Labor2 Asignment 1

LABOR RELATIONS LAW
PART ONE – INTRODUCTION MATERIALS
LABOR RELATIONS POLICY: FORMULATION AND HISTORICAL DEVELOPMENT
1987 CONTITUTION
Article II, SECTION 2. The Philippines renounces war as an instrument of national policy, adopts the generally
accepted principles of international law as part of the law of the land and adheres to the policy of peace, equality,
justice, freedom, cooperation, and amity with all nations.
SECTION 10. The State shall promote social justice in all phases of national development.
SECTION 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers
and promote their welfare.
Article III, SECTION 8. The right of the people, including those employed in the public and private sectors, to form
unions, associations, or societies for purposes not contrary to law shall not be abridged.
Article IX – B, SECTION 2. (2) Appointments in the civil service shall be made only according to merit and fitness to
be determined, as far as practicable, and, except to positions which are policy-determining, primarily confidential, or
highly technical, by competitive examination.
Article XII, SECTION 12. The State shall promote the preferential use of Filipino labor, domestic materials and locally
produced goods, and adopt measures that help make them competitive.
Article XIII, SECTION 3

The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote
full employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to
security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers and employers and the
preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers, recognizing the right of labor to its just
share in the fruits of production and the right of enterprises to reasonable returns to investments, and to
expansion and growth.
SECTION 14
The State shall protect working women by providing safe and healthful working conditions, taking into account
their maternal functions, and such facilities and opportunities that will enhance their welfare and enable them
to realize their full potential in the service of the nation.
Labor Code of the Philippines
Article 3- ART. 3. Declaration of basic policy. - The State shall afford protection to labor, promote full employment,
ensure equal work opportunities regardless of sex, race or creed and regulate the relations between workers and
employers. The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure,
and just and humane conditions of work.
Art. 211. Declaration of Policy.
A. It is the policy of the State:
a. To promote and emphasize the primacy of free collective bargaining and negotiations, including voluntary
arbitration, mediation and conciliation, as modes of settling labor or industrial disputes;
b. To promote free trade unionism as an instrument for the enhancement of democracy and
the promotion of social justice and development;
c. To foster the free and voluntary organization of a strong and united labor movement;
d. To promote the enlightenment of workers concerning their rights and obligations as union members and as
employees;
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e. To provide an adequate administrative machinery for the expeditious settlement of labor or industrial disputes;
f. To ensure a stable but dynamic and just industrial peace; and
g. To ensure the participation of workers in decision and policy-making processes affecting their rights, duties
and welfare.
B. To encourage a truly democratic method of regulating the relations between the employers and employees by means
of agreements freely entered into through collective bargaining, no court oradministrative agency or official shall have
the power to set or fix wages, rates of pay, hours ofwork or other terms and conditions of employment, except as
otherwise provided under this Code.(As amended by Section 3, Republic Act No. 6715, March 21, 1989)
Art. 275. Tripartism and tripartite conferences.
a. Tripartism in labor relations is hereby declared a State policy. Towards this end, workers and employers shall,
as far as practicable, be represented in decision and policy-making bodies of the government.
b. The Secretary of Labor and Employment or his duly authorized representatives may, from time to time, call a
national, regional, or industrial tripartite conference of representatives of government, workers and employers
for the consideration and adoption of voluntary codes of principles designed to promote industrial peace based
on social justice or to align labor movement relations with established priorities in economic and social
development. In calling such conference, the Secretary of Labor and Employment may consult with accredited
representatives of workers and employers. (As amended by Section 32, Republic Act No. 6715, March 21,
1989)
Cases:
1. Associacion de Agricultores vs. Talisay – Silay Mining Co., 88 SCRA 294
Title: ASSOCIACION DE AGRICULTURES DE TALISAY-SILAY, INC., et. al. vs. TALISAY-SILAY

MILLING CO., INC., et. al
G.R. No. L-37662 July 15, 1975
Nature: Class suit determining the constitutionality of R.A. 809
Keywords: Planters and millers of sugarcane
Summary:
Facts: The claim of the plaintiffs is that inasmuch as under Republic Act 809, approved on June 22, 1952, it
is provided that:
Section 1. In the absence of written milling agreements between the majority of planters and the millers
of sugarcane in any milling district in the Philippines, the unrefined sugar produced in that district from
the mining by any sugar central of the sugar-cane of any sugar-cane planter or plantation owner, as
well as all by products and derivatives thereof, shall be divided between them as follows:
Sixty per centum for the planter, and forty per centum for the central in any milling district the maximum
actual production of which is not more than four hundred thousand piculs: Provided, That the
provisions of this section shall not apply to sugar centrals with an actual production of less than one
hundred fifty thousand piculs.
Sixty-two and one-half per centum for the planter, and thirty-seven and one-half per centum for the
central in any milling district the maximum actual production of which exceeds four hundred thousand
piculs but does not ex six hundred thousand piculs;
Sixty-five per centum for the planter, and thirty-five per centum for the central in any milling district the
maximum actual production of which exceeds six hundred thousand piculs but does not exceed nine
hundred thousand piculs;
Sixty-seven and one-half per centum for the planter, and thirty-two and one-half per centum for the
central in any mining district the maximum actual production of which exceed nine hundred thousand
piculs but does not exceed one million two hundred thousand piculs;
Seventy per centum for the planter, and thirty per centum for the central in any milling district the
maximum actual production of which exceeds one on two hundred thousand piculs.
As second and alternative cause of action, the PLANTERS averred that on or before October 24,
1954, the CENTRAL executed contracts with eight planters in which a higher percentage of partition
in the sugar and by-products and derivatives produced by the CENTRAL was given to said eight
planters than those given to the rest of the planters in the district, that is, 63% to 64%, the latter,
whenever the production of the CENTRAL should be 1,200,000 piculs or over, whereas all the others
were given only 60%, and inasmuch as under the provisions of the milling contracts between the
PLANTERS and the CENTRAL since the crop year 1920-1921.
As third cause of action, the PLANTERS alleged that notwithstanding that the applicability of Republic
Act 809 to the Talisay-Silay milling district had already been ruled upon by the Sugar Quota
Administrator, the Central still refused to abide by said ruling and to cause the release to the plaintiffs
of the corresponding amounts to which they are entitled.
CENTRAL filed its respective answers to the amended complaint and the supplements thereto. In said
answers, the CENTRAL alleged in substance the following defenses: (1) that Republic Act 809 is
invalid and unconstitutional; (2) that even if said Act were valid, it is not applicable to the Talisay-Silay
milling district because the majority of the planters had written milling contracts with the CENTRAL at
the time said Act went into effect, and that this continued during the crop years 1951-52, 1952-53,
1953-54, and all the subsequent crop years in dispute; (3) that the planters who entered into said
milling contracts did so voluntarily and those voluntary contracts may not be altered or modified without
infringing the constitutional guarantee on freedom of contracts and the non-impairment clause of the
Constitution; and as to those planters who entered into contracts after the effective date of the law,
they should be deemed as having voluntarily waived all the rights and benefits that might accrue to
them under it; (4) that the Act does not contain any expressed or implied provision invalidating the
written milling contract s entered into between the CENTRAL and the owners of adherent plantations
before its effective date; (5) that the Act sanctions and allows the entering into milling contracts after
its effective date, and as a matter of fact a large number of the PLANTERS are also planters in the
Hawaiian-Philippine milling district, adjoining the Talisay-Silay milling district, and they had entered
into milling contracts with the Hawaiian-Philippine Co. one year and four months after the effectivity
of the Act and in their milling contracts they had stipulations regarding sharing participation without
regard to the ratios fixed in the Act, and they have abided by those mining contracts, and (6) that the
arrangement, regarding the issuance of escrow quedans and the deposit of the proceeds of the sale
of the disputed increased participation of the planters was agreed to and accepted by the CENTRAL
from the Sugar Quota Administrator under duress, because said Administrator would not allow the
issuance of any warehouse receipt on the share of the mill unless the CENTRAL agreed to the escrow
quedans arrangement; (7) that neither are the PLANTERS entitled to increased participation as
claimed by them in their second and alternative cause of action because they do not qualify as the
PLANTERS contemplated in their invoked twenty second (Vigesimo Segundo) paragraph of the
original milling contract, since what are referred to in that paragraph are only the PLANTERS "que se
obliguen a molercailadulce en la fabrics para la cosecha 1920-21 "; (8) that the provisions of Republic
Act 809 relating to the increased sharing participation of the planters would affect and alter the
allocation of exportable sugar to the United States (export A sugar) among Philippine mills and
plantation owners, in violation of the Trade Relations Agreement between the Philip pines and the
United States, and this is precisely what is expected from the application of the law as provided in the
second paragraph of Section 8 of the very same Republic Act 809; and (9) that the instant case is not
a proper one for a class suit.
Issues: Whetherthat Republic Act 809 is invalid and unconstitutional. – NO.
Ratio: Police Power
In Lutz vs. Araneta (G.R. No. L-2859, Dec. 22 1959), this Court recognized the propriety of exercising
police power when it is needed to do so in order that our sugar industry may be stabilized, and to that
end, it was held that the legislature could provide that the distribution of benefits from the proceeds of
sugar be readjusted among the components of the industry to enable it to resist the added strain of
the increase in taxes that it had to sustain then. With at least equal persuasiveness must such
reasoning obtain when the re-adjustment of the distribution of proceeds is impelled by the need to
render social justice among all the participants in the industry, specially the laborers. The amicus
curiae held that there is not enough showing of unreasonableness in the legislation in question. Quite
to the contrary, all the provisions of the impugned act to be germane to the end being pursued.
Social Justice
But it is not police power alone that sustains the validity of the statutory provision in dispute. Having
in view its primary objective to promote the interests of labor, it can never be possible that the State
would be bereft of constitutional authority to enact legislations of its kind. Here, in the Philippines,
whenever any government measure designed for the advancement of the working class is impugned
on constitutional grounds and shadows of doubt are cast over the scope of the State's prerogative in
respect thereto, the imperious mandate of the social justice Ideal consecrated in our fundamental
laws, both the old and the new asserts its majesty, upon the courts to accord utmost consideration to
the spirit animating the act assailed, not just for the sake of enforcing the explicit social justice
provisions of the article on "Declaration of Principles and State Policies", but more fundamentally, to
serve the sacred cause of human dignity, which is actually what lies at the core of those constitutional
precepts as it is also the decisive element always in the determination of any controversy between
capital and labor.
Thus, Section 5 of Article II of the Constitution of 1935, under the aegis of which the law in question
was enacted, made it one of the declared principles to which the people committed themselves that
"the promotion of social justice to insure the well being and economic dc security of all the people
should be the concern of the State." More specifically in regard to labor, there was also Section 6 of
Article XIX, to the effect that "the State shall afford protection to labor ... and shall regulate the relation
between . . . labor and capital in industry and in agriculture. It is difficult to conceive of any legislation
more aptly rooted in the declared principle and the plain injunction of the old Constitution just quoted
than the Act under discussion which is a law to regulate the relations between the centrals and the
planters with the primordial objective of protecting and promoting the interests of labor. In regard then
to the arguments of the centrals relative to due process and the sanctity of contractual obligations as
well as the freedom of contract, We hold that more cogently than in regard to the exertion of police
power as discussed above, the criterion for determining whether or not social justice has been over-
extended in any given case is nothing more than the economic viability or feasibility of the proposed
law in favor of labor, and certainly not the existence of exceptional circumstances. In other words, as
long as capital in industry or agriculture will not be fatally prejudiced to the extent of incurring losses
as a result of its enforcement, any legislation to improve labor conditions would be valid, provided the
assailed legislation is more or less demanded as a measure to improve the situation in which the
workers and laborers are actually found And in the case at bar, there is not even a pretension that the
finances of the centrals would be anywhere in the red as a result of the enforcement of Republic Act
809.
In the light of the foregoing considerations, We do not find the position of the Central that Section I of
Republic Act 809 interferes unconstitutionally with existing contracts and the freedom of all the parties
concerned in entering into new ones to be sufficiently persuasive.
If We declare the Act unconstitutional upon the ground that it is unwarranted invasion of the freedom
of contract as between the millers and the planters, the deplorable condition of the laborers in the
sugar farms would remain as it was before its enactment. On the other hand, if We sustain its validity
but at the same time apply it literally and sanction a construction thereof that would enable the centrals
and their planters to enter into agreements, under which the latter would have to be given increased
participation without any obligation to share the same with their laborers, the Court would be a party
to a conspiracy to virtually defraud labor of the benefits, the grant of which is precisely its sole
redeeming feature to save it from unconstitutionality. For it is clear for anyone to see that without the
Act, under the conditions prevailing in the industry, the planters would have no means of persuading,
much less compelling, the centrals or millers to give them any increase in their respective shares,
whereas, with this law, faced with the prospect of being forced to grant the planters their proportion of
sharing prescribed by it, if no written contracts were to be signed by them with the majority of the
planters, naturally, the centrals would readily agree to give the planters the increase they want, —
which could be less than that stipulated in the Act and yet be exactly what the planters would get
under it if the majority of them were not to have written contracts with the central. In which eventuality,
and should we uphold the proposed strictly literal construction of the Act, the laborers would be left
holding the proverbial empty bag. In that way, the interests of the capitalist components of the industry,
the millers and planters, would be served by the compulsive effect of the law but labor would not be
assured of receiving even the crumbs, when the truth is that the legislation would have no reason for
being as a constitutional and enforceable statute if it did not include mandatory provisions designed
to lift them from misery. The Court emphatically refuses to have anything to do with such an
unconscionable posture vis-a-vis the fate of labor, which pose, after all We must assume could not
have been in the contemplation of the legislature that precisely inserted into it its pro-labor element in
order to bring it within the ambit of the social justice and police power protection of the fundamental
law. We condemn such a view as definitely anti-social and as a gross injustice to labor, which no
respectable legislature composed of duly elected representatives of the people may ever be deemed
as capable of dirtying the sacred statute books with.
Ruling: All of the CENTRAL's counterclaim are hereby accordingly overruled. In G.R. No. L-21304, the petition
is hereby dismissed the issues raised therein, as We have demonstrated a few pages back, having
already become moot and academic. No attorney's fees, bad faith on the part of the CENTRAL in the
premises not having been sufficiently Shown. No costs in both cases.
Doctrine: As long as capital in industry or agriculture will not be fatally prejudiced to the extent of incurring losses
as a result of its enforcement, any legislation to improve labor conditions would be valid, provided the
assailed legislation is more or less demanded as a measure to improve the situation in which the
workers and laborers are actually found And in the case at bar, there is not even a pretension that the
finances of the centrals would be anywhere in the red as a result of the enforcement of Republic Act
809.
Associacio de Agricultores v. Talisay-Silay Mining Co., 88 SCRA 294
FACTS: On 22 June 1952, Republic Act 809 was enacted for the purpose of addressing the necessity to increase the
share of planters and laborers in the income derived from the sugar industry. Said act was to regulate the relations
among the persons engaged in the sugar industry. Under Section 1 thereof, it was provided that “in the absence of
written milling agreements between the majority of planters and the millers of sugarcane in any milling district in the
Philippines, the unrefined sugar produced in that district from the milling by any sugar central of the sugar cane of any
sugarcane planter or planter-owner, as well as all by-products and derivative thereof, shall be divided between them
as follows: 60% for the planter and 40% for the central in any district the maximum actual production of which is not
more than 400,000 piculs..” The Association de Agricultores de Talisay-Silay Inc. and six sugarcane planters filed a
petition to the Secretary of Labor, praying that the latter (1) declare the applicability to the Talisay-Silay Mill District of
the sharing participation prescribed by RA 809 for every crop year starting from 1952-1953; (2) adjudicated in favor of
the planters and their laborers in the account entitled “In trust for Talisay-Silay Milling Co. Inc., and Department of
Labor”; (3) order the Central to account for any unsold quedans or the proceeds thereof which have been deposited
with the PNB in the trust account; (4) order the Central to account for and pay jointly and severally to the planters and
their laborers the proceeds of the sugar representing the increased participation for the 1954-1955 crop year plus legal
interest in facor of the planters computed on the basis of the average market price during the month within which the
sugar was sold. On the other hand, the Talisay-Silay Milling Co. Inc. alleged that (1) RA 809 was invalid and
unconstitutional; (2) that even if it was valid, the planters had written milling contracts with the Central at the time the
said act went into effect, and (3) the planters who entered into said contracts did so voluntarily and those voluntary
contracts may not be altered or modified without infringing the constitutional guarantee on freedom of contracts and
non-impairment clause of the Constitution.
ISSUE: Whether RA 809 would violate the non-impairment clause of the Constitution and infringe the Constitutional
guarantee on freedom of contracts if applied to the Talisay-Silay Mill District.
HELD: [No] RA 809 is a social justice and police power measure for the promotion of labor conditions in sugar
plantations; hence, whatever rational degree of constraint it exerts on freedom of contract and existing contractual
obligation as is constitutionally permissible. The said act was concerned and enacted as a social legislation designed
primarily to ameliorate the condition of the laborers in the sugar plantation. Having in view its primary objective, to
promote the interests of the labor, it can never be possible that the State would be bereft of constitutional authority to
enact legislations of its kind. The imperious mandate of the social justice ideal consecrated in our fundamental laws,
asserts its majesty, calling upon the courts to accord utmost consideration to the spirit animating the act assailed, not
just for the sake of enforcing the explicit social justice provisions of the article on “Declaration of Principles and State
Policies”, but more fundamentally, to serve the sacred cause of human dignity, which is actually what lies at the core
of those constitutional precepts as it is also the decisive element always in the determination of any controversy
between capital and labor. RA 809, which provides for bigger shares to the planters in the big milling districts than those
in the small milling districts, does not violate the equal protection clause considering that the more a central produces,
the bigger could be its margin of profit which can be correspondingly cut for the purpose of enlarging the share of the
planters
2. PAL vs. PALEA, 57 SCRA 489
Title: (2) PAL vs PALEA, 57 SCRA 489 (Reinstatement of Fidel Gotangco by the Court of Industrial
Relations despite the guilty finding for breach of trust and violation of the rules and regulations)
Nature: Appeal by certiorari from a resolution of Court of Industrial Relations
Keywords: Security of tenure, Reinstatement, Too severe a penalty
Summary: Court of Industrial Relation to SC
Facts: Fidel Gotangco was found guilty of breach of trust and violation of the rules and regulations of his
employer after a piece of lead material of negligible value which he intended to bring home for personal
use was confiscated from his person by a security guard. Hence, Gotangco was dismissed.
However, the Court of Industrial Relations ordered his reinstatement without payment of backwages.
It ruled that the dismissal is too severe a penalty to impose on Gotangco because (1) it is his first time
to commit the charge in question for the duration of his 17 years of service with respondent; (2) the
cost of said material, considering its size, is negligible (8" x 10" x 1/2"); (3) respondent did not lose
anything after all as the lead material was retrieved in time; (4) the ignominy and mental torture
undergone by Gotangco is practically punishment in itself; and (5) he has been under preventive
suspension to date. For which reason, it would seem more equitable to retain than dismiss him.
On the other hand, PAL seek to reverse the order of the Court of Industrial Relations reinstating
Gotangco. It alleged that the Court should not order the reinstatement of Gotangco in the light of its
undisputed finding that he is guilty of breach of trust and violation of the rules and regulations of his
employer and upon the principle that the Court of Industrial Relations cannot arrogate upon itself the
authority to order an employer to reinstate a dismissed employee who admittedly has breached the
trust of his employer.
Issues: Whether or not the Court of Industrial Relations can arrogate upon itself the authority to order an
employer to reinstate a dismissed employee who admittedly has breached the trust of his employer
on the ground of the Constitutional provision on security of tenure?
Ruling: Yes. The Court of Industrial Relations may order an employer to reinstate a dismissed employee.
The paramount police power is a limitation on the right of an employer to freely select or discharge his
employees. Moreover, while there was an admission that misfeasance or malfeasance could be a
ground for dismissal, the last sentence thereof reads: "The law, in protecting the rights of the laborer,
authorizes neither oppression nor self-destruction of the employer." Where, therefore, it could be
shown that the result would be neither oppressive nor self-destructive, it cannot be asserted
dogmatically that an outright termination, of employment is justified. The Constitution also expressly
requires the State to assure workers "security of tenure.
In this case, the court noted that in cases where the dismissal or suspension of an employee is
capricious, or unjustified, or of another mode illegal, the State must protect the worker through its
agency or instruments, in this case, it is the Court of Industrial Relations.
Doctrine: In cases where the dismissal or suspension of an employee is capricious, or unjustified, or of another
mode illegal, the State must protect the worker through its agency or instruments.
2. PAL v. PALEA, 57 SCRA 489
FACTS: Fidel Gotangco, an employee of Philippine Airlines for almost 17 years, was caught and apprehended by the
authorities of such company trying to slip out a lead material which size is just 8 x 10 x ½ inches.
Philippine Airlines filed a case of breach of trust and violation of the rules and regulations of the company before the
Court of Industrial Relations.
However such court dismissed the case filed by Philippine airlines and ordered Fidel Gotangco be reinstated despite a
blatant violation of the rules and regulations of such company.
Hence, Philippine airlines filed an appeal before the Court.
ISSUE: Whether or not the Court of Industrial Relations committed a grave abuse of discretion amounting to lack of
jurisdiction for its decision reinstating Fidel Gotangco despite a blatant violation of the rules and regulations of such
company.
HELD: No. The Court of Industrial Relations did not commit a grave abuse of discretion amounting to lack of jurisdiction
for its decision reinstating Fidel Gotangco despite a blatant violation of the rules and regulations of the company.
The order was proper. The whole controversy is centered around the right of the Court of Industrial Relations to order
the readmission of a laborer who, it is admitted, had been found derelict in the performance of his duties towards his
employer. We concede that the right of an employer to freely select or discharge his employees, is subject to regulation
by the State basically in the exercise of its paramount police power. (Com. Act Nos. 103 and 213). But much as we
should expand beyond economic orthodoxy, we hold that an employer cannot legally be compelled to continue with the
employment of a person who admittedly was guilty of misfeasance or malfeasance towards his employer, and whose
continuance in the service of the latter is patently inimical to his interests.'" Its tone of certitude is unwarranted. The
very excerpt cited speaks of the paramount police power as a limitation on the right of an employer to freely select or
discharge his employees. Moreover, while there was an admission that misfeasance or malfeasance could be a ground
for dismissal, the last sentence thereof reads: "The law, in protecting the rights of the laborer, authorizes neither
oppression nor self-destruction of the employer." Where, therefore, it could be shown that the result would be neither
oppressive nor self-destructive, it cannot be asserted dogmatically that an outright termination, of employment is
justified. n the light of all the circumstances disclosed, particularly that it was a first offense after seventeen years of
service, reached the conclusion, neither arbitrary nor oppressive, that dismissal was too severe a penalty, this Court
should not view the matter differently. From the facts as found by respondent Court accepted by petitioner, the offense
was "breach of trust and violation of the rules and regulations of the company." A lead material of negligible size, in the
opinion of respondent Court, its measurement being eight inches by ten inches, with thickness of one-half inch, not
shown to be of any use to the company, hardly of any pecuniary worth, it would be too harsh an appraisal to view it as
constituting theft.
3. PLDT vs. NLRC, 164 SCRA 671
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, petitioner,vs. THE NATIONAL
Title:
LABOR RELATIONS COMMISSION and MARILYN ABUCAY, respondents.
Nature:
Keywords: Terminated for Dishonesty,No Separation Pay/Financial Assistance
Summary:
• Marilyn Abucay, a traffic operator of the Philippine Long Distance Telephone Company, was
accused by two complainants of having demanded and received from them the total amount of
P3,800.00 in consideration of her promise to facilitate approval of their applications for
telephone installation.
• 1 Investigated and heard, she was found guilty as charged and accordingly separated from the
service.
• LA Marilyn Abucay went to the Ministry of Labor and Employment claiming she had been
illegally removed. After consideration of the evidence and arguments of the parties, illegal
Facts: termination case is dismissed for lack of merit but she must be given one month pay for every
year of service as financial assistance
• Considering that Dr. Helen Bangayan and Mrs.Consolacion Martinez are not totally blameless
in the light of the fact that the deal happened outhide the premises of respondent company and
that their act of giving P3,800.00 without any receipt is tantamount to corruption of public
officers.�
NLRC Both the petitioner and the private respondent appealed to the National Labor Relations
Board, which upheld the said decision in toto and dismissed the appeals. The private
respondent took no further action, thereby impliedly accepting the validity of her dismissal
Issues: WON an employee who was terminated due to dishonesty is entitled to financial assistance.
NO,the policy of social justice is not intended to countenance wrongdoing simply because it is
committed by the underprivileged. At best it may mitigate the penalty but it certainly will not
condone the offense. Compassion for the poor is an imperative of every humane society but
only when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot be
permitted to be refuge of scoundrels any more than can equity be an impediment to the
punishment of the guilty. Those who invoke social justice may do so only if their hands are clean
and their motives blameless and not simply because they happen to be poor. This great policy
of our Constitution is not meant for the protection of those who have proved they are not worthy
of it, like the workers who have tainted the cause of labor with the blemishes of their own
character.
Ruling:
Applying the above considerations, we hold that the grant of separation pay in the case at bar is
unjustified. The private respondent has been dismissed for dishonesty, as found by the labor
arbiter and affirmed by the NLRC and as she herself has impliedly admitted. The fact that she
has worked with the PLDT for more than a decade, if it is to be considered at all, should be
taken against her as it reflects a regrettable lack of loyalty that she should have strengthened
instead of betraying during all of her 10 years of service with the company. If regarded as a
justification for moderating the penalty of dismissal, it will actually become a prize for disloyalty,
perverting the meaning of social justice and undermining the efforts of labor to cleanse its ranks
of all undesirables.
Social Justice
Doctrine: The policy of social justice is not intended to countenance wrongdoing simply because it is
committed by the underprivileged.
PLDT v. NLRC, 164 SCRA 671
FACTS: Marilyn Abucay, a traffic operator of the Philippine Long Distance Telephone Company (PLDT), was accused
by two (2) complainants of having demanded and received from the the total amount of P3,800 in consideration of her
promise to facilitate approval of their applications for telephone installation. Investigated and heard, she was found
guilty as charged and accordingly separated from the service. She went tot he Ministry of Labor and Employment
claiming she had been illegally removed. After the evidence and arguments of the parties were considered, the
company was sustained and the complaint was dismissed for lack of merit. The Labor Arbiter’s decision, however,
awarded financial assistance to Abucay equivalent to one month of pay for every year of service. Both Abucay and
PLDT appealed to the National Labor Relations Borad, which upheld the decision in toto. PLDT filed a petition for
certiorari before the Supreme Court. The Supreme Court granted the petition, affirming the decision of the Board except
for the grant of separtation pay in the form of financial assistance, which was disallowed.
ISSUE: Whether Abucay is entitled to financial assistance / separation pay even if she was removed from employment
for just case, on the basis of equity and compassion and due to previous decisions of the Supreme Court.
HELD: The rule embodied in the Labor Code is that a person dismissed for cause (as defined therein) is not entitled to
separation pay. The case of Firestone Tire vs. Lariosa, Soco vs. Mercantile Corporation of Davao, Filipino Inc. vs.
NLRC, and others, constitute the exception, based upon considertations of equity. Equity has been defined as justice
outside law, being ethical rather than jural and belonging to the sphere of morals than of law. Hence, it cannot prevail
against the expressed provision of the labor laws allowing dismissal of employees for cause and without any provision
for separation pay. Still, where the exception has been applied, the justification for the grant of separation pay and the
amount or rate of such award. has not been consistent. The Court, thus, made distinctions. Where it comes to such
valid but not iniquitous causes as failure to comply with work standards, the grant of separation pay to the dismissed
employee may be both just and compassionate, particularly if he has worked for some time with the company. Under
such circumstances, the award to the employee of separation pay would be sustainable under the social justice policy
even if the separation is for cause. Separation pay shall be allowed as a measure of social justice only in those instances
where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral
character. A contrary rule would have the effect of rewarding rather than punishing the erring employee for his offense.
The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the
underprivileged.
Statutory Source and Interpretation

Cases:
4. BF Goodrich Confidential and Salaried Employees Union vs. BF Goodrich Philippines, Inc., 49 SCRA
532
Title: BF Goodrich Philippines Inc, vs BF Goodrich Confidential and Salaried Employees Union
(49 SCRA 532)
Nature: Review for certiorari of decision of Court of of Industrial Relations
Keywords: Certification election pending unfair labor practice case
Summary:
Facts:  Rodolfo Pajaro, as President of B.F. Goodrich (Makati Office) Confidential and Salaried
Employees Union-NATU, Pablo C. Fulgar, as President of B.F. Goodrich (Marikina Factory)
Confidential and Salaried Employees Union-NATU and one MarcelinoLontok, Jr., representing
himself as Vice-President, NATU, sent a letter to the petitioner, seeking recognition as the
bargaining agent of such employees so that thereafter there could be negotiations for a
collective contract.
 Petitioner, as employer, countered by filing two petitions for certification election with
respondent Court of Industrial Relations (CIR).
 A case for unfair labor practice (Case No. 5612-ULP) was filed by the petitioner against the
private respondents for staging a strike to force recognition of their unions. The petitioner also
filed identical motions in MC Cases Nos. 2995 and 2996 to hold in abeyance the hearings of
the petitions for certification election.
 It is petitioner's stand that if Case No. 5612-ULP will prosper and the strike staged by
respondent unions during the pendency of the instant cases will be declared illegal and the
individual members cited therein as respondents found guilty of the unfair labor practice acts
complained of, the latter will consequently lose their status as employees and will be
disqualified to vote in a certification election that may be ordered by the Court
 Respondents maintain that the pendency of said unfair labor practice case is not a bar to the
hearing of the instant cases
Court of Denied the petitioner's motions. Held that Individual respondents in the ULP case are still
Industrial employees and possessed of the right to self-organization. Included therein is their choice of a
Relations bargaining representative. To hold the certification proceedings in abeyance until final judgment
(CIR) of the ULP case will be a denial of the aforesaid statutory right, the employees being left without
a collective bargaining representative.
CIR (recon) Decision affirmed
Issues: Whether or not a certification election may be stayed at the instance of the employer, pending the
determination of an unfair labor practice case filed by it against certain employees affiliated with
respondent-unions.
Ratio:  There is no valid reason for the postponement sought. There is no certitude that the final
decision arrived at in the pending unfair labor practice case would sustain the claim of
petitioner. Even if success would attend such endeavor, it cannot be plausibly asserted that its
employees adjudged as having been engaged in such illegal strike are ipso facto deprived of
such status.
 Management is not to be precluded from filing an unfair labor practice case but such suit should
not be allowed to lend itself as a means, whether intended or not, to prevent a truly free
expression of the will of the labor group as to the organization that will represent it.
Ruling: The case does not show abuse of discretion to warrant reversal of actuation of the respondent
court. Petition dismissed
Doctrine: As expressly set forth in the Industrial Peace Act, which speaks of the labor organizations as
"designated or selected for the purpose of collective bargaining by the majority of the employees
in an appropriate collective bargaining unit [be the exclusive] representative of all the employees
in such unit for the purpose of collective bargaining." The law clearly contemplates all the
employees, not only some of them. As much as possible then, there is to be no unwarranted
reduction in the number of those taking part in a certification election, even under the guise that in
the meanwhile, which may take some time, some of those who are employees could possibly lose
such status, by virtue of a pending unfair labor practice case.
4. BF Goodrich Confidential and Salaried Employees Union v. BF Goodrich Philippines, Inc. 49 SCRA 532
FACTS: The Goodrich Unions were seeking to be recognized as the bargaining agent of BF Goodrich Phils’ employees
so that there could negotiations for a collective contract. BF Goodrich countered this by filing for two petitions for
certification election with the CIR. Strike notices were sent to the company by the union demanding recognition and
soon after a strike was actually held. The company then filed a case of illegal strike and unfair labor practice against
the unions.
ISSUE: WON the determination of an unfair labor practice case, brought against unions, must precede the holding of
a certification election
HELD: No. REASONING: - If under the circumstances disclosed, management is allowed to have its way, the result
might be to dilute or fritter away the strength of an organization bent on a more zealous defense of labor's prerogatives.
- This is not to say that management is to be precluded from filing an unfair labor practice case. It is merely to stress
that such a suit should not be allowed to lend itself as a means, whether intended or not, to prevent a truly free
expression of the will of the labor group as to the organization that will represent it. - There is no valid reason then for
the postponement sought. This is one instance that calls for the application of the maxim, lex dilationes semper
exhorret. (The law abhors delays.) - The law clearly contemplates all the employees, not only some of them, to take
part in the certification election. (Some of the employees could possibly lose such status, by virtue of a pending unfair
labor practice case, if such case is to be resolved first before the election.) - Another reason (re: no point in the
postponement of said election) is that even if the company wins in the pending case, it does not mean that the
employees involved automatically would lose their jobs making them ineligible to participate in the cert. election. (Ergo
the respondent court decided in the negative.) Besides, it was said in General Maritime Stevedores' Union v. South
Sea Shipping Line: the question of whether or not a certification election shall be held "may well be left to the sound
discretion of the Court of Industrial Relations, considering the conditions involved in the case…."
5. Caltex Filipino Manager and Supervisors Association vs. CIR, 44 SCRA 350
CALTEX FILIPINO MANAGERS AND SUPERVISORS
ASSOCIATION petitioner,
vs.
Title: COURT OF INDUSTRIAL RELATIONS, CALTEX
(PHILIPPINES), INC., W.E. MENEFEE and B.F. EDWARDS,
respondents.
44 SCRA 350
Nature: Statutory Source and Interpretation
Keywords:
Summary:
The Caltex Filipino Managers and Supervisors' Association is a labor organization of Filipino manager’s
supervisors in Caltex(Philippines), Inc., respondent Company in this proceeding. On February 8, 1965,
the Association sent a set of proposals to the Company wherein one of the demands was the
recognition of the Association as the duly authorized bargaining agency for managers and supervisors
in the Company. To this the Company countered stating that a distinction exists between
representatives of management and individuals employed as supervisors and that it is Company's
belief that managerial employees are not qualified for membership in a labor organization; hence, it is
digested that the Association institute a certification proceeding so as to remove any question with
regard to position titles that should be included in the bargaining unit. The Association felt disinclined to
follow the suggestion of the Company and so on February 22, 1965 the Company initiated a
certification proceeding docketed as Case 1484-MC. On March 8, 1965, the Association filed notice to
strike. On the basis of the strike notice filed on March 8, 1965 and in view of acts committed by the
Company which the Association considered as constituting unfair labor practice, the Association struck
Facts: on April 22,1965.The Company, filed Case No. 1484-MC(1) praying among others, to declare the strike
of Caltex Filipino Managers and Supervisors Association “illegal”. The Association's charge for unfair
labor practices against the Company and its officials on September 10, 1965, in Case No. 4344-ULP
against Caltex (Philippines), Inc., W. E. Menefee and B.F. Edwards. According to the latter, the
Company and some of its officials, including B.F. Edwards, inquired into the organization of the
Association and he manifested his antagonism to it and its President; that another Company official,
W.E. Menefee issued a statement of policy designed to discourage employees and supervisors from
joining labor organizations; that the Company refused to bargain although the Association commands
majority representation; that due to the steps taken by the Company to destroy the Association or
discourage its members from continuing their union membership, the Association was forced to file a
strike notice; that on April 22, 1965 it declared a strike; and that during the strike the Company and its
officers continued their efforts to weaken the Association as well as its picket lines. The Company in its
answer filed with respondent court denied the charges of unfair labor
practice.
(a) Whether or not the CIR has jurisdiction over Case No. 1484-MC(1);
(b) Whether or not the strike staged by the Association on April 22, 1965 is illegal and, incident thereto,
whether respondent court correctly terminated the employee status of Jose Mapa,
Issues: Dominador Mangalino and Herminigildo Mandanas and reprimanded and admonished the other officers
of the Association;
(c)Whether or not respondent court correctly absolved the respondents in Case No. 4344-ULP from the
unfair labor practice charge.
Ratio:
Respondent's court's jurisdiction over Case No. 1484-MC(1) has to be tested by the allegations, reading
of said pleading shows that the same is for injunctive relief under Section 9(d) of Republic Act No. 875
(Magna Carta of Labor); for contempt, obviously pursuant to See, 6 of Commonwealth Act No. 103 in
conjunction with Sec. 3 (b) of Rule 71 of the Rules of Court; and for forfeiture of the employee status of
the strikers by virtue of their participation in what the Company considered as an "illegal strike." It is well
known that the scheme in Republic Act No. 875 for achieving industrial peace rests essentially on a
free and private agreement between the employer and his employees as to the terms and conditions
Ruling: under which the employer is to give work and the employees are to furnish labor, unhampered as far
as possible by judicial or administrative intervention. On this premise the lawmaking body has virtually
prohibited the issuance of injunctive relief involving or growing out of labor disputes.
The prohibition to issue labor injunctions is designed to give labor a comparable bargaining power with
capital and must be liberally construed to that end (U.S. vs. Brotherhood of Locomotive Engineers, 79
F. Supp. 485, Certiorari denied, 69 S. Ct. 137, 335
U.S. 867, cause remanded on other grounds, 174 F. 2nd 160, 85 U.S. App. D.C., certiorari denied 70 S.
Ct. 140, 338 U.S. 872, 94 L. Ed. 535). It is said that the prohibition creates substantive and not purely
procedural law. (Oregon Shipbuilding Corporation vs. National Labor Relations Board, 49 F. Supp. 886).
Within the purview of our ruling, speaking through Justice Labrador, in Social Security Employees
Association (PAFLU), et al. vs. The Hon. Edilberto Soriano, et al. (G.R. No. L-20100, July 16, 1964, 11
SCRA 518, 520), there can be no injunction issued against any strike except in only one instance, that
is, when a labor dispute arises in an industry indispensable to the national interest and such dispute is
certified by the President of the Philippines to the Court of Industrial Relations in compliance with Sec.
10 of Republic Act No. 875. As a corollary to this, an injunction in an uncertified case must be based on
the strict requirement See. 9 (d) of Republic Act No. 875; the purpose of such injunction is not to enjoin
the strike itself, but only unlawful activities. To the extent, then, that the Company sought injunctive relief
under Sec. 9(d) of Republic Act No.875, respondent court had jurisdiction over the Company's "Urgent
Petition" dated April 26, 1965.
We now come to the issue as to whether the strike staged by the Association on April 22, 1965 is illegal.
To begin with, we view the return-to-work agreement of May 30, 1965 as in the nature of a partial
compromise between the parties and, more important, a labor contract; consequently, in the latter aspect
the same "must yield to the common good" (Art. 1700, Civil Code of the Philippines) and "(I)n case of
doubt ... shall be construed in favor of the safety and decent living for the laborer" (Art. 1702, ibid). To
our mind when the Company unqualifiedly bound itself in the return-to-work agreement that all employees
will be taken back "with the same employee status prior to April 22, 1965," the Company thereby made
manifest its intention and conformity not to proceed with Case No. 1484-MC, (c) relating the illegality of
the strike incident. For while it is true that there is a reservation in the return-to-work agreement as follows:
6. The parties agree that all Court cases now pending shall continue, including CIR Case No. 1484-MC.
we think the same is to be construed bearing in mind the conduct and intention of the parties. The failure
to mention Case No. 1484-MC(1) while specifically mentioning Case No. 1484-MC, in our opinion, bars
the Company from proceeding with the former especially in the light of the additional specific stipulation
that the strikers would be taken back with the same employee status prior to the strike on April 22, 1965.
The records disclose further that, according to Atty. Domingo E. de Lara when he testified on October 9,
1965, and this is not seriously disputed by private respondents, the purpose of Paragraph 10 of the
return-to-work agreement was, to quote in part from this witness, "to secure the tenure of employees
after the returnto-work agreement considering that as I understand there were demotions and
suspensions of one or two employees during the strike and, moreover, there was this incident Case No.
1484-MC(1)" (see Brief for the Petition pp. 41-42). To borrow the language of Justice J.B.L. Reyes in
Citizens Labor Union Pandacan Chapter vs.
Standard Vacuum Oil Company (G.R. No. L-7478, May 6, 1955), in so far as the illegality of the strike is
concerned in this proceeding and in the light of the records.
... the matter had become moot. The parties had both abandoned their original positions and come
to a virtual compromise and agreed to resume unconditionally their former relations. To proceed
with the declaration of illegality would not only breach this understanding, freely arrived at, but
to unnecessarily revive animosities to the prejudice of industrial peace .
In addition, it is clear that the strike of the Association was declared not just for the purpose of gaining
recognition but also for bargaining in bad faith on the part of the Company and by reason of unfair labor
practices committed by its officials. Significantly, in the voluntary return-to-work agreement entered into
between the Company and the Association, thereby ending the strike, the Company agreed to recognize
for membership in the Association the position titles mentioned in Annex "B" of said agreement.
The guilty conduct of the Company before, during after the strike of April 22, 1965 cannot escape the
Court's attention. It will suffice to mention typical instances by way of illustration. Long prior to the strike,
the Company had interferred with the Cebu Supervisors' Union by enticing Mapa into leaving the Union
under the guise of promotion in Manila; shortly before the strike, B.R. Edwards, Manager-Operations,
had inquired into the formation and organization of the petitioner Association in this case. During the
strike, in addition to the culpable acts of the Company already narrated above, due significance must be
given to the inclusion initially of J.J. Mapa and A. Buenaventura, the Association's President and Vice-
President respectively, in 1965, in two coercion cases filed at that time and their subsequent elimination
from the charges the initiative of the Company after the settlement of strike; the cutting off of telephone
facilities extended Association members in the refinery; and the use of a member of the Association to
spy for the company. The discriminatory acts practiced by the Company against active unionists after the
strike furnish further evidence that Company committed unfair labor practices as charged.
there can be no injunction issued against any strike except in only one instance, that is, when a labor
dispute arises in an industry indispensable to the national interest and such dispute is certified by the
Doctrine
President of the Philippines to the Court of Industrial Relations in compliance with Sec. 10 of Republic
Act No. 875
5. Caltex Filipino Manager and Supervisors Association v. CIR, 44 SCRA 350
FACTS: The Caltex Filipino Managers and Supervisors' Association is a labor organization of Filipino managers
supervisors in Caltex (Philippines), Inc., respondent Company in this proceeding. On February 8, 1965 the Association
sent a set of proposals to the Company wherein one of the demands was the recognition of the Association as the duly
authorized bargaining agency for managers and supervisors in the Company. To this the Company countered stating
that a distinction exists between representatives of management and individuals employed as supervisors and that it
is Company's belief that managerial employees are not qualified for membership in a labor organization; hence, it is
digested that the Association institute a certification proceeding so as to remove any question with regard to position
titles that should be included in the bargaining unit. The Association felt disinclined to follow the suggestion of the
Company and so on February 22, 1965 the Company initiated a certification proceeding docketed as Case 1484- MC.
On March 8, 1965 the Association filed notice to strike. On the basis of the strike notice filed on March 8, 1965 and in
view of acts committed by the Company which the Association considered as constituting unfair labor practice, the
Association struck on April 22, 1965. The Company, filed Case No. 1484-MC(1) praying among others, to declare the
strike of Caltex Filipino Managers and Supervisors Association “illegal”.. The Association's charge for unfair labor
practices against the Company and its officials on September 10, 1965, in Case No. 4344- ULP against Caltex
(Philippines), Inc., W. E. Menefee and B.F. Edwards. According to the latter, the Company and some of its officials,
including B.F. Edwards, inquired into the organization of the Association and he manifested his antagonism to it and its
President; that another Company official, W.E. Menefee issued a statement of policy designed to discourage employees
and supervisors from joining labor organizations; that the Company refused to bargain although the Association
commands majority representation; that due to the steps taken by the Company to destroy the Association or
discourage its members from continuing their union membership, the Association was forced to file a strike notice; that
on April 22, 1965 it declared a strike; and that during the strike the Company and its officers continued their efforts to
weaken the filed with respondent court denied the charges of unfair labor practice.
ISSUE: (a) Whether or not the CIR has jurisdiction over Case No. 1484-MC(1); (b) Whether or not the strike staged by
the Association on April 22, 1965 is illegal and, incident thereto, whether respondent court correctly terminated the
employee status of Jose Mapa, Dominador Mangalino and Herminigildo Mandanas and reprimanded and admonished
the other officers of the Association; and (c) Whether or not respondent court correctly absolved the respondents in
Case No. 4344-ULP from the unfair labor practice charge.
HELD: Respondent's court's jurisdiction over Case No. 1484-MC(1) has to be tested by the allegations, reading of said
pleading shows that the same is for injunctive relief under Section 9(d) of Republic Act No. 875 (Magna Carta of Labor);
for contempt, obviously pursuant to See, 6 of Commonwealth Act No. 103 in conjunction with Sec. 3 (b) of Rule 71 of
the Rules of Court; and for forfeiture of the employee status of the strikers by virtue of their participation in what the
Company considered as an "illegal strike." It is well known that the scheme in Republic Act No. 875 for achieving
industrial peace rests essentially on a free and private agreement between the employer and his employees as to the
terms and conditions under which the employer is to give work and the employees are to furnish labor, unhampered as
far as possible by judicial or administrative intervention. On this premise the lawmaking body has virtually prohibited
the issuance of injunctive relief involving or growing out of labor disputes. The prohibition to issue labor injunctions is
designed to give labor a comparable bargaining power with capital and must be liberally construed to that end (U.S. vs.
Brotherhood of Locomotive Engineers, 79 F. Supp. 485, Certiorari denied, 69 S. Ct. 137, 335 U.S. 867, cause remanded
on other grounds, 174 F. 2nd 160, 85 U.S. App. D.C., certiorari denied 70 S. Ct. 140, 338 U.S. 872, 94 L. Ed. 535). It
is said that the prohibition creates substantive and not purely procedural law. (Oregon Shipbuilding Corporation vs.
National Labor Relations Board, 49 F. Supp. 886). Within the purview of our ruling, speaking through Justice Labrador,
in Social Security Employees Association (PAFLU), et al. vs. The Hon. Edilberto Soriano, et al. (G.R. No. L-20100, July
16, 1964, 11 SCRA 518, 520), there can be no injunction issued against any strike except in only one instance, that is,
when a labor dispute arises in an industry indispensable to the national interest and such dispute is certified by the
President of the Philippines to the Court of Industrial Relations in compliance with Sec. 10 of Republic Act No. 875. As
a corollary to this, an injunction in an uncertified case must be based on the strict requirement See. 9 (d) of Republic
Act No. 875; the purpose of such injunction is not to enjoin the strike itself, but only unlawful activities. To the extent,
then, that the Company sought injunctive relief under Sec. 9(d) of Republic Act No.875, respondent court had
jurisdiction over the Company's "Urgent Petition" dated April 26, 1965. We now come to the issue as to whether the
strike staged by the Association on April 22, 1965 is illegal. To begin with, we view the return-to-work agreement of
May 30, 1965 as in the nature of a partial compromise between the parties and, more important, a labor contract;
consequently, in the latter aspect the same "must yield to the common good" (Art. 1700, Civil Code of the Philippines)
and "(I)n case of doubt ... shall be construed in favor of the safety and decent living for the laborer" (Art. 1702, ibid). To
our mind when the Company unqualifiedly bound itself in the return-to-work agreement that all employees will be taken
back "with the same employee status prior to April 22, 1965," the Company thereby made manifest its intention and
conformity not to proceed with Case No. 1484-MC, (c) relating the illegality of the strike incident. For while it is true that
there is a reservation in the return-to-work agreement as follows: 6. The parties agree that all Court cases now pending
shall continue, including CIR Case No. 1484-MC. we think the same is to be construed bearing in mind the conduct
and intention of the parties. The failure to mention Case No. 1484-MC(1) while specifically mentioning Case No. 1484-
MC, in our opinion, bars the Company from proceeding with the former especially in the light of the additional specific
stipulation that the strikers would be taken back with the same employee status prior to the strike on April 22, 1965.
The records disclose further that, according to Atty. Domingo E. de Lara when he testified on October 9, 1965, and this
is not seriously disputed by private respondents, the purpose of Paragraph 10 of the return-to-work agreement was, to
quote in part from this witness, "to secure the tenure of employees after the returnto-work agreement considering that
as I understand there were demotions and suspensions of one or two employees during the strike and, moreover, there
was this incident Case No. 1484-MC(1)" (see Brief for the Petition pp. 41-42). To borrow the language of Justice J.B.L.
Reyes in Citizens Labor Union Pandacan Chapter vs. Standard Vacuum Oil Company (G.R. No. L-7478, May 6, 1955),
in so far as the illegality of the strike is concerned in this proceeding and in the light of the records. ... the matter had
become moot. The parties had both abandoned their original positions and come to a virtual compromise and agreed
to resume unconditionally their former relations. To proceed with the declaration of illegality would not only breach this
understanding, freely arrived at, but to unnecessarily revive animosities to the prejudice of industrial peace. In addition,
it is clear that the strike of the Association was declared not just for the purpose of gaining recognition but also for
bargaining in bad faith on the part of the Company and by reason of unfair labor practices committed by its officials.
Significantly, in the voluntary return-to-work agreement entered into between the Company and the Association,
thereby ending the strike, the Company agreed to recognize for membership in the Association the position titles
mentioned in Annex "B" of said agreement. The guilty conduct of the Company before, during after the strike of April
22, 1965 cannot escape the Court's attention. It will suffice to mention typical instances by way of illustration. Long prior
to the strike, the Company had interferred with the Cebu Supervisors' Union by enticing Mapa into leaving the Union
under the guise of promotion in Manila; shortly before the strike, B.R. Edwards, Manager-Operations, had inquired into
the formation and organization of the petitioner Association in this case. During the strike, in addition to the culpable
acts of the Company already narrated above, due significance must be given to the inclusion initially of J.J. Mapa and
A. Buenaventura, the Association's President and Vice-President respectively, in 1965, in two coercion cases filed at
that time and their subsequent elimination from the charges the initiative of the Company after the settlement of strike;
the cutting off of telephone facilities extended Association members in the refinery; and the use of a member of the
Association to spy for the company. The discriminatory acts practiced by the Company against active unionists after
the strike furnish further evidence that Company committed unfair labor practices as charged.
6. Feati University vs. Bautista, 18 SCRA 1191
Title: Feati University vs. Bautista, 18 SCRA 1191

Nature: Consolidated case that focused on the determination whether charitable institution or one
organized for profit is included in the definition of employer
Keywords:
Summary:
Facts:  On January 14, 1963, the President of the respondent Feati University Faculty Club-PAFLU
(Faculty Club) wrote a letter to Mrs. Victoria L. Araneta, President of petitioner Feati University
(University) informing her of the organization of the Faculty Club into a registered labor union.
 The Faculty Club is composed of members who are professors and/or instructors of the
University.
 On January 22, 1963, the President of the Faculty Club sent another letter containing twenty-
six demands that have connection with the employment of the members of the Faculty Club
by the University, and requesting an answer within ten days from receipt thereof.
 On February 18, 1963, the members of the Faculty Club declared a strike and established
picket lines in the premises of the University, resulting in the disruption of classes in the
University. Despite further efforts of the officials from the Department of Labor to effect a
settlement of the differences between the management of the University and the striking
faculty members no satisfactory agreement was arrived at. On March 21, 1963, the President
of the Philippines certified to the Court of Industrial Relations the dispute between the
management of the University and the Faculty Club pursuant to the provisions of Section 10
of Republic Act No. 875.
 In connection with the dispute between the University and the Faculty Club and certain
incidents related to said dispute, various cases were filed with the Court of Industrial Relations
— hereinafter referred to as CIR.
 The University filed a motion to dismiss that case upon the ground that the CIR has no
jurisdiction over the case, and on March 30, 1963 Judge Jose S. Bautista issued an order
denying the motion to dismiss and declaring that the Industrial Peace Act is applicable to both
parties in the case and that the CIR had acquired jurisdiction over the case by virtue of the
presidential certification; and in that same order Judge Bautista ordered the strikers to return
to work and the University to take them back under the last terms and conditions existing
before the dispute arose; and enjoined the University from dismissing any employee or
laborer without previous authority from the court.
Issue: The University has raised several issues in the present cases, the pivotal one being its claim that
the Court of Industrial Relations has no jurisdiction over the parties and the subject matter in CIR
Cases 41-IPA, 1183-MC and V-30, brought before it, upon the ground that Republic Act No. 875
is not applicable to the University because it is an educational institution and not an industrial
establishment and hence not an "employer" in contemplation of said Act; and neither is Republic
Act No. 875 applicable to the members of the Faculty Club because the latter are independent
contractors and, therefore, not employees within the purview of the said Act.
Ruling: Does the University operate as an educational institution for profit? Does it declare dividends for
its stockholders? If it does not, it must be declared beyond the purview of Republic Act No. 875;
but if it does, Republic Act No. 875 must apply to it. The University itself admits that it has declared
dividends.3 The CIR in its order dated March 30, 1963 in CIR Case No. 41-IPA — which order
was issued after evidence was heard — also found that the University is not for strictly educational
purposes and that "It realizes profits and parts of such earning is distributed as dividends to
private stockholders or individuals (Exh. A and also 1 to 1-F, 2-x 3-x and 4-x)"4 Under this
circumstance, and in consonance with the rulings in the decisions of this Court, above cited, it is
obvious that Republic Act No. 875 is applicable to herein petitioner Feati University.
But the University claims that it is not an employer within the contemplation of Republic Act No.
875, because it is not an industrial establishment. At most, it says, it is only a lessee of the
services of its professors and/or instructors pursuant to a contract of services entered into
between them. We find no merit in this claim. Let us clarify who is an "employer" under the Act.
Section 2(c) of said Act provides:
Sec. 2. Definitions.—As used in this Act —
(c) The term employer include any person acting in the interest of an employer, directly or
indirectly, but shall not include any labor organization (otherwise than when acting as an
employer) or any one acting in the capacity or agent of such labor organization.
As stated above, Republic Act No. 875 does not give a comprehensive but only a complementary
definition of the term "employer". The term encompasses those that are in ordinary parlance
"employers." What is commonly meant by "employer"? The term "employer" has been given
several acceptations. The lexical definition is "one who employs; one who uses; one who engages
or keeps in service;" and "to employ" is "to provide work and pay for; to engage one's service; to
hire." (Webster's New Twentieth Century Dictionary, 2nd ed., 1960, p. 595). The Workmen's
Compensation Act defines employer as including "every person or association of persons,
incorporated or not, public or private, and the legal representative of the deceased employer" and
"includes the owner or lessee of a factory or establishment or place of work or any other person
who is virtually the owner or manager of the business carried on in the establishment or place of
work but who, for reason that there is an independent contractor in the same, or for any other
reason, is not the direct employer of laborers employed there." [Sec. 39(a) of Act No. 3428.] The
Minimum Wage Law states that "employer includes any person acting directly or indirectly in the
interest of the employer in relation to an employee and shall include the Government and the
government corporations". [Rep. Act No. 602, Sec. 2(b)]. The Social Security Act defines
employer as "any person, natural or juridical, domestic or foreign, who carries in the Philippines
any trade, business, industry, undertaking, or activity of any kind and uses the services of another
person who is under his orders as regards the employment, except the Government and any of
its political subdivisions, branches or instrumentalities, including corporations owned or controlled
by the Government." (Rep. Act No. 1161, Sec. 8[c]).
Under none of the above definitions may the University be excluded, especially so if it is
considered that every professor, instructor or teacher in the teaching staff of the University, as
per allegation of the University itself, has a contract with the latter for teaching services, albeit for
one semester only. The University engaged the services of the professors, provided them work,
and paid them compensation or salary for their services. Even if the University may be considered
as a lessee of services under a contract between it and the members of its Faculty, still it is
included in the term "employer". "Running through the word `employ' is the thought that there has
been an agreement on the part of one person to perform a certain service in return for
compensation to be paid by an employer. When you ask how a man is employed, or what is his
employment, the thought that he is under agreement to perform some service or services for
another is predominant and paramount." (Ballentine Law Dictionary, Philippine ed., p. 430, citing
Pinkerton National Detective Agency v. Walker, 157 Ga. 548, 35 A. L. R. 557, 560, 122 S.E. Rep.
202).
To bolster its claim of exception from the application of Republic Act No. 875, the University
contends that it is not state that the employers included in the definition of 2 (c) of the Act. This
contention can not be sustained. In the first place, Sec. 2 (c) of Republic Act No. 875 does not
state that the employers included in the definition of the term "employer" are only and exclusively
"industrial establishments"; on the contrary, as stated above, the term "employer" encompasses
all employers except those specifically excluded by the Act. In the second place, even the Act
itself does not refer exclusively to industrial establishments and does not confine its application
thereto. This is patent inasmuch as several provisions of the Act are applicable to non-industrial
workers, such as Sec. 3, which deals with "employees' right to self-organization"; Sections 4 and
5 which enumerate unfair labor practices; Section 8 which nullifies private contracts contravening
employee's rights; Section 9 which relates to injunctions in any case involving a labor dispute;
Section 11 which prohibits strikes in the government; Section 12 which provides for the exclusive
collective bargaining representation for labor organizations; Section 14 which deals with the
procedure for collective bargaining; Section 17 which treats of the rights and conditions of
membership in labor organizations; Sections 18, 19, 20 and 21 which provide respectively for the
establishment of conciliation service, compilation of collective bargaining contracts, advisory
labor-management relations; Section 22 which empowers the Secretary of Labor to make a study
of labor relations; and Section 24 which enumerates the rights of labor organizations. (See
Dissenting Opinion of Justice Concepcion in Boy Scouts of the Philippines v. Juliana Araos, G.R.
No. L-10091, January 29, 1958.)
The University urges that even if it were an employer, still there would be no employer-employee
relationship between it and the striking members of the Faculty Club because the latter are not
employees within the purview of Sec. 2(d) of Republic Act No. 875 but are independent
contractors. This claim is untenable.
This definition is again, like the definition of the term "employer" [Sec. 2(c)], by the use of the term
"include", complementary. It embraces not only those who are usually and ordinarily considered
employees, but also those who have ceased as employees as a consequence of a labor dispute.
The term "employee", furthermore, is not limited to those of a particular employer. As already
stated, this Court in the cases of The Angat River Irrigation System, et al. v. Angat River Workers'
Union (PLUM), et al., supra, has defined the term "employer" as "one who employs the services
of others; one for whom employees work and who pays their wages or salaries. "Correlatively, an
employee must be one who is engaged in the service of another; who performs services for
another; who works for salary or wages. It is admitted by the University that the striking professors
and/or instructors are under contract to teach particular courses and that they are paid for their
services. They are, therefore, employees of the University.
The contention of the University that the professors and/or instructors are independent
contractors, because the University does not exercise control over their work, is likewise
untenable. This Court takes judicial notice that a university controls the work of the members of
its faculty; that a university prescribes the courses or subjects that professors teach, and when
and where to teach; that the professors' work is characterized by regularity and continuity for a
fixed duration; that professors are compensated for their services by wages and salaries, rather
than by profits; that the professors and/or instructors cannot substitute others to do their work
without the consent of the university; and that the professors can be laid off if their work is found
not satisfactory. All these indicate that the university has control over their work; and professors
are, therefore, employees and not independent contractors. There are authorities in support of
this view.
Moreover, even if university professors are considered independent contractors, still they would
be covered by Rep. Act No. 875. In the case of the Boy Scouts of the Philippines v. Juliana Araos,
supra, this Court observed that Republic Act No. 875 was modelled after the Wagner Act, or the
National Labor Relations Act, of the United States, and this Act did not exclude "independent
contractors" from the orbit of "employees". It was in the subsequent legislation — the Labor
Management Relation Act (Taft-Harley
Act) — that "independent contractors" together with agricultural laborers, individuals in domestic
service of the home, supervisors, and others were excluded. (See Rothenberg on Labor
Relations, 1949, pp. 330-331).
Doctrine: The term employer encompasses all employers except those specifically excluded in the
Industrial Peace Act. the Act itself specifically enumerated those who are not included in the term
"employer", namely: (1) a labor, (2) anyone acting in the capacity of officer or agent of such labor
organization, and (3) the Government and any political subdivision or instrumentality thereof
insofar as the right to strike for the purpose of securing changes or modifications in the terms and
conditions of employment is concerned. Among these statutory exemptions, educational
institutions are not included; hence, they can be included in the term "employer.
The Industrial Court has jurisdiction over unfair labor practice charges against institutions that are
organized, operated and maintained for profit. The Industrial Peace Act is applicable to any
organization or entity- whatever may be its purpose when it was created- that is operated for profit
or gain.
6. Feati University v. Bautista, 18 SCRA 1191
FACTS:
 January 14, 1963: the President of Feati University Faculty Club (PAFLU) wrote a letter to Mrs. Victoria L.
Araneta, President of Feati University informing her that it registered as a labor union.
 January 22, 1963: PAFLU sent a letter with 26 demands in relation to their employment and requesting an
answer within 10 days from receipt thereof.
 Araneta answered the letters, requesting that she be given at least 30 days to study thoroughly the different
phases of the demands. Meanwhile counsel for Feati, wrote a letter to the President of PAFLU demanding
proof of its majority status and designation as a bargaining representative
 February 1, 1963: the President of PAFLU rejected the extension of time and filed a notice of strike with the
Bureau of Labor due to Feati’s refusal to bargain collectively.
 Conciliation Division of the Bureau of Labor made efforts to conciliate them but failed.
 February 18, 1963: PAFLU declared a strike and established picket lines in the premises of Feati resulting in
the disruption of classes in the University.
 March 21, 1963: the President of the Philippines certified to the Court of Industrial Relations (CIR) the dispute
between Feati and PAFLU pursuant to the provisions of Section 10 of Republic Act No. 875.
 3 cases were filed with the CIR
 CIR Case No. 41-IPA – PAFLU’s petition to declare in contempt of court since Feati refused to accept
them back to work in violation of the return-to-work order of March 30, 1963 and has employed
professors and/or instructors to take their places
 CIR Case No. 1183-MC – PAFLU’s petition for certification election praying that it be certified as the
sole and exclusive bargaining representative
 Later withdrawn since the Case 41-IPA had already been certified by the President to the
CIR and has absorbed the issues herein
 CIR Case No. V-30 – PAFLU’s complaint for indirect contempt of court filed against the administrative
officials of the Feati reiterating Case 41-IPA
 May 10, 1963: Feati filed before the SC a petition for certiorari and prohibition with writ of preliminary injunction
which was issued upon the Feati's filing a bond of P50,000 (increased from P1,000), ordering CIR Judge Jose
S. Bautista to desist and refrain from further proceeding
 March 23, 1963: On the strength of the presidential certification, Judge Bautista set the case for hearing
 Feati, thru counsel filed a motion to dismiss the case upon the ground that the CIR has no jurisdiction over
the case, because:
1. The Industrial Peace Act is NOT applicable to the University, it being an educational institution, nor to the
members of the Faculty Club, they being independent contractors;
2. the presidential certification is violative of Section 10 of the Industrial Peace Act, as the University is not
an industrial establishment and there was no industrial dispute which could be certified to the CIR.
 Judge Bautista denied the motion to dismiss and ordered the strikers to return immediately to work and the
University to take them back under the last terms and conditions existing before the dispute arose.
 Without the motion for reconsideration having been acted upon by the CIR en banc, Judge Bautista set the
case for hearing on the merits for May 8, 1963 but was cancelled upon Feati’s petition for certiorari alleging
that Judge Jose S. Bautista acted without, or in excess of, jurisdiction, or with grave abuse of discretion, in
taking cognizance of, and in issuing the questioned orders in, CIR Cases Nos. 41-IPA 1183-MC and V-30
 Feati claims that it is not an employer within the contemplation of R.A. 875, because it is not an industrial
establishment
 Feati also claims that it is only a lessee of the services of its professors and/or instructors pursuant to a contract
of services entered into between them because the University does not exercise control over their work
ISSUE: Whether Feati University can be considered as an employer and PAFLU as an employee to be covered by
R.A. 875 and have right to unionize.
HELD: YES. petition for certiorari and prohibition with preliminary injunction in Case G.R. No. L-21278 is dismissed
 Section 2(c) of R.A. 875:
The term employer include any person acting in the interest of an employer, directly or indirectly, but shall
not include any labor organization (otherwise than when acting as an employer) or any one acting in the
capacity or agent of such labor organization.
 Congress did not intend to give a complete definition of "employer", but rather that such definition should be
complementary to what is commonly understood as employer
 Act itself specifically enumerated those who are not included in the term "employer" and educational
institutions are not included; hence, they can be included in the term "employer". However, those educational
institutions that are not operated for profit are not within the purview of Republic Act No. 875.
o Feati realizes profits and parts of such earning is distributed as dividends to private stockholders or
individuals.
 It embraces not only those who are usually and ordinarily considered employees, but also those who have
ceased as employees as a consequence of a labor dispute.
 employee must be one who is engaged in the service of another; who performs services for another; who
works for salary or wages
 "workers" limited to those performing physical labor
o embrace stenographers and bookkeepers
o Teachers are not included
 Feati controls the work of the members of its faculty
o prescribes the courses or subjects that professors teach, and when and where to teach
o professors' work is characterized by regularity and continuity for a fixed duration
o professors are compensated for their services by wages and salaries, rather than by profits
o professors and/or instructors cannot substitute others to do their work without the consent of the
university
o professors can be laid off if their work is found not satisfactory
 Moreover, even if university professors are considered independent contractors, still they would be covered
by Rep. Act No. 875
 Professors, instructors or teachers of private educational institutions who teach to earn a living are entitled to
the protection of our labor laws — and one such law is Republic Act No. 875.
 The term "labor dispute" includes any controversy concerning terms, tenure or conditions of employment, or
concerning the association or representation of persons in negotiating, fixing, maintaining, changing, or
seeking to arrange terms or conditions of employment regardless of whether the disputants stand in proximate
relation of employer and employees.
 To certify a labor dispute to the CIR is the prerogative of the President under the law (Because the strike
declared by the members of the minority union threatens a major industry of 18,000 students which affects
the national interest), and this Court will not interfere in, much less curtail, the exercise of that prerogative.
The jurisdiction of the CIR in a certified case is exclusive. The parties involved in the case may appeal to the
Supreme Court from the order or orders thus issued by the CIR.
 Section 10 of Republic Act No. 875 empowers the Court of Industrial Relations to issue an order "fixing the
terms of employment." This clause is broad enough to authorize the Court to order the strikers to return to
work and the employer to readmit them.
 The return-to-work order cannot be considered as an impairment of the contract entered into with the
replacements. Besides, labor contracts must yield to the common good and such contracts are subject to the
special laws on labor unions, collective bargaining, strikes and similar subjects.
Labor Organization: Legitimate Labor Organization
Article [212] 219 (g) and (h)

"Labor organization" means any union or association of employees which exists in whole or in part for the purpose of
collective bargaining or of dealing with employers concerning terms and conditions of employment.
"Legitimate labor organization" means any labor organization duly registered with the Department of Labor and
Employment, and includes any branch or local thereof.
Cases:
Airline Pilots Association, et al. vs. CIR, 76 SCRA 274

Title: AIR LINE PILOTS ASSOCIATION OF THE PHILIPPINES (GASTON GROUP) vs. THE CIR and AIR
LINES PILOTS ASSOCIATION OF THE PHILIPPINES (GOMEZ GROUP), respondents.
PETITIONS for certiorari of the resolutions of the Court of Industrial Relations.
Nature: A labor union may authorize a segment thereof to bargain collectively with the employer and in the
Keywords: exercise of such authority to have custody of the union’s fund and office and make use of the union’s
name.
CIRSC
Summary:
Facts:  On October 30, 1970, a general membership meeting was held to amend ALPAP's
constitution and by-laws in anticipation of the fact that they may be forced to resign or retire
because of their union activities. They adopted a new section stating 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. . .”
 At that time, PAL and ALPAP were locked in a labor dispute which was the cause of strikes
staged by ALPAP
 Afterwards, a substantial majority of the ALPAP members filed letters of
retirement/resignation from PAL
 PAL filed an urgent ex parte motion with the industrial court to enjoin the members of ALPAP
from retiring or resigning en masse
 The court issued an order commanding ALPAP members not to strike under pain of dismissal
and forfeiture of rights and privileges
 Still, majority of the ALPAP members filed their letters of retirement/resignation which PAL
eventually accepted with the caveat that the pilots concerned will not be entitled to any benefit
or privilege by reason of their employment
 On December 18-22, 1970, an election of ALPAP officers was held resulting in the election
of Felix Gaston as President by 180 votes. The following day, 45 pilots who did not tender
their retirement or resignation elected Ben Hur Gomez as President.
 On January 2, 1971, ALPAP (Gomez group) filed a petition with CIR praying for certification
as the sole and exclusive collective bargaining representative. This was opposed by ALPAP
(Gaston group) on the ground that the industrial court has no jurisdiction.
 The court rendered a decision certifying that ALPAP (Gomez) as the sole and exclusive
bargaining rep entitled to all the rights and privileges of a legitimate labor org, including the
right to its office and its union fund. The following circumstances were cited to justify the
conclusions reached by him in his decision, namely:
1. that there has been no certification election within the period of 12 months prior to
the date the petition for certification was filed;
2. 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;
3. 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
accompanied this with actual acts of not reporting for work;
4. that the pilots affiliated with the Gaston group tried to retrieve their deposits and
other funds from the ALPAP Cooperative Credit Union on the ground that they have already
retired/resigned from PAL;
5. that some of the members of the Gaston group joined another airline after their
retirement/resignation;
6. 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); and
7. that the contention that the mass retirement or resignation was merely an
involuntary protest by those affiliated with the Gaston group is not borne out by the evidence
as, aside from 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 stressed
by them.
Issue: WON the CIR acted without jurisdiction in passing upon (1) the question of which, between the
groups of Gaston and Gomez is the duly elected set of officers of the ALPAP, and (2) the question
of which, between the two groups, is entitled to the name, office and funds of the said Association.
Ruling: (1) 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 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 Gomez
as President of ALPAP. He was elected at a meeting of only 45 ALPAP members called just one day
after the election of Gaston as President of ALPAP who, as shown, received a majority of 180 votes
out of a total membership of 270.
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. As the circumstances show that 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. In the eventuality that the pilots presently employed by PAL and who
subscribe to the leadership of 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. Whatever vested rights, interest or participation they may have in the assets of ALPAP as a
result of their membership therein should properly be liquidated in favor of such withdrawing members
of the association.
(2) 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.
7. Lopez Sugar Corporation vs. Secretary of Labor, 247 SCRA 1
Title LOPEZ SUGAR CORPORATION, petitioner,

vs. SECRETARY OF LABOR,NATIONAL CONGRESS OF UNIONS IN THE SUGAR
INDUSTRY OF THE PHILIPPINES (NACUSIP) and COMMERCIAL AND AGRO-INDUSTRIAL
LABOR ORGANIZATION (CAILO), respondents.
Nature Petition of Certiorari
Keywords Art 257 applied to Legitimate Labor Organization
Summary
Facts - 6 July 1989, private respondent National Congress of Unions in the Sugar Industry of the
Philippines- TUCP ("NACUSIP-TUCP") filed with the Department of Labor and Employment
("DOLE") a petition for direct certification or for certification election to determine the sole and
exclusive collective bargaining representative of the supervisory employees of herein petitioner,
Lopez Sugar Corporation.
- NACUSIP-TUCP averred that it was a legitimate national labor organization; that LSC was
employing 55 supervisory employees, the majority of whom were members of the union; that
no other labor organization was claiming membership over the supervisory employees; that
there was no existing collective bargaining agreement covering said employees; and that there
was no legal impediment either
to a direct certification of NACUSIP-TUCP or to the holding of a certification election.
- LSC contended, that the petition was bereft of any legal or factual basis; that the petition was
designed to harass the company; and that its employees above the
rank-and-file category were in truth unaware of the petition.
-18 August 1989, the Commercial and Agro-Industrial Labor Organization also claiming to count
substantial membership among the LSC supervisory employees, moved to intervene. (Granted)
- 22 August 1989, NACUSIP-TUCP submitted Charter Certificate No. 003-89, dated 20 July
1989, of the NACUSIP-TUCP Lopez Sugar Central Supervisory Chapter. LSC, on its part,
submitted a list of its employees above the rank-and-file status preparatory to the
inclusion/exclusion proceedings.
- One Carlos S. Gevero, asserting a right to represent the "supervisors of LSC," filed a motion
to dismiss the petition for lack of interest on the part of the supervisory employees.
Med-Arbiter Med-Arbiter Felizardo T. Serapio issued an Order granting the petition. He ruled that under
Article 257 of the Labor Code, as amended, the Med-Arbiter was left with no option but to order
the conduct of a certification election immediately upon the filing of the petition, holding that the
subsequent disaffiliation or withdrawals of members did not adversely affect the standing of the
petition.
"VIEWED IN THE LIGHT OF THE FOREGOING, the petition for certification election
is hereby GRANTED with the following choices:
"1) National Congress of Unions in the Sugar Industry of the Phils. (NACUSIP-TUCP)
2) Commercial and Agro-Industrial Labor Organization (CAILO);
"3) No Union.
DOLE Secretary of Labor ruled that the holding by the Med-Arbiter of a certification election is
mandatory under Article 257 of the Labor Code (appealdenied)(same reason w/M-A)
ISSUE Whether Art 257 of the Labor Code should be applied on the ground that NACUSIP-TUCP is a
legitimate organization.
RULING NO.
The law did not reduce the Med-Arbiter to an automaton which can instantly be set to impulse
by the mere filing of a petition for certification election. He is still tasked to satisfy himself that all
the conditions of the law are met, and among the legal requirements is that the petitioning union
must be a legitimate labor organization in good standing.
The petition for certification election, in the case at bench, was filed by the NACUSIP-TUCP, a
national labor organization duly registered with the DOLE render Registration Certificate No.
FED-402-6390-IP. The legitimate status of NACUSIP-TUCP might be conceded; being merely,
however, an agent for the local organization (the NACUSIP-TUCP Lopez Sugar Central
Supervisory Chapter), the federation's bona fide status alone would not suffice. The local
chapter, as its principal, should also be a legitimate labor organization in good standing.
A local or chapter therefore becomes a legitimate labor organization only upon submission of
the following to the BLR:
1) A charter certificate, within 30 days from its issuance by the labor federation or national union,
and
2) The constitution and by-laws, a statement on the set of officers, and the books of accounts
all of which are certified under oath by the secretary or treasurer, as the case may be, of such
local or chapter, and attested to by its president.
Absent compliance with these mandatory requirements, the local or chapter does not become a
legitimate labor organization. 16
The only document extant on record to establish the legitimacy of the NACUSIP-TUCP Lopez
Sugar Central Supervisory Chapter is a charter certificate and nothing else. The instant petition,
at least for now, must thus be GRANTED.
DOCTRINE Article 257 cited by the Solicitor General directs the automatic conduct of a certification election
in an unorganized establishment, it also requires that the petition for certification election must
be filed by a legitimate labor organization.
Article 212(h) defines a legitimate labor organization as "any labor organization duly registered
with the DOLE and includes any branch or local thereof." (Emphasis supplied) Rule I, Section
1(j), Book V of the Implementing Rules likewise defines a legitimate labor organization as "any
labor organization duly registered with the DOLE and includes any branch, local or
affiliate thereof."
8. Lopez Sugar Corporation v. Secretary of Labor, 247 SCRA 1
FACTS: On July 26, 1989, respondent, National Congress of Unions in the Sugar Industry of the Philippines-TUCP
filed to the Department of Labor and Employment (DOLE) Regional Office number VI, Bacolod City, a petition for direct
certification or for certification election to determine the sole and exclusive collective bargaining representative of the
supervisory employees of herein petitioner Lopez Sugar Corporation.
NACUSIP-TUCP averred that it was a legitimate national labor organization; that LSC was employing 55 supervisory
employees; the majority of whom were members of the union; that no other labor org was claiming membership over
the supervisory employees and that there was no existing collective bargaining agreement covering said employees;
and that there was no legal impediment either to direct certification of NACUSIP-TUCP or to the holding of a certification
election.
LSC opposed and contended, dated August 14, 1989, that the petitioner was bereft of any legal or factual basis; that
the petition was nothing more than a useless scrap of paper designed to harass the company; and that it’s employees
above the rank-and-file category were in truth unaware of the petition.
On August 18, 1989, Commercial and Agro-Industrial Labor Organization (CAILO) a registered labor organization also
claiming to count substantial membership among the LSC supervisory employees, moved to intervene. Thus,
GRANTED.
On Sept. 13, 1989, Carlo S. Gevero, asserting a right to represent the “supervisors of LSC” filed a motion to dismiss
the petition for lack of interest on the part of the supervisory employees.
Oct. 16 1989 Med- arbiter Felijardo T. Serapio issued an order granting the petition. He ruled that under Art 257 of the
Labor Code, as amended, the Med-Arbiter was left with no option but to order the conduct of a certification election
immediately upon the filing of petition, holding that the subsequent disaffiliation or withdrawals of members did not
adversely affect the standing of the petition.
Hence, this petition.
ISSUE: Whether or not public respondent Honorable Secretary of Labor and Employment committed grave abuse of
discretion amounting to lack of jurisdiction when it refused to dismiss a petition for certification election despite clear
lack of legal and factual basis for holding the same.
HELD: Yes. Public respondent Hon. Secretary of Labor and employment committed grave abuse of discretion
amounting to lack of jurisdiction when it refused to dismiss a petition for certification election despite clear lack of legal
and factual basis for holding the same.
The petition for certification of election was filed by the NACUSIP-TUCP, a national labor organization duly
registered with DOLE rendered Certificate no. FED-402-6390-IP. The legitimate status of NACUSIP-TUCP might be
conceded; being merely an agent for the local organization (NACUSIP TUCP Lopez Sugar Central Supervisory
Chapter, the Federation’s bona fide status alone would not suffice.
The local chapter should also be a legitimate labor organization in good standing. Accordingly, in Progressive
Development, we elucidated:
A local or chapter therefore becomes a legitimate labor organization only upon submission of the following to the
Bureau of Labor Relations:
1. A charter certificate, within 30 days from its issuance by the labor federation or national union.
2. The constitution and by laws, a statement on the set of officers and the books of accounts all of which are
certified under oath by the secretary or treasurer, as the case maybe, of such local or chapter and attested to
by its president.
Absent compliance with these mandatory requirements, the local or chapter does not become a legitimate labor
organization.
The only document extant on record to establish the legitimacy of the NACUSIP-TUCP Lopez Sugar Central
Supervisory Chapter is a charter certificate and nothing else. Hence, violated, in case of union affiliation with a
federation, the documentary requirements in Rule II section 3 €, Book V of the implementing Rules.
The instant petition is granted. The petition for certification of election is dismissed.
Labor Dispute
Article [212] 219
"Labor dispute" includes any controversy or matter concerning terms and conditions of employment or the association
or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of
employment, regardless of whether the disputants stand in the proximate relation of employer and employee.
Definition
Case:
8. San Miguel Corporation Employees Union vs. Bersamira, 186 SCRA 496
Title SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, DANIEL S.L. BORBON I I ,

HERMINIA REYES, MARCELA PURIFICACION, ET AL., petitioners, vs. HON. JESUS G.
BERSAMIRA, IN HIS CAPACITY AS PRESIDING JUDGE OF BRANCH 166, RTC, PASIG, and
SAN MIGUEL CORPORATIONCORPORATION,respondents
Nature Special civil action for Certiorari and Prohibition
Keywords Definition of labor dispute
Summary A labor dispute exists at the case at bar
Facts Sometime in 1983 and 1984, SanMig entered into contracts for merchandising services with Lipercon
and D'Rite. These companies are independent contractors duly licensed by the Department of Labor
and Employment (DOLE).
In said contracts, it was expressly understood and agreed that the workers employed by the
contractors were to be paid by the latter and that none of them were to be deemed employees or
agents of SanMig. There was to be no employer- employee relation between the contractors and/or
its workers, on the one hand, and SanMig on the other.
San Miguel Corporation Employees Union-PTWGO (the Union, for brevity) is the duly authorized
representative of the monthly paid rank-and-file employees of SanMig with whom the latter executed
a Collective Bargaining Agreement (CBA) effective 1 July 1986 to 30 June 1989. Section 1 of their
CBA specifically provides that "temporary, probationary, or contract employees and workers are
excluded from the bargaining unit and, therefore, outside the scope of this Agreement."
In a letter, dated 20 November 1988, the Union advised SanMig that some Lipercon and D'Rite
workers had signed up for union membership and sought the regularization of their employment with
SMC. The Union alleged that this group of employees, while appearing to be contractual workers of
supposedly independent contractors, have been continuously working for SanMig for a period ranging
from six (6) months to fifteen (15) years and that their work is neither casual nor seasonal as they are
performing work or activities necessary or desirable in the usual business or trade of SanMig. Thus, it
was contended that there exists a "labor-only" contracting situation. It was then demanded that the
employment status of these workers be regularized. On 12 January 1989, on the ground that it had
failed to receive any favorable response from SanMig, the Union filed a notice of strike for unfair labor
practice, CBA violations, and union busting.
On 30 January 1989, the Union again filed a second notice of strike for unfair labor practice. Beginning
14 February 1989 until 2 March 1989, series of pickets were staged by Lipercon and D'Rite workers
in various SMC plants and offices. On 6 March 1989, SMC filed a verified Complaint for Injunction and
Damages before respondent Court
Decision of RTC - Issued the corresponding Writ of Preliminary Injunction after SanMig had posted the required
Courts bond of P100,000.00 to answer for whatever damages petitioners may sustain by reason thereof. In
issuing the Injunction, respondent Court rationalized:
The absence of employer-employee relationship negates the existence of labor dispute. Verily, this
court has jurisdiction to take cognizance of plaintiff's grievance. The evidence so far presented
indicates that plaintiff has contracts for services with Lipercon and D'Rite. The application and contract
for employment of the defendants' witnesses are either with Lipercon or D'Rite. What could be
discerned is that there is no employer-employee relationship between plaintiff and the contractual
workers employed by Lipercon and D'Rite.
NCMB of DOLE (Conciliation) - On 3 May 1989, the National Conciliation and Mediation Board
(NCMB) called the parties to conciliation. The Union stated that it would lift the strike if the thirty (30)
Lipercon and D'Rite employees were recalled, and discussion on their other demands, such as wage
distortion and appointment of coordinators, were made. Effected eventually was a Memorandum of
Agreement between SanMig and the Union that "without prejudice to the outcome of G.R. No. 87700
and Civil Case No. 57055, the laid- off individuals . . . shall be recalled effective 8 May 1989 to their
former jobs or equivalent positions under the same terms and conditions prior to lay-off '. In turn, the
Union would immediately lift the pickets and return to work
Issue/s Whether or not the case at bar involves, or is in connection with, or relates to a labor dispute.
Ratio & A "labor dispute" as defined in Article 212 (1) of the Labor Code includes "any controversy or matter
Ruling concerning terms and conditions of employment or the association or representation of persons in
negotiating, fixing, maintaining, changing, or arranging the terms and conditions of employment,
regardless of whether the disputants stand in the proximate relation of employer and employee.
While it is SanMig's submission that no employer-employee relationship exists between itself, on the
one hand, and the contractual workers of Lipercon and D'Rite on the other, a labor dispute can
nevertheless exist "regardless of whether the disputants stand in the proximate relationship of
employer and employee” provided the controversy concerns, among others, the terms and conditions
of employment or a "change" or "arrangement" thereof.
That a labor dispute, as defined by the law, does exist herein is evident. At bottom, what the Union
seeks is to regularize the status of the employees contracted by Lipercon and D'Rite and, in effect,
that they be absorbed into the working unit of SanMig. This matter definitely dwells on the working
relationship between said employees vis-a-visSanMig. Terms, tenure and conditions of their
employment and the arrangement of those terms are thus involved bringing the matter within the
purview of a labor dispute.
Doctrine A labor dispute can nevertheless exist "regardless of whether the disputants stand in the proximate
relationship of employer and employee” provided the controversy concerns, among others, the terms
and conditions of employment or a "change" or "arrangement" thereof.
9. San Miguel Corporation Employees Union v. Bersamina, 186 SCRA 496
FACTS:
Sometime in 1983 and 1984, SanMig entered into contracts for merchandising services with Lipercon and D'Rite
(independent contractors duly licensed by the DOLE). In said contracts, it was expressly understood and agreed that
the workers employed by the contractors were to be paid by the latter and that none of them were to be deemed
employees or agents of SanMig. There was to be no employer-employee relation between the contractors and/or its
workers, on the one hand, and SanMig on the other.
Petitioner San Miguel Corporation Employees Union-PTWGO (the Union, for brevity) is the duly authorized
representative of the monthly paid rank-and-file employees of SanMig with whom the latter executed a Collective
Bargaining Agreement.
In a letter, dated 20 November 1988 (Annex C, Petition), the Union advised SanMig that some Lipercon and D'Rite
workers had signed up for union membership and sought the regularization of their employment with SMC.
On 12 January 1989 on the ground that it had failed to receive any favorable response from SanMig, the Union filed a
notice of strike for unfair labor practice, CBA violations, and union busting
Beginning 14 February 1989 until 2 March 1989, series of pickets were staged by Lipercon and D'Rite workers in
various SMC plants and offices.
On 6 March 1989, SMC filed a verified Complaint for Injunction and Damages
ISSUE:
Whether, or not the case at bar involves, or is in connection with, or relates to a labor dispute
HELD:
A "labor dispute" as defined in Article 212 (1) of the Labor Code includes "any controversy or matter concerning terms
and conditions of employment or the association or representation of persons in negotiating, fixing, maintaining,
changing, or arranging the terms and conditions of employment, regardless of whether the disputants stand in the
proximate relation of employer and employee."
A labor dispute can nevertheless exist "regardless of whether the disputants stand in the proximate relationship of
employer and employee"
That a labor dispute, as defined by the law, does exist herein is evident. At bottom, what the Union seeks is to
regularize the status of the employees contracted by Lipercon and D'Rite in effect, that they be absorbed into the
working unit of SanMig. This matter definitely dwells on the working relationship between said employees vis-a-vis
SanMig. Terms, tenure and conditions of their employment and the arrangement of those terms are thus involved
bringing the matter within the purview of a labor dispute. Further, the Union also seeks to represent those workers,
who have signed up for Union membership, for the purpose of collective bargaining. SanMig, for its part, resists that
Union demand on the ground that there is no employer-employee relationship
9. Gold City Integrated Port Services vs. NLRC, 245 SCRA 627
Title: GOLD CITY PORT SERVICES VS. NLRC (10)

Nature: Petition for certiorari against decision of NLRC
Keywords: Illegal strike of stevedorers
Summary:
Facts:  Apr 30,1985 Gold City Port service’s employees gathered in mass action to express their
grievances. They were members of Macajalar Labor Union- Federation of Free workers
(MLU-FFW).
 On same morning, strikers filed individual notices of strike.
 Due to failure of conciliation, INPORT filed a complaint for illegal strike with Labor Arbiter
 On May 7, 1985 NLRC issued a TRO and majority returned for work except respondents.
 278 employees claimed they were duped to sign the notice of strike and returned to work.
Labor Strike is found to be illegal. LA held strikers should be accepted back without screening required and
Arbiter that union officers should also be accepted back to work after seeking reconsideration from
petitioner.
NLRC NLRC affirmed LA’s decision with modification-holding in view of strained relationships between
parties, separation pay must be rewarded in lieu of reinstatement. It awarded 6 months’ salary as
separation pay.
CA
Issues: Whether separation pay and backwages may be awarded by public respondent NLRC to
participants of illegal strike
Ratio: No backwages will be awarded to private respondent-union members as a penalty for their
participation in the illegal strike. Their continued participation in said strike, even after most of their
coworkers had returned to work, can hardly be rewarded by such an award.
The fate of private respondent-union officers is different. Their insistence on unconditional
reinstatement or separation pay and backwages is unwarranted and unjustified. For knowingly
participating in an illegal strike, the law mandates that a union officer may be terminated from
employment.
Ruling: WHEREFORE, from the foregoing premises, the Petition in G.R. No. 103560 (“Gold City Integrated
Port Service, Inc. vs. National Labor Relations Commission, et al.”) is GRANTED One month salary
for each year of service until 1985 is awarded to private respondents who were not union officer as
separation pay. The petition in G.R. No. 103599 (“AdeloEbuna, et al. vs. National Labor Relations
Commission, et al.”) is DISMISSED for lack of merit. No costs.
Doctrine: Labor dispute includes any controversy or matter concerning terms or conditions of employment or
the association or representation of persons in negotiating, , fixing or maintaining, changing or
arranging the terms and conditions of employment, regardless of whether or not disputants stand in
the proximate relation of employers and employees.
10. Gold City Integrated Port Service Inc. v. NLRC, 245 SCRA 627
Note: A strike can only happen when there is a labor dispute.
FACTS: Early in the morning of April 30, 1985, employees of Gold City Integrated Port Services Inc, stopped working
and gathered in a mass action to express their grievances regarding wages, thirteenth month pay and hazard pay. On
the same morning, the strikers filed individual notices of strike with the then Ministry of Labor and Employment. With
the failure of conciliation conferences between the company (Gold City Integrated port Services, Inc., INPORT, for
short) and the strikers, the former (INPORT) filed a complaint before the Labor Arbiter for Illegal Strike with prayer for
a restraining order/preliminary injunction. The NLRC issued a temporary restraining order which prompted the strikers
to return to work. The strike staged by the said workers was found by the Labor Arbiter to be illegal for not complying
with the requirements in Article 246 of the Labor Code. The NLRC affirmed with the modification the Arbiter’s decision.
It held that the concerted action by the workers was more of a “protest action” than a strike. However, the Commission
still affirmed the Labor Arbiter’s decision which declared the strike illegal.
ISSUE: Whether or not the mass action of the employees is the result of labor dispute between the parties involved.
HELD: A labor dispute includes any controversy or matter concerning terms or condition or representation of persons
in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether
or not the disputants stand in the proximate relation of employers and employees. Private respondents and their co-
workers stopped working and held the mass action on April 30, 1985 to press for their wages and other benefits. What
transpired then was clearly a strike, for the cessation of work by concerted action resulted from labor dispute
Test for Determining Labor Dispute
Case:
10. RCPI vs. Philippine Communications Electronics and Electricity Workers Federation, 65 SCRA 82
Title: RADIO COMMUNICATIONS OF THE PHILIPPINES, INC. (RCPI), vs. PHILIPPINE

COMMUNICATIONS ELECTRONICS & ELECTRICITY WORKERS' FEDERATION (FCWF), et. al.
G.R. No. L-37662 July 15, 1975
Nature: Prayer for modified judgment

Keywords: order of reinstatement
Summary: Modification of previous SC decision
Facts: Facts (August 30, 1974 case)
Philippine Communications Electronics and Electricity Workers' Federation presented to the
petitioner a set of proposals to be embodied in a collective bargaining agreement. As the response
was negative, the main ground being that there was already an existing collective labor contract, an
impasse resulted. It was sought to be resolved by the Bureau of Labor Relations of the Department
of Labor acting as conciliator. The attempt was unsuccessful. A strike was declared on November
17, 1967. The respondent Court took over as there was an element of an unfair labor practice. In
addition, on January 3, 1968, the Secretary of Labor sent a communication to respondent Court
endorsing the labor dispute under Section 16(c) of the Minimum Wage Law. There was on February
15, 1968 a motion filed by respondent labor Union seeking an order of reinstatement pending the
resolution of the case on the merits. It was granted by respondent Court in a resolution of April 23,
1968. Apparently, the return-to-work order was not complied with, as on December 27, 1969, a writ
of execution was issued by the Clerk of Court of respondent Court requiring the reinstatement of the
strikers without loss of seniority.
In this case, the respondents pray to include in the judgment an award of backwages to the
employees and laborers concerned, in addition to their immediate reinstatement. The plea is opposed
by petitioner upon the ground that the issue of payment of backwages was neither raised in nor
passed upon by the Industrial Court and is, in fact, not even touched in the previous pleadings of the
parties in the instant case. Additionally, it is averred that the matter is now actually being looked into
by the National Labor Relations Board, hence it is not necessary for this Court to take it up.
Issues: Whether the respondents may claim backwages? – YES
Ratio: The fact that nothing was done in the court below about it is not a valid objection to the granting
thereof. Neither can its denial be justified just because it was not expressly demanded by respondents
before Our decision was handed down.
We are not dealing here with backwages to be paid to workers who are being ordered reinstated as
a consequence of a finding by the court that their suspension or dismissal by their employer is illegal,
which, of course, is dependent on the sound discretion of the court. (Union of Philippine Education
Employees vs. Philippine Education Company, 91 Phil. 93.) In the present instance, what is involved
is a failure to comply with, nay a veiled defiance by respondent of a return-to-work order of the
Industrial Court issued seven years ago. Worse, from all appearances, such continued resistance of
petitioner to said peremptory order can hardly evoke sympathy. To begin with, its attempt to question
the identity of those entitled to reinstatement claiming that they were not actually in their employ at
the time of the declaration of the strike sounds hollow. It is inconceivable that strangers and outsiders
would try to be taken in such a surreptitious manner. Neither can the allegation that petitioner has
presented evidence of abandonment prior to the strike and of resignations subsequent thereto be of
help to petitioner. Voluntary abandonment of work before a strike is too unusual to be readily credible
whereas purported resignations after a strike and during the pendency of protracted reinstatement
proceedings are at least suspect and do not affect the employee status of the persons concerned,
unless there is patent evidence that the pretended abandonment or resignation was due to another
employment. Moreover, the proceedings below had been stalled by transparent dilatory moves of
petitioner which are basically irreconcilable with the attitude of cooperativeness and obedience an
employer is expected to maintain at all times towards orders of the court issued by virtue of powers
expressly granted to it by law. (Section 10, Republic Act 875; Section 19, Commonwealth Act 103.)
Employees and workers deprived of their means of livelihood in defiance of a judicial order the legality
of which is beyond dispute do not have to remind the court of their right to get compensated of their
lost earnings upon their actual reinstatement. Award thereof should come as a matter of course. For
us not to rule on this point now only to leave it for action by the National Labor Relations Board and
thereby give rise to another possible appeal to Us is to unnecessarily lengthen even more the tortuous
road already travelled by respondents in their effort to get what has been rightfully due them since
years ago. We would be recreant to our constitutional duty to give protection to labor that way.
Accordingly, each of the 167 members of respondent unions named in the decision under review and
found by the Industrial Court to be entitled to reinstatement should be paid backwages for two years,
without any deduction or qualification, at the respective rates of compensation they were receiving at
the time of the strike, November 17, 1967. It goes without saying that all those who can be shown by
incontestible evidence to have died prior to the date of the strike shall be disregarded, but the heirs
of those who have died after the strike shall receive the respective proportional amounts due their
predecessors-in-interest as of the time of death, if the same occurred less than two years from the
date of the strike, and the full two-years backwages, if after two years from said date. Any amount
paid by reason or on the occasion of supposed resignations after the strike shall not be deducted.
Ruling: WHEREFORE, the motion for reconsideration of petitioner dated September 16, 1974 as well as the
motion to intervene of URCPICLA-PAFLU of October 16, 1974 are both denied for lack of merit. On
the other hand, the motion of respondent RCPIEU of November 6, 1974 for modification of judgment
is granted, if only to complete Our decision, which cannot be final without such award being included
therein. Petitioner is ordered to pay the 167 employees and workers of petitioner enumerated in the
lndustrial Court's order of October 5,1973 backwages for two years, without any deduction or
qualification, pursuant to the tenor of the above opinion. This resolution is also immediately executory.
Doctrine: Employees and workers deprived of their means of livelihood in defiance of a judicial order the legality
of which is beyond dispute do not have to remind the court of their right to get compensated of their
lost earnings upon their actual reinstatement. Award thereof should come as a matter of course.
11. RCPI v. Philippine Communications Electronics and Electricity Workers Federation, 65 SCRA 82
FACTS: In a labor dispute involving RCPI and RCPI employees' union where union members were dismissed following
a strike due to their defiance of a return to work order issued by the Industrial Court, this Court declared the dismissal
illegal and ordered immediate reinstatement of the illegally dismissed employees. -RCPIEU filed a petition for a modified
judgment to include an award of backwages to the employees concerned in addition to reinstatement. -RCPI opposed
upon the ground that the issue of payment of backwages was neither raised in nor passed upon by the Industrial Court
and not even touched in the previous pleadings of the respondents. Additionally, the matter is being looked into by
National Relations Board, hence it is not necessary for this Court to take it up.
ISSUE: WON the Court may modify its judgment to include an award of backwages
HELD: -The Industrial Court had no discretion in the matter for there was no issue of fault it had to decide. If it overlooked
the award, that was plain error which is within the Court's prerogative to correct motu propio, as it is done in appeals
by writ of error (sec. 7 rule 51). -Such award is in order, for it is a logical and inescapable consequence of the order of
reinstatement that one is actually incomplete without the other. -Not ruling on this point now to leave it for action by the
National Labor Relations Board and thereby give rise to another possible appeal in this Court is to unnecessarily
lengthen the process for the respondents to get what is rightfully due them, contrary to the Constitutional duty to give
protection to labor. Motion of respondent RCPIEU for modification of judgment granted. possible appeal in this Court
is to unnecessarily lengthen the process for the respondents to get what is rightfully due them, contrary to the
Constitutional duty to give protection to labor. Motion of respondent RCPIEU for modification of judgment granted.
Labor Relations Policy
Dispute Settlement Methodology
Article [211] 218 (a)- To promote and emphasize the primacy of free collective bargaining and negotiations, including
voluntary arbitration, mediation and conciliation, as modes of settling labor or industrial disputes;
Collective Bargaining
Case:
11. Kiok Loy vs. NLRC, 1414 SCRA 179
Title: (12) Kiok Loy vs NLRC, 141 SCRA 179 (Employer’s unjustified refusal to bargain)
Nature: Petition on certiorari to annul the decision of NLRC
Keywords: Collective Bargaining, Unfair Labor Practice
Summary: BLR – LA – NLRC - SC
Facts: The PambansangKilusangPaggawa (Union), a legitimate labor federation, won in the certification
election and was subsequently certified by the Bureau of Labor Relations (BLR) as the sole and
exclusive bargaining agent of the rank-and-file employees of Sweden Ice Cream Plant (Company).
Thereafter, the Union furnished the Company with two copies of its proposed collective bargaining
agreement (CBA) together with its request for the Company’s counter proposals. However, the
company did not act on the request despite the reiteration of the Union of its requests.
Left with no other alternative in its attempt to bring the Company to the bargaining table, the Union,
on filed a "Notice of Strike", with the BLR on ground of unresolved economic issues in collective
bargaining.
Conciliation proceedings then followed during the thirty-day statutory cooling-off period. But all
attempts towards an amicable settlement failed, prompting the BLR to certify the case to the National
Labor Relations Commission (NLRC) for compulsory arbitration. The labor arbiter set the initial
hearing, however, both parties failed to submit their respective position papers as required. Hence,
the said hearing was cancelled and reset to another date. Meanwhile, the Union submitted its position
paper. The Company did not, and instead requested for a resetting which was granted. The Company
was directed anew to submit its financial statements for the years 1976, 1977, and 1978.
The case was further reset to May 11, 1979 due to the withdrawal of the Company's counsel of record,
Meanwhile, Atty. FortunatoPanganiban formally entered his appearance as counsel for the Company
only to request for another postponement allegedly for the purpose of acquainting himself with the
case. Meanwhile, the Company submitted its position paper on May 28, 1979.
When the case was called for hearing as scheduled, the Company's representative who was supposed
to be examined failed to appear. Again, it requested for postponement which the labor arbiter denied
and that the Company has waived its right to present further evidence and, therefore, considered the
case submitted for resolution.
The labor arbiter submitted its report to the NLRC which eventually rendered its decision declaring the
company guilty of unjustified refusal to bargain. It also ruled that the draft proposal for a collective
bargaining agreement sent by the Union to the company was found to be reasonable and declared to
be the collective agreement which should govern the relationship between the parties herein.
The company assailed the decision of the NLRC alleging that it acted without or in excess of its
jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction in rendering the
challenged decision. The Court initially dismissed the petition for lack of merit but was the Resolution
of dismissal was reconsidered and the petition was given due course.
The company alleged that its right to procedural due process has been violated when it was precluded
from presenting further evidence in support of its stand and when its request for further postponement
was denied. It also contends that the NLRC's finding of unfair labor practice for refusal to bargain is
not supported by law and the evidence and that the Collective Bargaining Agreement approved and
adopted by the NLRC is unreasonable and lacks legal basis.
BLR The Union filed a notice of strike with the BLR on ground of unresolved economic issues in collective
bargaining. Conciliation proceedings then followed during the thirty-day statutory cooling-off period.
But all attempts towards an amicable settlement failed, prompting the BLR to certify the case to the
NLRC for compulsory arbitration.
Labor The labor arbiter set the initial hearing, however, both parties failed to submit their respective position
Arbiter papers as required. Hence, the said hearing was cancelled and reset to another date. Meanwhile, the
Union submitted its position paper. The Company did not, and instead requested for a resetting which
was granted. The Company was directed anew to submit its financial statements for the years 1976,
1977, and 1978.
After several postponement and when the scheduled examination of the Company's representative
failed to appear, the Labor Arbiter denied another postponement and ruled the Company has waived
its right to present further evidence and, therefore, considered the case submitted for resolution.
The labor arbiter submitted its report to the NLRC.
NLRC The NLRC rendered its decision declaring the company guilty of unjustified refusal to bargain. It also
ruled that the draft proposal for a collective bargaining agreement sent by the Union to the company
was found to be reasonable and declared to be the collective agreement which should govern the
relationship between the parties herein.
Issues: Whether or not Sweden Ice Cream Plant committed an unfair labor practice for unjust refusal to
bargain?
Ruling: Yes, Sweden Ice Cream Plant committed an unfair labor practice for unjust refusal to bargain.
Collective bargaining which is defined as negotiations towards a collective agreement, is one of the
democratic frameworks under the New Labor Code, designed to stabilize the relation between labor
and management and to create a climate of sound and stable industrial peace. It is a mutual
responsibility of the employer and the Union and is characterized as a legal obligation. So much so
that Article 249, par. (g) of the Labor Code makes it an unfair labor practice for an employer to refuse
"to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an
agreement with respect to wages, hours of work, and all other terms and conditions of employment
including proposals for adjusting any grievance or question arising under such an agreement and
executing a contract incorporating such agreement, if requested by either party.
In this case, Sweden Ice Cream Plant unjust refusal to bargain

Doctrine: the Labor Code makes it an unfair labor practice for an employer to refuse "to meet and convene
promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to
wages, hours of work, and all other terms and conditions of employment including proposals for
adjusting any grievance or question arising under such an agreement and executing a contract
incorporating such agreement, if requested by either party.
12. Kiok Loy v. NLRC, 1414 SCRA 179
FACTS:
 The Pambansang Kilusang Paggawa, a legitimate late labor federation, won and was subsequently certified
in a resolution by the Bureau of Labor Relations as the sole and exclusive bargaining agent of the rank-and-
file employees of Sweden Ice Cream Plant.
 The Union furnished the Company with two copies of its proposed collective bargaining agreement. At the
same time, it requested the Company for its counter proposals. Both requests were ignored and remained
unacted upon by the Company.
 Thereafter, the Union filed a "Notice of Strike", with the Bureau of Labor Relations (BLR) on ground of
unresolved economic issues in collective bargaining.
 Conciliation proceedings then followed during the thirty-day statutory cooling-off period. But all attempts
towards an amicable settlement failed.
 The case was brought to the National Labor Relations Commission (NLRC) for compulsory arbitration
pursuant to Presidential Decree No. 823, as amended. But the Company requested for a lot of postponements.
NLRC ruled that respondent Sweden Ice Cream is guilty of unjustified refusal to bargain, in violation of Section
(g) Article 248 (now Article 249), of P.D. 442, as amended.
ISSUE: Whether the Company is guilty of unfair labor practice for refusal to bargain.
HELD: Yes. Petition dismissed for lack of merit.
 Collective bargaining is one of the democratic frameworks under the New Labor Code, designed to stabilize
the relation between labor and management and to create a climate of sound and stable industrial peace. It
is a mutual responsibility of the employer and the Union and is characterized as a legal obligation.
 Article 249, par. (g) of the Labor Code makes it an unfair labor practice for an employer to refuse "to meet and
convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to
wages, hours of work, and all other terms and conditions of employment including proposals for adjusting any
grievance or question arising under such an agreement and executing a contract incorporating such
agreement, if requested by either party.
 The mechanics of collective bargaining are set in motion only when the following jurisdictional preconditions
are present, namely,
o possession of the status of majority representation of the employees' representative in accordance
with any of the means of selection or designation provided for by the Labor Code;
o proof of majority representation; and
o a demand to bargain under Article 251, par. (a) of the New Labor Code.
 A Company's refusal to make counter proposal if considered in relation to the entire bargaining process, may
indicate bad faith since the Union's request for a counter proposal is left unanswered. Besides, petitioner
Company's approach and attitude-stalling the negotiation by a series of postponements, non-appearance at
the hearing conducted, and undue delay in submitting its financial statements, lead to no other conclusion
except that it is unwilling to negotiate and reach an agreement with the Union.
Trade Unionism
Article [211] 218 (b) and (e)
b. To promote free trade unionism as an instrument for the enhancement of democracy and the promotion of social
justice and development;
Article [212] 219 (g)

g. "Labor organization" means any union or association of employees which exists in whole or in part for the purpose
of collective bargaining or of dealing with employers concerning terms and conditions of employment.
Worker Enlightenment
Article [211] 218 (d)
d. To promote the enlightenment of workers concerning their rights and obligations as union members and as
employees;
Article [241] 249 (p): Rights and conditions of Membership in a Labor Organization
Art. 241. Rights and conditions of membership in a labor organization. The following are the rights and
conditions of membership in a labor organization:
p. It shall be the duty of any labor organization and its officers to inform its members on the provisions of its constitution
and by-laws, collective bargaining agreement, the prevailing labor relations system and all their rights and obligations
under existing labor laws.
Article 277 (a)
Art. 277. Miscellaneous provisions.
a. All unions are authorized to collect reasonable membership fees, union dues, assessments and fines and other
contributions for labor education and research, mutual death and hospitalization benefits, welfare fund, strike fund and
credit and cooperative undertakings. (As amended by Section 33, Republic Act No. 6715, March 21, 1989)
Sections 1 – 3, Rule XX, Book V

RULE XX
LABOR EDUCATION AND RESEARCH
Section 1. Labor education of workers and employees. - The Department shall develop, promote and implement
appropriate labor education and research programs on the rights and responsibilities of workers and employers.
It shall be the duty of every legitimate labor organization to implement a labor education program for its members on
their rights and obligations as unionists and as employees.
Section 2. Mandatory conduct of seminars. - Subject to the provisions of Article 241, it shall be mandatory for every
legitimate labor organization to conduct seminars and similar activities on existing labor laws, collective agreements,
company rules and regulations and other relevant matters. The union seminars and similar activities may be conducted
independently of or in cooperation with the Department and other labor education institutions.
Section 3. Special fund for labor education and research. - Every legitimate labor organization shall, for the above
purpose, maintain a special fund for labor education and research. Existing strike funds may, in whole or in part, be
transformed into labor education and research funds. The labor organization may also periodically assess and collect
reasonable amounts from its members for such funds.
Cases:
12. Davao Integrated Fort vs. Olvida, 210 SCRA 553
Title INTEGRATED PORT AND STEVEDORING SERVICES CORPORATION, petitioner,
vs.
Title:
ALFREDO C. OLVIDA IN HIS CAPACITY AS VOLUNTARY ARBITRATOR, AND THE ASSOCIATION OF
TRADE UNIONS (ATU¬TUCP)., respondents.
Nature: petition for certiorari with prayer for the issuance of a temporary restraining order
Keywords: interpretation of CBA for 6 days sick leave/ education assistance
Summary:
The union composing of petitioner's employees sought for the interpretation of two provisions of the five¬year
Collective Bargaining Agreement:
1. ARTICLE VIII — SICK, VACATION AND EMERGENCY LEAVES.

Sec. 4 — Emergency Leaves. The Company agrees to grant a maximum or six (6) days Emergency Leave
with pay per calendar year to all regular field workers, covered by this agreement who have rendered at least
six months of service (including overtime) per calendar year, are members of the Regular Labor Pool, upon
prior approval by the company. Said Emergency Leave is not cumulative (sic) nor commutable." (pp. 46¬47,
Rollo; Emphasis supplied.)
ARTICLE XVII — SPECIAL PROVISIONS.

Sec. 4 — Union Education and Training Fund. The Company agrees to contribute twelve thousand
(P12,000.00) pesos per year to the Union Education and Training Fund. (p. 48, Rollo.)
The company's new Assistant General Manager Benjamin Marzo, insisted that the above provisions are to be
interpreted as:
1. Under Article VIII, Section 4 (Emergency Leave) — that before the intermittent field workers who are
members of the Regular Labor Pool can avail of the six (6) days Emergency Leave provided in this provision,
the workers must have rendered at least six months of service per calendar year regardless of their
employment status (i.e., regular or probationary). Thus, all regular (non¬ intermittent) field workers, who belong
to the Regular Labor Pool must have rendered at least six months of service per calendar year to be entitled to
the six days Emergency Leave Pay. Petitioner pointed out that the phrase "per calendar year" is used twice in
Section 4, the first of which modifies the word "pay" and the second modifies the phrase "who or rendered at
least six months of service." (pp. 130¬131.) The entitlement and enjoyment of the emergency leave must be
strictly availed in the calendar year on which the six months service was rendered.
2. Under Article XVII, Section 4 (Union Education and Training Fund) — petitioner required that the Union
Facts:
should first prepare and submit a seminar program before it can avail of the Education and Training Fund of
P12,000.00 per annum.
Arbitrator:
After due hearing, respondent Arbitrator rendered a decision on May 19, 1990, upholding the union's
interpretations of Article VIII, Section 4 and Article XVII, Section 4, of the Collective Bargaining Agreement.
The dispositive portion of the decision reads:
1. The first sentence of Article VIII, Section 4 which read: "The Company agrees to grant maximum or six (6)
days Emergency Leave with pay per calendar year to all regular field workers" — refers to all non-intermittent
regular field workers who reported for work everyday and therefore the requirement of six (6) months or 1,248
hours does not apply; whereas, the next sentences which stated the following: "covered by this agreement who
have rendered at least six months (including overtime) per calendar year, are members of the Regular Labor
Pool, upon prior approval by the company." — refers to intermittent workers/members of the Regular Labor
Pool, whose work depends upon the arrival of vessels in the wharf and therefore must comply [with] the
requirement in the agreement, and so before it can avail of the six (6) days Emergency Leave with pay must
first rendered at least six months (including overtime) per calendar year. Once the 1,248 hours (6 months) is
complied subject workers can avail the benefit anytime an Emergency occurred and the same condition of
1,248 hours shall no longer apply in the succeeding calendar years.
2. With respect to the other provision of Article XVII, Section 4 of the new CBA — Union Education and
Training Fund — since the language of the agreement is clear and simple the respondent company shall
comply [with] its obligation by contributing to the Union Education and Training Fund the amount of Twelve
Thousand (P12,000.00) pesos per year at the beginning of each and every year and/or P1,000.00 at the end of
each and every month during the lifetime of the CBA at the option of the respondent company. Any post
signing condition impose by either or the parties that may affect the spontaneous implementation of Article
XVII, Section 4 is foreign to the language of the contract.
Issues: Interpretation of CBA provisions as mentioned
Ratio:
In this petition for certiorari, petitioner assails the respondent Arbitrator's construction
Ruling: Court finds the petitioner's interpretation of Section 4, Article VIII (emergency leave) more logical than
the Arbitrator's and the Union's. The provision of the CBA is clear: (1) the employee must be a member of the
Regular Labor Pool; (2) he is entitled to only six (6) days emergency leave with pay per calendar year; and (3)
he must have rendered service for at least six (6) months during the year when he took his emergency leave.
The emergency leave may be staggered or it may last for any number of days as emergencies arise but the
employee is entitled only to six (6) days of emergency leave "with pay" per year. Since the emergency leave is
allowed to enable the employee to attend to an emergency in his family or household, it may be taken at any
time during the calendar year but he must render at least six months service for that year to be entitled to
collect his wages for the six (6) days of his emergency leave. Since emergencies are unexpected and
unscheduled happenings, it would be absurd to require the employee to render six (6) months service before
being entitled to take a six¬day emergency leave with pay for it would mean that no emergency leave can be
taken by an employee during the first six months of a calendar year.
Ruling:
With regard to the provision on Union Education and Training Fund in Section 4, Article XVII of the CBA, the
petitioner's requirement that the Union submit a seminar program for each calendar year before it may claim
the company's P12,000 yearly donation to the fund, is not warranted by the terms of the CBA. The Arbitrator
did not abuse his discretion in ruling that the respondent company should comply with its obligation to
contribute to the Union Education and Training Fund the amount of Twelve Thousand (P12,000.00) pesos per
year by paying said amount to the Union at the beginning of each and every year, or contributing P1,000.00 at
the end of each and every month during the lifetime or the CBA, at the option of the company. As correctly
observed by the Arbitrator, the employer's demand for the submission of a seminar program "is foreign to the
language of the contract" with the union.
WHEREFORE, the petition for certiorari is GRANTED. Section 4, Article VIII of the CBA is interpreted to mean
that any employee who is a member of the Regular Labor Pool is entitled to six (6) days emergency leave with
pay per calendar year provided he has rendered at least six (6) months service during the year when he took
his emergency leave. The decision of the respondent Voluntary Arbitrator is AFFIRMED in other respects.
Doctrine:
13. Davao Integrated Port v. Olvida, 210 SCRA 339
FACTS: The DAVAO INTEGRATED PORT AND STEVEDORING SERVICES CORPORATION filed a petition for
certiorari with prayer for the issuance of a temporary restraining order impugns the Decision dated May 19, 1990 of the
Voluntary Arbitrator, Alfredo C. Olvida. The controversy centers on the interpretation of two provisions of the five-year
Collective Bargaining Agreement (effective April 15, 1989 up to April 14, 1994) between the petitioner, Davao Integrated
Port and Stevedoring Services Corporation (or "DIPSSC"), and the respondent, Association of Trade Unions [ATU-
TUCP] (the Union, for short). Those provisions are: 1. ARTICLE VIII - SICK, VACATION AND EMERGENCY LEAVES.
Sec. 4 - Emergency Leaves. The Company agrees to grant a maximum or six (6) days Emergency Leave with pay per
calendar year to all regular field workers, covered by this agreement who have rendered at least six months of service
(including overtime) per calendar year, are members of the Regular Labor Pool, upon prior approval by the company.
Said Emergency Leave is not cumulative (sic) nor commutable." (pp. 46-47, Rollo; Emphasis supplied.) ARTICLE XVII
- SPECIAL PROVISIONS. Sec. 4 - Union Education and Training Fund. The Company agrees to contribute twelve
thousand (P12,000.00) pesos per year to the Union Education and Training Fund. (p. 48, Rollo.) According to petitioner
Assistant General Manager Benjamin Marzo, insisted that the above provisions are to be interpreted as: 1. Under Article
VIII, Section 4 (Emergency Leave) - that before the intermittent field workers who are members of the Regular Labor
Pool can avail of the six (6) days Emergency Leave provided in this provision, the workers must have rendered at least
six months of service per calendar year regardless of their employment status (i.e., regular or probationary). Thus, all
regular (non-intermittent) field workers, who belong to the Regular Labor Pool must have rendered at least six months
of service per calendar year to be entitled to the six days Emergency Leave Pay. Petitioner pointed out that the phrase
"per calendar year" is used twice in Section 4, the first of which modifies the word "pay" and the second modifies the
phrase "who or rendered at least six months of service." (pp. 130-131.) The entitlement and enjoyment of the
emergency leave must be strictly availed in the calendar year on which the six months service was rendered. law library
2. Under Article XVII, Section 4 (Union Education and Training Fund) - petitioner required that the Union should first
prepare and submit a seminar program before it can avail of the Education and Training Fund of P12,000.00 per annum.
After due hearing, respondent arbitrator rendered a decision on interpretations of Article VIII, Section 4 and Article XVII,
Section 4, of the Collective Bargaining Agreement different to the petitioner.
ISSUE: Whether or not, the respondent arbitrator is correct on its interpretation of the provision in the said CBA.
HELD: The Supreme Court agrees to the petitioner contention. The Court finds the petitioner's interpretation of Section
4, Article VIII (emergency leave) more logical than the Arbitrator's and the Union's. The provision of the CBA is clear:
(1) the employee must be a member of the Regular Labor Pool; (2) he is entitled to only six (6) days emergency leave
with pay per calendar year; and (3) he must have rendered service for at least six (6) months during the year when he
took his emergency leave. The emergency leave may be staggered or it may last for any number of days as
emergencies arise but the employee is entitled only to six (6) days of emergency leave "with pay" per year. Since the
emergency leave is allowed to enable the employee to attend to an emergency in his family or household, it may be
taken at any time during the calendar year but he must render at least six months service for that year to be entitled to
collect his wages for the six (6) days of his emergency leave. Since emergencies are unexpected and unscheduled
happenings, it would be absurd to require the employee to render six (6) months service before being entitled to take
a six-day emergency leave with pay for it would mean that no emergency leave can be taken by an employee during
the first six months of a calendar year. law library With regard to the provision on Union Education and Training Fund
in Section 4, Article XVII of the CBA, the petitioner's requirement that the Union submit a seminar program for each
calendar year before it may claim the company's P12,000 yearly donation to the fund, is not warranted by the terms of
the CBA. The Arbitrator did not abuse his discretion in ruling that the respondent company should comply with its
obligation to contribute to the Union Education and Training Fund the amount of Twelve Thousand (P12,000.00) pesos
per year by paying said amount to the Union at the beginning of each and every year, or contributing P1,000.00 at the
end of each and every month during the lifetime or the CBA, at the option of the company. As correctly observed by
the Arbitrator, the employer's demand for the submission of a seminar program "is foreign to the language of the
contract" with the union.ch
13. Victoria vs. Inciong, 157 SCRA 339
Title: Victoria vsInciong-Acting Labor Secretary – (Respondent Company: Far East Broadcasting Company
Nature: Inc)
Keywords: Review for Certiorari of Order of Acting Secretary of Labor
Summary: Responsibility of Union Leader to inform its members on prevailing labor standards
Facts:  Petitioner Saturno Victoria is the president of the Far East Broadcasting Company
Employees Union. The said union declared a strike against respondent company for refusal
to recognize the union on the ground that the respondent, being a non-profit, non-stock,
non-commercial and religious corporation, is not covered by Republic Act 875, otherwise
known as the Industrial Peace Act, the labor law enforced at that time. Respondent filed
with the Court of First Instance of Bulacan, Civil Case No. 750-V, for the issuance of an
injunction and a prayer that the strike be declared illegal.
 Petitioner together with the other strikers filed with the ad hoc National Labor Relations
Commission Case Nos. 0021 and 0285 for reinstatement. The Arbitrator rendered a
decision and ordered respondent to reinstate petitioner
 In a Decision dated April 23, 1975, in Civil Case No. 750-V, promulgated by the Court of
First Instance of Bulacan, the strike staged by herein petitioner and the other strikers was
declared illegal inasmuch as it was for the purpose of compelling the company to recognize
their labor union which could not be legally done because the company is not covered by
Republic Act 875 as it is a non-profit organization since it does not declare dividends.
Based on said Decision, respondent company dismissed the petitioner from his
employment. Hence, he filed the instant complaint for illegal dismissal before the NLRC
against the respondent company alleging violation of Article 267 of the Labor Code which
requires clearance from the Secretary of Labor for every shutdown of business
establishments or dismissal of employees.
Labor  Based on the finding that respondent did not file any application for clearance to terminate
Arbiter the services of complainant before dismissing him from his employment, Labor Arbiter
rendered a decision in petitioner's favor declaring the dismissal to be illegal, thereby ordering
reinstatement with full backwages.
NLRC (on  Respondent appealed. NLRC affirmed Labor Arbiter.
appeal)
Secretary  Respondent appealed from the decision of NLRC. Decision was set aside. A new judgment
of Labor entered, ordering respondent company to give petitioner separation pay equivalent to one-
(on appeal) half month salary for every year of service
Issues: 1. Whether or not a clearance from the Secretary of Labor is still necessary before the
petitioner could be dismissed.
2. Whether or not the decision of the CFI-Bulacan in the civil case ipso facto gave the private
respondent authority to dismiss petitioner without clearance from the Secretary of Labor.
Ratio: 1. Technically speaking, no clearance was obtained by private respondent from the then
Secretary of Labor. However, the rationale behind the clearance requirement was fully met.
The Secretary of Labor was apprised of private respondent's intention to terminate the
services of petitioner. This in effect is an application for clearance to dismiss petitioner from
employment. The affirmance of the restrictive condition in the dispositive portion of the
labor arbiter's decision in NLRC Case Nos. 0021 and 0285 by the Secretary of Labor and
the Office of the President of the Philippines, signifies a grant of authority to dismiss
petitioner in case the strike is declared illegal by the Court of First Instance of Bulacan.
Respondent company acted in good faith when it terminated the employment of petitioner
upon a declaration of illegality of the strike by the Court of First Instance of Bulacan.
Moreover, the then Secretary of Labor manifested his conformity to the dismissal, not once,
but twice. In this regard, the mandatory rule on clearance need not be applied.
2. The law then enforced, Republic Act 875 specifically excluded respondent company from
its coverage. Even if the parties had gone to court to compel recognition, no positive relief
could have been obtained since the same was not sanctioned by law. Because of this,
there was no necessity on the part of private respondent to show specific acts of petitioner
during the strike to justify his dismissal. Petitioner should have known and it was his duty to
impart this imputed knowledge to the members of the union that employees and laborers in
non- profit organizations are not covered by the provisions of the Industrial Peace Act and
the Court of Industrial Relations/ Court of First Instance has no jurisdiction to entertain
petitions of labor unions or organizations of said non-profit organizations for certification as
the exclusive bargaining representatives of said employees and laborers.
Ruling: Inasmuch as there was a valid and reasonable ground to dismiss petitioner but no report as required
by the implementing rules and regulations of the Labor Code was filed by respondent Company with
the then Department of Labor, petitioner as held by the Acting Secretary of Labor, is entitled to
separation pay equivalent to one-half month salary for every year of service.
Petition is dismissed. The decision of the acting Secretary of Labor is Affirmed.

Doctrine: Worker Enlightenment
Petitioner as a union leader, must see to it that the policies and activities of the union in the conduct
of labor relations are within the precepts of law and any deviation from the legal boundaries shall be
imputable to the leader. He bears the responsibility of guiding the union along the path of law and to
cause the union to demand what is not legally demandable, would foment anarchy which is a prelude
to chaos.
14. Victoria v. Inciong, 157 SCRA 339
FACTS: Complainant Saturno Victoria is the president of the Far East Broadcasting Company Employees Union.
September 8, 1972 the said Union declared a strike against respondent company because they were not recognized
as a legitimate labor union by such company. September 11, 1972 respondent filed with the Court Of First Instance of
Bulacan, Civil Case no 750-V for the issuance of an injunction and a prayer that the strike be declared illegal.
October 24 1972, complainant together with the other strikers filed with the ad hoc NLRC case nos. 0021 and 0285 for
reinstatement. The Arbitrator rendered a decision in said case on December 28 1972, wherein he ordered respondent
to reinstate complainants subject to the following conditions:
“This order shall, however, be without prejudice whatever the decision of the CFI of Bulacan may promulgate in Civil
case no. 750-v and to the requirements the existing order may need of people working with the mass media
communications”.
In a decision dated April 23, 1975 in Civil case no. 750-v, promulgated by the CFI of Bulcan, the strike staged by herein
complainant and other strikers was declared illegal. Based on said decisions, respondent dismisssed complainant from
his employment.
Hence, complainant filed the instant complaint for illegal dismissal.
ISSUE: Whether or not a clearance from the secretary of labor is not necessary before the petitioner herein could be
dismissed considering the restrictive condition in the decision of the compulsory arbitration in NLRC.
HELD: No. a clearance from the secretary of Labor is not necessary before the petitioner herein could be dismissed
considering the restrictive condition in the decision of the compulsory arbitration in NLRC.
The court agrees with the Solicitor General, technically speaking, no cleareance was obtained by private
respondent from the then Secretary of Labor, the last step towards full compliance with the requirements of law on the
matter of dismissal of employees.
However, the rationale behind the clearance was fully met. The secretary of Labor was apprised of private
respondents intention to terminate the services of petitioner from employment. The affirmance of the restrictive
condition in the dispositive portion of the Labor arbiter’s decision in NLRC case no. 0021 and 0285 by the Secretary of
Labor and the Office of the President of the Philippines, signifies a grant of authority to dismiss petitioner in case the
strike be declared illegal by the Court of First Instance of Bulacan. Consequently, and as correctly stated by the Solicitor
General, private respondent acted in good faith when it terminated the employment of petitioner upon declaration of
illegality of the strike by the CFI of Bulacan. Moreover, the the Secretary of Labor manifested his conformity to the
dismissal, not once, but twice. In this regard, the mandatory rule on clearance need not be applied.
The Court also agrees with the acting Secretary of Labor that what was required in the case of petitioner’s
dismissal was only a report as provided under section 11(f) of Rule XIV of the Rules and Regulation implementing the
Labor code which provides:
“Every employer shall submit a report to the regional office in accordance with the form presented by the Department
on the following instances of termination of employment, suspension, lay-off or shutdown which may be effected by the
employer w/o prior clearance within 5 days thereafter”
Machinery Dispute Settlement

Article 211 (e)
Industrial Peace
Article 211 (f)
f. To ensure a stable but dynamic and just industrial peace; and
Article 273 (a) – (i)

Title IX
SPECIAL PROVISIONS
Article 273.Study of labor-management relations. The Secretary of Labor shall have the power and it shall be his duty
to inquire into:
a. the existing relations between employers and employees in the Philippines;
b. the growth of associations of employees and the effect of such associations upon employer-employee
relations;
c. the extent and results of the methods of collective bargaining in the determination of terms and conditions of
employment;
d. the methods which have been tried by employers and associations of employees for maintaining mutually
satisfactory relations;
e. desirable industrial practices which have been developed through collective bargaining and other voluntary
arrangements;
f. the possible ways of increasing the usefulness and efficiency of collective bargaining for settling differences;
g. the possibilities for the adoption of practical and effective methods of labor-management cooperation;
h. any other aspects of employer-employee relations concerning the promotion of harmony and understanding
between the parties; and
i. the relevance of labor laws and labor relations to national development.
The Secretary of Labor shall also inquire into the causes of industrial unrest and take all the necessary steps within his
power as may be prescribed by law to alleviate the same, and shall from time to time recommend the enactment of
such remedial legislation as in his judgment may be desirable for the maintenance and promotion of industrial peace.
Worker Participation in decision Making
Article 211 (g)
g. To ensure the participation of workers in decision and policy-making processes affecting their rights, duties and
welfare.
Article 277 (g)
h. The Ministry shall help promote and gradually develop, with the agreement of labor organizations and
employers, labor-management cooperation programs at appropriate levels of the enterprise based on the
shared responsibility and mutual respect in order to ensure industrial peace and improvement in productivity,
working conditions and the quality of working life. (Incorporated by Batas PambansaBilang 130, August 21,
1981)
Right Test
Case:
14. PAL vs. NLRC, 225 SCRA 301
Title: PAL vs. NLRC, 225 SCRA 301
Nature: Petition for certiorari on the issue of whether or not the formulation of a Code of Discipline among
employees is a shared responsibility of the employer and the employees.
Keywords:
Summary:
Facts:  On March 15, 1985, the Philippine Airlines, Inc. (PAL) completely revised its 1966 Code of
Discipline. The Code was circulated among the employees and was immediately
implemented, and some employees were forthwith subjected to the disciplinary measures
embodied therein.
 On August 20, 1985, the Philippine Airlines Employees Association (PALEA) filed a
complaint in the National Labor Relations Commission (NLRC) for unfair labor practice
(Case No. NCR-7-2051-85) with the following remarks: "ULP with arbitrary implementation
of PAL's Code of Discipline without notice and prior discussion with Union by
Management" (Rollo, p. 41).
CONTENTION OF PALEA:
 that PAL, by its unilateral implementation of the Code, was guilty of unfair labor practice,
specifically Paragraphs E and G of Article 249 and Article 253 of the Labor Code
 that copies of the Code had been circulated in limited numbers;
 that being penal in nature the Code must conform with the requirements of sufficient
publication, and
 that the Code was arbitrary, oppressive, and prejudicial to the rights of the employees.
PRAYER OF PALEA:
o that implementation of the Code be held in abeyance;
o that PAL should discuss the substance of the Code with PALEA;
o that employees dismissed under the Code be reinstated and their cases subjected to
further hearing; and
o that PAL be declared guilty of unfair labor practice and be ordered to pay damages
MOTION TO DISMISS
PAL asserts its prerogative as an employer to prescribe rules and regulations regarding
employees' conduct in carrying out their duties and function
CONTENTION OF PAL
 that by implementing the Code, it had not violated the collective bargaining agreement
(CBA) or any provision of the Labor Code.
 that the complain is unsupported by evidence
 that Article 253 of the Labor Code cited by PALEA reffered to the requirements for
negotiating a CBA which was inapplicable as indeed the current CBA had been
negotiated.
REPLY OF PALEA
In its reply to PAL's position paper, PALEA maintained that Article 249 (E) of the Labor Code was
violated when PAL unilaterally implemented the Code, and cited provisions of Articles IV and I of
Chapter II of the Code as defective for, respectively, running counter to the construction of penal
laws and making punishable any offense within PAL's contemplation.
MID November 7, 1986, Decision: Labor Arbiter Isabel P. Ortiguerra
ARBITER  No unfair labor practice had been committed
- finding no bad faith on the part of PAL in adopting the Code
 PAL was "not totally fault free"
Reason:
- while the issuance of rules and regulations governing the conduct of employees is a
"legitimate management prerogative" such rules and regulations must meet the test of
"reasonableness, propriety and fairness."
 PAL "failed to prove that the new Code was amply circulated."
- such "failure" on the part of PAL resulted in the imposition of penalties on employees
who thought all the while that the 1966 Code was still being followed.
WHEREFORE, premises considered, respondent PAL is hereby ordered as follows:
1. Furnish all employees with the new Code of Discipline;
2. Reconsider the cases of employees meted with penalties under the New Code of
Discipline and remand the same for further hearing; and
3. Discuss with PALEA the objectionable provisions specifically tackled in the body of the
decision.
All other claims of the complainant union (is) [are] hereby, dismissed for lack of merit.
SO ORDERED.
National  PAL APPEALED TO THE NLRC

Labor  found no evidence of unfair labor practice committed by PAL and
Relations  affirmed the dismissal of PALEA's charge.
Commission
(NLRC)  made the following observations:
o failure of management to discuss the provisions of a contemplated code of

discipline would result in the erosion and deterioration of an otherwise harmonious
and smooth relationship between them as did happen in the instant case
o the complainant union in this case has the right to feel isolated in the adoption of
the New Code of Discipline.
o the Code of Discipline involves security of tenure and loss of employment — a
property right
o participation by the union in the adoption of the code if conduct could have
accelerated and enhanced their feelings of belonging and would have resulted in
cooperation rather than resistance to the Code. In fact, labor-management
cooperation is now "the thing."
WHEREFORE, premises considered, we modify the appealed decision in the sense that the
New Code of Discipline should be reviewed and discussed with complainant union, particularly
the disputed provisions [.] (T)hereafter, respondent is directed to furnish each employee with
a copy of the appealed Code of Discipline. The pending cases adverted to in the appealed
decision if still in the arbitral level, should be reconsidered by the respondent Philippine Air Lines.
Other dispositions of the Labor Arbiter are sustained.
SC Petition for certiorari

PAL then filed the instant petition for certiorari charging public respondents with grave abuse of
discretion in:
(a) directing PAL "to share its management prerogative of formulating a Code of Discipline";
(b) engaging in quasi-judicial legislation in ordering PAL to share said prerogative with the union;
(c) deciding beyond the issue of unfair labor practice, and
(d) requiring PAL to reconsider pending cases still in the arbitral level (p. 7, Petition; p. 8, Rollo.)
PAL assertion:
o that when it revised its Code on March 15, 1985, there was no law which mandated the
sharing of responsibility therefore between employer and employee.
Issues: Whether management may be compelled to share with the union or its employees its prerogative of
formulating a code of discipline.
Ratio: Indeed, it was only on March 2, 1989, with the approval of Republic Act No. 6715, amending Article
211 of the Labor Code, that the law explicitly considered it a State policy "(t)o ensure the
participation of workers in decision and policy-making processes affecting the rights, duties and
welfare." However, even in the absence of said clear provision of law, the exercise of management
prerogatives was never considered boundless.
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 vs. NLRC, 190 SCRA 758 [1990]).
Moreover, as enunciated in Abbott Laboratories (Phil.), vs. NLRC (154 713 [1987]), it must be duly
established that the prerogative being invoked is clearly a managerial one.
PAL's position that it cannot be saddled with the "obligation" of sharing management prerogatives
as during the formulation of the Code, Republic Act No. 6715 had not yet been enacted
(Petitioner's Memorandum, p. 44; Rollo, p. 212), cannot thus be sustained. While such "obligation"
was not yet founded in law when the Code was formulated, the attainment of a harmonious
labor-management relationship and the then already existing state policy of enlightening
workers concerning their rights as employees demand no less than the observance of
transparency in managerial moves affecting employees' rights.
Ruling: WHEREFORE, the petition is DISMISSED and the questioned decision AFFIRMED. No special
pronouncement is made as to costs.
Doctrine: "participation of workers in decision and policy making processes affecting their rights, duties and
welfare."
15. PAL v. NLRC, 225 SCRA 301
On March 15, 1985, the Philippine Airlines, Inc. (PAL) completely revised its 1966 Code of Discipline. The Code was
circulated among the employees and was immediately implemented, and some employees were forthwith subjected to
the disciplinary measures embodied therein.August 20, 1985, the Philippine Airlines Employees Association (PALEA)
filed a complaint before the National Labor Relations Commission (NLRC) for unfair labor practice,specifically
Paragraphs E and G of Article 249 and Article 253 of the Labor Code on the ground that PAL arbitrarily implemented
the Code of Discipline without notice and prior discussion with Union by Management; that the copies of the Code had
been circulated in limited numbers; that being penal in nature the Code must conform with the requirements of sufficient
publication, and that the Code was arbitrary, oppressive, and prejudicial to the rights of the employees. PAL should
have discussed the substance of the Code with PALEA; that employees dismissed under the Code be reinstated and
their cases subjected to further hearing.The following are the assailed provisions of the Code by PALEA:
“Sec. 2. Non-exclusivity. — This Code does not contain the entirety of the rules and regulations of the company. Every
employee is bound to comply with all applicable rules, regulations, policies, procedures and standards, including
standards of quality, productivity and behaviour, as issued and promulgated by the company through its duly authorized
officials. Any violations thereof shall be punishable with a penalty to be determined by the gravity and/or frequency of
the offense.”
“Sec. 7. Cumulative Record. — An employee's record of offenses shall be cumulative. The penalty for an offense shall
be determined on the basis of his past record of offenses of any nature or the absence thereof. The more habitual an
offender has been, the greater shall be the penalty for the latest offense. Thus, an employee may be dismissed if the
number of his past offenses warrants such penalty in the judgment of management even if each offense considered
separately may not warrant dismissal. Habitual offenders or recidivists have no place in PAL. On the other hand, due
regard shall be given to the length of time between commission of individual offenses to determine whether the
employee's conduct may indicate occasional lapses (which may nevertheless require sterner disciplinary action) or a
pattern of incorrigibility.”
PAL filed a motion to dismiss the complaint, asserting its prerogative as an employer to prescribe rules and regulations
regarding employees’ conduct in carrying out their duties and functions, and alleging that by implementing the Code, it
had not violated the collective bargaining agreement (CBA) or any provision of the Labor Code. PAL maintained that
Article 253 of the Labor Code cited by PALEA reffered to the requirements for negotiating a CBA which was inapplicable
as indeed the current CBA had been negotiated.
PAL posits the view that by signing the 1989-1991 collective bargaining agreement, on June 27, 1990, PALEA in effect,
recognized PAL's "exclusive right to make and enforce company rules and regulations to carry out the functions of
management without having to discuss the same with PALEA and much less, obtain the latter's conformity thereto"
Petitioner's view is based on the following provision of the agreement:
“The Association recognizes the right of the Company to determine matters of management it policy and Company
operations and to direct its manpower. Management of the Company includes the right to organize, plan, direct and
control operations, to hire, assign employees to work, transfer employees from one department, to another, to promote,
demote, discipline, suspend or discharge employees for just cause; to lay-off employees for valid and legal causes, to
introduce new or improved methods or facilities or to change existing methods or facilities and the right to make and
enforce Company rules and regulations to carry out the functions of management.
The exercise by management of its prerogative shall be done in a just reasonable, humane and/or lawful manner.”
In the decision rendered by Labor Arbiter Isabel P. Ortiguerra it was held,that there was no bad faith on the part of PAL
in adopting the Code and ruling that no unfair labor practice had been committed. However, PAL was "not totally fault
free," while the issuance of rules and regulations governing the conduct of employees is a "legitimate management
prerogative" such rules and regulations must meet the test of "reasonableness, propriety and fairness." She found
Section 2 of the Code aforequoted as "an all embracing and all encompassing provision that makes punishable any
offense one can think of in the company"; while Section 7, likewise quoted above, is "objectionable for it violates the
rule against double jeopardy thereby ushering in two or more punishment for the same misdemeanor."
The labor arbiter also found that PAL "failed to prove that the new Code was amply circulated." Noting that PAL's
assertion that it had furnished all its employees copies of the Code is unsupported by documentary evidence, she
stated that such "failure" on the part of PAL resulted in the imposition of penalties on employees who thought all the
while that the 1966 Code was still being followed. Thus, the arbiter concluded that "(t)he phrase ignorance of the law
excuses no one from compliance . . . finds application only after it has been conclusively shown that the law was
circulated to all the parties concerned and efforts to disseminate information regarding the new law have been exerted.
The labor arbiter thereupon ordered PAL to: 1. Furnish all employees with the new Code of Discipline; 2. Reconsider
the cases of employees meted with penalties under the New Code of Discipline and remand the same for further
hearing; and 3. Discuss with PALEA the objectionable provisions specifically tackled in the body of the decision.All
other claims of the complainant union (is) [are] hereby, dismissed for lack of merit.
PAL appealed to the NLRC. The NLRC found no evidence of unfair labor practice committed by PAL and affirmed the
dismissal of PALEA's charge. The NLRC in its decision found that: “Indeed, failure of management to discuss the
provisions of a contemplated code of discipline which shall govern the conduct of its employees would result in the
erosion and deterioration of an otherwise harmonious and smooth relationship between them as did happen in the
instant case. There is no dispute that adoption of rules of conduct or discipline is a prerogative of management and is
imperative and essential if an industry is to survive in a competitive world. However, management can no longer exclude
labor in the deliberation and adoption of rules and regulations that will affect them.The Code of Discipline involves
security of tenure and loss of employment — a property right. In fact, our Constitution has recognized the principle of
"shared responsibility" between employers and workers and has likewise recognized the right of workers to participate
in "policy and decision-making process affecting their rights . . ." The latter provision was interpreted by the
Constitutional Commissioners to mean participation in "management"”
Respondent Commission thereupon disposed: “that the New Code of Discipline should be reviewed and discussed with
complainant union, particularly the disputed provisions.Respondent is directed to furnish each employee with a copy of
the appealed Code of Discipline. The pending cases adverted to in the appealed decision if still in the arbitral level,
should be reconsidered by the respondent Philippine Air Lines. Other dispositions of the Labor Arbiter are sustained.”
PAL then filed the instant petition for certiorari charging public respondents with grave abuse of discretion in: (a)
directing PAL "to share its management prerogative of formulating a Code of Discipline"; (b) engaging in quasi-judicial
legislation in ordering PAL to share said prerogative with the union; (c) deciding beyond the issue of unfair labor
practice, and (d) requiring PAL to reconsider pending cases still in the arbitral level
Issue(s):
(1) Whether the management may be compelled to share with the union or its employees its prerogative of formulating
a code of discipline when there is no law which mandated the sharing of responsibility between the employer and
employee when said code has been revised.
(2) Whether the formulation of the code of responsibility is a purely managerial prerogative.
Held:
(1)Yes.
PAL’s assertion that there was no law which mandated the sharing of responsibility between employer and employee
when it revised its Code on March 15, 1985 cannot be countenanced.
Indeed, it was only on March 2, 1989, with the approval of Republic Act No. 6715, amending Article 211 of the Labor
Code, that the law explicitly considered it a State policy " to ensure the participation of workers in decision and policy-
making processes affecting the rights, duties and welfare." While such "obligation" was not yet founded in law when
the Code was formulated, the attainment of a harmonious labor-management relationship and the then already existing
state policy of enlightening workers concerning their rights as employees demand no less than the observance of
transparency in managerial moves affecting employees' rights.Thus, even before Article 211 of the labor Code (P.D.
442) was amended by Republic Act No. 6715, it was already declared a policy of the State, "(d) To promote the
enlightenment of workers concerning their rights and obligations . . . as employees."
(2) No.
The provisions of the Code reveals that they are not purely business-oriented nor do they concern the management
aspect of the business of the company as in the San Miguel case. The provisions of the Code clearly have
repercussions on the employee's right to security of tenure. The implementation of the provisions may result in the
deprivation of an employee's means of livelihood which, as correctly pointed out by the NLRC, is a property right
(Callanta, vs Carnation Philippines, Inc.,). In view of these aspects of the case which border on infringement of
constitutional rights, we must uphold the constitutional requirements for the protection of labor and the promotion of
social justice, according to Justice Isagani Cruz, tilt "the scales of justice when there is doubt, in favor of the worker"
(Employees Association of the Philippine American Life Insurance Company vs. NLRC).
A line must be drawn between management prerogatives regarding business operations per se and those which affect
the rights of the employees. In treating the latter, management should see to it that its employees are at least properly
informed of its decisions or modes action. Indeed, industrial peace cannot be achieved if the employees are denied
their just participation in the discussion of matters affecting their rights.
The exercise of management prerogatives cannot be considered boundless. Thus, in Cruz vs. Medina it was held that
management's prerogatives must be without abuse of discretion.In San Miguel Brewery Sales Force Union (PTGWO)
vs. Ople, it was upheld that the company's right to implement a new system of distributing its products, but gave the
following caveat: “So long as a company's management prerogatives are exercised in good faith for the advancement
of the employer's interest and not for the purpose of defeating or circumventing the rights of the employees under
special laws or under valid agreements, this Court will uphold them. In the case of University of Sto. Tomas vs. NLRC,
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.
PAL also posits the view, that by signing the 1989-1991 collective bargaining agreement, on June 27, 1990, PALEA in
effect, recognized PAL's "exclusive right to make and enforce company rules and regulations to carry out the functions
of management without having to discuss the same with PALEA and much less, obtain the latter's conformity thereto."
The aforementioned provision in the collective bargaining agreement may not be interpreted as cession of employees'
rights to participate in the deliberation of matters which may affect their rights and the formulation of policies relative
thereto.
Wage Fixing
Article 211B
B. To encourage a truly democratic method of regulating the relations between the employers and employees by means
of agreements freely entered into through collective bargaining, no court or administrative agency or official shall have
the power to set or fix wages, rates of pay, hours of work or other terms and conditions of employment, except as
otherwise provided under this Code. (As amended by Section 3, Republic Act No. 6715, March 21, 1989)
Article 263 (g)
Art. 263. Strikes, picketing and lockouts.
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
provision as well as with such orders as he may issue to enforce the same.
Rationale Policy
Case:
15. Caltex Filipino Manager and Supervisors Association vs. CIR, 44 SCRA 350
(please refer to case #5)
16. Caltex Filipino Manager and Supervisors Association v. CIR, 44 SCRA 350
FACTS: On March 15, 1985, the Philippine Airlines, Inc. (PAL) completely revised its 1966 Code of Discipline. The
Code was circulated among the employees and was immediately implemented, and some employees were forthwith
subjected to the disciplinary measures embodied therein. Thus, on August 20, 1985, the Philippine Airlines Employees
Association (PALEA) filed a complaint before the National Labor Relations Commission (NLRC) for unfair labor practice
with the following remarks: "ULP with arbitrary implementation of PAL's Code of Discipline without notice and prior
discussion with Union by Management". It prayed that implementation of the Code be held in abeyance; that PAL
should discuss the substance of the Code with PALEA; that employees dismissed under the Code be reinstated and
their cases subjected to further hearing; and that PAL be declared guilty of unfair labor practice and be ordered to pay
damages. PAL filed a motion to dismiss the complaint, asserting its prerogative as an employer to prescibe rules and
regulations regarding employees' conduct in carrying out their duties and functions, and alleging that by implementing
the Code, it had not violated the collective bargaining agreement (CBA) or any provision of the Labor Code. PAL asserts
that when it revised its Code on March 15, 1985, there was no law which mandated the sharing of responsibility therefor
between employer and employee.
ISSUE: Whether or not the formulation of a Code of Discipline among employees is a shared responsibility of the
employer and the employees.
HELD: Indeed, it was only on March 2, 1989, with the approval of Republic Act No. 6715, amending Article 211 of the
Labor Code, that the law explicitly considered it a State policy "(t)o ensure the participation of workers in decision and
policy-making processes affecting the rights, duties and welfare." However, even in the absence of said clear provision
of law, 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. The exercise of
managerial prerogatives is not unlimited. The implementation of the provisions (PAL‘s 1966 Code of Discipline) may
result in the deprivation of an employee's means of livelihood which, as correctly pointed out by the NLRC, is a property
right (Callanta, vs Carnation Philippines, Inc., 145 SCRA 268 [1986]). In view of these aspects of the case which border
on infringement of constitutional rights, we must uphold the constitutional requirements for the protection of labor and
the promotion of social justice, for these factors, according to Justice Isagani Cruz, tilt "the scales of justice when there
is doubt, in favor of the worker" (Employees Association of the Philippine American Life Insurance Company vs. NLRC,
199 SCRA 628 [1991] 635). Verily, a line must be drawn between management prerogatives regarding business
operations per se and those which affect the rights of the employees. In treating the latter, management should see to
it that its employees are at least properly informed of its decisions or modes action. Indeed, industrial peace cannot be
achieved if the employees are denied their just participation in the discussion of matters affecting their rights. Thus,
even before Article 211 of the labor Code (P.D. 442) was amended by Republic Act No. 6715, it was already declared
a policy of the State, "(d) To promote the enlightenment of workers concerning their rights and obligations as
employees." This was, of course, amplified by Republic Act No 6715 when it decreed the "participation of workers in
decision and policy making processes affecting their rights, duties and welfare." PAL's position that it cannot be saddled
with the "obligation" of sharing management prerogatives as during the formulation of the Code, Republic Act No. 6715
had not yet been enacted (Petitioner's Memorandum, p. 44; Rollo, p. 212), cannot thus be sustained. While such
"obligation" was not yet founded in law when the Code was formulated, the attainment of a harmonious labor-
management relationship and the then already existing state policy of enlightening workers concerning their rights as
employees demand no less than the observance of transparency in managerial moves affecting employees' rights.
Tripartism
Article 275 (a) and (b)
Art. 275. Tripartism and tripartite conferences.
a. Tripartism in labor relations is hereby declared a State policy. Towards this end, workers and employers shall,
as far as practicable, be represented in decision and policy-making bodies of the government.
b. The Secretary of Labor and Employment or his duly authorized representatives may, from time to time, call a
national, regional, or industrial tripartite conference of representatives of government, workers and employers
for the consideration and adoption of voluntary codes of principles designed to promote industrial peace based
on social justice or to align labor movement relations with established priorities in economic and social
development. In calling such conference, the Secretary of Labor and Employment may consult with accredited
representatives of workers and employers. (As amended by Section 32, Republic Act No. 6715, March 21,
1989)
PART TWO: RIGHT TO SELF-ORGANIZATION
Basis of Right
1. 1987 Constitution
Article III- SECTION 8. The right of the people, including those employed in the public and private sectors, to form
unions, associations, or societies for purposes not contrary to law shall not be abridged.
2. Article XIII- SECTION 3. The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful
concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure,
humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes
affecting their rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers and employers and the preferential
use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith
to foster industrial peace.
The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share
in the fruits of production and the right of enterprises to reasonable returns on investments, and to expansion and
grow.
3. Section 6, Article III, 1935 Constitution- (No Section 6, Only Section 1, Paragraph 6)
(6) The right to form associations or societies for purposes not contrary to law shall not be abridged.
Section 7, Article IV, 1973 Constitution
4. SEC. 7. The right to form associations or societies for purposes not contrary to law shall not be abridged.
Cases:
16. Metrolab Industries vs. Roldan Confessor, G.R. No. 108855, February 25, 1996
Title: METROLAB INDUSTRIES, INC. vs. HONORABLE MA. NIEVES ROLDAN-CONFESOR
G.R. No. 108855. February 28, 1996
Nature: Petition for certiorari
Keywords: Confidential employees
Summary: DOLE - SC
Facts: Metro Drug Corporation Employees Association-Federation of Free Workers (Union) is a labor
organization representing the rank and file employees of petitioner Metrolab Industries, Inc. and also
of Metro Drug, Inc.
The CBA between Metrolab and the Union expired. The negotiations for a new CBA, however, ended
in a deadlock. Consequently, 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 enjoining the strike and lockout and
directed the parties to cease and desist from committing any and all acts that might exacerbate the
situation.
Thereafter, 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. The Union filed a motion for reconsideration.
During its pendency, 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. On the other hand, Metrolab contended that
the layoff was temporary and in the exercise of its management prerogative.
Acting Labor Secretary Confesor issued a resolution declaring the layoff of Metrolabs 94 rank and
file workers illegal and ordered their reinstatement with full backwages. 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.
Labor Secretary Confesor denied the partial motion for reconsideration and also ruled that executive
secretaries are excluded from the closed-shop provision of the CBA, not from the bargaining unit.
The Union filed a motion for execution. Metrolab opposed. Hence, the present petition for certiorari
with application for issuance of a Temporary Restraining Order.
Issues: Whether or not the Hon. Secretary of Labor and Employment gravely abused her discretion in
including Executive Secretaries as part of the bargaining unit of the rank and file employees.
Ratio: Although Article 245 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.
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 employee(s) 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 we 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 branchs 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 employers 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. . . .
The Unions 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 Metrolabs 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.
Ruling: 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 Metrolabs General Manager and the executive
secretaries of the members of its Management Committee are excluded from the bargaining unit of
petitioners rank and file employees.
Doctrine: Although Article 245 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.
17. Metrolab Industries v. Roldan Confessor, GR No. 108855, February 25, 1996
FACTS: After the CBA between Metrolab Industries, Inc. and the labor organization (Metro Drug Corp. Employee’s
Assoc. – FFW) expired, negotiations for new CBA ended into deadlock. Both parties failed to settle their dispute despite
conciliation efforts of the National Conciliation and Mediation Board (NCMB) hence, the Secretary of Labor issued an
assumption order over the entire labor dispute. Accordingly, any strike or lockout has been strictly enjoined. Likewise,
the parties were directed to cease and desist from committing any and all acts that might exacerbate the situation.
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. The labor union, however, filed a motion for reconsideration. During
the pendency of the motion for reconsideration, Metrolab laid off 94 of its rank and file employees contending that the
layoff was temporary and in the exercise of its management prerogative.
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. Thereafter, Metrolab recalled some of the laid off workers.
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 order included provisions stating
that 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.
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.
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.
Pending the resolution of the motions, Metrolab laid off 73 of its employees on grounds of redundancy due to lack of
work which the union again promptly opposed.
On 15 October 1992, Labor Secretary Confesor again issued a cease and desist order. Metrolab moved for
reconsideration.
On 25 January 1993, Labor Secretary Confesor issued the assailed Omnibus Resolution containing the following
orders:
1. MII's motion for partial reconsideration of our 14 April 1992 resolution 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.
Finally, all prohibitory injunctions issued as a result of our assumption of jurisdiction over this dispute are hereby lifted.
Labor Secretary Confesor also ruled that executive secretaries are excluded from the closed-shop provision of the
CBA, not from the bargaining unit.
The Union filed a motion for execution. Metrolab opposed. Hence, the present petition for certiorari with application for
issuance of a Temporary Restraining Order.
ISSUE: WON executive secretaries must be included as part of the bargaining unit of rank and file employees.
HELD: NO. By recognizing the expanded scope of the right to self-organization, the intent of the court was to delimit
the types of employees excluded from the close shop provisions, not from the bargaining unit. The executive
secretaries of General Manager and the Management Committees should not only be exempted from the closed-shop
provision but should not be permitted to join in the bargaining unit of the rank and file employees as well as on the
grounds that the executive secretaries are confidential employees , having access to “vital labor information”.
As stated in several cases, confidential employees are prohibited and disqualified to join any bargaining unit since the
very nature of the functions are to assist and act in a confidential capacity, or to have access to confidential matters of,
persons who exercise managerial functions in the field of labor relations. Finally, confidential employees cannot be
classified as rank and file from the very nature of their work. Excluding confidential employees from the rank and file of
bargaining unit, therefore, is not tantamount to discrimination.
Therefore, executive secretaries of petitioners’ General Manager and its Management Committee are permanently
excluded from the bargaining unit of petitioner’s rank and file employees.
17. Singer Sewing Machine Co. vs. Drilon, 193 SCRA 270
Title: SINGER SEWING MACHINE COMPANY vs. HON. FRANKLIN M. DRILON, MED-ARBITER FELIX
B. CHAGUILE, JR., and SINGER MACHINE COLLECTORS UNION-BAGUIO (SIMACUB)
Nature: PETITION for certiorari to review the order and resolution of the Department of Labor and Collection
Keywords: agents are not employees and so not entitled to right to join or form a labor organization
MedArbiter DesignateLabor SecretarySC
Summary:
Facts:  The respondent union filed a petition for direct certification as the sole and exclusive
MedArbiter bargaining agent of all collectors of the Singer Sewing Machine Company, Baguio City
Designate branch
 The Company opposed the petition mainly on the ground that the union members are
actually not employees but are independent contractors as evidenced by the collection
agency agreement
 The respondent Med-Arbiter, finding that there exists an employer-employee relationship,
granted the petition for certification election.
Labor  On appeal, Secretary of Labor Franklin M. Drilon affirmed it.
Secretary  The motion for reconsideration of the Secretary’s resolution was denied.
SC Hence, this petition
 The petitioner relies on the following stipulations in the Collection Agency Agreement:
(a) a collector is designated as a “collecting agent” who is to be considered at all times as
an independent contractor and not employee of the Company;
(b) collection of all payments on installment accounts are to be made monthly or oftener;
(c) an agent is paid his compensation for service in the form of a commission of 6% of all
collections made and turned over plus a bonus on said collections;
(d) an agent is required to post a cash bond of three thousand pesos (P3,000.00)
(e) he is subject to all the terms and conditions in the agreement;
(f) the agreement is effective for one year from the date of its execution and renewable
on a yearly basis; and
(g) hisservices shall be terminated in case of failure to satisfy the minimum monthly
collection performance required, failure to post a cash bond, or cancellation of the
agreement at the instance of either party unless the agent has a pending obligation or
indebtedness in favor of the Company.
 The respondents, to prove that union members are employees, asserted that they “perform
the most desirable and necessary activities for the continuous and effective operations of
the business of the petitioner Company” citing Article 280 of the Labor Code. They also
contend that they cannot legally qualify as independent contractors who have substantial
capital or investment in the form of equipment, tools, and the like necessary in the conduct
of the business. Further, they quote paragraphs 2, 3, and 4 of the agreement as control
measures over the means by which an agent is to perform his services.
-paragraph 2 states that an agent shall utilize only receipt forms authorized and issued
by the Company
-paragraph 3 states that an agent has to submit and deliver at least once a week or as
often as required a report of all collections made using report forms furnished by the
Company
-paragraph 4 on the monthly collection quota
Issues: WON the commission agents are not employees but are independent contractors not entitled to
right to join or form a labor organization
Ruling: The present case mainly calls for the application of the control test, which if not satisfied, would lead
us to conclude that no employer-employee relationship exists. Hence, if the union members are not
employees, no right to organize for purposes of bargaining, nor to be certified as such bargaining
agent can ever be recognized.
The following elements are generally considered in the determination of the employer-employee
relationship; “(1) the selection and engagement of the employee; (2) the payment of wages; (3) the
power of dismissal; and (4) the power to control the employee’s conduct—although the latter is the
most important element”
The Agreement confirms the status of the collecting agent in this case as an independent contractor
not only because he is explicitly described as such but also because the provisions permit him to
perform collection services for the company without being subject to the control of the latter except
only as to the result of his work.
The requirement that collection agents utilize only receipt forms and report forms issued by the
Company and that reports shall be submitted at least once a week is not necessarily an indication of
control over the means by which the job of collection is to be performed. The agreement itself
specifically explains that receipt forms shall be used for the purpose of avoiding a co-mingling of
personal funds of the agent with the money collected on behalf of the Company. Likewise, the use of
standard report forms as well as the regular time within which to submit a report of collection is
intended to facilitate order in office procedures. The monthly collection quota is a normal requirement
found in similar contractual agreements and is so stipulated to encourage a collecting agent to report
at least the minimum amount of proceeds.
The Court finds the contention of the respondents that the union members are employees under
Article 280 of the Labor Code to have no basis. The definition that regular employees are those who
perform activities which are desirable and necessary for the business of the employer is not
determinative in this case. Article 280 is not the yardstick for determining the existence of an
employment relationship because it merely distinguishes between two kinds of employees, i.e.,
regular employees and casual employees, for purposes of determining the right of an employee to
certain benefits, to join or form a union, or to security of tenure. Article 280 does not apply where the
existence of an employment relationship is in dispute.
The respondents’ contention that the union members are employees of the Company is based on
selected provisions of the Agreement but ignores the following circumstances 1. The collection
agents are not required to observe office hours or report to Singer’s office everyday except, naturally
and necessarily, for the purpose of remitting their collections; 2. The collection agents do not have to
devote their time exclusively for SINGER. There is no prohibition on the part of the collection agents
from working elsewhere. Nor are these agents required to account for their time and submit a record
of their activity; 3. The manner and method of effecting collections are left solely to the discretion of
the collection agents without any interference on the part of Singer; 4. The collection agents shoulder
their transportation expenses incurred in the collections of the accounts assigned to them; 5. The
collection agents are paid strictly on commission basis. The amounts paid to them are based solely
on the amounts of collection each of them make. They do not receive any commission if they do not
effect any collection even if they put a lot of effort in collecting. They are paid commission on the
basis of actual collections; and 6. The commissions earned by the collection agents are directly
deducted by them from the amount of collections they are able to effect. The net amount is what is
then remitted to Singer.
The Court finds that since private respondents are not employees of the Company, they are not
entitled to the constitutional right to join or form a labor organization for purposes of collective
bargaining. Accordingly, there is no constitutional and legal basis for their “union” to be granted their
petition for direct certification.
Resolution and order reversed and set aside.
18. Singer Sewing Machine Co. v. Drilon, 193 SCRA 270
FACTS:
 This is a petition for certiorari assailing the order of Chaguile and Drilon denying the motion for reconsideration
in the case of the certification of Singer Machine Collectors Union - Baguio(SIMACUB) as the sole and
collective bargaining agent.
 February 1989, SIMACUB filed a petition for direct certification as the sole and exclusive bargaining agent of
all collectors of the singer company, Baguio City branch. The company opposed the petition on the ground
that union members are actually not employees but independent contractors of the company.
 Chaguile found that there exist an employee-employer relationship between the union members and company,
thus he granted the petition for certification. On appeal, Drilon affirmed the same. Thus this petition, alleging
that Drilon and Chaguile acted in excess of jurisdiction and/or committed grave abuse of discretion in that: (1)
DOLE has no jurisdiction over cases where there is employee-employer relationship, (2) right to due process
was denied when the evidence of the union members' being commission agents was disregarded by Drilon,
(3) that Drilon and Chaguile erred in finding the existence of employee-employer relationship, (4) Drilon and
Chaguile disregarded the well-settled rule that commission agents are not employees but are independent
contractors.
 Respondents insist that the provisions of Collective Agency Agreement contradict the company's position that
the union members are independent contractors. Proving that union members are performing the most
desirable and necessary activities for the continuous and effective operations of the company. Citing also that
the union members will not qualify as independent contractors because they are not free from control of the
alleged employer, who have substantial capital or investment in the equipment, tool and other necessities of
the business.
ISSUE: Whether members of SIMACUB are entitled to right of self-organization.
HELD:
 The following elements are generally considered in the determination of the employer-employee relationship;
"(1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and
(4) the power to control the employee's conduct — although the latter is the most important element."
 The petitioner relies on the following stipulation in the agreement: (a) a collector is designated as a collecting
agent" who is to be considered at all times as an independent contractor and not employee of the Company;
While the respondents rely on Paragraph 4 on the monthly collection quota required by the Company is
deemed by respondents as a control measure over the means by which an agent is to perform his services.
 Because of the agreement's confirmation of the status of the collecting agent as independent contractor, court
ruled in favor of the petitioner. Saying also that the monthly collection qouta is a normal requirement in
contractual agreements (among other reasons like, collectors are not bound to report on a daily basis, they
are not prohibited to seek another employment, and they are paid in a commission basis, etc). Thus concluding
also that there is no employer-employee relationship. Denying the contention that the alleged employees are
performing activities that are necessary for the business is not determinative in this case, due to the
agreement.
 The Court finds that since private respondents are not employees of the Company, they are not entitled to the
constitutional right to join or form a labor organization for purposes of collective bargaining. Accordingly, there
is no constitutional and legal basis for their “union” to be granted their petition for direct certification. This Court
made this pronouncement in La Suerte Cigar and Cigarette Factory v. Director of Bureau of Labor Relations,
supra:
. . . The question of whether employer-employee relationship exists is a primordial consideration before extending labor
benefits under the workmen’s compensation, social security, medicare, termination pay and labor relations law. It is
important in the determination of who shall be included in a proposed bargaining unit because, it is the sine qua non,
the fundamental and essential condition that a bargaining unit be composed of employees. Failure to establish this
juridical relationship between the union members and the employer affects the legality of the union itself. It means the
ineligibility of the union members to present a petition for certification election as well as to vote therein . . . . (At p. 689)
Extent and Scope of Right
Cases:
18. Reyes vs. Trajano, 209 SCRA 484
Title ALEXANDER REYES, ALBERTO M. NERA, EDGARDO M. GECA, and 138 others,
vs. CRESENCIANO B. TRAJANO, as Officer-in-Charge, Bureau of Labor Relations, Med. Arbiter
PATERNO ADAP, and TRI-UNION EMPLOYEES UNION, et al., respondent.
Nature special civil action of certiorari
Keywords Right to self organization, available to all
Summary
Facts The certification election was authorized among the employees of Tri-Union Industries Corporation.
The competing unions were Tri-Union Employees Union-Organized Labor Association in Line
Industries and Agriculture (TUEU-OLALIA), and Trade Union of the Philippines and Allied Services
(TUPAS). Of the 348 workers initially deemed to be qualified voters, only 240 actually took part in the
election. Among the 240 employees who cast their votes were 141 members of the IglesianiKristo.
The ballots provided for three (3) choices. (a) TUPAS and (b) TUEU-OLALIA; and, conformably with
established rule and practice, 1 for (c) a third choice: "NO UNION."
The final tally of the votes showed the following results:
TUPAS 1, TUEU-OLALIA 95, NO UNION 1, SPOILED 1, CHALLENGED 141
The challenged votes were those cast by the 141 INK members. They were segregated and excluded
from the final count in virtue of an agreement between the competing unions, reached at the pre-
election conference, that the INK members should not be allowed to vote "because they are not
members of any union and refused to participate in the previous certification elections."
The INK employees promptly made known their protest to the exclusion of their votes. They filed f a
petition to cancel the election alleging that it "was not fair" and the result thereof did "not reflect the true
sentiments of the majority of the employees." TUEU-OLALIA opposed the petition. It contended that
the petitioners "do not have legal personality to protest the results of the election," because "they are
not members of either contending unit, but . . . of the INK" which prohibits its followers, on religious
grounds, from joining or forming any labor organization . . . ."
Med- The Med-Arbiter saw no merit in the INK employees 1 petition. He certified the TUEU-OLALIA as the
Arbiter sole and exclusive bargaining agent of the rank-and-file employees. He decided the fact that "religious
belief was (being) utilized to render meaningless the rights of the non-members of the IglesianiKristo
to exercise the rights to be represented by a labor organization as the bargaining agent," and declared
the petitioners as "not possessed of any legal personality to institute this present cause of action" since
they were not parties to the petition for certification election.
The petitioners brought the matter up on appeal to the Bureau of Labor Relations. There they argued
that the Med-Arbiter had "practically disenfranchised petitioners who had an overwhelming majority,"
and "the TUEU-OLALIA certified union cannot be legally said to have been the result of a valid election
where at least fifty-one percent of all eligible voters in the appropriate bargaining unit shall have cast
their votes.
BLR Assistant Labor Secretary Cresenciano B. Trajano, then Officer-in-Charge of the Bureau of Labor
Relations, denied the appeal. He opined that the petitioners are "bereft of legal personality" since they
"are not constituted into a duly organized labor union, hence, not one of the unions which vied for
certification as sole and exclusive bargaining representative."
He also pointed out that the petitioners "did not participate in previous certification elections in the
company for the reason that their religious beliefs do not allow them to form, join or assist labor
organizations."
ISSUE Whether the141 INK members should be denied the right to vote on the ground that they "did not
participate in previous certification elections in the company for the reason that their religious beliefs
do not allow them to form, join or assist labor organizations
RULING NO.
The right of self-organization includes the right to organize or affiliate with a labor union or determine
which of two or more unions in an establishment to join, and to engage in concerted activities with co-
workers for purposes of collective bargaining through representatives of their own choosing, or for their
mutual aid and protection, i.e., the protection, promotion, or enhancement of their rights and interests. 5
The respondents' argument that the petitioners are disqualified to vote because they "are not
constituted into a duly organized labor union" — "but members of the INK which prohibits its followers,
on religious grounds, from joining or forming any labor organization" — and "hence, not one of the
unions which vied for certification as sole and exclusive bargaining representative," is specious.Neither
law, administrative rule nor jurisprudence requires that only employees affiliated with any labor
organization may take part in a certification election. On the contrary, the plainly discernible intendment
of the law is to grant the right to vote to all bona fide employees in the bargaining unit, whether they
are members of a labor organization or not
The contention that petitioners should be denied the right to vote because they "did not participate in
previous certification elections in the company for the reason that their religious beliefs do not allow
them to form, join or assist labor organizations," persuade acceptance. No law, administrative rule or
precedent prescribes forfeiture of the right to vote by reason of neglect to exercise the right in past
certification elections. In denying the petitioners' right to vote upon these egregiously fallacious
grounds, the public respondents exercised their discretion whimsically, capriciously and oppressively
and gravely abused the same.
WHEREFORE, the petition for certiorari is GRANTED; the Decision of the then Officer-in-Charge of the
Bureau of Labor Relations dated December 21, 1987 (affirming the Order of the Med-Arbiter dated July
22, 1988) is ANNULLED and SET ASIDE.
19. Reyes v. Trajano, 209 SCRA 484
FACTS:
 Public Respondent Trajano as OIC of the Bureau of Labor Relations sustained the denial by the Med Arbiter
of the right to vote of one hundred forty-one members of the “Iglesia ni Kristo” (INK), all employed in the same
company, at a certification election at which two labor organizations were contesting the right to be the
exclusive representative of the employees in the bargaining unit.
 The certification election was authorized to be conducted by the Bureau of Labor Relations among the
employees of Tri-Union Industries Corporation. The competing unions were Tri-Union Employees Union-
Organized Labor Association in Line Industries and Agriculture (TUEU-OLALIA), and Trade Union of the
Philippines and Allied Services (TUPAS).
o The final tally of the votes showed the following results:
TUPAS 1, TUEU-OLALIA 95, NO UNION 1, SPOILED 1, CHALLENGED 141
 The challenged votes were those cast by the 141 INK members. They were segregated and excluded from
the final count in virtue of an agreement between the competing unions, reached at the pre-election conference
that the INK members should not be allowed to vote “because they are not members of any union and refused
to participate in the previous certification elections.”
 The INK employees promptly filed a petition to cancel the election alleging that it “was not fair” and the result
thereof did “not reflect the true sentiments of the majority of the employees.” TUEU-OLALIA opposed the
petition contending that the petitioners “do not have legal personality to protest the results of the election,”
because “they are not members of either contending unit, but . . . of the INK” which prohibits its followers, on
religious grounds, from joining or forming any labor organization . . . .”
ISSUE: Whether employees who are not part of any union may validly exercise their right to vote in a certification
election.
HELD: YES. Guaranteed to all employees or workers is the “right to self-organization and to form, join, or assist labor
organizations of their own choosing for purposes of collective bargaining.” This is made plain by no less than three
provisions of the Labor Code of the Philippines.
 The right of self-organization includes the right to organize or affiliate with a labor union or determine which of
two or more unions in an establishment to join, and to engage in concerted activities with co-workers for
purposes of collective bargaining through representatives of their own choosing, or for their mutual aid and
protection, i.e., the protection, promotion, or enhancement of their rights and interests.
 The right to form or join a labor organization necessarily includes the right to refuse or refrain from exercising
said right. It is self-evident that just as no one should be denied the exercise of a right granted by law, so also,
no one should be compelled to exercise such a conferred right. The fact that a person has opted to acquire
membership in a labor union does not preclude his subsequently opting to renounce such membership.
 The purpose of a certification election is precisely the ascertainment of the wishes of the majority of the
employees in the appropriate bargaining unit: to be or not to be represented by a labor organization, and in
the affirmative case, by which particular labor organization. If the results of the election should disclose that
the majority of the workers do not wish to be represented by any union, then their wishes must be respected,
and no union may properly be certified as the exclusive representative of the workers in the bargaining unit in
dealing with the employer regarding wages, hours and other terms and conditions of employment. The minority
employees — who wish to have a union represent them in collective bargaining — can do nothing but wait for
another suitable occasion to petition for a certification election and hope that the results will be different. They
may not and should not be permitted, however, to impose their will on the majority — who do not desire to
have a union certified as the exclusive workers’ benefit in the bargaining unit — upon the plea that they, the
minority workers, are being denied the right of self-organization and collective bargaining.
 The respondents’ argument that the petitioners are disqualified to vote because they “are not constituted into
a duly organized labor union” — “but members of the INK which prohibits its followers, on religious grounds,
from joining or forming any labor organization” — and “hence, not one of the unions which vied for certification
as sole and exclusive bargaining representative,” is specious. Neither law, administrative rule nor
jurisprudence requires that only employees affiliated with any labor organization may take part in a certification
election. On the contrary, the plainly discernible intendment of the law is to grant the right to vote to all bona
fide employees in the bargaining unit, whether they are members of a labor organization or not.
 Neither does the contention that petitioners should be denied the right to vote because they “did not participate
in previous certification elections in the company for the reason that their religious beliefs do not allow them
to form, join or assist labor organizations,” persuade acceptance. No law, administrative rule or precedent
prescribes forfeiture of the right to vote by reason of neglect to exercise the right in past certification elections.
20 .Knitjoy vs. Calleja, 214 SCRA 174

Title KNITJOY MANUFACTURING, INC., petitioner, , vs.. PURA FERRER- PURA FERRER- CALLEJA,
Director of Bureau of Labor Relat ions, and KNITJOYCALLEJA, Director of Bureau of Labor Relat ions,
and KNITJOY MONTHLY EMPLOYEES UNION, MONTHLY EMPLOYEES UNION, respondents
Nature Two consolidated cases
Keywords Right to self organization – extent and scope
Summary
Facts Petitioner KNITJOY had a collective bargaining agreement (CBA) with the Federation of Filipino
Workers (FFW). The bargaining unit covered only the regular rank-and-file employees of KNITJOY
paid on a daily or piece-rate basis. It did not include regular rank- and-file office and production
employees paid on a monthly basis. The CBA expired on 15 June 1987. Prior to its expiration, the
FFW was split into two (2) factions — the Johnny Tan and the Aranzamendez factions. The latter
eventually became the Confederation of Filipino Workers (CFW), herein petitioner in G.R. No. 82111.
Also prior to the expiration of the CBA, the Trade Union of the Philippines and Allied Services
(TUPAS) filed a petition for the holding of a certification election among KNITJOY's regular rank-and-
file employees paid on a daily and piece-rate basis. Excluded were the regular rank-and-file
employees paid on a monthly basis. In the certification election conducted on 10 June 1987, CFW
emerged as the winner; thereafter, negotiations for a new CBA between CFW and KNITJOY
commenced.
On 24 June 1987, during the pendency of the said negotiations, private respondent KMEU
filed a petition for certification election among KNITJOY's regular rank-and-file monthly-
paid employees with Regional Office No. IV of the Department of Labor and Employment
(DOLE) which docketed the same as R-04-OD-M-6-75-87. The Knitjoy Monthly Employees
Association and Confederation of Citizens Labor Union (KMEU-CCLU), another union
existing in the said company, and petitioner CFW intervened therein.
In the bargaining history of KNITJOY, the CBA has been consistently limited to the regular rank-and-
file employees paid on a daily or piece-rate basis. On the other hand, the rank-and-file employees
paid on a monthly basis were never included within its scope. Respondent KMEU's membership is
limited to the latter class of employees, KMEU does not seek to dislodge CFW as the exclusive
bargaining representative for the former. The records further disclose that in the
certification solicited by TUPAS and during the elections which followed thereafter,
resulting in the certification of CFW as the exclusive bargaining representative, the
monthly-paid employees were expressly excluded. Thus, the negotiations between CFW
and KNITJOY following such a certification could only logically refer to the rank-and-file
employees paid on a daily or piece-rate basis. Clearly therefore, KNITJOY and CFW
recognize that insofar as the monthly-paid employees are concerned, the latter's
constituting a separate bargaining unit with the appropriate union as sole bargaining
representative, can neither be prevented nor avoided without infringing on these
employees' rights to form a union and to enter into collective bargaining negotiations.
Stated differently, KNITJOY and CFW recognize the fact that the existing bargaining unit in
the former is not — and has never been — the employer unit. Given this historical and
factual setting, KMEU had the unquestioned and undisputed right to seek certification as
the exclusive bargaining representative for the monthly-paid rank-and-file employees; both
KNITJOY and CFW cannot block the same on the basis of this Court's declaration in
BuletinPublishingCorp.vs.Hon.Sanchez15 and GeneralRubberandFootwearCorp.vs.
Bureau of Labor Relations (155 SCRA 283 [1987]) regarding the one-company-one union
concept.
Decision LA - The petition for certification election was dismissed in the Order of 4 September 1987 of Med-
of Courts Arbiter Rolando S. de la Cruz, the dispositive portion of which reads:
"WHEREFORE, premises considered, the petition is hereby Dismissed, but the
parties are instructed to work out (sic) towards the formation of a single union in
the company."
BLR - KMEU filed a motion to reconsider this order, which was treated as an appeal by the
Bureau of Labor Relations (BLR).
On 1 December 1987, public respondent PuraFerrer-Calleja. Director of the BLR, handed

down a Decision 22 reversing the order of Med-Arbiter de la Cruz. The dispositive portion of
the Decision reads:
"WHEREFORE, premises considered, the Appeal of Knitjoy Monthly Employees is

hereby granted subject to the exclusion of the monthly paid employees who are
deemed managerial.
Issue/s Whether or not petitioner KNITJOY's monthly-paid regular rank-and-file
employees can constitute an appropriate bargaining unit separate and distinct
from the existing unit composed of daily or piece-rate paid regular rank-and-file
employees.
Ratio & The present Article 245 of the Labor Code expressly allows supervisory employees who are not
Ruling performing managerial functions to join, assist or form their separate union but bars them from
membership in a labor organization of the rank-and-file employees.
The second case on the other hand, demolishes the stand of KNITJOY and CFW for, as
correctly contended by the respondents, it in fact recognizes an exception to the one company-one
union concept. Thus:
"Perhaps it is unusual for the petitioner to have to deal with two (2) collective
bargaining unions but there is no one to blame except petitioner itself for creating
the situation it is in. From the beginning of the existence in 1963 of a bargaining
unit for the employees up to the present, petitioner had sought to indiscriminately
suppress the members of the private respondent's right (sic) to self-organization
provided for by law. Petitioner, in justification of its action, maintained that the
exclusion of the members of the private respondent from the bargaining union of
the rank-and-file or from forming their own union was agreed upon by petitioner
corporation with the previous bargaining representatives . . . Such posture has no
leg to stand on. It has not been shown that private respondent was privy to this
agreement. And even if it were so, it can never bind subsequent federations and
unions particularly private respondent-union because it is a curtailment of the
right to self-organization guaranteed by the labor laws. However, to prevent any
difficulty and to avoid confusion to all concerned and, more importantly, to fulfill
the policy of the New Labor Code as well as to be consistent with Our ruling in the
Buletin case, supra, the monthly-paid rank-and-file employees should be allowed
to join the union of the daily-paid-rank-and-file employees of petitioner so that
they can also avail of the CBA benefits ortoformtheirownrank-and-fileunion,
withoutprejudicetothecertificationelectionthathasbeenordered." 2121
(Emphasis supplied)
The public respondent then committed no abuse of discretion ordering a certification election among
the monthly-paid rank-and-file employees, except managerial employees, of KNITJOY. The choice
however, should not be, as correctly contended by CFW, limited to merely (a) KMEU and (b) no
union. The records disclose that the intervenors in the petition for certification are the KMEA-CCLU
and CFW. They should be included as among the choices in the certification election.
Doctrine The right to form a union or association or to self-organization comprehends two (2) broad notions, to
wit: (a) the liberty or freedom, i.e., the absence of restraint which guarantees that the employee may
act for himself without being prevented by law, and (b) the power, by virtue of which an employee
may, as he pleases, join or refrain from joining an association. (Victoriano vs. Elizalde Rope Workers'
Union, 59 SCRA 54)
20. Knitjoy v. Calleja, 214 SCRA 174
FACTS: In the bargaining history of KNITJOY, the CBA has been consistently limited to the regular rank-and-file
employees paid on a daily or piece-rate basis (represented by Federation of Filipino Workers - FFW). On the other
hand, the rank-and-file employees paid on a monthly basis were never included within its scope. Prior to the expiration
of the CBA, FFW was split into 2 factions - the Johnny Tan and the Aranzamendez factions. The latter eventually
became the Confederation of Filipino Workers (CFW) while the former retained the name of FFW. Respondent
KMEU™as membership is limited to the latter class of employees, KMEU does not seek to dislodge CFW as the
exclusive bargaining representative for the former. The records further disclose that in the certification solicited by
TUPAS and during the elections which followed thereafter, resulting in the certification of CFW as the exclusive
bargaining representative, the monthly-paid employees were expressly excluded. Thus, the negotiations between CFW
and KNITJOY following such a certification could only logically refer to the rank-and-file employees paid on a daily or
piece-rate basis.
ISSUE: Is there a violation of collective right of employees to self-organization? Whether or not petitioner KNITJOY as
monthly-paid regular rank-and-file employees can constitute an appropriate bargaining unit separate and distinct from
the existing unit composed of daily or piece-rate paid regular rank-and-file employees?
HELD: Yes. The suggested bias of the Labor Code on one company-one union policy must yield to the right of the
employees to form unions or associations for purposes not contrary to law, to self-organization and to enter into
collective bargaining negotiations, among others, which the Constitution guarantees.
21. General Rubber and Footwear Corp. vs. BLR, 155 SCRA 283
Title: GENERAL RUBBER AND FOOTWEAR CORP. VS BLR (21)

Nature: Petition for review due to serious error of law and grave abuse of discretion on the part of the
Bureau of Labor Relations
Keywords: Formation of another bargaining unit in same company
Summary:
Facts:  In 1985, the SamahangManggagawasa General Rubber Corporation — ANGLO was formed by
the rank and file employees as their union after the expiration on October 15, 1985 of the
collective bargaining agreement executed by petitioner with General Rubber Workers Union
(Independent) on October 15, 1982.
 On July 17, 1985, the National Association of Trade Unions of Monthly Paid Employees-NATU,
filed a petition for direct certification with tile Bureau of Labor Relations which petition was
opposed by petitioner.
 On September 2, 1985, the Med-Arbiter issued an Order for the holding of a certification election
after finding that a certification election is in order in this case and observing that it is the fairest
remedy to determine whether employees of petitioner desire to have a union or not.
 On appeal, the Bureau of Labor Relations denied both the appeal and motion for reconsideration
interposed by petitioner and affirmed the ruling of the Med-Arbiter.
Labor --NA
Arbiter
NLRC --NA
CA --NA
 Issues:  Whether The Bureau of Labor Relations committed serious error of law and grave abuse of
discretion in ordering the creation of a new bargaining unit at petitioner, notwithstanding that
there is already an existing bargaining unit
 Whether the Bureau of Labor Relations committed serious error of law in holding that managerial
employees or those employees exercising managerial functions can legally form and join a labor
organization and be members of the new bargaining unit.
 Whether the Bureau of Labor Relations committed grave abuse of discretion in holding that
supervisors, employees performing managerial, confidential and technical functions and office
personnel, who are negotiated by petitioner to be excluded from the existing bargaining unit
because they are performing vital functions to management, can form and join a labor
 Ratio: Thus, it can be readily seen from the above findings of the Bureau of labor Relations that the
members of private respondent are not managerial employees as claimed by petitioners but merely
considered as rank-and-file employees who have every right to self-organization or to be heard
through a duly certified collective bargaining union. The Supervisory power of the members of private
respondent union consists merely in recommending as to what managerial actions to take in
disciplinary cases. These members of private respondent union do not fit the definition of managerial
employees which We laid down in the case of Bulletin Publishing Corporation v. Sanchez (144 SCRA
628). These members of private respondent union are therefore not prohibited from forming their
own collective bargaining unit since it has not been shown by petitioner that "the responsibilities (of
these monthly-paid-employees) inherently require the exercise of discretion and independent
judgment as supervisors" or that "they possess the power and authority to lay down or exercise
management policies." Similarly, he held in the same case that "Members of supervisory unions who
do not fall within the definition of managerial employees shall become eligible to loin or assist the
rank-and-file labor organization, and if none exists, to form or assist in the forming of such rank-and-
file organizations.
 Ruling: WHEREFORE, premises considered, the petition is hereby DISMISSED for lack of merit.
 Doctrine: Rank-and-file employees have every right to self-organization or to be heard through a duly certified
collective bargaining union.
21. General Rubber and Footwear Corp v. BLR, 155 SCRA 283
Facts:
On 15 Oct 1982, General Rubber executed a CBA with General Rubber Workers Union (Independent). Three years
later [17 Jul 1985], the monthly-paid employees formed their own collective bargaining unit [NATU] and filed a petition
for direct certification with the BLR. General Rubber opposed this. On 02 Sep 1985, the Med-Arbiter issued an order
for the holding of a certification election. A month later, the CBA expired. The daily-paid rank and file employees formed
the Samahang Manggagawa sa General Rubber Corporation-ANGLO as their union for collective bargaining. BLR
issued an order that sanctioned the creation of 2 bargaining units in General Rubber.
General Rubber argued that:
1. There is already an existing bargaining unit, whose members are represented by the ANGLO for collective bargaining
purposes, so why did BLR order the creation of a new bargaining unit?
2. Managerial employees or those employees exercising managerial functions CANNOT legally form and join a labor
3. Supervisors, employees performing managerial, confidential and technical functions and office personnel, who are
negotiated by General Rubber to be excluded from the existing bargaining unit because they are performing vital
functions to management, CANNOT form and join a labor organization and be members of the new bargaining unit.
4. A policy is in favor of a larger unit and not the creation of smaller units in one establishment.
5. The monthly-paid-employees are excluded from the first existing bargaining unit of the daily-paid rank and file
employees because in 1963, when the employees initially started to exercise their right to self-organization, General
Rubber bargained for the exclusion of the monthly-paid employees from the existing bargaining unit because they are
performing vital functions of management. In view of this exclusion, General Rubber took upon itself to take care of
them and directly gave them the benefits or privileges without having to bargain for them or without the aid of the
bargaining arm or force of a union.
Issue(s):
(1) WON the NATU members / monthly-paid employees are rank-and-file employees. YES
(2) WON the monthly-paid employees should be allowed to join the union of the daily-paid employees. YES
Held:
The fact that the employees perform supervisory functions (making recommendation petitions as to what managerial
actions to take in disciplinary cases) does not make them managerial employees already. It has not been clearly
established how effective those recommendations are.
The proliferation of unions in an employer unit is discouraged as a matter of policy unless there are compelling reasons
which would deny a certain class of employees the right to self-organization for purposes of collective bargaining. This
case does not fall squarely within the exception. The monthlies who are rank-and-file have been historically excluded
from the bargaining unit composed of daily-paid rank-and-filers. The expired CBA provides:
Section 1. Appropriate bargaining unit. — This Agreement covers all regular employees and workers employed by the
company at its factory in Malabon, Metro Manila. The words "employee," "laborer" and "workers" when used in this
Agreement shall be deemed to refer to those employees within the bargaining unit. Employees who occupy managerial,
confidential or technical positions, supervisors, contract employees, monthly-paid employees, security as wen as office
personnel are excluded from the appropriate bargaining unit.
Workers with Right to Self-Organization
Section 8, Article III, 1987 Constitution
SECTION 8. The right of the people, including those employed in the public and private sectors, to form unions,
associations, or societies for purposes not contrary to law shall not be abridged.
All Employees
Article 243.Coverage and employees’ right to self-organization. All persons employed in commercial, industrial and
agricultural enterprises and in religious, charitable, medical, or educational institutions, whether operating for profit or
not, shall have the right to self-organization and to form, join, or assist labor organizations of their own choosing for
purposes of collective bargaining. Ambulant, intermittent and itinerant workers, self-employed people, rural workers
and those without any definite employers may form labor organizations for their mutual aid and protection. (As amended
by Batas PambansaBilang 70, May 1, 1980)
Cases:
22. Alliance of Nationalist, et al vs. Samahang, 285, SCRA 271
Title: ALLIANCE OF NATIONALIST AND GENUINE LABOR ORGANIZATION (ANGLO-KMU)vs.

SAMAHAN NG MGA MANGAGAWANG NAGKAKAISA SA MANILA BAY SPINNING MILLS AT
J.P. COATS (SAMANA BAY)
Nature: G.R. No. 118562. July 5, 1996
Keywords: Petition for certiorari
Summary: local union has the right to disaffiliate from its mother union
Med Arbiter - DOLE (appeal) - SC (petition for certiorari under Rule 65)
Facts: ANGLO is a duly registered labor organization while SAMANA BAY is its affiliate. In representation
of SAMANA BAY, ANGLO entered and concluded a Collective Bargaining Agreement (CBA) with
Manila Bay Spinning Mills and J.P. Coats Manila Bay, Inc. on November 1, 1991. On December 4,
1993, the Executive Committee of SAMANA BAY decided to disaffiliate from ANGLO in view of the
latter's dereliction of its duty to promote and advance the welfare of SAMANA BAY and the alleged
cases of corruption involving the federation officers. Said disaffiliation was unanimously confirmed by
the members of SAMANA BAY.
On April 4, 1994, a petition to stop remittance of federation dues to ANGLO was filed by SAMANA
BAY with the Bureau of Labor Relations on the ground that the corporations, despite having been
furnished copies of the union resolution relating to said disaffiliation, refused to honor the
same. ANGLO counteracted by unseating all officers and board members of SAMANA BAY and
appointing, in their stead, a new set of officers who were duly recognized by the corporations.
In its position paper, ANGLO contended that the disaffiliation was void considering that a collective
bargaining agreement is still existing and the freedom period has not yet set in. ANGLO wants to
impress that the disaffiliation was invalid for two reasons, namely: that the procedural requirements
for a valid disaffiliation were not followed; and that it was made in violation of P.D. 1391.
Labor The Med-Arbiter resolved that the disaffiliation was void but upheld the illegality of the ouster officers
Arbiter of SAMANA BAY.
DOLE 1. declared the disaffiliation of SAMANA BAY from ANGLO as valid;

2. directed Manila Bay Spinning Mills, Inc. and J.P. Coats to stop remitting to ANGLO
federation dues and instead to remit the whole amount of union dues to the treasurer
of SAMANA BAY; and
3. enjoined ANGLO-KMU from interfering in the affairs of SAMANA BAY.
Issues: 1. whether the disaffiliation was valid; and

2. whether petitioner can validly oust individual private respondents from their positions.
Ratio: WHEREFORE, premises considered, the petition is hereby DISMISSED.
Ruling: 1. Failure to observe certain procedural requirements for a valid disaffiliation. Non-compliance
with the procedure on disaffiliation, being premised on purely technical grounds cannot rise
above the fundamental right of self- organization.
Settled is the rule that a local union has the right to disaffiliate from its mother union when
circumstances warrant. Generally, a labor union may disaffiliate from the mother union to form a local
or independent union only during the 60-day freedom period immediately preceding the expiration of
the CBA. However, even before the onset of the freedom period, disaffiliation may be carried out
when there is a shift of allegiance on the part of the majority of the members of the union.
2. ANGLO contends that individual private respondents were validly ousted as they have
ceased to be officers of the incumbent union (ANGLO-KMU) at the time of disaffiliation. In
order to fill the vacuum, it was deemed proper to appoint the individual replacements so as
not to put in disarray the organizational structure and to prevent chaos and confusion among
the general membership and within the company.
The contention is bereft of merit. A local labor union is a separate and distinct unit primarily designed
to secure and maintain an equality of bargaining power between the employer and their employee-
members. A local union does not owe its existence to the federation with which it is affiliated. It is a
separate and distinct voluntary association owing its creation to the will of its members. [7] The mere
act of affiliation does not divest the local union of its own personality, neither does it give the mother
federation the license to act independently of the local union. It only gives rise to a contract of
agency[8] where the former acts in representation of the latter.
By SAMANA BAY's disaffiliation from ANGLO, the vinculum that previously bound the two entities
was completely severed. ANGLO was divested of any and all power to act in representation of
SAMANA BAY. Thus, any act performed by ANGLO affecting the interests and affairs of SAMANA
BAY, including the ouster of herein individual private respondents, is rendered without force and
effect.
Doctrine: All employees enjoy the right to self-organization and to form and join labor organizations of their own
choosing for the purpose of collective bargaining. This is a fundamental right of labor and derives its
existence from the Constitution. In interpreting the protection to labor and social justice provisions of
the Constitution and the labor laws, rules or regulations, we have always adopted the liberal approach
which favors the exercise of labor rights.
22. Alliance Nationalist, et al. v. Samahang, 285 SCRA 371
FACTS: Petitioner Alliance of Nationalist and Genuine Labor Organization (ANGLO for brevity) is a duly registered
labor organization while respondent union Samahan Ng Mga Mangagawang Nagkakaisa sa Manila Bay Spinning Mills
and J.P. Coats (SAMANA BAY for brevity) is its affiliate. In representation of SAMANA BAY, ANGLO entered and
concluded a Collective Bargaining Agreement (CBA) with Manila Bay Spinning Mills and J.P. Coats Manila Bay, Inc.
(hereinafter referred to as the corporations) on November 1, 1991. SAMANA BAY decided to disaffiliate from ANGLO
in view of the latter’s negligence of its duty to promote and advance the welfare of SAMANA BAY and the alleged cases
of corruption involving the federation officers. Said disaffiliation was unanimously confirmed by the members of
SAMANA BAY.
A petition to stop remittance of federation dues to ANGLO was filed by SAMANA BAY with the Bureau of Labor
Relations on the ground that the corporations, despite having been furnished copies of the union resolution relating to
said disaffiliation, refused to honor the same. ANGLO counter-acted by unseating all officers and board members of
SAMANA BAY and appointing, in their stead, a new set of officers who were duly recognized by the corporations.
ANGLO contended that the disaffiliation was void considering that a collective bargaining agreement is still existing and
the freedom period has not yet set in.
ISSUE: Whether the disaffiliation was valid.
HELD: yes, the rule that all employees enjoy the right to self-organization and to form and join labor organizations of
their own choosing for the purpose of collective bargaining. This is a fundamental right of labor and derives its existence
from the Constitution. In interpreting the protection to labor and social justice provisions of the Constitution and the
labor laws, rules or regulations, we have always adopted the liberal approach which favors the exercise of labor rights.
The contention is bereft of merit. A local labor union is a separate and distinct unit primarily designed to secure and
maintain an equality of bargaining power between the employer and their employee-members. A local union does not
owe its existence to the federation with which it is affiliated. It is a separate and distinct voluntary association owing its
creation to the will of its members. 7 The mere act of affiliation does not divest the local union of its own personality,
neither does it give the mother federation the license to act independently of the local union. It only gives rise to a
contract of agency 8 where the former acts in representation of the latter.
23. Kapatiransa Meat and Canning Division vs. Calleja, 162 SCRA 367
Title: (23) Kapatiransa Meat and Canning Division vsCalleja, 162 SCRA 367
Nature: Review of the resolution of Director of BLR dismissing the appeal of Tupas on the order of Med-Arbiter
to conduct a certification of election among regular daily paid rank and file employees to determine
the contending unions
Keywords: Right to self-organization
Summary: Med-Arbiter - BLR- SC
Facts: TUPAS was the sole and exclusive collective bargaining representative of the workers in the Meat
and Canning Division of the Universal Robina Corporation from 1984-1987, with a 3-year collective
bargaining agreement (CBA) which was to expire on November 15, 1987. Within the freedom period
of 60 days prior to the expiration of its CBA, TUPAS filed an amended notice of strike on to pressure
the company to extend, renew, or negotiate a new CBA with it.On October 12, 1987, the TUPAS
staged a strike. However, ROBINA obtained an injunction against the strike, resulting in an
agreement to return to work and for the parties to negotiate a new CBA.
Meanwhile, on October 8, 1987, the NEW ULO, composed mostly of workers belonging to the
IGLESIA NI KRISTO sect, registered as a labor union. Thereafter, it claimed that it has "the majority
of the daily wage rank and file employees numbering 191 and filed a petition for a certification
election at the Bureau of Labor Relations.
TUPAS moved to dismiss the petition for being defective in form and that the members of the NEW
ULO were mostly members of the IglesianiKristo sect which three (3) years previous refused to
affiliate with any labor union. It also accused the company of using the NEW ULO to defeat TUPAS'
bargaining rights. However, the Med-Arbiter ordered the holding of a certification election within 20
days.
TUPAS appealed the order to the BLR but was dismissed. Likewise, their motion for reconsideration
was denied. Meanwhile, TUPAS was able to negotiate a new 3-year CBA with ROBINA.
Med- NEW ULO registered as a labor union and claimed that it has the majority of the daily wage rank and
Arbiter file employees. It filed a petition for a certification election at the Bureau of Labor Relations. Tupas
moved to dismiss the petition from being defective in form and that the members of the NEW ULO
were mostly members of the IglesianiKristo sect which three (3) years previous refused to affiliate with
any labor union. It also accused the company of using the NEW ULO to defeat TUPAS' bargaining
rights.
The Med-Arbiter ordered the holding of a certification election within 20 days.
BLR TUPAS appealed to the Bureau of Labor Relations BLR. However, the BLR dismissed the appeal.
Likewise, their motion for reconsideration was denied.
Issues: Whether or not the regular daily wage rank and file employees who are members of IglesianiKristo
has the right to self-organization?
Ruling: Yes. The regular daily wage rank and file employees who are members of IglesianiKristohas the right
to self-organization.
The right of members of the IGLESIA NI KRISTO sect not to join a labor union for being contrary to
their religious beliefs, does not bar the members of that sect from forming their own union. The
recognition of the tenets of the sect should not infringe on the basic right of self-organization granted
by the constitution to workers, regardless of religious affiliation.
Doctrine: The right of members of the IGLESIA NI KRISTO sect not to join a labor union for being contrary to
their religious beliefs, does not bar the members of that sect from forming their own union.
Non – Profit Organization
Cases:
24. FEU-Dr. Nicanor Reyes Medical Foundation, Inc. vs.Trajano, 152 SCRA 725
FEU-DR. NICANOR REYES MEDICAL FOUNDATION, INC.,petitioner, �vs.�HON. CRESENCIANO

Title: TRAJANO and RICARDO C. CASTRO, FAR EASTERN UNIVERSITY DR. NICANOR REYES MEDICAL
FOUNDATION, INC. ALLIANCE OF FILIPINO WORKERS (AFW),respondents.
Nature: petition for certiorari seeking to annul and set aside the decision of the respondent Director
Keywords: FEU( a non profit org) employees can form a union
Summary:
The petitioner, Far Eastern University-Dr.Nicanor Reyes Memorial Foundation, Inc., has a work force of
about 350 rank and file employees, majority of whom are members of private respondent Alliance of
Filipino Workers. The Union,privaterespondent,filed a Petition for Consent and/or Certification Election
with The Ministry of Labor and Employment. The petitioner opposed the petition on the ground that a
similar petition involving the same issues and the same parties is pending the Supreme Court. The PR
admitted it filed a similar petition for certification election with the Ministry of Labor and Employment
earlier but the petition was denied by the MED Arbiter and the Secretary of Labor on appeal, on the
Facts:
ground that the petitioner was a non-stock, non-profit medical institution, therefore, its employees may not
form, join, or organize a union pursuant to
Article 244 of the Labor Code; that private respondent filed a petition for certiorari with the Supreme Court
assailing the constitutionality of Article 244 of the Labor Code; that pending resolution of the aforesaid
petition, or on May 1, 1980, Batas PambansaBilang 70 was enacted amending Article 244 of the Labor
Code, thus granting even employees of non-stock, non-profit institutions the right to form, join and
organize labor unions of their choice;
Med Med Arbiter issued an Order granting the petition, declaring that a certification election be conducted to
Arbiter determine the exclusive bargaining representative of all the rank and file employees of the petitioner
affirmed. In dismissing the appeal(of petitioner)however, respondent Director said that:... respondent's
(petitioner herein, reliance on the petition with the Supreme Court involving as it does the provisions of
director Article 244 of the Labor Code vis-a-vis the character of the hospital, which has been alleged as a non-
profit medical foundation, has been rendered moot and academic by virtue of the amendatory BP #70,
which allows employees of non-profit medical institutions to unionize.
Issues: Whether or not a non-profit org can form a union.
Ratio:
Yes ,At the time private respondent filed its petition for certification election on February 13, 1986, Article
244 of the Labor Code was already amended by Batas PambansaBilang 70, to wit:
Art. 244. Coverage and employees' right to self-organization. — All persons employed in commercial,
industrial and charitable, medical or educational institutions whether operating for profit or not, shall have
the right to self-organizations of their own choosing for purposes of collective bargaining. Ambulant
intermittent and itinerant workers, self-employed people, rural workers and those without any definite
employers may form labor organizations for the purpose of enhancing and defending their interests and
Ruling:
for their mutual aid and protection.
Under the aforequoted provision, there is no doubt that rank and file employees of non-profit medical
institutions (as herein petitioner) are now permitted to form, organize or join labor unions of their choice
for purposes of collective bargaining. Since private respondent had complied with the requisites provided
by law for calling a certification election (p. 15, Rollo), it was incumbent upon respondent Director to
conduct such certification election to ascertain the bargaining representative of petitioner's employees.
Doctrine: Non Profit Organization can for a union
24. FEU-Dr. Nicanor Reyes Medical Foundation, Inc. v. Trajano, 152 SCRA 725
FACTS:
 The petitioner, Far Eastern University-Dr. Nicanor Reyes Memorial Foundation, Inc., has a work force of about
350 rank and file employees, majority of whom are members of private respondent Alliance of Filipino Workers.
 On February 13, 1986, private respondent filed a Petition for Consent and/or Certification Election with The
Ministry of Labor and Employment. The petitioner opposed the petition on the ground that a similar petition
involving the same issues and the same parties is pending resolution before the Supreme Court.
 Apparently as early as May 10, 1976, private respondent filed a similar petition for certification election with
the Ministry of Labor and Employment but the petition was denied on the ground that the petitioner was a non-
stock, non-profit medical institution, therefore, its employees may not form, join, or organize a union pursuant
to Article 244 of the Labor Code. Private respondent filed a petition for certiorari with the Supreme Court
assailing the constitutionality of Article 244 of the Labor Code. Pending resolution of the aforesaid petition
Batas Pambansa Bilang 70 was enacted amending Article 244 of the Labor Code, thus granting even
employees of non-stock, non-profit institutions the right to form, join and organize labor unions of their choice.
In the exercise of such right, private respondent filed another petition for certification election with the Ministry
of Labor and Employment.
ISSUE: Whether rank and file employees of non-profit organization are covered by the right to self-organization
HELD: YES. At the time private respondent filed its petition for certification election on February 13, 1986, Article 244
of the Labor Code was already amended by Batas Pambansa Bilang 70, to wit:
Art. 244. Coverage and employees’ right to self-organization. — All persons employed in commercial,
industrial and charitable, medical or educational institutions whether operating for profit or not, shall
have the right to self-organizations of their own choosing for purposes of collective bargaining.
Ambulant intermittent and itinerant workers, self-employed people, rural workers and those without
any definite employers may form labor organizations for the purpose of enhancing and defending
their interests and for their mutual aid and protection.
 Under the aforequoted provision, there is no doubt that rank and file employees of non-profit medical
institutions (as herein petitioner) are now permitted to form, organize or join labor unions of their choice for
purposes of collective bargaining. Since private respondent had complied with the requisites provided by law
for calling a certification election, it was incumbent upon respondent Director to conduct such certification
election to ascertain the bargaining representative of petitioner’s employees.
25. Kapatiransa Meat and Canning Division vs. Calleja, 162 SCRA 367
Title: (25) Kapatiransa Meat and Canning Division vsCalleja, 162 SCRA 367
Nature:
Keywords: Right to self-organization. Not-for-profit
Summary:
Facts: TUPAS was the sole and exclusive collective bargaining representative of the workers in the Meat
and Canning Division of the Universal Robina Corporation.
Meanwhile, the NEW ULO composed mostly of workers belonging to the IglesianiKristo sect,
registered as a labor union. Thereafter, it claimed that it has the majority of the daily wage rank and
file employees and filed a petition for a certification election at the Bureau of Labor Relations to
determine which of the contending unions shall be the bargaining unit of the daily wage rank and file
employees.
The Med-Arbiter ordered the holding of a certification election within 20 days despite the moved of
TUPAS to dismiss the petition for being defective in form and that the members of the NEW ULO
were mostly members of the IglesianiKristo sect which three (3) years previous refused to affiliate
with any labor union. It also accused the company of using the NEW ULO to defeat TUPAS'
bargaining rights.
TUPAS appealed to the Bureau of Labor Relations BLR but was dismissed. Its motion for
reconsideration was denied.
Med- NEW ULO registered as a labor union and claimed that it has the majority of the daily wage rank and
Arbiter file employees. It filed a petition for a certification election at the Bureau of Labor Relations. Tupas
moved to dismiss the petition from being defective in form and that the members of the NEW ULO
were mostly members of the IglesianiKristo sect which three (3) years previous refused to affiliate with
any labor union. It also accused the company of using the NEW ULO to defeat TUPAS' bargaining
rights.
The Med-Arbiter ordered the holding of a certification election within 20 days

BLR TUPAS appealed to the Bureau of Labor Relations BLR. However, the BLR dismissed the appeal.
Likewise, their motion for reconsideration was denied.
Issues: Whether or not the member of IglesianiKristo has the right to self-organization?
Ruling: Yes. Members of IglesianiKristo has the right to self-organization.
The rights of members of the IGLESIA NI KRISTO sect not to join a labor union for being contrary to
"recognition of the tenets of the sect ... should not infringe on the basic right of self-organization granted
Doctrine: The rights of members of the IGLESIA NI KRISTO sect not to join a labor union for being contrary to
"recognition of the tenets of the sect ... should not infringe on the basic right of self-organization granted
25. Kapatiran sa Meat and Canning Division v. Calleja, 162 SCRA 367
FACTS: From 1984 to 1987 Petitioner Kapatiran sa Meat and Canning Division (TUPAS) was the sole and exclusive
collective bargaining representative of the workers in the Meat and Canning Division of the Universal Robina
Corporation, with a 3-year collective bargaining agreement (CBA) which was to expire on November 15, 1987.
Within the freedom period of 60 days prior to the expiration of its CBA, TUPAS filed an amended notice of strike as a
means of pressuring the company to extend, renew, or negotiate a new CBA with it.
On October 8, 1987, the NEW ULO, composed mostly of workers belonging to the IGLESIA NI KRISTO sect, registered
as a labor union.
On October 12, 1987, the TUPAS staged a strike. ROBINA obtained an injunction against the strike, resulting in an
agreement to return to work and for the parties to negotiate a new CBA.
The next day NEW ULO filed a petition for a certification election at the Bureau of Labor Relations.
TUPAS moved to dismiss the petition claiming among others that the members of the NEW ULO were mostly members
of the Iglesia ni Kristo sect which three years previous refused to affiliate with any labor union. It also accused the
company of using the NEW ULO to defeat TUPAS’ bargaining rights.
The Med-Arbiter ordered the holding of a certification election.
TUPAS appealed to the Bureau of Labor Relations. In the meantime, it was able to negotiate a new 3-year CBA with
ROBINA, which was signed on December 3, 1987 and to expire on November 15, 1990.
On January 27, 1988, respondent BLR Director Calleja dismissed the appeal.
ISSUE: W/N members of a sect who are not allowed by their religion to join a labor union may form their own union?
HELD: YES. This Court’s decision in Victoriano vs. Elizalde Rope Workers’ Union, 59 SCRA 54, upholding the right of
members of the IGLESIA NI KRISTO sect not to join a labor union for being contrary to their religious beliefs, does not
bar the members of that sect from forming their own union. The public respondent correctly observed that
the “recognition of the tenets of the sect … should not infringe on the basic right of self-organization granted by the
constitution to workers, regardless of religious affiliation.”
The fact that TUPAS was able to negotiate a new CBA with ROBINA within the 60-day freedom period of the existing
CBA, does not foreclose the right of the rival union, NEW ULO, to challenge TUPAS’ claim to majority status, by filing
a timely petition for certification election before TUPAS’ old CBA expired and before it signed a new CBA with the
company. As pointed out by Med-Arbiter Abdullah, a “certification election is the best forum in ascertaining the majority
status of the contending unions wherein the workers themselves can freely choose their bargaining representative thru
secret ballot.” Since it has not been shown that this order is tainted with unfairness, this Court will not thwart the holding
of a certification election (Associated Trade Unions [ATU] vs. Noriel, 88 SCRA 96).
Employees of Government Corporations
Article 244.Right of employees in the public service. Employees of government corporations established under the
Corporation Code shall have the right to organize and to bargain collectively with their respective employers. All other
employees in the civil service shall have the right to form associations for purposes not contrary to law. (As amended
by Executive Order No. 111, December 24, 1986)
Supervisors
Article 245.Ineligibility of managerial employees to join any labor organization; right of supervisory employees.
Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not
be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate
labor organizations of their own. (As amended by Section 18, Republic Act No. 6715, March 21, 1989)
Article 212 (m)
m. "Managerial employee" is one who is vested with the powers or prerogatives to lay down and execute management
policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. Supervisory
employees are those who, in the interest of the employer, effectively recommend such managerial actions if the
exercise of such authority is not merely routinely or clerical in nature but requires the use of independent judgment. All
employees not falling within any of the above definitions are considered rank-and-file employees for purposes of this
Book.
TOYOTA MOTOR PHILIPPINES CORPORATION vs. TOYOTA MOTOR PHILIPPINES CORPORATION LABOR
UNION AND THE SECRETARY OF LABOR AND EMPLOYMENT
TOPIC: Workers with Right to Self-Organization_Test of Supervisory Employees
FACTS:
 Toyota Motor Philippines Corporation Labor Union (TMPCLU) filed a petition for certification election with the
Department of Labor, National Capital Region, for all rank-and-file employees of the Toyota Motor Corporation.
 Petitioner sought the denial of the issuance of an Order directing the holding of a certification election on two
grounds: first, that the respondent union, being "in the process of registration" had no legal personality to file the
same as it was not a legitimate labor organization as of the date of the filing of the petition; and second, that the
union was composed of both rank-and-file and supervisory employees in violation of law.
 The Med-Arbiter dismissed respondent union's petition for certification election for lack of merit.
 On appeal, the Office of the Secretary of Labor, Undersecretary Bienvenido E. Laguesma directed the holding of
a certification election among the regular rank-and-file employees of Toyota Motor Corporation.
 Not satisfied with the decision of the Office of the Secretary of Labor, petitioner reiterated claim that as of the date
of filing of petition for certification election, respondent TMPCLU had not yet acquired the status of a legitimate
labor organization as required by the Labor Code, and that the proposed bargaining unit was inappropriate. Hence,
this special civil action
ISSUE:
Whether or not "the Secretary of Labor and Employment committed grave abuse of discretion amounting to lack or
excess of jurisdiction in reversing the findings of the Med-Arbiters to the effect that: 1) the inclusion of the prohibited
mix of rank-and file and supervisory employees in the roster of members and officers of the union cannot be cured by
a simple inclusion-exclusion proceeding; and that 2) the respondent union had no legal standing at the time of the filing
of its petition for certification election.
HELD:
The Supreme Court granted the petition. On the issue of inclusion of rank-and-file and supervisory employees, based
on Article 245 of the Labor Code, Supervisory employees shall not be eligible for membership in a labor organization
of the rank-and-file employees but may join, assist or form separate labor organizations of their own.
A labor organization composed of both rank-and-file and supervisory employees is no labor organization at all. It cannot
possess any of the rights of a legitimate labor organization, including the right to file a petition for certification election
for the purpose of collective bargaining.
It is the petitioner's contention that forty-two (42) of the respondent union's members, including three of its officers,
occupy supervisory positions. The rationale behind the Code's exclusion of supervisors from unions of rank-and-file
employees is that such employees, while in the performance of supervisory functions, become the alter ego of
management in the making and the implementing of key decisions at the sub-managerial level.
The foregoing discussion, therefore, renders entirely irrelevant, the technical issue raised as to whether or not
respondent union was in possession of the status of a legitimate labor organization at the time of filing, when, as
petitioner vigorously claims, the former was still at the stage of processing of its application for recognition as a
legitimate labor organization.
DUNLOP SLAZENGER (PHILS.), INC., petitioner, vs. HON. SECRETARY OF LABOR AND EMPLOYMENT and
DUNLOP SLAZENGER STAFF ASSOCIATION - APSOTEU, respondents.
FACTS:
Petitioner (the Company) seeks for the annulment of the resolution and order of the public respondent Secretary of
Labor and Employment after it granted the request for a certification election of private respondent (the Union).
The main contention of the Company is that the respondent union is comprised of supervisory and rank-and-file
employees and cannot act as bargaining agent for the proposed unit and that a single certification election cannot be
conducted jointly among supervisory and rank-and-file employees. The respondent union alleged that its members
are supervisors and not rank-and-file employees. It averred that all its members are paid monthly by the petitioner
company. It alleged that the bargaining unit it seeks to represent is made up of the monthly paid supervisory
employees and other personnel who cannot be classified as belonging to the rank-and-file.
The list of monthly paid employees submitted by the petitioner company reveals that the positions occupied by the
twenty six (26) office and technical employees are composed of A/C mechanic, draftsmen, storemen, motorpool
mechanic, secretaries, accounts clerk, company nurses, industrial mechanic, boiler men, laboratory technicians,
payroll clerk, welder, purchasing clerk, company drivers and electricians.
ISSUE:
Whether or not the respondent union can file a petition for certification election to represent the supervisory employees
of the petitioner company including the abovementioned employees?
HELD:
No. The list reveals that the positions occupied by the twenty six (26) office and technical employees are in fact rank-
and-file positions. Article 245 of the Labor Code clearly provides that "supervisory employees shall not be eligible for
membership in a labor organization of the rank-and-file employees. The test of supervisory status as we have
repeatedly ruled is whether an employee possesses authority to act in the interest of his employer, which
authority should not be merely routinary or clerical in nature but requires the use of independent judgment.
Corrollarily, what determines the nature of employment is not the employee's title, but his job description.It is
fairly obvious that the above said positions cannot be considered as supervisory positions for they do not carry the
authority to act in the interest of the employer or to recommend managerial actions. It is not decisive that these
employees are monthly paid employees. Their mode of compensation is usually a matter of convenience and does not
necessarily determine the nature and character of their job.
PAPER INDUSTRIES CORP. V LAGUESMA
Facts:
Petitioner Paper Industries Corporation of the Philippines (PICOP) manufactures paper and timber products at Tabon,
Bislig, Surigao del Sur. More or less 487 of its supervisory and technical staff employees are signatory members of the
private respondent PICOP-Bislig Supervisory and Technical Staff Employees Union (PBSTSEU).7
On August 9, 1989, PBSTSEU instituted a Petition for Certification Election to determine the sole and exclusive
bargaining agent of the supervisory and technical staff employees of PICOP for collective bargaining agreement (CBA)
purposes.
During the pre-election conference on January 18, 1990, PICOP questioned and objected to the inclusion of some
section heads and supervisors in the list of voters whose positions it averred were reclassified as managerial employees
in the light of the reorganization effected by it. Under the Revised Organizational Structure of the PICOP, the company
was divided into four (4) main business groups, namely: Paper Products Business, Timber Products Business, Forest
Resource Business and Support Services Business. A vice- president or assistant vice-president heads each of these
business groups. A division manager heads the divisions comprising each business group. A department manager
heads the departments comprising each division. Section heads and supervisors, now called section managers and
unit managers, head the sections and independent units, respectively, comprising each department. PICOP advanced
the view that considering the alleged present authority of these section managers and unit managers to hire and fire,
they are classified as managerial employees, and hence, ineligible to form or join any labor organization.
Following the submission by the parties of their respective position papers and evidence on this issue, Med-Arbiter
Phibun D. Pura issued an Order dated March 27, 1990, holding that supervisors and section heads of the petitioner are
managerial employees and therefore excluded from the list of voters for purposes of certification election.
PBSTSEU appealed the Order of the Med-Arbiter to the Office of the Secretary, DOLE. ALU likewise appealed. PICOP
submitted evidence militating against the appeal. Public respondent Bienvenido E. Laguesma, acting as the then
Undersecretary of Labor, issued the Order dated April 17, 1991 setting aside the Order dated March 27, 1990 of the
Med-Arbiter and declaring that the subject supervisors and section heads are supervisory employees eligible to vote in
the certification election.
PICOP sought reconsideration of the Order dated April 17, 1991 but was denied.
Issue:
WHETHER OR NOT THE PUBLIC RESPONDENT HONORABLE BIENVENIDO E. LAGUESMA,

UNDERSECRETARY OF LABOR AND EMPLOYMENT, COMMITTED GRAVE ABUSE OF DISCRETION, WHEN
HE DENIED YOUR PETITIONER'S PLEA TO PRESENT ADDITIONAL EVIDENCE TO PROVE THAT SOME OF ITS
MANAGERIAL EMPLOYEES ARE DISQUALIFIED FROM JOINING OR FORMING A UNION REPRESENTED BY
CO-RESPONDENT PBSTSEU, IN VIEW OF A SUPERVENING EVENT BROUGHT ABOUT BY THE CHANGES IN
THE ORGANIZATIONAL STRUCTURE OF YOUR PETITIONER WHICH WAS FULLY IMPLEMENTED IN
JANUARY 1991 AFTER THE CASE WAS ELEVATED ON APPEAL AND SUBMITTED FOR DECISION.
Held:
PICOP's main thesis is that the positions Section Heads and Supervisors, who have been designated as Section
Managers and Unit Managers, as the case may be, were converted to managerial employees under the decentralization
and reorganization program it implemented in 1989. Being managerial employees, with alleged authority to hire and
fire employees, they are ineligible for union membership under Article 245 of the Labor Code.
The petition, not being meritorious, must fail and the same should be as it is hereby dismissed.
First. In United Pepsi-Cola Supervisory Union (UPSU) v. Laguesma, we had occasion to elucidate on the term
"managerial employees." Managerial employees are ranked as Top Managers, Middle Managers and First Line
Managers. Top and Middle Managers have the authority to devise, implement and control strategic and operational
policies while the task of First-Line Managers is simply to ensure that such policies are carried out by the rank-and- file
employees of an organization. Under this distinction, "managerial employees" therefore fall in two (2) categories,
namely, the "managers" per se composed of Top and Middle Managers, and the "supervisors" composed of First-Line
Managers. Thus, the mere fact that an employee is designated "manager" does not ipso facto make him one.
Designation should be reconciled with the actual job description of the employee, for it is the job description that
determines the nature of employment.
In the petition before us, a thorough dissection of the job description of the concerned supervisory employees and
section heads indisputably show that they are not actually managerial but only supervisory employees since they do
not lay down company policies. PICOP's contention that the subject section heads and unit managers exercise the
authority to hire and fire is ambiguous and quite misleading for the reason that any authority they exercise is not
supreme but merely advisory in character. Theirs is not a final determination of the company policies inasmuch as any
action taken by them on matters relative to hiring, promotion, transfer, suspension and termination of employees is still
subject to confirmation and approval by their respective superior. Thus, where such power, which is in effect
recommendatory in character, is subject to evaluation, review and final action by the department heads and other higher
executives of the company, the same, although present, is not effective and not an exercise of independent judgment
as required by law.
UNITED PEPSI-COLA SUPERVISORY UNION vs. HON. BIENVENIDO E. LAGUESMA and PEPSI-COLA
PRODUCTS, PHILIPPINES, INC.
TOPIC: Security Guards
FACTS:
Petitioner is a union of supervisory employees. The union filed a petition for certification election on behalf of the route
managers at Pepsi-Cola Products Philippines, Inc. However, its petition was denied by the med-arbiter and, on appeal,
by the Secretary of Labor and Employment, on the ground that the route managers are managerial employees and,
therefore, ineligible for union membership under the first sentence of Art. 245 of the Labor Code, which
provides:Ineligibility of managerial employees to join any labor organization; right of supervisory employees. —
labororganizations of their own.
ISSUES:
(1) Whether the route managers at Pepsi-Cola Products Philippines, Inc. are managerial employees.
(2) Whether Art. 245, insofar as it prohibits managerial employees from forming, joining or assisting labor unions,
violates Art. III, 8 of the Constitution.
HELD:
(1) Yes. It appears that this question was the subject of two previous determinations by the Secretary of
Labor and Employment, in accordance with which this case was decided by the med-arbiter. To qualify
as managerial employee, there must be a clear showing of the exercise of managerial attributes under
paragraph (m), Article 212 of the Labor Code as amended. Designations or titles of positions are not
controlling. As to the route managers and accounting manager, we are convinced that they are managerial
employees. Their job descriptions clearly reveal so. Thus, we have in this case an expert’s view that the
employees concerned are managerial employees within the purview of Art. 212. At the very least, the
principle of finality of administrative determination compels respect for the finding of the Secretary of
Labor that route managers are managerial employees as defined by law in the absence of anything to
show that such determination is without substantial evidence to support it.
(2) No. Constitutionality of Art. 245 Art.245 is the result of the amendment of the Labor Code in 1989 by R.A.
No. 6715, otherwise known as the Herrera-Veloso Law. Unlike the Industrial Peace Act or the provisions
of the Labor Code which it superseded, R.A. No. 6715 provides separate Definitions : “managerial
employee” is one who is vested with powers or prerogatives to lay down and execute management
policies and/or to hire transfer, suspend, lay off, recall, discharge, assign or discipline employees.
Supervisory employees are those who, in the interest of the employer, effectively recommend such
managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires
the use of independent judgment. All employees not falling within any of the above definitions are
considered rank-and-file employees for purposes of this Book.
The proposal to amend Art. III, 8 of the draft Constitution by including labor unions in the guarantee of
organizational right should be taken in the context of statements that his aim was the removal of the
statutory ban against security guards and supervisory employees joining labor organizations. The
approval by the Constitutional Commission of his proposal can only mean, therefore, that the
Commission intended the absolute right to organize of government workers, supervisory employees, and
security guards to be constitutionally guaranteed. By implication, no similar absolute constitutional right
to organize for labor purposes should be deemed to have been granted to top-level and middle
managers. As to them the right of self-organization may be regulated and even abridged conformably to
Art. III, 8
PEPSI COLA V. Secretary of Labor
TOPIC: Workers with no right to self organization; Managerial and confidential employees
FACTS:
Upon petition, the Med arbiter ordered the conduct of a Certification Election to be participated by and among the
supervisory workers of the respondent company, PepsiCola Products Philippines, Inc. at its plant at Tinao,Cagayan
de Oro City, including all the satellite warehouse within the territorial coverage and control of the Cagayan de Oro
PepsiCola Plant. The job designation of some of the supervisory employees of the Union are among others route
managers, sales service dept. manager, accounting manager, warehouse operations manager, and maintenance
manager.
PEPSI assails the said order of granting the petition for certification election on the ground that
the Union’s officers and members are managerial employees who are not eligible to join labor organizations.
ISSUE:
Whether or not the Union’s officers are managerial employees not eligible to join labor organizations.
RULING:
Yes to some positions; no to others.
The Court finds merit in the submission of the OSG that Route Managers, Chief Checkers and Warehouse
Operations Managers are supervisors while Credit & Collection Managers and Accounting Managers are highly
confidential employees.
In the case of Credit and Collection Managers and Accounting Managers, they are highly confidential employees not
eligible for membership in a supervisors union.
A confidential employee is one entrusted with confidence on delicate matters, or with the custody, handling, or care
and protection of the employers property. While Art. 245 of the Labor Code singles out managerial employee as
ineligible to join, assist or form any labor organization,
under the doctrine of necessary implication, confidential employees are similarly disqualified.
In 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 onesided.
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.
UNITED PEPSI-COLA SUPERVISORY UNION vs. HON. BIENVENIDO E. LAGUESMA and PEPSI-COLA
PRODUCTS, PHILIPPINES, INC. respondents.
FACTS:
Petitioner is a union of supervisory employees. The union filed a petition for certification election on behalf of the route
managers at Pepsi-Cola Products Philippines, Inc. However, its petition was denied by the med-arbiter and, on appeal,
by the Secretary of Labor and Employment, on the ground that the route managers are managerial employees and,
therefore, ineligible for union membership under the first sentence of Art. 245 of the Labor Code, which
provides:Ineligibility of managerial employees to join any labor organization; right of supervisory employees. —
labororganizations of their own.
ISSUES:
(1) Whether the route managers at Pepsi-Cola Products Philippines, Inc. are managerial employees.
(2) Whether Art. 245, insofar as it prohibits managerial employees from forming, joining or assisting labor unions,
violates Art. III, 8 of the Constitution.
HELD:
(1) Yes. It appears that this question was the subject of two previous determinations by the Secretary of
Labor and Employment, in accordance with which this case was decided by the med-arbiter. To qualify
as managerial employee, there must be a clear showing of the exercise of managerial attributes under
paragraph (m), Article 212 of the Labor Code as amended. Designations or titles of positions are not
controlling. As to the route managers and accounting manager, we are convinced that they are managerial
employees. Their job descriptions clearly reveal so. Thus, we have in this case an expert’s view that the
employees concerned are managerial employees within the purview of Art. 212. At the very least, the
principle of finality of administrative determination compels respect for the finding of the Secretary of
Labor that route managers are managerial employees as defined by law in the absence of anything to
show that such determination is without substantial evidence to support it.
(2) No. Constitutionality of Art. 245 Art.245 is the result of the amendment of the Labor Code in 1989 by R.A.
No. 6715, otherwise known as the Herrera-Veloso Law. Unlike the Industrial Peace Act or the provisions
of the Labor Code which it superseded, R.A. No. 6715 provides separate Definitions : “managerial
employee” is one who is vested with powers or prerogatives to lay down and execute management
policies and/or to hire transfer, suspend, lay off, recall, discharge, assign or discipline employees.
Supervisory employees are those who, in the interest of the employer, effectively recommend such
managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires
the use of independent judgment. All employees not falling within any of the above definitions are
considered rank-and-file employees for purposes of this Book.
The proposal to amend Art. III, 8 of the draft Constitution by including labor unions in the guarantee of
organizational right should be taken in the context of statements that his aim was the removal of the
statutory ban against security guards and supervisory employees joining labor organizations. The
approval by the Constitutional Commission of his proposal can only mean, therefore, that the
Commission intended the absolute right to organize of government workers, supervisory employees, and
security guards to be constitutionally guaranteed. By implication, no similar absolute constitutional right
to organize for labor purposes should be deemed to have been granted to top-level and middle
managers. As to them the right of self-organization may be regulated and even abridged conformably to
Art. III, 8.
PEPSI COLA V. Secretary of Labor

FACTS:
Upon petition, the Med arbiter ordered the conduct of a Certification Election to be participated by and among the
supervisory workers of the respondent company, PepsiCola Products Philippines, Inc. at its plant at Tinao,Cagayan
de Oro City, including all the satellite warehouse within the territorial coverage and control of the Cagayan de Oro
PepsiCola Plant. The job designation of some of the supervisory employees of the Union are among others route
managers, sales service dept. manager, accounting manager, warehouse operations manager, and maintenance
manager.
PEPSI assails the said order of granting the petition for certification election on the ground that
the Union’s officers and members are managerial employees who are not eligible to join labor organizations.
ISSUE:
Whether or not the Union’s officers are managerial employees not eligible to join labor organizations.
RULING:
Yes to some positions; no to others.
The Court finds merit in the submission of the OSG that Route Managers, Chief Checkers and Warehouse
Operations Managers are supervisors while Credit & Collection Managers and Accounting Managers are highly
confidential employees.
In the case of Credit and Collection Managers and Accounting Managers, they are highly confidential employees not
eligible for membership in a supervisors union.
A confidential employee is one entrusted with confidence on delicate matters, or with the custody, handling, or care
and protection of the employers property. While Art. 245 of the Labor Code singles out managerial employee as
ineligible to join, assist or form any labor organization,
under the doctrine of necessary implication, confidential employees are similarly disqualified.
In 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 onesided.
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.
SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION AND ERNESTO L. PONCE,
vs. HONARABLE BIENVENIDO E. LAGUESMA IN HIS CAPACITY AS UNDERSECRETARY OF LABOR AND
EMPLOYMENT, HONORABLE DANILO L. REYNANTE IN HIS CAPACITY AS MED-ARBITER AND SAN MIGUEL
CORPORATION
FACTS:
 Petitioner union filed before the Department of Labor and Employment (DOLE) a Petition for District Certification
or Certification Election among the supervisors and exempt employees of the SMC Magnolia Poultry Products
Plants of Cabuyao, San Fernando and Otis.
 Med-Arbiter Danilo L. Reynante issued an Order ordering the conduct of certification among the supervisors and
exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis as one
bargaining unit.
 San Miguel Corporation filed a Notice of Appeal with Memorandum on Appeal, pointing out, among others, the
Med-Arbiters error in grouping together all three (3) separate plants, Otis, Cabuyao and San Fernando, into one
bargaining unit, and in including supervisory levels 3 and above whose positions are confidential in nature.
 Respondent, Undersecretary Laguesma, granted respondent companys Appeal and ordered the remand of the
case to the Med-Arbiter of origin for determination of the true classification of each of the employees sought to be
included in the appropriate bargaining unit.
 San Miguel Corporation filed a Motion for Reconsideration
 Respondent granting the Motion, citing the doctrine: Confidential employees, like managerial employees, are not
allowed to form, join or assist a labor union for purposes of collective bargaining.
 In this case, S3 and S4 and the so-called exempt employees are admittedly confidential employees and therefore,
they are not allowed to form, join or assist a labor union for purposes of collective bargaining following the above
courts ruling. Consequently, they are not allowed to participate in the certification election. Hence this petition.
ISSUE: Whether Supervisory employees 3 and 4 and the exempt employees of the company are considered
confidential employees, hence ineligible from joining a union.
HELD:
The Court ruled that said employees do not fall within the term confidential employees who may be
prohibited from joining a union. There is no question that the said employees, supervisors and the exempt
employees, are not vested with the powers and prerogatives to lay down and execute management policies
and/or to hire, transfer, suspend, layoff, recall, discharge or dismiss employees. They are, therefore, not
qualified to be classified as managerial employees who, under Article 245 of the Labor Code, are not
eligible to join, assist or form any labor organization. In the very same provision, they are not allowed
membership in a labor organization of the rank-and-file employees but may join, assist or form separate
labor organizations of their own. The only question that need be addressed is whether these employees are
properly classified as confidential employees or not.
Confidential employees are those who (1) assist or act in a confidential capacity, (2) to persons who
formulate, determine, and effectuate management policies in the field of labor relations. 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 employees and his supervisor, and the supervisor must
handle the prescribed responsibilities relating to labor relations.
COOPERATIVE RURAL BANK OF DAVAO CITY, INC., petitioner, vs. PURA FERRER-CALLEJA, DIRECTOR,
BUREAU OF LABOR RELATIONS, MOLE, MANILA; FELIZARDO T. SERAPIO, MED-ARBITER DESIGNATE,
REGIONAL OFFICE NO. XI, MOLE, DAVAO CITY; and FEDERATION OF FREE WORKERS, respondents.
TOPIC: Workers with No Right to Self-Organization_Worker/Member of Cooperative
FACTS:
The record of the case discloses that the herein petitioner Cooperative Rural Bank of Davao City, Inc. is a
cooperative banking corporation operating in Davao City. It is owned in part by the Government and its employees
are members and co-owners of the same. The herein private respondent Federation of Free Workers is a labor
organization registered with the Department of Labor and Employment. It is interested in representing the said
employees for purposes of collective bargaining. The labor organization filed with the Davao City Regional Office of
the then Ministry of Labor and Employment a verified Petition for certification election among the rank-and-file
employees of the petitioner. The petitioner Cooperative reiterated therein its view that its employees are disqualified
from forming the labor organization so contemplated.
ISSUE:
Whether or not the employees of a cooperative can organize themselves for purposes of collective bargaining?
HELD:
No. An employee therefore of such a cooperative who is a member and co-owner thereof cannot invoke the right to
collective bargaining for certainly an owner cannot bargain with himself or his co-owners. In the opinion of August 14,
1981 of the Solicitor General he correctly opined that employees of cooperatives who are themselves members of the
cooperative have no right to form or join labor organizations for purposes of collective bargaining for being themselves
co-owners of the cooperative. Hence, only the rank and file employees of petitioner who are not its members or co-
owners are entitled to self-organization, collective bargaining, and negotiations, while the other employees who are
members or co-owners thereof cannot enjoy such right.
SINGER SEWING MACHINE COMPANY VS. DRILON
TOPIC: NON EMPLOYEES
FACTS: On February 15, 1989, the respondent union filed a petition for direct certification as the sole and exclusive
bargaining agent of all collectors of the Singer Sewing Machine Company, Baguio City branch (hereinafter referred to
as "the Company").
The Company opposed the petition mainly on the ground that the union members are actually not employees but are
independent contractors as evidenced by the collection agency agreement which they signed.
The respondent Med-Arbiter, finding that there exists an employer-employee relationship between the union members
and the Company, granted the petition for certification election. On appeal, Secretary of Labor Franklin M. Drilon
affirmed it. The motion for reconsideration of the Secretary's resolution was denied.
ISSUE: Whether or not the public respondents patently erred in finding that there exists an employer-employee
relationship;
HELD: The present case mainly calls for the application of the control test, which if not satisfied, would lead us to
conclude that no employer-employee relationship exists. Hence, if the union members are not employees, no right to
organize for purposes of bargaining, nor to be certified as such bargaining agent can ever be recognized. The following
elements are generally considered in the determination of the employer-employee relationship; "(1) the selection and
engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the
employee's conduct — although the latter is the most important element."
The Collection Agency Agreement defines the relationship between the Company and each of the union members who
signed a contract. The petitioner relies on the following stipulations in the agreements: (a) a collector is designated as
a collecting agent" who is to be considered at all times as an independent contractor and not employee of the Company;
(b) collection of all payments on installment accounts are to be made monthly or oftener; (c) an agent is paid his
compensation for service in the form of a commission of 6% of all collections made and turned over plus a bonus on
said collections; (d) an agent is required to post a cash bond of three thousand pesos (P3,000.00) to assure the faithful
performance and observance of the terms and conditions under the agreement; (e) he is subject to all the terms and
conditions in the agreement; (f) the agreement is effective for one year from the date of its execution and renewable on
a yearly basis; and (g) his services shall be terminated in case of failure to satisfy the minimum monthly collection
performance required, failure to post a cash bond, or cancellation of the agreement at the instance of either party unless
the agent has a pending obligation or indebtedness in favor of the Company.
Meanwhile, the respondents rely on other features to strengthen their position that the collectors are employees. They
quote paragraph 2 which states that an agent shall utilize only receipt forms authorized and issued by the Company.
They also note paragraph 3 which states that an agent has to submit and deliver at least once a week or as often as
required a report of all collections made using report forms furnished by the Company. Paragraph 4 on the monthly
collection quota required by the Company is deemed by respondents as a control measure over the means by which
an agent is to perform his services.
The nature of the relationship between a company and its collecting agents depends on the circumstances of each
particular relationship. Not all collecting agents are employees and neither are all collecting agents independent
contractors. The collectors could fall under either category depending on the facts of each case.
The Agreement confirms the status of the collecting agent in this case as an independent contractor not only because
he is explicitly described as such but also because the provisions permit him to perform collection services for the
company without being subject to the control of the latter except only as to the result of his work. After a careful analysis
of the contents of the agreement, we rule in favor of the petitioner.
The requirement that collection agents utilize only receipt forms and report forms issued by the Company and that
reports shall be submitted at least once a week is not necessarily an indication of control over the means by which the
job of collection is to be performed. The agreement itself specifically explains that receipt forms shall be used for the
purpose of avoiding a co-mingling of personal funds of the agent with the money collected on behalf of the Company.
Likewise, the use of standard report forms as well as the regular time within which to submit a report of collection are
intended to facilitate order in office procedures. Even if the report requirements are to be called control measures, any
control is only with respect to the end result of the collection since the requirements regulate the things to be done after
the performance of the collection job or the rendition of the service.
The monthly collection quota is a normal requirement found in similar contractual agreements and is so stipulated to
encourage a collecting agent to report at least the minimum amount of proceeds. In fact, paragraph 5, section b gives
a bonus, aside from the regular commission every time the quota is reached. As a requirement for the fulfillment of the
contract, it is subject to agreement by both parties. Hence, if the other contracting party does not accede to it, he can
choose not to sign it. From the records, it is clear that the Company and each collecting agent intended that the former
take control only over the amount of collection, which is a result of the job performed.
The respondents' contention that the union members are employees of the Company is based on selected provisions
of the Agreement but ignores the following circumstances which respondents never refuted either in the trial
proceedings before the labor officials nor in its pleadings filed before this Court.
1. The collection agents are not required to observe office hours or report to Singer's office everyday except,
naturally and necessarily, for the purpose of remitting their collections.
2. The collection agents do not have to devote their time exclusively for SINGER. There is no prohibition on
the part of the collection agents from working elsewhere. Nor are these agents required to account for their
time and submit a record of their activity.
3. The manner and method of effecting collections are left solely to the discretion of the collection agents
without any interference on the part of Singer.
4. The collection agents shoulder their transportation expenses incurred in the collections of the accounts
assigned to them.
5. The collection agents are paid strictly on commission basis. The amounts paid to them are based solely on
the amounts of collection each of them make. They do not receive any commission if they do not effect any
collection even if they put a lot of effort in collecting. They are paid commission on the basis of actual
collections.
6. The commissions earned by the collection agents are directly deducted by them from the amount of
collections they are able to effect. The net amount is what is then remitted to Singer." (Rollo, pp. 7-8)
If indeed the union members are controlled as to the manner by which they are supposed to perform their collections,
they should have explicitly said so in detail by specifically denying each of the facts asserted by the petitioner. As there
seems to be no objections on the part of the respondents, the Court finds that they miserably failed to defend their
position.
A thorough examination of the facts of the case leads us to the conclusion that the existence of an employer-employee
relationship between the Company and the collection agents cannot be sustained.
The plain language of the agreement reveals that the designation as collection agent does not create an employment
relationship and that the applicant is to be considered at all times as an independent contractor. This is consistent with
the first rule of interpretation that the literal meaning of the stipulations in the contract controls (Article 1370, Civil Code;
La Suerte Cigar and Cigarette Factory v. Director of Bureau of Labor, Relations, 123 SCRA 679 [1983]). No such words
as "to hire and employ" are present. Moreover, the agreement did not fix an amount for wages nor the required working
hours. Compensation is earned only on the basis of the tangible results produced, i.e., total collections made (Sarra v.
Agarrado, 166 SCRA 625 [1988]). In Investment Planning Corp. of the Philippines v. Social Security System, 21 SCRA
924 [1967] which involved commission agents, this Court had the occasion to rule, thus:
We are convinced from the facts that the work of petitioner's agents or registered representatives more nearly
approximates that of an independent contractor than that of an employee. The latter is paid for the labor he
performs, that is, for the acts of which such labor consists the former is paid for the result thereof . . . .
xxx xxx xxx
Even if an agent of petitioner should devote all of his time and effort trying to sell its investment plans he would
not necessarily be entitled to compensation therefor. His right to compensation depends upon and is measured
by the tangible results he produces."
Moreover, the collection agent does his work "more or less at his own pleasure" without a regular daily time frame
imposed on him (Investment Planning Corporation of the Philippines v. Social Security System, supra; See alsoSocial
Security System v. Court of Appeals, 30 SCRA 210 [1969]).
The grounds specified in the contract for termination of the relationship do not support the view that control exists "for
the causes of termination thus specified have no relation to the means and methods of work that are ordinarily required
of or imposed upon employees." (Investment Planning Corp. of the Phil. v. Social Security System, supra)
The last and most important element of the control test is not satisfied by the terms and conditions of the contracts.
There is nothing in the agreement which implies control by the Company not only over the end to be achieved but also
over the means and methods in achieving the end (LVN Pictures, Inc. v. Philippine Musicians Guild, 1 SCRA 132
[1961]).
The Court finds the contention of the respondents that the union members are employees under Article 280 of the Labor
Code to have no basis. The definition that regular employees are those who perform activities which are desirable and
necessary for the business of the employer is not determinative in this case. Any agreement may provide that one party
shall render services for and in behalf of another for a consideration (no matter how necessary for the latter's business)
even without being hired as an employee. This is precisely true in the case of an independent contractorship as well as
in an agency agreement. The Court agrees with the petitioner's argument that Article 280 is not the yardstick for
determining the existence of an employment relationship because it merely distinguishes between two kinds of
employees, i.e., regular employees and casual employees, for purposes of determining the right of an employee to
certain benefits, to join or form a union, or to security of tenure. Article 280 does not apply where the existence of an
employment relationship is in dispute.
The Court finds that since private respondents are not employees of the Company, they are not entitled to the
constitutional right to join or form a labor organization for purposes of collective bargaining. Accordingly, there is no
constitutional and legal basis for their "union" to be granted their petition for direct certification. This Court made this
pronouncement in La Suerte Cigar and Cigarette Factory v. Director of Bureau of Labor Relations, supra:
. . . The question of whether employer-employee relationship exists is a primordial consideration before
extending labor benefits under the workmen's compensation, social security, medicare, termination pay and
labor relations law. It is important in the determination of who shall be included in a proposed bargaining unit
because, it is the sine qua non, the fundamental and essential condition that a bargaining unit be composed
of employees. Failure to establish this juridical relationship between the union members and the employer
affects the legality of the union itself. It means the ineligibility of the union members to present a petition for
certification election as well as to vote therein . . . . (At p. 689)
WHEREFORE, the Order dated June 14,1989 of Med-Arbiter Designate Felix B. Chaguile, Jr., the Resolution and Order
of Secretary Franklin M. Drilon dated November 2, 1989 and December 14, 1989, respectively are hereby REVERSED
and SET ASIDE. The petition for certification election is ordered dismissed and the temporary restraining order issued
by the Court on December 21, 1989 is made permanent.
Metrolab Industries Inc. vs. Roldan Confesor
TOPIC: FIDUCIARY EMPLOYEES
FACTS:
The CBA between Metrolab and the union expired. The negotiations for a new CBA ended in a deadlock. The union
filed a notice to strike. The Secretary of Labor assumes jurisdiction over the entire labor dispute and issued an order
resolving all the disputed items in the CBA. The union filed a motion for reconsideration. During the pendency of such
motion Metrolab laid off 94 of its rank and file employees. The union filed a motion for a cease and desist order to enjoin
Metrolab from implementing the mass layoff. On the other hand, Metrolab contend that the layoff was temporary and
in the exercise of its management prerogative. The Secretary of Labor issued a resolution declaring the layoff illegal
and ordered their reinstatement with full back wages. The Labor Secretary also ruled that executive secretaries are
excluded from the closed-shop provision of the CBA, not from the bargaining unit.
ISSUE:
Whether executive secretaries must be includedas part of the bargaining unit of rank and fileemployees.
RULING:
NO. By recognizing the expanded scope of theright to self-organization, the intent of thecourt was to delimit the types
of employeesexcluded from the close shop provisions, notfrom the bargaining unit. The executive secretaries of
General Managerand the Management Committees should notonly be exempted from the closed-shopprovision but
should not be permitted to joinin the bargaining unit of the rank and fileemployees as well as on the grounds that
theexecutive secretaries are confidentialemployees , having access to “vital laborinformation”.
As stated in several cases, confidentialemployees are prohibited and disqualified to join any bargaining unit since the
very natureof the functions are to assist and act in aconfidential capacity, or to have access toconfidential matters of,
persons who exercisemanagerial functions in the field of laborrelations.Finally, confidential employees cannot
beclassified as rank and file from the very natureof their work. Excluding confidentialemployees from the rank and file of
bargainingunit, therefore, is not tantamount todiscrimination.
MACTAN WORKERS UNION VS ABOITIZ
TOPIC: PARTY PROTECTED BY LABOR ORGANIZATIONS
FACTS:
The company of Aboitiz is employing laborers and employees belonging to two rival labor unions. Namely MWU and
ALU. The company and ALU, as the bargaining representative of employees, entered into a ‘Collective Bargaining
Agreement which mandated a profit sharing bonus for its labourers and workersto. The bonus will be paid by the
company in 2 installments to ALU and ALU will deliver it to the employees. Unclaimed bonuses shall be returned to
the management.
The members of MWU did not receive their shares because they did not go to the ALU office to receive their shares.
ALU then returned the funds to the management with an advice to management to refrain from delivering the amount
to the members of MWU without a court order otherwise ALU will take steps to protect the interests of its members.
Because of the warning from ALU, the company deposited the amount of P4,035.82 with the Labor Administrator.
The MWU filed a case with the lower court to recover the amount. The lower court ordered the company to deliver the
sum of money to ALU and for ALU to pay the members of MWU their corresponding shares. Hence, the present
appeal of ALU.
ISSUE:
Whether or not ALU only represent its members and not the entire workforce of the company
RULING:
No. 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 forgotten that what is entitled
to constitutional protection is labor,more specifically the workers, not labor organizations. That is the Raison D’etere
of labor unions.

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LABOR RELATIONS LAW

PART ONE – INTRODUCTION MATERIALS

LABOR RELATIONS POLICY: FORMULATION AND HISTORICAL DEVELOPMENT

Article XIII, SECTION 3

Art. 211. Declaration of Policy.

A. It is the policy of the State:

Art. 275. Tripartism and tripartite conferences.

Title: ASSOCIACION DE AGRICULTURES DE TALISAY-SILAY, INC., et. al. vs. TALISAY-SILAY

2. PAL vs. PALEA, 57 SCRA 489

2. PAL v. PALEA, 57 SCRA 489

PLDT v. NLRC, 164 SCRA 671

Statutory Source and Interpretation

Title: Feati University vs. Bautista, 18 SCRA 1191

Sec. 2. Definitions.—As used in this Act —

6. Feati University v. Bautista, 18 SCRA 1191

Labor Organization: Legitimate Labor Organization

Article [212] 219 (g) and (h)

Airline Pilots Association, et al. vs. CIR, 76 SCRA 274

7. Lopez Sugar Corporation vs. Secretary of Labor, 247 SCRA 1

Title LOPEZ SUGAR CORPORATION, petitioner,

8. Lopez Sugar Corporation v. Secretary of Labor, 247 SCRA 1

Article [212] 219

Title SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, DANIEL S.L. BORBON I I ,

Title: GOLD CITY PORT SERVICES VS. NLRC (10)

Note: A strike can only happen when there is a labor dispute.

Test for Determining Labor Dispute

Title: RADIO COMMUNICATIONS OF THE PHILIPPINES, INC. (RCPI), vs. PHILIPPINE

Nature: Prayer for modified judgment

Labor Relations Policy

Dispute Settlement Methodology

The labor arbiter submitted its report to the NLRC.

In this case, Sweden Ice Cream Plant unjust refusal to bargain

12. Kiok Loy v. NLRC, 1414 SCRA 179

HELD: Yes. Petition dismissed for lack of merit.

Article [211] 218 (b) and (e)

Article [212] 219 (g)

Article 277 (a)

Art. 277. Miscellaneous provisions.

Sections 1 – 3, Rule XX, Book V

1. ARTICLE VIII — SICK, VACATION AND EMERGENCY LEAVES.

ARTICLE XVII — SPECIAL PROVISIONS.

13. Davao Integrated Port v. Olvida, 210 SCRA 339

13. Victoria vs. Inciong, 157 SCRA 339

Petition is dismissed. The decision of the acting Secretary of Labor is Affirmed.

14. Victoria v. Inciong, 157 SCRA 339

Machinery Dispute Settlement

Article 273 (a) – (i)

Article 277 (g)

National  PAL APPEALED TO THE NLRC

o failure of management to discuss the provisions of a contemplated code of

SC Petition for certiorari

15. PAL v. NLRC, 225 SCRA 301

Article 263 (g)

Art. 263. Strikes, picketing and lockouts.

Art. 275. Tripartism and tripartite conferences.

PART TWO: RIGHT TO SELF-ORGANIZATION

Section 7, Article IV, 1973 Constitution

Resolution and order reversed and set aside.

18. Singer Sewing Machine Co. v. Drilon, 193 SCRA 270

Extent and Scope of Right

19. Reyes v. Trajano, 209 SCRA 484

20 .Knitjoy vs. Calleja, 214 SCRA 174

On 1 December 1987, public respondent PuraFerrer-Calleja. Director of the BLR, handed