent Diosdado Garcia
(Garcia), who was assigned as Operations Manager;
- in addition to their regular monthly income, respondents also received commissions equivalent to 8 to 10% of their wages;
- sometime in October 1997, the said commissions were reduced to 7 to 9% - this led respondents and other employees of
PTI to hold a series of meetings to discuss the protection of their interests as employees;
- these meetings led petitioner Renato Claros, who is the president of PTI, to suspect that respondents are about to form a
union;
- Claros made known to Garcia his objection to the formation of a union;
- in December 1997, PTI employees requested for a cash advance, but the same was denied by management which resulted
in demoralization on the employees' ranks;
- later, PTI acceded to the request of some, but not all, of the employees;
- the foregoing circumstances led respondents to form a union for their mutual aid and protection;
- in order to block the continued formation of the union, PTI caused the transfer of all union members and sympathizers to
one of its sub-companies, Lubas Transport (Lubas);
- despite such transfer, the schedule of drivers and conductors, as well as their company identification cards, were issued by
PTI; the daily time records, tickets and reports of the respondents were also filed at the PTI office; and, all claims for salaries were
transacted at the same office;
- later, the business of Lubas deteriorated because of the refusal of PTI to maintain and repair the units being used therein,
which resulted in the virtual stoppage of its operations and respondents' loss of employment.
2. Petitioners DENIED the material allegations. They contended that:
- respondents were no longer their employees, since they all transferred to Lubas at their own request;
- petitioners have nothing to do with the management and operations of Lubas as well as the control and supervision of the
latter's employees;
- petitioners were not aware of the existence of any union in their company and came to know of the same only in June 1998
when they were served a copy of the summons in the petition for certification election filed by the union;
- that before the union was registered on April 15, 1998, the complaint subject of the present petition was already filed; that
the real motive in the filing of the complaints was because PTI asked respondents to vacate the bunkhouse where they (respondents)
and their respective families were staying because PTI wanted to renovate the same.
3. LA Decision: dismissed the complaints for ULP and ILLEGAL DISMISSAL for some respondents BUT declared some as ILLEGALLY
DISMISSED and thus, ordered LUCBAS to pay backwages and separation pay in lieu of reinstatement. LA ruled that petitioners are not
guilty of ULP in the absence of evidence to show that they violated respondents right to self-organization. The LA also held that Lubas
is the respondents employer and that it is an entity which is separate, distinct and independent from PTI. Nonetheless, the Labor
Arbiter found that Lubas is guilty of illegally dismissing respondents from their employment. PARTIAL APPEAL to the NLRC was made
praying that PTI should also be equally liable.
4. NLRC Decision: modified the decision of LA. MOR by Respondents denied!
5. CA: granted respondents petition. It ruled that petitioners are guilty of unfair labor practice; that Lubas is a mere instrumentality,
agent conduit or adjunct of PTI; and that petitioners act of transferring respondents employment to Lubas is indicative of their intent
to frustrate the efforts of respondents to organize themselves into a union. MOR denied!
ISSUES:
1. Whether the petition filed with the CA was fatally defective because the attached verification and CNFS was signed only by Garcia?
NO
2. Whether the CA erred in declaring that petitioners PTI, Claros and Lucbas are one and the same corporation and thus, liable in
solidum to respondents? NO
3. Whether CA erred when it ordered petitioners to reinstate respondents to their former positions, considering that the issue of
reinstatement was never brought up before it and respondents never questioned the award of separation pay to them? NO.
4. Whether the petitioners are guilty of ULP? YES.
HELD:
1.
GR: The certificate of non-forum shopping must be signed by all the plaintiffs in a case and the signature of only one of them is
insufficient, the Court has stressed that the rules on forum shopping, which were designed to promote and facilitate the orderly
administration of justice, should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate
objective.
XPN: Substantial compliance therewith under justifiable circumstances, considering especially that although it is obligatory, it is not
jurisdictional.
When ALL the petitioners share a common interest and invoke a common cause of action or defense, the signature of only
one of them in the certification against forum shopping substantially complies with the rules.
In the present case, there is no question that respondents share a common interest and invoke a common cause of action. Hence, the
signature of respondent Garcia is a sufficient compliance with the rule governing certificates of non-forum shopping. In the first place,
some of the respondents actually executed a SPA authorizing Garcia as their attorney-in-fact in filing a petition for certiorari with the
CA.
With respect to the absence of some of the workers signatures in the verification, the verification requirement is deemed
substantially complied with when some of the parties who undoubtedly have sufficient knowledge and belief to swear
to the truth of the allegations in the petition had signed the same. Such verification is deemed a sufficient assurance that the
matters alleged in the petition have been made in good faith or are true and correct, and not merely speculative. Moreover,
respondents' Partial Appeal shows that the appeal stipulated as complainants-appellants Rizal Beato, et al., meaning that there were
more than one appellant who were all workers of petitioners.
2.
Lubas is a mere agent, conduit or adjunct of PTI.
A settled formulation of the doctrine of piercing the corporate veil is that when two business enterprises are owned, conducted and
controlled by the same parties, both law and equity will, when necessary to protect the rights of third parties, disregard the legal
fiction that these two entities are distinct and treat them as identical or as one and the same.
In the present case, it may be true that Lubas is a single proprietorship and not a corporation. However, petitioners attempt to isolate
themselves from and hide behind the supposed separate and distinct personality of Lubas so as to evade their liabilities is precisely
what the classical doctrine of piercing the veil of corporate entity seeks to prevent and remedy.

If Lubas were truly a separate entity, how come that it was Prince Transport who made the decision to transfer its employees to the
former? Besides, Prince Transport never regarded Lubas Transport as a separate entity. In the a letter, it referred to said entity as
Lubas operations. Moreover, in said letter, it did not transfer the employees; it assigned them. Lastly, the existing funds and 201 file
of the employees were turned over not to a new company but a new management.
The Court also agrees with respondents that if Lubas is indeed an entity separate and independent from PTI why is it that the latter
decides which employees shall work in the former?
Moreover, petitioners failed to refute the contention of respondents that despite the latters transfer to Lubas of their daily time
records, reports, daily income remittances of conductors, schedule of drivers and conductors were all made, performed, filed and kept
at the office of PTI. In fact, respondents identification cards bear the name of PTI.
3.
It is clear from the complaints filed by respondents that they are seeking reinstatement.
In any case, Section 2 (c), Rule 7 of the Rules of Court provides that a pleading shall specify the relief sought, but may add a general
prayer for such further or other reliefs as may be deemed just and equitable. Under this rule, a court can grant the relief warranted by
the allegation and the proof even if it is not specifically sought by the injured party; the inclusion of a general prayer may justify the
grant of a remedy different from or together with the specific remedy sought, if the facts alleged in the complaint and the evidence
introduced so warrant.
In the instant case, aside from their specific prayer for reinstatement, respondents, in their separate complaints, prayed for such
reliefs which are deemed just and equitable.
4.
Respondetns transfer of work assignments to Lubas was designed by petitioners as a subterfuge to foil the formers right to organize
themselves into a union.
Under Article 248 (a) and (e) of the Labor Code, an employer is guilty of unfair labor practice if it interferes with, restrains or coerces
its employees in the exercise of their right to self-organization or if it discriminates 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.
Indeed, evidence of petitioners' ULP is shown by the established fact that, after respondents' transfer to Lubas, petitioners left them
high and dry insofar as the operations of Lubas was concerned. Petitioners withheld the necessary financial and logistic support such
as spare parts, and repair and maintenance of the transferred buses until only two units remained in running condition. This left
respondents virtually jobless.

038 MANILA MINING CORP. EMPLOYEES ASSOCFEDERATION OF FREE WORKERS CHAPTER vs.
MANILA MINING CORP.
[G.R. NO. 178222-23; September 29, 2010 ]
TOPIC: Unfair Labor Practices
PONENTE: Perez

AUTHOR: Nikki A
NOTES: (if applicable)

FACTS:
Respondent Manila Mining Corporation (MMC) is a publicly-listed corporation engaged in large-scale mining for gold and copper ore.
MMC is required by law to maintain a tailings containment facility to store the waste material generated by its mining operations.
Consequently, MMC constructed several tailings dams to treat and store its waste materials. One of these dams was Tailings Pond No.
7 (TP No. 7), which was constructed in 1993 and was operated under a permit issued by the Department of Environment and Natural
Resources (DENR), through its Environmental Management Bureau (EMB) in Butuan City, Agusan del Norte.
When the Union members were able to acquire the Unions legitimate registration status, it submitted letters to MMC relating its
intention to bargain collectively. The Union submitted its Collective Bargaining Agreement proposal to MMC.
Upon the expiration of the tailings permit, DENR-EMB did not issue a permanent permit due to the inability of MMC to secure an
Environmental Compliance Certificate (ECC). An essential component of an ECC is social acceptability or consent of the residents of
the community to allow TP No. 7 to operate, which MMC failed to obtain. Hence, it was compelled to temporarily shut down its minig
operations and temporary laying-off of more than 400 members in the mine site. On July 30, 2001, MMC called for the suspension of
negotiations on the CBA until resumption of operations.
The employees laid off together with the Union filed a complaint before the labor arbiter on even date praying for reinstatement,
recognition of the Union as the sole and exclusive representative of its rank-and-file employees and payment of moral and exemplary
damages and attorneys fees. In their position paper, herein petitioners challenged the validity of the lay-off on the averment that
MMC: (1) was not suffering from business losses; (2) did not want to bargain collectively with the Union; (3) terminated all union
officers and active members; (4) did not show that cost-cutting measures were taken; (5) did not employ any criteria in choosing which
employees to lay-off; and (6) laid-off those who signed the attendance sheet of the union organizational meeting. They questioned the
timing of their lay-off.
Respondents justified the temporary lay-off as bona fide in character and a valid management prerogative pending the issuance of the
permit to continuously operate TP No. 7.
The labor arbiter ruled in favor of MMC and held that the temporary shutdown of the mining operation, as well as the temporary lay-

off of the employees, is valid.

On appeal, the National Labor Relations Commission (NLRC) modified the judgment of the labor arbiter and ordered the payment of
separation pay equivalent to one month pay for every year of service. It ratiocinated that the temporary lay-off, which exceeded more
than six (6) months, had the effect of severance of the employer-employee relationship. The dispositive portion of the Decision read:
WHEREFORE, the assailed decision is, as it is hereby, Vacated and Set Aside and a new one entered ordering respondent Manila
Mining Corporation to pay the individual complainants their separation pay computed as follows:
1. Samuel G. [Z]uiga From Feb. 1, 1995 to
July 27, 2001 =
P14,300/mo.
P14,300 x 7 yrs. x
2. Myrna Maquio From March 1992 to
July 27, 2001 =
P14,000/mo.
P14,000 x 9 yrs. x
3. Doroteo J. Torre From July 1983 to
July 27, 2001 =
P10,000/mo.
P10,000 x 18 yrs. x
4. Arsenio Mark M. Perez From June 1996 to
July 27, 2001 =
P9,500/mo.
P9,500 x 5 yrs. x
5. Edmundo M. Galvez From June 1997 to
July 27, 2001 =
P9,500/mo.
P9,500 x 4 yrs. x
6. Jonathan Araneta From March 1992 to
July 27, 2001 =
P15,500/mo.
P15,500 x 9 yrs. x
7. Teresita D. Lagman From August 1980 to
July 27, 2001 =
P10,900/mo.
P10,900 x 20 yrs. x
8. Gerardo Opena From October 1997 to
July 27, 2001 =
P8,250/mo.
P8,250 x 4 yrs. x
9. Edwin Tuazon From August 1994 to
July 27, 2001 =
P7,000/mo.
P7,000 x 8 yrs. x
GRAND TOTAL

In addition respondent company is hereby ordered to pay attorneys fees to complainants equivalent to 10% of the award.
In an Order dated 31 May 2004, the NLRC affirmed its Resolution.
Dissatisfied, both parties separately filed their petitions for certiorari with the Court of Appeals, docketed as CA-G.R. SP No. 86073
and CA G.R. SP No. 86163.
In its Decision dated 30 June 2006, the Court of Appeals modified the NLRC ruling, thus:
WHEREFORE, the instant petition is partially GRANTED and the challenged Resolution dated August 29, 2003 of public respondent
National Labor Relations Commission in NLRC NCR CA No. 033111-(CA No. 033111-02) is MODIFIED insofar as it holds MMC
liable to pay the Union attorneys fees equivalent to 10% of the award, which portion of the questioned decision is now SET ASIDE.
The monetary award of separation pay is maintained, but is MODIFIED from one (1) month pay for every year of service to ONEHALF (1/2) MONTH PAY for every year of service, a fraction of at least six (6) months being considered as one (1) whole year.

ISSUE(S): WON MCC is liable for ULP.

HELD: NO. We observe that MMC was forced by the circumstances, hence, it resorted to a temporary suspension of its mining and
milling operations. It is clear that MMC had no choice. It would be well to reiterate at this juncture that the reason for such suspension
cannot be attributed to DENR-EMB. It is thus, evident, that the MMC declared temporary suspension of operations to avert further
losses.

RATIO:
The lay-off is neither illegal nor can it be considered as unfair labor practice.
Despite all efforts exerted by MMC, it did not succeed in obtaining the consent of the residents of the community where the tailings
pond would operate, one of the conditions imposed by DENR-EMB in granting its application for a permanent permit. It is precisely
MMCs faultless failure to secure a permit which caused the temporary shutdown of its mining operations. As aptly put by the Court of
Appeals:
The evidence on record indeed clearly shows that MMCs suspension of its mining operations was bonafide and the reason for such
suspension was supported by substantial evidence. MMC cannot conduct mining operations without a tailings disposal system. For this
purpose, MMC operates TP No. 7 under a valid permit from the Department of Environment and Natural Resources (DENR) through
its Environmental Management Bureau (EMB). In fact, a "Temporary Authority to Construct and Operate" was issued on January 25,
2001 in favor of MMC valid for a period of six (6) months or until July 25, 2001. The NLRC did not dispute MMCs claim that it had
timely filed an application for renewal of its permit to operate TP No. 7 but that the renewal permit was not immediately released by
the DENR-EMB, hence, MMC was compelled to temporarily shutdown its milling and mining operations. Here, it is once apparent that
the suspension of MMCs mining operations was not due to its fault nor was it necessitated by financial reasons. Such suspension was
brought about by the non-issuance of a permit for the continued operation of TP No. 7 without which MMC cannot resume its milling
and mining operations. x x x. [Emphasis supplied.]
Unfair labor practice cannot be imputed to MMC since, as ruled by the Court of Appeals, the call of MMC for a suspension of the CBA
negotiations cannot be equated to "refusal to bargain."
For a charge of unfair labor practice to prosper, it must be shown that the employer was motivated by ill-will, bad faith or fraud, or was
oppressive to labor. The employer must have acted in a manner contrary to morals, good customs, or public policy causing social
humiliation, wounded feelings or grave anxiety. While the law makes it an obligation for the employer and the employees to bargain
collectively with each other, such compulsion does not include the commitment to precipitately accept or agree to the proposals of the
other. All it contemplates is that both parties should approach the negotiation with an open mind and make reasonable effort to reach a
common ground of agreement.
Even as we declare the validity of the lay-off, we cannot say that MMC has no obligation at all to the laid-off employees. The validity
of its act of suspending its operations does not excuse it from paying separation pay.
We observe that MMC was forced by the circumstances, hence, it resorted to a temporary suspension of its mining and milling
operations. It is clear that MMC had no choice. It would be well to reiterate at this juncture that the reason for such suspension cannot
be attributed to DENR-EMB. It is thus, evident, that the MMC declared temporary suspension of operations to avert further losses.
The decision to suspend operation ultimately lies with the employer, who in its desire to avert possible financial losses, declares, as

here, suspension of operations.

The Court is not impressed with the claim that actual severe financial losses exempt MMC from paying separation benefits to
complainants. In the first place, MMC did not appeal the decision of the Court of Appeals which affirmed the NLRCs award of
separation pay to complainants. MMCs failure had the effect of making the awards final so that MMC could no longer seek any other
affirmative relief. In the second place, the non-issuance of a permit forced MMC to permanently cease its business operations, as
confirmed by the Court of Appeals. Under Article 283, the employer can lawfully close shop anytime as long as cessation of or
withdrawal from business operations is bona fide in character and not impelled by a motive to defeat or circumvent the tenurial rights
of employees, and as long as he pays his employees their termination pay in the amount corresponding to their length of service. The
cessation of operations, in the case at bar is of such nature. It was proven that MMC stopped its operations precisely due to failure to
secure permit to operate a tailings pond. Separation pay must nonetheless be given to the separated employees.

DISSENTING/CONCURRING OPINION(S):
CASE LAW/ DOCTRINE:

039 CENTRAL AZUCARERA DE BAIS EMPLOYEES AUTHOR:

UNION v. CENTRAL AZUCARERA DE BAIS, INC.
GR 186605 November 17, 2010
TOPIC: Unfair Labor Practices
PONENTE: Mendoza, J.
FACTS:
1. Respondent Central Azucarera De Bais, Inc. (CAB) is a corporation duly organized and existing under the laws of the Philippines. It
is represented by its President, Antonio Steven L. Chan (Chan), in this proceeding.
2. Petitioner Central Azucarera De Bais Employees Union-National Federation of Labor (CABEU-NFL) is a duly registered labor union
and a certified bargaining agent of the CAB rank-and-file employees, represented by its President, Pablito Saguran (Saguran).
3. CABEU-NFL sent CAB a proposed Collective Bargaining Agreement (CBA) seeking increases in the daily wage and vacation and
sick leave benefits of the monthly employees and the grant of leave benefits and 13th month pay to seasonal workers.
4. CAB responded with a counter-proposal to the effect that the production bonus incentive and special production bonus and
incentives be maintained. In addition, respondent CAB agreed to execute a pro-rated increase of wages every time the government
would mandate an increase in the minimum wage. CAB, however, did not agree to grant additional and separate Christmas bonuses.
5. CAB received an Amended Union Proposal sent by CABEU-NFL reducing its previous demand regarding wages and bonuses. CAB,
however, maintained its position on the matter. Thus, the collective bargaining negotiations resulted in a deadlock.
6. On account of the impasse, CABEU-NFL filed a Notice of Strike with the National Conciliation and Mediation Board (NCMB). The
NCMB then assumed conciliatory-mediation jurisdiction and summoned the parties to conciliation conferences.
7. In its Letter sent to CAB (letter-request), CABEU-NFL requested copies of CABs annual financial statements from 2001 to 2004
and asked for the resumption of conciliation meetings.
8. CAB replied through its June 14, 2005 Letter (letter-response) to NCMB Regional Director of Dumaguete City Isidro Cepeda,
which reads:
At the outset, it observed that the letter signed by Mr. Pablito Saguran who is no longer an employee of the
Central for he was one of those lawfully terminated due to an authorized cause x x x.
More importantly, the declared purpose of the requested conciliation meeting has already been rendered
moot and academic because: (1) the Union which Mr. Saguran purportedly represents has already lost its majority
status by reason of the disauthorization and withdrawal of support thereto by more than 90% of the rank and file
employees in the bargaining unit of Central sometime in January, 2005, and (2) the workers themselves, acting as
principal, after disauthorizing the previous agent CABEU-NFL have organized themselves into a new Union known
as Central Azucarera de Bais Employees Labor Association (CABELA) and after obtaining their registration
certificate and making due representation that it is a duly organized union representing almost all the rank and file
workers in the Central, had concluded a new collective bargaining agreement with the Central on April 21, 2005 in
Dumaguete City. The aforesaid CBA had been duly ratified by the rank and file workers constituting 91% of the
collective bargaining unit x x x.

Clearly, therefore, the request for further conciliation conference will serve no lawful and practical purpose.
In view of the foregoing, and for the sake of continued industrial peace prevailing in the Central, we beseech the
Honorable Office to disregard the aforesaid request.
9. It appears that the NCMB failed to act on the letter-response of CAB. Neither did it convene CAB and CABEU-NFL to continue the
negotiations between them.
10. Reacting from the letter-response of CAB, CABEU-NFL filed a Complaint for Unfair Labor Practice for the formers refusal to
bargain with it.
11. The LA dismissed the complaint. Pertinent portions of the LA decision read:
The procedure in the discharge of the duty to bargain collectively is provided for in Article 250 of the Labor Code:
(1) the party who desires to negotiate an agreement shall serve a written notice upon the other party with a statement
of proposals; (2) the other party shall make a reply thereto not later than ten (10) days from receipt of notice; (3) if
the dispute is unsettled resulting in a deadlock, the NCMB shall intervene upon the request or at its own initiative and
call the parties to conciliation Meeting x x x (4) if the NCMB fails to effect an agreement, the Board shall exert all
efforts to settle disputes amicably and encourage the parties to submit their case to a voluntary arbitrator; (5) the
parties may also go on strike or declare a lockout as the case may be after complying with legal requirements.
Subject, of course, to the plenary power of the Secretary of Labor and Employment to assume jurisdiction over the
dispute or to certify the same to the NLRC for compulsory arbitration.
In the case at bar, the record shows that respondent CAB replied to the complainant Unions CBA proposals with its
own set of counterproposals x x x. Likewise, respondent CAB responded to the Unions subsequent counterproposals
x x x. Record further shows that respondent CAB participated in a series of CBA negotiations conducted by the
parties at the plant level as well as in the conciliation/mediation proceedings conducted by the NCMB. Unfortunately,
both exercises resulted in a deadlock.
At this juncture it cannot be said, therefore, that respondent CAB refused to negotiate or that it violated its duty to
bargain collectively in light of its active participation in the past CBA negotiations at the plant level as well as in the
NCMB. x x x
xxxxxxxxx
We do not agree that respondent CAB committed an unfair labor practice act in questioning the capacity of Mr.
Pablito Saguran to represent complainant union in the CBA negotiations because Mr. Pablito Saguran was no longer
an employee of respondent CAB at that time having been separated from employment on the ground of redundancy
and having received the corresponding separation benefits. x x x.
So also, we do not find respondent CAB guilty of unfair labor practice by its act of writing the NCMB Director in a
letter dated June 24, 2005, stating its legal position on complainants request for further conciliation to the effect that
since almost [all] of the rank and file employees, the principals in a principal-agent relationship, have withdrawn
their support to the complainant union and that in fact they have already organized themselves into a DOLEregistered labor union known as CABELA, any further conciliation will serve no lawful and practical purpose. x x x.
At this juncture, it was incumbent upon the NCMB to make a ruling on the request of the complainant union as well
as upon the corresponding comment of respondent CAB. If the NCMB chose not to pursue further negotiation
between the parties, respondent CAB should not be faulted therefor. x x x.
Under the facts obtaining, when the conciliation/mediation by the NCMB has not been officially concluded, we find
the instant complaint for unfair labor practice not only without merit but also premature.
WHEREFORE, foregoing considered, the case is hereby DISMISSED for lack of merit.
SO ORDERED.
12. On appeal, the NLRC reversed the LAs decision and found CAB guilty of unfair labor practice. The NLRC explained:
The issue to be resolved is whether or not respondent company committed an unfair labor practice for violation of its
duty to bargain collectively in good faith.
xxxxxxxxx

The important event to discuss in the instant case is respondents act of concluding a CBA with CABELA. As gleaned
from respondents letter to NCMB dated June 14, 2005, it concluded a CBA with CABELA because they opined that
complainant lost its majority status in January 2005 when 90% of the rank-and-file employees disauthorized and
withdrew their support to complainant. These rank-and-file employees who withdrew their support, organized and
formed CABELA. In fine, respondent believed that CABELA enjoyed the majority status of CABELA since it was
supported by 90% of all employees in the bargaining unit.
In resolving the issue of whether respondents act of concluding a CBA with CABELA is warranted under the
circumstances is to examine the validity of such act. The mechanics of collective bargaining are set in motion only
when the following jurisdictional preconditions are present, namely: 1) possession of the status of majority
representation of the employees representative in accordance with any of the means of selection and designation
provided for by the Labor Code, 2) proof of majority representation, and 3) a demand to bargain under Article 250,
par. (a) of the Labor Code x x x.
In the instant case, it is undeniable that complainant is the certified collective bargaining agent of the regular workers
and seasonal employees of respondent. Its status as such was determined in a certification election conducted by the
Department of Labor and Employment (DOLE). As such, there was no reason for respondent to deal and negotiate
with CABELA since the latter does not have such status of majority representation. x x x.
X x x. Based on this premise, respondent violated its duty to bargain with complainant when during the pendency of
the conciliation proceedings before the NCMB it concluded a CBA with another union as a consequence, it refused to
resume negotiation with complainant upon the latters demand.
With respect to respondents observation that the request for conciliation meeting was signed by one who is not
eligible and authorized to represent any union with the company since he is no longer an employee, suffice it to state
that at the time the request was made, such employee has questioned the validity of his dismissal with then NLRC. X
x x.
Respondents failure to act on the request of the complainant to resume negotiation for no valid reason constitutes
unfair labor practice. Consequently, the proposed CBA as amended should be imposed to respondent.
WHEREFORE, premises considered, the appealed Decision is REVERSED and SET ASIDE. Another one is entered
declaring that respondent Central Azucarera de Bais is guilty of unfair labor practice. As such, the proposed CBA of
complainant, as amended is imposed to respondent Central Azucarera de Bais.
SO ORDERED.
13. CAB moved for a reconsideration but the motion was denied by the NLRC in its resolution dated September 28, 2007.
14. Unsatisfied, CAB elevated the matter to the CA by way of a petition for certiorari under Rule 65 alleging grave abuse of discretion
on the part of the NLRC in reversing the LA decision and issuing the questioned resolution.
15. CA found CABs petition meritorious and reversed the NLRC decision and resolution. The CA pointed out:
xxxxxxxxx
First. This Court has acquired jurisdiction over the person of private respondent CABEU-NFL. Through its
counsel of record, CABEU-NFL already filed its extensive comment on the instant petition. Hence, it is now useless
to contend that it was denied notice of the same and the opportunity to be heard on it. x x x.
xxxxxxxxx
Second. Petitioner CAB was not shown to have violated the rule requiring parties to certify in their
initiatory pleadings against forum shopping. Private respondent CABEU-NFL alleges in its comment that the two
cases are pending before this Court: CA-G.R. No. 03132 and CA-G.R. No. 03017 involving the same parties as in the
case at bar. Unfortunately, CABEU-NFL did not explain how the issues in those pending cases are related to or
similar to those involved in this proceeding. x x x.
xxxxxxxxx

Third. x x x x x x x x x
In the case at bar, private respondent CABEU-NFL failed in its burden of proof to present substantial
evidence to support the allegation of unfair labor practice. The assailed Decision and Resolution of public respondent
referred merely to two (2) circumstances which allegedly support the conclusion that the presumption of good faith
had been rebutted and that bad faith was extant in petitioners actions. To recall, these circumstances are: (a) the
execution of a supposed collective bargaining agreement with another labor union, CABELA; and (b) CABs sending
of the letter dated June 14, 2005 to NCMB seeking to call off the collective bargaining negotiations. These, however,
are not enough to ascribe the very serious offense of unfair labor practice upon petitioner. x x x.
xxxxxxxxx
x x x petitioner CAB was not scuttling the ongoing negotiations towards a new collective bargaining
agreement. It was simply propounding a position to the NCMB for the latter to rule on. That the negotiations did not
push through was not the result of CAB managements intransigence because there was none at least so far as the case
record confirms. There is nothing that establishes petitioners predetermined resolve not to budge from an initial
position perhaps stubbornness of some ambiguous sort but not the absence of good faith to pursue collective
bargaining. x x x.
14. CABEU-NFL moved for a reconsideration but its motion was denied by the CA in its Resolution dated January 21, 2009. Hence
this petition.

ISSUE:
Whether or not respondent CAB was guilty of acts constituting unfair labor practice by refusing to bargain collectively
HELD:
No.
RATIO:
CAB is being accused of violating its duty to bargain collectively supposedly because of its act in concluding a CBA with
CABELA, another union in the bargaining unit, and its failure to resume negotiations with CABEU-NFL.
The concept of unfair labor practice is provided in Article 247 of the Labor Code which states:
Article 247. Concept of Unfair Labor Practice and Procedure for Prosecution thereof. -- Unfair labor
practices violate the constitutional right of workers and employees to self-organization, are inimical to the legitimate
interests of both labor and management, including their right to bargain collectively and otherwise deal with each
other in an atmosphere of freedom and mutual respect, disrupt industrial peace and hinder the promotion of healthy
and stable labor-management relations.
xxxxxxxxx
The Labor Code, likewise, enumerates the acts constituting unfair labor practices of the employer, thus:
Article 248. Unfair Labor Practices of Employers.It shall be unlawful for an employer to commit any of the
following unfair labor practice:
xxxxxxxxx
(g) To violate the duty to bargain collectively as prescribed by this Code.
For a charge of unfair labor practice to prosper, it must be shown that CAB was motivated by ill will, bad faith, or fraud, or
was oppressive to labor, or done in a manner contrary to morals, good customs, or public policy, and, of course, that social humiliation,
wounded feelings or grave anxiety resulted x x x in suspending negotiations with CABEU-NFL. Notably, CAB believed that CABEUNFL was no longer the representative of the workers. [34] It just wanted to foster industrial peace by bowing to the wishes of the
overwhelming majority of its rank and file workers and by negotiating and concluding in good faith a CBA with CABELA. [35] Such
actions of CAB are nowhere tantamount to anti-unionism, the evil sought to be punished in cases of unfair labor practices.
Furthermore, basic is the principle that good faith is presumed and he who alleges bad faith has the duty to prove the same. By
imputing bad faith to the actuations of CAB, CABEU-NFL has the burden of proof to present substantial evidence to support the
allegation of unfair labor practice. [ 3 6 ] Apparently, CABEU-NFL refers only to the circumstances mentioned in the letter-response,
namely, the execution of the supposed CBA between CAB and CABELA and the request to suspend the negotiations, to conclude that
bad faith attended CABs actions. The Court is of the view that CABEU-NFL, in simply relying on the said letter-response, failed to

substantiate its claim of unfair labor practice to rebut the presumption of good faith.

Moreover, as correctly determined by the LA, the filing of the complaint for unfair labor practice was premature inasmuch as
the issue of collective bargaining is still pending before the NCMB.
In the resolution of labor cases, this Court has always been guided by the State policy enshrined in the Constitution that the
rights of workers and the promotion of their welfare shall be protected. The Court is, likewise, guided by the goal of attaining
industrial peace by the proper application of the law. Thus, it cannot favor one party, be it labor or management, in arriving at a just
solution to a controversy if the party has no valid support to its claims. It is not within this Courts power to rule beyond the ambit of
the law.
CASE LAW/ DOCTRINE:
DISSENTING/CONCURRING OPINION(S):
Bpi vs. Bpi
Note: this is a very long case, may dissent pa.
Facts:
in this case there was a merger between bpi and far east bank.
The agreement between the two company was that the employees of far east bank would be
absorbed by bpi.
The bpi union of davao approached the employees of far east bank and explained to them that
there is a union shop agreement for new employees of bpi. That as new employees of bpi it was
mandatory for them to join their union, or else their employment would be terminated.
Most of the employees did not join.
The issue was then referred to management and the union invoked the union shop clause of the
cba.
ARTICLE II
Section 1. Maintenance of Membership All employees within the bargaining unit who are
members of the Union on the date of the effectivity of this Agreement as well as employees
within the bargaining unit who subsequently join or become members of the Union during
the lifetime of this Agreement shall as a condition of their continued employment with the
Bank, maintain their membership in the Union in good standing.

Section 2. Union Shop - New employees falling within the bargaining unit as defined in Article I of
this Agreement, who may hereafter be regularly employed by the Bank shall, within thirty (30)
days after they become regular employees, join the Union as a condition of their continued
employment. It is understood that membership in good standing in the Union is a condition of their
continued employment with the Bank
The issue was not acted upon by management.
The union then submitted for voluntary arbitration
Voluntary Arbitrator Rosalina Letrondo-Montejo, in a Decision[12] dated November 23, 2001, ruled in
favor of petitioner BPIs interpretation that the former FEBTC employees were not covered by the
Union Security Clause of the CBA between the Union and the Bank on the ground that the said
employees were not new employees who were hired and subsequently regularized, but were
absorbed employees by operation of law because the former employees of FEBTC can be
considered assets and liabilities of the absorbed corporation.
This ruling, upon appeal to the CA, was reversed. The ca sided with the union. The ca upheld the
validity of the union shop agreement.
The ca also ruled that there is no distinction between new employees and absorbed employees.
The similarities lies on the following, to wit: (a) they have a new employer; (b) new working
conditions; (c) new terms of employment and; (d) new company policy to follow. As such,
they should be considered as new employees for purposes of applying the provisions of the
CBA regarding the union-shop clause.

It would also be unfair if the absorbed employees would be able to enjoy the fruits of the CBA,
without contributing to the union in terms of fees.
This then would cause in the disturbance of industrial peace.
Ca also recognized that:
A 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 jobs. It is THE MOST PRIZED ACHIEVEMENT OF UNIONISM. IT ADDS MEMBERSHIP AND
COMPULSORY DUES. By holding out to loyal members a promise of employment in the closedshop, it wields group solidarity.
Bpi then appeals to the sc
Petitioner argues that the term new employees in the Union Shop Clause of the CBA is qualified by
the phrases who may hereafter be regularly employed and after they become regular employees
which led petitioner to conclude that the new employees referred to in, and contemplated by, the
Union Shop Clause of the CBA were only those employees who were new to BPI, on account of
having been hired initially on a temporary or probationary status for possible regular employment
at some future date. BPI argues that the FEBTC employees absorbed by BPI cannot be considered
as new employees of BPI for purposes of applying the Union Shop Clause of the CBA

Issue: whether the absorbed employees should be members of the union for their continued employment?
Sc ruling: yes, they should be members of the union.
There is union shop when all new regular employees are required to join the union within a certain
period for their continued employment.
There is maintenance of membership shop when employees, who are union members as of the
effective date of the agreement, or who thereafter become members, must maintain union
membership as a condition for continued employment until they are promoted or transferred out of
the bargaining unit or the agreement is terminated.
A closed-shop, on the other hand, may be defined as an enterprise in which, by agreement between
the employer and his employees or their representatives, no person may be employed in any or
certain agreed departments of the enterprise unless he or she is, becomes, and, for the duration of
the agreement, remains a member in good standing of a union entirely comprised of or of which the
employees in interest are a part
the purpose of a union shop or other union security arrangement is to guarantee the continued
existence of the union through enforced membership for the benefit of the workers.
However, under law and jurisprudence, the following kinds of employees are exempted
from its coverage, namely,
o employees who at the time the union shop agreement takes effect are bona fide members of
a religious organization which prohibits its members from joining labor unions on religious
grounds;[21]
o employees already in the service and already members of a union other than the
majority at the time the union shop agreement took effect;[22]
o confidential employees who are excluded from the rank and file bargaining unit; [23] and
o employees excluded from the union shop by express terms of the agreement.
The absorbed employees do not come under any of these exceptions.
Hence they should be included in the union.
When certain employees are obliged to join a particular union as a requisite for continued
employment, as in the case of Union Security Clauses, this condition is a valid restriction of the
freedom or right not to join any labor organization because it is in favor of unionism. This Court, on
occasion, has even held that a union security clause in a CBA is not a restriction of the right of
freedom of association guaranteed by the Constitution.[24]
Moreover, a 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 jobs. It is the most prized achievement of unionism. It adds membership and
compulsory dues. By holding out to loyal members a promise of employment in the closed shop, it
wields group solidarity
Further the sc also anticipates the danger to unionism if the ruling of the voluntary arbiter would be
affirmed

Petitioners restrictive reading of the Union Shop Clause could also inadvertently open an avenue,
which an employer could readily use, in order to dilute the membership base of the certified union
in the collective bargaining unit (CBU). By entering into a voluntary merger with a non-unionized
company that employs more workers, an employer could get rid of its existing union by the simple
expedient of arguing that the absorbed employees are not new employees, as are commonly
understood to be covered by a CBAs union security clause. This could then lead to a new majority
within the CBU that could potentially threaten the majority status of the existing union and,
ultimately, spell its demise as the CBUs bargaining representative. Such a dreaded but not entirely
far-fetched scenario is no different from the ingenious and creative union-busting schemes that
corporations have fomented throughout the years, which this Court has foiled time and again in
order to preserve and protect the valued place of labor in this jurisdiction consistent with the
Constitutions mandate of insuring social justice.
The interpretation would make it easier for the management to get rid or weaken the current
bargaining representative.
Indeed, a union security clause in a CBA should be interpreted to give meaning and effect to its
purpose, which is to afford protection to the certified bargaining agent and ensure that the
employer is dealing with a union that represents the interests of the legally mandated percentage
of the members of the bargaining unit.
The union shop clause offers protection to the certified bargaining agent by ensuring that future
regular employees who (a) enter the employ of the company during the life of the CBA; (b) are
deemed part of the collective bargaining unit; and (c) whose number will affect the number of
members of the collective bargaining unit will be compelled to join the union.
Without the union shop clause or with the restrictive interpretation thereof as proposed in the
dissenting opinions, the company can jeopardize the majority status of the certified union by
excluding from union membership all new regular employees whom the Company will absorb in
future mergers and all new regular employees whom the Company hires as regular from the
beginning of their employment without undergoing a probationary period. In this manner, the
Company can increase the number of members of the collective bargaining unit and if this increase
is not accompanied by a corresponding increase in union membership, the certified union may lose
its majority status and render it vulnerable to attack by another union who wishes to represent the
same bargaining unit.[35]
Or worse, a certified union whose membership falls below twenty percent (20%) of the total
members of the collective bargaining unit may lose its status as a legitimate labor organization
altogether
Time and again, this Court has ruled that the individual employees right not to join a union may be
validly restricted by a union security clause in a CBA [49] and such union security clause is not a
violation of the employees constitutional right to freedom of association
In the case at bar, since the former FEBTC employees are deemed covered by the Union Shop
Clause, they are required to join the certified bargaining agent, which supposedly has gathered the
support of the majority of workers within the bargaining unit in the appropriate certification
proceeding. Their joining the certified union would, in fact, be in the best interests of the former
FEBTC employees for it unites their interests with the majority of employees in the bargaining
unit. It encourages employee solidarity and affords sufficient protection to the majority status of the
union during the life of the CBA which are the precisely the objectives of union security clauses,
such as the Union Shop Clause involved herein.
In sum, this Court finds it reasonable and just to conclude that the Union Shop Clause of the CBA
covers the former FEBTC employees who were hired/employed by BPI during the effectivity of the
CBA in a manner which petitioner describes as absorption. A contrary appreciation of the facts of
this case would, undoubtedly, lead to an inequitable and very volatile labor situation which this
Court has consistently ruled against.
In the case of former FEBTC employees who initially joined the union but later withdrew their
membership, there is even greater reason for the union to request their dismissal from the
employer since the CBA also contained a Maintenance of Membership Clause.
WHEREFORE, the petition is hereby DENIED, and the Decision dated September 30, 2003 of the
Court of Appeals is AFFIRMED, subject to the thirty (30) day notice requirement imposed
herein. Former FEBTC employees who opt not to become union members but who qualify for
retirement shall receive their retirement benefits in accordance with law, the applicable retirement
plan, or the CBA, as the case may be.


Dissent:
Quickie lang:
Justice carpio belives that with the right to self organization also comes the right not to self organize. To
compel or to mandate that a worker join a union is against the concept of self organization. Self
organization should be free from coercion.
To terminate a worker simply because he does not want to join the union is contrary to law. This is because
employment may only be terminated for just and lawful cause. Refusal to join union is not one of those
lawful or just causes.
Further, the far east employees cannot be considered new employees. This is because the effect of merger
is that their previous rank and status would not be affected upon their absorption with bpi. If upon their
absorption to bpi, they would be considered as new employees then their status as workers have obviously
changed. Such then is contrary as to what was agreed upon in the merger.
Justice carpio also is of the position that merger has the effect of automatically absorbing the employees of
far east bank.(pero corpo ito kaya wag na natin pag usapan)
Now, as to the assertion of the ca that the far east employees are free riders, since they benefit in the
CBA, and yet they do not contribute to the union. Justice carpio explains that the union still has the right to
collect from these non union members who have obtained some benefit from their acts of collective
bargaining.
Section 248(e) of the Labor Code provides that, "Employees of an appropriate collective 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
The right to choose with whom one will associate oneself is the very foundation and essence of
that partnership. It should be noted that the provision guarantees the right to form an
association. It does not include the right to compel others to form or join one." Thus, to compel
the absorbed FEBTC employees to join the Union at the risk of losing their jobs is violative of their
constitutional freedom to associate.
To consider the former FEBTC employees not"new employees" of BPI for the purpose of the union shop
clause of the CBA does not necessarily mean that the FEBTC employees are considered "old employees" of
BPI, hired by BPI on the date that the employees were hired by FEBTC. The former FEBTC employees are
not old BPI employees. They are former FEBTC employees absorbed by BPI upon effectivity of the merger.
Nevertheless, as absorbed employees, these former FEBTC employees cannot be relegated to being "new
employees" of BPI within the contemplation of the union shop clause of the CBA.
If the absorbed employees are treated as "new employees," and they refuse to join the Union, the Union
can ask BPI to terminate their employment. And BPI can validly terminate their employment pursuant to
the union shop clause. It is well-settled that termination of employment by virtue of a union security clause
embodied in a CBA is recognized in our jurisdiction, and an employer who merely complies in good faith
with the union's request for the dismissal of an employee pursuant to the CBA cannot be considered guilty
of unfair labor practice.
since the absorbed FEBTC employees will pay all union dues and fees, there is no reason to force them to
join the Union except to humiliate them by trampling upon their fundamental constitutional right to join or
not to join a union. This the Court should not allow.

042 GENERAL MILLING CORPORATION v. AUTHOR: Norman

ERNESTO CASIO, ROLANDO IGOT, MARIO NOTES: (if applicable)
FAMADOR, NELSON LIM, FELICISIMO BOOC,
PROCOPIO OBREGON, JR., and ANTONIO
ANINIPOK
G.R. No. 149552, March 10, 2010
TOPIC: Union Security Clause
PONENTE: LEONARDO-DE CASTRO, J
FACTS:

1. The labor union Ilaw at Buklod ng Mangagawa (IBM)-Local 31 Chapter (Local 31) was the sole and exclusive
bargaining agent of the rank and file employees of GMC in Lapu-Lapu City.

2. November 30, 1991: IBM-Local 31, through its officers and board members, namely, respondents Virgilio Pino,
Paulino Cabreros, Ma. Luna P. Jumaoas, Dominador Booc, Bartolome Auman, Remegio Cabantan, Fidel Valle,
Loreto Gonzaga, Edilberto Mendoza and Antonio Panilag (Pino, et al.), entered into a Collective Bargaining
Agreement (CBA) with GMC.
3. The CBA contained the following union security provisions:
Section 3. MAINTENANCE OF MEMBERSHIP All employees/workers employed by the Company with the exception of those who are
specifically excluded by law and by the terms of this Agreement must be members in good standing of the Union within thirty (30) days upon the signing of this
agreement and shall maintain such membership in good standing thereof as a condition of their employment or continued employment.
Section 6. The Company, upon written request of the Union, shall terminate the services of any employee/worker who fails to fulfill the conditions set forth in
Sections 3 and 4 thereof, subject however, to the provisions of the Labor Laws of the Philippines and their Implementing Rules and Regulations. The Union shall absolve
the Company from any and all liabilities, pecuniary or otherwise, and responsibilities to any employee or worker who is dismissed or terminated in pursuant thereof.

4. Casio, et al. were regular employees of GMC with daily earnings ranging from P173.75 to P201.50, and length of
service varying from eight to 25 years. Casio was elected IBM-Local 31 President for a three-year term in June
1991, while his co-respondents were union shop stewards.
5. In a letter ated February 24, 1992, Rodolfo Gabiana (Gabiana), the IBM Regional Director for Visayas and
Mindanao, furnished Casio, et al. with copies of the Affidavits of GMC employees Basilio Inoc and Juan Potot,
charging Casio, et al. with acts inimical to the interest of the union. Through the same letter, Gabiana gave Casio,
et al. three days from receipt thereof within which to file their answers or counter-affidavits. However, Casio, et al.
refused to acknowledge receipt of Gabianas letter.
6. February 29, 1992: Pino, et al., as officers and members of the IBM-Local 31, issued a Resolution expelling Casio,
et al. from the union.
7. Gabiana then wrote a letter dated March 10, 1992, addressed to Eduardo Cabahug (Cabahug), GMC VicePresident for Engineering and Plant Administration, informing the company of the expulsion of Casio, et al. from
the union pursuant to the Resolution dated February 29, 1992 of IBM-Local 31 officers and board members.
Gabiana likewise requested that Casio, et al. be immediately dismissed from their work for the interest of
industrial peace in the plant. He sent another letter dated March 19, 1992, inquiring from Cabahug why Casio, et
al. were still employed with GMC despite the request of IBM-Local 31 that Casio, et al. be immediately dismissed
from service pursuant to the closed shop provision in the existing CBA. Gabiana reiterated the demand of IBMLocal 31 that GMC dismiss Casio, et al., with the warning that failure of GMC to do so would constitute gross
violation of the existing CBA and constrain the union to file a case for unfair labor practice against GMC.
8. Pressured by the threatened filing of a suit for unfair labor practice, GMC acceded to Gabianas request to
terminate the employment of Casio, et al. GMC issued a Memorandum dated March 24, 1992 terminating the
employment of Casio, et al. effective April 24, 1992 and placing the latter under preventive suspension for the
meantime.
9. March 27, 1992: Casio, et al., in the name of IBM-Local 31, filed a Notice of Strike with the NCMB-Regional
Office No. VII (NCMB-RO). Casio, et al. alleged as bases for the strike the illegal dismissal of union officers and
members, discrimination, coercion, and union busting. The NCMB-RO held conciliation proceedings, but no
settlement was reached among the parties.
10. Casio et al filed a Complaint against GMC and Pino, et al. for unfair labor practice, particularly, the termination of
legitimate union officers, illegal suspension, illegal dismissal, and moral and exemplary damages with the NLRC.
11. Labor Arbiter dismissed case because NLRC case did not did not undergo voluntary arbitration -> Prior to
undergoing voluntary arbitration before the NCMB-RO, parties agreed to submit case to grievance machinery ->
was not held so NCMB Voluntary Arbitrator Canonoy-Morada assumed jurisdiction over the same (VA Case No.
AC 389-01-01-95)
12. Voluntary Arbitrator Canonoy-Morada rendered on August 16, 1995 a Voluntary Arbitration Award dismissing the
Complaint in VA Case No. AC 389-01-01-95 for lack of merit, but granting separation pay and attorneys fees to
Casio, et al.
13. CA granted petition for certiorari and set aside the Voluntary Arbitration Award while the dismissal of Casio, et
al., was made by GMC pursuant to a valid closed shop provision under the CBA, the company, however, failed to
observe the elementary rules of due process in implementing the said dismissal.

ISSUE(S): Whether the CA committed grave abuse of discretion amounting to lack of or excess of jurisdiction when it set
aside the Voluntary Arbitration Award and ordered the reinstatement and full backwages to Casio et. al?
HELD: NO. In terminating the employment of an employee by enforcing the union security clause, the employer needs
only to determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the enforcement
of the union security provision in the CBA; and (3) there is sufficient evidence to support the decision of the union to expel
the employee from the union. These requisites constitute just cause for terminating an employee based on the union
security provision of the CBA (3rd requisite is not complied with)
RATIO:

1. The Court agrees with the Court of Appeals. The dismissal of Casio, et al. was indeed illegal, having been done
without just cause and the observance of procedural due process.

2. In Alabang Country Club, Inc. v. National Labor Relations Commission, the Court laid down the grounds for
which an employee may be validly terminated, thus:
Under the Labor Code, an employee may be validly terminated on the following grounds: (1) just causes under
Art. 282; (2) authorized causes under Art. 283; (3) termination due to disease under Art. 284, and (4) termination by the
employee or resignation under Art. 285.
Another cause for termination is dismissal from employment due to the enforcement of the union security
clause in the CBA

3. Union security is a generic term, which is applied to and comprehends closed shop, union shop, maintenance of

4.

5.
6.

7.

8.

membership, or any other form of agreement which imposes upon employees the obligation to acquire or retain
union membership as a condition affecting employment. There is union shop when all new regular employees are
required to join the union within a certain period as a condition for their continued employment. There is
maintenance of membership shop when employees, who are union members as of the effective date of the
agreement, or who thereafter become members, must maintain union membership as a condition for continued
employment until they are promoted or transferred out of the bargaining unit or the agreement is terminated. A
closed shop, on the other hand, may be defined as an enterprise in which, by agreement between the employer and
his employees or their representatives, no person may be employed in any or certain agreed departments of the
enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member in good standing
of a union entirely comprised of or of which the employees in interest are a part.
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 interest vis--vis the employer.
Moreover, a stipulation 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.
In terminating the employment of an employee by enforcing the union security clause, the employer needs only to
determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the
enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to support the decision
of the union to expel the employee from the union. These requisites constitute just cause for terminating an
employee based on the union security provision of the CBA.
There is no question that in the present case, the CBA between GMC and IBM-Local 31 included a maintenance of
membership and closed shop clause as can be gleaned from Sections 3 and 6 of Article II. IBM-Local 31, by
written request, can ask GMC to terminate the employment of the employee/worker who failed to maintain its
good standing as a union member. It is similarly undisputed that IBM-Local 31, through Gabiana, the IBM
Regional Director for Visayas and Mindanao, twice requested GMC, in the letters dated March 10 and 19, 1992, to
terminate the employment of Casio, et al. as a necessary consequence of their expulsion from the union. It is the
third requisite that there is sufficient evidence to support the decision of IBM-Local 31 to expel Casio, et al. which
appears to be lacking in this case.
It is apparent from the aforequoted letter that GMC terminated the employment of Casio, et al. relying upon the
Resolution dated February 29, 1992 of Pino, et al. expelling Casio, et al. from IBM-Local 31; Gabianas Letters

dated March 10 and 19, 1992 demanding that GMC terminate the employment of Casio, et al. on the basis of the
closed shop clause in the CBA; and the threat of being sued by IBM-Local 31 for unfair labor practice. The letter
made no mention at all of the evidence supporting the decision of IBM-Local 31 to expel Casio, et al. from
the union. GMC never alleged nor attempted to prove that the company actually looked into the evidence of
IBM-Local 31 for expelling Casio, et al. and made a determination on the sufficiency thereof. Without such
a determination, GMC cannot claim that it had terminated the employment of Casio, et al. for just cause.
9. The failure of GMC to make a determination of the sufficiency of evidence supporting the decision of IBM-Local
31 to expel Casio, et al. is a direct consequence of the non-observance by GMC of procedural due process in the
dismissal of employees.
***Due process part
The twin requirements of notice and hearing constitute the essential elements of procedural due process. The law requires
the employer to furnish the employee sought to be dismissed with two written notices before termination of employment
can be legally effected: (1) a written notice apprising the employee of the particular acts or omissions for which his
dismissal is sought in order to afford him an opportunity to be heard and to defend himself with the assistance of counsel,
if he desires, and (2) a subsequent notice informing the employee of the employers decision to dismiss him. This procedure
is mandatory and its absence taints the dismissal with illegality.
Irrefragably, GMC cannot dispense with the requirements of notice and hearing before dismissing Casio, et al. even when
said dismissal is pursuant to the closed shop provision in the CBA. The rights 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 are 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 hence dismissal
from his job
In the case at bar, Casio, et al. did not receive any other communication from GMC, except the written notice of
termination dated March 24, 1992. GMC, by its own admission, did not conduct a separate and independent investigation
to determine the sufficiency of the evidence supporting the expulsion of Casio, et al. by IBP-Local 31. It straight away
acceded to the demand of IBP-Local 31 to dismiss Casio, et al.
042 PICOP RESOURCES, INCORPORATED (PRI) v. AUTHOR:
ANACLETO L. TAECA, GEREMIAS S. TATO, NOTES: (if applicable)
JAIME N. CAMPOS, MARTINIANO A. MAGAYON,
JOSEPH B. BALGOA, MANUEL G. ABUCAY,
MOISES
M.
ALBARAN,
MARGARITO
G.
ALICANTE, JERRY ROMEO T. AVILA, LORENZO
D. CANON, RAUL P. DUERO, DANILO Y. ILAN,
MANUEL M. MATURAN, JR., LUISITO R. POPERA,
CLEMENTINO C. QUIMAN, ROBERTO Q. SILOT,
CHARLITO D. SINDAY, REMBERT B. SUZON
ALLAN J. TRIMIDAL, and NAMAPRI-SPFL,
G.R. No. 160828, August 9, 2010
TOPIC: Union Security Clause
PONENTE: PERALTA, J.:
FACTS:

1. February 13, 2001, respondents filed filed a Complaint for unfair labor practice, illegal dismissal and money
claims against petitioner PICOP Resources, Incorporated (PRI), Wilfredo Fuentes (in his capacity as PRI's Vice
President/Resident Manager), Atty. Romero Boniel (in his capacity as PRI's Manager of Legal/Labor), Southern
Philippines Federation of Labor (SPFL), Atty. Wilbur T. Fuentes (in his capacity as Secretary General of SPFL),
Pascasio Trugillo (in his capacity as Local President of Nagkahiusang Mamumuo sa PICOP Resources, Inc.SPFL [NAMAPRI-SPFL]) and Atty. Proculo Fuentes, Jr. (in his capacity as National President of SPFL).
2. Respondents were regular rank-and-file employees of PRI and bona fide members of Nagkahiusang Mamumuo sa
PRI Southern Philippines Federation of Labor (NAMAPRI-SPFL), which is the collective bargaining agent for the

rank-and-file employees of petitioner PRI.

3. PRI has a collective bargaining agreement (CBA) with NAMAPRI-SPFL for a period of five (5) years from May
22, 1995 until May 22, 2000.
The CBA contained the following union security provisions:
Article II- Union Security and Check-Off
Section 6. Maintenance of membership.
6.1All employees within the appropriate bargaining unit who are members of the UNION at the time of the signing of this
AGREEMENT shall, as a condition of continued employment by the COMPANY, maintain their membership in the UNION in good standing
during the effectivity of this AGREEMENT.
6.2Any employee who may hereinafter be employed to occupy a position covered by the bargaining unit shall be advised by the
COMPANY that they are required to file an application for membership with the UNION within thirty (30) days from the date his appointment
shall have been made regular.
6.3The COMPANY, upon the written request of the UNION and after compliance with the requirements of the New Labor Code,
shall give notice of termination of services of any employee who shall fail to fulfill the condition provided in Section 6.1 and 6.2 of this Article,
but it assumes no obligation to discharge any employee if it has reasonable grounds to believe either that membership in the UNION was not
available to the employee on the same terms and conditions generally applicable to other members, or that membership was denied or terminated
for reasons other than voluntary resignation or non-payment of regular union dues. Separation under the Section is understood to be for cause,
consequently, the dismissed employee is not entitled to separation benefits provided under the New Labor Code and in this AGREEMENT

4. May 16, 2000, Atty. Fuentes sent a letter to the management of PRI demanding the termination of employees who
allegedly campaigned for, supported and signed the Petition for Certification Election of the Federation of Free
Workers Union (FFW) during the effectivity of the CBA. NAMAPRI-SPFL considered said act of campaigning for
and signing the petition for certification election of FFW as an act of disloyalty and a valid basis for termination
for a cause in accordance with its Constitution and By-Laws, and the terms and conditions of the CBA,
specifically Article II, Sections 6.1 and 6.2 on Union Security Clause.
5. In a letter dated May 23, 2000, Mr. Pascasio Trugillo requested the management of PRI to investigate those union
members who signed the Petition for Certification Election of FFW during the existence of their CBA.
NAMAPRI-SPFL, likewise, furnished PRI with machine copy of the authorization letters dated March 19, 20 and
21, 2000, which contained the names and signatures of employees.
6. Acting on the May 16 and May 23, 2000 letters of the NAMAPRI-SPFL, Atty. Romero A. Boniel issued a
memorandum addressed to the concerned employees to explain in writing within 72 hours why their employment
should not be terminated due to acts of disloyalty as alleged by their Union. Within the period from May 26 to
June 2, 2000, a number of employees who were served explanation memorandum submitted their explanation,
while some did not.
7. After evaluation, in a letter dated July 12, 2000, Atty. Fuentes advised the management of PRI that the Union
found the member's explanations to be unsatisfactory. He reiterated the demand for termination, but only of 46
member-employees, including respondents.
8. October 16, 2000, PRI served notices of termination for causes to the 31 out of the 46 employees whom
NAMAPRIL-SPFL sought to be terminated on the ground of acts of disloyalty committed against it when
respondents allegedly supported and signed the Petition for Certification Election of FFW before the freedom
period during the effectivity of the CBA. A Notice dated October 21, 2000 was also served on the Department of
Labor and Employment Office (DOLE), Caraga Region.
9. Respondents then accused PRI of Unfair Labor Practice punishable under Article 248 (a), (b), (c), (d) and (e) of
the Labor Code, while Atty. Fuentes and Wilbur T. Fuentes and Pascasio Trujillo were accused of violating Article
248 (a) and (b) of the Labor Code.
10. Labor Arbiter declared the respondents dismissal to be illegal and ordered PRI to reinstate respondents to their
former or equivalent positions without loss of seniority rights and to jointly and solidarily pay their backwages.
11. NLRC reversed the decision of the Labor Arbiter; thus, declaring the dismissal of respondents from employment
as legal. -> Respondents MR denied -> Filed with CA a petition for certiorari under rule 65
12. Court of Appeals reversed and set aside the assailed Resolutions of the NLRC and reinstated the Decision dated
March 16, 2001 of the Labor Arbiter.
ISSUE(S): Whether there was just cause to terminate the employment of respondents.
HELD: NO. In terminating the employment of an employee by enforcing the union security clause, the employer needs to
determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the enforcement of the
union security provision in the CBA; and (3) there is sufficient evidence to support the decision of the union to expel the

employee from the union. These requisites constitute just cause for terminating an employee based on the union security
provision of the CBA. (Petitioner failed to satistfy 3rd requisite)
Mere signing of the authorization in support of the Petition for Certification Election of FFW on March 19, 20 and 21, or
before the freedom period, is not sufficient ground to terminate the employment of respondents inasmuch as the petition
itself was actually filed during the freedom period. Nothing in the records would show that respondents failed to maintain
their membership in good standing in the Union. Respondents did not resign or withdraw their membership from the Union
to which they belong. Respondents continued to pay their union dues and never joined the FFW.
RATIO:
Petitioners Argument
- dismissal of the respondents was valid and legal. It claimed to have acted in good faith at the instance of the
incumbent union pursuant to the Union Security Clause of the CBA.
- Citing Article 253 of the Labor Code, PRI contends that as parties to the CBA, they are enjoined to keep the status
quo and continue in full force and effect the terms and conditions of the existing CBA during the 60-day period
and/or until a new agreement is reached by the parties.

10. Union security" is a generic term, which is applied to and comprehends "closed shop," union shop," "maintenance
of membership," or any other form of agreement which imposes upon employees the obligation to acquire or retain
union membership as a condition affecting employment. There is union shop when all new regular employees are
required to join the union within a certain period as a condition for their continued employment. There is
maintenance of membership shop when employees, who are union members as of the effective date of the
agreement, or who thereafter become members, must maintain union membership as a condition for continued
employment until they are promoted or transferred out of the bargaining unit, or the agreement is terminated. A
closed shop, on the other hand, may be defined as an enterprise in which, by agreement between the employer and
his employees or their representatives, no person may be employed in any or certain agreed departments of the
enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member in good standing
of a union entirely comprised of or of which the employees in interest are a part.
11. However, in terminating the employment of an employee by enforcing the union security clause, the
employer needs to determine and prove that: (1) the union security clause is applicable; (2) the union is
requesting for the enforcement of the union security provision in the CBA; and (3) there is sufficient
evidence to support the decision of the union to expel the employee from the union. These requisites
constitute just cause for terminating an employee based on the union security provision of the CBA.
12. As to the first requisite, there is no question that the CBA between PRI and respondents included a union security
clause, specifically, a maintenance of membership as stipulated in Sections 6 of Article II, Union Security and
Check-Off. Following the same provision, PRI, upon written request from the Union, can indeed terminate the
employment of the employee who failed to maintain its good standing as a union member. Secondly, it is likewise
undisputed that NAMAPRI-SPFL, in two (2) occasions demanded from PRI, in their letters dated May 16 and 23,
2000, to terminate the employment of respondents due to their acts of disloyalty to the Union. However, as to the
third requisite, we find that there is no sufficient evidence to support the decision of PRI to terminate the
employment of the respondents.
13. PRI alleged that respondents were terminated from employment based on the alleged acts of disloyalty they
committed when they signed an authorization for the Federation of Free Workers (FFW) to file a Petition for
Certification Election among all rank-and-file employees of PRI. It contends that the acts of respondents are a
violation of the Union Security Clause, as provided in their Collective Bargaining Agreement. - > WRONG
14. Mere signing of the authorization in support of the Petition for Certification Election of FFW on March 19, 20 and
21, or before the freedom period, is not sufficient ground to terminate the employment of respondents inasmuch as
the petition itself was actually filed during the freedom period. Nothing in the records would show that
respondents failed to maintain their membership in good standing in the Union. Respondents did not resign or
withdraw their membership from the Union to which they belong. Respondents continued to pay their union dues
and never joined the FFW.
15. Significantly, petitioner's act of dismissing respondents stemmed from the latter's act of signing an authorization
letter to file a petition for certification election as they signed it outside the freedom period. However, we are
constrained to believe that an authorization letter to file a petition for certification election is different from an
actual Petition for Certification Election. Likewise, as per records, it was clear that the actual Petition for

Certification Election of FFW was filed only on May 18, 2000. Thus, it was within the ambit of the freedom
period which commenced from March 21, 2000 until May 21, 2000. Strictly speaking, what is prohibited is the
filing of a petition for certification election outside the 60-day freedom period.
16. Moreover, PRI anchored their decision to terminate respondents employment on Article 253 of the Labor Code
which states that it shall be the duty of both parties to keep the status quo and to continue in full force and effect
the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is
reached by the parties. It claimed that they are still bound by the Union Security Clause of the CBA even after the
expiration of the CBA; hence, the need to terminate the employment of respondents. Petitioner's reliance on
Article 253 is misplaced.
17. Applying Article 256 of the Labor Code, it can be said that while it is incumbent for the employer to continue to
recognize the majority status of the incumbent bargaining agent even after the expiration of the freedom period,
they could only do so when no petition for certification election was filed. The reason is, with a pending petition
for certification, any such agreement entered into by management with a labor organization is fraught with the risk
that such a labor union may not be chosen thereafter as the collective bargaining representative. The provision for
status quo is conditioned on the fact that no certification election was filed during the freedom period. Any other
view would render nugatory the clear statutory policy to favor certification election as the means of ascertaining
the true expression of the will of the workers as to which labor organization would represent them. Moreover, the
last sentence of Article 253 which provides for automatic renewal pertains only to the economic provisions of the
CBA, and does not include representational aspect of the CBA.