AN MIGUEL FOODS, INCORPORATED, G.R. No.

146206

Petitioner,

Present:

CARPIO,* J.,

VELASCO, J., Chairperson,

-versus- PERALTA,

ABAD, and

SERENO,**JJ.

SAN MIGUEL CORPORATION SUPERVISORS

and EXEMPT UNION,
Promulgated:
Respondent.

August 1, 2011

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

DECISION

PERALTA, J.:

The issues in the present case, relating to the inclusion of employees in supervisor levels 3 and 4 and the exempt
employees in the proposed bargaining unit, thereby allowing their participation in the certification election; the
application of the community or mutuality of interests test; and the determination of the employees who belong to the
category of confidential employees, are not novel.

In G.R. No. 110399, entitled San Miguel Corporation Supervisors and Exempt Union v. Laguesma,[1] the Court held that
even if they handle confidential data regarding technical and internal business operations, supervisory employees 3 and
4 and the exempt employees of petitioner San Miguel Foods, Inc. (SMFI) are not to be considered confidential
employees, because the same do not pertain to labor relations, particularly, negotiation and settlement of
grievances. Consequently, they were allowed to form an appropriate bargaining unit for the purpose of collective
bargaining. The Court also declared that the employees belonging to the three different plants of San Miguel
Corporation Magnolia Poultry Products Plants in Cabuyao, San Fernando, and Otis, having community or mutuality of
interests, constitute a single bargaining unit. They perform work of the same nature, receive the same wages and
compensation, and most importantly, share a common stake in concerted activities. It was immaterial that the three
plants have different locations as they did not impede the operations of a single bargaining representative.[2]

Pursuant to the Court's decision in G.R. No. 110399, the Department of Labor and Employment National Capital Region
(DOLE-NCR) conducted pre-election conferences.[3] However, there was a discrepancy in the list of eligible voters, i.e.,
petitioner submitted a list of 23 employees for the San Fernando plant and 33 for the Cabuyao plant, while respondent
listed 60 and 82, respectively.[4]

On August 31, 1998, Med-Arbiter Agatha Ann L. Daquigan issued an Order[5] directing Election Officer Cynthia Tolentino
to proceed with the conduct of certification election in accordance with Section 2, Rule XII of Department Order No. 9.

On September 30, 1998, a certification election was conducted and it yielded the following results,[6] thus:

Cabuyao San Fernando Total

Plant Plant

Yes 23 23 46

No 0 0 0

Spoiled 2 0 2

Segregated 41 35 76

Total Votes

Cast 66 58 124

On the date of the election, September 30, 1998, petitioner filed the Omnibus Objections and Challenge to
Voters,[7] questioning the eligibility to vote by some of its employees on the grounds that some employees do not belong
to the bargaining unit which respondent seeks to represent or that there is no existence of employer-employee
relationship with petitioner. Specifically, it argued that certain employees should not be allowed to vote as they are: (1)
confidential employees; (2) employees assigned to the live chicken operations, which are not covered by the bargaining
unit; (3) employees whose job grade is level 4, but are performing managerial work and scheduled to be promoted; (4)
employees who belong to the Barrio Ugong plant; (5) non-SMFI employees; and (6) employees who are members of
other unions.

On October 21, 1998, the Med-Arbiter issued an Order directing respondent to submit proof showing that the
employees in the submitted list are covered by the original petition for certification election and belong to the
bargaining unit it seeks to represent and, likewise, directing petitioner to substantiate the allegations contained in its
Omnibus Objections and Challenge to Voters.[8]

In compliance thereto, respondent averred that (1) the bargaining unit contemplated in the original petition is the
Poultry Division of San Miguel Corporation, now known as San Miguel Foods, Inc.; (2) it covered the operations in
Calamba, Laguna, Cavite, and Batangas and its home base is either in Cabuyao, Laguna or San Fernando, Pampanga;
and (3) it submitted individual and separate declarations of the employees whose votes were challenged in the
election.[9]

Adding the results to the number of votes canvassed during the September 30, 1998 certification election, the final tally
showed that: number of eligible voters 149; number of valid votes cast 121; number of spoiled ballots - 3; total number
of votes cast 124, with 118 (i.e., 46 + 72 = 118 ) Yes votes and 3 No votes.[10]

The Med-Arbiter issued the Resolution[11] dated February 17, 1999 directing the parties to appear before the Election
Officer of the Labor Relations Division on March 9, 1999, 10:00 a.m., for the opening of the segregated
ballots. Thereafter, on April 12, 1999, the segregated ballots were opened, showing that out of the 76 segregated

votes, 72 were cast for Yes and 3 for No, with one spoiled ballot.[12]

Based on the results, the Med-Arbiter issued the Order[13] dated April 13, 1999, stating that since the Yes vote received
97% of the valid votes cast, respondent is certified to be the exclusive bargaining agent of the supervisors and exempt
employees of petitioner's Magnolia Poultry Products Plants in Cabuyao, San Fernando, and Otis.

On appeal, the then Acting DOLE Undersecretary, in the Resolution[14] dated July 30, 1999, in OS-A-2-70-91 (NCR-OD-M-
9010-017), affirmed the Order dated April 13, 1999, with modification that George C. Matias, Alma Maria M. Lozano,
Joannabel T. Delos Reyes, and Marilyn G. Pajaron be excluded from the bargaining unit which respondent seeks to
represent. She opined that the challenged voters should be excluded from the bargaining unit, because Matias and
Lozano are members of Magnolia Poultry Processing Plants Monthly Employees Union, while Delos Reyes and Pajaron
are employees of San Miguel Corporation, which is a separate and distinct entity from petitioner.

Petitioners Partial Motion for Reconsideration[15] dated August 14, 1999 was denied by the then Acting DOLE
Undersecretary in the Order[16] dated August 27, 1999.

In the Decision[17] dated April 28, 2000, in CA-G.R. SP No. 55510, entitled San Miguel Foods, Inc. v. The Honorable Office
of the Secretary of Labor, Bureau of Labor Relations, and San Miguel Corporation Supervisors and Exempt Union, the
Court of Appeals (CA) affirmed with modification the Resolution dated July 30, 1999 of the DOLE Undersecretary, stating
that those holding the positions of Human Resource Assistant and Personnel Assistant are excluded from the bargaining
unit.
Petitioners Motion for Partial Reconsideration[18] dated May 23, 2000 was denied by the CA in the Resolution[19] dated
November 28, 2000.

Hence, petitioner filed this present petition raising the following issues:

I.

WHETHER THE COURT OF APPEALS DEPARTED FROM JURISPRUDENCE WHEN IT EXPANDED THE SCOPE OF THE
BARGAINING UNIT DEFINED BY THIS COURT'S RULING IN G.R. NO. 110399.

II.

WHETHER THE COURT OF APPEALS DEPARTED FROM JURISPRUDENCE - SPECIFICALLY, THIS COURT'S DEFINITION OF A
CONFIDENTIAL EMPLOYEE - WHEN IT RULED FOR THE INCLUSION OF THE PAYROLL MASTER POSITION IN THE
BARGAINING UNIT.

III.

WHETHER THIS PETITION IS A REHASH OR A RESURRECTION OF THE ISSUES RAISED IN G.R. NO. 110399, AS ARGUED BY
PRIVATE RESPONDENT.

Petitioner contends that with the Court's ruling in G.R. No. 110399[20] identifying the specific employees who can
participate in the certification election, i.e., the supervisors (levels 1 to 4) and exempt employees of San Miguel Poultry
Products Plants in Cabuyao, San Fernando, and Otis, the CA erred in expanding the scope of the bargaining unit so as to
include employees who do not belong to or who are not based in its Cabuyao or San Fernando plants. It also alleges that
the employees of the Cabuyao, San Fernando, and Otis plants of petitioners predecessor, San Miguel Corporation, as
stated in G.R. No. 110399, were engaged in dressed chicken processing, i.e., handling and packaging of chicken meat,
while the new bargaining unit, as defined by the CA in the present case, includes employees engaged in live chicken
operations, i.e., those who breed chicks and grow chickens.

Respondent counters that petitioners proposed exclusion of certain employees from the bargaining unit was a rehashed
issue which was already settled in G.R. No. 110399. It maintains that the issue of union membership coverage should no
longer be raised as a certification election already took place on September 30, 1998, wherein respondent won with 97%
votes.

Petitioners contentions are erroneous. In G.R. No. 110399, the Court explained that the employees of San Miguel
Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis constitute a single bargaining unit,
which is not contrary to the one-company, one-union policy. An appropriate bargaining unit is defined as a group of
employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective
interest of all the employees, consistent with equity to the employer, indicate to be best suited to serve the reciprocal
rights and duties of the parties under the collective bargaining provisions of the law.[21]

In National Association of Free Trade Unions v. Mainit Lumber Development Company Workers Union United Lumber and
General Workers of the Phils,[22] the Court, taking into account the community or mutuality of interests test, ordered the
formation of a single bargaining unit consisting of the Sawmill Division in Butuan City and the Logging Division in Zapanta
Valley, Kitcharao, Agusan [Del] Norte of the Mainit Lumber Development Company. It held that while the existence of a
bargaining history is a factor that may be reckoned with in determining the appropriate bargaining unit, the same is not
decisive or conclusive. Other factors must be considered. The test of grouping is community or mutuality of interest. This
is so because the basic test of an asserted bargaining 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.[23] Certainly, there
is a mutuality of interest among the employees of the Sawmill Division and the Logging Division. Their functions mesh
with one another. One group needs the other in the same way that the company needs them both. There may be
differences as to the nature of their individual assignments, but the distinctions are not enough to warrant the
formation of a separate bargaining unit.[24]

Thus, applying the ruling to the present case, the Court affirms the finding of the CA that there should be only one
bargaining unit for

the employees in Cabuyao, San Fernando, and Otis[25] of Magnolia Poultry Products Plant involved in dressed chicken
processing and Magnolia Poultry Farms engaged in live chicken operations. Certain factors, such as specific line of work,
working conditions, location of work, mode of compensation, and other relevant conditions do not affect or impede
their commonality of interest. Although they seem separate and distinct from each other, the specific tasks of each
division are actually interrelated and there exists mutuality of interests which warrants the formation of a single
bargaining unit.

Petitioner asserts that the CA erred in not excluding the position of Payroll Master in the definition of a confidential
employee and, thus, prays that the said position and all other positions with access to salary and compensation data be
excluded from the bargaining unit.

This argument must fail. Confidential employees are defined as those who (1) assist or act in a confidential capacity, in
regard (2) to persons who formulate, determine, and effectuate management policies in the field of labor
relations.[26] The two criteria are cumulative, and both must be met if an employee is to be considered a confidential
employee - that is, the confidential relationship must exist between the employee and his supervisor, and the supervisor
must handle the prescribed responsibilities relating to labor relations. The exclusion from bargaining units of employees
who, in the normal course of their duties, become aware of management policies relating to labor relations is a principal
objective sought to be accomplished by the confidential employee rule.[27]
A confidential employee is one entrusted with confidence on delicate, or with the custody, handling or care and
protection of the employers property.[28] Confidential employees, such as accounting personnel, should be excluded
from the bargaining unit, as their access to confidential information may become the source of undue
advantage.[29] However, such fact does not apply to the position of Payroll Master and the whole gamut of employees
who, as perceived by petitioner, has access to salary and compensation data. The CA correctly held that the position
of Payroll Master does not involve dealing with confidential labor relations information in the course of the performance
of his functions. Since the nature of his work does not pertain to company rules and regulations and confidential labor
relations, it follows that he cannot be excluded from the subject bargaining unit.

Corollarily, although Article 245[30] of the Labor Code limits the ineligibility to join, form and assist any labor organization
to managerial employees, jurisprudence has extended this prohibition to

confidential employees or those who by reason of their positions or nature of work are required to assist or act in a
fiduciary manner to managerial employees and, hence, are likewise privy to sensitive and highly confidential
records.[31] Confidential employees are thus excluded from the rank-and-file bargaining unit. The rationale for their
separate category and disqualification to join any labor organization is similar to the inhibition for managerial
employees, because if allowed to be affiliated with a union, the latter might not be assured of their loyalty in view of
evident conflict of interests and the union can also become company-denominated with the presence of managerial
employees in the union membership.[32] Having access to confidential information, confidential employees may also
become the source of undue advantage. Said employees may act as a spy or spies of either party to a collective
bargaining agreement.[33]

In this regard, the CA correctly ruled that the positions of Human Resource Assistant and Personnel Assistant belong to
the category of confidential employees and, hence, are excluded from the bargaining unit, considering their respective
positions and job descriptions. As Human Resource Assistant,[34] the scope of ones work necessarily involves labor
relations, recruitment and selection of employees, access to employees' personal files and compensation package, and
human resource management. As regards a Personnel Assistant,[35] one's work includes the recording of minutes for
management during collective bargaining negotiations, assistance to management during grievance meetings and
administrative investigations, and securing legal advice for labor issues from the petitioners team of lawyers, and
implementation of company programs.Therefore, in the discharge of their functions, both gain access to vital labor
relations information which outrightly disqualifies them from union membership.

The proceedings for certification election are quasi-judicial in nature and, therefore, decisions rendered in such
proceedings can attain finality.[36] Applying the doctrine of res judicata, the issue in the

present case pertaining to the coverage of the employees who would constitute the bargaining unit is now a foregone
conclusion.

It bears stressing that a certification election is the sole concern of the workers; hence, an employer lacks the
personality to dispute the same. The general rule is that an employer has no standing to question the process of
certification election, since this is the sole concern of the workers.[37] Law and policy demand that employers take a
strict, hands-off stance in certification elections. The bargaining representative of employees should be chosen free from
any extraneous influence of management. A labor bargaining representative, to be effective, must owe its loyalty to the
employees alone and to no other.[38] The only exception is where the employer itself has to file the petition pursuant to
Article 258[39] of the Labor Code because of a request to bargain collectively.[40]

With the foregoing disquisition, the Court writes finis to the issues raised so as to forestall future suits of similar nature.

WHEREFORE, the petition is DENIED. The Decision dated April 28, 2000 and Resolution dated November 28, 2000 of the
Court of Appeals, in CA-G.R. SP No. 55510, which affirmed with modification the Resolutions dated July 30, 1999 and
August 27, 1999 of the Secretary of Labor, are AFFIRMED.
G.R. No. 192648

DE OCAMPO MEMORIAL SCHOOLS, INC., Petitioner

vs
BIGKIS MANGGAGAWA SA DE OCAMPO MEMORIAL SCHOOL, INC. , Respondent

DECISION

JARDELEZA, J.:

This is a Petition for Review on Certiorari1 assailing the Court of Appeals (CA) Decision2 dated July 15, 2009 and the
Resolution3 dated June 21, 2010 (assailed Decision). The assailed Decision affirmed the Decision4 dated December 29,
2004 of the Bureau of Labor Relations (BLR), Department of Labor and Employment (DOLE) in Case No. BLR-A-C-75-8-
24-04, In Re: Petition for Cancellation of Union Registration of Bigkis Manggagawa sa De Ocampo Memorial School,
Inc., - Lakas Union Registration Number (NCR-12-CC-002-2003).

De Ocampo Memorial Schools, Inc. (De Ocampo) is a domestic corporation duly-organized and existing under the laws of
the Philippines. It has two main divisions, namely: De Ocampo Memorial Medical Center (DOMMC), its hospital entity,
and the De Ocampo Memorial Colleges (DOMC), its school entity.5

On September 26, 2003, Union Registration No. NCR-UR-9-3858- 2002 was issued in favor of Bigkis Manggagawa sa De
Ocampo Memorial Medical Center - LAKAS (BMDOMMC).6

Later, on December 5, 2003, Bigkis Manggagawa sa De Ocampo Memorial School, Inc. (BMDOMSI) was issued a Union
Registration/Certificate of Creation of Local Chapter No. NCR-l 2-CC-002- 2003 and declared a legitimate labor
organization.7

On March 4, 2004, De Ocampo filed a Petition for Cancellation of Ce1iificate of Registration8 with the Department of
Labor and Employment - National Capital Region (DOLE-NCR). It sought to cancel the Certificate of Registration of
BMDOMSI on the following grounds: 1) misrepresentation, false statement and fraud in connection with its creation and
registration as a labor union as it shared the same set of officers and members with BMDOMMC; 2) mixed membership
of rank-and-file and managerial/supervisory employees; and 3) inappropriate bargaining unit.9

On April 13, 2004, De Ocampo filed a Supplemental Petition,10 informing the DOLE-NCR of the cancellation of the
Certificate of Registration of BMDOMMC in Case No. NCR-OD-0307-009-LRD. It attached a copy of the Decision11of the
DOLE-NCR dated March 3, 2004, which cancelled and struck off Union Registration No. NCR-UR-9-3858- 2002 from the
registry of legitimate labor organizations for being an inappropriate bargaining unit.12

On May 18, 2004, BMDOMSI filed its Comment-Opposition to Petition for Cancellation of Certificate of Registration and
Supplemental Petition,13 denying De Ocampo's allegations and claiming that the latter only wants to impede the
formation of the union.

In a Decision14 dated July 26, 2004, Acting Regional Director Ciriaco A. Lagunzad III of the DOLE-NCR ruled that BMDOMSI
committed misrepresentation by making it appear that the bargaining unit is composed of faculty and technical
employees. In fact, all the union officers and most of the members are from the General Services
Division.15 Furthermore, the members of the union do not share commonality of interest, as it is composed of academic
and non-academic personnel.16 The nature of work of the employees of the General Services Division, while falling
within the category of non-academic personnel, differs from that of the other nonacademic employees composed of
clerks, messengers, etc., since they also serve the hospital component of De Ocampo.17

BMDOMSI then filed an appeal to the BLR alleging that the union members are all employees of De Ocampo and that the
bargaining unit it sees to represent is appropriate.18

In a Decision19 dated December 29, 2004, the BLR reversed the Regional Director's finding of misrepresentation, false
statement or fraud in BMDOMSI's application for registration. According to the BLR, De Ocampo failed to adduce proof
to support its allegation of mixed membership within respondent union.20 Further, and contrary to De Ocampo's claim,
records show that BMDOMSI stated in its application that its members are composed of rank-and-file employees falling
under either faculty or technical occupational classifications.21 The BLR also held that the existence of an inappropriate
bargaining unit would not necessarily result in the cancellation of union registration, and the inclusion of a disqualified
employee in a union is not a ground for cancellation.22 Even if BMDOMSI shared the same set of officers and members of
BMDOMMC, the latter had already been delisted on March 3, 2004 and there is no prohibition against organizing
another union.23

De Ocampo filed a Petition for Certiorari24 with the CA seeking to annul and set aside the BLR Decision as well as the
Resolution25 dated January 24, 2005 denying its motion for reconsideration.

The CA affirmed the Decision of the BLR. It ruled that there was no misrepresentation, false statement or fraud in the
application for registration.

The record shows that, as BMDOMSI had indicated, the bargaining unit as described is composed of rank-and-file
employees with occupational classifications under technical and faculty.26 The CA found that there could be no
misrepresentation as the members appearing in the minutes of the general membership meeting, and the list of
members who attended the meeting and ratified the union constitution and by-laws, are in truth employees of the
school, though some service the hospital.27 The CA also ruled that, other than De Ocampo's bare allegations, there was
no proof of intent to defraud or mislead on the part of BMDOMSI. Hence, the charge of fraud, false statement or
misrepresentation cannot be sustained.28

However, the CA observed that the members of the union, who are from academic, non-academic, and general services,
do not perform work of the same nature, receive the same wages and compensation, nor share a common stake in
concerted activities.29 While these factors dictate the separation of the categories of employees for purposes of
collective bargaining,30 the CA reasoned that such lack of mutuality and commonality of interest of the union members is
not among the grounds for cancellation of union registration under Article 239 of the Labor Code.31

De Ocampo filed a motion for reconsideration which was denied in the assailed Resolution dated June 21, 2010. Hence,
this petition.

De Ocampo maintains that BMDOMSI committed misrepresentation and fraud in connection with its application,
creation and registration. It intentionally suppressed the fact that at the time of its application, there was another union
known as BMDOMMC, with whom they shared the same set of officers and members.32 It was also made to appear that
BMDOMMC is a labor union representing a separate bargaining unit whose personality, affairs and composition are
unknown to BMDOMSI.33 Lastly, BMDOMSI suppressed the fact that its members have no mutuality or commonality of
interest as they belong to different work classifications, nature and designations.34

II

We deny the petition.

Article 247, previously Aiiicle 239 of the Labor Code35 provides:

Art. 247. Grounds for Cancellation of Union Registration. - The following may constitute grounds for cancellation of
union registration:

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

(b) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of
officers, and the list of voters;

(c) Voluntary dissolution by the members.

For fraud and misrepresentation to constitute grounds for cancellation of union registration under the Labor Code, the
nature of the fraud and misrepresentation must be grave and compelling enough to vitiate the consent of a majority of
union members.36

De Ocampo insists that "by conveniently disregarding" BMDOMMC's existence during the filing of its application, despite
having the same set of officers and members,37 BMDOMSI "had misrepresented facts, made false statements and
committed fraud in its application for union registration for alleging facts therein which they [know] or ought to have
known to be false."38

We agree with the BLR and the CA that BMDOMSI did not commit fraud or misrepresentation in its application for
registration.1âwphi1 In the form "Report of Creation of Local Chapter"39 filed by BMDOMSI, the applicant indicated in
the portion "Description of the Bargaining Unit" that it is composed of "Rank and File" and under the "Occupational
Classification," it marked "Technical" and "Faculty."

Further, the members appearing in the Minutes of the General Membership and the List of Workers or Members who
attended the organizational meeting and adopted/ratified the Constitution and By-Laws are, as represented, employees
of the school and the General Services Division, though some of the latter employees service the hospital.40

Moreover, there is nothing in the form "Report of Creation of Local Chapter" that requires the applicant to disclose the
existence of another union, much less the names of the officers of such other union. Thus, we cannot see how
BMDOMSI made the alleged misrepresentation or false statements in its application.

De Ocampo likewise claims that BMDOMSI committed fraud and misrepresentation when it suppressed the fact that
there exists "no mutuality and/or communality of interest"41 of its members. This, De Ocampo asserts, is a ground for
the cancellation of its registration.

We disagree.

While the CA may have ruled that there is no mutuality or commonality of interests among the members of BMDOMSI,
this is not enough reason to cancel its registration. The only grounds on which the cancellation of a union's registration
may be sought are those found in Article 247 of the Labor Code. In Tagaytay Highlands International Golf Club
Incorporated v. Tagaytay Highlands Employees Union-PTGW0,42 we ruled that "[t]he inclusion in a union of disqualified
employees is not among the grounds for cancellation, unless such inclusion is due to misrepresentation, false statement
or fraud under the circumstances enumerated in Sections (a) and (c) of Article [247] x x x of the Labor Code."43 Thus, for
purposes of de-certifying a union, it is not enough to establish that the rank-and-file union includes ineligible employees
in its membership. Pursuant to paragraphs (a) and (b) of Article 247 of the Labor Code, it must be shown that there was
misrepresentation, false statement or fraud in connection with: (1) the adoption or ratification of the constitution and
by-laws or amendments thereto; (2) the minutes of ratification; (3) the election of officers; (4) the minutes of the
election of officers; and (5) the list of voters.44 Failure to submit these documents together with the list of the newly
elected-appointed officers and their postal addresses to the BLR may also constitute grounds for cancellation, lack of
mutuality of interests, however, is not among said grounds.45

The BLR and the CA's finding that the members of BMDOMSI are rank-and-file employees is supported by substantial
evidence and is binding on this Court.46 On the other hand, other than the allegation that BMDOMSI has the same set of
officers with BMDOMMC and the allegation of mixed membership of rank-and-file and managerial or supervisory
employees, De Ocampo has cited no other evidence of the alleged fraud and misrepresentation.

A final word. A party seeking the cancellation of a union's certificate of registration must bear in mind that:

x x x [A] direct challenge to the legitimacy of a labor organization based on fraud and misrepresentation in securing its
certificate of registration is a serious allegation which deserves careful scrutiny. Allegations thereof should be
compounded with supporting circumstances and evidence. The records of the case are devoid of such evidence.
Furthermore, this Court is not a trier of facts, and this doctrine applies with greater force in labor cases. Findings of fact
of administrative agencies and quasi-judicial bodies, such as the BLR, which have acquired expertise because their
jurisdiction is confined to specific matters, are generally accorded not only great respect but even finality.47

WHEREFORE, the petition is hereby DENIED for lack of merit. The Decision of the Court of Appeals in CA-G.R. SP No.
89162 dated July 15, 2009 is AFFIRMED.

SO ORDERED.
GR. NO. 218454, December 01, 2016

PENINSULA EMPLOYEES UNION (PEU),* Petitioner, v. MICHAEL B. ESQUIVEL, DOMINGO G. MABUTAS, RANDELL V.
AFAN, LOISELLE S. AGUNOD, GEMELO L. ANSELMO, GERYMY ANCHETA, JOYLY V. ASUNCION, CRESENCIA A. BERMEJO,
JOSHUA S. BERSAMINA, LITO S. CALINISAN, RANULFO C. CASTILLO, ENRICO C. CASTRO, GERARDO R. CASTRO,
GLICERIA H. CELIZ, MARIA POLA R CORDERO, JORGE MARIO C. CORONADO, DOMINGA C. CRUZ, JUSTINE CRUZ,
RONALD S. DADIA, ARCHIMEDES S. DALISAY, JOSEF PATRICK P. DE VERA, SERGIO B. DIANE, NONITA M. DOMINGO,
JOSELITO E. EDANG, KRISTINE ANNE A. ENGRACIAL, CARLO GILJOSEF A. FORNIER, ELIAS S. GACAD, MEL GARRIDO,
PHILLIP MICHAEL C. GAUDINEZ, SILVERIA B. GRAN, RODOR D. HEMEDES, BENIGNO A. HONGCO, LEONARD N. LAMBOT,
MELECIO D. LAURENTE III, GRACE MILLISCEN L. LIM, MARIA ALICIA GEZZA D. LLAVE, EULALIA B. LOBATON, WILFREDO
G. LOPEZ, GENLIE D. LUCERNA, DOMINGO C. MABUTAS III, CARMELITA A. MALIG, NICANOR T. MANGUIAT, HERVE
STEVE A. MARTIN, RODELIO N. MARZO, FLORENCIO A. MASA, JR., EDINA H. MORALES, SYLVIA M. MORALES, ROBERT
H. NACINO, ANGELO F. ONA, JEFFERSON 0. ONG, DENNIS 0. RAMOS, DENNIS S. REMBULAT, BENJIE B. REYES, VICTOR
EMMANUEL I. REYES, ANTONIO R. RIOVEROS, MARCELO S. RIPA III, ALLAN T. ROXAS, MARIA B. RUANTO II, RONALD A.
SALMON, ARMANDO P. SANTUYO, BRYAN S. SUN, MARYGRACE F. TAMAYO, LORENZVI IRENE U. TAN, MILAGROS 0.
TELOSA, HERMILO R. TUMBAGA, GINA S. UY, AND VENICE T. VILLAPONDO, Respondents.

DECISION

PERLAS-BERNABE, J.:

Before the Court is a petition for review on certiorari 1 assailing the Decision2 dated February 9, 2015 and the
Resolution3 dated May 21, 2015 of the Court of Appeals (CA) in CA-G.R. SP No. 124566, which annulled and set aside the
Order4 dated March 6, 2012 (March 6, 2012 Order) of the Office of the Secretary (OSEC) of the Department of Labor and
Employment (DOLE) in OS-AJ-0024-07 declaring petitioner Peninsula Employees Union (PEU) National Union of Workers
in Hotel Restaurants and Allied Industries (NUWHRAIN)5 entitled to collect the amount of two percent (2%) agency fees
from The Peninsula Manila Hotel Labor Union (TPMHLU), the former collective bargaining agent,6 and the non-affiliated
employees (NAE;7 collectively, non-PEU members), herein represented by respondents Michael B. Esquivel, Domingo G.
Mabutas, Randell V. Afan, et al. (respondents), retroactively from July 2010.chanroblesvirtuallawlibrary

The Facts

On December 13, 2007, PEU's Board of Directors passed Local Board Resolution No. 12, series of
20078authorizing (a) the affiliation of PEU with NUWHRAIN, and the direct membership of its individual members
thereto; (b) the compliance with all the requirements therefor; and (c) the Local President to sign the affiliation
agreement with NUWHRAIN upon acceptance of such affiliation.9 On the same day, the said act was submitted to the
general membership, and was duly ratified by 223 PEU members.10

Beginning January 1, 2009, PEU-NUWHRAIN sought to increase the union dues/agency fees from one percent (1%) to
two percent (2%) of the rank and file employees' monthly salaries, brought about by PEU's affiliation with NUWHRAIN,
which supposedly requires its affiliates to remit to it two percent (2%) of their monthly salaries.11

Meanwhile, in a Decision12 dated October 10, 2008 (October 10, 2008 Decision), the OSEC resolved the collective
bargaining deadlock between PEU-NUWHRAIN and The Peninsula Manila Hotel (Hotel), ordering the parties to execute a
collective bargaining agreement (CBA) incorporating the dispositions therein (arbitral award).13 The parties have yet to
actually sign a CBA but have, for the most part, implemented the arbitral award.14
In March 2009, PEU-NUWHRAIN requested15 the OSEC for Administrative Intervention for Dispute Avoidance16 (AIDA)
pursuant to DOLE Circular No. 1, series of 200617 in relation to the issue, among others, of its entitlement to collect
increased agency fees from the non-PEU members,18 which was docketed as OSEC-AIDA-03-001-09.19

The non-PEU members objected to the assessment of increased agency fees arguing that: (a) the new CBA is
unenforceable since no written CBA has been formally signed and executed by PEU-NUWHRAIN and the Hotel; (b) the
2% agency fee is exorbitant and unreasonable; and (c) PEU-NUWHRAIN failed to comply with the mandatory
requirements for such increase.20

The OSEC's Ruling

In a Decision21 dated June 2, 2010 (June 2, 2010 Decision), the OSEC upheld PEU-NUWHRAIN's right to collect agency
fees from the non-PEU members in accordance with Article 4, Section 2 of the expired CBA, which was declared to be in
full force and effect pursuant to the October 10, 2008 Decision, but only at the rate of one percent (1%),22 and denied its
bid to increase the agency fees to two percent (2%) for failure to show that its general membership approved the same,
noting that: (a) the October 28, 2008 General Membership Resolution23 (GMR) submitted in support of the claimed
increase dealt with the approval of the payment of attorney's fees from the CBA backwages, without reference to any
approval of the increase in union dues; and (b) the minutes24 of its October 28, 2008 general membership meeting
(October 28, 2008 minutes) merely stated that there was a need to update the individual check-off authorization to
implement the two percent (2%) union dues, but was silent as to any deliberation and formal approval thereof.25 The
OSEC pointed out that the only direct proof presented for the claimed increase in union dues was the PEU President's
application for union membership with PEU-NUWHRAIN26 dated October 29, 2008, together with his Individual Check-
Off Authorization27 purportedly dated May 11, 2008, which precedes such application and, thus, cannot be given
credence.28

Dissatisfied, PEU-NUWHRAIN moved for reconsideration,29 attaching thereto copies of: (a) the July 1, 2010
GMR30 confirming and affirming the alleged approval of the deduction of two percent (2%) union dues from the
members' monthly basic salaries; (b) the individual check-off authorizations31 dated November 26 and 27, 2008 from
three (3) members authorizing the deduction of two percent (2%) union dues from their monthly basic salaries;
and (c) payslips32 of some PEU-NUWHRAIN members purportedly showing the deduction of two percent (2%) union dues
from their monthly basic pay beginning January 2009.

On March 6, 2012, the OSEC issued an Order33 partially granting PEU-NUWHRAIN's motion for reconsideration, and
declaring it entitled to collect two percent (2%) agency fees from the non-PEU members beginning July 2010 since the
GMR showing approval for the increase of the union dues from one percent (1%) to two percent (2%) was only procured
at that time.34

Unperturbed, respondents filed a petition for certiorari35 with the CA, docketed as CA-GR. SP No. 124566, alleging that
the OSEC committed grave abuse of discretion amounting to lack or excess of jurisdiction in allowing PEU-NUWHRAIN to
collection increased agency fees despite non-compliance with the legal requirements therefor.36

The CA Ruling
In a Decision37 dated February 9, 2015, the CA set aside the OSEC's March 6, 2012 Order, and reinstated the June 2, 2010
Decision.38 It ruled that PEU-NUWHRAIN failed to prove compliance with the requisites for a valid check-off since the
October 28, 2008 minutes do not show that the increase in union dues was duly approved by its general membership. It
also found the July 1, 2010 GMR suspicious considering that it surfaced only after PEU received the OSEC's June 2, 2010
Decision disallowing the collection of increased agency fees.39

PEU-NUWHRAIN moved for reconsideration,40 which was, however, denied in a Resolution41 dated May 21, 2015; hence,
the present petition.chanroblesvirtuallawlibrary

The Issue Before the Court

The essential issue for the Court's resolution is whether or not the CA committed reversible error in ruling that PEU-
NUWHRAIN had no right to collect the increased agency fees.chanroblesvirtuallawlibrary

The Court's Ruling

The petition lacks merit.

The recognized collective bargaining union which successfully negotiated the CBA with the employer is given the right to
collect a reasonable fee called "agency fee" from non-union members who are employees of the appropriate bargaining
unit, in an amount equivalent to the dues and other fees paid by union members, in case they accept the benefits under
the CBA.42 While the collection of agency fees is recognized by Article 25943 (formerly Article 248) of the Labor Code, as
amended, the legal basis of the union's right to agency fees is neither contractual nor statutory, but quasi-contractual,
deriving from the established principle that non-union employees may not unjustly enrich themselves by benefiting from
employment conditions negotiated by the bargaining union.44

In the present case, PEU-NUWHRAIN's right to collect agency fees is not disputed. However, the rate of agency fees it
seeks to collect from the non-PEU members is contested, considering its failure to comply with the requirements for a
valid increase of union dues, rendering the collection of increased agency fees unjustified.

Case law interpreting Article 250 (n) and (o)45 (formerly Article 241) of the Labor Code, as amended, mandates the
submission of three (3) documentary requisites in order to justify a valid levy of increased union dues. These are: (a) an
authorization by a written resolution of the majority of all the members at the general membership meeting duly called
for the purpose; (b) the secretary's record of the minutes of the meeting, which shall include the list of all members
present, the votes cast, the purpose of the special assessment or fees and the recipient of such assessment or
fees;46 and (c) individual written authorizations for check-off duly signed by the employees concerned.47

In the present case, however, PEU-NUWHRAIN failed to show compliance with the foregoing requirements. It attempted
to remedy the "inadvertent omission" of the matter of the approval of the deduction of two percent (2%) union dues
from the monthly basic salary of each union member through the July 1, 2010 GMR,48 entitled "A GENERAL
MEMBERSHIP RESOLUTION AUTHORIZING THE DEDUCTION OF TWO PERCENT (2%) UNION DUES FROM THE MONTHLY
BASIC SALARY OF EACH UNION MEMBER," which stated, among others, that:chanRoblesvirtualLawlibrary
 1. the General Membership Assembly (Assembly) "approved the deduction of two percent (2%) union dues from
the monthly basic salary of each union member" during its 8th General Membership Meeting, as shown in the
October 28, 2008 minutes;ChanRoblesVirtualawlibrary

2. "through inadvertence, the [October 28, 2008 GMR] failed to include the Assembly's approval of the two
percent (2%) deduction of union dues;"

3. the July 1, 2010 GMR is being issued "to confirm and affirm what was agreed upon during the 8th General
Membership Meeting dated October 28, 2008."49

On the other hand, the adverted October 28, 2008 minutes50 stated, inter alia, that:chanRoblesvirtualLawlibrary

1. "the [two percent (2%)] Union dues will have to be implemented since PEU was already affiliated with
NUWHRAIN [in] 2007";51]

2. "it was discussed, deliberated and approved by the majority of members the (sic) 10% of total CBA back wages
through [the Assembly] resolution authorizing the payment of attorney's fees."52

It is evident from the foregoing that while the matter of implementing the two percent (2%) union dues was taken up
during the PEU-NUWHRAIN's 8th General Membership Meeting on October 28, 2008, there was no sufficient showing
that the same had been duly deliberated and approved. The minutes of the Assembly itself belie PEU-NUWHRAIN's claim
that the increase in union dues and the corresponding check-off were duly approved since it merely stated that "the
[two percent (2%)] Union dues will have to be implemented,"53 meaning, it would still require the submission of such
matter to the Assembly for deliberation and approval Such conclusion is bolstered by the silence of the October 28, 2008
GMR on the matter of two percent (2%) union dues, in contrast to the payment of 10% attorney's fees from the CBA
backwages which was clearly spelled out as having been "discussed and approved."54 Thus, as aptly pointed out by the
CA: "[i]f indeed majority of the members of [PEU-NUWHRAIN] approved the increase in union dues, the same should
have been mentioned in the [October 28, 2008 minutes], and reflected in the GMR of the same date."55

Having failed to establish due deliberation and approval of the increase in union dues from one percent (1%) to two
percent (2%), as well as the deduction of the two percent (2%) union dues during PEU-NUWHRAIN's 8th General
Membership Meeting on October 28, 2008, there was nothing to confirm, affirm, or ratify through the July 1, 2010 GMR.
Contrary to the ruling of the OSEC in its March 6, 2012 Order, the July 1, 2010 GMR, by itself, cannot justify the
collection of two percent (2%) agency fees from the non-PEU members beginning July 2010. The Assembly was not
called for the purpose of approving the proposed increase in union dues and the corresponding check-off, but merely to
"confirm and affirm" a purported prior action which PEU-NUWHRAIN, however, failed to establish.

Corollarily, no individual check-off authorizations can proceed therefrom, and the submission of the November 2008
check-off authorizations56 becomes inconsequential. Jurisprudence states that the express consent of the employee to
any deduction in his compensation is required to be obtained in accordance with the steps outlined by the law, which
must be followed to the letter;57 however, PEU-NUWHRAIN failed to comply. Thus, the CA correctly ruled that there is
no legal basis to impose union dues and agency fees more than that allowed in the expired CBA, i.e., at one percent (1%)
of the employee's monthly basic salary.

In fine, the Court finds no reversible error on the part of the CA in granting petitioner's certiorari petition, and finding
that the OSEC gravely abused its discretion in declaring PEU-NUWHRAIN's entitlement to collect two percent (2%)
agency fees from the non-PEU members beginning July 2010. The OSEC's March 6, 2012 Order is patently contrary to
law, hence, imbued with grave abuse of discretion correctible through certiorari.58
WHEREFORE, the petition is DENIED. The Decision dated February 9, 2015 and the Resolution dated May 21, 2015 of the
Court of Appeals (CA) in CA-G.R. SP No. 124566 are hereby AFFIRMED.

SO ORDERED.ChanRoblesVirtualawlibrary
G.R. No. 193816

ERSON ANG LEE DOING BUSINESS as "SUPER LAMINATION SERVICES," Petitioner

vs.
SAMAHANG MANGGAGAWA NG SUPER LAMINATION (SMSLS-NAFLU-KMU), Respondent

DECISION

SERENO, CJ.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court on the Decision1 and Resolution2 of the
Court of Appeals (CA) affirming the assailed Decision3 of the Department of Labor and Employment (DOLE). DOLE
allowed the conduct of certification election among the rank-and-file employees of Super Lamination Services (Super
Lamination), Express Lamination Services, Inc. (Express Lamination), and Express Coat Enterprises, Inc. (Express Coat).

THE ANTECEDENT FACTS

Petitioner Erson Ang Lee (petitioner), through Super Lamination, is a duly registered entity principally engaged in the
business of providing lamination services to the general public. Respondent Samahan ng mga Manggagawa ng Super
Lamination Services (Union A) is a legitimate labor organization, which is also a local chapter affiliate of the National
Federation of Labor Unions - Kilusang Mayo Uno.4 It appears that Super Lamination is a sole proprietorship under
petitioner's name,5 while Express Lamination and Express Coat are duly incorporated entities separately registered with
the Securities and Exchange Commission (SEC).6

On 7 March 2008, Union A filed a Petition for Certification Election7 to represent all the rank-and-file employees of Super
Lamination.8

Notably, on the same date, Express Lamination Workers' Union (Union B) also filed a Petition for Certification Election to
represent all the rank-and-file employees of Express Lamination.9

Also on the same date, the Samahan ng mga Manggagawa ng Express Coat Enterprises, Inc. (Union C) filed a Petition for
Certification Election to represent the rank-and-file employees of Express Coat.10

Super Lamination, Express Lamination, and Express Coat, all represented by one counsel, separately claimed in their
Comments and Motions to Dismiss that the petitions must be dismissed on the same ground - lack of employer-
employee relationship between these establishments and the bargaining units that Unions A, B, and C seek to represent
as well as these unions' respective members.11 Super Lamination, in its Motion, posited that a majority of the persons
who were enumerated in the list of members and officers of Union A were not its employees, but were employed by
either Express Lamination or Express Coat.12 Interestingly, both Express Lamination and Express Coat, in turn,
maintained the same argument - that a majority of those who had assented to the Petition for Certification Election
were not employees of either company, but of one of the two other companies involved.13

All three Petitions for Certification Election of the Unions were denied. On 21 May 2008, an Order was issued by DOLE
National Capital Region (NCR) Med-Arbiter Michael Angelo Parado denying the respective petitions of Unions B and C on
the ground that there was no existing employer-employee relationship between the members of the unions and the
companies concerned. On 23 May 2008, DOLE NCR Med-Arbiter Alma Magdaraog-Alba also denied the petition of
respondent Union A on the same ground.14

The three unions filed their respective appeals before the Office of the DOLE Secretary, which consolidated the appeal
because the involved companies alternately referred to one another as the employer of the members of the bargaining
units sought to be represented.15 The unions argued that their petitions should have been allowed considering that the
companies involved were unorganized, and that the employers had no concomitant right to oppose the petitions. They
also claimed that while the questioned employees might have been assigned to perform work at the other companies,
they were all under one management's direct control and supervision.16

DOLE, through Undersecretary Romeo C. Lagman, rendered the assailed Decision, the dispositive portion of which reads
as follows:

WHEREFORE, premises considered, the appeals filed by Express Lamination Workers Union (ELWU-NAFLU-KMU),
Samahang Manggagawa ng Express Coat Enterprises, Inc. (SMEC-NAFLU-KMU) and Samahang Manggagawa ng Super
Lamination Services (SMSLS-NAFLU-KMU) are hereby GRANTEDand the Orders dated 21 May 2008 of DOLE-NCR
Mediator-Arbiter Michael Angelo T. Parado are hereby REVERSED and SET ASIDE. The Order dated 23 May 2008 of DOLE
NCR Mediator-Arbiter Alma E. Magdaraog-Alba is likewise REVERSED and SET ASIDE.

Accordingly, let the entire records of this be remanded to the regional office of origin for the immediate conduct of
certification election among the rank-and-file employees of Express Lamination Services, Inc., Super Lamination Services
and Express Coat Enterprises Inc., after the conduct of pre-election conference/s, with the following as choices;

1. Express Lamination Workers Union-NAFLU-KMU;

2. Samahan ng mga Manggagawa ng Super Lamination Services-NAFLU-KMU;

3. Samahang ng mga Manggagawa ng Express Coat Enterprises, Inc.-NAFLU-KMU; and

4. "No Union."

The employer/s and/or contending union(s) are hereby directed to submit to the Regional Office of origin, within ten
(10) days from receipt of this Decision, a certified list of employees in the bargaining unit or the payrolls covering the
members of the bargaining unit for the last three (3) months prior to the issuance of the Decision.

SO DECIDED.17 (Emphases in the original)

DOLE found that Super Lamination, Express Lamination, and Express Coat were sister companies that had a common
human resource department responsible for hiring and disciplining the employees of the three companies. The same
department was found to have also given them daily instructions on how to go about their work and where to report for
work. It also found that the three companies involved constantly rotated their workers, and that the latter's
identification cards had only one signatory.18

To DOLE, these circumstances showed that the companies were engaged in a work-pooling scheme, in light of which
they might be considered as one and the same entity for the purpose of determining the appropriate bargaining unit in a
certification election.19 DOLE applied the concept of multi-employer bargaining under Sections 5 and 6 of DOLE
Department Order 40-03, Series of 2003. Under that concept, the creation of a single bargaining unit for the rank-and-
file employees of all three companies was not implausible and was justified under the given circumstances.20 Thus, it
considered these rank-and-file employees as one bargaining unit and ordered the conduct of a certification election as
uniformly prayed for by the three unions.

Aggrieved, petitioner instituted an appeal before the CA, which denied his Petition and affirmed the Decision of
DOLE.1âwphi1 It sided with DOLE in finding that Super Lamination, Express Lamination, and Express Coat were sister
companies that had adopted a work-pooling scheme. Therefore, it held that DOLE had correctly applied the concept of
multi-employer bargaining in finding that the three companies could be considered as the same entity, and their rank-
and-file employees as comprising one bargaining unit.21

Petitioner filed a Motion for Reconsideration of the CA Decision, but the motion was denied.22 Therefore, he now comes
to this Court through the present Petition.

ISSUES

From the established facts and arguments, we cull the issues as follows:

1. Whether the application of the doctrine of piercing the corporate veil is warranted

2. Whether the rank-and-file employees of Super Lamination, Express Lamination, and Express Coat constitute an
appropriate bargaining unit

THE COURT'S RULING

We deny the petition.

An application of the doctrine of
piercing the corporate veil is
warranted.

Petitioner argues that separate corporations cannot be treated as a single bargaining unit even if their businesses are
related,23 as these companies are indubitably distinct entities with separate juridical personalities.24 Hence, the
employees of one corporation cannot be allowed to vote in the certification election of another corporation, lest the
abovementioned rule be violated.25

Petitioner's argument, while correct, is a general rule. This Court has time and again disregarded separate juridical
personalities under the doctrine of piercing the corporate veil. It has done so in cases where a separate legal entity is
used to defeat public convenience, justify wrong, protect fraud, or defend crime, among other grounds.26 In any of these
situations, the law will regard it as an association of persons or, in case of two corporations, merge them into one.27

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.28

This formulation has been applied by this Court to cases in which the laborer has been put in a disadvantageous position
as a result of the separate juridical personalities of the employers involved.29 Pursuant to veil-piercing, we have held two
corporations jointly and severally liable for an employee's back wages.30 We also considered a corporation and its
separately-incorporated branches as one and the same for purposes of finding the corporation guilty of illegal
dismissal.31 These rulings were made pursuant to the fundamental doctrine that the corporate fiction should not be used
as a subterfuge to commit injustice and circumvent labor laws.32

Here, a certification election was ordered to be held for all the rank-and- file employees of Super Lamination, Express
Lamination, and Express Coat.1âwphi1 The three companies were supposedly distinct entities based on the fact that
Super Lamination is a sole proprietorship while Express Lamination and Express Coat were separately registered with the
SEC.33 The directive was therefore, in effect, a piercing of the separate juridical personalities of the corporations
involved. We find the piercing to be proper and in accordance with the law as will be discussed below.
The following established facts show that Super Lamination, Express Lamination, and Express Coat are under the control
and management of the same party - petitioner Ang Lee. In effect, the employees of these three companies have
petitioner as their common employer, as shown by the following facts:

1. Super Lamination, Express Lamination, and Express Coat were engaged in the same business of providing lamination
services to the public as admitted by petitioner in his petition.34

2. The three establishments operated and hired employees through a common human resource department as found by
DOLE in a clarificatory hearing.35 Though it was not clear which company the human resource department was officially
attached to, petitioner admits in his petition that such department was shared by the three companies for purposes of
convenience.36

3. The workers of all three companies were constantly rotated and periodically assigned to Super Lamination or Express
Lamination or Express Coat to perform the same or similar tasks.37 This finding was further affirmed when petitioner
admitted in his petition before us that the Super Lamination had entered into a work-pooling agreement with the two
other companies and shared a number of their employees.38

4. DOLE found and the CA affirmed that the common human resource department imposed disciplinary sanctions and
directed the daily performance of all the members of Unions A, B, and C.39

5. Super Lamination included in its payroll and SSS registration not just its own employees, but also the supposed
employees of Express Lamination and Express Coat. This much was admitted by petitioner in his Motion to
Dismiss40 which was affirmed by the Med-Arbiter in the latter's Order.41

6. Petitioner admitted that Super Lamination had issued and signed the identification cards of employees who were
actually working for Express Lamination and Express Coat.42

7. Super Lamination, Express Lamination, and Express Coat were represented by the same counsel who interposed the
same arguments in their motions before the Med-Arbiters and DOLE.43

Further, we discern from the synchronized movements of petitioner and the two other companies an attempt to
frustrate or defeat the workers' right to collectively bargain through the shield of the corporations' separate juridical
personalities. We make this finding on the basis of the motions to dismiss filed by the three companies. While similarly
alleging the absence of an employer-employee relationship, they alternately referred to one another as the employer of
the members of the bargaining units sought to be represented respectively by the unions. This fact was affirmed by the
Med-Arbiters' Orders finding that indeed, the supposed employees of each establishment were found to be alternately
the employees of either of the two other companies as well. This was precisely the reason why DOLE consolidated the
appeals filed by Unions A, B, and C.44

Due to the finger-pointing by the three companies at one another, the petitions were dismissed. As a result, the three
unions were not able to proceed with the conduct of the certification election. This also caused confusion among the
employees as to who their real employer is, as Union A claims in its Comment.45

We hold that if we allow petitioner and the two other companies to continue obstructing the holding of the election in
this manner, their employees and their respective unions will never have a chance to choose their bargaining
representative. We take note that all three establishments were unorganized. That is, no union therein was ever duly
recognized or certified as a bargaining representative.46

Therefore, it is only proper that, in order to safeguard the right of the workers and Unions A, B, and C to engage in
collective bargaining, the corporate veil of Express Lamination and Express Coat must be pierced. The separate existence
of Super Lamination, Express Lamination, and Express Coat must be disregarded. In effect, we affirm the lower tribunals
in ruling that these companies must be treated as one and the same unit for purposes of holding a certification election.

Petitioner has cited Diatagon Labor Federation Local v. Ople47 and lndophil Textile Mill Worker Union v. Calica48 in which
this Court refused to treat separate corporations as a single bargaining unit. Those cases, however, are not substantially
identical with this case and would not warrant their application herein. Unlike in the instant case, the corporations
involved were found to be completely independent or were not involved in any act that frustrated the laborers' rights.

In Diatagon,49 we refused to include the 236 employees of Georgia Pacific International Corporation in the bargaining
unit of the employees of Liangga Bay Logging Co., Inc. This Court's refusal was in light of the fact that the two
corporations were indubitably distinct entities with separate corporate identities and origins. Moreover, there was no
discernible attempt to frustrate any of their labor-related rights, as the only conflict was over which bargaining unit they
belonged to.

In Indophil,50 this Court refused to pierce the corporate veil of Indophil Textile Mill and Indophil Acrylic Manufacturing.
We found that the creation of Indophil Acrylic was not a device to evade the application of the collective bargaining
agreement (CBA) between petitioner union and Indophil Textile Mill. This Court further found that despite the similarity
in their business operations, the separate personalities of the two corporations were maintained and were not used for
any of the purposes specified under the law that would warrant piercing. It is also apparent in this case that the workers'
rights were not being hampered by the employers concerned, as the only issue between them was the extent of the
subject CBA's application.

In this case, not only were Super Lamination, Express Lamination, and Express Coat found to be under the control of
petitioner, but there was also a discernible attempt to disregard the workers' and unions' right to collective bargaining.

The foregoing considered, we find no error in the CA' s affirmance of the DOLE directive. We affirm DOLE's application
by analogy of the concept of multi-employer bargaining to justify its Decision to treat the three companies as one. While
the multi-employer bargaining mechanism is relatively new and purely optional under Department Order No. 40-03, it
illustrates the State's policy to promote the primacy of free and responsible exercise of the right to collective
bargaining.51 The existence of this mechanism in our labor laws affirm DOLE's conclusion that its treatment of the
employees of the three companies herein as a single bargaining unit is neither impossible nor prohibited.52 It is justified
under the circumstances discussed above.

Besides, it is an established rule that factual findings of labor officials, who are deemed to have acquired expertise in
matters within their jurisdiction, are generally accorded by the courts not only respect but even finality when supported
by substantial evidence; i.e., that amount of relevant evidence which a reasonable mind might accept as adequate to
justify a conclusion.53

The bargaining unit of the rank-and-

file employees of the three companies
is appropriate.

Petitioner argues that there is no showing that the rank-and-file employees of the three companies would constitute an
appropriate bargaining unit on account of the latter's different geographical locations.54 This contention lacks merit. The
basic test for determining the appropriate bargaining unit is the application of a standard whereby a unit is deemed
appropriate if it affects a grouping of employees who have substantial, mutual interests in wages, hours, working
conditions, and other subjects of collective bargaining.55 We have ruled that geographical location can be completely
disregarded if the communal or mutual interests of the employees are not sacrificed.56
In the present case, there was communal interest among the rank-and-file employees of the three companies based on
the finding that they were constantly rotated to all three companies, and that they performed the same or similar duties
whenever rotated.57 Therefore, aside from geographical location, their employment status and working conditions were
so substantially similar as to justify a conclusion that they shared a community of interest. This finding is consistent with
the policy in favor of a single-employer unit, unless the circumstances require otherwise.58The more solid the employees
are, the stronger is their bargaining capacity.59

As correctly observed by the CA and DOLE, while there is no prohibition on the mere act of engaging in a work-pooling
scheme as sister companies, that act will not be tolerated, and the sister companies' separate juridical personalities will
be disregarded, if they use that scheme to defeat the workers' right to collective bargaining. The employees' right to
collectively bargain with their employers is necessary to promote harmonious labor-management relations in the
interest of sound and stable industrial peace.60

WHEREFORE, the Petition for Review on Certiorari under Rule 45 is DENIED for lack of merit. The Court of Appeals
Decision61 and Resolution62 in CA-G.R. SP No. 109486 are hereby AFFIRMED.

SO ORDERED.

MARIA LOURDES P.A. SERENO

Chief Justice, Chairperson