G.R. No.

108855 February 28, 1996

METROLAB INDUSTRIES, INC., petitioner,

vs.
HONORABLE MA. NIEVES ROLDAN-CONFESOR, in her capacity as Secretary of the Department of Labor and
Employment and METRO DRUG CORPORATION EMPLOYEES ASSOCIATION - FEDERATION OF FREE
WORKERS, respondents.

DECISION

KAPUNAN, J.:

This is a petition for certiorari under Rule 65 of the Revised Rules of Court seeking the annulment of the Resolution and
Omnibus Resolution of the Secretary of Labor and Employment dated 14 April 1992 and 25 January 1993, respectively, in
OS-AJ-04491-11 (NCMB-NCR-NS-08-595-91; NCMB-NCR-NS-09-678-91) on grounds that these were issued with grave
abuse of discretion and in excess of jurisdiction.

Private respondent Metro Drug Corporation Employees Association-Federation of Free Workers (hereinafter referred to as
the Union) is a labor organization representing the rank and file employees of petitioner Metrolab Industries, Inc. (hereinafter
referred to as Metrolab/MII) and also of Metro Drug, Inc.

On 31 December 1990, the Collective Bargaining Agreement (CBA) between Metrolab and the Union expired. The
negotiations for a new CBA, however, ended in a deadlock.

Consequently, on 23 August 1991, the Union filed a notice of strike against Metrolab and Metro Drug Inc. The parties failed to
settle their dispute despite the conciliation efforts of the National Conciliation and Mediation Board.

To contain the escalating dispute, the then Secretary of Labor and Employment, Ruben D. Torres, issued an assumption
order dated 20 September 1991, the dispositive portion of which reads, thus:

WHEREFORE, PREMISES CONSIDERED, and pursuant to Article 263 (g) of the Labor Code, as amended, this
Office hereby assumes jurisdiction over the entire labor dispute at Metro Drug, Inc. - Metro Drug Distribution Division
and Metrolab Industries, Inc.

Accordingly, any strike or lockout is hereby strictly enjoined. The Companies and the Metro Drug Corp.Employees
Association - FFW are likewise directed to cease and desist from committing any and all acts that might exacerbate
the situation.

Finally, the parties are directed to submit their position papers and evidence on the aforequoted deadlocked issues
to this office within twenty (20) days from receipt hereof.

SO ORDERED.1 (Emphasis ours.)

On 27 December 1991, then Labor Secretary Torres issued an order resolving all the disputed items in the CBA and ordered
the parties involved to execute a new CBA.

Thereafter, the union filed a motion for reconsideration.

On 27 January 1992, during the pendency of the abovementioned motion for reconsideration, Metrolab laid off 94 of its rank
and file employees.

On the same date, the Union filed a motion for a cease and desist order to enjoin Metrolab from implementing the mass
layoff, alleging that such act violated the prohibition against committing acts that would exacerbate the dispute as specifically
directed in the assumption order. 2
On the other hand, Metrolab contended that the layoff was temporary and in the exercise of its management prerogative. It
maintained that the company would suffer a yearly gross revenue loss of approximately sixty-six (66) million pesos due to the
withdrawal of its principals in the Toll and Contract Manufacturing Department. Metrolab further asserted that with the
automation of the manufacture of its product "Eskinol," the number of workers required for its production is significantly
reduced.3

Thereafter, on various dates, Metrolab recalled some of the laid off workers on a temporary basis due to availability of work in
the production lines.

On 14 April 1992, Acting Labor Secretary Nieves Confesor issued a resolution declaring the layoff of Metrolab's 94 rank and
file workers illegal and ordered their reinstatement with full backwages. The dispositive portion reads as follows:

WHEREFORE, the Union's motion for reconsideration is granted in part, and our order of 28 December 1991 is
affirmed subject to the modifications in allowances and in the close shop provision. The layoff of the 94 employees at
MII is hereby declared illegal for the failure of the latter to comply with our injunction against committing any act
which may exacerbate the dispute and with the 30-day notice requirement. Accordingly, MII is hereby ordered to
reinstate the 94 employees, except those who have already been recalled, to their former positions or substantially
equivalent, positions with full backwages from the date they were illegally laid off on 27 January 1992 until actually
reinstated without loss of seniority rights and other benefits. Issues relative to the CBA agreed upon by the parties
and not embodied in our earlier order are hereby ordered adopted for incorporation in the CBA. Further, the
dispositions and directives contained in all previous orders and resolutions relative to the instant dispute, insofar as
not inconsistent herein, are reiterated. Finally, the parties are enjoined to cease and desist from committing any act
which may tend to circumvent this resolution.

SO RESOLVED. 4

On 6 March 1992, Metrolab filed a Partial Motion for Reconsideration alleging that the layoff did not aggravate the dispute
since no untoward incident occurred as a result thereof. It, likewise, filed a motion for clarification regarding the constitution of
the bargaining unit covered by the CBA.

On 29 June 1992, after exhaustive negotiations, the parties entered into a new CBA. The execution, however, was without
prejudice to the outcome of the issues raised in the reconsideration and clarification motions submitted for decision to the
Secretary of Labor. 5

Pending the resolution of the aforestated motions, on 2 October 1992, Metrolab laid off 73 of its employees on grounds of
redundancy due to lack of work which the union again promptly opposed on 5 October 1992.

On 15 October 1992, Labor Secretary Confesor again issued a cease and desist order. Metrolab moved for a
reconsiderations.6

On 25 January 1993, Labor Secretary Confesor issued the assailed Omnibus Resolution containing the following orders:

xxx xxx xxx

1. MII's motion for partial reconsideration of our 14 April 1992 resolution specifically that portion thereof assailing our
ruling that the layoff of the 94 employees is illegal, is hereby denied. MII is hereby ordered to pay such employees
their full backwages computed from the time of actual layoff to the time of actual recall;

2. For the parties to incorporate in their respective collective bargaining agreements the clarifications herein
contained; and

3. MII's motion for reconsideration with respect to the consequences of the second wave of layoff affecting 73
employees, to the extent of assailing our ruling that such layoff tended to exacerbate the dispute, is hereby denied.
But inasmuch as the legality of the layoff was not submitted for our resolution and no evidence had been adduced
 upon which a categorical finding thereon can be based, the same is hereby referred to the NLRC for its appropriate
action.

Finally, all prohititory injunctions issued as a result of our assumption of jurisdiction over this dispute are hereby
lifted.

SO RESOLVED.7

Labor Secretary Confesor also ruled that executive secretaries are excluded from the closed-shop provision of the CBA, not
from the bargaining unit.

On 4 February 1993, the Union filed a motion for execution. Metrolab opposed. Hence, the present petition forcertiorari with
application for issuance of a Temporary Restraining Order.

On 4 March 1993, we issued a Temporary Restraining Order enjoining the Secretary of Labor from enforcing and
implementing the assailed Resolution and Omnibus Resolution dated 14 April 1992 and 25 January 1993, respectively.

In its petition, Metrolab assigns the following errors:

A.

THE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND EMPLOYMENT COMMITTED GRAVE ABUSE
OF DISCRETION AND EXCEEDED HER JURISDICTION IN DECLARING THE TEMPORARY LAYOFF ILLEGAL,
AND ORDERING THE REINSTATEMENT AND PAYMENT OF BACKWAGES TO THE AFFECTED EMPLOYEES. *

B.

THE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND EMPLOYMENT GRAVELY ABUSED HER
DISCRETION IN INCLUDING EXECUTIVE SECRETARIES AS PART OF THE BARGAINING UNIT OF RANK AND
FILE EMPLOYEES.8

Anent the first issue, we are asked to determine whether or not public respondent Labor Secretary committed grave abuse of
discretion and exceeded her jurisdiction in declaring the subject layoffs instituted by Metrolab illegal on grounds that these
unilateral actions aggravated the conflict between Metrolab and the Union who were, then, locked in a stalemate in CBA
negotiations.

Metrolab argues that the Labor Secretary's order enjoining the parties from committing any act that might exacerbate the
dispute is overly broad, sweeping and vague and should not be used to curtail the employer's right to manage his business
and ensure its viability.

We cannot give credence to Metrolab's contention.

This Court recognizes the exercise of management prerogatives and often declines to interfere with the legitimate business
decisions of the employer. However, this privilege is not absolute but subject to limitations imposed by law. 9

In PAL v. NLRC, 10 we issued this reminder:

xxx xxx xxx

. . . the exercise of management prerogatives was never considered boundless. Thus, in Cruz vs. Medina(177
SCRA 565 [1989]), it was held that management's prerogatives must be without abuse of discretion. . . .

xxx xxx xxx

 All this points to the conclusion that the exercise of managerial prerogatives is not unlimited. It is circumscribed by
limitations found in law, a collective bargaining agreement, or the general principles of fair play and
justice (University of Sto. Tomas v. NLRC, 190 SCRA 758 [1990]) . . . . (Emphasis ours.)

xxx xxx xxx

The case at bench constitutes one of the exceptions. The Secretary of Labor is expressly given the power under the Labor
Code to assume jurisdiction and resolve labor disputes involving industries indispensable to national interest. The disputed
injunction is subsumed under this special grant of authority. Art. 263 (g) of the Labor Code specifically provides that:

xxx xxx xxx

(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 return to work and the employer 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 provisionas well as with such orders as he may issue to enforce the same. . . .
(Emphasis ours.)

xxx xxx xxx

That Metrolab's business is of national interest is not disputed. Metrolab is one of the leading manufacturers and suppliers of
medical and pharmaceutical products to the country.

Metrolab's management prerogatives, therefore, are not being unjustly curtailed but duly balanced with and tempered by the
limitations set by law, taking into account its special character and the particular circumstances in the case at bench.

As aptly declared by public respondent Secretary of Labor in its assailed resolution:

xxx xxx xxx

MII is right to the extent that as a rule, we may not interfere with the legitimate exercise of management prerogatives
such as layoffs. But it may nevertheless be appropriate to mention here that one of the substantive evils which
Article 263 (g) of the Labor Code seeks to curb is the exacerbation of a labor dispute to the further detriment of the
national interest. When a labor dispute has in fact occurred and a general injunction has been issued restraining the
commission of disruptive acts, management prerogatives must always be exercise consistently with the statutory
objective. 11

xxx xxx xxx

Metrolab insists that the subject layoffs did not exacerbate their dispute with the Union since no untoward incident occurred
after the layoffs were implemented. There were no work disruptions or stoppages and no mass actions were threatened or
undertaken. Instead, petitioner asserts, the affected employees calmly accepted their fate "as this was a matter which they
had been previously advised would be inevitable. 12

After a judicious review of the record, we find no compelling reason to overturn the findings of the Secretary of Labor.

We reaffirm the doctrine that considering their expertise in their respective fields, factual findings of administrative agencies
supported by substantial evidence are accorded great respect and binds this Court. 13
The Secretary of Labor ruled, thus:

xxx xxx xxx

Any act committed during the pendency of the dispute that tends to give rise to further contentious issues or
increase the tensions between the parties should be considered an act of exacerbation. One must look at the act
itself, not on speculative reactions. A misplaced recourse is not needed to prove that a dispute has been
exacerbated. For instance, the Union could not be expected to file another notice of strike. For this would depart
from its theory of the case that the layoff is subsumed under the instant dispute, for which a notice of strike had
already been filed. On the other hand, to expect violent reactions, unruly behavior, and any other chaotic or drastic
action from the Union is to expect it to commit acts disruptive of public order or acts that may be illegal. Under a
regime of laws, legal remedies take the place of violent ones. 14

xxx xxx xxx

Protest against the subject layoffs need not be in the form of violent action or any other drastic measure. In the instant case
the Union registered their dissent by swiftly filing a motion for a cease and desist order. Contrary to petitioner's allegations
the Union strongly condemned the layoffs and threatened mass action if the Secretary of Labor fails to timely intervene:

xxx xxx xxx

3. This unilateral action of management is a blatant violation of the injunction of this Office against committing acts
which would exacerbate the dispute. Unless such act is enjoined the Union will be compelled to resort to its legal
right to mass actions and concerted activities to protest and stop the said management action. This mass layoff is
clearly one which would result in a very serious labor dispute unless this Office swiftly intervenes. 15

xxx xxx xxx

Metrolab and the Union were still in the process of resolving their CBA deadlock when petitioner implemented the subject
layoffs. As a result, motions and oppositions were filed diverting the parties', attention, delaying resolution of the bargaining
deadlock and postponing the signing of their new CBA, thereby aggravating the whole conflict.

We, likewise, find untenable Metrolab's contention that the layoff of the 94 rank-and-file employees was temporary, despite
the recall of some of the laid off workers.

If Metrolab intended the layoff of the 94 workers to be temporary, it should have plainly stated so in the notices it sent to the
affected employees and the Department of Labor and Employment. Consider the tenor of the pertinent portions of the layoff
notice to the affected employees:

xxx xxx xxx

Dahil sa mga bagay na ito, napilitan ang ating kumpanya na magsagawa ng "lay-off" ng mga empleyado sa Rank &
File dahil nabawasan ang trabaho at puwesto para sa kanila. Marami sa atin ang kasama sa "lay-off" dahil wala
nang trabaho para sa kanila. Mahirap tanggapin ang mga bagay na ito subalit kailangan nating gawin dahil hindi
kaya ng kumpanya ang magbayad ng suweldo kung ang empleyado ay walang trabaho. Kung tayo ay patuloy na
magbabayad ng suweldo, mas hihina ang ating kumpanya at mas marami ang maaaring maapektuhan.

Sa pagpapatupad ng "lay-off" susundin natin ang LAST IN-FIRST OUT policy. Ang mga empleyadong may
pinakamaikling serbisyo sa kumpanya ang unang maaapektuhan. Ito ay batay na rin sa nakasaad sa ating CBA na
ang mga huling pumasok sa kumpanya ang unang masasama sa "lay-off" kapag nagkaroon ng ganitong mga
kalagayan.

Ang mga empleyado na kasama sa "lay-off" ay nakalista sa sulat na ito. Ang umpisa ng lay-off ay sa Lunes, Enero
27. Hindi na muna sila papasok sa kumpanya. Makukuha nila ang suweldo nila sa Enero 30, 1992.
 Hindi po natin matitiyak kung gaano katagal ang "lay-off", ngunit ang aming tingin ay matatagalan bago maakaroon
na dagdag na trabaho. Dahil dito, sinimulan na namin ang isang "Redundancy Program" sa mga
supervisors. Mabawasan ang mga puwesto para sa kanila, kaya sila ay mawawalan ng trabaho at bibigyan na ng
redundancy pay. 16 (Emphasis ours.)

xxx xxx xxx

We agree with the ruling of the Secretary of Labor, thus:

xxx xxx xxx

. . . MII insists that the layoff in question is temporary not permanent. It then cites International
Hardware,Inc. vs. NLRC, 176 SCRA 256, in which the Supreme Court held that the 30-day notice required under
Article 283 of the Labor Code need not be complied with if the employer has no intention to permanently severe (sic)
the employment relationship.

We are not convinced by this argument. International Hardware involves a case where there had been a reduction of
workload. Precisely to avoid laying off the employees, the employer therein opted to give them work on a rotating
basis. Though on a limited scale, work was available. This was the Supreme Court's basis for holding that there was
no intention to permanently severe (sic) the employment relationship.

Here, there is no circumstance at all from which we can infer an intention from MII not to sever the employment
relationship permanently. If there was such an intention, MII could have made it very clear in the notices of layoff.
But as it were, the notices are couched in a language so uncertain that the only conclusion possible is the
permanent termination, not the continuation, of the employment relationship.

MII also seeks to excuse itself from compliance with the 30-day notice with a tautology. While insisting that there is
really no best time to announce a bad news, (sic) it also claims that it broke the bad news only on 27 January 1992
because had it complied with the 30-day notice, it could have broken the bad news on 02 January 1992, the first
working day of the year. If there is really no best time to announce a bad news (sic), it wouldn't have mattered if the
same was announced at the first working day of the year. That way, MII could have at least complied with the
requirement of the law. 17

The second issue raised by petitioner merits our consideration.

In the assailed Omnibus Resolution, Labor Secretary Confesor clarified the CBA provisions on closed-shop and the scope of
the bargaining unit in this wise:

xxx xxx xxx

Appropriateness of the bargaining unit.

xxx xxx xxx

Exclusions. In our 14 April 1992 resolution, we ruled on the issue of exclusion as follows:

These aside, we reconsider our denial of the modifications which the Union proposes to introduce on the
close shop provision. While we note that the provision as presently worded has served the relationship of
the parties well under previous CBA'S, the shift in constitutional policy toward expanding the right of all
workers to self-organization should now be formally by the parties, subject to the following exclusions only:

1. Managerial employees; and

 2. The executive secretaries of the President, Executive Vice-President, Vice-President, Vice-President for
Sales, Personnel manager, and Director for Corporate Planning who may have access to vital labor
relations information or who may otherwise act in a confidential capacity to persons who determine or
formulate management policies.

The provisions of Article I (b) and Attachment I of the 1988-1990 CBA shall thus be modified consistently
with the foregoing.

Article I (b) of the 1988-1990 CBA provides:

b) Close Shop. - All Qualified Employees must join the Association immediately upon regularization as a
condition for continued employment. This provision shall not apply to: (i) managerial employees who are
excluded from the scope of the bargaining unit; (ii) the auditors and executive secretaries of senior
executive officers, such as, the President, Executive Vice-President, Vice-President for Finance, Head of
Legal, Vice-President for Sales, who are excluded from membership in the Association; and (iii) those
employees who are referred to in Attachment I hereof, subject, however, to the application of the provision
of Article II, par. (b) hereof. Consequently, the above-specified employees are not required to join the
Association as a condition for their continued employment.

On the other hand, Attachment I provides:

Exclusion from the Scope of the Close Shop Provision.

The following positions in the Bargaining Unit are not covered by the Close Shop provision of the CBA
(Article I, par. b):

1. Executive Secretaries of Vice-Presidents, or equivalent positions.

2. Executive Secretary of the Personnel Manager, or equivalent Positions.

3. Executive Secretary, of the Director for Corporate Planning, or equivalent positions.

4. Some personnel in the Personnel Department, EDP Staff at Head Office, Payroll Staff at Head office,
Accounting Department at Head Office, and Budget Staff, who because of the nature of their duties and
responsibilities need not join the Association as a condition for their employment.

5. Newly-hired secretaries of Branch Managers and Regional Managers.

Both MDD and MII read the exclusion of managerial employees and executive secretaries in our 14 April 1992
resolution as exclusion from the bargaining unit. They point out that managerial employees are lumped under one
classification with executive secretaries, so that since the former are excluded from the bargaining unit, so must the
latter be likewise excluded.

This reading is obviously contrary to the intent of our 14 April 1992 resolution. By recognizing the expanded scope of
the right to self-organization, our intent was to delimit the types of employees excluded from the close shop
provision, not from the bargaining unit, to executive secretaries only. Otherwise, the conversion of the exclusionary
provision to one that refers to the bargaining unit from one that merely refers to the close shop provision would
effectively curtail all the organizational rights of executive secretaries.

The exclusion of managerial employees, in accordance with law, must therefore still carry the qualifying phrase
"from the bargaining unit", in Article I (b) (i) of the 1988-1990 CBA. In the same manner, the exclusion of executive
secretaries should be read together with the qualifying phrase "are excluded from membership in the Association" of
the same Article and with the heading of Attachment I. The latter refers to "Exclusions from Scope of Close Shop
 Provision" and provides that "[t]he following positions in Bargaining Unit are not covered by the close shop provision
of the CBA."

The issue of exclusion has different dimension in the case of MII. In an earlier motion for clarification, MII points out
that it has done away with the positions of Executive Vice-President, Vice-President for Sales, and Director for
Corporate Planning. Thus, the foregoing group of exclusions is no longer appropriate in its present organizational
structure. Nevertheless, there remain MII officer positions for which there may be executive secretaries. These
include the General Manager and members of the Management Committee, specifically i) the Quality Assurance
Manager; ii) the Product Development Manager; iii) the Finance Director; iv) the Management System Manager; v)
the Human Resources Manager; vi) the Marketing Director; vii) the Engineering Manager., viii) the Materials
Manager; and ix) the Production Manager.

xxx xxx xxx

The basis for the questioned exclusions, it should be noted, is no other than the previous CBA between MII and the
Union. If MII had undergone an organizational restructuring since then, this is a fact to which we have never been
made privy. In any event, had this been otherwise the result would have been the same. To repeat, we limited the
exclusions to recognize the expanded scope of the right to self-organization as embodied in the Constitution. 18

Metrolab, however, maintains that executive secretaries of the General Manager and the executive secretaries of the Quality
Assurance Manager, Product Development Manager, Finance Director, Management System Manager, Human Resources
Manager, Marketing Director, Engineering Manager, Materials Manager and Production Manager, who are all members of the
company's Management Committee should not only be exempted from the closed-shop provision but should be excluded
from membership in the bargaining unit of rank and file employees as well on grounds that their executive secretaries are
confidential employees, having access to "vital labor information." 19

We concur with Metrolab.

Although Article 245 of the Labor Code 20 limits the ineligibility to join, form and assist any labor organization to managerial
employees, jurisprudence has extended this prohibition to confidential employees or those who by reason of their positions
or nature of work are required to assist or act in a fiduciary manner to managerial employees and hence, are likewise privy to
sensitive and highly confidential records.

The rationale behind the exclusion of confidential employees from the bargaining unit of the rank and file employees and
their disqualification to join any labor organization was succinctly discussed in Philips Industrial Development v. NLRC: 21

xxx xxx xxx

On the main issue raised before Us, it is quite obvious that respondent NLRC committed grave abuse of discretion in
reversing the decision of the Executive Labor Arbiter and in decreeing that PIDI's "Service Engineers, Sales Force,
division secretaries, all Staff of General Management, Personnel and Industrial Relations Department, Secretaries of
Audit, EDP and Financial Systems are included within the rank and file bargaining unit."

In the first place, all these employees, with the exception of the service engineers and the sales force personnel, are
confidential employees. Their classification as such is not seriously disputed by PEO-FFW; the five (5) previous
CBAs between PIDI and PEO-FFW explicitly considered them as confidential employees. By the very nature of their
functions, they assist and act in a confidential capacity to, or have access to confidential matters of, persons who
exercise managerial functions in the field of labor relations. As such, the rationale behind the ineligibility of
managerial employees to form, assist or join a labor union equally applies to them.

In Bulletin Publishing Co., Inc. vs. Hon. Augusto Sanchez, this court elaborated on this rationale, thus:

. . . The rationale for this inhibition has been stated to be, because if these managerial employees would
belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of
 evident conflict of interests. The union can also become company-dominated with the presence of
managerial employees in Union membership.

In Golden Farms, Inc. vs. Ferrer-Calleja, this Court explicitly made this rationale applicable to confidential
employees:

This rationale holds true also for confidential employees such as accounting personnel, radio and telegraph
operators, who having access to confidential information, may become the source of undue advantage.
Said employees may act as a spy or spies of either party to a collective bargaining agreement. This is
specially true in the present case where the petitioning Union is already the bargaining agent of the rank-
and-file employees in the establishment. To allow the confidential employees to join the existing Union of
the rank-and-file would be in violation of the terms of the Collective Bargaining Agreement wherein this kind
of employees by the nature of their functions/positions are expressly excluded.

xxx xxx xxx

Similarly, in National Association of Trade Union-Republic Planters Bank Supervisors Chapter v. Torres 22we
declared:

xxx xxx xxx

. . . As regards the other claim of respondent Bank that Branch Managers/OICs, Cashiers and Controllers
are confidential employees, having control, custody and/or access to confidential matters, e.g., the branch's
cash position, statements of financial condition, vault combination, cash codes for telegraphic transfers,
demand drafts and other negotiable instruments, pursuant to Sec. 1166.4 of the Central Bank Manual
regarding joint custody, this claim is not even disputed by petitioner. A confidential employee is one
entrusted with confidence on delicate matters, or with the custody, handling, or care and protection of the
employer's property. While Art. 245 of the Labor Code singles out managerial employees as ineligible to
join, assist or form any labor organization, under the doctrine of necessary implication, confidential
employees are similarly disqualified. . . .

xxx xxx xxx

. . . (I)n the collective bargaining process, managerial employees are supposed to be on the side of the
employer, to act as its representatives, and to see to it that its interest are well protected. The employer is
not assured of such protection if these employees themselves are union members. Collective bargaining in
such a situation can become one-sided. It is the same reason that impelled this Court to consider the
position of confidential employees as included in the disqualification found in Art. 245 as if the
disqualification of confidential employees were written in the provision. If confidential employees could
unionize in order to bargain for advantages for themselves, then they could be governed by their own
motives rather than the interest of the employers. Moreover, unionization of confidential employees for the
purpose of collective bargaining would mean the extension of the law to persons or individuals who are
supposed to act "in the interest of the employers. It is not farfetched that in the course of collective
bargaining, they might jeopardize that interest which they are duty-bound to protect. . . .

xxx xxx xxx

And in the latest case of Pier 8 Arrastre & Stevedoring Services, Inc. vs. Roldan-Confesor, 23 we ruled that:

xxx xxx xxx

Upon the other hand, legal secretaries are neither managers nor supervisors. Their work is basically routinary and
clerical. However, they should be, differentiated from rank-and-file employees because they are tasked with, among
others, the typing of legal documents, memoranda and correspondence, the keeping of records and files, the giving
 of and receiving notices, and such other duties as required by the legal personnel of the corporation. Legal
secretaries therefore fall under the category of confidential employees. . . .

xxx xxx xxx

We thus hold that public respondent acted with grave abuse of discretion in not excluding the four foremen and legal
secretary from the bargaining unit composed of rank-and-file employees.

xxx xxx xxx

In the case at bench, the Union does not disagree with petitioner that the executive secretaries are confidential employees. It
however, makes the following contentions:

xxx xxx xxx

There would be no danger of company domination of the Union since the confidential employees would not be
members of and would not participate in the decision making processes of the Union.

Neither would there be a danger of espionage since the confidential employees would not have any conflict of
interest, not being members of the Union. In any case, there is always the danger that any employee would leak
management secrets to the Union out of sympathy for his fellow rank and filer even if he were not a member of the
union nor the bargaining unit.

Confidential employees are rank and file employees and they, like all the other rank and file employees, should be
granted the benefits of the Collective Bargaining Agreement. There is no valid basis for discriminating against them.
The mandate of the Constitution and the Labor Code, primarily of protection to Labor, compels such conclusion. 24

xxx xxx xxx

The Union's assurances fail to convince. The dangers sought to be prevented, particularly the threat of conflict of, interest
and espionage, are not eliminated by non-membership of Metrolab's executive secretaries or confidential employees in the
Union. Forming part of the bargaining unit, the executive secretaries stand to benefit from any agreement executed between
the Union and Metrolab. Such a scenario, thus, gives rise to a potential conflict between personal interests and their duty as
confidential employees to act for and in behalf of Metrolab. They do not have to be union members to affect or influence
either side.

Finally, confidential employees cannot be classified as rank and file. As previously discussed, the nature of employment of
confidential employees is quite distinct from the rank and file, thus, warranting a separate category. Excluding confidential
employees from the rank and file bargaining unit, therefore, is not tantamount to discrimination.

WHEREFORE, premises considered, the petition is partially GRANTED. The resolutions of public respondent Secretary of
Labor dated 14 April 1992 and 25 January 1993 are hereby MODIFIED to the extent that executive secretaries of petitioner
Metrolab's General Manager and the executive secretaries of the members of its Management Committee are excluded from
the bargaining unit of petitioner's rank and file employees.

SO ORDERED.

G.R. No. L-30241 June 30, 1972

MACTAN WORKERS UNION and TOMAS FERRER, as President thereof, plaintiffs-appellees,
vs.
DON RAMON ABOITIZ, President, Cebu Shipyard & Engineering Works, Inc.; EDDIE LIM, as Treasurer; JESUS
DIAGO, Superintendent of the aforesaid corporation; WILFREDO VIRAY, as Resident Manager of the Shipyard &
Engineering Works, Inc.; and the CEBU SHIPYARD & ENGINEERING WORKS, INC., defendants-appellees;
ASSOCIATION LABOR UNION, intervenor-appellant.

Andales Law Office for plaintiffs-appellees.

Pedro B. Uy Calderon for defendants-appellees.

Seno, Mendoza & Associates for intervenor-appellant.

FERNANDO, J.:p

The dispute in this appealed decision from the Court of First Instance of Cebu on questions of law is between plaintiff Mactan
Workers Union 1 and intervenor Associated Labor Union. The former in its complaint on behalf of seventy-two of its
members working in defendant corporation, Cebu Shipyard and Engineering Works, Inc. 2 did file a money claim in the
amount of P4,035.82 representing the second installment of a profit-sharing agreement under a collective bargaining
contract entered into between such business firm and intervenor labor union as the exclusive collective bargaining
representative of its workers. The plaintiff was successful both in the City Court of Lapulapu where such complaint was
first started as well as in the Court of First Instance of Cebu. It is from the decision of the latter court, rendered on
February 22, 1968, that this appeal was interposed by intervenor Associated Labor Union. It must have been an
awareness on appellant's part that on the substantive aspect, the claim of plaintiff to what was due its members under
such collective bargaining agreement was meritorious that led it to rely on alleged procedural obstacles for the reversal
sought. Intervenor, however, has not thereby dented the judgment. As will be more fully explained, there are no
applicable procedural doctrines that stand in the way of plaintiff's suit. We affirm.

The facts are not in dispute. According to the decision: "From the evidence presented it appears that the defendant Cebu
Shipyard & Engineering Works, Inc. in Lapulapu City is employing laborers and employees belonging to two rival labor
unions. Seventy-two of these employees or laborers whose names appear in the complaint are affiliated with the Mactan
Workers Union while the rest are members of the intervenor Associated Labor Union. On November 28, 1964, the defendant
Cebu Shipyard & Engineering Works, Inc. and the Associated Labor Union entered into a 'Collective Bargaining
Agreement' ... the pertinent part of which, Article XIII thereof, [reads thus]: '... The [Company] agrees to give a profit-sharing
bonus to its employees and laborers to be taken from ten per cent (10%) of its net profits or net income derived from the
direct operation of its shipyard and shop in Lapulapu City and after deducting the income tax and the bonus annually given to
its General Manager and the Superintendent and the members of the Board of Directors and Secretary of the Corporation, to
be payable in two (2) installments, the first installment being payable in March and the second installment in June, each year
out of the profits in agreement. In the computation of said ten per cent (10%) to [be] distributed as a bonus among the
employees and laborers of the [Company] in proportion to their salaries or wages, only the income derived by the [Company]
from the direct operation of its shipyard and shop in Lapulapu City, as stated herein-above-commencing from the earnings
during the year 1964, shall be included. Said profit-sharing bonus shall be paid by the [Company] to [Associated Labor
Union] to be delivered by the latter to the employees and laborers concerned and it shall be the duty of the Associated Labor
Union to furnish and deliver to the [Company] the corresponding receipts duly signed by the laborers and employees entitled
to receive the profit-sharing bonus within a period of sixty (60) days from the date of receipt by [it] from the [Company] of the
profit-sharing bonus. If a laborer or employee of the [Company] does not want to accept the profit-sharing bonus which the
said employee or laborer is entitled under this Agreement, it shall be the duty of the [Associated Labor Union] to return the
money received by [it] as profit-sharing bonus to the [Company] within a period of sixty (60) days from the receipt by the
[Union] from the [Company] of the said profit-sharing bonus.'" 3 The decision went on to state: "In compliance with the said
collective bargaining agreement, in March, 1965 the defendant Cebu Shipyard & Engineering Works, Inc. delivered to
the ALU for distribution to the laborers or employees working with the defendant corporation to the profit-sharing bonus
corresponding to the first installment for the year 1965. Again in June 1965 the defendant corporation delivered to the
Associated Labor Union the profit-sharing bonus corresponding to the second installment for 1965. The members of
the Mactan Workers Union failed to receive their shares in the second installment of bonus because they did not like to
go to the office of the ALU to collect their shares. In accordance with the terms of the collective bargaining after 60
days, the uncollected shares of the plaintiff union members was returned by the ALU to the defendant corporation. At
the same time the defendant corporation was advised by the ALU not to deliver the said amount to the members of the
Mactan Workers Union unless ordered by the Court, otherwise the ALU will take such step to protect the interest of its
members ... . Because this warning given by the intervenor union the defendant corporation did not pay to the plaintiffs
the sum of P4,035.82 which was returned by the Associated Labor Union, but instead, deposited the said amount with
the Labor Administrator. For the recovery of this amount this case was filed with the lower court." 4

The dispositive portion of such decision follows: "[Wherefore], judgment is hereby rendered ordering the defendants to
deliver to the Associated Labor Union the sum of P4,035.82 for distribution to the employees of the defendant corporation
who are members of the Mactan Workers Union; and ordering the intervenor Associated Labor Union, immediately after
receipt of the said amount, to pay the members of the Mactan Workers Union their corresponding shares in the profit-sharing
bonus for the second installments for the year 1965." 5

It is from such a decision that an appeal was taken by intervenor Associated Labor Union. As is quite apparent on the face of
such judgment, the lower court did nothing except to require literal compliance with the terms of a collective bargaining
contract. Nor, as will be hereafter discussed, has any weakness thereof been demonstrated on the procedural questions
raised by appellant. To repeat, we have to affirm.

1. The terms and conditions of a collective bargaining contract constitute the law between the parties. Those who are entitled
to its benefits can invoke its provisions. In the event that an obligation therein imposed is not fulfilled, the aggrieved party has
the right to go to court for redress. 6 Nor does it suffice as a defense that the claim is made on behalf of non-members of
intervenor Associated Labor Union, for it is a well-settled doctrine that the benefits of a collective bargaining agreement
extend to the laborers and employees in the collective bargaining unit, including those who do not belong to the
chosen bargaining labor organization. 7 Any other view would be a discrimination on which the law frowns. It is
appropriate that such should be the case. As was held in United Restauror's Employees and Labor Union v.
Torres, 8 this Court speaking through Justice Sanchez, "the right to be the exclusive representative of all the employees
in an appropriate collective bargaining unit is vested in the labor union 'designated or selected' for such purpose 'by the
majority of the employees' in the unit concerned." 9 If it were otherwise, the highly salutory purpose and objective of the
collective bargaining scheme to enable labor to secure better terms in employment condition as well as rates of pay
would be frustrated insofar as non-members are concerned, deprived as they are of participation in whatever
advantages could thereby be gained. The labor union that gets the majority vote as the exclusive bargaining
representative does not act for its members alone. It represents all the employees in such a bargaining unit. It is not to
be indulged in any attempt on its part to disregard the rights of non-members. Yet that is what intervenor labor union
was guilty of, resulting in the complaint filed on behalf of the laborers, who were in the ranks of plaintiff Mactan Labor
Union.

The outcome was not at all unexpected. The right being clear all that had to be done was to see to its enforcement. Nor did
the lower court in the decision now on appeal, require anything else other than that set forth in the collective bargaining
agreement. All that was done was to have the covenants therein contained as to the profit-sharing scheme carried out and
respected. It would be next to impossible for intervenor Associated Labor Union to point to any feature thereof that could not
in any wise be objected to as repugnant to the provisions of the collective bargaining contract. Certainly the lower court, as
did the City Court of Lapu-lapu, restricted itself to compelling the parties to abide by what was agreed upon. How then can
the appealed decision be impugned?

2. Intervenor Associated Labor Union, laboring under such a predicament had perforce to rely on what it considered
procedural lapses. It would assail the alleged lack of a cause of action, of jurisdiction of the City Court of Lapulapu and of
personality of the Mactan Workers Union to represent its members. There is no merit to such an approach. The highly
sophisticated line of argument followed in its brief as appellant does not carry a persuasive ring. What is apparent is that
intervenor was hard put to prop up what was inherently a weak, not to say an indefensible, stand. The impression given is
that of a litigant clutching at straws.
How can the allegation of a lack of a cause of action be taken seriously when precisely there was a right violated on the part
of the members of plaintiff Mactan Workers Union, a grievance that called for redress? The assignment of error that the City
Court of Lapulapu was bereft of jurisdiction is singularly unpersuasive. The amount claimed by plaintiff Mactan Workers
Union on behalf of its members was P4,035.82 and if the damages and attorney's fees be added, the total sum was less than
P10,000.00. Section 88 of the Judiciary Act in providing for the original jurisdiction of city courts in civil cases provides: "In all
civil actions, including those mentioned in Rules fifty-nine and sixty-two (now Rules 57 and 60) of the Rules of Court, arising
in his municipality or city, and not exclusively cognizable by the Court of First Instance, the municipal judge and the judge of
a city court shall have exclusive original jurisdiction where the value of the subject matter or amount of the demand does not
exceed ten thousand pesos, exclusive of interests and costs." 10 It is true that if an element of unfair labor practice may be
discerned in a suit for the enforcement of a collective bargaining contract, then the matter is solely cognizable by the
Court of Industrial Relations. 11 It is equally true that as of the date the lower court decision was rendered, the question
of such enforcement had been held to be for the regular courts to pass upon. 12 Counsel for intervenor Associated
Labor Union was precisely the petitioner in one of the decisions of this Court, Seno v . Mendoza, 13 where such a
doctrine was reiterated. In the language of Justice Makalintal, the ponente: "As the issue involved in the instant case,
although arising from a labor dispute, does not refer to one affecting an industry which is indispensable to the national
interest and certified by the President to the Industrial Court, nor to minimum wage under the Minimum Wage Law, nor
to hours of employment under the Eight-Hour Labor Law, nor to an unfair labor practice, but seeks the enforcement of
a provision of the collective bargaining agreement, ..., jurisdiction pertains to the ordinary courts and not to the
Industrial Court." 14 There was only a half-hearted attempt, if it could be called that, to lend credence to the third error
assigned, namely that plaintiff Mactan Workers Union could not file the suit on behalf of its members. That is evident
by intervenor Associated Labor Union devoting only half a page in its brief to such an assertion. It is easy to see why it
should be thus. On its face, it certainly appeared to be oblivious of how far a labor union can go, or is expected to, in
the defense of the rights of its rank and file. There was an element of surprise, considering that such a contention
came from a labor organization, which under normal condition should be the last to lay itself open to a charge that it is
not averse to denigrating the effectiveness of labor unions.

3. This brings us to one last point. It is quite understandable that labor unions in their campaign for membership, for acquiring
ascendancy in any shop, plant, or industry would do what lies in their power to put down competing groups. The struggle is
likely to be marked with bitterness, no quarter being given or expected on the part of either side. Nevertheless, it is not to be
forgotten that what is entitled to constitutional protection is labor, or more specifically the working men and women, not labor
organizations. The latter are merely the instrumentalities through which their welfare may be promoted and fostered. That is
the raison d'etre of labor unions. The utmost care should be taken then, lest in displaying an unyielding, intransigent attitude
on behalf of their members, injustice be committed against opposing labor organizations. In the final analysis, they alone are
not the sole victims, but the labor movement itself, which may well be the recipient of a crippling blow. Moreover, while it is
equally understandable that their counsel would take advantage of every legal doctrine deemed applicable or conjure up any
defense that could serve their cause, still, as officers of the court, there should be an awareness that resort to such a
technique does result in clogged dockets, without the least justification especially so if there be insistence on flimsy and
insubstantial contentions just to give some semblance of plausibility to their pleadings. Certainly, technical virtuosity, or what
passes for it, is no substitute for an earnest and sincere desire to assure that there be justice according to law. That is a
creed to which all members of the legal profession, labor lawyers not excluded, should do their best to live by.

WHEREFORE, the decision of the lower court of February 22, 1968 is affirmed. Costs against Associated Labor Union.
G.R. No. L-33705 April 15, 1977

AIR LINE PILOTS ASSOCIATION OF THE PHILIPPINES (GASTON GROUP), petitioner,

vs.
THE COURT OF INDUSTRIAL RELATIONS and AIR LINES PILOTS ASSOCIATION OF THE PHILIPPINES (GOMEZ
GROUP), respondents.

G.R. No. L-35206 April 15, 1977

CESAR CHAVEZ, JUR FRANCISCO ACHONDOA, SERAFIN ADVINCULA, MAXIMO R. AFABLE, ALFREDO AGBULOS,
SOLOMON A. HERRERA, NEMESIO ALMARIO, JULIUS AQUINO, RENE ARELLANO, CARLITO ARRIBE FERNANDO
AYUBO GENEROSO BALTAZAR, EDDIE BATONG MALAQUE, URSO D. BELLO, TOMAS BERNALES RUDOLFO
BIDES AUGUSTO BLANCO, HORACIO BOBIS ROMEO B. BONTUYAN ANTONINO E. BUENAVENTURA, PEDRO BUNI
ISABELO BUSTAMANTE, JOSE BUSTAMANTE, RICARDO BUSTAMANTE, ERNESTO D. BUZON TRANQUILINO CABE
ISIDORO CALLEJA, CESAR CARETA FERNANDO CARAG, ROGELIO CASINO, JOSE CASTILLO, NICANOR
CASTILLO, RAFAEL CASTRO, JOSE DE LA CONCEPCION, CARLOS CRUZ, WILFREDO CRUZ, MAGINOO
CUSTODIO, TOMAS DE LA JOSE DE LEON, BENJAMIN DELFIN, GREGORIO DELGADO, IRINEO DEROTAS
DUMAGUIN BENEDICTO FELICIANO, RODRIGO FRIAS JOSE GIL, ANTONIO GOMEZ, ROBERTO GONZALEZ,
BIENVENIDO GOROSPE, AMADO R. GULOY JOSE GUTIERREZ, ANTONIO IBARRETA MUSSOLINI IGNACIO,
ROBERTO INIGO MATIAS JABIER ROGELIO JARAMILLO HARRY JISON, ALBERTO JOCSON, VALENTIN LABATA
JAIME LACSON, JORGE LACSON, FRANCISCO LANSANG MENANDRO LAUREANO, JESUS LAQUINDANUM
LEONARDO LONTOC, RAUL LOPEZ, RENE LORENZO, OSBORNE LUCERO, ARISTON LUISTRO MANUEL LUKBAN,
VIRGILIO MABABA, MARIANO MAGTIBAY, EDGARDO MAJARAIS EMILIO MALLARE LEONCIO MANARANG,
ALFREDO MARBELLA, ALFREDO MARTINEZ, EDILBERTO MEDINA, CLEMENTE MIJARES, EDMUNDO MISA,
CONRADO MONTALBAN, FERNANDO NAVARRETE, EUGENIO NAVEA ERNESTO TOMAS, NIERRAS PATROCINIO
OBRA, VICTORINO ORGULLO CLEMENTE PACIS, CESAR PADILLA, ROMEO PAJARILLO RICARDO PANGILINAN,
CIRILO PAREDES, AMANDO PARIS ALBERTO PAYUMO, PEDRO PENERA FRANCISCO PEPITO, ADOLFO PEREZ,
DOMINGO POLOTAN EDUARDO RAFAEL, SANTOS RAGAZA TEODORO RAMIREZ, RAFAEL RAVENA ANTONIO
REYES, GREGORIO RODRIGUEZ, LEONARDO SALCEDO, HENRY SAMONTE, PAQUITO SAMSON, ARTHUR B.
SANTOS, ARTURO T. SANTOS ANGELES SARTE, VALERIANO SEGURA, RUBEN SERRANO, LINO SEVERINO,
ANGEL SEVILLA, BENJAMIN SOLIS, PATROCINIO TAN, RAFAEL TRIAS EDGARDO VELASCO, LORETO VERGEIRE
RUBEN VICTORINO, ALEXANDER VILLACAMPA, CAMILO VILLAGONZALO BAYANI VILLANUEVA, RIZAL
VILLANUEVA, ROMULO VILLANUEVA, ROLANDO VILLANUEVA, CARLOS VILLAREAL, and ALFONSO SAPIRAIN
AND OTHERS and AIR LINE PILOTS ASSOCIATION. OF THE PHILIPPINES (GASTON), petitioners,
vs.
THE HONORABLE JUDGES ARSENIO I. MARTINEZ, AMANDO C. BUGAYONG and JOAQUIN M. SALVADOR of the
COURT OF INDUSTRIAL RELATIONS, BEN HUR GOMEZ, claiming to represent AIR LINE PILOTS ASSOCIATION OF
THE PHILIPPINES, CARLOS ORTIZ AND OTHERS, and PHILIPPINE AIR LINES INC.,respondents.
J. C. Espinas & Associates for petitioner (Gaston Group)

Jose K. Manguiat Jr. for respondent Court, et al.

E. Morabe & Associate for respondent (Gomez Group).

CASTRO, C.J.:

These are two petitions for certiorari (L-33705 and L-35206), consolidated for purposes of decision because they involve
more or less the same parties and interlocking issues.

In L-33705 the petitioner Air Line Pilots Association of the Philippines (Gaston group) maintains that the Court of Industrial
Relations acted without jurisdiction in passing upon (1) the question of which, in a certification proceeding, between the set of
officers elected by the group of Philippine Air Lines pilots headed by Captain Felix Gaston, on the one hand, and the set of
officers elected by the group headed by Captain Ben Hur Gomez, on the other, is the duly elected set of officers of the Air
Line Pilots Association of the Philippines, and (2) the question of which, between the two groups, is entitled to the name,
office and funds of the said Association.

In L-35206 the individual petitioners (numbering 127) and the Air Line Pilots Association of the Philippines (hereinafter
referred to as ALPAP) (Gaston maintain that the industrial Court acted without jurisdiction and with grave abuse of descretion
in promulgating its resolution dated June 19, 1972 which suspended the hearing of the said petitioners' plea below for
reinstatement and/or return to work in the Philippine Air Lines (hereinafter referred to as PAL) or, alternatively, the payment of
their retirement and/or separation pay, as the case may be, until this Court, shall have decided L-33705.

L-33705

On January 2, 1971, the Air Line Pilots Association of the Philippines, represented by Ben Hur Gomez who claimed to be its
President, filed a petition with the Court of Industrial Relations praying for certification as the sole and exclusive collective
bargaining representative of "all the pilots now under employment by the Philippine Air Lines, Inc, and are on active flight
and/or operational assignments." The petition which was docketed in the sala of Judge Joaquin M. Salvador as Case 2939-
MC was opposed in the name of the same association by Felix C. Gaston (who also claimed to be its President) on the
ground that the industrial court has no jurisdiction over the subject-matter o" the petition "because a certification proceeding
in the Court of Industrial Relations is not the proper forum for the adjudication of the question as to who is the lawful
president of a legitimate labor organization."

On May 29, 1971, after hearing the petition, Judge Salvador rendered a decision certifying the

... ALPAP composed only of pilots employed by PAL with Capt. Ben Hur Gomez as its president, as the sole
and exclusive Bargaining representative of all the pilots employed by PAL and are on active flights and/or
operational assignments, and as such is entitled to all the rights and privileges of a legitimate labor
organization, including the right to its office and its union funds.

The following circumstances were cited by Judge Salvador to justify the conclusions reached by him in his decision, namely:

(a) that there has been no certification election within the Period of 12 months prior to the date the petition for certification
was filed;

(b) that the PAL entered into a collective bargaining agreement with ALPAP for "pilots in the employ of the Company" only for
the duration of the period from February 1, 1969 to January 31, 1972:
(c) that PAL pilots belonging to the Gaston, group, in defiance of court orders issued in Case 101-IPA(B) (see L-
35206, infra) retired/resigned en masse from the PAL and retired/resigned accompanied this with actual acts of not reporting
for work;

(d) that the pilots affiliated with the Gaston group tried to then deposits and other funds from the ALPAP Cooperative Credit
union on the ground that they have already retired/resigned from PAL;

(e) that some of the members of the Gaston Group joined another airline after their retirement/resignation;

(f) that the Gaston group claimed before the industrial court that the order enjoining them from retiring or resigning
constituted a violation of the prohibition against involuntary servitude (see L-35206, infra);

(g) that the contention that the mess retirement or resignation was merely an involuntary protest by those affiliated with the
Gaston group is not borne out by the evidence as, aside their aforementioned acts, the said group of pilots even filed a civil
complaint against the PAL in which the cessation of their employment with PAL was strongly expressed by them.

It appears that prior to the filing of the certification petition below, a general ALPAP membership meeting was held on
October 30, 1970, at which 221 out of 270 members adopted a resolution amending ALPAP's constitution and by-laws by
providing in a new section thereof that

Any active member who shall be forced to retire or forced to resign or otherwise terminated for union
activities as solely determine' by the Association shall have the option to either continue to be and remain
as an active member in good standing or to resign in writing his active membership with the Association. ...

According to ALPAP (Gaston), the foregoing amendment was adopted "In anticipation on the fact that they may be forced to
resign or retire because of their 'union activities.' At this period of time, PAL and ALPAP were locked in a labor dispute
certified by the President to the Industrial court and docketed as Case 101-IPA(B) (see L-35206, infra).

On December 12, 1970, despite a no-work-stoppage order of the industrial court, a substantial majority of ALPAP members
filed letters of retirement/resignation from the PAL.

Thereafter, on December 18-22, 1970, an election of ALPAP officers was held. resulting in the election of Felix C. Gaston as
President by 180 votes. Upon the other hand, on December 23, 1970, about 45 pilots who did not tender their retirement or
resignation the PAL gathered at the house of Atty. Morabe and elected Ben Hur Gomez as ALPAP President.

On June 3, 1971, ALPAP (Gaston) filed an opposition in Case 101-IPAB to an urgent ex parte motion of the PAL to enjoin the
members of ALPAP from retiring or resigning en masse It was claimed by ALPAP (Gaston) that

1. Insofar as herein oppositors are concerned, the allegations of respondent that their 'resignations' and
'retirements' are sham resignations and retirements and that 'There is no honest or genuine desire to
terminate the employee relationship with PAL are completely false. Their bona fide intention to terminate
their employer-employee relationship with PAL is conclusively shown by the fact that they have not sought
reinstatement in or re-employment by PAL and also by the fact that they are either seeking employment in
another airline company;

2. Respondent in effect recognized such bona fide intention of the herein oppositors as shown by the fact
that it accepted said resignations and retirements and did not initiate any contempt proceedings against
them; and

3. The action of herein oppositors in filing their resignations and retirements was a legitimate exercise of
their legal and constitutional rights and the same, therefore, cannot be considered as a valid ground to
deprive them of benefits which they had already earned including, among others, retirement benefits to
which they are entitled under the provisions of an existing contract between petitioner and respondent.
Such deprivation would constitute impairment of the obligations of contract.
On June 15, 1971, the industrial court en banc, acting on a motion for reconsideration filed by ALPAP (Gaston) in Case 2939-
MC against the decision of Judge Salvador, denied the same. The said court's resolution was then appealed to this Court (L-
33705).

L-35206

On October 3, 1970, the President of the Philippines certified a labor dispute between members of ALPAP and the PAL to the
Court of Industrial Relations. The dispute which had to do with union economic demands was docketed as Case No. 101-
IPA(B) and was assigned to Judge Ansberto P. Paredes.

On October 7, 1970, after conferring with both parties for two days, Judge Paredes issued a return-to-work order, the
pertinent portions of which read as follows:

PALEA and ALPAP, their officers and members, and i 11 employees who have joined the present strike
which resulted from the labor disputes certified by the President to the Court, or who have not reported for
work as a result of the strikes, are hereby ordered forthwith to call off the strikes and lift the picket lines ...
and return to work not later than Friday, October 9, 1970, and management to admit them back to work
under the same terms and conditions of employment existing before the strikes, including what has been
earlier granted herein.

PAL is ordered not to suspend, dismiss or lay-off any employee as a result of these strikes. Read into this
order is the provision of Section 19, C.A. 103, as amended, for the guidance of the parties,

xxx xxx xxx

Failure to comply with any provision of this Order shall constitute contempt of court, and the employee
failing or refusing to work by October 9, 1970, without justifiable cause, shall immediately be replaced by
PAL, and may not be reinstated without prior Court order and on justifiable grounds.

On October 10, 1970, Judge Paredes, having been informed that the strikes had not been called off, issued another order
directing the strikers to lift their pickets and return to work and explaining that his order of October 7, 1970 partook of the
nature of amandatory injunction under the doctrine laid down in Philippine Association of Free Labor Union (PAFLU) vs. Hon,
Joaquin M. Salvador, et al., (L-29471 and L-29487, September 28, 1968).

The strike, however, continued until the industrial court en banc denied, on October 19, 1970, ALPAP's motion for
reconsideration of the said orders.

On October 22, 1970, the strikers returned to work, except (according to the PAL) two pilots, one of them being Felix C.
Gaston who allegedly refused to take the flights assigned to him. Due to his refusal, among other reasons, PAL terminated
Gaston's services on October 27, 1970. His dismissal was reported to the industrial court on October 29, 1970. Thereafter,
the court a quo set the validity of Gaston's dimissal for hearing, but, on several occassions, he refused to submit his side
before the hearing examiner, claiming that his case would be prosecuted through the proper forum at the proper time.

On November 24, 1970, the PAL filed an urgent ex parte motion with the industrial court to enjoin the members of ALPAP
from proceeding with their intention to retire or resign en masse. On November 26, 1970, Judge Paredes issued an order
commanding ALAPAP members

... not to strike or in any way cause any stoppage in the operation and service of PAL, under pain of dismisal
and forfeiture of rights, and privilieges accruing to their respective employments should they disregard this
Order; and PAL is also ordered not to lockout any of such members and officers of ALPAP under pain of
contempt and cancellation of its franchise.

ALPAP filed a motion for the reconsideration of the foregoing order claiming, among other, that it subjected them to
involuntary servitude:
 It is crystal-clear that the disputed Order in effect compels the members of petiitioner to work against their
will. Stated differently, the members of petitioner association are bieng perced or forced by the Trial Court to
be in a state of slavery for the beneift of respondent corporation. In this regard, therefore, the Trial Court
grossly violated a Constitutional mandate which states:

No involuntary servitude in any form shall exist except as a punishment for c rime whereof the party shall
have been duly convicted. (Article III, Section 1 (13)).

The constitutional provision does not provide any condition as to the cause or causes of the unwillingness
to work. Suffice it to say that an employee for whatever reason of his own. cannot be compelled and forced
to work against his will.

The court a quo however, denied the foregoing motion for reconsideration on December 11, 1970.

Just the same, on December 12, 1970, a substantial majority of the members of ALPAP staged a mass resignation and/or
retirement from PAL

In vigorous protest to your provocative harrassment, unfair labor tactics, the contemptuous lockout of our
co-members and your vicious and vindictive attitude towards labor most exemplified by the illegal
termination of the services of our President, Capt, Felix C. Gaston

The mentioned individual letters of retirement/resignation were accepted by PAL on December 14, 1970, with the caveat that
the pilots concerned will not be entitled to any benefit or privilege to which they may otherwise be entitled by reason of their
employment with the PAL, as the pilots' acts constituted R violation of the November 26, 1970 order of the industrial court.

On December 28, 1970, Ben Hur Gomez, alleging that he was elected President of ALPAP by its members who did not join
the mass resignation and retirement, filed a motion in Case 101 IPA by praying that he be allowed to represent the ALPAP
which was theretofore represented by Capt. Felix Gaston because the pilots who retired or resigned from PAL ceased to be
employees Thereof and no longer have any interest in the subject-matter of the said case. This was later converted into a
motion to intervene on February 9, 1971.

On September 1, 1971, Felix Gaston filed a motion for Contempt against PAL stating that his dismissal from PAL on October
27, 1970 was without just cause and violation of the Order of the industrial court dated October 7, 1970 as well as section 19
of C.A. 103. He prayed that he be reinstated.

On October 23, 1971, twenty-one pilots who filed their retirement. from PAL filed a petition in the 'Industrial court praying also
that they be readmitted to PAL or, failing so, that they be allowed to retire with the benefits provided for under the PAL
Retirement Plan or, if they are not yet e i b e to under said Plan, that they be given separation pay, In their petition for
reinstatement, said Pilots (who were later joined by other pilots similarly situated) alleged,inter alia

1. That they are some of the employees of the respondent company and members of the petitioner union
who resigned en masse or retired en masse from the respondent after having been led to believe in good
faith by Capt. Felix Gaston who was then the uncontested president of the petitioner union and their
counsel that such a mass resignation or mass retirement was a valid exercise of their right to protest the
dismissal of Capt. Gaston in connection with the Certified dispute that was pending before the Court.

2. That later on they came to know that such a mass resignation or surpass retirement was enjoined by this
Honorable Court 'under the pain of' dismissal and forfeiting of rights and privileges accruing to their
respective employment if they disregarded such order of injunction,

3. That they did not deliberately disregard such injunction order and if they failed to comply with it within a
reasonable time, it was because they were made to believe and assured by their leader that such
resignation or retirement was a lawful exercise of concerted action that the full consequences of such act
 was not explained to them by counsel: and in addition, they were told that those who returned to the
company would be expelled from the union, and suffer the corresponding penalty.

xxx xxx xxx

ALPAP (Gomez) opposed the foregoing petitions. In this connection, the records disclose that on August 20, 1971, 89 of the
pilots who retired en masse from PAL filed a complaint with the Court of First Instance of Manila in Case 15084 for the
recovery of retirement benefits due them under the PAL Retirement Plan. The complaint was dismissed by the trial, court on
PAL's motion. The records, however, do not disclose the reason for the said dismissal.

On December 23, 1971, Judge Paredes issued an order deferring action on the motion to dismiss the petitions for
reinstatement on the ground that the matters alleged in the said petitions would required the submission of proof. ALPAP
(Gomez,) filed a motion for reconsideration of this order but the same was denied by the industrial court en banc for
being pro forma.

On February 1, 1972, ALPAP (Gaston) joined and consolidated the mentioned petitions for reinstatement, The same was
opposed by both PAL and ALPAP (Gomez),

On March 24, 1972, ALPAP (Gomez) filed a motion to suspend the proceedings in Case 101-IPA(B) until the prejudicial
question of who should prosecute the main case (Case 101-IPA) is resolved. On April 18, 1972, Judge Paredes issued an
order deferring the hearing of the main case until this Court shall have decided L-33705, but allowing other matters, including
the consolidated petition for reinstatement, to be heard.

On. May 5, 1972, ALPAP (Gomez) filed another motion to suspend the hearing on the mentioned petition for reinstatement
on the ground that this Court's decision in L-33705 should be awaited. ALPAP (Gaston) opposed that motion on the ground
that the matter had already been denied twice and the order setting the case for hearing was merely. On May 15, 1972,
Judge Paredes denied the said motion to suspend the hearing on the petition for reinstatement unless a countermanding
Order is issued by a higher Court."

On May 18, 1972, ALPAP (Gomez) filed a motion for reconsideration of Judge Paredes' order, alleging that employee status
of those who resigned or retired en masse was an issue in mentioned Case 2939-MC decision on which is still pending
consideration before Court in L-33705.

On June 19, 1972, the industrial court en banc passed a resolution reversing Judge Paredes' order on the ground that the
question of the employee status of the pilots who were seeking reinstatement with PAL has already been raised squarely in
Case 2939-MC and resolved by the said tribunal found that the said pilots have already lost their employee status as a
consequence of their resignations and/or retirement from PAL which had been duly accepted by the latter.

DISCUSSION

In 'Its brief before this Court, ALPAP (Gaston) states that it goes not question the recognition extended by PAL to ALPAP
(Gomez ) the collective bargaining agent of all PAL pilots on active flight duty. Neither does it dispute the assumption by
ALPAP (Gomez) of the authority to manage and administer the collective bargaining agreement between ALPAP and PAL
(which at any rate had expired on January 31, 1972) nor the right of ALPAP (Gomez) to negotiate and conclude any other
collective bargaining agreement with PAL. What it disputes, however, is the authorization given by the industrial court to
ALPAP (Gomez), in a certification proceeding, to take over the corporate name, office and funds of ALPAP.

This Court has always stressed that a certification proceeding is not a litigation, in the sense in which this term is ordinarily
understood, but an investigation of a non-adversary, fact finding character in which the Court of Industrial Relations plays the
part of a disinterested investigator seeking merely to ascertain the desires of employees as to the matter of their
representation (National Labor Union vs. Go Soc and Sons, 23 SCRA 436; Benguet Consolidated, Inc. vs. Bobok Lumber
Jack Ass'n., L-11029, May 23, 1958; Bulakena Restaurant and Caterer vs. C.I.R., 45 SCRA 95; LVN Pictures, Inc. vs.
Philippine Musicians Guild (FFW) and C.I.R., 1 SCRA 132). Such being the nature of a certification proceeding, we find no
cogent reason that should prevent the industrial court, in such a proceeding, from inquiring into and satisfying itself about
matters which may be relevant and crucial. though seemingly beyond the purview of such a proceeding, to the complete
realization of the well-known purposes of a certification case.

Such a situation may arise, as it did in the case at bar, where a group of pilots of a particular airline, allegedly anticipation
their forced retirement or resignation on account of strained relations with the airline arising from unfulfilled economic
demands, decided to adopt an amendment to their organization's constitution and by-laws in order to enable them to retain
their membership standing therein even after the termination of their employment with the employer concerned. The
industrial court definitely should be allowed ample discretion to secure a disclosure of circumstances which will enable it to
act fairly in a certification case.

This Court nonetheless finds, after a close and dispassionate study of the facts on record, that the industrial court's
conclusion, that the mentioned amendment to the ALPAP constitution and by-laws is illegal (a) because it was not adopted in
accordance with the procedure prescribed and (b) because member of labor organization cannot adopt an amendment to
their fundamental charter so as to include non employees (of PAL) as member, is erroneous.

We have made a careful examination of the records of L-33705 and we find the adoption of the resolution introducing the
questioned amendment to be substancial compliance with the ALPAP constitution and by-law. Indeed, there is no refutation
of the act that 221out of the 270 members of ALPAP did cast their votesin favor of the said amendment on October 30, 1970
at the ALPAP general membership meeting.

Their Court cannot likewise subcribe to the restrictive interpretation made by the court below of the term "labor organization,"
which Section 2(e) of R.A. 875 defines as any union or association of employees which exist, in whole or in part, for the
purpose of the collective bargaining or dealing with employers concerning terms and conditions of employment." The
absence of the condition which the court below would attach to the statutory concept of a labor organization, as being limited
to the employees of particular employer, is quite evident from the law. The emphasis of Industrial Peace Act is clearly on the
pourposes for which a union or association of employees established rather than that membership therein should be limited
only to the employees of a particular employer. Trite to say, under Section 2(h) of R.A 875 "representative" is define as
including "a legitimate labor organization or any officer or agent of such organization, whether or not employed by the
employer or employeewhom he represents." It cannot be overemphasized likewise that labor dispute can exist "regardless of
whether the disputants stand in the proximate relation of employer and employee. (Section 2(j), R.a. 875).

There is, furthermore, nothing in the constitution and by-laws of ALPAP which indubitably restricts membership therein to PAL
pilots alone. 1 Although according to ALPAP (Gomez there has never been an instance when a non-PAL pilot became a
member of ALPAP, the complete lack of any such precondition for ALPAP membership cannot but be interpreted as an
unmistakable authority for the association to accept pilots into its fold though they may not be under PAL's employ.

The fundamental assumptions relied upon by the industrial court as bases for authorizing ALPAP (Gomez) to take over the
office and funds of ALPAP being, in this Court's opinion, erroneous, and, in the absence of any serious dispute that on
December 18-22, 1970 Felix C. Gaston, and four other pilots, were elected by the required majority of ALPAP members as
officers of their association, this Court hereby rules that the mentioned authorization to ALPAP (Gomez) to take over the
office, funds and name of ALPAP was done with grave abuse of discretion.

Moreover, this Court cannot hold as valid and binding the election of Ben Hur Gomez as President of ALPAP. He was elected
at a meeting of only 45 ALPAP members called just one day after the election of Felix C. Gaston as President of ALPAP who,
as shown, received a majority of 180 votes out of a total membership of 270. tender the provisions of section 4, article in of
the Constitution and By-Laws of ALPAP, duly elected officers of that association shall remain in office for ac least one year;

The term of office of the officers of the Association shall start on the first day of the fiscal year of the
Association. It shall continue for one year or until they are re-elected or until their successors have been
elected or appointed and takes office in accordance with the Constitution and by-laws.

While this Court considers the ruling of the court below, on the matter of who has the exclusive rights to the office, funds and
name of ALPAP, as having been erroneously made, we cannot hold, however, that those belonging to the group of ALPAP
(Gomez) do not possess any right at all over the office, funds and name of ALPAP of which they are also members.
In our opinion, it is perfectly within the powers and prerogatives of a labor organization, through its duly elected officers, to
authorize a segment of that organization to bargain collectively with a particular employer, particularly where those
constituting the segment share a common and distinguishable interest, apart from the rest of their fellow union members, on
matters that directly affect the terms and conditions of their particular employment. As the circumstances pertinent to the
case at bar presently stand, ALPAP (Gaston) has extended recognition to ALPAP (Gomez) to enter and conclude collective
bargaining contracts with PAL. Having given ALPAP (Gomez) this authority, it would be clearly unreasonable on the part of
ALPAP (Gaston) to disallow the former a certain use of the office, funds and name of ALPAP when such use is necessary or
would be required to enable ALPAP (Gomez) to exercise, in a proper manner, its delegated authority to bargain collectively
with PAL. Clearly, an intelligently considered adjustment of grievances and integration of the diverse and varying interests
that not infrequently and, often, unavoidably permeate the membership of a labor organization, will go a long way, in
achieving peace and harmony within the ranks of ALPAP. Of course, in the eventuality that the pilots presently employed by
PAL and who subscribe to the leadership of Ben Hur Gomez should consider it to their better interest to have their own
separate office, name and union funds, nothing can prevent them from setting up a separate labor union. In that eventuality,
whatever vested rights, interest or participation they may have in the assets, including cash funds, of ALPAP as a result of
their membership therein should properly be liquidated in favor of such withdrawing members of the association.

On the matter of whether the industrial court also abuse its authority for allowing ALPAP (Gomez) to appropriate the ALPAP
name, it does not appear that the herein petitioner has shown below any exclusive franchise or right to the use of that name.
Hence, there is no proper basis for correcting the action taken by the court below on this regard.

L-35206

The threshold issue posed in L-35206 is whether the Court of Industrial Relations acted without jurisdiction and with grave
abuse of discretion in promulgating the resolution dated June 19, 1972 suspending hearings on the mentioned petition for
reinstatement until this Court shall have decided L-33705.

We find no merit to the charge made.

While it is correct, as submitted by ALPAP (Gaston), that in the 1971 case of Philippine Federation of Petroleum Workers
(PFPW) vs. CIR (37 SCRA 716) this Court held that in a certified labor dispute all issues involved in the same should be
determined in the case where the certified dispute was docketed and that the parties should not be permitted to isolate other
germane issues or demands and reserve them for determination in the other cases pending before other branches of the
industrial court, non-compliance with this rule is at best an error in procedure, rather than of jurisdiction, which is not beyond
the power of this Court to review where sufficient reasons exists, a situation not obtaining in the case at bar.

After a thoroughgoing study of the records of these two consolidated petitions, this Court finds that the matter of the
reinstatement of the pilots who retired or resigned from PAL was ventilated fully and adequately in the certification case in all
its substantive aspects, including the allegation of the herein petitioners that they were merely led to believe in good faith that
in retiring or resigning from PAL they were simply exercising their rights to engage in concerted activity. In the light of the
circumstances thus found below it can be safely concluded that the mass retirement and resignation action of the herein
petitioners was intentionally planned to abort the effects of the October 7, 10 and 19, 1970 return-to-work orders of the
industrial court (which they, in fact, ignored for more than a week) by placing themselves beyond the jurisdictional control of
the said court through the umbrella of the constitutional, prohibition against involuntary servitude, thereby enabling them to
pursue their main pressure objective of grounding most, if not all, PAL flight operations. Clearly, the powers given to the
industrial court in a certified labor dispute will be meaningless and useless to pursue where its jurisdiction cannot operate.

We cannot consequently disagree with the court a quo when it concluded that the actuations of the herein petitioners after
they retired and resigned en masse their retrieval of deposits and other funds from the ALPAP Cooperative Credit Union
on the ground that they have already retired or resigned, their employment with another airline, the filing of a civil suit for the
recovery of their retirement pay where they invoked the Provision against involuntary servitude to obtain payment thereof,
and their repeated manifestations before the industrial court that their retirement and resignation were not sham, but
voluntary, and intentional are, in the aggregate, indubitable indications that the said pilots did retire/resign from PAL with
full awareness of the Likely consequences of their acts. Their protestations of good faith, after nearly a year of underscoring
the fact that they were no longer employed with PAL, cannot but appear to a reasonable mind as a late and regrettable
ratiocination.
Parenthetically, contrary to ALPAP (Gaston)'s argument that the pilots' retirement' resignation was a legitimate concerted
activity , citing Section 2(1) of the Industrial Peace Act which defines "strike" as "any temporary stoppage of work by the
concerted action of employees as a result of an industrial dispute," it is worthwhile to observe that as the law defines it, a
strike means only a "temporary stoppage of work." What the mentioned pilots did, however, cannot be considered, in the
opinion of this Court, as mere "temporary stoppage of work." What they contemplated was evidently a permanent cut-off of
employment relationship with their erstwhile employer, the Philippine Air Lines. In any event, the dispute below having been
certified as existing in an industry indispensable to the national interest, the said pilots' rank disregard for the compulsory
orders of the industrial court and their daring and calculating venture to disengage themselves from that court's jurisdiction,
for the obvious purpose of satisfying their narrow economic demands to the prejudice of the public interest, are evident
badges of bad faith.

A legitimate concerted activity is a matter that cannot be used to circumvent judicial orders or be tossed around like a
plaything Definitely, neither employers nor employees should be allowed to make of judicial authority a now-youve-got-it-
now-you-dont affair. The courts cannot hopefully effectuate and vindicate the sound policies of the Industrial Peace Act and
all our labor laws if employees, particularly those who on account of their highly, advanced technical background and
relatively better life status are far above the general working class spectrum, will be permitted to defy and invoke the
jurisdiction of the courts whenever the alternative chosen will serve to feather their pure and simple economic demands.

ACCORDINGLY, in L-33705 the resolution of the Court of Industrial Relations dated June 15, 1971 upholding the decision of
Judge Joaquin M. Salvador dated May 29, 1971 is hereby modified in accordance with the foregoing opinion. Felix 6. Gaston
or whoever may be the incumbent President of ALPAP is hereby ordered to give to any member withdrawing his membership
from ALPAP whatever right, interest or participation such member may have in the assets, including cash funds, of ALPAP as
a result of his membership in that association.

In L-35206, the petition assailing the resolution of the Court of Industrial Relations dated June 19, 1972, is hereby dismissed
for lack of merit insofar as the petitioners' allegations of their right to reinstatement with PAL is concerned. With reference to
the alternative action, re: payment of their claims for retirement or separation pay, the Secretary of Labor, in accordance with
the applicable procedure prescribed by law, is hereby ordered to determine whether such claim is in order, particularly in view
of the caveat made by PAL, in accepting the petitioners' individual letters of retirement/resignation, that said petitioners shall
not be entitled to any benefit or privilege to which they may otherwise be entitled by reason of their employment with PAL as
the former's acts constituted a violation of the order of the industrial court dated November 26, 1970.

Without costs in both instances.