LABREL
Southern Philippines Federation of Labor (SPFL)
Coverage of the rights to Self- Organization
G.R. No. 80882 April 24, 1989
SOUTHERN PHILIPPINES FEDERATION OF LABOR (SPFL), petitioner,
vs.
HONORABLE PURA FERRER CALLEJA, Director, Bureau of Labor Relations,
Department of Labor and Employment, public respondent. MINDANAO MINERS
EMPLOYEE UNION SANDIGAN NG MANGGAGAWANG PILIPINO
(SANDIGAN), forced intervenor-private respondent. APEX MINING COMPANY,
INC., employer-private respondent.
Proculo P. Fuentes, Jr. for petitioner.
Valeriano F. Pasquil and Ruben V. Abarquez for respondent Apex Mining Co., Inc.
Raul C. Nengasca and Antonio G. Jolejole for respondent Sandigan.
GUTIERREZ, JR., J.:
This petition for certiorari seeks to annul and set aside the Order issued by public
respondent Director Pura Ferrer Calleja of the Bureau of Labor Relations dated June
23, 1987 which certified the respondent union, Mindanao Miners Employees Union-
Sandigan ng Manggagawang Pilipino (MMEU-Sandigan), as the sole and exclusive
bargaining representative of the rank-and-file employees of respondent Apex Mining
Company (Apex) after the said public respondent denied the motion of herein
petitioner to exclude one hundred ninety-seven (197) employees from voting in the
certification election. The denial is based on the ground that they are rank-and-file
employees.
As summarized by the Solicitor General in his Comment, the facts are as follows:
On December 29, 1986, petitioner Southern Philippines Federation
of Labor filed a petition for certification election among the rank-
and-file employees of private respondent Apex Mining Company,
Incorporated with the Department of Labor in Region XI, Davao
City.
On February 6, 1987, Med-Arbiter Conrado 0. Macasa, Sr. issued
an Order calling for the holding of the certification election on
February 23, 1987 among the rank-and-file employees of APEX
with the following choices:
l.
2. Mindanao Miners Employees Union-Sandigan ng
Manggagawang Pilipino (MMEU-Sandigan) and
3. No union.
On February 9, 1987, a pre-election conference was conducted
among the petitioner Union; private respondent Union, MMEU-
Sandigan; and APEX to settle details in the conduct of the election
such as the venue of the election and the list of employees qualified
to vote in the election.
During the pre-election conference, the parties agreed to delete
from the list of workers prepared and submitted by APEX
numbering One Thousand Seven Hundred Sixteen (1,716), the
names of nineteen (1 9) managerial employees and seventy-three
probationary employees who were statutorily disqualified from
voting. Petitioner Union objected to the inclusion in said list of the
following: (1) employees occupying the positions of Supervisor I, II,
and III; (2) employees under confidential/special payrolls; and (3)
employees who were not paying Union dues. The petitioner Union
contends that the aforementioned employees were disqualified from
participating in the certification election since the Supervisors were
managerial employees while the last two were disqualified by virtue
of their non-membership in the Union and their exclusion from the
benefits of the collective bargaining agreement.
In view of the lack of agreement among the parties on the list of
qualified voters, Med-Arbiter Macasa issued an Order on February
20, 1987, the dispositive portion of which reads:
"Wherefore, premises considered it is hereby
declared that the following groups of workers be
not included in the list of employees qualified to
vote in the consent election on February 23,
1987, as follows:
1 Nineteen (19) managerial employees;
2 Seventy-three (73) probationary employees;
and
3 Nineteen (19) Supervisors 1;
All other workers except the foregoing will be
allowed to vote."
1
On February 23, 1987, the day of the certification election, On March 19, 1987, Med-Arbiter Macasa issued an Order, the
petitioner Union filed a Motion for Reconsideration of Macasa's dispositive portion of which reads:
Order dated February 20, 1987. The certification election was
nonetheless conducted, with the result as follows: "Wherefore, the interest of industrial peace
considered, it is hereby directed that the
l. Southern Philippines Federation of Labor............. 614 challenged ballots be opened and inventoried on
26 March 1987 at 3:00 p.m., before the entire
2. Mindanao Miners Employees records of the case be indorsed to the BLR for
union review."
(MMEU-
Sandigan).................................. xxx xxx xxx
................. 528
Petitioner Union appealed Macasa's Order dated March 19, 1987 to
3. No Union......................................................................... 9 the Bureau of Labor Relations. On April 14, 1987, BLR Director
Pura Ferrer-Calleja issued an Order, the dispositive portion of
4. Challenged Ballots......................................................197 which reads:

5. Spoiled............................................................................25 "WHEREFORE, the Appeal of petitioner Southern

Philippines Federation of Labor (SPFL) is hereby
dismissed for lack of merit and the Med- Arbiter's
TOTAL VOTES CAST............................................................1,373 Order dated 19 March 1987 is affirmed with
modification that the 197 ballots should be
On the basis of the foregoing results, respondent Union filed an opened and canvassed by Labor Regional Office
Urgent Motion to Open the Challenged Ballots, with the prayer, to XI, Davao City. Let, therefore, the records of this
wit: case be immediately remanded to the said office,
for the immediate implementation of this
"Wherefore, premises considered, it is most Resolution."
respectfully prayed of this Honorable office that
this instant motion be given due course and that Petitioner Union moved for a reconsideration of the resolution dated
an order be issued to open and count the April 14, 1987. Meanwhile, on May 21, 1987, Med-Arbiter Macasa
challenged ballots in order to determine, once opened and canvassed the 197 challenged ballots with the result as
and for all, the winner in the certification and/or follows:
consent election and thereafter certify the sole
and exclusive collective bargaining representative SPFL 12 votes
of all rank-and-file employees and workers of SANDIGAN 178 votes
Apex Mining Company, Incorporated." No Union 2 votes
Spoiled 4 votes
xxx xxx xxx Envelop with
no ballots 1 vote
On March 11, 1987, APEX filed a Manifestation and Motion
manifesting its interest in the speedy resolution of the case and __________
primary concern for "the restoration of normalcy and the TOTAL 197 votes
preservation of industrial peace in the already explosive situation in
the mining area." As a consequence of the opening and canvass of the challenged
ballots, the outcome of the certification election became:
xxx xxx xxx

2
 SPFL 626 votes
SANDIGAN 706 votes
No Union 11 votes
___________
TOTAL 1,343 votes
Based on the aforementioned results, respondent Union filed a
Manifestation with the BLR with prayer for the issuance of
Certification Order certifying it as the sole and exclusive bargaining
representative of the rank-and-file employees of APEX. On June
23, 1987, Director Calleja issued an Order, the dispositive portion of
which reads:
"WHEREFORE, the Motion for reconsideration of
Petitioner SPFL is hereby denied for lack of merit.
Meanwhile, intervenor Mindanao Employees
Union-Sandigan Ng Manggagawang Pilipino
(MMEU- SANDIGAN) is hereby certified as the
sole and exclusive bargaining representative of
the rank-and-file employees of respondent Apex
Mining Company, Inc. Accordingly, the
management of Apex Mining Company, Inc., is
directed to negotiate with (MMEU-SANDIGAN)
for the conclusion of a collective bargaining
agreement (CBA)."
Hence, this petition.
The issue raised in this petition is whether or not the public respondent committed
grave abuse of discretion in allowing the 197 employees to vote in the certification
election when, as alleged by the petitioner, they are disqualified by express provision
of law or under the existing collective bargaining agreement.
It is maintained by the petitioner that under the Labor Code, managerial employees
are excluded from forming or joining a collective bargaining unit; and under the
collective bargaining agreement executed between Apex and respondent union,
among those who are excluded from the bargaining unit are: a) managerial
employees as defined in paragraph K, Article 212 of the Labor Code; b) those
performing supervisory functions; and c) those holding confidential positions as
determined by the company. Therefore, the employees holding the positions of
Supervisors II and III and those in the confidential payrolls should be excluded from
joining the bargaining unit and from voting in the certification election. Likewise, those
employees who are not paying union dues should be excluded from the same since
the existing CBA contains a Union shop provision.
The contentions have no merit.
Although we have upheld the validity of the CBA as the law among the parties, (see
Planters Products, Inc. v. NLRC, et al., G.R. No. 78524, January 20, 1989), its
provisions cannot override what is expressly provided by law that only managerial
employees are ineligible to join, assist or form any labor organization (See Art. 247,
Labor Code). Therefore, regardless of the challenged employees' designations,
whether they are employed as Supervisors or in the confidential payrolls, if the nature
of their job does not fall under the definition of "managerial" as defined in the Labor
Code, they are eligible to be members of the bargaining unit and to vote in the
certification election. Their right to self-organization must be upheld in the absence of
an express provision of law to the contrary. It cannot be curtailed by a collective
bargaining agreement.
Hence, it is important to determine whether the positions of Supervisors II and III are
considered "managerial" under the law.
As defined in the Labor Code and as we have held in the case of Franklin Baker
Company of the Phils. v. Trajano, (1 57 SCRA 416, 421-423, [1988]):
A managerial employee is defined as 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, or to effectively recommend such
managerial actions. (Reynolds Phil. Corp. v. Eslava, 137 SCRA
[1985], citing Section 212 (K), Labor Code.)
xxxxxxxxx
The test of "supervisory" or "managerial status" depends on
whether a person possesses authority to act in the interest of his
employer in the matter specified in Article 212 (k) of the Labor Code
and Section 1 (m) of its Implementing Rules and whether such
authority is not merely routinary or clerical in nature, but requires
the use of independent judgment. Thus, where such
recommendatory powers as in the case at bar, are subject to
evaluation, review and final action by the department heads and
other higher executives of the company, the same, although
present, are not effective and not an exercise of independent
judgment as required by law (National Warehousing Corp. v. CIR, 7
SCRA 602-603 [1963]).
Furthermore, in line with the ruling of this Court, subject employees
are not managerial employees because as borne by the records,
they do not participate in policy making but are given ready policies
to execute and standard practices to observe, thus having little
freedom of action (National Waterworks and Sewerage Authority v.
NWSA Consolidated, L-18938, 11 SCRA 766 [1964]).
3
The petitioner's motion for reconsideration before the public respondent outlined the
job description of Supervisors. In the category of Supervisory II, the "General
Summary" provides:

GENERAL SUMMARY:

Assists the Foreman in the effective dispatching/distribution of

manpower and equipment to carry out approved work. (p. 30, Rollo)

while the first duty enumerated in the position of Supervisor III states:

1. Executes and coordinates work plans emanating from his

supervisors. (p. 32, Rollo)

Thus, it is clear from the above provisions that the functions of the questioned
positions are not managerial in nature because they only execute approved and
established policies leaving little or no discretion at all whether to implement the said
policies or not. The respondent Director, therefore, did not commit grave abuse of
discretion in dismissing the petitioner's appeal from the Med-Arbiter's Order to open
and count the challenged ballots in denying the petitioner's motion for reconsideration
and in certifying the respondent Union as the sole and exclusive bargaining
representative of the rank-and-file employees of respondent Apex .

As regards the employees in the confidential payroll, the petitioner has not shown that
the nature of their jobs is classified as managerial except for its allegation that they
are considered by management as occupying managerial positions and highly
confidential. Neither can payment or non-payment of union dues be the determining
factor of whether the challenged employees should be excluded from the bargaining
unit since the union shop provision in the CBA applies only to newly hired employees
but not to members of the bargaining unit who were not members of the union at the
time of the signing of the CBA. It is, therefore, not impossible for employees to be
members of the bargaining unit even though they are non-union members or not
paying union dues.

WHEREFORE, the petition is hereby DISMISSED for LACK OF MERIT. Costs

against the petitioner.

SO ORDERED.

4
G.R. No. 77231 May 31, 1989
SAN JOSE CITY ELECTRIC SERVICE COOPERATIVE, INC.
(SAJELCO), petitioner,
vs.
MINISTRY OF LABOR AND EMPLOYMENT and MAGKAISA-ADLO, respondents.
MEDIALDEA, J.:
This is a petition for certiorari under Rule 65 of the Rules of Court. Petitioner San
Jose City Electric Service Cooperative, Inc. (SAJELCO, for brevity) seeks the reversal
of the Order (pp. 38-40, Rollo) of Pura Ferrer-Calleja, Director of Bureau of Labor
Relations in BLR Case No. A-10-259-86 which affirmed the Order of Med-Arbiter
Antonio R. Cortez to conduct a certification election among the rank-and-file
employees of SAJELCO.
The antecedent facts of the instant case are as follows:
On July 29, 1986, private respondent Manggagawang Nagkakaisa ng SAJELCO-
Association of Democratic Labor Organization (MAGKAISA-ADLO) filed a petition (pp.
16-18, Rollo) for direct certification election with the Regional Office No. 111 of the
Department of Labor and Employment in San Fernando, Pampanga. The petition
alleged that MAGKAISA-ADLO is a legitimate labor organization duly registered with
the Ministry of Labor and Employment; that there are more or less fifty-four (54) rank
and file employees in SAJELCO; that almost 62% of the employees sought to be
represented have supported the filing of the petition; that there has been no valid
certification election held in SAJELCO during the twelve (12) month period prior to the
filing of the petition and that there is no other union in the bargaining unit.
In its answer (pp. 19-21, Rollo), SAJELCO opposed the petition for direct certification
election contending, inter alia, that the employees who sought to be represented by
private respondent are members-consumers of the Cooperative itself and at the same
time composed the General Assembly which, pursuant to the By-laws is also the final
arbiter of any dispute arising in the Cooperative. Thus:
xxx
5. That some, if not most, of the employees who sought to be
represented by the petitioner, are member-consumers, and as such
are members of the General or Special Assembly which is the final
arbiter on any dispute which a member and/or the Board, or the
Cooperative may have, and that such "some"of said alleged
supporters, in their capacity as member-consumers, enjoy two
personalities in that as employees and/or members of the General
Assembly, and therefore cannot fairly and prudently represent such
opposing personalities that merge into one juridical or natural
person, and these special and unique status or personalities of the
supposed supporters cannot qualify to be represented by the
petitioner, without doing injustice, in equity and unfair status or
advantage to those member-consumers who have not that destiny
or status of becoming employees;
6 No valid and lawful representation can be obtained by petitioner
in behalf of the supposed supporters, who are also member-
consumer, that are bound by the Article of Incorporation, By-laws of
the respondent Cooperative and pertinent Decrees and laws, to
support and defend the basic policies of the Government on Electric
Cooperatives;
7. There is no possible legal way by which to dismantle the
personalities of some of the supporters of the petitioner, as
employees, from their status as consumer-members, who are,
under the By-laws, part and parcels of the General or Special
Assembly that finally decides any dispute, and no reasonable or
valid scale of justice could be invoked to divide a person who, in
conscience, is also the other fellow against whom a remedy is
sought for in allowing this to happen is tantamount to slaughtering a
man to his own ends;
xxx
On September 5, 1986, the Med-Arbiter who was assigned to the case issued an
Order (pp. 24-26, Rollo) granting the petition for direct certification election on the
basis of the pleadings filed. The Order said that while some of the members of
petitioner union are members of the cooperative, it cannot be denied that they are
also employees within the contemplation of the Labor Code and are therefore entitled
to enjoy all the benefits of employees, including the right to self-organization (pp.
25, Rollo). This Order was appealed by SAJELCO to the Bureau of Labor Relations.
In its appeal, (pp. 27-36, Rollo) SAJELCO reiterated its position that:
. . . upon the principle that in electric cooperative — as in the case
of respondent, there is a merger of the consumer-members that
composed of the assembly and that of the rank-and-file members of
the petitioners-into one person or juridical status thus rendering the
proposed collective bargaining agent ineffective and/or uncalled for
— considering that a grievance machinery for employees and/or
member-consumers of the cooperative-has been provided for by
the By-laws as a built-in over-all arbiter involving disputes affecting
said cooperative;
Respondent Director of the Bureau of Labor Relations dismissed the appeal and
sustained the ruling of the Med-Arbiter in an order dated January 5, 1987.
5
On February 19, 1987, SAJELCO filed the instant petition for certiorari praying that
the order of respondent Director be set aside and another one rendered denying the
holding or conduct of a certification election among the rank and file employees of
SAJELCO.
In a letter dated June 20, 1987, Atty. Ricardo Soto, Jr., counsel for private respondent
union, manifested that a direct certification election was conducted in SAJELCO,
there being no restraining order from this Court enjoining the holding thereof Likewise,
Atty. Soto was of the opinion that in view of the direct certification election conducted,
the petition brought before this Court by SAJELCO has become moot and academic
(p. 48, Rollo). Attached to his letter is a copy of the minutes of the certification election
held on April 13, 1987 showing that of forty three (43) employees who voted, thirty
(30) voted for respondent union and thirteen (13) voted for "no union."
In the resolution of this court (First Division) dated September 29, 1987, respondents
were required to comment on the petition. The Solicitor General filed its comment
dated October 30, 1987 wherein it took a stand contrary to that of respondent
Director. To support its stand, the Solicitor General argued firstly, that the union
members who seek to be represented by the union are the very members of the
cooperative, thereby resulting in a fusion of two personalities. Thus, it will be
inconsistent for the union members to bargain with themselves. Secondly, he said
that article 243 of the Labor Code; requires that before one can form, join or assist a
labor union, he must first be employed and to be an employee one must be under hire
and must have no involvement in the ownership of the firm. A labor union is formed
for purposes of collective bargaining. The duty to bargain exists only between
employer and employees and not between an employer and his co-owners. Thirdly,
he also said that under the National Electrification Decree (P.D. No. 269, August 6,
1973) members of an electric cooperative such as petitioner, besides contributing
financially to its establishments and maintenance, participate in its management. In
the latter aspect, they possess the powers and prerogatives of managerial employees
who are not eligible to join, assist or form any labor organization (pp. 4-6 of Comment;
pp 43-45, Rollo).
On November 25, 1987, We required Atty. Soto, Jr. to comment on the comment of
the Solicitor General (p. 47, Rollo). However, the notices sent to him were returned
and stamped "moved to an unknown address." But respondent Director of the Bureau
of Labor Relations filed a comment on the aforesaid comment of the Solicitor General
reiterating his stand that members of private respondent union fall under the general
provision of Article 244 of the Code on who are qualified to form, join or assist in the
formation of unions as they are neither managerial employees nor persons belonging
to subversive organizations. Thus, on May 25, 1988, we gave due course to the
petition (p. 79, Rollo).
The only issue presented for resolution in this petition is whether or not the
employees-members of an electric cooperative can organize themselves for purposes
of collective bargaining.
This Court had the occasion to rule on this issue in the consolidated cases
of Batangas I-Electric Cooperative Labor Union vs. Romeo Young, et al., G.R. No.
62386, Bulacan II- Electric Cooperative, Inc., vs. Hon. Eliseo A. Penaflor, et al., G.R.
No. 70880 and Albay Electric Cooperative vs. Crescencio B. Trajano et. al., G.R. No.
74560 (November 9, 1988), citing the case of Cooperative Rural Bank of Davao City,
Inc. vs. Pura Ferrer-Calleja, G.R. No. 77951, September 26,1988, where it was held
that:
A cooperative, therefore, is by its nature different from an ordinary
business concern being run either, by persons, partnerships or
corporations. Its owners and/or members are the ones who run and
operate the business while the others are its employees. As above
stated, irrespective of the name of shares owned by its members
they are entitled to cast one vote each in deciding upon the affair of
the cooperative. Their share capital earn limited interests, They
enjoy special privileges as — exemption from income tax and sales
taxes, preferential right to supply their products to State agencies
and even exemption from minimum wage laws.
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 corectly
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.
However, in so far as it involves cooperatives with employees who
are not members or co-owners thereof, certainly such employees
are entitled to exercise the rights of all workers to organization,
collective bargaining, negotiations and others as are enshrined in
the Constitution and existing laws of the country.
In this petition, San Jose City Electric Service Cooperative, Inc. (SAJELCO) claims
that its employees are also members of the cooperative. It cited Section 17(18) of its
By-laws which declares that:
The Board shall also create positions for subordinate employees
and fix their duties and remunerations. Only member-consumers or
members of their immediate family shall be employed by the
cooperative (Emphasis supplied).
The above-cited provision, however, mentions two types of employees, namely: the
members-consumers and the members of their immediate families. As regards
employees of SAJELCO who are members-consumers, the rule is settled that they
are not qualified to form, join or assist labor organizations for purposes of collective
bargaining. The reason for withholding from employees of a cooperative who are
members-co-owners the right to collective bargaining is clear: an owner cannot
bargain with himself. However, employees who are not members-consumers may
6
form, join or assist labor organizations for purposes of collective bargaining
notwithstanding the fact that employees of SAJELCO who are not members-
consumers were employed ONLY because they are members of the immediate family
of members-consumers. The fact remains that they are not themselves members-
consumers, and as such, they are entitled to exercise the rights of all workers to
organization, collective bargaining, negotiations and others as are enshrined in
Section 8, Article III and Section 3, Article XIII of the 1987 Constitution, Labor Code of
the Philippines and other related laws (Cooperative Rural Bank of Davao City, Inc.,
supra, p. 10).

ACCORDINGLY, the petition is GRANTED. The assailed Order of respondent Pura

Ferrer-Calleja, Director of the Bureau of Labor Relations is hereby MODIFIED to the
effect that only the rank-and-file employees of petitioner who are not its members-
consumers are entitled to self-organization, collective bargaining, and negotiations,
while other employees who are members-consumers thereof cannot enjoy such right.
The direct certification election conducted on April 13, 1987 is hereby set aside. The
Regional Office III of the Department of Labor and Employment in San Fernando,
Pampanga is hereby directed: (a) to determine the number of rank and file employees
of SAJELCO who are not themselves members-consumers; (b) to resolve whether or
not there is compliance with the requirements set forth in Article 257 of the Labor
Code; and (c) in the affirmative, to immediately conduct a direct certification election
among the rank and file employees of SAJELCO who are not members-consumers.

SO ORDERED.

7
G.R. No. 85750 September 28, 1990
INTERNATIONAL CATHOLIC IMMIGRATION COMMISSION, petitioner
vs
HON. PURA CALLEJA IN HER CAPACITY AS DIRECTOR OF THE BUREAU OF
LABOR RELATIONS AND TRADE UNIONS OF THE PHILIPPINES AND ALLIED
SERVICES (TUPAS) WFTU respondents.
G.R. No. 89331 September 28, 1990
KAPISANAN NG MANGGAGAWA AT TAC SA IRRI-ORGANIZED LABOR
ASSOCIATION IN LINE INDUSTRIES AND AGRICULTURE, petitioner,
vs
SECRETARY OF LABOR AND EMPLOYMENT AND INTERNATIONAL RICE
RESEARCH INSTITUTE, INC., respondents.
Araullo, Zambrano, Gruba, Chua Law Firm for petitioner in 85750.
Dominguez, Armamento, Cabana & Associates for petitioner in G.R. No. 89331.
Jimenez & Associates for IRRI.
Alfredo L. Bentulan for private respondent in 85750.
MELENCIO-HERRERA, J.:
Consolidated on 11 December 1989, these two cases involve the validity of the claim
of immunity by the International Catholic Migration Commission (ICMC) and the
International Rice Research Institute, Inc. (IRRI) from the application of Philippine
labor laws.
I respondent BLR Director who, again, ordered the immediate conduct of a pre-election
Facts and Issues
A. G.R. No. 85750 — the International Catholic Migration Commission
(ICMC) Case.
As an aftermath of the Vietnam War, the plight of Vietnamese refugees fleeing from
South Vietnam's communist rule confronted the international community.
In response to this crisis, on 23 February 1981, an Agreement was forged between
the Philippine Government and the United Nations High Commissioner for Refugees
whereby an operating center for processing Indo-Chinese refugees for eventual
resettlement to other countries was to be established in Bataan (Annex "A", Rollo, pp.
22-32).
ICMC was one of those accredited by the Philippine Government to operate the
refugee processing center in Morong, Bataan. It was incorporated in New York, USA,
at the request of the Holy See, as a non-profit agency involved in international
humanitarian and voluntary work. It is duly registered with the United Nations
Economic and Social Council (ECOSOC) and enjoys Consultative Status, Category II.
As an international organization rendering voluntary and humanitarian services in the
Philippines, its activities are parallel to those of the International Committee for
Migration (ICM) and the International Committee of the Red Cross (ICRC) [DOLE
Records of BLR Case No. A-2-62-87, ICMC v. Calleja, Vol. 1].
On 14 July 1986, Trade Unions of the Philippines and Allied Services (TUPAS) filed
with the then Ministry of Labor and Employment a Petition for Certification Election
among the rank and file members employed by ICMC The latter opposed the petition
on the ground that it is an international organization registered with the United Nations
and, hence, enjoys diplomatic immunity.
On 5 February 1987, Med-Arbiter Anastacio L. Bactin sustained ICMC and dismissed
the petition for lack of jurisdiction.
On appeal by TUPAS, Director Pura Calleja of the Bureau of Labor Relations (BLR),
reversed the Med-Arbiter's Decision and ordered the immediate conduct of a
certification election. At that time, ICMC's request for recognition as a specialized
agency was still pending with the Department of Foreign Affairs (DEFORAF).
Subsequently, however, on 15 July 1988, the Philippine Government, through the
DEFORAF, granted ICMC the status of a specialized agency with corresponding
diplomatic privileges and immunities, as evidenced by a Memorandum of Agreement
between the Government and ICMC (Annex "E", Petition, Rollo, pp. 41-43), infra.
ICMC then sought the immediate dismissal of the TUPAS Petition for Certification
Election invoking the immunity expressly granted but the same was denied by
conference. ICMC's two Motions for Reconsideration were denied despite an opinion
rendered by DEFORAF on 17 October 1988 that said BLR Order violated ICMC's
diplomatic immunity.
Thus, on 24 November 1988, ICMC filed the present Petition for Certiorari with
Preliminary Injunction assailing the BLR Order.
On 28 November 1988, the Court issued a Temporary Restraining Order enjoining the
holding of the certification election.
8
On 10 January 1989, the DEFORAF, through its Legal Adviser, retired Justice Jorge
C. Coquia of the Court of Appeals, filed a Motion for Intervention alleging that, as the
highest executive department with the competence and authority to act on matters
involving diplomatic immunity and privileges, and tasked with the conduct of
Philippine diplomatic and consular relations with foreign governments and UN
organizations, it has a legal interest in the outcome of this case.
Over the opposition of the Solicitor General, the Court allowed DEFORAF
intervention.
On 12 July 1989, the Second Division gave due course to the ICMC Petition and
required the submittal of memoranda by the parties, which has been complied with.
As initially stated, the issue is whether or not the grant of diplomatic privileges and
immunites to ICMC extends to immunity from the application of Philippine labor laws.
ICMC sustains the affirmative of the proposition citing (1) its Memorandum of
Agreement with the Philippine Government giving it the status of a specialized
agency, (infra); (2) the Convention on the Privileges and Immunities of Specialized
Agencies, adopted by the UN General Assembly on 21 November 1947 and
concurred in by the Philippine Senate through Resolution No. 91 on 17 May 1949 (the
Philippine Instrument of Ratification was signed by the President on 30 August 1949
and deposited with the UN on 20 March 1950) infra; and (3) Article II, Section 2 of the
1987 Constitution, which declares that the Philippines adopts the generally accepted
principles of international law as part of the law of the land.
Intervenor DEFORAF upholds ICMC'S claim of diplomatic immunity and seeks an
affirmance of the DEFORAF determination that the BLR Order for a certification
election among the ICMC employees is violative of the diplomatic immunity of said
organization.
Respondent BLR Director, on the other hand, with whom the Solicitor General agrees,
cites State policy and Philippine labor laws to justify its assailed Order, particularly,
Article II, Section 18 and Article III, Section 8 of the 1987 Constitution, infra; and
Articles 243 and 246 of the Labor Code, as amended, ibid. In addition, she contends
that a certification election is not a litigation but a mere investigation of a non-
adversary, fact-finding character. It is not a suit against ICMC its property, funds or
assets, but is the sole concern of the workers themselves.
B. G.R. No. 89331 — (The International Rice Research Institute [IRRI] Case).
Before a Decision could be rendered in the ICMC Case, the Third Division, on 11
December 1989, resolved to consolidate G.R. No. 89331 pending before it with G.R.
No. 85750, the lower-numbered case pending with the Second Division, upon
manifestation by the Solicitor General that both cases involve similar issues.
The facts disclose that on 9 December 1959, the Philippine Government and the Ford
and Rockefeller Foundations signed a Memorandum of Understanding establishing
the International Rice Research Institute (IRRI) at Los Baños, Laguna. It was intended
to be an autonomous, philanthropic, tax-free, non-profit, non-stock organization
designed to carry out the principal objective of conducting "basic research on the rice
plant, on all phases of rice production, management, distribution and utilization with a
view to attaining nutritive and economic advantage or benefit for the people of Asia
and other major rice-growing areas through improvement in quality and quantity of
rice."
Initially, IRRI was organized and registered with the Securities and Exchange
Commission as a private corporation subject to all laws and regulations. However, by
virtue of Pres. Decree No. 1620, promulgated on 19 April 1979, IRRI was granted the
status, prerogatives, privileges and immunities of an international organization.
The Organized Labor Association in Line Industries and Agriculture (OLALIA), is a
legitimate labor organization with an existing local union, the Kapisanan ng
Manggagawa at TAC sa IRRI (Kapisanan, for short) in respondent IRRI.
On 20 April 1987, the Kapisanan filed a Petition for Direct Certification Election with
Region IV, Regional Office of the Department of Labor and Employment (DOLE).
IRRI opposed the petition invoking Pres. Decree No. 1620 conferring upon it the
status of an international organization and granting it immunity from all civil, criminal
and administrative proceedings under Philippine laws.
On 7 July 1987, Med-Arbiter Leonardo M. Garcia, upheld the opposition on the basis
of Pres. Decree No. 1620 and dismissed the Petition for Direct Certification.
On appeal, the BLR Director, who is the public respondent in the ICMC Case, set
aside the Med-Arbiter's Order and authorized the calling of a certification election
among the rank-and-file employees of IRRI. Said Director relied on Article 243 of the
Labor Code, as amended, infra and Article XIII, Section 3 of the 1987
Constitution, 1 and held that "the immunities and privileges granted to IRRI do not
include exemption from coverage of our Labor Laws." Reconsideration sought by
IRRI was denied.
On appeal, the Secretary of Labor, in a Resolution of 5 July 1989, set aside the BLR
Director's Order, dismissed the Petition for Certification Election, and held that the
grant of specialized agency status by the Philippine Government to the IRRI bars
DOLE from assuming and exercising jurisdiction over IRRI Said Resolution reads in
part as follows:
Presidential Decree No. 1620 which grants to the IRRI the status,
prerogatives, privileges and immunities of an international
organization is clear and explicit. It provides in categorical terms
that:
9
 Art. 3 — The Institute shall enjoy immunity from any penal, civil and
administrative proceedings, except insofar as immunity has been
expressly waived by the Director-General of the Institution or his
authorized representative.
Verily, unless and until the Institute expressly waives its immunity,
no summons, subpoena, orders, decisions or proceedings ordered
by any court or administrative or quasi-judicial agency are
enforceable as against the Institute. In the case at bar there was no
such waiver made by the Director-General of the Institute. Indeed,
the Institute, at the very first opportunity already vehemently
questioned the jurisdiction of this Department by filing an ex-parte
motion to dismiss the case.
Hence, the present Petition for Certiorari filed by Kapisanan alleging grave abuse of
discretion by respondent Secretary of Labor in upholding IRRI's diplomatic immunity.
The Third Division, to which the case was originally assigned, required the
respondents to comment on the petition. In a Manifestation filed on 4 August 1990,
the Secretary of Labor declared that it was "not adopting as his own" the decision of
the BLR Director in the ICMC Case as well as the Comment of the Solicitor General
sustaining said Director. The last pleading was filed by IRRI on 14 August 1990.
Instead of a Comment, the Solicitor General filed a Manifestation and Motion praying
that he be excused from filing a comment "it appearing that in the earlier case
of International Catholic Migration Commission v. Hon. Pura Calleja, G.R. No. 85750.
the Office of the Solicitor General had sustained the stand of Director Calleja on the
very same issue now before it, which position has been superseded by respondent
Secretary of Labor in G.R. No. 89331," the present case. The Court acceded to the
Solicitor General's prayer.
The Court is now asked to rule upon whether or not the Secretary of Labor committed
grave abuse of discretion in dismissing the Petition for Certification Election filed by
Kapisanan.
Kapisanan contends that Article 3 of Pres. Decree No. 1620 granting IRRI the status,
privileges, prerogatives and immunities of an international organization, invoked by
the Secretary of Labor, is unconstitutional in so far as it deprives the Filipino workers
of their fundamental and constitutional right to form trade unions for the purpose of
collective bargaining as enshrined in the 1987 Constitution.
A procedural issue is also raised. Kapisanan faults respondent Secretary of Labor for
entertaining IRRI'S appeal from the Order of the Director of the Bureau of Labor
Relations directing the holding of a certification election. Kapisanan contends that
pursuant to Sections 7, 8, 9 and 10 of Rule V 2 of the Omnibus Rules Implementing
the Labor Code, the Order of the BLR Director had become final and unappeable and
that, therefore, the Secretary of Labor had no more jurisdiction over the said appeal.
On the other hand, in entertaining the appeal, the Secretary of Labor relied on Section
25 of Rep. Act. No. 6715, which took effect on 21 March 1989, providing for the direct
filing of appeal from the Med-Arbiter to the Office of the Secretary of Labor and
Employment instead of to the Director of the Bureau of Labor Relations in cases
involving certification election orders.
III
Findings in Both Cases.
There can be no question that diplomatic immunity has, in fact, been granted ICMC
and IRRI.
Article II of the Memorandum of Agreement between the Philippine Government and
ICMC provides that ICMC shall have a status "similar to that of a specialized agency."
Article III, Sections 4 and 5 of the Convention on the Privileges and Immunities of
Specialized Agencies, adopted by the UN General Assembly on 21 November 1947
and concurred in by the Philippine Senate through Resolution No. 19 on 17 May
1949, explicitly provides:
Art. III, Section 4. The specialized agencies, their property and
assets, wherever located and by whomsoever held, shall enjoy
immunity from every form of legal process except insofar as in any
particular case they have expressly waived their immunity. It is,
however, understood that no waiver of immunity shall extend to any
measure of execution.
Sec. 5. — The premises of the specialized agencies shall be
inviolable. The property and assets of the specialized agencies,
wherever located and by whomsoever held shall be immune from
search, requisition, confiscation, expropriation and any other form
of interference, whether by executive, administrative, judicial or
legislative action. (Emphasis supplied).
IRRI is similarly situated, Pres. Decree No. 1620, Article 3, is explicit in its grant of
immunity, thus:
Art. 3. Immunity from Legal Process. — The Institute shall enjoy
immunity from any penal, civil and administrative proceedings,
except insofar as that immunity has been expressly waived by the
Director-General of the Institute or his authorized representatives.
Thus it is that the DEFORAF, through its Legal Adviser, sustained ICMC'S invocation
of immunity when in a Memorandum, dated 17 October 1988, it expressed the view
that "the Order of the Director of the Bureau of Labor Relations dated 21 September
1988 for the conduct of Certification Election within ICMC violates the diplomatic
immunity of the organization." Similarly, in respect of IRRI, the DEFORAF speaking
10
through The Acting Secretary of Foreign Affairs, Jose D. Ingles, in a letter, dated 17
June 1987, to the Secretary of Labor, maintained that "IRRI enjoys immunity from the
jurisdiction of DOLE in this particular instance."
The foregoing opinions constitute a categorical recognition by the Executive Branch of
the Government that ICMC and IRRI enjoy immunities accorded to international
organizations, which determination has been held to be a political question conclusive
upon the Courts in order not to embarrass a political department of Government.
It is a recognized principle of international law and under our
system of separation of powers that diplomatic immunity is
essentially a political question and courts should refuse to look
beyond a determination by the executive branch of the government,
and where the plea of diplomatic immunity is recognized and
affirmed by the executive branch of the government as in the case
at bar, it is then the duty of the courts to accept the claim of
immunity upon appropriate suggestion by the principal law officer of
the government . . . or other officer acting under his direction.
Hence, in adherence to the settled principle that courts may not so
exercise their jurisdiction . . . as to embarrass the executive arm of
the government in conducting foreign relations, it is accepted
doctrine that in such cases the judicial department of (this)
government follows the action of the political branch and will not
embarrass the latter by assuming an antagonistic jurisdiction. 3
A brief look into the nature of international organizations and specialized agencies is
in order. The term "international organization" is generally used to describe an
organization set up by agreement between two or more states. 4 Under contemporary
international law, such organizations are endowed with some degree of international
legal personality 5 such that they are capable of exercising specific rights, duties and
powers. 6 They are organized mainly as a means for conducting general international
business in which the member states have an interest. 7 The United Nations, for
instance, is an international organization dedicated to the propagation of world peace.
"Specialized agencies" are international organizations having functions in particular
fields. The term appears in Articles 57 8 and 63 9 of the Charter of the United Nations:
The Charter, while it invests the United Nations with the general
task of promoting progress and international cooperation in
economic, social, health, cultural, educational and related matters,
contemplates that these tasks will be mainly fulfilled not by organs
of the United Nations itself but by autonomous international
organizations established by inter-governmental agreements
outside the United Nations. There are now many such international
agencies having functions in many different fields, e.g. in posts,
telecommunications, railways, canals, rivers, sea transport, civil
aviation, meteorology, atomic energy, finance, trade, education and
culture, health and refugees. Some are virtually world-wide in their
membership, some are regional or otherwise limited in their
membership. The Charter provides that those agencies which have
"wide international responsibilities" are to be brought into
relationship with the United Nations by agreements entered into
between them and the Economic and Social Council, are then to be
known as "specialized agencies." 10
The rapid growth of international organizations under contemporary international law
has paved the way for the development of the concept of international immunities.
It is now usual for the constitutions of international organizations to
contain provisions conferring certain immunities on the
organizations themselves, representatives of their member states
and persons acting on behalf of the organizations. A series of
conventions, agreements and protocols defining the immunities of
various international organizations in relation to their members
generally are now widely in force; . . . 11
There are basically three propositions underlying the grant of international immunities
to international organizations. These principles, contained in the ILO Memorandum
are stated thus: 1) international institutions should have a status which protects them
against control or interference by any one government in the performance of functions
for the effective discharge of which they are responsible to democratically constituted
international bodies in which all the nations concerned are represented; 2) no country
should derive any national financial advantage by levying fiscal charges on common
international funds; and 3) the international organization should, as a collectivity of
States members, be accorded the facilities for the conduct of its official business
customarily extended to each other by its individual member States. 12 The theory
behind all three propositions is said to be essentially institutional in character. "It is not
concerned with the status, dignity or privileges of individuals, but with the elements of
functional independence necessary to free international institutions from national
control and to enable them to discharge their responsibilities impartially on behalf of
all their members. 13 The raison d'etre for these immunities is the assurance of
unimpeded performance of their functions by the agencies concerned.
The grant of immunity from local jurisdiction to ICMC and IRRI is clearly necessitated
by their international character and respective purposes. The objective is to avoid the
danger of partiality and interference by the host country in their internal workings. The
exercise of jurisdiction by the Department of Labor in these instances would defeat
the very purpose of immunity, which is to shield the affairs of international
organizations, in accordance with international practice, from political pressure or
control by the host country to the prejudice of member States of the organization, and
to ensure the unhampered performance of their functions.
ICMC's and IRRI's immunity from local jurisdiction by no means deprives labor of its
basic rights, which are guaranteed by Article II, Section 18, 14 Article III, Section
8, 15 and Article XIII, Section 3 (supra), of the 1987 Constitution; and implemented by
Articles 243 and 246 of the Labor Code, 16 relied on by the BLR Director and by
Kapisanan.
11
For, ICMC employees are not without recourse whenever there are disputes to be
settled. Section 31 of the Convention on the Privileges and Immunities of the
Specialized Agencies of the United Nations 17 provides that "each specialized agency
shall make provision for appropriate modes of settlement of: (a) disputes arising out of
contracts or other disputes of private character to which the specialized agency is a
party." Moreover, pursuant to Article IV of the Memorandum of Agreement between
ICMC the the Philippine Government, whenever there is any abuse of privilege by
ICMC, the Government is free to withdraw the privileges and immunities accorded.
Thus:
Art. IV. Cooperation with Government Authorities. — 1. The
Commission shall cooperate at all times with the appropriate
authorities of the Government to ensure the observance of
Philippine laws, rules and regulations, facilitate the proper
administration of justice and prevent the occurrences of any abuse
of the privileges and immunities granted its officials and alien
employees in Article III of this Agreement to the Commission.
2. In the event that the Government determines that there has been
an abuse of the privileges and immunities granted under this
Agreement, consultations shall be held between the Government
and the Commission to determine whether any such abuse has
occurred and, if so, the Government shall withdraw the privileges
and immunities granted the Commission and its officials.
Neither are the employees of IRRI without remedy in case of dispute with
management as, in fact, there had been organized a forum for better management-
employee relationship as evidenced by the formation of the Council of IRRI
Employees and Management (CIEM) wherein "both management and employees
were and still are represented for purposes of maintaining mutual and beneficial
cooperation between IRRI and its employees." The existence of this Union factually
and tellingly belies the argument that Pres. Decree No. 1620, which grants to IRRI the
status, privileges and immunities of an international organization, deprives its
employees of the right to self-organization.
The immunity granted being "from every form of legal process except in so far as in
any particular case they have expressly waived their immunity," it is inaccurate to
state that a certification election is beyond the scope of that immunity for the reason
that it is not a suit against ICMC. A certification election cannot be viewed as an
independent or isolated process. It could tugger off a series of events in the collective
bargaining process together with related incidents and/or concerted activities, which
could inevitably involve ICMC in the "legal process," which includes "any penal, civil
and administrative proceedings." The eventuality of Court litigation is neither remote
and from which international organizations are precisely shielded to safeguard them
from the disruption of their functions. Clauses on jurisdictional immunity are said to be
standard provisions in the constitutions of international Organizations. "The immunity
covers the organization concerned, its property and its assets. It is equally applicable
to proceedings in personam and proceedings in rem." 18
We take note of a Manifestation, dated 28 September 1989, in the ICMC Case (p.
161, Rollo), wherein TUPAS calls attention to the case entitled "International Catholic
Migration Commission v. NLRC, et als., (G.R. No. 72222, 30 January 1989, 169
SCRA 606), and claims that, having taken cognizance of that dispute (on the issue of
payment of salary for the unexpired portion of a six-month probationary employment),
the Court is now estopped from passing upon the question of DOLE jurisdiction
petition over ICMC.
We find no merit to said submission. Not only did the facts of said controversy occur
between 1983-1985, or before the grant to ICMC on 15 July 1988 of the status of a
specialized agency with corresponding immunities, but also because ICMC in that
case did not invoke its immunity and, therefore, may be deemed to have waived it,
assuming that during that period (1983-1985) it was tacitly recognized as enjoying
such immunity.
Anent the procedural issue raised in the IRRI Case, suffice it to state that the Decision
of the BLR Director, dated 15 February 1989, had not become final because of a
Motion for Reconsideration filed by IRRI Said Motion was acted upon only on 30
March 1989 when Rep. Act No. 6715, which provides for direct appeals from the
Orders of the Med-Arbiter to the Secretary of Labor in certification election cases
either from the order or the results of the election itself, was already in effect,
specifically since 21 March 1989. Hence, no grave abuse of discretion may be
imputed to respondent Secretary of Labor in his assumption of appellate jurisdiction,
contrary to Kapisanan's allegations. The pertinent portion of that law provides:
Art. 259. — Any party to an election may appeal the order or results
of the election as determined by the Med-Arbiter directly to the
Secretary of Labor and Employment on the ground that the rules
and regulations or parts thereof established by the Secretary of
Labor and Employment for the conduct of the election have been
violated. Such appeal shall be decided within 15 calendar days
(Emphasis supplied).
En passant, the Court is gratified to note that the heretofore antagonistic positions
assumed by two departments of the executive branch of government have been
rectified and the resultant embarrassment to the Philippine Government in the eyes of
the international community now, hopefully, effaced.
WHEREFORE, in G.R. No. 85750 (the ICMC Case), the Petition is GRANTED, the
Order of the Bureau of Labor Relations for certification election is SET ASIDE, and
the Temporary Restraining Order earlier issued is made PERMANENT.
In G.R. No. 89331 (the IRRI Case), the Petition is Dismissed, no grave abuse of
discretion having been committed by the Secretary of Labor and Employment in
dismissing the Petition for Certification Election.
No pronouncement as to costs.
12
G.R. No. L-25246 September 12, 1974
BENJAMIN VICTORIANO, plaintiff-appellee,
vs.
ELIZALDE ROPE WORKERS' UNION and ELIZALDE ROPE FACTORY, INC.,
defendants, ELIZALDE ROPE WORKERS' UNION, defendant-appellant.
Salonga, Ordonez, Yap, Sicat & Associates for plaintiff-appellee.
Cipriano Cid & Associates for defendant-appellant.
ZALDIVAR, J.:p
Appeal to this Court on purely questions of law from the decision of the Court of First
Instance of Manila in its Civil Case No. 58894.
The undisputed facts that spawned the instant case follow:
Benjamin Victoriano (hereinafter referred to as Appellee), a member of the religious
sect known as the "Iglesia ni Cristo", had been in the employ of the Elizalde Rope
Factory, Inc. (hereinafter referred to as Company) since 1958. As such employee, he
was a member of the Elizalde Rope Workers' Union (hereinafter referred to as Union)
which had with the Company a collective bargaining agreement containing a closed
shop provision which reads as follows:
Membership in the Union shall be required as a condition of
employment for all permanent employees workers covered by this
Agreement.
The collective bargaining agreement expired on March 3, 1964 but was renewed the
following day, March 4, 1964.
Under Section 4(a), paragraph 4, of Republic Act No. 875, prior to its amendment by
Republic Act No. 3350, the employer was not precluded "from making an agreement
with a labor organization to require as a condition of employment membership therein,
if such labor organization is the representative of the employees." On June 18, 1961,
however, Republic Act No. 3350 was enacted, introducing an amendment to —
paragraph (4) subsection (a) of section 4 of Republic Act No. 875, as follows: ... "but
such agreement shall not cover members of any religious sects which prohibit
affiliation of their members in any such labor organization".
Being a member of a religious sect that prohibits the affiliation of its members with
any labor organization, Appellee presented his resignation to appellant Union in 1962,
and when no action was taken thereon, he reiterated his resignation on September 3,
1974. Thereupon, the Union wrote a formal letter to the Company asking the latter to
separate Appellee from the service in view of the fact that he was resigning from the
Union as a member. The management of the Company in turn notified Appellee and
his counsel that unless the Appellee could achieve a satisfactory arrangement with
the Union, the Company would be constrained to dismiss him from the service. This
prompted Appellee to file an action for injunction, docketed as Civil Case No. 58894 in
the Court of First Instance of Manila to enjoin the Company and the Union from
dismissing Appellee.1 In its answer, the Union invoked the "union security clause" of
the collective bargaining agreement; assailed the constitutionality of Republic Act No.
3350; and contended that the Court had no jurisdiction over the case, pursuant to
Republic Act No. 875, Sections 24 and 9 (d) and (e). 2 Upon the facts agreed upon by
the parties during the pre-trial conference, the Court a quo rendered its decision on
August 26, 1965, the dispositive portion of which reads:
IN VIEW OF THE FOREGOING, judgment is rendered enjoining
the defendant Elizalde Rope Factory, Inc. from dismissing the
plaintiff from his present employment and sentencing the defendant
Elizalde Rope Workers' Union to pay the plaintiff P500 for attorney's
fees and the costs of this action.3
From this decision, the Union appealed directly to this Court on purely questions of
law, assigning the following errors:
I. That the lower court erred when it did not rule that Republic Act
No. 3350 is unconstitutional.
II. That the lower court erred when it sentenced appellant herein to
pay plaintiff the sum of P500 as attorney's fees and the cost
thereof.
In support of the alleged unconstitutionality of Republic Act No. 3350, the Union
contented, firstly, that the Act infringes on the fundamental right to form lawful
associations; that "the very phraseology of said Republic Act 3350, that membership
in a labor organization is banned to all those belonging to such religious sect
prohibiting affiliation with any labor organization"4 , "prohibits all the members of a
given religious sect from joining any labor union if such sect prohibits affiliations of
their members thereto"5 ; and, consequently, deprives said members of their
constitutional right to form or join lawful associations or organizations guaranteed by
the Bill of Rights, and thus becomes obnoxious to Article III, Section 1 (6) of the 1935
Constitution. 6
Secondly, the Union contended that Republic Act No. 3350 is unconstitutional for
impairing the obligation of contracts in that, while the Union is obliged to comply with
its collective bargaining agreement containing a "closed shop provision," the Act
relieves the employer from its reciprocal obligation of cooperating in the maintenance
of union membership as a condition of employment; and that said Act, furthermore,
impairs the Union's rights as it deprives the union of dues from members who, under
the Act, are relieved from the obligation to continue as such members.7
13
Thirdly, the Union contended that Republic Act No. 3350 discriminatorily favors those
religious sects which ban their members from joining labor unions, in violation of
Article Ill, Section 1 (7) of the 1935 Constitution; and while said Act unduly protects
certain religious sects, it leaves no rights or protection to labor organizations. 8
Fourthly, Republic Act No. 3350, asserted the Union, violates the constitutional
provision that "no religious test shall be required for the exercise of a civil right," in
that the laborer's exercise of his civil right to join associations for purposes not
contrary to law has to be determined under the Act by his affiliation with a religious
sect; that conversely, if a worker has to sever his religious connection with a sect that
prohibits membership in a labor organization in order to be able to join a labor
organization, said Act would violate religious freedom.9
Fifthly, the Union contended that Republic Act No. 3350, violates the "equal protection
of laws" clause of the Constitution, it being a discriminately legislation, inasmuch as
by exempting from the operation of closed shop agreement the members of the
"Iglesia ni Cristo", it has granted said members undue advantages over their fellow
workers, for while the Act exempts them from union obligation and liability, it
nevertheless entitles them at the same time to the enjoyment of all concessions,
benefits and other emoluments that the union might secure from the employer. 10
Sixthly, the Union contended that Republic Act No. 3350 violates the constitutional
provision regarding the promotion of social justice. 11
Appellant Union, furthermore, asserted that a "closed shop provision" in a collective
bargaining agreement cannot be considered violative of religious freedom, as to call
for the amendment introduced by Republic Act No. 3350; 12and that unless Republic
Act No. 3350 is declared unconstitutional, trade unionism in this country would be
wiped out as employers would prefer to hire or employ members of the Iglesia ni
Cristo in order to do away with labor organizations. 13
Appellee, assailing appellant's arguments, contended that Republic Act No. 3350
does not violate the right to form lawful associations, for the right to join associations
includes the right not to join or to resign from a labor organization, if one's conscience
does not allow his membership therein, and the Act has given substance to such right
by prohibiting the compulsion of workers to join labor organizations; 14 that said Act
does not impair the obligation of contracts for said law formed part of, and was
incorporated into, the terms of the closed shop agreement; 15 that the Act does not
violate the establishment of religion clause or separation of Church and State, for
Congress, in enacting said law, merely accommodated the religious needs of those
workers whose religion prohibits its members from joining labor unions, and balanced
the collective rights of organized labor with the constitutional right of an individual to
freely exercise his chosen religion; that the constitutional right to the free exercise of
one's religion has primacy and preference over union security measures which are
merely contractual 16; that said Act does not violate the constitutional provision of
equal protection, for the classification of workers under the Act depending on their
religious tenets is based on substantial distinction, is germane to the purpose of the
law, and applies to all the members of a given class; 17 that said Act, finally, does not
violate the social justice policy of the Constitution, for said Act was enacted precisely
to equalize employment opportunities for all citizens in the midst of the diversities of
their religious beliefs." 18
I. Before We proceed to the discussion of the first assigned error, it is necessary to
premise that there are some thoroughly established principles which must be followed
in all cases where questions of constitutionality as obtains in the instant case are
involved. All presumptions are indulged in favor of constitutionality; one who attacks a
statute, alleging unconstitutionality must prove its invalidity beyond a reasonable
doubt, that a law may work hardship does not render it unconstitutional; that if any
reasonable basis may be conceived which supports the statute, it will be upheld, and
the challenger must negate all possible bases; that the courts are not concerned with
the wisdom, justice, policy, or expediency of a statute; and that a liberal interpretation
of the constitution in favor of the constitutionality of legislation should be adopted. 19
1. Appellant Union's contention that Republic Act No. 3350 prohibits and bans the
members of such religious sects that forbid affiliation of their members with labor
unions from joining labor unions appears nowhere in the wording of Republic Act No.
3350; neither can the same be deduced by necessary implication therefrom. It is not
surprising, therefore, that appellant, having thus misread the Act, committed the error
of contending that said Act is obnoxious to the constitutional provision on freedom of
association.
Both the Constitution and Republic Act No. 875 recognize freedom of association.
Section 1 (6) of Article III of the Constitution of 1935, as well as Section 7 of Article IV
of the Constitution of 1973, provide that the right to form associations or societies for
purposes not contrary to law shall not be abridged. Section 3 of Republic Act No. 875
provides that employees shall have the right to self-organization and to form, join of
assist labor organizations of their own choosing for the purpose of collective
bargaining and to engage in concerted activities for the purpose of collective
bargaining and other mutual aid or protection. What the Constitution and the Industrial
Peace Act recognize and guarantee is the "right" to form or join associations.
Notwithstanding the different theories propounded by the different schools of
jurisprudence regarding the nature and contents of a "right", it can be safely said that
whatever theory one subscribes to, a right comprehends at least two broad notions,
namely: first, liberty or freedom, i.e., the absence of legal restraint, whereby an
employee may act for himself without being prevented by law; and second, power,
whereby an employee may, as he pleases, join or refrain from Joining an association.
It is, therefore, the employee who should decide for himself whether he should join or
not an association; and should he choose to join, he himself makes up his mind as to
which association he would join; and even after he has joined, he still retains the
liberty and the power to leave and cancel his membership with said organization at
any time. 20 It is clear, therefore, that the right to join a union includes the right to
abstain from joining any union. 21 Inasmuch as what both the Constitution and the
Industrial Peace Act have recognized, and guaranteed to the employee, is the "right"
to join associations of his choice, it would be absurd to say that the law also imposes,
in the same breath, upon the employee the duty to join associations. The law does
not enjoin an employee to sign up with any association.
14
The right to refrain from joining labor organizations recognized by Section 3 of the
Industrial Peace Act is, however, limited. The legal protection granted to such right to
refrain from joining is withdrawn by operation of law, where a labor union and an
employer have agreed on a closed shop, by virtue of which the employer may employ
only member of the collective bargaining union, and the employees must continue to
be members of the union for the duration of the contract in order to keep their jobs.
Thus Section 4 (a) (4) of the Industrial Peace Act, before its amendment by Republic
Act No. 3350, provides that although it would be an unfair labor practice for an
employer "to discriminate in regard to hire or tenure of employment or any term or
condition of employment to encourage or discourage membership in any labor
organization" the employer is, however, not precluded "from making an agreement
with a labor organization to require as a condition of employment membership therein,
if such labor organization is the representative of the employees". By virtue, therefore,
of a closed shop agreement, before the enactment of Republic Act No. 3350, if any
person, regardless of his religious beliefs, wishes to be employed or to keep his
employment, he must become a member of the collective bargaining union. Hence,
the right of said employee not to join the labor union is curtailed and withdrawn.
To that all-embracing coverage of the closed shop arrangement, Republic Act No.
3350 introduced an exception, when it added to Section 4 (a) (4) of the Industrial
Peace Act the following proviso: "but such agreement shall not cover members of any
religious sects which prohibit affiliation of their members in any such labor
organization". Republic Act No. 3350 merely excludes ipso jure from the application
and coverage of the closed shop agreement the employees belonging to any religious
sects which prohibit affiliation of their members with any labor organization. What the
exception provides, therefore, is that members of said religious sects cannot be
compelled or coerced to join labor unions even when said unions have closed shop
agreements with the employers; that in spite of any closed shop agreement, members
of said religious sects cannot be refused employment or dismissed from their jobs on
the sole ground that they are not members of the collective bargaining union. It is
clear, therefore, that the assailed Act, far from infringing the constitutional provision
on freedom of association, upholds and reinforces it. It does not prohibit the members
of said religious sects from affiliating with labor unions. It still leaves to said members
the liberty and the power to affiliate, or not to affiliate, with labor unions. If,
notwithstanding their religious beliefs, the members of said religious sects prefer to
sign up with the labor union, they can do so. If in deference and fealty to their
religious faith, they refuse to sign up, they can do so; the law does not coerce them to
join; neither does the law prohibit them from joining; and neither may the employer or
labor union compel them to join. Republic Act No. 3350, therefore, does not violate
the constitutional provision on freedom of association.
2. Appellant Union also contends that the Act is unconstitutional for impairing the
obligation of its contract, specifically, the "union security clause" embodied in its
Collective Bargaining Agreement with the Company, by virtue of which "membership
in the union was required as a condition for employment for all permanent employees
workers". This agreement was already in existence at the time Republic Act No. 3350
was enacted on June 18, 1961, and it cannot, therefore, be deemed to have been
incorporated into the agreement. But by reason of this amendment, Appellee, as well
as others similarly situated, could no longer be dismissed from his job even if he
should cease to be a member, or disaffiliate from the Union, and the Company could
continue employing him notwithstanding his disaffiliation from the Union. The Act,
therefore, introduced a change into the express terms of the union security clause;
the Company was partly absolved by law from the contractual obligation it had with
the Union of employing only Union members in permanent positions, It cannot be
denied, therefore, that there was indeed an impairment of said union security clause.
According to Black, any statute which introduces a change into the express terms of
the contract, or its legal construction, or its validity, or its discharge, or the remedy for
its enforcement, impairs the contract. The extent of the change is not material. It is not
a question of degree or manner or cause, but of encroaching in any respect on its
obligation or dispensing with any part of its force. There is an impairment of the
contract if either party is absolved by law from its performance. 22 Impairment has
also been predicated on laws which, without destroying contracts, derogate from
substantial contractual rights. 23
It should not be overlooked, however, that the prohibition to impair the obligation of
contracts is not absolute and unqualified. The prohibition is general, affording a broad
outline and requiring construction to fill in the details. The prohibition is not to be read
with literal exactness like a mathematical formula, for it prohibits unreasonable
impairment only. 24 In spite of the constitutional prohibition, the State continues to
possess authority to safeguard the vital interests of its people. Legislation appropriate
to safeguarding said interests may modify or abrogate contracts already in
effect. 25 For not only are existing laws read into contracts in order to fix the
obligations as between the parties, but the reservation of essential attributes of
sovereign power is also read into contracts as a postulate of the legal order. All
contracts made with reference to any matter that is subject to regulation under the
police power must be understood as made in reference to the possible exercise of
that power. 26 Otherwise, important and valuable reforms may be precluded by the
simple device of entering into contracts for the purpose of doing that which otherwise
may be prohibited. The policy of protecting contracts against impairment presupposes
the maintenance of a government by virtue of which contractual relations are
worthwhile a government which retains adequate authority to secure the peace and
good order of society. The contract clause of the Constitution must, therefore, be not
only in harmony with, but also in subordination to, in appropriate instances, the
reserved power of the state to safeguard the vital interests of the people. It follows
that not all legislations, which have the effect of impairing a contract, are obnoxious to
the constitutional prohibition as to impairment, and a statute passed in the legitimate
exercise of police power, although it incidentally destroys existing contract rights,
must be upheld by the courts. This has special application to contracts regulating
relations between capital and labor which are not merely contractual, and said labor
contracts, for being impressed with public interest, must yield to the common good. 27
In several occasions this Court declared that the prohibition against impairing the
obligations of contracts has no application to statutes relating to public subjects within
the domain of the general legislative powers of the state involving public
welfare. 28 Thus, this Court also held that the Blue Sunday Law was not an
infringement of the obligation of a contract that required the employer to furnish work
on Sundays to his employees, the law having been enacted to secure the well-being
15
and happiness of the laboring class, and being, furthermore, a legitimate exercise of
the police power. 29
In order to determine whether legislation unconstitutionally impairs contract
obligations, no unchanging yardstick, applicable at all times and under all
circumstances, by which the validity of each statute may be measured or determined,
has been fashioned, but every case must be determined upon its own circumstances.
Legislation impairing the obligation of contracts can be sustained when it is enacted
for the promotion of the general good of the people, and when the means adopted to
secure that end are reasonable. Both the end sought and the means adopted must be
legitimate, i.e., within the scope of the reserved power of the state construed in
harmony with the constitutional limitation of that power. 30
What then was the purpose sought to be achieved by Republic Act No. 3350? Its
purpose was to insure freedom of belief and religion, and to promote the general
welfare by preventing discrimination against those members of religious sects which
prohibit their members from joining labor unions, confirming thereby their natural,
statutory and constitutional right to work, the fruits of which work are usually the only
means whereby they can maintain their own life and the life of their dependents. It
cannot be gainsaid that said purpose is legitimate.
The questioned Act also provides protection to members of said religious sects
against two aggregates of group strength from which the individual needs protection.
The individual employee, at various times in his working life, is confronted by two
aggregates of power — collective labor, directed by a union, and collective capital,
directed by management. The union, an institution developed to organize labor into a
collective force and thus protect the individual employee from the power of collective
capital, is, paradoxically, both the champion of employee rights, and a new source of
their frustration. Moreover, when the Union interacts with management, it produces
yet a third aggregate of group strength from which the individual also needs protection
— the collective bargaining relationship. 31
The aforementioned purpose of the amendatory law is clearly seen in the Explanatory
Note to House Bill No. 5859, which later became Republic Act No. 3350, as follows:
It would be unthinkable indeed to refuse employing a person who,
on account of his religious beliefs and convictions, cannot accept
membership in a labor organization although he possesses all the
qualifications for the job. This is tantamount to punishing such
person for believing in a doctrine he has a right under the law to
believe in. The law would not allow discrimination to flourish to the
detriment of those whose religion discards membership in any labor
organization. Likewise, the law would not commend the deprivation
of their right to work and pursue a modest means of livelihood,
without in any manner violating their religious faith and/or belief. 32
It cannot be denied, furthermore, that the means adopted by the Act to achieve that
purpose — exempting the members of said religious sects from coverage of union
security agreements — is reasonable.
It may not be amiss to point out here that the free exercise of religious profession or
belief is superior to contract rights. In case of conflict, the latter must, therefore, yield
to the former. The Supreme Court of the United States has also declared on several
occasions that the rights in the First Amendment, which include freedom of religion,
enjoy a preferred position in the constitutional system. 33 Religious freedom, although
not unlimited, is a fundamental personal right and liberty, 34 and has a preferred
position in the hierarchy of values. Contractual rights, therefore, must yield to freedom
of religion. It is only where unavoidably necessary to prevent an immediate and grave
danger to the security and welfare of the community that infringement of religious
freedom may be justified, and only to the smallest extent necessary to avoid the
danger.
3. In further support of its contention that Republic Act No. 3350 is unconstitutional,
appellant Union averred that said Act discriminates in favor of members of said
religious sects in violation of Section 1 (7) of Article Ill of the 1935 Constitution, and
which is now Section 8 of Article IV of the 1973 Constitution, which provides:
No law shall be made respecting an establishment of religion, or
prohibiting the free exercise thereof, and the free exercise and
enjoyment of religious profession and worship, without
discrimination and preference, shall forever be allowed. No religious
test shall be required for the exercise of civil or political rights.
The constitutional provision into only prohibits legislation for the support of any
religious tenets or the modes of worship of any sect, thus forestalling compulsion by
law of the acceptance of any creed or the practice of any form of worship, 35 but also
assures the free exercise of one's chosen form of religion within limits of utmost
amplitude. It has been said that the religion clauses of the Constitution are all
designed to protect the broadest possible liberty of conscience, to allow each man to
believe as his conscience directs, to profess his beliefs, and to live as he believes he
ought to live, consistent with the liberty of others and with the common good. 36 Any
legislation whose effect or purpose is to impede the observance of one or all religions,
or to discriminate invidiously between the religions, is invalid, even though the burden
may be characterized as being only indirect. 37 But if the stage regulates conduct by
enacting, within its power, a general law which has for its purpose and effect to
advance the state's secular goals, the statute is valid despite its indirect burden on
religious observance, unless the state can accomplish its purpose without imposing
such burden. 38
In Aglipay v. Ruiz 39 , this Court had occasion to state that the government should not
be precluded from pursuing valid objectives secular in character even if the incidental
result would be favorable to a religion or sect. It has likewise been held that the
statute, in order to withstand the strictures of constitutional prohibition, must have a
secular legislative purpose and a primary effect that neither advances nor inhibits
religion. 40 Assessed by these criteria, Republic Act No. 3350 cannot be said to
16
violate the constitutional inhibition of the "no-establishment" (of religion) clause of the
Constitution.
The purpose of Republic Act No. 3350 is secular, worldly, and temporal, not spiritual
or religious or holy and eternal. It was intended to serve the secular purpose of
advancing the constitutional right to the free exercise of religion, by averting that
certain persons be refused work, or be dismissed from work, or be dispossessed of
their right to work and of being impeded to pursue a modest means of livelihood, by
reason of union security agreements. To help its citizens to find gainful employment
whereby they can make a living to support themselves and their families is a valid
objective of the state. In fact, the state is enjoined, in the 1935 Constitution, to afford
protection to labor, and regulate the relations between labor and capital and
industry. 41 More so now in the 1973 Constitution where it is mandated that "the State
shall afford protection to labor, promote full employment and equality in employment,
ensure equal work opportunities regardless of sex, race or creed and regulate the
relation between workers and employers. 42
The primary effects of the exemption from closed shop agreements in favor of
members of religious sects that prohibit their members from affiliating with a labor
organization, is the protection of said employees against the aggregate force of the
collective bargaining agreement, and relieving certain citizens of a burden on their
religious beliefs; and by eliminating to a certain extent economic insecurity due to
unemployment, which is a serious menace to the health, morals, and welfare of the
people of the State, the Act also promotes the well-being of society. It is our view that
the exemption from the effects of closed shop agreement does not directly advance,
or diminish, the interests of any particular religion. Although the exemption may
benefit those who are members of religious sects that prohibit their members from
joining labor unions, the benefit upon the religious sects is merely incidental and
indirect. The "establishment clause" (of religion) does not ban regulation on conduct
whose reason or effect merely happens to coincide or harmonize with the tenets of
some or all religions. 43 The free exercise clause of the Constitution has been
interpreted to require that religious exercise be preferentially aided. 44
We believe that in enacting Republic Act No. 3350, Congress acted consistently with
the spirit of the constitutional provision. It acted merely to relieve the exercise of
religion, by certain persons, of a burden that is imposed by union security
agreements. It was Congress itself that imposed that burden when it enacted the
Industrial Peace Act (Republic Act 875), and, certainly, Congress, if it so deems
advisable, could take away the same burden. It is certain that not every conscience
can be accommodated by all the laws of the land; but when general laws conflict with
scrupples of conscience, exemptions ought to be granted unless some "compelling
state interest" intervenes. 45 In the instant case, We see no such compelling state
interest to withhold exemption.
Appellant bewails that while Republic Act No. 3350 protects members of certain
religious sects, it leaves no right to, and is silent as to the protection of, labor
organizations. The purpose of Republic Act No. 3350 was not to grant rights to labor
unions. The rights of labor unions are amply provided for in Republic Act No. 875 and
the new Labor Code. As to the lamented silence of the Act regarding the rights and
protection of labor unions, suffice it to say, first, that the validity of a statute is
determined by its provisions, not by its silence 46 ; and, second, the fact that the law
may work hardship does not render it unconstitutional. 47
It would not be amiss to state, regarding this matter, that to compel persons to join
and remain members of a union to keep their jobs in violation of their religious
scrupples, would hurt, rather than help, labor unions, Congress has seen it fit to
exempt religious objectors lest their resistance spread to other workers, for religious
objections have contagious potentialities more than political and philosophic
objections.
Furthermore, let it be noted that coerced unity and loyalty even to the country, and
a fortiori to a labor — union assuming that such unity and loyalty can be attained
through coercion — is not a goal that is constitutionally obtainable at the expense of
religious liberty. 48 A desirable end cannot be promoted by prohibited means.
4. Appellants' fourth contention, that Republic Act No. 3350 violates the constitutional
prohibition against requiring a religious test for the exercise of a civil right or a political
right, is not well taken. The Act does not require as a qualification, or condition, for
joining any lawful association membership in any particular religion or in any religious
sect; neither does the Act require affiliation with a religious sect that prohibits its
members from joining a labor union as a condition or qualification for withdrawing
from a labor union. Joining or withdrawing from a labor union requires a positive act.
Republic Act No. 3350 only exempts members with such religious affiliation from the
coverage of closed shop agreements. So, under this Act, a religious objector is not
required to do a positive act — to exercise the right to join or to resign from the union.
He is exempted ipso jure without need of any positive act on his part. A conscientious
religious objector need not perform a positive act or exercise the right of resigning
from the labor union — he is exempted from the coverage of any closed shop
agreement that a labor union may have entered into. How then can there be a
religious test required for the exercise of a right when no right need be exercised?
We have said that it was within the police power of the State to enact Republic Act
No. 3350, and that its purpose was legal and in consonance with the Constitution. It is
never an illegal evasion of a constitutional provision or prohibition to accomplish a
desired result, which is lawful in itself, by discovering or following a legal way to do
it. 49
5. Appellant avers as its fifth ground that Republic Act No. 3350 is a discriminatory
legislation, inasmuch as it grants to the members of certain religious sects undue
advantages over other workers, thus violating Section 1 of Article III of the 1935
Constitution which forbids the denial to any person of the equal protection of the
laws. 50
The guaranty of equal protection of the laws is not a guaranty of equality in the
application of the laws upon all citizens of the state. It is not, therefore, a requirement,
in order to avoid the constitutional prohibition against inequality, that every man,
woman and child should be affected alike by a statute. Equality of operation of
17
statutes does not mean indiscriminate operation on persons merely as such, but on
persons according to the circumstances surrounding them. It guarantees equality, not
identity of rights. The Constitution does not require that things which are different in
fact be treated in law as though they were the same. The equal protection clause
does not forbid discrimination as to things that are different. 51 It does not prohibit
legislation which is limited either in the object to which it is directed or by the territory
within which it is to operate.
The equal protection of the laws clause of the Constitution allows classification.
Classification in law, as in the other departments of knowledge or practice, is the
grouping of things in speculation or practice because they agree with one another in
certain particulars. A law is not invalid because of simple inequality. 52 The very idea
of classification is that of inequality, so that it goes without saying that the mere fact of
inequality in no manner determines the matter of constitutionality. 53 All that is
required of a valid classification is that it be reasonable, which means that the
classification should be based on substantial distinctions which make for real
differences; that it must be germane to the purpose of the law; that it must not be
limited to existing conditions only; and that it must apply equally to each member of
the class. 54 This Court has held that the standard is satisfied if the classification or
distinction is based on a reasonable foundation or rational basis and is not palpably
arbitrary. 55
In the exercise of its power to make classifications for the purpose of enacting laws
over matters within its jurisdiction, the state is recognized as enjoying a wide range of
discretion. 56 It is not necessary that the classification be based on scientific or
marked differences of things or in their relation. 57 Neither is it necessary that the
classification be made with mathematical nicety. 58 Hence legislative classification
may in many cases properly rest on narrow distinctions, 59 for the equal protection
guaranty does not preclude the legislature from recognizing degrees of evil or harm,
and legislation is addressed to evils as they may appear.
We believe that Republic Act No. 3350 satisfies the aforementioned requirements.
The Act classifies employees and workers, as to the effect and coverage of union
shop security agreements, into those who by reason of their religious beliefs and
convictions cannot sign up with a labor union, and those whose religion does not
prohibit membership in labor unions. Tile classification rests on real or substantial, not
merely imaginary or whimsical, distinctions. There is such real distinction in the
beliefs, feelings and sentiments of employees. Employees do not believe in the same
religious faith and different religions differ in their dogmas and cannons. Religious
beliefs, manifestations and practices, though they are found in all places, and in all
times, take so many varied forms as to be almost beyond imagination. There are
many views that comprise the broad spectrum of religious beliefs among the people.
There are diverse manners in which beliefs, equally paramount in the lives of their
possessors, may be articulated. Today the country is far more heterogenous in
religion than before, differences in religion do exist, and these differences are
important and should not be ignored.
Even from the phychological point of view, the classification is based on real and
important differences. Religious beliefs are not mere beliefs, mere ideas existing only
in the mind, for they carry with them practical consequences and are the motives of
certain rules. of human conduct and the justification of certain acts. 60 Religious
sentiment makes a man view things and events in their relation to his God. It gives to
human life its distinctive character, its tone, its happiness or unhappiness its
enjoyment or irksomeness. Usually, a strong and passionate desire is involved in a
religious belief. To certain persons, no single factor of their experience is more
important to them than their religion, or their not having any religion. Because of
differences in religious belief and sentiments, a very poor person may consider
himself better than the rich, and the man who even lacks the necessities of life may
be more cheerful than the one who has all possible luxuries. Due to their religious
beliefs people, like the martyrs, became resigned to the inevitable and accepted
cheerfully even the most painful and excruciating pains. Because of differences in
religious beliefs, the world has witnessed turmoil, civil strife, persecution, hatred,
bloodshed and war, generated to a large extent by members of sects who were
intolerant of other religious beliefs. The classification, introduced by Republic Act No.
3350, therefore, rests on substantial distinctions.
The classification introduced by said Act is also germane to its purpose. The purpose
of the law is precisely to avoid those who cannot, because of their religious belief, join
labor unions, from being deprived of their right to work and from being dismissed from
their work because of union shop security agreements.
Republic Act No. 3350, furthermore, is not limited in its application to conditions
existing at the time of its enactment. The law does not provide that it is to be effective
for a certain period of time only. It is intended to apply for all times as long as the
conditions to which the law is applicable exist. As long as there are closed shop
agreements between an employer and a labor union, and there are employees who
are prohibited by their religion from affiliating with labor unions, their exemption from
the coverage of said agreements continues.
Finally, the Act applies equally to all members of said religious sects; this is evident
from its provision. The fact that the law grants a privilege to members of said religious
sects cannot by itself render the Act unconstitutional, for as We have adverted to, the
Act only restores to them their freedom of association which closed shop agreements
have taken away, and puts them in the same plane as the other workers who are not
prohibited by their religion from joining labor unions. The circumstance, that the other
employees, because they are differently situated, are not granted the same privilege,
does not render the law unconstitutional, for every classification allowed by the
Constitution by its nature involves inequality.
The mere fact that the legislative classification may result in actual inequality is not
violative of the right to equal protection, for every classification of persons or things for
regulation by law produces inequality in some degree, but the law is not thereby
rendered invalid. A classification otherwise reasonable does not offend the
constitution simply because in practice it results in some inequality. 61 Anent this
matter, it has been said that whenever it is apparent from the scope of the law that its
object is for the benefit of the public and the means by which the benefit is to be
obtained are of public character, the law will be upheld even though incidental
advantage may occur to individuals beyond those enjoyed by the general public. 62
18
6. Appellant's further contention that Republic Act No. 3350 violates the constitutional
provision on social justice is also baseless. Social justice is intended to promote the
welfare of all the people. 63 Republic Act No. 3350 promotes that welfare insofar as it
looks after the welfare of those who, because of their religious belief, cannot join labor
unions; the Act prevents their being deprived of work and of the means of livelihood.
In determining whether any particular measure is for public advantage, it is not
necessary that the entire state be directly benefited — it is sufficient that a portion of
the state be benefited thereby.
Social justice also means the adoption by the Government of measures calculated to
insure economic stability of all component elements of society, through the
maintenance of a proper economic and social equilibrium in the inter-relations of the
members of the community. 64 Republic Act No. 3350 insures economic stability to
the members of a religious sect, like the Iglesia ni Cristo, who are also component
elements of society, for it insures security in their employment, notwithstanding their
failure to join a labor union having a closed shop agreement with the employer. The
Act also advances the proper economic and social equilibrium between labor unions
and employees who cannot join labor unions, for it exempts the latter from the
compelling necessity of joining labor unions that have closed shop agreements and
equalizes, in so far as opportunity to work is concerned, those whose religion
prohibits membership in labor unions with those whose religion does not prohibit said
membership. Social justice does not imply social equality, because social inequality
will always exist as long as social relations depend on personal or subjective
proclivities. Social justice does not require legal equality because legal equality, being
a relative term, is necessarily premised on differentiations based on personal or
natural conditions. 65 Social justice guarantees equality of opportunity 66 , and this is
precisely what Republic Act No. 3350 proposes to accomplish — it gives laborers,
irrespective of their religious scrupples, equal opportunity for work.
7. As its last ground, appellant contends that the amendment introduced by Republic
Act No. 3350 is not called for — in other words, the Act is not proper, necessary or
desirable. Anent this matter, it has been held that a statute which is not necessary is
not, for that reason, unconstitutional; that in determining the constitutional validity of
legislation, the courts are unconcerned with issues as to the necessity for the
enactment of the legislation in question. 67 Courts do inquire into the wisdom of
laws. 68 Moreover, legislatures, being chosen by the people, are presumed to
understand and correctly appreciate the needs of the people, and it may change the
laws accordingly. 69 The fear is entertained by appellant that unless the Act is
declared unconstitutional, employers will prefer employing members of religious sects
that prohibit their members from joining labor unions, and thus be a fatal blow to
unionism. We do not agree. The threat to unionism will depend on the number of
employees who are members of the religious sects that control the demands of the
labor market. But there is really no occasion now to go further and anticipate
problems We cannot judge with the material now before Us. At any rate, the validity of
a statute is to be determined from its general purpose and its efficacy to accomplish
the end desired, not from its effects on a particular case. 70 The essential basis for the
exercise of power, and not a mere incidental result arising from its exertion, is the
criterion by which the validity of a statute is to be measured. 71
II. We now pass on the second assignment of error, in support of which the Union
argued that the decision of the trial court ordering the Union to pay P500 for attorney's
fees directly contravenes Section 24 of Republic Act No. 875, for the instant action
involves an industrial dispute wherein the Union was a party, and said Union merely
acted in the exercise of its rights under the union shop provision of its existing
collective bargaining contract with the Company; that said order also contravenes
Article 2208 of the Civil Code; that, furthermore, Appellee was never actually
dismissed by the defendant Company and did not therefore suffer any damage at all
. 72
In refuting appellant Union's arguments, Appellee claimed that in the instant case
there was really no industrial dispute involved in the attempt to compel Appellee to
maintain its membership in the union under pain of dismissal, and that the Union, by
its act, inflicted intentional harm on Appellee; that since Appellee was compelled to
institute an action to protect his right to work, appellant could legally be ordered to pay
attorney's fees under Articles 1704 and 2208 of the Civil Code. 73
The second paragraph of Section 24 of Republic Act No. 875 which is relied upon by
appellant provides that:
No suit, action or other proceedings shall be maintainable in any
court against a labor organization or any officer or member thereof
for any act done by or on behalf of such organization in furtherance
of an industrial dispute to which it is a party, on the ground only that
such act induces some other person to break a contract of
employment or that it is in restraint of trade or interferes with the
trade, business or employment of some other person or with the
right of some other person to dispose of his capital or labor.
(Emphasis supplied)
That there was a labor dispute in the instant case cannot be disputed for appellant
sought the discharge of respondent by virtue of the closed shop agreement and under
Section 2 (j) of Republic Act No. 875 a question involving tenure of employment is
included in the term "labor dispute". 74 The discharge or the act of seeking it is the
labor dispute itself. It being the labor dispute itself, that very same act of the Union in
asking the employer to dismiss Appellee cannot be "an act done ... in furtherance of
an industrial dispute". The mere fact that appellant is a labor union does not
necessarily mean that all its acts are in furtherance of an industrial
dispute. 75 Appellant Union, therefore, cannot invoke in its favor Section 24 of
Republic Act No. 875. This case is not intertwined with any unfair labor practice case
existing at the time when Appellee filed his complaint before the lower court.
Neither does Article 2208 of the Civil Code, invoked by the Union, serve as its shield.
The article provides that attorney's fees and expenses of litigation may be awarded
"when the defendant's act or omission has compelled the plaintiff ... to incur expenses
to protect his interest"; and "in any other case where the court deems it just and
equitable that attorney's fees and expenses of litigation should be recovered". In the
instant case, it cannot be gainsaid that appellant Union's act in demanding Appellee's
dismissal caused Appellee to incur expenses to prevent his being dismissed from his
19
job. Costs according to Section 1, Rule 142, of the Rules of Court, shall be allowed as
a matter of course to the prevailing party.

WHEREFORE, the instant appeal is dismissed, and the decision, dated August 26,
1965, of the Court of First Instance of Manila, in its Civil Case No. 58894, appealed
from is affirmed, with costs against appellant Union. It is so ordered.

20
G.R. Nos. 43633-34 September 14, 1990
PABLO ARIZALA, SERGIO MARIBAO, LEONARDO JOVEN, and FELINO
BULANDUS, petitioners,
vs.
THE COURT OF APPEALS and THE PEOPLE OF THE PHILIPPINES, respondents.
Januario T. Seno for petitioners.
NARVASA, J.:
Under the Industrial Peace Act, 1 government-owned or controlled corporations had
the duty to bargain collectively and were otherwise subject to the obligations and
duties of employers in the private sector.2 The Act also prohibited supervisors to
become, or continue to be, members of labor organizations composed of rank-and-file
employees, 3 and prescribed criminal sanctions for breach of the prohibition. 4
It was under the regime of said Industrial Peace Act that the Government Service
Insurance System (GSIS, for short) became bound by a collective bargaining
agreement executed between it and the labor organization representing the majority
of its employees, the GSIS Employees Association. The agreement contained a
"maintenance-of-membership" clause, 5 i.e., that all employees who, at the time of the
execution of said agreement, were members of the union or became members
thereafter, were obliged to maintain their union membership in good standing for the
duration of the agreement as a condition for their continued employment in the GSIS.
There appears to be no dispute that at that time, the petitioners occupied supervisory
positions in the GSIS. Pablo Arizala and Sergio Maribao were, respectively, the Chief
of the Accounting Division, and the Chief of the Billing Section of said Division, in the
Central Visayas Regional Office of the GSIS. Leonardo Joven and Felino Bulandus
were, respectively, the Assistant Chief of the Accounting Division (sometimes Acting
Chief in the absence of the Chief) and the Assistant Chief of the Field Service and
Non-Life Insurance Division (and Acting Division Chief in the absence of the Chief), of
the same Central Visayas Regional Office of the GSIS. Demands were made on all
four of them to resign from the GSIS Employees Association, in view of their
supervisory positions. They refused to do so. Consequently, two (2) criminal cases for
violation of the Industrial Peace Act were lodged against them in the City Court of
Cebu: one involving Arizala and Maribao 6 and the other, Joven and Bulandus. 7
Both criminal actions resulted in the conviction of the accused in separate
decisions. 8 They were each sentenced "to pay a fine of P 500.00 or to suffer
subsidiary imprisonment in case of insolvency." They appealed to the Court of
Appeals.9 Arizala's and Maribao's appeal was docketed as CA-G.R. No. 14724-CR;
that of Joven and Bulandus, as CA-G.R. No. 14856-CR.
The appeals were consolidated on motion of the appellants, and eventuated in a
judgment promulgated on January 29, 1976 affirming the convictions of all four
appellants. The appellants moved for reconsideration. They argued that when the so
called "1973 Constitution" took effect on January 17, 1973 pursuant to Proclamation
No. 1104, the case of Arizala and Maribao was still pending in the Court of Appeals
and that of Joven and Bulandus, pending decision in the City Court of Cebu; that
since the provisions of that constitution and of the Labor Code subsequently
promulgated (eff., November 1, 1974), repealing the Industrial Peace Act-placed
employees of all categories in government-owned or controlled corporations without
distinction within the Civil Service, and provided that the terms and conditions of their
employment were to be "governed by the Civil Service Law, rules and regulations"
and hence, no longer subject of collective bargaining, the appellants ceased to fall
within the coverage of the Industrial Peace Act and should thus no longer continue to
be prosecuted and exposed to punishment for a violation thereof. They pointed out
further that the criminal sanction in the Industrial Peace Act no longer appeared in the
Labor Code. The Appellate Court denied their plea for reconsideration.
Hence, the present petition for review on certiorari.
The crucial issue obviously is whether or not the petitioners' criminal liability for a
violation of the Industrial Peace Act may be deemed to have been obliterated in virtue
of subsequent legislation and the provisions of the 1973 and 1987 Constitutions.
The petitioners' contention that their liability had been erased is made to rest upon the
following premises:
1. Section 1, Article XII-B of the 1973 Constitution does indeed provide that the "Civil
Service embraces every branch, agency, subdivision and instrumentality of the
government, including government-owned or controlled corporations, .. administered
by an independent Civil Service Commission.
2. Article 292 of the Labor Code repealed such parts and provisions of the Industrial
Peace Act as were "not adopted as part" of said Code "either directly or by
reference." The Code did not adopt the provision of the Industrial Peace Act
conferring on employees of government-owned or controlled corporations the right of
self-organization and collective bargaining; in fact it made known that the "terms and
conditions of employment of all government employees, including employees of
government-owned and controlled corporations," would thenceforth no longer be fixed
by collective bargaining but "be governed by the Civil Service Law, rules and
regulations." 10
3. The specific penalty for violation of the prohibition on supervisors being members in
a labor organization of employees under their supervision has disappeared.
4. The Code also modified the concept of unfair labor practice, decreeing that
thenceforth, "it shall be considered merely as an administrative offense rather than a
criminal offense (and that) (u)nfair labor practice complaints shall x x be processed
like any ordinary labor disputes."11
21
On the other hand, in justification of the Appellate Tribunal's affirmance of the
petitioners' convictions of violations of the Industrial Peace Act, the People-
1) advert to the fact that said Labor Code also states that "all actions or claims
accruing prior to ... (its) effectivity ... shall be determined in accordance with the laws
in force at the time of their accrual;" and
2) argue that the legislature cannot generally intervene and vacate the judgment of
the courts, either directly or indirectly, by the repeal of the statute under which said
judgment has been rendered.
The legal principles governing the rights of self-organization and collective bargaining
of rank-and-file employees in the government- particularly as regards supervisory,
and high level or managerial employees have undergone alterations through the
years.
Republic Act No. 875
As already intimated, under RA 875 (the Industry Peace Act), 12 persons "employed in
proprietary functions of the Government, including but not limited to governmental
corporations," had the right of self-organization and collective bargaining, including
the right to engage in concerted activities to attain their objectives, e.g. strikes.
But those "employed in governmental functions" were forbidden to "strike for the
purpose of securing changes or modification in their terms and conditions of
employment" or join labor organizations which imposed on their members the duty to
strike. The reason obviously was that the terms and conditions of their employment
were "governed by law" and hence could not be fixed, altered or otherwise modified
by collective bargaining.
Supervisory employees were forbidden to join labor organizations composed of
employees under them, but could form their own unions. Considered "supervisors'
were those 'having authority in the interest of an employer to hire, transfer, suspend,
lay-off, recall, discharge, assign, recommend, or discipline other employees, or
responsibly to direct them, and to adjust their grievance or effectively to recommend
such acts if, in connection with the foregoing, the exercise of such authority is not
merely routinary or clerical in nature but requires the use of independent judgment." 13
Republic Act No. 2260
Similar provisions were found in R.A. No. 2260, the Civil Service Act of 1959. This Act
declared that the "Philippine Civil Service ... (embraced) all branches, subdivisions
and instrumentalities of the government including government-owned and controlled
corporations." 14
It prohibited such civil service employees who were "employed in governmental
functions" to belong to any labor organization which imposed on their members "the
obligation to strike or to join strikes." And one of the first issuances of the President
after the proclamation of martial law in September, 1972, was General Order No. 5
which inter alia banned strikes in vital industries," as well as 'all rallies,
demonstrations and other forms of group actions." 15
Not so prohibited, however, were those "employed in proprietary functions of the
Government including, but not limited to, governmental corporations."16 The Act also
penalized any person who "violates, refuses or neglects to comply with any ...
provisions (of the Act) or rules (thereunder promulgated) ... by a fine not exceeding
one thousand pesos or by imprisonment not exceeding six months or both such fine
and imprisonment in the discretion of the court." 17
The 1973 Constitution
The 1973 Constitution laid down the broad principle that "(t)he State shall assure the
rights of workers to self-organization, collective bargaining, security of tenure, and just
and humane conditions of work," 18 and directed that the "National Assembly shall
provide for the standardization of compensation of government officials and
employees, including those in government-owned or controlled corporations, taking
into account the nature of the responsibilities pertaining to, and the qualifications
required for, the positions concerned." 19
PD 442, The Labor Code
The Labor Code of the Philippines, Presidential Decree No. 442, enacted within a
year from effectivity of the 1973 Constitution, 20 incorporated the proposition that the
"terms and conditions of employment of all government employees, including
employees of government-owned and controlled corporations ... (are) governed by
the Civil Service Law, rules and regulations." 21 It incorporated, too, the constitutional
mandate that the salaries of said employees "shall be standardized by the National
Assembly."
The Labor Code, 22 however "exempted" government employees from the right to
self-organization for purposes of collective bargaining. While the Code contained
provisions acknowledging the right of "all persons employed in commercial, industrial
and agricultural enterprises, including religious, medical or educational institutions
operating for profit" to "self-organization and to form, join or assist labor organizations
for purposes of collective bargaining," they "exempted from the foregoing provisions:
a) security guards;
b) government employees, including employees of government government-owned
and/ or controlled corporations;
c) managerial employees; and
22
d) employees of religious, charitable, medical and educational institutions not
operating for profit, provided the latter do not have existing collective agreements or
recognized unions at the time of the effectivity of the code or have voluntarily waived
their exemption."23
The reason for denying to government employees the right to "self-organization and
to form, join or assist labor organizations for purposes of collective bargaining" is
presumably the same as that under the Industrial Peace Act, i.e., that the terms and
conditions of government employment are fixed by law and not by collective
bargaining.
Some inconsistency appears to have arisen between the Labor Code and the Civil
Service Act of 1959. Under the Civil Service Act, persons "employed in proprietary
functions of the government including, but not limited to, governmental corporations'-
not being within "the policy of the Government that the employees therein shall not
strike for the purpose of securing changes in their terms and conditions of
employment"-could legitimately bargain with their respective employers through their
labor organizations, and corollarily engage in strikes and other concerted activities in
an attempt to bring about changes in the conditions of their work. They could not
however do so under the Labor Code and its Implementing Rules and Regulations;
these provided that "government employees, including employees of government-
owned and/or controlled corporations," without distinction as to function, were
"exempted" (excluded is the better term) from "the right to self-organization and to
form, join or assist labor organizations for purposes of collective bargaining," and by
implication, excluded as well from the right to engage in concerted activities, such as
strikes, as coercive measures against their employers.
Members of supervisory unions who were not managerial employees, were declared
by the Labor Code to be "eligible to join or assist the rank and file labor organization,
and if none exists, to form or assist in the forming of such rank and file organization
" 24 Managerial employees, on the other hand, were pronounced as 'not eligible to
join, assist or form any labor organization." 25 A "managerial employee" was defined
as one vested with power or prerogatives to lay down and execute management
policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees, or to effectively recommend such managerial actions." 26
Presidential Decree No. 807
Clarification of the matter seems to have been very shortly attempted by the Civil
Service Decree of the Philippines, Presidential Decree No. 807 (eff., Oct. 6,1975)
which superseded the Civil Service Law of 1959 (RA 2260) 27 and repealed or
modified "all laws, rules and regulations or parts thereof inconsistent with the
provisions" thereof. The Decree categorically described the scope and coverage of
the "Civil Service" as embracing 44 every branch, agency, subdivision, and
instrumentality of the government, including every government owned or controlled
corporation whether performing governmental or propriety function. 28 The effect was
seemingly to prohibit government employees (including those "employed in
proprietary functions of the Government") to "strike for the purpose of securing
changes of their terms and conditions of employment," 29 something which, as
aforestated, they were allowed to do under the Civil Service Act of 1959. 30
Be this as it may it seems clear that PD 807 (the Civil Service Decree) did not modify
the declared ineligibility of "managerial employees" from joining, assisting or
forming any labor organization.
Executive Order No. 111
Executive Order No. 111, issued by President Corazon C. Aquino on December 24,
1986 in the exercise of legislative powers under the Freedom Constitution, modified
the general disqualification above mentioned of 'government employees, including
employees of government-owned and/or controlled corporations" from "the right to
self-organization and to form, join or assist labor organizations for purposes of
collective bargaining.' It granted to employees "of government corporations
established under the Corporation Code x x the right to organize and to bargain
collectively with their respective employers." 31 To all 'other employees in the civil
service, ... (it granted merely) the right to form associations for purposes not contrary
to law," 32 not for "purposes of collective bargaining."
The 1987 Constitution
The provisions of the present Constitution on the matter appear to be somewhat more
extensive. They declare that the "right to self organization shall not be denied to
government employees;"33 that the State "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;" and that said workers
"shall be entitled to security of tenure, humane conditions of work, and a living wage,
... (and) also participate in policy and decision-making processes affecting their rights
and benefits as may be provided by law. 34
CSC Memorandum Circular No. 6
Memorandum Circular No. 6 of the Civil Service Commission, issued on April 21,
1987 enjoined strikes by government officials and employees, to wit: 35
... Prior to the enactment by Congress of applicable laws
concerning strike by government employees, and considering that
there are existing laws which prohibit government officials and
employees from resorting to strike, the Commission enjoins, under
pain of administrative sanctions, all government officers and
employees from staging strikes, demonstrations, mass leaves,
walk-outs and other forms of mass action which will result in
temporary stoppage or disruption of public services. To allow
otherwise is to undermine or prejudice the government system.
Executive Order No. 180
23
The scope of the constitutional right to self-organization of "government employees"
above mentioned, was defined and delineated in Executive Order No. 180 (eff. June
1, 1987). According to this Executive Order, the right of self-organization does indeed
pertain to all "employees of all branches, subdivisions, instrumentalities and agencies
of the Government, including government-owned or controlled corporations with
original charters;" 36 such employees "shall not be discriminated against in respect of
their employment by reason of their membership in employees' organizations or
participation in the normal activities of their organization x x (and their) employment
shall not be subject to the condition that they shall not join or shall relinquish their
membership in the employees' organizations. 37
However, the concept of the government employees' right of self-organization differs
significantly from that of employees in the private sector. The latter's right of self-
organization, i.e., "to form, join or assist labor organizationsfor purposes of collective
bargaining," admittedly includes the right to deal and negotiate with their respective
employers in order to fix the terms and conditions of employment and also, to engage
in concerted activities for the attainment of their objectives, such as strikes, picketing,
boycotts. But the right of government employees to "form, join or assist employees
organizations of their own choosing" under Executive Order No. 180 is not regarded
as existing or available for "purposes of collective bargaining," but simply "for the
furtherance and protection of their interests." 38
In other words, the right of Government employees to deal and negotiate with their
respective employers is not quite as extensive as that of private employees. Excluded
from negotiation by government employees are the "terms and conditions of
employment ... that are fixed by law," it being only those terms and conditions not
otherwise fixed by law that "may be subject of negotiation between the duly
recognized employees' organizations and appropriate government authorities," 39 And
while EO No. 180 concedes to government employees, like their counterparts in the
private sector, the right to engage in concerted activities, including the right to strike,
the executive order is quick to add that those activities must be exercised in
accordance with law, i.e. are subject both to "Civil Service Law and rules" and "any
legislation that may be enacted by Congress," 40 that "the resolution of complaints,
grievances and cases involving government employees" is not ordinarily left to
collective bargaining or other related concerted activities, but to "Civil Service Law
and labor laws and procedures whenever applicable;" and that in case "any dispute
remains unresolved after exhausting all available remedies under existing laws and
procedures, the parties may jointly refer the dispute to the (Public Sector Labor-
Management) Council for appropriate action."41 What is more, the Rules and
Regulations implementing Executive Order No. 180 explicitly provide that since the
"terms and conditions of employment in the government, including any political
subdivision or instrumentality thereof and government-owned and controlled
corporations with original charters are governed by law, the employees therein shall
not strike for the purpose of securing changes thereof. 42
On the matter of limitations on membership in labor unions of government employees,
Executive Order No. 180 declares that "high level employees whose functions are
normally considered as policy making or managerial, or whose duties are of a highly
confidential nature shall not be eligible to join the organization of rank-and-file
government employees. 43 A "high level employee" is one "whose functions are
normally considered policy determining, managerial or one whose duties are highly
confidential in nature. A managerial function refers to the exercise of powers such as:
1. To effectively recommend such managerial actions; 2. To formulate or execute
management policies and decisions; or 3. To hire, transfer, suspend, lay off, recall,
dismiss, assign or discipline employees. 44
Republic Act No. 6715
The rule regarding membership in labor organizations of managerial and supervisory
employees just adverted to, was clarified and refined by Republic Act No. 6715,
effective on March 21, 1989, further amending the Labor Code.
Under RA 6715 labor unions are regarded as organized either (a) "for purposes of
negotiation," or (b) "for furtherance and protection"of the members' rights.
Membership in unions organized "for purposes of negotiation" is open only to rank-
and-file employees. "Supervisory employees" are ineligible "for membership in a labor
organization of the rank-and-file employees but may join, assist or form separate
labor organizations of their own," i.e., one organized "for furtherance and protection"
of their rights and interests. However, according to the Rules implementing RA 6715,
"supervisory employees who are included in an existing rank-and- file bargaining unit,
upon the effectivity of Republic Act No. 6715 shall remain in that unit ..." Supervisory
employees are "those who, in the interest of the employer, effectively recommend
such managerial actions 45 if the exercise of such authority is not merely routinary or
clerical in nature but requires the use of independent judgment. 46
Membership in employees' organizations formed for purposes of negotiation are open
to rank-and-file employees only, as above mentioned, and not to high
level employees. 47 Indeed, "managerial employees" or "high level employees" are, to
repeat, "not eligible to join, assist or form any labor organization" at
all. 48 A managerialemployee is defined as "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." 49
This is how the law now stands, particularly with respect to supervisory employees vis
a vis labor organizations of employees under them.
Now, the GSIS performs proprietary functions. It is a non-stock corporation, managed
by a Board of Trustees exercising the "usual corporate powers."50 In other words, it
exercises all the powers of a corporation under the Corporation Law in so far as they
are not otherwise inconsistent with other applicable law. 51 It is engaged essentially in
insurance, a business that "is not inherently or exclusively a governmental function, ...
(but) is on the contrary, in essence and practice, of a private nature and interest." 52
1. The petitioners contend that the right of self-organization and collectivebargaining
had been withdrawn by the Labor Code from government employees including those
in government-owned and controlled corporations- chiefly for the reason that the
terms and conditions of government employment, all embraced in civil service, may
24
not be modified by collective bargaining because set by law. It is therefore immaterial,
they say, whether supervisors are members of rank-and-file unions or not; after all,
the possibility of the employer's control of the members of the union thru supervisors
thus rendering collective bargaining illusory, which is the main reason for the
prohibition, is no longer of any consequence.
This was true, for a time. As already discussed, both under the Labor Code and PD
807, government employees, including those in government-owned or controlled
corporations, were indeed precluded from bargaining as regards terms and conditions
of employment because these were set by law and hence could not possibly be
altered by negotiation.
But EO 111 restored the right to organize and to negotiate and bargain of employees
of "government corporations established under the Corporation Code." And EO 180,
and apparently RA 6715, too, granted to all government employees the right of
collective bargaining or negotiation except as regards those terms of their
employment which were fixed by law; and as to said terms fixed by law, they were
prohibited to strike to obtain changes thereof.
2. The petitioners appear to be correct in their view of the disappearance from the law
of the prohibition on supervisors being members of labor organizations composed of
employees under their supervision. The Labor Code (PD 442) allowed supervisors (if
not managerial) to join rank-and-file unions. And under the Implementing Rules of RA
6715, supervisors who were members of existing labor organizations on the effectivity
of said RA 6715 were explicitly authorized to "remain therein."
3. The correctness of the petitioners' theory that unfair labor practices ceased to be
crimes and were deemed merely administrative offenses in virtue of the Labor Code,
cannot be gainsaid. Article 250 of the Labor Code did provide as follows:
ART. 250. Concept of unfair labor practice.-The concept of unfair
labor practice is hereby modified. Henceforth, it shall be considered
merely as an administrative offense rather than a criminal offense.
Unfair labor practice complaints shall, therefore, be processed like
any ordinary labor disputes.
But unfair labor practices were declared to be crimes again by later amendments of
the Labor Code effected by Batas Pambansa Blg. 70, approved on May 1, 1980. As
thus amended, the Code now pertinently reads as follows:
ART. 248. Concept of unfair labor practice and procedure for
prosecution thereof. — Unfair labor practices violate the right of
workers and employees to self organization, are inimical to the
legitimate interests of both labor and management including their
right to bargain collectively and otherwise deal with each other in an
atmosphere of freedom and mutual respect, and hinder the
promotion of healthy and stable labor management relations.
Consequently, unfair labor practices are not only violations of the
civil rights of both labor and management but are also offenses
against the State which shall be subject to prosecution and
punishment as herein provided.
xxx xxx xxx
Recovery of civil liability in the administrative proceedings shall bar
recovery under the Civil Code.
No criminal prosecution under this title may be instituted without a
final judgment, finding that an unfair labor practice was committed
having been first obtained in the preceding paragraph. ...
The decisive consideration is that at present, supervisors who were already members
of a rank-and-file labor organization at the time of the effectivity of R.A. No. 6715, are
authorized to "remain therein." It seems plain, in other words, that the maintenance by
supervisors of membership in a rank-and-file labor organization even after the
enactment of a statute imposing a prohibition on such membership, is not only not a
crime, but is explicitly allowed, under present law.
Now, in a case decided as early as 1935, People v. Tamayo, 53 where the appellants
had appealed from a judgment convicting them of a violation of a municipal -
ordinance, and while their appeal was pending, the ordinance was repealed such that
the act complained of ceased to be a criminal act but became legal, this Court
dismissed the criminal proceedings, pronouncing the effects of the repeal to be as
follows:
In the leading case of the United States vs. Cuna (12 Phil. 241),
and Wing vs. United States (218 U.S. 272), the doctrine was clearly
established that in the Philippines repeal of a criminal act by its
reenactment, even without a saving clause would not destroy
criminal liability. But not a single sentence in either derision
indicates that there was any desire to hold that a person could be
prosecuted convicted, and punished for acts no longer criminal.
There is no question that at common law and in America a much
more favorable attitude towards the accused exists relative to
statutes that have been repealed than has been adopted here. Our
rule is more in conformity with the Spanish doctrine, but even in
Spain, where the offense ceased to be criminal, petition cannot be
had (1 Pacheco, Commentaries, 296).
The repeal here was absolute and not a reenactment and repeal by
implication. Nor was there any saving clause. The legislative intent
as shown by the action of the municipal is that such conduct,
formerly denounced, is no longer deemed criminal, and it would be
illogical for this court to attempt to sentence appellant for the
offense that no longer exists.
25
 We are therefore of the opinion that the proceedings against SO ORDERED.
appellant must be dismissed.

To the same effect and in even more unmistakable language is People v.

Almuete 54 where the defendants-appellees were charged under section 39 of
Republic Act No. 1199, as amended (the Agricultural Land Tenancy Law of 1954)
which penalized pre-threshing by either agricultural tenant or his landlord. They
sought and secured a dismissal on the ground, among others, that there was no law
punishing the act charged-a reference to the fact that Republic Act No. 1199 had
already been superseded by the Agricultural Land Reform Code of 1963 which
instituted the leasehold system and abolished share tenancy subject to certain
conditions. On appeal by the Government, this Court upheld the dismissal, saying:

The legislative intent not to punish anymore the tenant's act of pre-
reaping and pre-threshing without notice to the landlord is inferable
from the fact that, as already noted, the Code of Agrarian Reforms
did not reenact section 39 of the Agricultural Tenancy Law and that
it abolished share tenancy which is the basis for penalizing
clandestine pre-reaping and pre-threshing.

xxx xxx xxx

As held in the Adillo case, 55 the act of pre-reaping and pre-

threshing without notice to the landlord, which is an offense under
the Agricultural Tenancy Law, had ceased to be an offense under
the subsequent law, the Code of Agrarian Reforms. To prosecute it
as an offense when the Code of Agrarian Reforms is already in
force would be repugnant or abhorrent to the policy and spirit of that
Code and would subvert the manifest legislative intent not to punish
anymore pre-reaping and pre-threshing without notice to the
landholder.

xxx xxx xxx

The repeal of a penal law deprives the courts of jurisdiction to

punish persons charged with a violation of the old penal law prior to
its repeal (People vs. Tamayo, 61 Phil. 225; People vs. Sindiong
and Pastor, 77 Phil. 1000; People vs. Binuya, 61 Phil. 208; U.S. vs.
Reyes, 10 Phil. 423; U.S. vs. Academia, 10 Phil. 431. See dissent
in Lagrimas vs. Director of Prisons, 57 Phil. 247, 252, 254).

The foregoing precedents dictate absolution of the appellants of the offenses imputed
to them.

WHEREFORE, the judgments of conviction in CA-G.R. No. 14724-CR and CA-G.R.

No. 14856-CR, subject of the appeal, as well as those in Crim. Case No. 5275-R and
Crim. Case No. 4130-R rendered by the Trial Court, are REVERSED and the
accused-appellants ACQUITTED of the charges against them, with costs de officio.
26
G.R. No. 96189 July 14, 1992
UNIVERSITY OF THE PHILIPPINES, petitioner,
vs.
HON. PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations,
Department of Labor and Employment, and THE ALL U.P. WORKERS' UNION,
represented by its President, Rosario del Rosario, respondent.
NARVASA, C.J.:
In this special civil action of certiorari the University of the Philippines seeks the
nullification of the Order dated October 30, 1990 of Director Pura Ferrer-Calleja of the
Bureau of Labor Relations holding that "professors, associate professors and
assistant professors (of the University of the Philippines) are . . rank-and-file
employees . . ;" consequently, they should, together with the so-called non-academic,
non-teaching, and all other employees of the University, be represented by only one
labor organization. 1 The University is joined in this undertaking by the Solicitor
General who "has taken a position not contrary to that of petitioner and, in fact, has
manifested . . that he is not opposing the petition . . ." 2
3
The case was initiated in the Bureau of Labor Relations by a petition filed on March
2, 1990 by a registered labor union, the "Organization of Non-Academic Personnel of
UP" (ONAPUP). 4 Claiming to have a membership of 3,236 members — comprising
more than 33% of the 9,617 persons constituting the non-academic personnel of UP-
Diliman, Los Baños, Manila, and Visayas, it sought the holding of a certification
election among all said non-academic employees of the University of the Philippines.
At a conference thereafter held on March 22, 1990 in the Bureau, the University
stated that it had no objection to the election.
On April 18, 1990, another registered labor union, the "All UP Workers' Union," 5 filed
a comment, as intervenor in the certification election proceeding. Alleging that its
membership covers both academic and non-academic personnel, and that it aims to
unite all UP rank-and-file employees in one union, it declared its assent to the holding
of the election provided the appropriate organizational unit was first clearly defined. It
observed in this connection that the Research, Extension and Professional Staff
(REPS), who are academic non-teaching personnel, should not be deemed part of the
organizational unit.
For its part, the University, through its General Counsel, 6 made of record its view that
there should be two (2) unions: one for academic, the other for non-academic or
administrative, personnel considering the dichotomy of interests, conditions and rules
governing these employee groups.
Director Calleja ruled on the matter on August 7, 1990. 7 She declared that "the
appropriate organizational unit . . should embrace all the regular rank-and-file
employees, teaching and non-teaching, of the University of the Philippines, including
all its branches" and that there was no sufficient evidence "to justify the grouping of
the non-academic or administrative personnel into an organization unit apart and
distinct from that of the academic or teaching personnel." Director Calleja adverted to
Section 9 of Executive Order No. 180, viz.:
Sec. 9. The appropriate organizational unit shall be the employer
unit consisting of rank-and-file employees, unless circumstances
otherwise require.
and Section 1, Rule IV of the Rules Implementing said EO 180 (as amended
by SEC. 2, Resolution of Public Sector Labor Management Council dated
May 14, 1989, viz.:
xxx xxx xxx
For purposes of registration, an appropriate organizational unit may
refer to:
xxx xxx xxx
d. State universities or colleges, government-owned or controlled
corporations with original charters.
She went on to say that the general intent of EO 180 was "not to fragmentize
the employer unit, as "can be gleaned from the definition of the term
"accredited employees' organization," which refers to:
. . a registered organization of the rank-and-file employees as
defined in these rules recognized to negotiate for the employees in
an organizational unit headed by an officer with sufficient authority
to bind the agency, such as . . . . . . state colleges and universities.
The Director thus commanded that a certification election be "conducted among rank-
and-file employees, teaching and non-teaching" in all four autonomous campuses of
the UP, and that management appear and bring copies of the corresponding payrolls
for January, June, and July, 1990 at the "usual pre-election conference . . ."
At the pre-election conference held on March 22, 1990 at the Labor Organizational
Division of the DOLE, 8 the University sought further clarification of the coverage of
the term, "rank-and-file" personnel, asserting that not every employee could properly
be embraced within both teaching and non-teaching categories since there are those
whose positions are in truth managerial and policy-determining, and hence, excluded
by law.
At a subsequent hearing (on October 4, 1990), the University filed a Manifestation
seeking the exclusion from the organizational unit of those employees holding
supervisory positions among non-academic personnel, and those in teaching staff
27
with the rank of Assistant Professor or higher, submitting the following as grounds
therefor:
1) Certain "high-level employees" with policy-making, managerial, or confidential
functions, are ineligible to join rank-and-file employee organizations under Section 3,
EO 180:
Sec. 3. High-level employees whose functions are normally
considered as policy-making or managerial or whose duties are of a
highly confidential nature shall not be eligible to join the
organization of rank-and file government employees;
2) In the University hierarchy, not all teaching and non-teaching personnel belong the
rank-and file: just as there are those occupying managerial positions within the non-
teaching roster, there is also a dichotomy between various levels of the teaching or
academic staff;
3) Among the non-teaching employees composed of Administrative Staff and
Research personnel, only those holding positions below Grade 18 should be regarded
as rank-and-file, considering that those holding higher grade positions, like Chiefs of
Sections, perform supervisory functions including that of effectively recommending
termination of appointments or initiating appointments and promotions; and
4) Not all teaching personnel may be deemed included in the term, "rank-and-file;"
only those holding appointments at the instructor level may be so considered,
because those holding appointments from Assistant Professor to Associate Professor
to full Professor take part, as members of the University Council, a policy-making
body, in the initiation of policies and rules with respect to faculty tenure and
promotion. 9
The ONAPUP quite categorically made of record its position; that it was not opposing
the University's proferred classification of rank-and file employees. On the other hand,
the "All UP Workers' Union" opposed the University's view, in a Position Paper
presented by it under date of October 18, 1990.
Director Calleja subsequently promulgated an Order dated October 30, 1990,
resolving the "sole issue" of "whether or not professors, associate professors and
assistant professors are included in the definition of high-level employee(s)" in light of
Rule I, Section (1) of the Implementing Guidelines of Executive Order No. 180,
defining "high level employee" as follows:
1. High Level Employee — is one whose functions are normally
considered policy determining, managerial or one whose duties are
highly confidential in nature. A managerial function refers to the
exercise of powers such as:
1. To effectively recommend such managerial
actions;
2. To formulate or execute management policies
and decisions; or
3. To hire, transfer, suspend, lay-off, recall,
dismiss, assign or discipline employees.
The Director adjudged that said teachers are rank-and-file employees "qualified to
join unions and vote in certification elections." According to her —
A careful perusal of the University Code . . shows that the policy-
making powers of the Council are limited to academic matters,
namely, prescribing courses of study and rules of discipline, fixing
student admission and graduation requirements, recommending to
the Board of Regents the conferment of degrees, and disciplinary
power over students. The policy-determining functions
contemplated in the definition of a high-level employee pertain to
managerial, executive, or organization policies, such as hiring,
firing, and disciplining of employees, salaries, teaching/working
hours, other monetary and non-monetary benefits, and other terms
and conditions of employment. They are the usual issues in
collective bargaining negotiations so that whoever wields these
powers would be placed in a situation of conflicting interests if he
were allowed to join the union of rank-and-file employees.
The University seasonably moved for reconsideration, seeking to make the following
points, to wit:
1) UP professors do "wield the most potent managerial powers: the power to rule on
tenure, on the creation of new programs and new jobs, and conversely, the abolition
of old programs and the attendant re-assignment of employees.
2) To say that the Council is "limited to (acting on) academic matters" is error, since
academic decisions "are the most important decisions made in a University . . (being,
as it were) the heart, the core of the University as a workplace.
3) Considering that the law regards as a "high level" employee, one who performs
either policy-determining, managerial, or confidential functions, the Director erred in
applying only the "managerial functions" test, ignoring the "policy-determining
functions" test.
4) The Director's interpretation of the law would lead to absurd results, e.g.: "an
administrative officer of the College of Law is a high level employee, while a full
Professor who has published several treatises and who has distinguished himself in
argument before the Supreme Court is a mere rank-and-file employee. A dormitory
28
manager is classified as a high level employee, while a full Professor or Political
Science with a Ph. D. and several Honorary doctorates is classified as rank-and-
file." 10
The motion for reconsideration was denied by Director Calleja, by Order dated
November 20, 1990.
The University would now have this Court declare void the Director's Order of October
30, 1990 as well as that of November 20, 1990. 11 A temporary restraining order was
issued by the Court, by Resolution dated December 5, 1990 conformably to the
University's application therefor.
Two issues arise from these undisputed facts. One is whether or not professors,
associate professors and assistant professors are "high-level employees" "whose
functions are normally considered policy determining, managerial or . . highly
confidential in nature." The other is whether or not, they, and other employees
performing academic functions, 12 should comprise a collective bargaining unit distinct
and different from that consisting of the non-academic employees of the
University, 13 considering the dichotomy of interests, conditions and rules existing
between them.
As regards the first issue, the Court is satisfied that it has been correctly resolved by
the respondent Director of Bureau Relations. In light of Executive Order No. 180 and
its implementing rules, as well as the University's charter and relevant regulations, the
professors, associate professors and assistant professors (hereafter simply referred
to as professors) cannot be considered as exercising such managerial or highly
confidential functions as would justify their being categorized as "high-level
employees" of the institution.
The Academic Personnel Committees, through which the professors supposedly
exercise managerial functions, were constituted "in order to foster greater
involvement of the faculty and other academic personnel in appointments,
promotions, and other personnel matters that directly affect them." 14 Academic
Personnel Committees at the departmental and college levels were organized
"consistent with, and demonstrative of the very idea of consulting the faculty and
other academic personnel on matters directly affecting them" and to allow "flexibility in
the determination of guidelines peculiar to a particular department or college." 15
Personnel actions affecting the faculty and other academic personnel should,
however, "be considered under uniform guidelines and consistent with the Resolution
of the Board (of Regents) adopted during its 789th Meeting (11-26-69) creating the
University Academic Personnel Board." 16 Thus, the Departmental Academic
Personnel Committee is given the function of "assist(ing) in the review of the
recommendations initiated by the Department Chairman with regard to recruitment,
selection, performance evaluation, tenure and staff development, in accordance with
the general guidelines formulated by the University Academic Personnel Board and
the implementing details laid down by the College Academic Personnel
Committee;" 17 while the College Academic Personnel Committee is entrusted with
the following functions: 18
1. Assist the Dean in setting up the details for the implementation of
policies, rules, standards or general guidelines as formulated by the
University Academic Personnel Board;
2. Review the recommendation submitted by the DAPCs with
regard to recruitment, selection, performance evaluation, tenure,
staff development, and promotion of the faculty and other academic
personnel of the College;
3. Establish departmental priorities in the allocation of available
funds for promotion;
4. Act on cases of disagreement between the Chairman and the
members of the DAPC particularly on personnel matters covered by
this Order;
5. Act on complaints and/or protests against personnel actions
made by the Department Chairman and/or the DAPC.
The University Academic Personnel Board, on the other hand, performs the following
functions: 19
1. Assist the Chancellor in the review of the recommendations of
the CAPC'S.
2. Act on cases of disagreement between the Dean and the CAPC.
3. Formulate policies, rules, and standards with respect to the
selection, compensation, and promotion of members of the
academic staff.
4. Assist the Chancellor in the review of recommendations on
academic promotions and on other matters affecting faculty status
and welfare.
From the foregoing, it is evident that it is the University Academic Personnel
Committee, composed of deans, the assistant for academic affairs and the chief of
personnel, which formulates the policies, rules and standards respecting selection,
compensation and promotion of members of the academic staff. The departmental
and college academic personnel committees' functions are purely recommendatory in
nature, subject to review and evaluation by the University Academic Personnel Board.
In Franklin Baker Company of the Philippines vs. Trajano, 20 this Court reiterated the
principle laid down in National Merchandising Corp. vs. Court of Industrial
Relations, 21 that the power to recommend, in order to qualify an employee as a
29
supervisor or managerial employee "must not only be effective but the exercise of
such authority should not be merely of a routinary or clerical nature but should require
the use of independent judgment." Where such recommendatory powers, as in the
case at bar, are subject to evaluation, review and final action by the department
heads and other higher executives of the company, the same, although present, are
not effective and not an exercise of independent judgment as required by law.
Significantly, the personnel actions that may be recommended by the departmental
and college academic personnel committees must conform with the general
guidelines drawn up by the university personnel academic committee. This being the
case, the members of the departmental and college academic personnel committees
are not unlike the chiefs of divisions and sections of the National Waterworks and
Sewerage Authority whom this Court considered as rank-and-file employees
in National Waterworks & Sewerage Authority vs. NWSA Consolidated
Unions, 22because "given ready policies to execute and standard practices to observe
for their execution, . . . they have little freedom of action, as their main function is
merely to carry out the company's orders, plans and policies."
The power or prerogative pertaining to a high-level employee "to effectively
recommend such managerial actions, to formulate or execute management policies or
decisions and/or to hire, transfer, suspend, lay-off, recall, dismiss, assign or discipline
employees" 23 is exercised to a certain degree by the university academic personnel
board/committees and ultimately by the Board of Regents in accordance with Section
6 of the University
Charter, 24 thus:
(e) To appoint, on the recommendation of the President of the
University, professors, instructors, lecturers and other employees of
the University; to fix their compensation, hours of service, and such
other duties and conditions as it may deem proper; to grant them in
its discretion leave of absence under such regulations as it may
promulgate, any other provision of law to the contrary
notwithstanding, and to remove them for cause after investigation
and hearing shall have been had.
Another factor that militates against petitioner's espousal of managerial employment
status for all its professors through membership in the departmental and college
academic personnel committees is that not all professors are members thereof.
Membership and the number of members in the committees are provided as
follows: 25
Sec. 2. Membership in Committees. — Membership in committees
may be made either through appointment, election, or by some
other means as may be determined by the faculty and other
academic personnel of a particular department or college.
Sec. 3. Number of Members. — In addition to the Chairman, in the
case of a department, and the Dean in the case of a college, there
shall be such number of members representing the faculty and
academic personnel as will afford a fairly representative,
deliberative and manageable group that can handle evaluation of
personnel actions.
Neither can membership in the University Council elevate the professors to the status
of high-level employees. Section 6 (f) and 9 of the UP Charter respectively provide: 26
Sec. 6. The Board of Regents shall have the following powers and
duties . . . ;
xxx xxx xxx
(f) To approve the courses of study and rules of discipline drawn up
by the University Council as hereinafter provided; . . .
Sec. 9. There shall be a University Council consisting of the
President of the University and of all instructors in the university
holding the rank of professor, associate professor, or assistant
professor. The Council shall have the power to prescribe the
courses of study and rules of discipline, subject to the approval of
the Board of Regents. It shall fix the requirements for admission to
any college of the university, as well as for graduation and the
receiving of a degree. The Council alone shall have the power to
recommend students or others to be recipients of degrees. Through
its president or committees, it shall have disciplinary power over the
students within the limits prescribed by the rules of discipline
approved by the Board of Regents. The powers and duties of the
President of the University, in addition to those specifically provided
in this Act shall be those usually pertaining to the office of president
of a university.
It is readily apparent that the policy-determining functions of the University Council
are subject to review, evaluation and final approval by the Board of Regents. The
Council's power of discipline is likewise circumscribed by the limits imposed by the
Board of Regents. What has been said about the recommendatory powers of the
departmental and college academic personnel committees applies with equal force to
the alleged policy-determining functions of the University Council.
Even assuming arguendo that UP professors discharge policy-determining functions
through the University Council, still such exercise would not qualify them as high-level
employees within the context of E.O. 180. As correctly observed by private
respondent, "Executive Order No. 180 is a law concerning public sector unionism. It
must therefore be construed within that context. Within that context, the University of
the Philippines represents the government as an employer. 'Policy-determining' refers
to policy-determination in university mattes that affect those same matters that may
be the subject of negotiation between public sector management and labor. The
reason why 'policy-determining' has been laid down as a test in segregating rank-and-
30
file from management is to ensure that those who lay down policies in areas that are
still negotiable in public sector collective bargaining do not themselves become part of
those employees who seek to change these policies for their collective welfare." 27
The policy-determining functions of the University Council refer to academic
matters, i.e. those governing the relationship between the University and its students,
and not the University as an employer and the professors as employees. It is thus
evident that no conflict of interest results in the professors being members of the
University Council and being classified as rank-and-file employees.
Be that as it may, does it follow, as public respondent would propose, that all rank-
and-file employees of the university are to be organized into a single collective
bargaining unit?
A "bargaining unit" has been defined as a group of employees of a given employer,
comprised of all or less than all of the entire body of employees, which the collective
interest of all the employees, consistent with equity to the employer, indicate to be the
best suited to serve the reciprocal rights and duties of the parties under the collective
bargaining provisions of the law. 28
Our labor laws do not however provide the criteria for determining the proper
collective bargaining unit. Section 12 of the old law, Republic Act No. 875 otherwise
known as the Industrial Peace Act, simply reads as follows: 29
Sec. 12. Exclusive Collective Bargaining Representation for Labor
Organizations. — The labor organization designated or selected for
the purpose of collective bargaining by the majority of the
employees in an appropriate collective bargaining unit shall be the
exclusive representative of all the employees in such unit for the
purpose of collective bargaining in respect to rates of pay, wages,
hours of employment, or other conditions of employment; Provided,
That any individual employee or group of employees shall have the
right at any time to present grievances to their employer.
Although said Section 12 of the Industrial Peace Act was subsequently incorporated
into the Labor Code with minor changes, no guidelines were included in said Code for
determination of an appropriate bargaining unit in a given case. 30 Thus, apart from
the single descriptive word "appropriate," no specific guide for determining the proper
collective bargaining unit can be found in the statutes.
Even Executive Order No. 180 already adverted to is not much help. All it says, in its
Section 9, is that "(t)he appropriate organizational unit shall be the employer unit
consisting of rank-and-file employees, unless circumstances otherwise require." Case
law fortunately furnishes some guidelines.
When first confronted with the task of determining the proper collective bargaining unit
in a particular controversy, the Court had perforce to rely on American jurisprudence.
In Democratic Labor Association vs. Cebu Stevedoring Company, Inc., decided on
February 28, 1958, 31 the Court observed that "the issue of how to determine the
proper collective bargaining unit and what unit would be appropriate to be the
collective bargaining
agency" . . . "is novel in this jurisdiction; however, American precedents on the matter
abound . . (to which resort may be had) considering that our present Magna Carta has
been patterned after the American law on the subject." Said the Court:
. . . Under these precedents, there are various factors which must
be satisfied and considered in determining the proper constituency
of a bargaining unit. No one particular factor is itself decisive of the
determination. The weight accorded to any particular factor varies
in accordance with the particular question or questions that may
arise in a given case. What are these factors? Rothenberg
mentions a good number, but the most pertinent to our case are: (1)
will of the employees (Globe Doctrine); (2) affinity and unit of
employees' interest, such as substantial similarity of work and
duties, or similarity of compensation and working conditions; (3)
prior collective bargaining history; and (4) employment status, such
as temporary, seasonal probationary employees. . . .
xxx xxx xxx
An enlightening appraisal of the problem of defining an appropriate
bargaining unit is given in the 10th Annual Report of the National
Labor Relations Board wherein it is emphasized that the factors
which said board may consider and weigh in fixing appropriate units
are: the history, extent and type of organization of employees; the
history of their collective bargaining; the history, extent and type of
organization of employees in other plants of the same employer, or
other employers in the same industry; the skill, wages, work, and
working conditions of the employees; the desires of the employees;
the eligibility of the employees for membership in the union or
unions involved; and the relationship between the unit or units
proposed and the employer's organization, management, and
operation. . . .
. . In said report, it is likewise emphasized that the basic test in
determining the appropriate bargaining unit is that a unit, to be
appropriate, must affect a grouping of employees who have
substantial, mutual interests in wages, hours, working conditions
and other subjects of collective bargaining (citing Smith on Labor
Laws, 316-317; Francisco, Labor Laws, 162). . . .
The Court further explained that "(t)he test of the grouping is community or mutuality
of interests. And this is so because 'the basic test of an asserted bargaining unit's
acceptability is whether or not it is fundamentally the combination which will best
assure to all employees the exercise of their collective bargaining rights' (Rothenberg
on Labor Relations, 490)." Hence, in that case, the Court upheld the trial court's
conclusion that two separate bargaining units should be formed, one consisting of
31
regular and permanent employees and another consisting of casual laborers or
stevedores.
Since then, the "community or mutuality of interests" test has provided the standard in
determining the proper constituency of a collective bargaining unit. In Alhambra Cigar
& Cigarette Manufacturing Company, et al. vs. Alhambra Employees' Association
(PAFLU), 107 Phil. 23, the Court, noting that the employees in the administrative,
sales and dispensary departments of a cigar and cigarette manufacturing firm perform
work which have nothing to do with production and maintenance, unlike those in the
raw lead (malalasi), cigar, cigarette, packing (precintera) and engineering and garage
departments, authorized the formation of the former set of employees into a separate
collective bargaining unit. The ruling in the Democratic Labor Association case, supra,
was reiterated in Philippine Land-Air-Sea Labor Unit vs. Court of Industrial Relations,
110 Phil. 176, where casual employees were barred from joining the union of the
permanent and regular employees.
Applying the same "community or mutuality of interests" test, but resulting in the
formation of only one collective bargaining units is the case of National Association of
Free Trade Unions vs. Mainit Lumber Development Company Workers Union-United
Lumber and General Workers of the Phils., G.R. No. 79526, December 21, 1990, 192
SCRA 598. In said case, the Court ordered the formation of a single bargaining unit
consisting of the Sawmill Division in Butuan City and the Logging Division in Zapanta
Valley, Kitcharao, Agusan Norte of the Mainit Lumber Development Company. The
Court reasoned:
The formation of two separate bargaining units, the first consisting of the rank-and-file
non-academic personnel, and the second, of the rank-and-file academic employees,
is the set-up that will best assure to all the employees the exercise of their collective
bargaining rights. These special circumstances, i.e., the dichotomy of interests and
concerns as well as the dissimilarity in the nature and conditions of work, wages and
compensation between the academic and non-academic personnel, bring the case at
bar within the exception contemplated in Section 9 of Executive Order No. 180. It was
grave abuse of discretion on the part of the Labor Relations Director to have ruled
otherwise, ignoring plain and patent realities.
WHEREFORE, the assailed Order of October 30, 1990 is hereby AFFIRMED in so far
as it declares the professors, associate professors and assistant professors of the
University of the Philippines as rank-and-file employees. The Order of August 7, 1990
is MODIFIED in the sense that the non-academic rank-and-file employees of the
University of the Philippines shall constitute a bargaining unit to the exclusion of the
academic employees of the institution — i.e., full professors, associate professors,
assistant professors, instructors, and the research, extension and professorial staff,
who may, if so minded, organize themselves into a separate collective bargaining
unit; and that, therefore, only said non-academic rank-and-file personnel of the
University of the Philippines in Diliman, Manila, Los Baños and the Visayas are to
participate in the certification election.
SO ORDERED.

Certainly, there is a mutuality of interest among the employees of

the Sawmill Division and the Logging Division. Their functions mesh
with one another. One group needs the other in the same way that
the company needs them both. There may be difference as to the
nature of their individual assignments but the distinctions are not
enough to warrant the formation of a separate bargaining unit.

In the case at bar, the University employees may, as already suggested, quite easily
be categorized into two general classes: one, the group composed of employees
whose functions are non-academic, i.e., janitors, messengers, typists, clerks,
receptionists, carpenters, electricians, grounds-keepers, chauffeurs, mechanics,
plumbers; 32 and two, the group made up of those performing academic
functions, i.e., full professors, associate professors, assistant professors, instructors
— who may be judges or government executives — and research, extension and
professorial staff. 33 Not much reflection is needed to perceive that the community or
mutuality of interests which justifies the formation of a single collective bargaining unit
is wanting between the academic and non-academic personnel of the university. It
would seem obvious that teachers would find very little in common with the University
clerks and other non-academic employees as regards responsibilities and functions,
working conditions, compensation rates, social life and interests, skills and intellectual
pursuits, cultural activities, etc. On the contrary, the dichotomy of interests, the
dissimilarity in the nature of the work and duties as well as in the compensation and
working conditions of the academic and non-academic personnel dictate the
separation of these two categories of employees for purposes of collective bargaining.

32
G.R. No. 107590 February 21, 1995
PAMANTASAN NG LUNGSOD NG MAYNILA (PLM), petitioner,
vs.
CIVIL SERVICE COMMISSION (CSC), PAMANTASAN NG LUNGSOD NG
MAYNILA FACULTY ORGANIZATION (PLMFO), ROBERTO AMORES, ROLANDO
AUSTRIA, VICENTE BANAGALE, NEMENCIO CABATUANDO, MANOLO HINA,
ELEANOR JIMENEZ, ANITA LEYSON, JONATHAN MANZANO, JOSE MEJIA,
ESTELITA PINEDA, LORDEO POQUIZ, ALFREDO RAZON, MA. ZELDA REYES,
SALVACION RODRIGUEZ, BELINDA SANTOS, and VIRGILIO
ZAMORA respondents.
VITUG, J.:
This petition stemmed from a complaint for illegal dismissal and unfair labor practice
filed with public respondent Civil Service Commission ("CSC") by private
respondents, through Pamantasan Ng Lungsod Ng Maynila Faculty Organization
("PLMFO"), against petitioner Pamantasan Ng Lungsod Ng Maynila ("PLM") and its
officers.
The sixteen (16) individual private respondents were full-time instructors of PLM
under "temporary contracts" of employment renewable on a yearly basis. They,
among other instructors, joined the PLMFO.
Uniform notices of termination, all dated 24 April 1990, were individually sent to
private respondents informing them of "the expiration of their temporary appointments
at the close of office hours on 31 May 1990" and the non-renewal of their
appointments for the school year (SY) 1990-1991. A series of letter-complaints
addressed to the CSC by private respondents evoked a letter-response from PLM,
dated 16 May 1990, traversing the complainants' right to compel a renewal of the
appointments. They were advised that their retention was not recommended by their
respective Deans.
On 29 May 1990, private respondents, through PLMFO, filed with the CSC a verified
complaint for illegal dismissal and unfair labor practice against petitioner and its
officers.
In a letter-comment, dated 13 July 1990, petitioner denied having committed any
unfair labor practice or having illegally dismissed private respondents. In its defense,
PLM interposed (1) the temporary nature of private respondents' contracts of
employment and (2) reasons that could justify the non- renewal of the contracts.
Public respondent CSC referred the case to the Public Sector Labor-Management
Council1 ("PSLMC"). The latter, through its deputized hearing officer, Med-Arbiter
Hope Ruiz-Valenzuela of the Bureau of Labor Relations of the Department of Labor
and Employment, after due notice, heard the case (PSLMC Case No. 00-06-91).
During the proceedings, petitioner relied in main on the temporary nature of private
respondents' employment contracts.
In a Resolution,2 dated 16 December 1991, the PSLMC found petitioner guilty of
"Unfair Labor Practice" and held that private respondents "should be reinstated." The
dispositive portion of its Resolution read:
WHEREFORE, premises considered, the Council finds that PLM
Management committed Unfair Labor Practice when it terminated
the services of herein complainants, and for which the latter should
be reinstated.
Accordingly, let this Resolution be forwarded to the Civil Service
Commission for appropriate action.
SO ORDERED.3
Petitioner's request for reconsideration was denied in PSLMC's Order of 30 April
1992. Forthwith, the PSLMC transmitted the case to the CSC for appropriate action.
On 15 May 1992, petitioner filed with this Court a petition for certiorari, entitled
"Pamantasan Ng Lungsod Ng Maynila vs. Public Sector Labor-Management Council,
et al.," docketed G.R. No. 105157, that sought the annulment of the aforementioned
PSLMC resolutions. In a Minute Resolution, dated 27 May 1992, the Court dismissed
the petition for PLM's failure to submit the certification required under Circular 28-91
on forum-shopping. The motion for the reconsideration of this resolution was
dismissed with finality, no compelling reason having been shown to reconsider the
dismissal of the petition. On 30 July 1992, the resolution became final and executory
and, in due course, was recorded in the Book of Entries of Judgment.
In the meantime, public respondent CSC, acting on the case forwarded to it by the
PSLMC, issued its Resolution No. 92-814, dated 25 June 1992, sustaining the
findings of the PSLMC. The CSC, accordingly, directed the reinstatement, with back
salaries, of private respondents; thus —
WHEREFORE, foregoing premises considered, the Commission
hereby resolves to rule that the termination of the services of
Estelita Pineda, Vicente Banagale, Salvacion Rodriguez, Anita
Leyson, Eleanor Jimenez, Ma. Zelda Reyes, Belinda Santos,
Lordeo Poquiz, Rolando Austria, Jonathan Manzano, Manolo Hina,
Nemencio Cabatuando, Alfredo Razon, Virgilio Zamora, Roberto
Amores and Jose Mejia, all of the Pamantasan ng Lungsod ng
Maynila, is illegal.
The PLM Management is hereby directed to reinstate these
employees to their former or equivalent positions and pay them
33
 back salaries and other benefits from the time of their illegal
termination until their actual reinstatement.4
The request for the reconsideration of the order was denied by the CSC in its
Resolution No. 92-1573 of 20 October 1992. Respondent CSC, in denying petitioner's
motion, held, among other things, that the findings of fact by the PSLMC deserved the
respect of the Commission and that there was no further need for it, to conduct a
hearing of its own.
The PLM cites the following reasons for its instant petition for certiorari (under Rule
65, not Rule 45 such as mistakenly referred to by petitioner):
1. The Civil Service Commission acted with grave abuse of
discretion tantamount to lack of jurisdiction and denial of due
process when it adopted entirely, without according the petitioner
the opportunity to be heard, the findings of facts and resolutions of
the Public Sector Labor and Management Council, a body separate
and distinct and with different jurisdiction from that of the
Commission.
2. The Civil Service Commission acted with grave abuse discretion
in effectively denying the petitioner the opportunity to present
evidence to substantiate its allegations in its defense against the
charge of illegal dismissal, to the prejudice of civil service and
public interest.
3. The Civil Service Commission committed a grave abuse of
discretion in directing reinstatement and payment of backwages to
private respondents whose temporary contracts of employment had
already expired.
On 11 May 1993, this Court, acting on petitioner's motion for the issuance of a writ of
preliminary injunction, issued, on 18 May 1993, a temporary restraining
order directing respondent CSC "to cease and desist from executing (its) assailed
Resolutions No. 92-814 and No. 92-1573.5
In our resolution, dated 17 August 1993, following the receipt of respondents'
comment, we gave due course to the petition and ordered the parties to file their
respective memoranda.
The Solicitor General took an adverse position to that of public respondent and
prayed that the petition be given due course, contending that it was inappropriate for
respondent CSC to rule on the aspect of illegal dismissal, an act that involved an
exercise of its original jurisdiction, without affording anew petitioner an opportunity to
be heard.
Public respondent CSC manifested its intention to file its own comment to the instant
petition; however, it failed to file any such comment within the allotted period. The
Court finally dispensed with the filing of the comment and ordered CSC to instead file
its memorandum in accordance with this Court's resolution of 24 August 1993. 6
On 20 January 1994, the Court dismissed the petition for failure to prosecute on the
part of petitioner, which likewise failed to file its memorandum, as well as because of
the "evident lack of interest of the parties" 7 to pursue the case. On petitioner's motion
for reconsideration, however, the Court resolved, on 24 February 1994, to reinstate
the petition.
Petitioner stresses that the CSC and the PSLMC both exercise quasi-judicial
functions but not on identical issues and subject matter; that the PSLMC possesses
jurisdiction only over the unfair labor practice aspect of private respondents' complaint
but that it is the CSC which alone can take cognizance over the question of illegal
dismissal; and that, therefore, when the CSC has simply adopted the
recommendations of the PSLMC in the unfair labor practice case in resolving the
issue of illegal dismissal and ordering the reinstatement of private respondents
without conducting further proceedings of its own, it has effectively denied petitioner
of its right to due process.
PSLMC's jurisdiction over the unfair labor practice case filed by private respondents
against petitioner is not disputed. The PSLMC, in case No. 00-06-91, has conducted
its proceedings in accordance with its legal mandate. 8The proceedings before Med-
Arbiter Valenzuela, who had been deputized to so act as the hearing officer, conform
with the "Rules and Regulations to Govern the Exercise of the Right of Government
Employees to Self Organization" —
Sec. 3. The Council may call on any officer or agency for
assistance. It may deputize officers to hear and recommend action
on complaints or grievances filed with the council.
Sec. 4. The procedure in the Council shall be non-adversarial in
nature. The parties may be required to submit their respective
position papers, together with all evidences available in support of
their respective positions within 15 days from receipt of notices.
Sec. 5. The decision of the Council shall be final.
The conclusion of the PSLMC regarding petitioner's alleged commission of unfair
labor practice against private respondents can no longer be considered a proper
issue either before the CSC or in this instance since this particular matter has already
been adjudged with finality in accordance with this Court's resolution in G.R. No.
105157 heretofore mentioned.
The PSLMC, in part, said:
34
. . . Individual sixteen (16) complainants were part of the original
founders of the PLMFO and claim to be active members thereof.
Complainants Vicente Benagale, Roberto Amores, and Anita
Leyson were the President, Treasurer and Secretary, respectively,
of the PLMFO. At the time of complainants separation, the union
had just secured its public sector union registration. All 16
complainants had temporary employment contracts that were
renewed on a yearly basis. Half of the complainants had been with
the PLM for a long time, ranging from four (4) to six and one-half (6
1/2) years.
It appears that the Faculty had many long-standing issues with the
PLM Management, which complainants claim motivated the
organization of the PLMFO. As gathered from the evidence, the
following are some of the more salient issues:
1. Failure to appoint a true faculty representative to the Board of
Regents as provided in the PLM Charter;
2 No faculty participation in areas where normally the faculty input
is sought. i.e.
a. revision of the student curriculum
b. the development of criteria/policies regarding
faculty development and promotion
3. While PLM has identified the academic qualifications and
teaching experience required for each level of hierarchy in the
faculty, the actual mechanics of promotion are vague. The faculty
remains in the dark as to whether they have already qualified and
therefore can apply for the next faculty rank as a matter of right.
The PLMFO maintains that this vagueness in the procedure/policies
for promotion is a deliberate scheme to enable PLM management
to establish the faculty according to its whim;
4. On the matter of promotion scheme, the faculty is not given the
complete results of their performance evaluation;
5. The faculty is kept guessing about the official salary scale
according to rank, so that the implementation of such official salary
scale can be arbitrary and discriminatory . . .;
6. Management refuses to allow the concerned faculty to participate
in choosing the Chairperson in their respective departments;
7. PLM's existing practice in the promotion of faculty members
either for permanent status or to the next higher rank as
undermined the university's standard of excellence. Out of the 223,
close to 30% of the faculty had no previous teaching experience
before joining PLM. There are only 29 assistant professors and 6
with the rank of professor. The teachers holding temporary
appointments comprise, almost half of the faculty.
After securing its union registration, PLMFO began asserting its
rights.
xxx xxx xxx
In its complaint, PLMFO alleged that their actions and
determination to see changes in the management of PLM angered
PLM which prompted its decision to terminate the services of the
complainants.
xxx xxx xxx
Ordinarily, there is merit to respondent's argument that employees
who hold temporary contracts of employment may not expect
renewal of appointment as a matter of right, the decision being a
management prerogative. However, when the exercise of this
privilege is alleged to be the means by which management hinders
unionism or outrightly bust unions and such allegation is supported
by evidence, the act needs to be examined and studied. It then
becomes incumbent upon Management to show that its intentions
are otherwise. Records of the case, however, reveal that despite
numerous opportunities to do so, PLM makes little attempt to rebut
the specific charges and instead rests its defense largely on the
argument that since complainants possess only temporary
contracts of employment, PLM has the right not to renew their
contracts without any need for justification.
There is sufficient evidence to show that the management of PLM is
not particularly enthusiastic about faculty participation in the
formulation of policies concerning the University and the Faculty
itself, as shown from the very nature of the majority of the
complaints of the faculty against the administration and the
response/reaction of the management to earlier attempts by the
faculty to bring about changes. . . .
. . . . The facts on record show that management did not respond to
any of the faculty issues. One accurate example is the matter of the
teachers' performance evaluation ratings which were the basis for
"renewal of appointment and recommendation for permanent
status." It was discussed in the dialogue that the over-all rating
35
 score of the faculty would include the Peer's evaluation. However,
as can be seen from the ratings of the complainants who were
accused of having poor performance, the Peer's evaluation was not
included as one of the factors for their evaluation.
xxx xxx xxx
. . . . In its position paper and other subsequent pleadings, PLM has
however, abandoned all efforts to pursue its line of defense. It
would appear therefore that the charges are false and untenable. If
this is so, why was PLM so bold as to present them as grounds for
the separation of complainants in the first place? Perhaps, it was
confident that because complainants possessed temporary
contracts of employment, no serious attempt would be made to
examine PLMFO's complaint. Whatever other reasons PLM may
have, the circumstances obtaining in the instant case show that
these charges were created as an attempt to confuse/mislead
PLM's real motivations on the matter.9
In agreeing with the PSLMC, the CSC, in its own resolution of 25 June 1992, stated:
In the arbitration proceedings, the PSLMC found that PLM
committed unfair labor practice when it terminated the services of
the complainants. It is undisputed that the PLM Management did
not renew the appointments of these members of the faculty with
temporary contracts but those who were hired as replacements
possess even lesser qualifications than the 16 complainants.
Further, the PLM Management refused and still refuses to produce
the results of their evaluation of the performance of the
complainants which can be an indication that presentation of such
evidence would be detrimental to its case. Hence, this issue before
us.
Had complainants not been among those active officers and/or
members of the PLMFO, and had their qualifications, training,
experience and performance rating not been impressive, the
Commission would have agreed that the termination or non-renewal
of the contracts of complainants does not constitute unfair labor
practice. But the records reveal otherwise. Hence, there is indeed
no reason for PLM Management to terminate the services of these
employees except to bust their organization. The Commission finds
no reason to disagree with the findings of facts by the PSLMC that
PLM Management committed an unfair labor practice.
xxx xxx xxx
Even temporary employees enjoy that basic right to form
organization or association for purposes not contrary to law.
PLMFO is that organization. Thus, its members cannot be
separated from the service for the simple reason of membership in
the said organization. And when the appointment status of these
members happens to be temporary in nature, such becomes merely
incidental and the doctrine that temporary employees have no
security of tenure must yield or is not applicable. When the clear
intent therefore of PLM Management in terminating the services of
these employees is to abridge their constitutional right to self-
organization, the Commission has the duty to give them protection
and uphold their basic right. This constitutional right of employees is
superior to the right of management not to renew the temporary
appointment of its employees. When the exercise of discretion by
the management is calculated to bust the union as what PLM
Management had done, the Commission has no choice but to
declare it as a grave abuse of discretion. 10
Petitioner insists that when CSC has ruled on the matter of illegal dismissal without
conducting any further hearing of its own, relying, instead, on PSLMC's finding of
unfair labor practice on the part of petitioner, the latter has thereby been denied due
process. Unfortunately for petitioner, however, the two supposed independent
issues, i.e., the unfair labor practice charge and the complaint for illegal dismissal
both filed by private respondents, are, in fact, here unavoidably interlinked. The non-
renewal of an employment contract with a term, it is true, is ordinarily a valid mode of
removal at the end of each
period. 11 This rule, however, must yield to the superior constitutional right of
employees, permanent or temporary, to self-organization. While, a temporary
employment may be ended with or without cause, it certainly may not, however, be
terminated for an illegal cause.
Petitioner claims that it was denied "due process." It itself admitted, however, that "it
manifested (before the PSLMC) its intention to submit evidence (that it had other valid
grounds for not renewing private respondents' temporary contracts of employment)
which, inadvertently or otherwise, it failed to present . . . 12 This supposed evidence, if
true and being material to substantiate its defense against the unfair labor charge,
should have been duly presented, but it did not. Petitioner should not now be heard to
complain that it was denied due process. We ruled, time and again, that "due
process" was designed to afford an opportunity to be heard, 13 not that an actual
hearing should always and indispensably be held.
In any case, in its reply to public respondents' comment, PLM enumerates the alleged
causes for the non-renewal of the contracts, to wit:
Name Cause
1. Zamora, Virgilio Failure to finish MA after 2 years
2. Benagale, Vicente Poor over-all performance
36
3. Mejia, Jose Worked with DAR while with PLM
4. Amores, Roberto Failure to complete MA
5. Reyes, Zelda Poor Performance
6. Santos, Belinda Tardiness in class, says negative
comments during faculty meeting
7. Poquiz, Lorredo Seldom returns test papers, taught in another university
8. Austria, Rolando Taught in another school for 2nd Semester of 1989-1990
9. Manzano, Jonathan Taught in another university
10. Hina, Manalo Poor class performance
11. Cabatuando, Nemensio Poor class performance, taught in another university
12. Rodriguez, Salvacion none given
13. Razon, Alfredo none given
14. Jimenez, Eleanor Tardiness during 2nd sem. in school
15. Leyson, Anita Enrolled in another law school
16. Pineda, Estelita Unbecoming conduct, tardiness 14
The PSLMC has noted, however, that the charges are either false or
untenable; hence, its following findings:
. . . In the case of complainants Zelda Reyes, Hina Manalo and
Nemencio Cabatuando, PLM alleged that they scored poorly in their
performance evaluation ratings. However, check with their actual
performance scores (see pp. 252-264, records) shows that their
grades are near perfect. PLMFO's President Vicente Benagale was
accused of having poor class performance scores. His evaluation
forms were, however, not available for scrutiny.
On two occasions, PLM was directed to produce the evaluation
results of the 16 complainants, the first, through an Order of
Director Salvador Fernandez dated May 28, 1990 (see p. 148
records) and the second, in the conference of January 24, 1990
(see p. 278, records). PLM failed to comply on both occasions. This
Council can only deduce that the presentation of such evidence
would be detrimental to its case.
Roberto Amores and Virgilio Zamora were separated on the ground
that they failed to complete their MA degrees. A glance at their
number of years of service makes PLM's charge spurious. In the
case of Roberto Amores, records show that he has been with PLM
for 6 1/2 years and was still on a temporary appointment basis.
Under Board Resolution 1025, he should be considered as a
permanent employee, his contract of employment having been
renewed after the interim period. If PLM were sincere in applying
the rule that all permanent faculty must have a Masters Degree, it
should have disqualified Mr. Amores after his interim period of
appointment. It therefore appears that PLM sought to enforce this
rule only after Mr. Amores was elected union treasurer. On the
other hand, PLM's objection as regards Virgilio Zamora is
premature. Mr. Zamora was only in his 4th year at the university.
Based on the concept of interim appointment, he is given up to the
fifth year to complete his Masters.
The cause for termination of Leyson's services was her enrollment
in another school without allegedly asking permission from PLM
management. On record (p. 507, records) is a letter dated January
7, 1989 of Anita Leyson to the University, asking permission to
continue her studies at the Arellano Law School for the 2nd
semester of 1989. PLM challenges complainant to show proof that
her request had been granted. Even if complainant, however,
cannot produce any document showing that she was granted
permission, in like manner, neither can PLM present any document
expressly prohibiting her to enroll at the Arellano University. PLM's
non-response, if this is indeed the case, must be construed as
consent. Complainant's request was for continuance of her studies.
If this act was truly objectionable, PLM should have questioned
about her previous enrollment at the Arellano University.
Moreover, this Council cannot help but comment that as part of
every person's basic human right, there is nothing to prevent nor
prohibit Ms. Leyson to enroll in the law school of her choice. As
borne out by her excellent performance ratings, complainant has
rendered an exemplary service. Penalizing complainant for seeking
to further improve herself is bordering on oppression.
In the same conference of January 24, 1991, PLM was directed to
further substantiate the validity of its charges against complainants.
In its position paper and other subsequent pleadings, PLM has
however, abandoned all efforts to pursue its line of defense. It
would appear therefore that the charges are false and untenable. If
37
 this is so, why was PLM so bold as to present them as grounds for
the separation of complainants in the first place? Perhaps, it was
confident that because complainants possessed, temporary
contracts of employment, no serious attempt would be made to
examine PLMFO's complaint. Whatever other reasons PLM may
have, the circumstances obtaining in the instant case show that
these charges were created as an attempt to confuse/mislead
PLM's real motivations on the matter.15

The finding of the PSLMC that the non-renewal by petitioner of the questioned
contracts of employment had been motivated by private respondents' union activities
is conclusive on the parties. Indeed, this Court's resolution in G.R. No. 105157 (PLM
vs. PSLMC et al.) which has long become final and executory should now render that
matter a fait accompli.

When the case was thus referred to the CSC by the PSLMC to take "appropriate
action" it understandably meant that the CSC should take the necessary steps of
reinstating the illegally dismissed employees.

WHEREFORE, the petition for certiorari is DISMISSED and the appealed resolutions
of the Civil Service Commission are AFFIRMED. The temporary restraining order
issued by this Court on 18 May 1993, is LIFTED. No costs.

SO ORDERED.

38
G.R. No. 122226 March 25, 1998 In resolving these issues it would be useful to begin by defining who are "managerial
employees" and considering the types of "managerial employees."
UNITED PEPSI-COLA SUPERVISORY UNION (UPSU), petitioner,
vs. Types of Managerial Employees
HON. BIENVENIDO E. LAGUESMA and PEPSI-COLA PRODUCTS, PHILIPPINES,
INC. respondents. The term "manager" generally refers to "anyone who is responsible for subordinates
and other organizational resources."1 As a class, managers constitute three levels of
a pyramid:

MENDOZA, J.: Top management

Petitioner is a union of supervisory employees. It appears that on March 20, 1995 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- Middle
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: Management

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 First-Line
eligible for membership in a labor organization of the rank-and-file
employees but may join, assist or form separate labor organizations of their Management
own.

(also called
Petitioner brought this suit challenging the validity of the order dated August 31, 1995,
as reiterated in the order dated September 22, 1995, of the Secretary of Labor and
Employment. Its petition was dismissed by the Third Division for lack of showing that Supervisor)
respondent committed grave abuse of discretion. But petitioner filed a motion for
reconsideration, pressing for resolution its contention that the first sentence of Art. ====================
245 of the Labor Code, so far as it declares managerial employees to be ineligible to
form, assist or join unions, contravenes Art. III, §8 of the Constitution which provides:
Operatives

The right of the people, including those employed in the public and private
or
sectors, to form unions, associations, or societies for purposes not contrary
to law shall not be abridged.
Operating
For this reason, the petition was referred to the Court en banc.
Employees
The Issues in this Case
FIRST-LINE MANAGERS — The lowest level in an organization at which
individuals are responsible for the work of others is called first-line or first-
Two questions are presented by the petition: (1) whether the route managers at
level management. First-line managers direct operating employees only;
Pepsi-Cola Products Philippines, Inc. are managerial employees and (2) whether Art.
they do not supervise other managers. Examples of first-line managers are
245, insofar as it prohibits managerial employees from forming, joining or assisting
the "foreman" or production supervisor in a manufacturing plant, the
labor unions, violates Art. III, §8 of the Constitution.
technical supervisor in a research department, and the clerical supervisor in
a large office. First-level managers are often called supervisors.

39
 MIDDLE MANAGERS — The term middle management can refer to more
than one level in an organization. Middle managers direct the activities of
other managers and sometimes also those of operating employees. Middle
managers' principal responsibilities are to direct the activities that implement
their organizations' policies and to balance the demands of their superiors
with the capacities of their subordinates. A plant manager in an electronics
firm is an example of a middle manager.
TOP MANAGERS — Composed of a comparatively small group of
executives, top management is responsible for the overall management of
the organization. It establishes operating policies and guides the
organization's interactions with its environment. Typical titles of top
managers are "chief executive officer," "president," and "senior vice-
president." Actual titles vary from one organization to another and are not
always a reliable guide to membership in the highest management
classification.2
As can be seen from this description, a distinction exists between those who have the
authority to devise, implement and control strategic and operational policies (top and
middle managers) and those whose task is simply to ensure that such policies are
carried out by the rank-and-file employees of an organization (first-level
managers/supervisors). What distinguishes them from the rank-and-file employees is
that they act in the interest of the employer in supervising such rank-and-file
employees.
"Managerial employees" may therefore be said to fall into two distinct categories: the
"managers" per se, who compose the former group described above, and the
"supervisors" who form the latter group. Whether they belong to the first or the second
category, managers, vis-a-vis employers, are, likewise, employees.3
The first question is whether route managers are managerial employees or
supervisors.
Previous Administrative Determinations of
the Question Whether Route Managers
are Managerial Employees
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.
In Case No. OS-MA-10-318-91, entitled Worker's Alliance Trade Union (WATU)
v. Pepsi-Cola Products Philippines, Inc., decided on November 13, 1991, the
Secretary of Labor found:
We examined carefully the pertinent job descriptions of the subject
employees and other documentary evidence on record vis-a-vis paragraph
(m), Article 212 of the Labor Code, as amended, and we find that only those
employees occupying the position of route manager and accounting
manager are managerial employees. The rest i.e. quality control manager,
yard/transport manager and warehouse operations manager are supervisory
employees.
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. In the instant case, nothing on record will support the claim that
the quality control manager, yard/transport manager and warehouse
operations manager are vested with said attributes. The warehouse
operations manager, for example, merely assists the plant finance manager
in planning, organizing, directing and controlling all activities relative to
development and implementation of an effective management control
information system at the sale offices. The exercise of authority of the quality
control manager, on the other hand, needs the concurrence of the
manufacturing manager.
As to the route managers and accounting manager, we are convinced that
they are managerial employees. Their job descriptions clearly reveal so.
On July 6, 1992, this finding was reiterated in Case No. OS-A-3-71-92. entitled In
Re: Petition for Direct Certification and/or Certification Election-Route
Managers/Supervisory Employees of Pepsi-Cola Products Phils. Inc., as follows:
The issue brought before us is not of first impression. At one time, we had
the occasion to rule upon the status of route manager in the same
company vis a vis the issue as to whether or not it is supervisory employee
or a managerial employee. In the case of Workers Alliance Trade Unions
(WATU) vs. Pepsi Cola Products, Phils., Inc. (OS-MA-A-10-318-91 ), 15
November 1991, we ruled that a route manager is a managerial employee
within the context of the definition of the law, and hence, ineligible to join,
form or assist a union. We have once more passed upon the logic of our
Decision aforecited in the light of the issues raised in the instant appeal, as
well as the available documentary evidence on hand, and have come to the
view that there is no cogent reason to depart from our earlier holding. Route
Managers are, by the very nature of their functions and the authority they
wield over their subordinates, managerial employees. The prescription found
in Art. 245 of the Labor Code, as amended therefore, clearly applies to
them.4
Citing our ruling in Nasipit Lumber Co. v. National Labor Relations
Commission,5 however, petitioner argues that these previous administrative
determinations do not have the effect of res judicata in this case, because "labor
relations proceedings" are "non-litigious and summary in nature without regard to
legal technicalities."6 Nasipit Lumber Co. involved a clearance to dismiss an
employee issued by the Department of Labor. The question was whether in a
subsequent proceeding for illegal dismissal, the clearance was res judicata. In holding
40
it was not, this Court made it clear that it was referring to labor relations proceedings DOLE's Finding that Route Managers are
of a non-adversary character, thus: Managerial Employees Supported by
Substantial Evidence in the Record
The requirement of a clearance to terminate employment was a creation of
the Department of labor to carry out the Labor Code provisions on security of The Court now finds that the job evaluation made by the Secretary of Labor is indeed
tenure and termination of employment. The proceeding subsequent to the supported by substantial evidence. The nature of the job of route managers is given in
filing of an application for clearance to terminate employment was outlined in a four-page pamphlet, prepared by the company, called "Route Manager Position
Book V, Rule XIV of the Rules and Regulations Implementing the Labor Description," the pertinent parts of which read:
Code. The fact that said rule allowed a procedure for the approval of the
clearance with or without the opposition of the employee concerned (Secs. 7 A. BASIC PURPOSE
& 8), demonstrates the non-litigious and summary nature of the proceeding.
The clearance requirement was therefore necessary only as an expeditious
shield against arbitrary dismissal without the knowledge and supervision of A Manager achieves objectives through others.
the Department of Labor. Hence, a duly approved clearance implied that the
dismissal was legal or for cause (Sec. 2).7 As a Route Manager, your purpose is to meet the sales
plan; and you achieve this objective through the skillful
But the doctrine of res judicata certainly applies to adversary administrative MANAGEMENT OF YOUR JOB AND THE
proceedings. As early as 1956, in Brillantes v. Castro,8 we sustained the dismissal of MANAGEMENT OF YOUR PEOPLE.
an action by a trial court on the basis of a prior administrative determination of the
same case by the Wage Administration Service, applying the principle of res judicata. These then are your functions as Pepsi-Cola Route
Recently, in Abad v. NLRC9 we applied the related doctrine of stare decisis in holding Manager. Within these functions — managing your job and
that the prior determination that certain jobs at the Atlantic Gulf and Pacific Co., were managing your people — you are accountable to your
project employments was binding in another case involving another group of District Manager for the execution and completion of
employees of the same company. Indeed, in Nasipit Lumber Co., this Court clarified various tasks and activities which will make it possible for
toward the end of its opinion that "the doctrine of res judicata applies . . . to judicial you to achieve your sales objectives.
or quasi judicial proceedings and not to the exercise of administrative powers." 10 Now
proceedings for certification election, such as those involved in Case No. OS-M-A-10- B. PRINCIPAL ACCOUNTABILITIES
318-91 and Case No. OS-A-3-71-92, are quasi judicial in nature and, therefore,
decisions rendered in such proceedings can attain finality.11
1.0 MANAGING YOUR JOB
Thus, we have in this case an expert's view that the employees concerned are
managerial employees within the purview of Art. 212 which provides: The Route Manager is accountable for
the following:
(m) "managerial employee" is one who is vested with powers or prerogatives
to lay down and execute management policies and/or to hire, transfer, 1.1 SALES DEVELOPMENT
suspend, lay off, recall, discharge, assign or discipline employees.
Supervisory employees are those who, in the interest of the employer, 1.1.1 Achieve the
effectively recommend such managerial actions if the exercise of such sales plan.
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
1.1.2 Achieve all
definitions are considered rank-and-file employees for purposes of this Book.
distribution and new
account objectives.
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
1.1.3 Develop new
employees as defined by law in the absence of anything to show that such
business opportunities
determination is without substantial evidence to support it. Nonetheless, the Court,
thru personal contacts
concerned that employees who are otherwise supervisors may wittingly or unwittingly
with dealers.
be classified as managerial personnel and thus denied the right of self-organization,
has decided to review the record of this case.
41
 1.1.4 Inspect and an accurate and
ensure that all timely basis.
merchandizing [sic]
objectives are 1.2.3 Ensure proper
achieved in all outlets. implementation of the
various company
1.1.5 maintain and policies and
improve productivity of procedures incl. but
all cooling equipment not limited to
and kiosks. shakedown; route
shortage; progressive
1.1.6 Execute and discipline; sorting;
control all authorized spoilages;
promotions. credit/collection;
accident; attendance.
1.1.7 Develop and
maintain dealer 1.2.4 Ensure
goodwill. collection of
receivables and
delinquent accounts.
1.1.8 Ensure all
accounts comply with
company suggested 2.0 MANAGING YOUR PEOPLE
retail pricing.
The Route Manager is accountable for
1.1.9 Study from time the following:
to time individual route
coverage and 2.1 Route Sales Team Development
productivity for
possible adjustments 2.1.2 Conduct route
to maximize utilization rides to train, evaluate
of resources. and develop all
assigned route
1.2 Administration salesmen and helpers
at least 3 days a
1.2.1 Ensure the week, to be supported
proper loading of by required route ride
route trucks before documents/reports &
check-out and the back check/spot
proper sorting of check at least 2 days
bottles before check- a week to be
in. supported by required
documents/reports.
1.2.2 Ensure the
upkeep of all route 2.1.2 Conduct sales
sales reports and all meetings and morning
other related reports huddles. Training
and forms required on should focus on the
enhancement of
42
 effective sales and Effective 01 April 1995, your basic monthly salary of P11,710 will be
merchandizing [sic] increased to P12,881 or an increase of 10%. This represents the added
techniques of the managerial responsibilities you will assume due to the recent restructuring
salesmen and and streamlining of Metro Sales Operations brought about by the continuous
helpers. Conduct losses for the last nine (9) months.
group training at least
1 hour each week on Let me remind you that for our operations to be profitable, we have to
a designated day and sustain the intensity and momentum that your group and yourself have
of specific topic. shown last March. You just have to deliver the desired volume targets, better
negotiated concessions, rationalized sustaining deals, eliminate or reduced
2.2 Code of Conduct overdues, improved collections, more cash accounts, controlled operating
expenses, etc. Also, based on the agreed set targets, your monthly
2.2.1 Maintain the performance will be closely monitored.
company's reputation
through strict You have proven in the past that your capable of achieving your targets thru
adherence to PCPPI's better planning, managing your group as a fighting team, and thru
code of conduct and aggressive selling. I am looking forward to your success and I expect that
the universal you just have to exert your doubly best in turning around our operations from
standards of a losing to a profitable one!
unquestioned
business Happy Selling!!
ethics.12

Earlier in this opinion, reference was made to the distinction between managers per
se (top managers and middle managers) and supervisors (first-line managers). That
distinction is evident in the work of the route managers which sets them apart from
supervisors in general. Unlike supervisors who basically merely direct operating
employees in line with set tasks assigned to them, route managers are responsible for
the success of the company's main line of business through management of their
respective sales teams. Such management necessarily involves the planning,
direction, operation and evaluation of their individual teams and areas which the work
of supervisors does not entail.

The route managers cannot thus possibly be classified as mere supervisors because
their work does not only involve, but goes far beyond, the simple direction or
supervision of operating employees to accomplish objectives set by those above
them. They are not mere functionaries with simple oversight functions but business
administrators in their own right. An idea of the role of route managers as
managersper se can be gotten from a memo sent by the director of metro sales
operations of respondent company to one of the route managers. It reads:13

03 April 1995 The plasticized card given to route managers, quoted in the separate opinion of
Justice Vitug, although entitled "RM's Job Description," is only a summary of
To : CESAR T . REOLADA performance standards. It does not show whether route managers are managers per
se or supervisors. Obviously, these performance standards have to be related to the
specific tasks given to route managers in the four-page "Route Manager Position
From : REGGIE M. SANTOS Description," and, when this is done, the managerial nature of their jobs is fully
revealed. Indeed, if any, the card indicates the great latitude and discretion given to
Subj : SALARY INCREASE route managers — from servicing and enhancing company goodwill to supervising
43
and auditing accounts, from trade (new business) development to the discipline,
training and monitoring of performance of their respective sales teams, and so forth,
— if they are to fulfill the company's expectations in the "key result areas."
Article 212(m) says that "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." Thus, their only power is to recommend. Certainly, the route
managers in this case more than merely recommend effective management action.
They perform operational, human resource, financial and marketing functions for the
company, all of which involve the laying down of operating policies for themselves
and their teams. For example, with respect to marketing, route managers, in
accordance with B.1.1.1 to B.1.1.9 of the Route Managers Job Description, are
charged, among other things, with expanding the dealership base of their respective
sales areas, maintaining the goodwill of current dealers, and distributing the
company's various promotional items as they see fit. It is difficult to see how
supervisors can be given such responsibility when this involves not just the routine
supervision of operating employees but the protection and expansion of the
company's business vis-a-visits competitors.
While route managers do not appear to have the power to hire and fire people (the
evidence shows that they only "recommended" or "endorsed" the taking of disciplinary
action against certain employees), this is because this
is a function of the Human Resources or Personnel Department of the
company.14 And neither should it be presumed that just because they are given set
benchmarks to observe, they are ipso facto supervisors. Adequate control methods
(as embodied in such concepts as "Management by Objectives [MBO]" and
"performance appraisals") which require a delineation of the functions and
responsibilities of managers by means of ready reference cards as here, have long
been recognized in management as effective tools for keeping businesses
competitive.
This brings us to the second question, whether the first sentence of Art. 245 of the
Labor Code, prohibiting managerial employees from forming, assisting or joining any
labor organization, is constitutional in light of Art. III, §8 of the Constitution which
provides:
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.
As already stated, whether they belong to the first category (managers per se) or the
second category (supervisors), managers are employees. Nonetheless, in the United
States, as Justice Puno's separate opinion notes, supervisors have no right to form
unions. They are excluded from the definition of the term "employee" in §2(3) of the
Labor-Management Relations Act of 1947.15 In the Philippines, the question whether
managerial employees have a right of self-organization has arisen with respect to
first-level managers or supervisors, as shown by a review of the course of labor
legislation in this country.
Right of Self-Organization of Managerial
Employees under Pre-Labor Code Laws
Before the promulgation of the Labor Code in 1974, the field of labor relations was
governed by the Industrial Peace Act (R.A. No. 875).
In accordance with the general definition above, this law defined "supervisor" as
follows:
Sec. 2. . . .
(k) "Supervisor" means any person having authority in the interest of an
employer, to hire, transfer, suspend, lay-off, recall, discharge, assign,
recommend, or discipline other employees, or responsibly to direct them,
and to adjust their grievances, or effectively to recommend such acts, if, in
connection with the foregoing, the exercise of such authority is not of a
merely routinary or clerical nature but requires the use of independent
judgment.16
The right of supervisors to form their own organizations was affirmed:
Sec. 3. Employees' Right to Self-Organization. — Employees shall have the
right to self-organization and to form, join or assist labor organizations of
their own choosing for the purpose of collective bargaining through
representatives of their own choosing and to engage in concerted activities
for the purpose of collective bargaining and other mutual aid and protection.
Individuals employed as supervisors shall not be eligible for membership in a
labor organization of employees under their supervision but may form
separate organizations of their own.17
For its part, the Supreme Court upheld in several of its decisions the right of
supervisors to organize for purposes of labor relations. 18
Although it had a definition of the term "supervisor," the Industrial Peace Act did not
define the term "manager." But, using the commonly-understood concept of
"manager," as above stated, it is apparent that the law used the term "supervisors" to
refer to the sub-group of "managerial employees" known as front-line managers. The
other sub-group of "managerial employees," known as managers per se, was not
covered.
However, in Caltex Filipino Managers and Supervisors Association v. Court of
Industrial Relations,19 the right of all managerial employees to self-organization was
upheld as a general proposition, thus:
It would be going too far to dismiss summarily the point raised by respondent
Company — that of the alleged identity of interest between the managerial
staff and the employing firm. That should ordinarily be the case, especially
44
 so where the dispute is between management and the rank and file. It does Jr. Supervisory Assistant
not necessarily follow though that what binds the managerial staff to the
corporation forecloses the possibility of conflict between them. There could Credit Assistant
be a real difference between what the welfare of such group requires and the
concessions the firm is willing to grant. Their needs might not be attended to
then in the absence of any organization of their own. Nor is this to indulge in Lab. Supvr. — Pandacan
empty theorizing. The record of respondent Company, even the very case
cited by it, is proof enough of their uneasy and troubled relationship. Jr. Sales Engineer B
Certainly the impression is difficult to erase that an alien firm failed to
manifest sympathy for the claims of its Filipino executives. To predicate Operations Assistant B
under such circumstances that agreement inevitably marks their relationship,
ignoring that discord would not be unusual, is to fly in the face of reality.
Field Engineer
. . . The basic question is whether the managerial personnel can organize.
What respondent Company failed to take into account is that the right to self- Sr. Opers. Supvr. — MIA A/S
organization is not merely a statutory creation. It is fortified by our
Constitution. All are free to exercise such right unless their purpose is Purchasing Assistant
contrary to law. Certainly it would be to attach unorthodoxy to, not to say an
emasculation of, the concept of law if managers as such were precluded
Jr. Construction Engineer
from organizing. Having done so and having been duly registered, as did
occur in this case, their union is entitled to all the rights under Republic Act
No. 875. Considering what is denominated as unfair labor practice under Sr. Sales Supervisor
Section 4 of such Act and the facts set forth in our decision, there can be
only one answer to the objection raised that no unfair labor practice could be Deport Supervisor A
committed by respondent Company insofar as managerial personnel is
concerned. It is, as is quite obvious, in the negative.20
Terminal Accountant B

Actually, the case involved front-line managers or supervisors only, as the plantilla of
Merchandiser
employees, quoted in the main opinion,21 clearly indicates:

Dist. Sales Prom. Supvr.

CAFIMSA members holding the following Supervisory Payroll Position Title
are Recognized by the Company
Instr. — Merchandising
Payroll Position Title
Asst. Dist. Accountant B
Assistant to Mgr. — National Acct. Sales
Sr. Opers. Supervisor
Jr. Sales Engineer
Jr. Sales Engineer A
Retail Development Asst.
Asst. Bulk Ter. Supt.
Staff Asst. — 0 Marketing
Sr. Opers. Supvr.
Sales Supervisor
Credit Supervisor A
Supervisory Assistant
Asst. Stores Supvr. A

45
 Ref. Supervisory Draftsman The definition shows that it is actually a combination of the commonly understood
definitions of both groups of managerial employees, grammatically joined by the
Refinery Shift Supvr. B phrase "and/or."

Asst. Supvr. A — Operations (Refinery) This general definition was perhaps legally necessary at that time for two reasons.
First, the 1974 Code denied supervisors their right to self-organize as theretofore
guaranteed to them by the Industrial Peace Act. Second, it stood the dictum in the
Refinery Shift Supvr. B Caltex case on its head by prohibiting all types of managers from forming unions. The
explicit general prohibition was contained in the then Art. 246 of the Labor Code.
Asst. Lab. Supvr. A (Refinery)
The practical effect of this synthesis of legal concepts was made apparent in the
St. Process Engineer B (Refinery) Omnibus Rules Implementing the Labor Code which the Department of Labor
promulgated on January 19, 1975. Book V, Rule II, §11 of the Rules provided:
Asst. Supvr. A — Maintenance (Refinery)
Supervisory unions and unions of security guards to cease operation. — All
Asst. Supvr. B — Maintenance (Refinery) existing supervisory unions and unions of security guards shall, upon the
effectivity of the Code, cease to operate as such and their registration
certificates shall be deemed automatically canceled. However, existing
Supervisory Accountant (Refinery) collective agreements with such unions, the life of which extends beyond the
date of effectivity of the Code, shall be respected until their expiry date
Communications Supervisor (Refinery) insofar as the economic benefits granted therein are concerned.

Finally, also deemed included are all other employees excluded from the Members of supervisory unions who do not fall within the definition of
rank and file unions but not classified as managerial or otherwise excludable managerial employees shall become eligible to join or assist the rank and file
by law or applicable judicial precedents. labor organization, and if none exists, to form or assist in the forming of such
rank and file organization. The determination of who are managerial
employees and who are not shall be the subject of negotiation between
Right of Self-Organization of Managerial
representatives of the supervisory union and the employer. If no agreement
Employees under the Labor Code
is reached between the parties, either or both of them may bring the issue to
the nearest Regional Office for determination.
Thus, the dictum in the Caltex case which allowed at least for the theoretical
unionization of top and middle managers by assimilating them with the supervisory
The Department of Labor continued to use the term "supervisory unions" despite the
group under the broad phrase "managerial personnel," provided the lynchpin for later
demise of the legal definition of "supervisor" apparently because these were the
laws denying the right of self-organization not only to top and middle management
unions of front line managers which were then allowed as a result of the statutory
employees but to front line managers or supervisors as well. Following the Caltex
grant of the right of self-organization under the Industrial Peace Act. Had the
case, the Labor Code, promulgated in 1974 under martial law, dropped the distinction
Department of Labor seen fit to similarly ban unions of top and middle managers
between the first and second sub-groups of managerial employees. Instead of
which may have been formed following the dictum in Caltex, it obviously would have
treating the terms "supervisor" and "manager" separately, the law lumped them
done so. Yet it did not, apparently because no such unions of top and middle
together and called them "managerial employees," as follows:
managers really then existed.

Art. 212. Definitions . . . .

Real Intent of the 1986 Constitutional Commission

(k) "Managerial Employee" is one who is vested with powers or prerogatives

This was the law as it stood at the time the Constitutional Commission considered the
to lay down and execute management policies and/or to hire, transfer,
draft of Art. III, §8. Commissioner Lerum sought to amend the draft of what was later
suspend, lay off, recall, discharge, assign or discipline employees, or to
to become Art. III, §8 of the present Constitution:
effectively recommend such managerial actions. All employees not falling
within this definition are considered rank and file employees for purposes of
this Book.22 MR. LERUM. My amendment is on Section 7, page 2, line 19, which is to
insert between the words "people" and "to" the following: WHETHER
46
 EMPLOYED BY THE STATE OR PRIVATE ESTABLISHMENTS. In other
words, the section will now read as follows: "The right of the people
WHETHER EMPLOYED BY THE STATE OR PRIVATE ESTABLISHMENTS
to form associations, unions, or societies for purposes not contrary to law
shall not be abridged."23
Explaining his proposed amendment, he stated:
MR. LERUM. Under the 1935 Bill of Rights, the right to form associations is
granted to all persons whether or not they are employed in the government.
Under that provision, we allow unions in the government, in government-
owned and controlled corporations and in other industries in the private
sector, such as the Philippine Government Employees' Association, unions
in the GSIS, the SSS, the DBP and other government-owned and controlled
corporations. Also, we have unions of supervisory employees and of security
guards. But what is tragic about this is that after the 1973 Constitution was
approved and in spite of an express recognition of the right to organize in
P.D. No. 442, known as the Labor Code, the right of government workers,
supervisory employees and security guards to form unions was abolished.
And we have been fighting against this abolition. In every tripartite
conference attended by the government, management and workers, we
have always been insisting on the return of these rights. However, both the
government and employers opposed our proposal, so nothing came out of
this until this week when we approved a provision which states:
Notwithstanding any provision of this article, the right to
self-organization shall not be denied to government
employees.
We are afraid that without any corresponding provision covering the private
sector, the security guards, the supervisory employees or majority
employees [sic] will still be excluded, and that is the purpose of this
amendment.
I will be very glad to accept any kind of wording as long as it will amount to
absolute recognition of private sector employees, without exception, to
organize.
THE PRESIDENT. What does the Committee say?
FR. BERNAS. Certainly, the sense is very acceptable, but the point raised
by Commissioner Rodrigo is well-taken. Perhaps, we can lengthen this a
little bit more to read: "The right of the people WHETHER UNEMPLOYED
OR EMPLOYED BY STATE OR PRIVATE ESTABLISHMENTS.
I want to avoid also the possibility of having this interpreted as applicable
only to the employed.
MR. DE LOS REYES. Will the proponent accept an amendment to the
amendment, Madam President?
MR. LERUM. Yes, as long as it will carry the idea that the right of the
employees in the private sector is recognized.24
Lerum thus anchored his proposal on the fact that (1) government employees,
supervisory employees, and security guards, who had the right to organize under the
Industrial Peace Act, had been denied this right by the Labor Code, and (2) there was
a need to reinstate the right of these employees. In consonance with his objective to
reinstate the right of government, security, and supervisory employees to organize,
Lerum then made his proposal:
MR. LERUM. Mr. Presiding Officer, after a consultation with several
Members of this Commission, my amendment will now read as follows: "The
right of the people INCLUDING THOSE EMPLOYED IN THE PUBLIC AND
PRIVATE SECTORS to form associations, unions, or societies for purposes
not contrary to law shall not be abridged. In proposing that amendment I ask
to make of record that I want the following provisions of the Labor Code to
be automatically abolished, which read:
Art. 245. Security guards and other personnel employed
for the protection and security of the person, properties
and premises of the employers shall not be eligible for
membership in a labor organization.
Art. 246. Managerial employees are not eligible to join,
assist, and form any labor organization.
THE PRESIDING OFFICER (Mr. Bengzon). What does the Committee say?
FR. BERNAS. The Committee accepts.
THE PRESIDING OFFICER. (Mr. Bengzon) The Committee has accepted
the amendment, as amended.
Is there any objection? (Silence) The Chair hears none; the amendment, as
amended, is approved.25
The question is what Commissioner Lerum meant in seeking to "automatically
abolish" the then Art. 246 of the Labor Code. Did he simply want "any kind of wording
as long as it will amount to absolute recognition of private sector employees, without
exception, to organize"?26 Or, did he instead intend to have his words taken in the
context of the cause which moved him to propose the amendment in the first place,
47
namely, the denial of the right of supervisory employees to organize, because he
said, "We are afraid that without any corresponding provision covering the private
sector, security guards, supervisory employees or majority [of] employees will still be
excluded, and that is the purpose of this amendment"? 27
It would seem that Commissioner Lerum simply meant to restore the right of
supervisory employees to organize. For even though he spoke of the need to
"abolish" Art. 246 of the Labor Code which, as already stated, prohibited "managerial
employees" in general from forming unions, the fact was that in explaining his
proposal, he repeatedly referred to "supervisory employees" whose right under the
Industrial Peace Act to organize had been taken away by Art. 246. It is noteworthy
that Commissioner Lerum never referred to the then definition of "managerial
employees" in Art. 212(m) of the Labor Code which put together, under the broad
phrase "managerial employees," top and middle managers and supervisors. Instead,
his repeated use of the term "supervisory employees," when such term then was no
longer in the statute books, suggests a frame of mind that remained grounded in the
language of the Industrial Peace Act.
Nor did Lerum ever refer to the dictum in Caltex recognizing the right of all managerial
employees to organize, despite the fact that the Industrial Peace Act did not expressly
provide for the right of top and middle managers to organize. If Lerum was aware of
the Caltex dictum, then his insistence on the use of the term "supervisory employees"
could only mean that he was excluding other managerial employees from his
proposal. If, on the other hand, he was not aware of the Caltex statement sustaining
the right to organize to top and middle managers, then the more should his repeated
use of the term "supervisory employees" be taken at face value, as it had been
defined in the then Industrial Peace Act.
At all events, that the rest of the Commissioners understood his proposal to refer
solely to supervisors and not to other managerial employees is clear from the
following account of Commissioner Joaquin G. Bernas, who writes:
In presenting the modification on the 1935 and 1973 texts, Commissioner
Eulogio R. Lerum explained that the modification included three categories
of workers: (1) government employees, (2) supervisory employees, and (3)
security guards. Lerum made of record the explicit intent to repeal provisions
of P.D. 442, the Labor Code. The provisions referred to were:
Art. 245. Security guards and other personnel employed
for the protection and security of the person, properties
and premises of the employers shall not be eligible for
membership in a labor organization.
Art. 246. Managerial employees are not eligible to join,
assist, and form any labor organization.28
Implications of the Lerum Proposal
In sum, Lerum's 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.
Constitutionality of Art. 245
Finally, the question is whether the present ban against managerial employees, as
embodied in Art. 245 (which superseded Art. 246) of the Labor Code, is valid. This
provision reads:
Art. 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.29
This provision 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 of the terms "managerial" and "supervisory employees," as
follows:
Art. 212. Definitions. . . .
(m) "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.
Although the definition of "supervisory employees" seems to have been unduly
restricted to the last phrase of the definition in the Industrial Peace Act, the legal
significance given to the phrase "effectively recommends" remains the same. In fact,
the distinction between top and middle managers, who set management policy, and
front-line supervisors, who are merely responsible for ensuring that such policies are
carried out by the rank and file, is articulated in the present definition.30 When read in
48
relation to this definition in Art. 212(m), it will be seen that Art. 245 faithfully carries out
the intent of the Constitutional Commission in framing Art. III, §8 of the fundamental
law.

Nor is the guarantee of organizational right in Art. III, §8 infringed by a ban against
managerial employees forming a union. The right guaranteed in Art. III, §8 is subject
to the condition that its exercise should be for purposes "not contrary to law." In the
case of Art. 245, there is a rational basis for prohibiting managerial employees from
forming or joining labor organizations. As Justice Davide, Jr., himself a constitutional
commissioner, said in his ponencia in Philips Industrial Development, Inc. v. NLRC:31

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

In Bulletin Publishing Co., Inc. v. Hon. Augusto Sanchez, this Court

elaborated on this rationale, thus:

. . . The rationale for this inhibition has been stated to be,

because if these managerial employees would belong to
or be affiliated with a Union, the latter might not be
assured of their loyalty to the Union in view of evident
conflict of interests. The Union can also become company-
dominated with the presence of managerial employees in
Union membership.32

To be sure, the Court in Philips Industrial was dealing with the right of confidential
employees to organize. But the same reason for denying them the right to organize
justifies even more the ban on managerial employees from forming unions. After all,
those who qualify as top or middle managers are executives who receive from their
employers information that not only is confidential but also is not generally available to
the public, or to their competitors, or to other employees. It is hardly necessary to
point out that to say that the first sentence of Art. 245 is unconstitutional would be to
contradict the decision in that case.

WHEREFORE, the petition is DISMISSED.

SO ORDERED.

49
G.R. No. 78755 July 19, 1989
GOLDEN FARMS, INC., petitioner,
vs.
THE HONORABLE DIRECTOR PURA FERRER-CALLEJA, BUREAU OF LABOR
RELATIONS and NATIONAL FEDERATION OF LABOR, respondents.
J. V. Yap Law Office for petitioner.
Beethoven L. Orcullo for private respondent.
PARAS, J.:
Petitioner Golden Farms, Inc., seeks a reversal of the resolution of public respondent
Department of Labor and Employment Director Pura Ferrer-Calleja in BLR Case No.
A-2-56-87 which affirmed on appeal the decision of Labor Arbiter Conrado O.
Macasa, Sr., in NLRC Case No. R-418-ROXI-MED-UR-8886, issuing a directive as
follows:
In view of the foregoing, the herein petition for certification election
filed by the National Federation of Labor (NFL) is hereby
DISMISSED; whereas, its resultant and relevant consequence of its
recognized representation of the entire rank-and-file employees of
the bargaining unit should be given life and meaning, as it is hereby
directed, and Employer Golden Farms, Incorporated likewise
enjoined to negotiate for a supplementary collective bargaining
agreement, or for the inclusion of the herein monthly paid rank-and-
file employees at Luna, Kapalong, Davao del Norte, and Lanang,
Davao City in the still existing negotiated contract, whichever the
parties may consider just and appropriate under the circumstances.
SO ORDERED. (p. 29, Rollo)
The case originated as a Petition for Direct Certification Election or Recognition filed
by herein private respondent in behalf of certain office employees and foremen before
Regional Office No. XI, Davao City of the Ministry of Labor and Employment.
Petitioner herein opposed said petition on the ground among others that a perusal of
the names allegedly supporting the said petition showed that said persons by the
nature of their jobs are performing managerial functions and/or occupying confidential
positions such that they cannot validly constitute a separate or distinct group from the
existing collective bargaining unit also represented by private respondent.
Petitioner is a corporation engaged in the production of bananas for export. Private
respondent Union represents the employees/workers of petitioner corporation, who
were the same signatories to an earlier Petition for Certification Election filed in 1984
before the Ministry of Labor known as ROXI Case No. UR-70-84, which was
dismissed by a Resolution issued by Med-Arbiter Conchita Martinez when it was
established that a collective bargaining unit (NFL) between the Corporation and the
rank-and-file employees was and is in existence at the time of the filing of the said
petition for certification election until the present filing. However, in the order of
dismissal, it was stated:
After taking into consideration the functions exercised by the
foremen as contained in their joint affidavits (Annexes "A-1", "A-2"
& "A-3", Petitioner's Position Paper) apparently, they fall within the
classification of rank-and-file employees. For, as consistently ruled
in a long line of decisions, mere supervisory designations in the
position titles, do not make the holders of such positions any less
rank and filers, without the convincing proof that such supervisory
designations are coupled with actual performance of managerial
functions. In the cases at bar, what was submitted by the
respondent companies are only lists of employees holding the
positions of foremen and confidential positions and as such are not
covered by the bargaining unit. Such piece of evidence alone does
not constitute convincing proof for us to adapt respondents' stance
(Annexes "A", "B", "C", & "D"). Comment on Petition). (p. 13, Rollo)
Having had no opportunity to contest the abovementioned statement in the order of
dismissal, petitioner herein as private respondent therein, filed a "Manifestation"
stating among others:
2. That since the petitions were dismissed the herein employees
make clear for the record that said view would run counter to the
provision of the pertinent Collective Bargaining Agreement whereby
the foremen were already acknowledged and agreed upon to be
managerial employees and accordingly excluded from the coverage
of the said CBA;
3. That with respect to those employees holding confidential
positions, it is a basic principle that they cannot be included in any
bargaining unit, the fact being that having access to confidential
informations, said employees may be the source of undue
advantage. Said employees may act as spies for either parties to
collective bargaining agreement. This is especially true in this case
where the petitioning union is already the bargaining agent of the
rank-and-file employees in the establishment. To allow confidential
employees to join existing bargaining unit will defeat the very
purpose for which an employee holding confidential position was in
the first place excluded. (p. 68, Rollo)
Private respondent herein as petitioner therein appealed the order of dismissal which
was accordingly opposed (Annex "L" p. 69, Rollo) by Golden Farms, Inc., reiterating
the grounds and arguments set forth in its Manifestation filed earlier. The appeal was
dismissed and subsequently the National Federation of Labor Union refiled the
50
Petition for Certification in NLRC Case No. R-418- ROX-MED-UR-88-86 which was
also dismissed. Said order of dismissal is now the subject of this review for containing
directives not within the power of a Med-Arbiter to issue. Petitioner Golden Farms,
Inc., now poses the following questions:
I HAS A MED-ARBITER THE POWER OR
AUTHORITY TO DIRECT MANAGEMENT TO
ENTER INTO A SUPPLEMENTAL COLLECTIVE
BARGAINING AGREEMENT WITH A one can be compelled to accept changes in the terms of the collective bargaining
CONTRACTING UNION.
II MAY SUPERVISORS, CASHIERS, FOREMEN,
AND EMPLOYEES HOLDING
CONFIDENTIAL/MANAGERIAL FUNCTION
COMPEL MANAGEMENT TO ENTER INTO A
COLLECTIVE BARGAINING AGREEMENT
WITH THEM. (p. 14, Rollo)
The petition merits Our consideration.
Respondents relied heavily on the alleged finding of Med-Arbiter Martinez that the
employees who were signatories to the petition for certification election and
represented by respondent Union are actually rank-and-file workers not disqualified
from entering into a collective bargaining agreement with management. In said
findings of fact, Med-Arbiter Martinez singled out in her classification as rank-and-file
employees the foremen of Petitioner Corporation considered from their joint affidavits
and for lack of convincing proof that their supervisory designations are coupled with
the actual performance of managerial functions.
Whether or not such finding is supported by the evidence is beside the point.
Respondents herein do not dispute that the signatories (listed in Annex "A", page 30,
Rollo) to the Petition for certification election subject of this case, were holding the
positions of cashier, purchasers, personnel officers, foremen and employees having
access to confidential information such as accounting personnel, radio and telegraph
operators and head of various sections. It is also a fact that respondent Union is the
exclusive bargaining Unit of the rank-and-file employees of petitioner corporation and
that an existing CBA between petitioner corporation and the Union representing these
rank-and-file employees was still enforced at the time the Union filed a petition for
certification election in behalf of the aforementioned signatories. Under the terms of
said CBA (Annex "E", p. 40, Rollo) it is expressly provided that:
Section 1. The COMPANY and the UNION hereby agree that the
recognized bargaining unit for purposes of this agreement shall
consist of regular rank-and-file workers employed by the
COMPANY at the plantation presently situated at Alejal, Carmen,
Davao. Consequently, all managerial personnel like,
superintendents, supervisor, foremen, administrative, professional
and confidential employees, and those temporary, casual,
contractual, and seasonal workers are excluded from the
bargaining unit and therefore, not covered by this agreement.
(p. 41, Rollo)
Respondents do not dispute the existence of said collective bargaining agreement.
We must therefore respect this CBA which was freely and voluntarily entered into as
the law between the parties for the duration of the period agreed upon. Until then no
agreement.
Furthermore, the signatories to the petition for certification election are the very type
of employees by the nature of their positions and functions which We have decreed
as disqualified from bargaining with management in case of Bulletin Publishing Co.
Inc. vs. Hon. Augusto Sanchez, etc. (144 SCRA 628) reiterating herein the rationale
for such ruling as follows: if these managerial employees would belong to or be
affiliated with a Union, the latter might not be assured of their loyalty to the Union in
view of evident conflict of interests or that the Union can be company- dominated with
the presence of managerial employees in Union membership. A managerial employee
is defined under Art. 212 (k) of the new Labor Code as "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, or to
effectively recommend such managerial actions. All employees not falling within this
definitions are considered rank-and-file employees for purposes of this Book."
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.
As to the company foremen, while in the performance of supervisory functions, they
may be the extension or alter ego of the management. Adversely, the foremen, by
their actuation, may influence the workers under their supervision to engage in slow
down commercial activities or similar activities detrimental to the policy, interest or
business objectives of the company or corporation, hence they also cannot join.
WHEREFORE, finding the assailed directive of Med-Arbiter Conrado O. Macasa, Sr.
which was affirmed by Director Pura Ferrer-Calleja reiterating the directive of Med-
Arbiter Conchita Martinez "to negotiate for a supplementary collective bargaining
agreement, or for the inclusion of the herein monthly paid rank-and- file employees" to
be erroneous as it is in complete disregard of the terms of the collective bargaining
agreement, the same is hereby DECLARED to be without force and effect.
51
G.R. No. L-98050 March 17, 1994
PHILIPPINE PHOSPHATE FERTILIZER CORPORATION, petitioner,
vs.
HON. RUBEN D. TORRES, Secretary of Labor and Employment, HON.
RODOLFO S. MILADO, Department of Labor and Employment Mediator-Arbiter
for Region VIII, Tacloban, City, and PHILPHOS MOVEMENT FOR PROGRESS,
INC. (PMPI), respondents.
Quiroz, Dumas & Henares Law Offices for petitioner.
Seno, Mendoza & Associates for private respondent Philphos Movement for
Progress, Inc.
BELLOSILLO, J.:
PHILIPPINE PHOSPHATE FERTILIZER CORPORATION (PHILPHOS) assails the
decision of the Secretary of Labor of 7 August 1990 affirming the order of the
Mediator-Arbiter of 28 March 1990 which directed the immediate conduct of a
certification election among the supervisory, professional or technical, and
confidential employees of petitioner corporation.
On 7 July 1989, Philphos Movement for Progress, Inc. (PMPI for brevity), filed with
the Department of Labor and Employment a petition for certification election among
the supervisory employees of petitioner, alleging that as a supervisory union duly
registered with the Department of Labor and Employment it was seeking to represent
the supervisory employees of Philippine Phosphate Fertilizer Corporation.
The petition for certification election filed by PMPI was not opposed by PHILPHOS. In
fact, on 11 August 1989, PHILPHOS submitted a position paper with the Mediator-
Arbiter stating that its management welcomed the creation of a supervisory
employees' union provided the necessary requisites of law were properly observed,
but exempting from the union its superintendents who were managerial and not
supervisory employees as they managed a division, subdivision or section, and were
vested with powers or prerogatives to lay down and execute management policies.
PHILPHOS also asserted that its professional or technical employees were not within
the definition of supervisory employees under the Labor Code as they were
immediately under the direction and supervision of its superintendents and
supervisors. Moreover, the professional and technical employees did not have a staff
of workers under them. Consequently, petitioner prayed for the exclusion of
its superintendents andprofessional/technical employees from the PMPI supervisory
union.
On 13 October 1989, Mediator-Arbiter Rodolfo S. Milado issued an order directing the
holding of a certification election among the supervisory employees of petitioner,
excluding therefrom the superintendents and theprofessional and technical
employees. He also directed the parties to attend the pre-election conference on 19
April 1990 for the determination of the mechanics of the election process and the
qualifications and eligibility of those allowed to vote.
On 15 November 1989, PMPI filed an amended petition with the Mediator-Arbiter
wherein it sought to represent not only the supervisory employees of petitioner but
also its professional/technical and confidential employees. The amended petition was
filed in view of the amendment of the PMPI Construction which included in its
membership the professional/technical and confidential employees.
On 14 December 1989, the parties therein agreed to submit their respective position
papers and to consider the amended petition submitted for decision on the basis
thereof and related documents.
On 28 March 1990, Mediator-Arbiter Milado issued an order granting the petition and
directing the holding of a certification election among the "supervisory,
professional (engineers, analysts, mechanics, accountants, nurses, midwives,
etc.), technical, and confidential employees" 1 to comprise the proposed bargaining
unit.
On 16 April 1990, PHILPHOS appealed the order of 28 March 1990 to the Secretary
of Labor and Employment who on 7 August 1990 rendered a decision through
Undersecretary Bienvenido Laguesma dismissing the appeal. PHILPHOS moved for
reconsideration but the same was denied; hence, the instant petition alleging grave
abuse of discretion on the part of public respondents in rendering the assailed rulings.
On 8 July 1991, this Court issued a temporary restraining order enjoining respondents
from holding the certification election among petitioner's supervisory,
professional/technical, and confidential employees scheduled on 12 July 1991.
There are two (2) issues raised by petitioner: (1) whether it was denied due process in
the proceedings before respondent Mediator-Arbiter; and, (2) whether
its professional/technical and confidential employees may validly join respondent
PMPI union which is composed of supervisors.
PHILPHOS claims that it was denied due process when respondent Mediator-Arbiter
granted the amended petition of respondent PMPI without according PHILPHOS a
new opportunity to be heard.
We do not see it the way PHILPHOS does here. The essence of due process is
simply an opportunity to be heard or, as applied to administrative proceedings, an
opportunity to explain one's side or an opportunity to seek a reconsideration of the
action or ruling complained of.2 Where, as in the instant case, petitioner PHILPHOS
agreed to file its position paper with the Mediator-Arbiter and to consider the case
submitted for decision on the basis of the position papers filed by the parties, there
was sufficient compliance with the requirement of due process, as petitioner was
afforded reasonable opportunity to present its side. 3 Moreover, petitioner could have,
52
if it so desired, insisted on a hearing to confront and examine the witnesses of the
other party. But it did
not; 4 instead, it opted to submit its position paper with the Mediator-Arbiter. Besides,
petitioner had all the opportunity to ventilate its arguments in its appeal to the
Secretary of Labor.
As regards the second issue, we are with petitioner that being a supervisory union,
respondent PMPI cannot represent the professional/technical and confidential
employees of petitioner whose positions we find to be more of the rank and file than
supervisory.
With the enactment in March 1989 of R.A. 6715, employees were thereunder
reclassified into three (3) groups, namely: (a) managerial employees, (b) supervisory
employees, and (c) rank and file employees. The category of supervisory employees
is once again recognized in the present law.
Article 212, par. (m), of the Labor Code, as amended, provides, that "(s)upervisory
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." The definition of
managerial employees is limited to those having authority to hire and fire, while those
who only recommend effectively the hiring or firing or transfer of personnel; are
considered closer to rank and file employees. The exclusion therefore of mid-level
executives from the category of managers has brought about a third classification, the
supervisory employees. The peculiar role of supervisors is such that while they are
not managers, when they recommend action implementing management policy or ask
for the discipline or dismissal of subordinates, they identify with the interests of the
employer and may act contrary to the interests of the rank and file. 5
In its position paper submitted to the Mediator-Arbiter, petitioner described the
positions and functions of itsprofessional/technical employees, (engineers, analysts,
mechanics, accountants, nurses, and midwives). The guidelines, which were not
refuted by respondent PMPI, state:
. . . . Professional and Technical positions are those whose primary
duty consists of the performance of work directly related to
management programs; who customarily, regularly and routinarily
exercise judgment in the application of concepts, methods, systems
and procedures in their respective fields of specialization; who
regularly and directly assist a managerial and/or supervisory
employee, execute under general supervision, work along
specialized or technical lines requiring special training, experience
or knowledge, or execute under general supervision special
assignments and task . . . . They are immediately under the
direction and supervision of supervisors or superintendents. They
have no men under them but are regularly called upon by their
supervisors or superintendents on some technical matters.6
Moreover, Herculano, A. Duhaylungsod, Personnel Officer of petitioner, attested that
there was no community of interests between the supervisors of petitioner and
the professional/technical employees; that as of 25 July 1990, personnel records
showed that there were 125 supervisors and 271 professional/technical employees;
that of the 271 professional/technical employees, 150 were directly under and being
supervised by supervisors, while the rest were staff members of superintendents.7
The certification of Personnel Officer Duhaylungsod that its professional/technical
employees occupy positions that are non-supervisory is evidence that said employees
belong to the rank and file.8 Quite obviously, theseprofessional/technical
employees cannot effectively recommend managerial actions with the use of
independent judgment because they are under the supervision of superintendents
and supervisors. Because it is unrefuted that these professional/technical
employees are performing non-supervisory functions, hence considered admitted,
they should be classified, at least for purposes of this case, as rank and file
employees. Consequently, theseprofessional/technical employees cannot be allowed
to join a union composed of supervisors. Conversely, supervisory employees cannot
join a labor organization of employees under their supervision but may validly form a
separate organization of their own.9 This is provided in Art. 245 of the Labor Code, as
amended by R.A. No. 6715, to wit:
. . . 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.
Respondent PMPI is supposed to be a union of 125 supervisors. If
the professional/technical employees are included as members, and records show
that they are 271 in all or much more than the supervisors, then PMPI will turn out to
be a rank and file union with the supervisors as members.
This is precisely the situation which the law prohibits. It would create an obvious
conflict of views among the members, or at least between two (2) groups of members
espousing opposing interests. The intent of the law is to avoid a situation
where supervisors would merge with the rank and file, or where the supervisors' labor
organization would represent conflicting interests, especially where, as in the case at
bar, the supervisors will be commingling with those employees whom they directly
supervise in their own bargaining unit. Members of the supervisory union might refuse
to carry out disciplinary measures against their co-member rank and file
employees. 10
Supervisors have the right to form their own union or labor organization. What the law
prohibits is a union whose membership comprises of supervisors merging with
the rank and file employees because this is where conflict of interests may arise in the
areas of discipline, collective bargaining and strikes. 11 The professional/technical
employees of petitioner therefore may join the existing rank and file union, or form a
union separate and distinct from the existing union organized by the rank and file
employees of the same company.
53
As to the confidential employees of the petitioner, the latter has not shown any proof
or compelling reason to exclude them from joining respondent PMPI and from
participating in the certification election, unless these confidential employees are the
same professional/technical employees whom we find to be occupying rank and file
positions.

WHEREFORE, the petition is GRANTED. The decision of respondent Secretary of

Labor of 7 August 1990, as well as the order of the respondent Mediator-Arbiter of 28
March 1990, is SET ASIDE. The professional/technical employees of petitioner
Philippine Phosphate Fertilizer Corporation (PHILPHOS) are declared disqualified
from affiliating with respondent Philphos Movement for Progress, Inc. (PMPI).

The Department of Labor is directed to order immediately the conduct of certification

election among the supervisory employees of petitioner, particularly excluding
therefrom its professional and technical employees.

SO ORDERED.

Cruz, Davide, Jr., Quiason and Kapunan, JJ., concur.

54
Affiliation and Disaffiliation
G.R. No. L-35120 January 31, 1984
ADAMSON & ADAMSON, INC., petitioner,
vs.
THE COURT OF INDUSTRIAL RELATIONS and ADAMSON & ADAMSON
SUPERVISORY UNION (FFW), respondents.
Sycip, Salazar, Luna & Feliciano for petitioner.
Jaime D. Lauron for respondents.
GUTIERREZ, JR., J.:
Adamson and Adamson, Inc., filed this petition to set aside orders of the respondent
Court of Industrial Relations (CIR) holding that the Adamson and Adamson, Inc.
supervisory Union (FFW) can legally represent supervisors of the petitioner
corporation notwithstanding the affiliation of the lank and file union of the same
company with the same labor federation, the Federation of Free Workers.
The Adamson and Adamson, Inc. Supervisory Union (FFW) informed the petitioner
about its having organized on the same date that the Adamson and Adamson, Inc.
Salesmen Association (FFW) advised the petitioner that the rank and file salesmen
had formed their own union.
The CIR dismissed the petition in CIR Case No. 3267-MC entitled "In the Matter of
Representation of the Supervisory Employees of Adamson and Adamson, Inc.,
Petitioner " thus prompting the filing of this petition for review on certiorari.
Subsequently and during the pendency of the present petition, the rank and file
employees formed their own union, naming it Adamson and Adamson Independent
Workers (FFW).
The petitioner made a lone assignment of error, to wit:
THE RESPONDENT COURT OF INDUSTRIAL RELATIONS ERRED IN
SUSTAINING THE ELIGIBILITY OF THE RESPONDENT UNION TO REPRESENT
THE PETITIONER'S SUPERVISORY EMPLOYEES NOT-WITHSTANDING THE
AFFILIATION OF THE SAID UNION WITH THE SAME NATIONAL FEDERATION
WITH WHICH THE UNIONS OF NON-SUPERVISORS IN THE PETITIONER
COMPANY ARE ALSO AFFILIATED.
The petitioner argues that the affiliation of the respondent union of supervisors, the
salesmen's association, and the Adamson and Adamson independent Workers Union
of rank and file personnel with the same national federation (FFW) violates Section 3
of the Industrial Peace Act, as amended, because — (1) it results in the indirect
affiliation Of supervisors and rank-and-file employees with one labor organization; (2)
since respondent union and the unions of non-supervisors in the same company are
governed by the same constitution and by-laws of the national federation, in practical
effect, there is but one union; and (3) it would result in the respondent union's losing
its independence because it becomes the alter ego of the federation.
The petitioner also submits that should affiliation be allowed, this would violate the
requirement of separateness of bar units under Section 12 of the Act because only
one union will in fact represent both supervisors and rank-and-file employees of the
petitioner.
The respondents on the other hand argue that the supervisory employees of an
employer may validly join an organization of the rank-and-file employees so long as
the said rank and file employees are not under their supervision. They submit that
Adamson and Adamson Supervisory Union (FFW) is not composed of sales
supervisors and, therefore, the salesmen of the company are not under the
supervision of the supervisory employees forming the union. Respondents also argue
that even if the salesmen of the petitioner company are under the supervision of the
members of the supervisory union, the prohibition would not apply because the
salesmen and the supervisory employees of the company have their separate and
distinct labor organizations, and, as a matter of fact, their respective unions sent
separate proposal for collective bargaining agreements. They contend that their
respective labor organizations, not the FFW, will represent their members in the
negotiations as well as in the signing of their respective contracts. Respondents
further argue that the Federation of Free Workers has, as its affiliates, supervisory as
well as rank-and-file employees, and should both the supervisory and the rank-and-
file employees of a certain employer who have separate certificates of registration
affiliate with the same federation, the prohibition does not apply as the federation is
not the organization of the supervisory employees contemplated in the law.
The issue presented involves the correct interpretation of Section 3 of Republic Act
No. 875, the Industrial Peace Act, as amended, which states:
Employees shall have the right to self-organization and to form join or assist labor
organizations of their own choosing for the purpose 6f collective bargaining through
representatives of their own and to engage in concerted activities for the purpose of
collective bargaining and other mutual aid or protection. Individuals employed as
supervisors shall not be eligible for membership in a labor organization of employees
under their supervision but may form separate organizations of their own.
The right of employees to self-organization and to form, join or assist labor
organizations of their own choosing for the purpose of collective bargaining and to
engage in concerted activities for mutual aid or protection is a fundamental right of
labor that derives its existence from the Constitution. It is recognized and
55
implemented through the abovecited Section 3 of the Industrial Peace Act as
amended.
In interpreting the protection to labor and social justice provisions of the Constitution
and the labor laws or rules and regulations implementing the constitutional mandates,
we have always adopted the liberal approach which favors the exercise of labor
rights.
In deciding this case, we start with the recognized rule that the right of supervisory
employees to organize under the Industrial Peace Act carries certain restrictions but
the right itself may not be denied or unduly abridged. The supervisory employees of
an employer cannot join any labor organization of employees under their supervision
but may validly form a separate organization of their own. As stated in Caltex Filipino
Managers and Supervisors Association v. Court of Industrial Relations (47 SCRA
112), it would be to attach unorthodoxy to, not to say an emasculation of, the concept
of law if managers as such were precluded from organization. Thus, if Republic Act
875, in its Section 3, recognizes the right of supervisors to form a separate
organization of their own, albeit they cannot be members of a labor organization of
employees under their supervision, that authority of supervisors to form a separate
labor union carries with it the right to bargain collectively with the employer.
(Government Service Insurance System v. Government Service Insurance System
Supervisors' Union, 68 SCRA 418).
The specific issue before us is whether or not a supervisor's union may affiliate with a
federation with which unions of rank and-file employees of the same employer are
also affiliated. We find without merit the contentions of petitioner that if affilation will
be allowed, only one union will in fact represent both supervisors and rank-and-file
employees of the petitioner; that there would be an indirect affiliation of supervisors
and rank-and-file employees with one labor organization; that there would be
emerging of two bargaining units ; and that the respondent union will loose its
independence because it becomes an alter ego of the federation.
In Elisco-Elirol Labor Union (NAFLU) v. Noriel (80 SCRA 681) and Liberty Cotton Mills
Workers Union v. Liberty Cotton Mills, Inc. (66 SCRA 512), we held :
xxx xxx xxx
... the court expressly cited and affirmed the basic principle that
'(T)he locals are separate and distinct units primarily designed to
secure and maintain the equality of bargaining power between the
employer and their employee-member in the economic struggle for
the fruits of the joint productive effort of labor and capital; and the
association of the locals into the national union (as PAFLU) was in
the furtherance of the same end. These association are concensual
entities capable of entering into such legal relations with their
members. The essential purpose was the affiliation of the local
unions into a common enterprise to increase by collective action the
common bargaining power in respect of the terms and conditions of
labor. Yet the locals remained the basic units of association; free to
serve their own and the common-interest of all, subject to the
restraints imposed by the Constitution and By-laws of the
Association; and free also to renounce the affiliation for mutual
welfare upon the terms laid down in the agreement which brought it
into existence.
We agree with the Court of Industrial Relations when it ruled that:
xxx xxx xxx
The confusion seems to have stemmed from the prefix of FFW after
the name of the local unions in the registration of both.
Nonetheless, the inclusion of FWW in the registration is merely to
stress that they are its affiliates at the time of registrations. It does
not mean that said local unions cannot stand on their own Neither
can it be construed that their personalities are so merged with the
mother federation that for one difference or another they cannot
pursue their own ways, independently of the federation. This is
borne by the fact that FFW, like other federation is a legitimate
labor organization separate and distinct from its locals and affiliates
and to construe the registration certificates of the aforecited unions,
along the line of the Company's argument. would tie up any
affiliates to the shoe string of the federation. ...
The Adamson and Adamson Supervisory Union and the Adamson and Adamson,
Inc., Salesmen Association (FFW), have their own respective constitutions and by-
laws. They are separately and independently registered of each other. Both sent their
separate proposals for collective bar agreements with their employer. There could be
no employer influence on rank-and-file organizational activities nor their could be any
rank and file influence on the supervisory function of the supervisors because of the
representation sought to be proscribed.
WHEREFORE, the instant petition is DISMISSED for lack of merit. The questioned
order and the resolution en bancof the respondent Court of Industrial Relations are
AFFIRMED.
SO ORDERED.
56
G.R. Nos. 174040-41 September 22, 2010
INSULAR HOTEL EMPLOYEES UNION-NFL, Petitioner,
vs.
WATERFRONT INSULAR HOTEL DAVAO, Respondent.
DECISION
PERALTA, J.:
Before this Court is a petition for review on certiorari,1 under Rule 45 of the Rules of
Court, seeking to set aside the Decision2 dated October 11, 2005, and the
Resolution3 dated July 13, 2006 of the Court of Appeals (CA) in consolidated labor
cases docketed as CA-G.R. SP No. 83831 and CA-G.R. SP No. 83657. Said Decision
reversed the Decision4 dated the April 5, 2004 of the Accredited Voluntary Arbitrator
Rosalina L. Montejo (AVA Montejo).
The facts of the case, as culled from the records, are as follows:
On November 6, 2000, respondent Waterfront Insular Hotel Davao (respondent) sent
the Department of Labor and Employment (DOLE), Region XI, Davao City, a Notice of
Suspension of Operations5 notifying the same that it will suspend its operations for a
period of six months due to severe and serious business losses. In said notice,
respondent assured the DOLE that if the company could not resume its operations
within the six-month period, the company would pay the affected employees all the
benefits legally due to them.
During the period of the suspension, Domy R. Rojas (Rojas), the President of Davao
Insular Hotel Free Employees Union (DIHFEU-NFL), the recognized labor
organization in Waterfront Davao, sent respondent a number of letters asking
management to reconsider its decision.
In a letter6 dated November 8, 2000, Rojas intimated that the members of the Union
were determined to keep their jobs and that they believed they too had to help
respondent, thus:
xxxx
Sir, we are determined to keep our jobs and push the Hotel up from sinking. We
believe that we have to help in this (sic) critical times. Initially, we intend to suspend
the re-negotiations of our CBA. We could talk further on possible adjustments on
economic benefits, the details of which we are hoping to discuss with you or any of
your emissaries. x x x7
In another letter8 dated November 10, 2000, Rojas reiterated the Union's desire to
help respondent, to wit:
We would like to thank you for giving us the opportunity to meet [with] your
representatives in order for us to air our sentiments and extend our helping hands for
a possible reconsideration of the company's decision.
The talks have enabled us to initially come up with a suggestion of solving the high
cost on payroll.
We propose that 25 years and above be paid their due retirement benefits and put
their length of service to zero without loss of status of employment with a minimum
hiring rate.
Thru this scheme, the company would be able to save a substantial amount and
reduce greatly the payroll costs without affecting the finance of the families of the
employees because they will still have a job from where they could get their income.
Moreover, we are also open to a possible reduction of some economic benefits as our
gesture of sincere desire to help.
We are looking forward to a more fruitful round of talks in order to save the hotel.9
In another letter10 dated November 20, 2000, Rojas sent respondent more proposals
as a form of the Union's gesture of their intention to help the company, thus:
1) Suspension of [the] CBA for ten years, No strike no lock-out shall be
enforced.
2) Pay all the employees their benefits due, and put the length of service to
zero with a minimum hiring rate. Payment of benefits may be on a staggered
basis or as available.
3) Night premium and holiday pays shall be according to law. Overtime
hours rendered shall be offsetted as practiced.
4) Reduce the sick leaves and vacation leaves to 15 days/15days.
5) Emergency leave and birthday off are hereby waived.
6) Duty meal allowance is fixed at ₱30.00 only. No more midnight snacks
and double meal allowance. The cook drinks be stopped as practiced.
7) We will shoulder 50% of the group health insurance and family medical
allowance be reduced to 1,500.00 instead of 3,000.00.
8) The practice of bringing home our uniforms for laundry be continued.
57
 9) Fixed manning shall be implemented, the rest of manpower requirements
maybe sourced thru WAP and casual hiring. Manpower for fixed manning
shall be 145 rank-and-file union members.
10) Union will cooperate fully on strict implementation of house rules in order
to attain desired productivity and discipline. The union will not tolerate
problem members.
11) The union in its desire to be of utmost service would adopt multi-tasking
for the hotel to be more competitive.
It is understood that with the suspension of the CBA renegotiations, the same existing
CBA shall be adopted and that all provisions therein shall remain enforced except for
those mentioned in this proposal.
These proposals shall automatically supersede the affected provisions of the CBA. 11
In a handwritten letter12
dated November 25, 2000, Rojas once again appealed to
respondent for it to consider their proposals and to re-open the hotel. In said letter,
Rojas stated that manpower for fixed manning shall be one hundred (100) rank-and-
file Union members instead of the one hundred forty-five (145) originally proposed.
Finally, sometime in January 2001, DIHFEU-NFL, through Rojas, submitted to
respondent a Manifesto13concretizing their earlier proposals.
After series of negotiations, respondent and DIHFEU-NFL, represented by its
President, Rojas, and Vice-Presidents, Exequiel J. Varela Jr. and Avelino C. Bation,
Jr., signed a Memorandum of Agreement14 (MOA) wherein respondent agreed to re-
open the hotel subject to certain concessions offered by DIHFEU-NFL in its
Manifesto.
Accordingly, respondent downsized its manpower structure to 100 rank-and-file
employees as set forth in the terms of the MOA. Moreover, as agreed upon in the
MOA, a new pay scale was also prepared by respondent.
The retained employees individually signed a "Reconfirmation of
Employment"15 which embodied the new terms and conditions of their continued
employment. Each employee was assisted by Rojas who also signed the document.
On June 15, 2001, respondent resumed its business operations.
On August 22, 2002, Darius Joves (Joves) and Debbie Planas, claiming to be local
officers of the National Federation of Labor (NFL), filed a Notice of Mediation 16 before
the National Conciliation and Mediation Board (NCMB), Region XI, Davao City. In
said Notice, it was stated that the Union involved was "DARIUS JOVES/DEBBIE
PLANAS ET. AL, National Federation of Labor." The issue raised in said Notice was
the "Diminution of wages and other benefits through unlawful Memorandum of
Agreement."
On August 29, 2002, the NCMB called Joves and respondent to a conference to
explore the possibility of settling the conflict. In the said conference, respondent and
petitioner Insular Hotel Employees Union-NFL (IHEU-NFL), represented by Joves,
signed a Submission Agreement17 wherein they chose AVA Alfredo C. Olvida (AVA
Olvida) to act as voluntary arbitrator. Submitted for the resolution of AVA Olvida was
the determination of whether or not there was a diminution of wages and other
benefits through an unlawful MOA. In support of his authority to file the complaint,
Joves, assisted by Atty. Danilo Cullo (Cullo), presented several Special Powers of
Attorney (SPA) which were, however, undated and unnotarized.
On September 2, 2002, respondent filed with the NCMB a Manifestation with Motion
for a Second Preliminary Conference,18 raising the following grounds:
1) The persons who filed the instant complaint in the name of the Insular
Hotel Employees Union-NFL have no authority to represent the Union;
2) The individuals who executed the special powers of attorney in favor of
the person who filed the instant complaint have no standing to cause the
filing of the instant complaint; and
3) The existence of an intra-union dispute renders the filing of the instant
case premature.19
On September 16, 2002, a second preliminary conference was conducted in the
NCMB, where Cullo denied any existence of an intra-union dispute among the
members of the union. Cullo, however, confirmed that the case was filed not by the
IHEU-NFL but by the NFL. When asked to present his authority from NFL, Cullo
admitted that the case was, in fact, filed by individual employees named in the SPAs.
The hearing officer directed both parties to elevate the aforementioned issues to AVA
Olvida.20
The case was docketed as Case No. AC-220-RB-11-09-022-02 and referred to AVA
Olvida. Respondent again raised its objections, specifically arguing that the persons
who signed the complaint were not the authorized representatives of the Union
indicated in the Submission Agreement nor were they parties to the MOA. AVA Olvida
directed respondent to file a formal motion to withdraw its submission to voluntary
arbitration.
On October 16, 2002, respondent filed its Motion to Withdraw. 21 Cullo then filed an
Opposition22 where the same was captioned:
NATIONAL FEDERATION OF LABOR
And 79 Individual Employees, Union Members,
Complainants,
58
-versus-
Waterfront Insular Hotel Davao,
Respondent.
In said Opposition, Cullo reiterated that the complainants were not representing
IHEU-NFL, to wit:
xxxx
2. Respondent must have been lost when it said that the individuals who
executed the SPA have no standing to represent the union nor to assail the
validity of Memorandum of Agreement (MOA). What is correct is that the
individual complainants are not representing the union but filing the
complaint through their appointed attorneys-in-fact to assert their individual
rights as workers who are entitled to the benefits granted by law and
stipulated in the collective bargaining agreement. 23
On November 11, 2002, AVA Olvida issued a Resolution 24 denying respondent's
Motion to Withdraw. On December 16, 2002, respondent filed a Motion for
Reconsideration25 where it stressed that the Submission Agreement was void
because the Union did not consent thereto. Respondent pointed out that the Union
had not issued any resolution duly authorizing the individual employees or NFL to file
the notice of mediation with the NCMB.
Cullo filed a Comment/Opposition26 to respondent's Motion for Reconsideration.
Again, Cullo admitted that the case was not initiated by the IHEU-NFL, to wit:
The case was initiated by complainants by filling up Revised Form No. 1 of the NCMB
duly furnishing respondent, copy of which is hereto attached as Annex "A" for
reference and consideration of the Honorable Voluntary Arbitrator. There is no
mention there of Insular Hotel Employees Union, but only National Federation of
Labor (NFL). The one appearing at the Submission Agreement was only a matter of
filling up the blanks particularly on the question there of Union; which was filled up
with Insular Hotel Employees Union-NFL. There is nothing there that indicates that it
is a complainant as the case is initiated by the individual workers and National
Federation of Labor, not by the local union. The local union was not included as party-
complainant considering that it was a party to the assailed MOA. 27
On March 18, 2003, AVA Olvida issued a Resolution 28 denying respondent's Motion
for Reconsideration. He, however, ruled that respondent was correct when it raised its
objection to NFL as proper party-complainant, thus:
Anent to the real complainant in this instant voluntary arbitration case, the respondent
is correct when it raised objection to the National Federation of Labor (NFL) and as
proper party-complainants.
The proper party-complainant is INSULAR HOTEL EMPLOYEES UNION-NFL, the
recognized and incumbent bargaining agent of the rank-and-file employees of the
respondent hotel. In the submission agreement of the parties dated August 29, 2002,
the party complainant written is INSULAR HOTEL EMPLOYEES UNION-NFL and not
the NATIONAL FEDERATION OF LABOR and 79 other members.
However, since the NFL is the mother federation of the local union, and signatory to
the existing CBA, it can represent the union, the officers, the members or union and
officers or members, as the case may be, in all stages of proceedings in courts or
administrative bodies provided that the issue of the case will involve labor-
management relationship like in the case at bar.
The dispositive portion of the March 18, 2003 Resolution of AVA Olvida reads:
WHEREFORE, premises considered, the motion for reconsideration filed by
respondent is DENIED. The resolution dated November 11, 2002 is modified in so far
as the party-complainant is concerned; thus, instead of "National Federation of Labor
and 79 individual employees, union members," shall be "Insular Hotel Employees
Union-NFL et. al., as stated in the joint submission agreement dated August 29, 2002.
Respondent is directed to comply with the decision of this Arbitrator dated November
11, 2002,
No further motion of the same nature shall be entertained.29
On May 9, 2003, respondent filed its Position Paper Ad Cautelam, 30 where it
declared, among others, that the same was without prejudice to its earlier objections
against the jurisdiction of the NCMB and AVA Olvida and the standing of the persons
who filed the notice of mediation.
Cullo, now using the caption "Insular Hotel Employees Union-NFL, Complainant," filed
a Comment31 dated June 5, 2003. On June 23, 2003, respondent filed its Reply. 32
Later, respondent filed a Motion for Inhibition33 alleging AVA Olvida's bias and
prejudice towards the cause of the employees. In an Order 34 dated July 25, 2003,
AVA Olvida voluntarily inhibited himself out of "delicadeza" and ordered the remand of
the case to the NCMB.
On August 12, 2003, the NCMB issued a Notice requiring the parties to appear before
the conciliator for the selection of a new voluntary arbitrator.
In a letter35 dated August 19, 2003 addressed to the NCMB, respondent reiterated its
position that the individual union members have no standing to file the notice of
mediation before the NCMB. Respondent stressed that the complaint should have
been filed by the Union.
On September 12, 2003, the NCMB sent both parties a Notice 36 asking them to
appear before it for the selection of the new voluntary arbitrator. Respondent,
59
however, maintained its stand that the NCMB had no jurisdiction over the case.
Consequently, at the instance of Cullo, the NCMB approved ex parte the selection of
AVA Montejo as the new voluntary arbitrator.
On April 5, 2004, AVA Montejo rendered a Decision 37 ruling in favor of Cullo, the
dispositive portion of which reads:
WHEREOF, in view of the all the foregoing, judgment is hereby rendered:
1. Declaring the Memorandum of Agreement in question as invalid as it is
contrary to law and public policy;
2. Declaring that there is a diminution of the wages and other benefits of the
Union members and officers under the said invalid MOA.
3. Ordering respondent management to immediately reinstate the workers
wage rates and other benefits that they were receiving and enjoying before
the signing of the invalid MOA;
4. Ordering the management respondent to pay attorney’s fees in an amount
equivalent to ten percent (10%) of whatever total amount that the workers
union may receive representing individual wage differentials.
As to the other claims of the Union regarding diminution of other benefits, this
accredited voluntary arbitrator is of the opinion that she has no authority to entertain,
particularly as to the computation thereof.
SO ORDERED.38
Both parties appealed the Decision of AVA Montejo to the CA. Cullo only assailed the
Decision in so far as it did not categorically order respondent to pay the covered
workers their differentials in wages reckoned from the effectivity of the MOA up to the
actual reinstatement of the reduced wages and benefits. Cullos' petition was docketed
as CA-G.R. SP No. 83831. Respondent, for its part, questioned among others the
jurisdiction of the NCMB. Respondent maintained that the MOA it had entered into
with the officers of the Union was valid. Respondent's petition was docketed as CA-
G.R. SP No. 83657. Both cases were consolidated by the CA.
On October 11, 2005, the CA rendered a Decision 39 ruling in favor of respondent, the
dispositive portion of which reads:
WHEREFORE, premises considered, the petition for review in CA-G.R. SP No. 83657
is hereby GRANTED, while the petition in CA-G.R. SP No. 83831 is DENIED.
Consequently, the assailed Decision dated April 5, 2004 rendered by AVA Rosalina L.
Montejo is hereby REVERSED and a new one entered declaring the Memorandum of
Agreement dated May 8, 2001 VALID and ENFORCEABLE. Parties are DIRECTED
to comply with the terms and conditions thereof.
SO ORDERED.40
Aggrieved, Cullo filed a Motion for Reconsideration, which was, however, denied by
the CA in a Resolution41 dated July 13, 2006.
Hence, herein petition, with Cullo raising the following issues for this Court's
resolution, to wit:
I.
WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS COMMITTED
SERIOUS ERRORS IN FINDING THAT THE ACCREDITED VOLUNTARY
ARBITRATOR HAS NO JURISDICTION OVER THE CASE SIMPLY BECAUSE THE
NOTICE OF MEDIATION DOES NOT MENTION THE NAME OF THE LOCAL
UNION BUT ONLY THE AFFILIATE FEDERATION THEREBY DISREGARDING THE
SUBMISSION AGREEMENT DULY SIGNED BY THE PARTIES AND THEIR LEGAL
COUNSELS THAT MENTIONS THE NAME OF THE LOCAL UNION.
II.
WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS COMMITTED
SERIOUS ERROR BY DISREGARDING THE PROVISIONS OF THE CBA SIMPLY
BECAUSE IT BELIEVED THE UNPROVEN ALLEGATIONS OF RESPONDENT
HOTEL THAT IT WAS SUFFERING FROM FINANCIAL CRISIS.
III.
THE HONORABLE COURT OF APPEALS MUST HAVE SERIOUSLY ERRED IN
CONCLUDING THAT ARTICLE 100 OF THE LABOR CODE APPLIES ONLY TO
BENEFITS ENJOYED PRIOR TO THE ADOPTION OF THE LABOR CODE WHICH,
IN EFFECT, ALLOWS THE DIMINUTION OF THE BENEFITS ENJOYED BY
EMPLOYEES FROM ITS ADOPTION HENCEFORTH.42
The petition is not meritorious.
Anent the first error raised, Cullo argues that the CA erred when it overlooked the fact
that before the case was submitted to voluntary arbitration, the parties signed a
Submission Agreement which mentioned the name of the local union and not only
NFL. Cullo, thus, contends that the CA committed error when it ruled that the
voluntary arbitrator had no jurisdiction over the case simply because the Notice of
Mediation did not state the name of the local union thereby disregarding the
Submission Agreement which states the names of local union as Insular Hotel
Employees Union-NFL.43
In its Memorandum,44 respondent maintains its position that the NCMB and Voluntary
Arbitrators had no jurisdiction over the complaint. Respondent, however, now also
contends that IHEU-NFL is a non-entity since it is DIHFEU-NFL which is considered
60
by the DOLE as the only registered union in Waterfront Davao.45 Respondent argues
that the Submission Agreement does not name the local union DIHFEU-NFL and that
it had timely withdrawn its consent to arbitrate by filing a motion to withdraw.
A review of the development of the case shows that there has been much confusion
as to the identity of the party which filed the case against respondent. In the Notice of
Mediation46 filed before the NCMB, it stated that the union involved was "DARIUS
JOVES/DEBBIE PLANAS ET. AL., National Federation of Labor." In the Submission
Agreement,47 however, it stated that the union involved was "INSULAR HOTEL
EMPLOYEES UNION-NFL."
Furthermore, a perusal of the records would reveal that after signing the Submission
Agreement, respondent persistently questioned the authority and standing of the
individual employees to file the complaint. Cullo then clarified in subsequent
documents captioned as "National Federation of Labor and 79 Individual Employees,
Union Members, Complainants" that the individual complainants are not representing
the union, but filing the complaint through their appointed attorneys-in-fact.48 AVA
Olvida, however, in a Resolution dated March 18, 2003, agreed with respondent that
the proper party-complainant should be INSULAR HOTEL EMPLOYEES UNION-
NFL, to wit:
x x x In the submission agreement of the parties dated August 29, 2002, the party
complainant written is INSULAR HOTEL EMPLOYEES UNION-NFL and not the
NATIONAL FEDERATION OF LABOR and 79 other members.49
The dispositive portion of the Resolution dated March 18, 2003 of AVA Olvida reads:
WHEREFORE, premises considered, the motion for reconsideration filed by
respondent is DENIED. The resolution dated November 11, 2002, is modified in so far
as the party complainant is concerned, thus, instead of "National Federation of Labor
and 79 individual employees, union members," shall be "Insular Hotel Employees
Union-NFL et. al., as stated in the joint submission agreement dated August 29, 2002.
Respondent is directed to comply with the decision of this Arbitrator dated November
11, 2002.50
After the March 18, 2003 Resolution of AVA Olvida, Cullo adopted "Insular Hotel
Employees Union-NFL et. al., Complainant" as the caption in all his subsequent
pleadings. Respondent, however, was still adamant that neither Cullo nor the
individual employees had authority to file the case in behalf of the Union.
While it is undisputed that a submission agreement was signed by respondent and
"IHEU-NFL," then represented by Joves and Cullo, this Court finds that there are two
circumstances which affect its validity: first, the Notice of Mediation was filed by a
party who had no authority to do so; second, that respondent had persistently voiced
out its objection questioning the authority of Joves, Cullo and the individual members
of the Union to file the complaint before the NCMB.
Procedurally, the first step to submit a case for mediation is to file a notice of
preventive mediation with the NCMB. It is only after this step that a submission
agreement may be entered into by the parties concerned.
Section 3, Rule IV of the NCMB Manual of Procedure provides who may file a notice
of preventive mediation, to wit:
Who may file a notice or declare a strike or lockout or request preventive mediation. -
Any certified or duly recognized bargaining representative may file a notice or
declare a strike or request for preventive mediation in cases of bargaining
deadlocks and unfair labor practices. The employer may file a notice or declare a
lockout or request for preventive mediation in the same cases. In the absence of a
certified or duly recognized bargaining representative, any legitimate labor
organization in the establishment may file a notice, request preventive mediation or
declare a strike, but only on grounds of unfair labor practice.
From the foregoing, it is clear that only a certified or duly recognized bargaining agent
may file a notice or request for preventive mediation. It is curious that even Cullo
himself admitted, in a number of pleadings, that the case was filed not by the Union
but by individual members thereof. Clearly, therefore, the NCMB had no jurisdiction to
entertain the notice filed before it.
Even though respondent signed a Submission Agreement, it had, however,
immediately manifested its desire to withdraw from the proceedings after it became
apparent that the Union had no part in the complaint. As a matter of fact, only four
days had lapsed after the signing of the Submission Agreement when respondent
called the attention of AVA Olvida in a "Manifestation with Motion for a Second
Preliminary Conference"51 that the persons who filed the instant complaint in the
name of Insular Hotel Employees Union-NFL had no authority to represent the Union.
Respondent cannot be estopped in raising the jurisdictional issue, because it is basic
that the issue of jurisdiction may be raised at any stage of the proceedings, even on
appeal, and is not lost by waiver or by estoppel.
In Figueroa v. People,52 this Court explained that estoppel is the exception rather than
the rule, to wit:
Applying the said doctrine to the instant case, the petitioner is in no way estopped by
laches in assailing the jurisdiction of the RTC, considering that he raised the lack
thereof in his appeal before the appellate court. At that time, no considerable period
had yet elapsed for laches to attach. True, delay alone, though unreasonable, will not
sustain the defense of "estoppel by laches" unless it further appears that the party,
knowing his rights, has not sought to enforce them until the condition of the party
pleading laches has in good faith become so changed that he cannot be restored to
his former state, if the rights be then enforced, due to loss of evidence, change of title,
intervention of equities, and other causes. In applying the principle of estoppel by
laches in the exceptional case of Sibonghanoy, the Court therein considered the
patent and revolting inequity and unfairness of having the judgment creditors go up
61
their Calvary once more after more or less 15 years.The same, however, does not
obtain in the instant case.
We note at this point that estoppel, being in the nature of a forfeiture, is not favored by
law. It is to be applied rarely—only from necessity, and only in extraordinary
circumstances. The doctrine must be applied with great care and the equity must be
strong in its favor.When misapplied, the doctrine of estoppel may be a most effective
weapon for the accomplishment of injustice. x x x (Italics supplied.) 53
The question to be resolved then is, do the individual members of the Union have the
requisite standing to question the MOA before the NCMB? On this note, Tabigue v.
International Copra Export Corporation (INTERCO)54 is instructive:
Respecting petitioners’ thesis that unsettled grievances should be referred to
voluntary arbitration as called for in the CBA, the same does not lie.The pertinent
portion of the CBA reads:
In case of any dispute arising from the interpretation or implementation of this
Agreement or any matter affecting the relations of Labor and Management,
the UNION and the COMPANY agree to exhaust all possibilities of conciliation
through the grievance machinery. The committee shall resolve all problems submitted
to it within fifteen (15) days after the problems ha[ve] been discussed by the
members. If the dispute or grievance cannot be settled by the Committee, or if the
committee failed to act on the matter within the period of fifteen (15) days herein
stipulated, the UNION and the COMPANY agree to submit the issue to Voluntary
Arbitration. Selection of the arbitrator shall be made within seven (7) days from the
date of notification by the aggrieved party. The Arbitrator shall be selected by lottery
from four (4) qualified individuals nominated by in equal numbers by both parties
taken from the list of Arbitrators prepared by the National Conciliation and Mediation
Board (NCMB). If the Company and the Union representatives within ten (10) days fail
to agree on the Arbitrator, the NCMB shall name the Arbitrator. The decision of the
Arbitrator shall be final and binding upon the parties. However, the Arbitrator shall not
have the authority to change any provisions of the Agreement.The cost of arbitration
shall be borne equally by the parties.
Petitioners have not, however, been duly authorized to represent the union. Apropos
is this Court’s pronouncement in Atlas Farms, Inc. v. National Labor Relations
Commission, viz:
x x x Pursuant to Article 260 of the Labor Code, the parties to a CBA shall name or
designate their respective representatives to the grievance machinery and if the
grievance is unsettled in that level, it shall automatically be referred to the voluntary
arbitrators designated in advance by parties to a CBA. Consequently, only disputes
involving the union and the company shall be referred to the grievance machinery
or voluntary arbitrators. (Emphasis and underscoring supplied.)55
If the individual members of the Union have no authority to file the case, does the
federation to which the local union is affiliated have the standing to do so? On this
note, Coastal Subic Bay Terminal, Inc. v. Department of Labor and Employment 56 is
enlightening, thus:
x x x A local union does not owe its existence to the federation with which it is
affiliated. It is a separate and distinct voluntary association owing its creation to the
will of its members. Mere affiliation does not divest the local union of its own
personality, neither does it give the mother federation the license to act
independently of the local union. It only gives rise to a contract of agency, where
the former acts in representation of the latter. Hence, local unions are considered
principals while the federation is deemed to be merely their agent. x x x57
Based on the foregoing, this Court agrees with approval with the disquisition of the
CA when it ruled that NFL had no authority to file the complaint in behalf of the
individual employees, to wit:
Anent the first issue, We hold that the voluntary arbitrator had no jurisdiction over the
case. Waterfront contents that the Notice of Mediation does not mention the name of
the Union but merely referred to the National Federation of Labor (NFL) with which
the Union is affiliated. In the subsequent pleadings, NFL's legal counsel even
confirmed that the case was not filed by the union but by NFL and the individual
employees named in the SPAs which were not even dated nor notarized.
Even granting that petitioner Union was affiliated with NFL, still the relationship
between that of the local union and the labor federation or national union with which
the former was affiliated is generally understood to be that of agency, where the local
is the principal and the federation the agency. Being merely an agent of the local
union, NFL should have presented its authority to file the Notice of Mediation. While
We commend NFL's zealousness in protecting the rights of lowly workers, We cannot,
however, allow it to go beyond what it is empowered to do.
As provided under the NCMB Manual of Procedures, only a certified or duly
recognized bargaining representative and an employer may file a notice of mediation,
declare a strike or lockout or request preventive mediation. The Collective Bargaining
Agreement (CBA), on the other, recognizes that DIHFEU-NFL is the exclusive
bargaining representative of all permanent employees. The inclusion of the word
"NFL" after the name of the local union merely stresses that the local union is NFL's
affiliate. It does not, however, mean that the local union cannot stand on its own. The
local union owes its creation and continued existence to the will of its members and
not to the federation to which it belongs. The spring cannot rise higher than its source,
so to speak.58
In its Memorandum, respondent contends that IHEU-NFL is a non-entity and that
DIHFEU-NFL is the only recognized bargaining unit in their establishment. While the
resolution of the said argument is already moot and academic given the discussion
above, this Court shall address the same nevertheless.
While the November 16, 2006 Certification59 of the DOLE clearly states that "IHEU-
NFL" is not a registered labor organization, this Court finds that respondent is
62
estopped from questioning the same as it did not raise the said issue in the
proceedings before the NCMB and the Voluntary Arbitrators. A perusal of the records
reveals that the main theory posed by respondent was whether or not the individual
employees had the authority to file the complaint notwithstanding the apparent non-
participation of the union. Respondent never put in issue the fact that DIHFEU-NFL
was not the same as IHEU-NFL. Consequently, it is already too late in the day to
assert the same.
Anent the second issue raised by Cullo, the same is again without merit.
Cullo contends that respondent was not really suffering from serious losses as found
by the CA. Cullo anchors his position on the denial by the Wage Board of
respondent's petition for exemption from Wage Order No. RTWPB-X1-08 on the
ground that it is a distressed establishment.60 In said denial, the Board ruled:
A careful analysis of applicant's audited financial statements showed that during the
period ending December 31, 1999, it registered retained earnings amounting to
₱8,661,260.00. Applicant's interim financial statements for the quarter ending
June 30, 2000 cannot be considered, as the same was not audited. Accordingly,
this Board finds that applicant is not qualified for exemption as a distressed
establishment pursuant to the aforecited criteria.61
In its Decision, the CA held that upholding the validity of the MOA would mean the
continuance of the hotel's operation and financial viability, to wit:
x x x We cannot close Our eyes to the impending financial distress that an employer
may suffer should the terms of employment under the said CBA continue.
If indeed We are to tilt the balance of justice to labor, then We would be inclined to
favor for the nonce petitioner Waterfront. To uphold the validity of the MOA would
mean the continuance of the hotel's operation and financial viability. Otherwise, the
eventual permanent closure of the hotel would only result to prejudice of the
employees, as a consequence thereof, will necessarily lose their jobs. 62
In its petition before the CA, respondent submitted its audited financial
statements63 which show that for the years 1998, 1999, until September 30, 2000, its
total operating losses amounted to ₱48,409,385.00. Based on the foregoing, the CA
was not without basis when it declared that respondent was suffering from impending
financial distress. While the Wage Board denied respondent's petition for exemption,
this Court notes that the denial was partly due to the fact that the June 2000 financial
statements then submitted by respondent were not audited. Cullo did not question nor
discredit the accuracy and authenticity of respondent's audited financial statements.
This Court, therefore, has no reason to question the veracity of the contents thereof.
Moreover, it bears to point out that respondent's audited financial statements covering
the years 2001 to 2005 show that it still continues to suffer losses.64
Finally, anent the last issue raised by Cullo, the same is without merit.
Cullo argues that the CA must have erred in concluding that Article 100 of the Labor
Code applies only to benefits already enjoyed at the time of the promulgation of the
Labor Code.
Article 100 of the Labor Code provides:
PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS- Nothing in
this Book shall be construed to eliminate or in any way diminish supplements, or other
employee benefits being enjoyed at the time of the promulgation of this Code.
On this note, Apex Mining Company, Inc. v. NLRC65 is instructive, to wit:
Clearly, the prohibition against elimination or diminution of benefits set out in Article
100 of the Labor Code is specifically concerned with benefits already enjoyed at the
time of the promulgation of the Labor Code. Article 100 does not, in other words,
purport to apply to situations arising after the promulgation date of the Labor Code x x
x.66
Even assuming arguendo that Article 100 applies to the case at bar, this Court agrees
with respondent that the same does not prohibit a union from offering and agreeing to
reduce wages and benefits of the employees. In Rivera v. Espiritu,67 this Court ruled
that the right to free collective bargaining, after all, includes the right to suspend it,
thus:
A CBA is "a contract executed upon request of either the employer or the exclusive
bargaining representative incorporating the agreement reached after negotiations with
respect to wages, hours of work and all other terms and conditions of employment,
including proposals for adjusting any grievances or questions arising under such
agreement." The primary purpose of a CBA is the stabilization of labor-management
relations in order to create a climate of a sound and stable industrial peace. In
construing a CBA, the courts must be practical and realistic and give due
consideration to the context in which it is negotiated and the purpose which it is
intended to serve.
The assailed PAL-PALEA agreement was the result of voluntary collective
bargaining negotiations undertaken in the light of the severe financial situation
faced by the employer, with the peculiar and unique intention of not merely
promoting industrial peace at PAL, but preventing the latter’s closure. We find
no conflict between said agreement and Article 253-A of the Labor Code. Article 253-
A has a two-fold purpose. One is to promote industrial stability and predictability.
Inasmuch as the agreement sought to promote industrial peace at PAL during its
rehabilitation, said agreement satisfies the first purpose of Article 253-A.1awphi1 The
other is to assign specific timetables wherein negotiations become a matter of right
and requirement. Nothing in Article 253-A, prohibits the parties from waiving or
suspending the mandatory timetables and agreeing on the remedies to enforce the
same.
63
In the instant case, it was PALEA, as the exclusive bargaining agent of PAL’s ground
employees, that voluntarily entered into the CBA with PAL. It was also PALEA that
voluntarily opted for the 10-year suspension of the CBA. Either case was the union’s
exercise of its right to collective bargaining. The right to free collective bargaining,
after all, includes the right to suspend it.68
Lastly, this Court is not unmindful of the fact that DIHFEU-NFL's Constitution and By-
Laws specifically provides that "the results of the collective bargaining negotiations
shall be subject to ratification and approval by majority vote of the Union members at
a meeting convened, or by plebiscite held for such special purpose."69 Accordingly, it
is undisputed that the MOA was not subject to ratification by the general membership
of the Union. The question to be resolved then is, does the non-ratification of the
MOA in accordance with the Union's constitution prove fatal to the validity thereof?
It must be remembered that after the MOA was signed, the members of the Union
individually signed contracts denominated as "Reconfirmation of
Employment."70 Cullo did not dispute the fact that of the 87 members of the Union,
who signed and accepted the "Reconfirmation of Employment," 71 are the respondent
employees in the case at bar. Moreover, it bears to stress that all the employees were
assisted by Rojas, DIHFEU-NFL's president, who even co-signed each contract.
Stipulated in each Reconfirmation of Employment were the new salary and benefits
scheme. In addition, it bears to stress that specific provisions of the new contract also
made reference to the MOA. Thus, the individual members of the union cannot feign
knowledge of the execution of the MOA. Each contract was freely entered into and
there is no indication that the same was attended by fraud, misrepresentation or
duress. To this Court's mind, the signing of the individual "Reconfirmation of
Employment" should, therefore, be deemed an implied ratification by the Union
members of the MOA.
In Planters Products, Inc. v.NLRC,71 this Court refrained from declaring a CBA invalid
notwithstanding that the same was not ratified in view of the fact that the employees
had enjoyed benefits under it, thus:
Under Article 231 of the Labor Code and Sec. 1, Rule IX, Book V of the Implementing
Rules, the parties to a collective [bargaining] agreement are required to furnish copies
of the appropriate Regional Office with accompanying proof of ratification by the
majority of all the workers in a bargaining unit. This was not done in the case at bar.
But we do not declare the 1984-1987 CBA invalid or void considering that the
employees have enjoyed benefits from it. They cannot receive benefits under
provisions favorable to them and later insist that the CBA is void simply because other
provisions turn out not to the liking of certain employees. x x x. Moreover, the two
CBAs prior to the 1984-1987 CBA were not also formally ratified, yet the employees
are basing their present claims on these CBAs. It is iniquitous to receive benefits
from a CBA and later on disclaim its validity.72
Applied to the case at bar, while the terms of the MOA undoubtedly reduced the
salaries and certain benefits previously enjoyed by the members of the Union, it
cannot escape this Court's attention that it was the execution of the MOA which
paved the way for the re-opening of the hotel, notwithstanding its financial distress.
More importantly, the execution of the MOA allowed respondents to keep their jobs. It
would certainly be iniquitous for the members of the Union to sign new contracts
prompting the re-opening of the hotel only to later on renege on their agreement on
the fact of the non-ratification of the MOA.
In addition, it bears to point out that Rojas did not act unilaterally when he negotiated
with respondent's management. The Constitution and By-Laws of DIHFEU-NFL
clearly provide that the president is authorized to represent the union on all occasions
and in all matters in which representation of the union may be agreed or
required.73 Furthermore, Rojas was properly authorized under a Board of Directors
Resolution74 to negotiate with respondent, the pertinent portions of which read:
SECRETARY's CERTIFICATE
I, MA. SOCORRO LISETTE B. IBARRA, x x x, do hereby certify that, at a meeting of
the Board of Directors of the DIHFEU-NFL, on 28 Feb. 2001 with a quorum duly
constituted, the following resolutions were unanimously approved:
RESOLVED, as it is hereby resolved that the Manifesto dated 25 Feb. 2001 be
approved ratified and adopted;
RESOLVED, FURTHER, that Mr. Domy R. Rojas, the president of the DIHFEU-
NFL, be hereby authorized to negotiate with Waterfront Insular Hotel Davao and
to work for the latter's acceptance of the proposals contained in DIHFEU-NFL
Manifesto; and
RESOLVED, FINALLY, that Mr. Domy R. Rojas is hereby authorized to sign any
and all documents to implement, and carry into effect, his foregoing authority.75
Withal, while the scales of justice usually tilt in favor of labor, the peculiar
circumstances herein prevent this Court from applying the same in the instant petition.
Even if our laws endeavor to give life to the constitutional policy on social justice and
on the protection of labor, it does not mean that every labor dispute will be decided in
favor of the workers. The law also recognizes that management has rights which are
also entitled to respect and enforcement in the interest of fair play. 76
WHEREFORE, premises considered, the petition is DENIED. The Decision dated
October 11, 2005, and the Resolution dated July 13, 2006 of the Court of Appeals in
consolidated labor cases docketed as CA-G.R. SP No. 83831 and CA-G.R. SP No.
83657, are AFFIRMED.
SO ORDERED.
64
G.R. No. L-45824 June 19, 1985
VOLKSCHEL LABOR UNION, petitioner,
vs.
BUREAU OF LABOR RELATIONS, ASSOCIATED LABOR UNION FOR METAL,
WORKERS, DMG, INC., PEOPLE'S CAR, INC., KARBAYAN INC., and RTC
TRADING, INC., respondents.
Ignacio P. Lacsina for petitioner.
William D. Dichoso for respondent DMG, Inc.
Abraham B. Drapiza for private respondent.
CUEVAS, J.:
Petition for certiorari to review the Resolutions dated January 25, 1977 and March 14,
1977 of the Bureau of Labor Relations.
On April 25. 1977, however, a Supplemental Petition was filed seeking the issuance
of —
(1) A preliminary mandatory injunction commanding respondents to
return to petitioner the union dues amounting to about P55,000.00
lawfully pertaining to it but illegally levied upon, collected and
handed over by respondent Bureau, acting through the NLRC
sheriff, to respondent Associated Labor Union for Metal workers,
with the collusion of respondents DMG, Inc., Karbayan, Inc. and
RTC Machineries, Inc.;
(2) A preliminary restraining order prohibiting respondents from
making further delivery to respondent Associated Labor Union for
Metal workers of Union dues collected or to be collected through
check-off from the wages of petitioner's members by respondents,
DMG, Inc., Karbayan, Inc., RTC Machineries, Inc., and People's
Car, Inc., under or by virtue of the questioned writ of execution
issued by respondent Bureau, dated April 4, 1977.
Petitioner was once affiliated with the Associated Labor Union for Metal Workers
(ALUMETAL for short). On August 1, 1975, both unions, using the name Volkschel
Labor Union Associated Labor Union for Metal Workers, jointly entered into a
collective bargaining agreement with respondent companies. One of the subjects
dealt with is the payment of union dues which is provided for in Section 3, Article 1, of
the CBA, which reads:
Section 3. CHECK-OFF. — The COMPANY agrees to make payroll
deductions not softener than twice a month of UNION membership
dues and such special assessments fees or fines as may be duly
authorized by the UNION, provided that the same is covered by the
individual check-off authorization of the UNION members. All said
deductions shall be promptly transmitted within five (5) days by the
COMPANY to the UNION Treasurer. The COMPANY shall prepare
two (2) checks. One (1) check will be under the name of the local
union as their local fund including local special assessment funds
and the other check will be for the ALU Regional Office regarding
the remittance of the UNION dues deduction.
On March 10, 1976, a majority of petitioner's members decided to disaffiliate from
respondent federation in order to operate on its own as an independent labor group
pursuant to Article 241 (formerly Article 240) of the Labor Code of the Philippines, the
pertinent portion of which reads:
Incumbent affiliates of existing federations or national unions may
disaffiliate only for the purpose of joining a federation or national
union in the industry or region in which it properly belongs or for the
purpose of operating as an independent labor group.
Accordingly, a resolution was adopted and signed by petitioner's members revoking
their check-off authorization in favor of ALUMETAL and notices thereof were served
on ALUMETAL and respondent companies.
Confronted with the predicament of whether or not to continue deducting from
employees' wages and remitting union dues to respondent, ALUMETAL which wrote
respondent companies advising them to continue deducting union dues and remitting
them to said federation, respondent companies sought the legal opinion of the
respondent Bureau as regards the controversy between the two unions. On
November 11, 1976, Med-Arbiter George A. Eduvalla of respondent Bureau rendered
a Resolution which in effect found the disaffiliation legal but at the same time gave the
opinion that, petitioner's members should continue paying their dues to ALUMETAL in
the concept of agency fees. 1
From the said Resolution, of the Med-Arbiter both petitioner and respondent
ALUMETAL appealed to the Director of respondent Bureau. Petitioner' contended that
the Med-Arbiter's opinion to the effect that petitioner's members remained obligated to
pay dues to respondent ALUMETAL was inconsistent with the dispositive finding that
petitioner's disaffiliation from ALUMETAL was valid. ALUMETAL, on the other hand,
assailed the Resolution in question asserting that the disaffiliation should have been
declared contrary to law.
On January 25, 1977, respondent Bureau, through its Acting Director, Francisco L.
Estrella, REVERSED the Med-Arbiter's Resolution., and declared that the Bureau
recognized "the continued affiliation of Volkschel Labor Union with the Associated
Labor Union for Metal Workers." 2
65
Petitioner appealed the Acting Director's Resolution to the Secretary of Labor know
Minister of Labor and Employment) who, treating the appeal as a Motion for
Reconsideration referred the same back to respondent Bureau On March 14, 1977,
the Bureau denied the appeal for lack of merit.
Hence, the instant petition.
Meanwhile, on April 4, 1977, on motion of ALUMETAL, the then Acting Secretary of
Labor, Amado Gat Inciong, issued a of execution commanding the Sheriff of the
National Labor Relations Commission to enforce and execute the order of January
25, 1977, which has become final and executory. 3 Pursuant thereto, the NLRC
Sheriff enforced and implemented the Order of January 25, 1977, as a result of which
respondent companies turned over and handed to respondent federation the union
dues and other assessments in accordance with the check-off provision of the CBA,
From the pleadings filed and arguments of counsel, the following issues present
themselves for this Court's resolution.
I from the latter.
Is petitioner union's disaffiliation from respondent federation valid?
II
Do respondent companies have the right to effect union dues
collections despite revocation by the employees of the check-off
authorization? and
III
Is respondent federation entitled to union dues payments from
petitioner union's members notwithstanding their disaffiliation from
said federation?
We resolve the first issue in the affirmative.
The right of a local union to disaffiliate from its mother union is well-settled. In
previous cases, it has been repeatedly held that a local union, being a separate and
voluntary association, is free to serve the interest of all its members including the
freedom to disaffiliate when circumstances warrant. 4 This right is consistent with the
Constitutional guarantee of freedom of association (Article IV, Section 7, Philippine
Constitution).
Petitioner contends that the disaffiliation was not due to any opportunists motives on
its part. Rather it was prompted by the federation's deliberate and habitual dereliction
of duties as mother federation towards petitioner union. Employees' grievances were
allegedly left unattended to by respondent federation to the detriment of the
employees' rights and interests.
In reversing the Med-Arbiter's resolution, respondent Bureau declared: the
Department of Labor is set on a task to restructure the labor movement to the end
that the workers will unite themselves along industry lines. Carried to its complete
fruition, only one union for every industry will remain to bargain collectively for the
workers. The clear policy therefore even now is to conjoin workers and worker
groups, not to dismember them. 5 This policy is commendable. However, we must not
lose sight of the constitutional mandate of protecting labor and the workers' right to
self-organization. In the implementation and interpretation of the provisions of the
Labor Code and its implementing regulations, the workingman's welfare should be the
primordial and paramount consideration. In the case at bar, it would go against the
spirit of the labor law to restrict petitioner's right to self-organization due to the
existence of the CBA. We agree with the Med-Arbiter's opinion that "A disaffiliation
does not disturb the enforceability and administration of a collective agreement; it
does not occasion a change of administrators of the contract nor even an amendment
of the provisions thereof." 6 But nowhere in the record does it appear that the contract
entered into by the petitioner and ALUMETAL prohibits the withdrawal of the former
This now brings us to the second issue. Under Section 3, Article I, of the CBA, the
obligation of the respondent companies to deduct and remit dues to ALUMETAL is
conditioned on the individual check-off authorization of petitioner's members, In other
words, ALUMETAL is entitled to receive the dues from respondent companies as long
as petitioner union is affiliated with it and respondent companies are authorized by
their employees (members of petitioner union) to deduct union dues. Without said
affiliation, the employer has no link to the mother union. The obligation of an
employee to pay union dues is coterminous with his affiliation or membership. "The
employees' check-off authorization, even if declared irrevocable, is good only as long
as they remain members of the union concerned." 7 A contract between an employer
and the parent organization as bargaining agent for the employees is terminated by
the disaffiliation of the local of which the employees are members. 8 Respondent
companies therefore were wrong in continuing the check-off in favor of respondent
federation since they were duly notified of the disaffiliation and of petitioner's
members having already rescinded their check-off authorization.
With the view we take on those two issues, we find no necessity in dwelling further on
the last issue. Suffice it to state that respondent federation is not entitled to union
dues payments from petitioner's members. "A local union which has validly withdrawn
from its affiliation with the parent association and which continues to represent the
employees of an employer is entitled to the check-off dues under a collective
bargaining contract." 9
WHEREFORE, the Resolutions of the Bureau of Labor Relations of January 25, 1977
and March 14, 1977 are REVERSED and SET ASIDE. Respondent ALUMETAL is
ordered to return to petitioner union all the union dues enforced and collected through
the NLRC Sheriff by virtue of the writ of execution dated April 4, 1977 issued by
respondent Bureau. No costs. SO ORDERED.
66
G.R. No. 127374 January 31, 2002
PHILIPPINE SKYLANDERS, INC., MARILES C. ROMULO and FRANCISCO
DAKILA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER EMERSON
TUMANON, PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU)
SEPTEMBER (now UNIFIED PAFLU) and SERAFIN AYROSO, respondents.
x---------------------------------------------------------x
G.R. No. 127431 January 31, 2002
PHILIPPINE SKYLANDERS AND WORKERS ASSOCIATION-NCW, MACARIO
CABANIAS, PEPITO RODILLAS, SHARON CASTILLO, DANILO CARBONEL,
MANUEL EDA, ROLANDO FELIX, JOCELYN FRONDA, RICARDO LUMBA,
JOSEPH MARISOL, NERISA MORTEL, TEOFILO QUIRONG, LEONARDO REYES,
MANUEL CADIENTE and HERMINIA RIOSA, petitioners,
vs.
PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU) SEPTEMBER
(now UNIFIED PAFLU) and NATIONAL LABOR RELATIONS COMMISSION,
SECOND DIVISION, respondents.
BELLOSILLO, J.:
This is a petition for certiorari1 seeking to set aside the 31 July 1996 Decision2 of the
National Labor Relations Commission affirming the 30 June 1995 Decision of the
Labor Arbiter holding petitioners Philippine Skylanders, Inc., Mariles C. Romulo3 and
Francisco Dakila as well as the elected officers of the Philippine Skylanders
Employees and Workers Association-PAFLU4 guilty of unfair labor practice and
ordering them to pay private respondent Philippine Association of Free Labor Union
(PAFLU) September5 ₱150,000.00 as damages. Petitioners likewise seek the reversal
of the 31 October 1996 Resolution of the NLRC denying their Motion for
Reconsideration.
In November 1993 the Philippine Skylanders Employees Association (PSEA), a local
labor union affiliated with the Philippine Association of Free Labor Unions (PAFLU)
September (PAFLU), won in the certification election conducted among the rank and
file employees of Philippine Skylanders, Inc. (PSI). Its rival union, Philippine
Skylanders Employees Association-WATU (PSEA-WATU) immediately protested the
result of the election before the Secretary of Labor.
Several months later, pending settlement of the controversy, PSEA sent PAFLU a
notice of disaffiliation citing as reason PAFLU's supposed deliberate and habitual
dereliction of duty toward its members. Attached to the notice was a copy of the
resolution adopted and signed by the officers and members of PSEA authorizing their
local union to disaffiliate from its mother federation.
PSEA subsequently affiliated itself with the National Congress of Workers (NCW),
changed its name to Philippine Skylanders Employees Association - National
Congress of Workers (PSEA-NCW), and to maintain continuity within the
organization, allowed the former officers of PSEA-PAFLU to continue occupying their
positions as elected officers in the newly-forged PSEA-NCW.
On 17 March 1994 PSEA-NCW entered into a collective bargaining agreement with
PSI which was immediately registered with the Department of Labor and
Employment.
Meanwhile, apparently oblivious to PSEA's shift of allegiance, PAFLU Secretary
General Serafin Ayroso wrote Mariles C. Romulo requesting a copy of PSI's audited
financial statement. Ayroso explained that with the dismissal of PSEA-WATU's
election protest the time was ripe for the parties to enter into a collective bargaining
agreement.
On 30 July 1994 PSI through its personnel manager Francisco Dakila denied the
request citing as reason PSEA's disaffiliation from PAFLU and its subsequent
affiliation with NCW.
Agitated by PSI's recognition of PSEA-NCW, PAFLU through Serafin Ayroso filed a
complaint for unfair labor practice against PSI, its president Mariles Romulo and
personnel manager Francisco Dakila. PAFLU alleged that aside from PSI's refusal to
bargain collectively with its workers, the company through its president and personnel
manager, was also liable for interfering with its employees' union activities. 6
Two (2) days later or on 6 October 1994 Ayroso filed another complaint in behalf of
PAFLU for unfair labor practice against Francisco Dakila. Through Ayroso PAFLU
claimed that Dakila was present in PSEA's organizational meeting thereby confirming
his illicit participation in union activities. Ayroso added that the members of the local
union had unwittingly fallen into the manipulative machinations of PSI and were lured
into endorsing a collective bargaining agreement which was detrimental to their
interests.7 The two (2) complaints were thereafter consolidated.
On 1 February 1995 PAFLU amended its complaint by including the elected officers
of PSEA-PAFLU as additional party respondents. PAFLU averred that the local
officers of PSEA-PAFLU, namely Macario Cabanias, Pepito Rodillas, Sharon Castillo,
Danilo Carbonel, Manuel Eda, Rolando Felix, Jocelyn Fronda, Ricardo Lumba,
Joseph Mirasol, Nerisa Mortel, Teofilo Quirong, Leonardo Reyes, Manuel Cadiente,
and Herminia Riosa, were equally guilty of unfair labor practice since they brazenly
allowed themselves to be manipulated and influenced by petitioner Francisco Dakila.8
PSI, its president Mariles C. Romulo, and its personnel manager Dakila moved for the
dismissal of the complaint on the ground that the issue of disaffiliation was an inter-
union conflict which lay beyond the jurisdiction of the Labor Arbiter. On the other
hand, PSEA-NCW took the cudgels for its officers who were being sued in their
capacities as former officers of PSEA-PAFLU and asserted that since PSEA was no
longer affiliated with PAFLU, Ayroso or PAFLU for that matter had no personality to
67
file the instant complaint. In support of this assertion, PSEA-NCW submitted in
evidence a Katunayan signed by 111 out of 120 rank and file employees of PSI
disauthorizing Ayroso or PAFLU from instituting any action in their behalf. 9
In a Decision rendered on 30 June 1995 the Labor Arbiter declared PSEA's
disaffiliation from PAFLU invalid and held PSI, PSEA-PAFLU and their respective
officers guilty of unfair labor practice. The Decision explained that despite PSEA-
PAFLU's status as the sole and exclusive bargaining agent of PSI's rank and file
employees, the company knowingly sanctioned and confederated with Dakila in
actively assisting a rival union. This, according to the Labor Arbiter, was a classic
case of interference for which PSI could be held responsible. As PSEA-NCW's
personality was not accorded recognition, its collective bargaining agreement with PSI
was struck down for being invalid. Ayroso's legal personality to file the complaint was
sustained on the ratiocination that under the Labor Code no petition questioning the
majority status of the incumbent bargaining agent shall be entertained outside of the
sixty (60)-day period immediately before the expiry date of such five (5)-year term of
the collective bargaining agreement that the parties may enter into. Accordingly,
judgment was rendered ordering PSI, PSEA-PAFLU and their officers to pay PAFLU
₱150,000.00 in damages.10
PSI, PSEA and their respective officers appealed to the National Labor Relations
Commission (NLRC). But the NLRC upheld the Decision of the Labor Arbiter and
conjectured that since an election protest questioning PSEA-PAFLU's certification as
the sole and exclusive bargaining agent was pending resolution before the Secretary
of Labor, PSEA could not validly separate from PAFLU, join another national
federation and subsequently enter into a collective bargaining agreement with its
employer-company.11
Petitioners separately moved for reconsideration but both motions were denied.
Hence, these petitions for certiorari filed by PSI and PSEA-NCW together with their
respective officers pleading for a reversal of the NLRC's Decision which they claimed
to have been rendered in excess of jurisdiction. In due time, both petitions were
consolidated.
In these petitions, petitioner PSEA together with its officers argued that by virtue of
their disaffiliation PAFLU as a mere agent had no authority to represent them before
any proceedings. They further asserted that being an independent labor union PSEA
may freely serve the interest of all its members and readily disaffiliate from its mother
federation when circumstances so warrant. This right, they averred, was consistent
with the constitutional guarantee of freedom of association. 12
For their part, petitioners PSI, Romulo and Dakila alleged that their decision to
bargain collectively with PSEA-NCW was actuated, to a large extent, by PAFLU's
behavior. Having heard no objections or protestations from PAFLU relative to PSEA's
disaffiliation, they reckoned that PSEA's subsequent association with NSW was
done bona fide.13
The Solicitor General filed a Manifestation in Lieu of Comment recommending that
both petitions be granted. In his Manifestation, the Solicitor General argued against
the Labor Arbiter's assumption of jurisdiction citing the following as
reasons: first, there was no employer-employee relationship between complainant
Ayroso and PSI over which the Labor Arbiter could rightfully assert his
jurisdiction; second, since the case involved a dispute between PAFLU as mother
federation and PSEA as local union, the controversy fell within the jurisdiction of the
Bureau of Labor Relations; and lastly, the relationship of principal-agent between
PAFLU and PSEA had been severed by the local union through the lawful exercise of
its right of disaffiliation.14
Stripped of non-essentials, the fundamental issue tapers down to the legitimacy of
PSEA's disaffiliation. To be more precise, may PSEA, which is an independent and
separate local union, validly disaffiliate from PAFLU pending the settlement of an
election protest questioning its status as the sole and exclusive bargaining agent of
PSI's rank and file employees?
At the outset, let it be noted that the issue of disaffiliation is an inter-union conflict the
jurisdiction of which properly lies with the Bureau of Labor Relations (BLR) and not
with the Labor Arbiter.15 Nonetheless, with due recognition of this fact, we deem it
proper to settle the controversy at this instance since to remand the case to the BLR
would only mean intolerable delay for the parties.
The right of a local union to disaffiliate from its mother federation is not a novel thesis
unillumined by case law. In the landmark case of Liberty Cotton Mills Workers Union
vs. Liberty Cotton Mills, Inc.16 we upheld the right of local unions to separate from
their mother federation on the ground that as separate and voluntary associations,
local unions do not owe their creation and existence to the national federation to
which they are affiliated but, instead, to the will of their members. The sole essence of
affiliation is to increase, by collective action, the common bargaining power of local
unions for the effective enhancement and protection of their interests. Admittedly,
there are times when without succor and support local unions may find it hard,
unaided by other support groups, to secure justice for themselves.
Yet the local unions remain the basic units of association, free to serve their own
interests subject to the restraints imposed by the constitution and by-laws of the
national federation, and free also to renounce the affiliation upon the terms laid down
in the agreement which brought such affiliation into existence.
Such dictum has been punctiliously followed since then. 17
Upon an application of the aforecited principle to the issue at hand, the impropriety of
the questioned Decisions becomes clearly apparent. There is nothing shown in the
records nor is it claimed by PAFLU that the local union was expressly forbidden to
disaffiliate from the federation nor were there any conditions imposed for a valid
breakaway. As such, the pendency of an election protest involving both the mother
federation and the local union did not constitute a bar to a valid disaffiliation. Neither
was it disputed by PAFLU that 111 signatories out of the 120 members of the local
68
union, or an equivalent of 92.5% of the total union membership supported the claim of
disaffiliation and had in fact disauthorized PAFLU from instituting any complaint in
their behalf. Surely, this is not a case where one (1) or two (2) members of the local
union decided to disaffiliate from the mother federation, but it is a case where almost
all local union members decided to disaffiliate.

It was entirely reasonable then for PSI to enter into a collective bargaining agreement
with PSEA-NCW. As PSEA had validly severed itself from PAFLU, there would be no
restrictions which could validly hinder it from subsequently affiliating with NCW and
entering into a collective bargaining agreement in behalf of its members.

There is a further consideration that likewise argues for the granting of the petitions. It
stands unchallenged that PAFLU instituted the complaint for unfair labor practice
against the wishes of workers whose interests it was supposedly protecting. The mere
act of disaffiliation did not divest PSEA of its own personality; neither did it give
PAFLU the license to act independently of the local union. Recreant to its mission,
PAFLU cannot simply ignore the demands of the local chapter and decide for its
welfare. PAFLU might have forgotten that as an agent it could only act in
representation of and in accordance with the interests of the local union. The
complaint then for unfair labor practice lodged by PAFLU against PSI, PSEA and their
respective officers, having been filed by a party which has no legal personality to
institute the complaint, should have been dismissed at the first instance for failure to
state a cause of action.

Policy considerations dictate that in weighing the claims of a local union as against
those of a national federation, those of the former must be preferred. Parenthetically
though, the desires of the mother federation to protect its locals are not altogether to
be shunned. It will however be to err greatly against the Constitution if the desires of
the federation would be favored over those of its members. That, at any rate, is the
policy of the law. For if it were otherwise, instead of protection, there would be
disregard and neglect of the lowly workingmen.

WHEREFORE, the petitions of Philippine Skylanders, Inc. and of Philippine

Skylanders and Workers Association-NCW, together with their respective officers,
are GRANTED. The Decision of the National Labor Relations Commission of 31 July
1996 affirming the Decision of the Labor Arbiter of 30 June 1995 holding petitioners
Philippine Skylanders and Workers Association-NCW, Philippine Skylanders, Inc. and
their respective officers, guilty of unfair labor practice and ordering them to pay
damages to private respondent Philippine Association of Free Labor Unions (PAFLU)
September (now UNIFIED PAFLU) as well as the Resolution of 31 October 1996
denying reconsideration is REVERSED and SET ASIDE. No costs.

SO ORDERED.

69
G.R. No. 113907 February 28, 2000
MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD (MSMG-
UWP), ITS PRESIDENT BEDA MAGDALENA VILLANUEVA, MARIO DAGANIO,
DONATO GUERRERO, BELLA P. SANCHEZ, ELENA TOBIS, RHODA TAMAYO,
LIWAYWAY MALLILIN, ELOISA SANTOS, DOMINADOR REBULLO, JOSE
IRLAND, TEOFILA QUEJADA, VICENTE SAMONTINA, FELICITAS DURIAN,
ANTONIO POLDO, ANGELINA TUGNA, SALVADOR PENALOSA, LUZVIMINDA
TUBIG, ILUMINADA RIVERA, ROMULO SUMILANG, NENITA BARBELONIA, LEVI
BASILIA, RICARDO PALAGA, MERCY ROBLES, LEODEGARIO GARIN,
DOMINGO ECLARINAL, MELCHOR GALLARDO, MARCELO GARIN, ROSALINA
BAUTISTA, MARY ANN TALIGATOS, ALEJANDRO SANTOS, ANTONIO FRAGA,
LUZ GAPULTOS, MAGDALENA URSUA, EUGENIO ORDAN, LIGAYA MANALO,
PEPITO DELA PAZ, PERLITA DIMAQUIAT, MYRNA VASQUEZ, FLORENTINA
SAMPAGA, ARACELI FRAGA, MAXIMINA FAUSTINO, MARINA TAN, OLIGARIO
LOMO, PRECILA EUSEBIO, SUSAN ABOGANO, CAROLINA MANINANG, GINA
GLIFONIA, OSCAR SOTTO, CELEDONA MALIGAYA, EFREN VELASQUEZ,
DELIA ANOVER, JOSEPHINE TALIMORO, MAGDALENA TABOR, NARCISA
SARMIENTO, SUSAN MACASIEB, FELICIDAD SISON, PRICELA CARTA, MILA
MACAHILIG, CORAZON NUNALA, VISITACION ELAMBRE, ELIZABETH INOFRE,
VIOLETA BARTE, LUZVIMINDA VILLOSA, NORMA SALVADOR, ELIZABETH
BOGATE, MERLYN BALBOA, EUFRECINA SARMIENTO, SIMPLICIA SIMPLICIA
BORLEO, MATERNIDAD DAVID, LAILA JOP, POTENCIANA CULALA, LUCIVITA
NAVARRO, ROLANDO BOTIN, AMELITA MAGALONA, AGNES CENA, NOLI
BARTOLAY, DANTE AQUINO, HERMINIA RILLON, CANDIDA APARIJADO,
LYDIA JIMENEZ, ELIZABETH ANOCHE, ALDA MURO, TERESA VILLANUEVA,
TERESITA RECUENCO, ELIZA SERRANO, ESTELLA POLINAR, GERTRUDES
NUNEZ, FELIPE BADIOLA, ROSLYN FERNANDEZ, OSCAR PAGUTA,
NATIVIDAD BALIWAS, ELIZABETH BARCIBAL, CYNTHIA ESTELLER,
TEODORA SANTOS, ALICIA PILAR, MILA PATENO, GLORIA CATRIZ, MILA
MACAHILIG, ADELAIDA DE LEON, ROSENDO EDILO, ARSENIA ESPIRITU,
NUMERIANO CABRERA, CONCEPSION ARRIOLA, PAULINA DIMAPASOK,
ANGELA SANGCO, PRESILA ARIAS, ZENAIDA NUNES, EDITHA IGNACIO,
ROSA GUIRON, TERESITA CANETA, ALICIA ARRO, TEOFILO RUWETAS,
CARLING AGCAOILI, ROSA NOLASCO, GERLIE PALALON, CLAUDIO DIRAS,
LETICIA ALBOS, AURORA ALUBOG, LOLITA ACALEN, GREGORIO ALIVIO,
GUILLERMO ANICETA, ANGELIE ANDRADA, SUSAN ANGELES, ISABELITA
AURIN, MANUELA AVELINA, CARLING AGCAOILI, TERESITA ALANO, LOLITA
AURIN, EMMABETH ARCIAGA, CRESENCIA ACUNA, LUZVIMINDA ABINES,
FLORENCIA ADALID, OLIVIA AGUSTIN, EVANGELINE ALCORAN, ROSALINA
ALFERES, LORNA AMANTE, FLORENTINA AMBITO, JULIETA AMANONCO,
CARMEN AMARILLO, JOSEFINA AMBAGAN, ZENAIDA ANAYA, MARIA ANGLO,
EDITHA ANTA ZO, MARY JANE ANTE, ANDREA AQUINO, ROWENA ARABIT,
MARIETA ARAGON, REBECCA ARCENA, LYDIA ARCIDO, FERNANDO
ARENAS, GREGORIO ARGUELLES, EDITHA ARRIOLA, EMMA ATIENZA, EMMA
ATIENZA, TEODY ATIENZA, ELIZABETH AUSTRIA, DIOSA AZARES, SOLIDA
AZAINA, MILAGROS BUAG, MARIA BANADERA, EDNALYN BRAGA, OFELIA
BITANGA, FREDISMINDA BUGUIS, VIOLETA BALLESTEROS, ROSARIO
BALLADJAY, BETTY BORIO, ROMANA BAUTISTA, SUSARA BRAVO, LILIA
BAHINGTING, ENIETA BALDOZA, DAMIANA BANGCORE, HERMINIA BARIL,
PETRONA BARRIOS, MILAGROS BARRAMEDA, PERLA BAUTISTA, CLARITA
BAUTISTA, ROSALINA BAUTISTA, ADELINA BELGA, CONSOLACION BENAS,
MARIA BEREZO, MERCEDES BEREBER, VIOLETA BISCOCHO, ERNESTO
BRIONES, ALVINA BROSOTO, AGUSTINA BUNYI, CARMEN BUGNOT, ERLINDA
BUENAFLOR, LITA BAQUIN, CONSEJO BABOL, CRISANTA BACOLOD, CELIA
DE BACTAT, MAZIMA BAGA, ELENA BALADAD, ROSARIO BALADJAY,
AMALIA BALAGTAS, ANITA BALAGTAS, MARIA BALAKIT, RUFINA BALATAN,
REBECCA BALDERAMA, AMELIA BALLESTER, BELEN BARQUIO,
BERNANDITA BASILIDES, HELEN BATO, HELEN BAUTISTA, ROMANA
BAUTISTA, ALMEDA BAYTA, AVELINA BELAYON, NORMA DE BELEN,
THELMA DE BELEN, JOCELYN BELTRAN, ELENA BENITEZ, VIRGINIA
BERNARDINO, MERLINA BINUYAG, LINA BINUYA, BLESILDA BISNAR,
SHIRLEY BOLIVAR, CRESENTACION MEDLO, JOCELYN BONIFACIO, AMELIA
BORBE, AMALIA BOROMEO, ZENAIDA BRAVO, RODRIGO BEULDA, TERESITA
MENDEZ, ELENA CAMAN, LALIANE CANDELARIA, MARRY CARUJANO,
REVELINA CORANES, MARITESS CABRERA, JUSTINA CLAZADA, APOLONIA
DELA CRUZ, VICTORIA CRUZ, JOSEFINA DELA CRUZ, MARITESS
CATANGHAL, EDNA CRUZ, LUCIA DE CASTRO, JOSIE CARIASO, OFELIA
CERVANTES, MEDITA CORTADO, AMALIA CASAJEROS, LUCINA CASTILIO,
EMMA CARPIO, ANACORITA CABALES, YOLANDA CAMO, MILA CAMAZUELA,
ANITA CANTO, ESTELA CANCERAN, FEMENCIA CANCIO, CYNTHIA CAPALAD,
MERLE CASTILLO, JESUSA CASTRO, CECILIA CASTILLO, SILVERITA
CASTRODES, VIVIAN CELLANO, NORMA CELINO, TERESITA CELSO, GLORIA
COLINA, EFIPANIA CONSTANTINO, SALVACION CONSULTA, MEDITA
CORTADO, AIDA CRUZ, MARISSA DELA CRUZ, EDITO CORCILLES, JELYNE
CRUZ, ROSA CORPOS, ROSITA CUGONA, ELSIE CABELLES, EMMA CADUT,
VICTORIA CALANZA, BARBARA CALATA, IMELDA CALDERON, CRISTINA
CALIDGUID, EMMALINDA CAMALON, MARIA CAMERINO, CARMENCITA
CAMPO, CONNIE CANEZO, LOURDES CAPANANG, MA. MILAGROS CAPILI,
MYRNA T. CAPIRAL, FLOR SAMPAGA, SUSAN B. CARINO, ROSARIO
CARIZON, VIRGINIA DEL CARMEN, EMMA CARPIO, PRESCILA CARTA, FE
CASERO, LUZ DE CASTRO, ANNA CATARONGAN, JOSEFINA CASTISIMO, JOY
MANALO, EMMIE CAWALING, JOVITA CARA, MARINA CERBITO, MARY
CAREJANO, ESTELA R. CHAVEZ, CONCEPCION PARAJA, GINA CLAUDIO,
FLORDELIZA CORALES, EDITO CORCIELER, ROSA C. CORROS, AMELIA
CRUZ, JELYNE CRUZ, WILFREDO DELA CRUZ, REINA CUEVAS, MARILOU
DEJECES, JOSEPHINE DESACULA, EDITHA DEE, EDITHA DIAZ, VIRGIE
DOMONDON, CELSA DOROPAW, VIOLETA DUMELINA, MARIBEL DIMATATAC,
ELBERTO DAGANIO, LETECIA DAGOHOY, DINDO DALUZ, ANGELITA DANTES,
GLORIA DAYO, LUCIA DE CASTRO, CARLITA DE GUZMAN, CARMEN DELA
CRUZ, MERCY DE LEON, MARY DELOS REYES, MARIETA DEPILO, MATILDE
DIBLAS, JULIETA DIMAYUGA, TEODORA DIMAYUGA, YOLANDA DOMDOM,
LUCITA DONATO, NELMA DORADO, RITA DORADO, SUSAN DUNTON,
HERMINIA SAN ESTEBAN, AMALI EUGENIO, OLIVIA EUSOYA, ERNESTO
ESCOBIN, EVELYN ESCUREL, LYDIA ESCOBIN, VICENTE E. ELOIDA. ELENA
EGAR, GLORIA ERENO, NORMA ESPIRIDION, ARSENIA ESPIRITU, AURORA
ESTACIO, DEMETRIA ESTONELO, MILAGROS FONSEGA, LYDIA FLORENTINO,
JULIA FARABIER, TRINIDAD FATALLA, IMELDA FLORES, JESSINA FRANCO,
MA. CRISTINA FRIJAS, ESPECTACION FERRER, BERDENA FLORES, LEONILA
FRANCISCO, BERNARDA FAUSTINO, DOLORES FACUNDO, CRETITA
70
FAMILARAN, EMELITA FIGUERAS, MA. VIRGINIA FLORENDO, AURORA
FRANCISCO, MA. JESUSA FRANCISCO, NENITA FUENTES, MARILOU
GOLINGAN, JUANITA GUERRERO, LYDIA GUEVARRA, SOCORRO GONZAGA,
PATRICIA GOMEO, ROSALINDA GALAPIN, CARMELITA GALVEZ, TERESA
GLE, SONIA GONZALES, PRIMITA GOMEZ, THERESA GALUA, JOSEFINA
GELUA, BRENDA GONZAGA, FLORA GALLARDO, LUCINDA GRACILLA,
VICTORIA GOZUM, NENITA GAMAO, EDNA GARCIA, DANILO GARCIA,
ROSARIO GIRAY, ARACELI GOMEZ, JOEMARIE GONZAGA, NELIA GONZAGA,
MARY GRANCE GOZON, CARMEN GONZALES, MERLITA GREGORIO,
HERMINIA GONZALES, CARLITA DE GUZMAN, MODESTA GABRENTINA,
EDITHA GADDI, SALVACIO GALIAS, MERLINDA GALIDO, MELINDA GAMIT,
JULIETA GARCIA, EMELITA GAVINO, CHARITO GILLIA, GENERA GONEDA,
CRESTITA GONZALES, FRANCISCA GUILING, JULIAN HERNANDEZ,
HERRADURA, SUSANA HIPOLITO, NERISSA HAZ, SUSAN HERNAEZ,
APOLONIA ISON, SUSAN IBARRA, LUDIVINA IGNACIO, CHOLITA INFANTE,
JULIETA ITURRIOS, ANITA IBO, MIRASOL INGALLA, JULIO JARDINIANO,
MERLITA JULAO, JULIETA JULIAN, MARIBETH DE JOSE, JOSEPHINE JENER,
IMELDA JATAP, JULIETA JAVIER, SALOME JAVIER, VICTORIA JAVIER,
SALVACION JOMOLO, EDNA JARNE, LYDIA JIMENEZ, TERESITA DE JUAN,
MARILYN LUARCA, ROSITA LOSITO, ROSALINA LUMAYAG, LORNA LARGA,
CRESTETA DE LEON, ZENAIDA LEGASPI, ADELAIDA LEON, IMELDA DE LEON,
MELITINA LUMABI, LYDIA LUMABI, ASUNCION LUMACANG, REGINA
LAPIADRIO, MELANIA LUBUGUAN, EVANGELINE LACAP, PELAGIA LACSI,
LORNA LAGUI, VIRGIE LAITAN, VIRGINIA LEE, CRESTELITA DE LEON,
FELICISIMA LEONERO, DIOSA LOPE, ANGELITA LOPEZ, TERESITA LORICA,
JUANITA MENDIETA, JUANITA MARANQUEZ, JANET MALIFERO, INAS
MORADOS, MELANIE MANING, LUCENA MABANGLO, CLARITA MEJIA, IRENE
MENDOZA, LILIA MORTA, VIGINIA MARAY, CHARITO MASINAHON, FILMA
MALAYA, LILIA MORTA, VIRGINIA MARAY, CHARITO MASINAHON, FILMA
MALAYA, LILIA MORTA, ROSITA MATIBAG, LORENZA MLINA, SABINA DEL
MUNDO, EDITHA MUYCO, NARCISA MABEZA, MA. FE MACATANGAY,
CONCEPCION MAGDARAOG, IMELDA MAHIYA, ELSA MALLARI, LIGAYA
MANAHAN, SOLEDA MANLAPAS, VIRGINIA MAPA, JOSEI MARCOS, LIBRADA
MARQUEZ, VIRGINIA MAZA, JULIANITA MENDIETA, EDILBERTA MENDOZA,
IRENE MERCADO, HELEN MEROY, CRISTINA MEJARES, CECILIA MILLET,
EMELITA MINON, JOSEPHINE MIRANA, PERLITA MIRANO, EVANGELINE
MISBAL, ELEANOR MORALES, TERESITA MORILLA, LYDIA NUDO, MYRIAM
NAVAL, CAROLINA NOLIA, ALICIA NUNEZ, MAGDALENA NAGUIDA, ELSA
NICOL, LILIA NACIONALES, MA. LIZA MABO, REMEDIOS NIEVES, MARGARITA
NUYLAN, TERESITA NIEVES, PORFERIA NARAG, RHODORA NUCASA,
CORAZON OCRAY, LILIA OLIMPO, VERONA OVERENCIA, FERMIN OSENA,
FLORENCIA OLIVAROS, SOLEDAD OBEAS, NARISSA OLIVEROS, PELAGIA
ORTEGA, SUSAN ORTEGA, CRISTINA PRENCIPE, PURITA PENGSON,
REBECCA PACERAN, EDNA PARINA, MARIETA PINAT, EPIFANIA PAJERLAN,
ROSALINA PASIBE, CECILIA DELA PAZ, LORETA PENA, APOLONIA
PALCONIT, FRANCISCO PAGUIO, LYDIA PAMINTAHON, ELSIE PACALDO,
TERESITA PADILLA, MYRNA PINEDA, MERCEIDTA PEREZ, NOVENA
PORLUCAS, TERESITA PODPOD, ADORACION PORNOBI, ALICIA PERILLO,
HELEN JOY PENDAL, LOURDES PACHECO, LUZVIMINDA PAGALA, LORETA
PAGAPULAN, FRANCISCO PAGUIO, PRISCO PALACA, FLORA PAMINTUAN,
NOEMI PARISALES, JOSEPHINE PATRICIO, CRISTINA PE BENITO, ANGELA
PECO, ANGELITA PENA, ESTER PENONES, NORMA PEREZ, MAURA
PERSEVERANCIA, MARINA PETILLA, JOSIE PIA, ZULVILITA PIODO, REBECCA
PACERAN, CLARITA POLICARPIO, MAXIMO POTENTO, PORFIRIO POTENTO,
FLORDELIZA PUMARAS, FERNANDO QUEVEDO, JULIANA QUINDOZA,
CHARITO QUIROZ, CARMELITA ROSINO, RODELIA RAYONDOYON,
FLORENCIA RAGOS, REBECCA ROSALES, ROSALYN RIVERO, FRANCISCO
RUIZ, FRANCIA ROSERO, EMELY RUBIO, EDILBERTO RUIO, JUANA RUBY,
RAQUEL REYES, MERCY ROBLES, ESTELA RELANO, ROSITA REYES NIMFA
RENDON, EPIFANIO RAMIRO, MURIEL REALCO, BERNARDITA RED, LEONITA
RODIL, BENITA REBOLA, DELMA REGALARIO, LENY REDILLAS, JULIETA
DELA ROSA, FELICITAS DELA ROSA, SUSAN RAFALLO, ELENA RONDINA,
NORMA RACELIS, JOSEPHINE RAGEL, ESPERANZA RAMIREZ, LUZVIMINDA
RANADA, CRISTINA RAPINSAN, JOCELYN RED, ORLANDO REYES, TERESITA
REYES, ANGELITA ROBERTO, DELIA ROCHA, EDLTRUDES ROMERO,
MELECIA ROSALES, ZENAIDA ROTAO, BELEN RUBIS, FE RUEDA, SYLVIA
SONGCAYAWON, CRISTINA SANANO, NERCISA SARMIENTO, HELEN SIBAL,
ESTELITA SANTOS, NORMA SILVESTRE, DARLITA SINGSON, EUFROCINA
SARMIENTO, MYRNA SAMSON, EMERLINA SADIA, LORNA SALAZAR,
AVELINA SALVADOR, NACIFORA SALAZAR, TITA SEUS, MARIFE SANTOS,
GRACIA SARMIENTO, ANGELITA SUMANGIL, ELIZABETH SICAT, MA.
VICTORIA SIDELA, ANALITA SALVADOR, MARITES SANTOS, VIRGINIA
SANTOS, THELMA SARONG, NILDA SAYAT, FANCITA SEGUNDO, FYNAIDA
SAGUI, EDITHA SALAZAR, EDNA SALZAR, EMMA SALENDARIO, SOLEDAD
SAMSON, EDNA SAN DIEGO, TERESITA SAN GABRIEL, GERTRUDES SAN
JOSE, EGLECERIA OSANCHEZ, ESTRELLA SANCHEZ, CECILIA DELOS
SANTOS, LUISA SEGOVIA, JOCELYN SENDING, ELENA SONGALIA, FELICITAS
SORIANO, OFELIA TIBAYAN, AIDA TIRNIDA, MONICA TIBAYAN, CRISTETA
TAMBARAN, GLORIA TACDA, NENVINA, FELINA TEVES, ANTONINA DELA
TORRE, MAXIMA TANILON, NENA TABAT, ZOSIMA TOLOSA, MARITA TENOSO,
IMELDA TANIO, LUZ TANIO, EVANGELINE TAYO, JOSEFINA TINGTING,
ARSENIA TISOY, MAGDALENA TRAJANO, JOSEFINA UBALDE, GINA UMALI,
IRMA VALENZUELA, FELY VALDEZ, PAULINA VALEZ, ROSELITA VALLENTE,
LOURDES VELASCO, AIDA VILLA, FRANCISCA VILLARITO, ZENAIDA
VISMONTE, DELIA VILLAMIEL, NENITA VASQUEZ, JOCELYN VILLASIS,
FERMARGARITA VARGAS, CELIA VALLE, MILA CONCEPCION VIRAY,
DOMINGA VALDEZ, LUZVIMINDA VOCINA, MADELINE VIVERO, RUFINA
VELASCO, AUREA VIDALEON, GLORIA DEL VALLE, THELMA VALLOYAS,
CYNTHIA DELA VEGA, ADELA VILLAGOMEZ, TERESITA VINLUAN, EUFEMIA
VITAN, GLORIA VILLAFLORES, EDORACION VALDEZ, ANGELITA VALDEZ,
ILUMINADA VALENCI, MYRNA VASQUEZ, EVELNYN VEJERAMO, TEODORA
VELASQUEZ, EDAN VILLANUEVA, PURITA VILLASENOR, SALVADOR WILSON,
EMELINA YU, ADELFA YU, ANA ABRIGUE, VIRGINIA ADOBAS, VICTORIA
ANTIPUESTO, MERCEDITA CASTILLO, JOCELYN CASTRO, CREMENIA DELA
CRUZ, JOSEPHINE IGNACIO, MELITA ILILANGOS, LIGAYA LUMAYAT, DELIA
LUMBES, ROSITA LIBRADO, DELIA LAGRAMADA, GEMMA MAGPANTAY,
EMILY MENDOZA, FIDELA PANGANIBAN, LEONOR RIZALDO, ILUMINDA
RIVERA, DIVINA SAMBAYAN, ELMERITA SOLAYAO, NANCY SAMALA, JOSIE
SUMARAN, LUZVIMINDA ABINES, ALMA ACOL, ROBERTO ADRIATICO,
GLORIA AGUINALDO, ROSARIO ALEYO, CRISTETA ALEJANDRO, LILIA
71
ALMOGUERA, CARMEN AMARILLO, TRINIDAD ARDANIEL, CERINA
AVENTAJADO, ZENAIDA AVAYA, LOLITA ARABIS, MARIA ARSENIA, SOFIA
AGUINALDO, SALVE ABAD, JOSEFINA AMBANGAN EMILIA AQUINO,
JOSEFINA AQUINO, JULIANA AUSAN, AMERCIANA ACOSTA, CONCEPCION
ALEROZA, DIANA ADOVOS, FELY ADVINCULA, SEOMINTA ARIAS, JOSEPHINE
ARCEDE, NORMA AMISTOSO, PRESENTACION ALONOS, EMMA ATIENZA,
LEONIDA AQUINO, ANITA ARILLON, ADELAIDA ARELLANO, NORMA
AMISTOSO, JOSEPHINE ARCEDE, SEMIONITA ARIAS, JOSEFINA BANTUG,
LOLITA BARTE, HERMINIA BASCO, MARGARITA BOTARDO, RUFINO BUGNOT,
LOLITA BUSTILLO, ISABEL BALAKIT, ROSARIO BARRERO, TESSIE BALBOS,
NORMA BENISANO, GUILLERMA BRUGES, BERNADETTE BARTOLOME,
SHIRLEY BELMONTE, MERONA BELZA, AZUCENA BERNALES, JOSE BASCO,
NIMPHA BANTOG, BENILDA BUBAN, REGINA BUBAN, SALOME BARRAMEDA,
IRENE BISCO, FELICITAS BAUTISTA, VIOLETA BURA, LINA BINUYA, BIBIANA
BAARDE, ELSA BAES, ANASTACIA BELONZO, SONIA BENOYO, ELIZABETH
BACUNGAN, PATRICIA BARRAMEDA, ERLINDA BARCELONA, EMMA BANICO,
APOLONIA BUNAO, LUCITA BOLEA, PACIFICA BARCELONA, EDITHA
BASIJAN, RENITA BADAMA, ELENA BALADAD, CRESENCIA BAJO,
BERNADITA BASILID, MELINDA BEATO, YOLANDA BATANES, EDITHA
BORILLA, ANITA BAS, ELSA CALIPUNDAN, MARIA CAMERINO,VIRGINIA
CAMPOSANO, MILAGROS CAPILI, CARINA CARINO, EUFEMIA CASIHAN,
NENITA CASTRO, FLORENCIA CASUBUAN, GIRLIE CENTENO, MARIANITA
CHIQUITO, IMELDA DELA CRUZ, TEODOSIA GONG, TEOFILA CARACOL,
TERESITA CANTA, IRENEA CUNANAN, JULITA CANDILOSAS, VIOLETA
CIERES, MILAGROS DELA CRUZ, FLOREPES CAPULONG, CARMENCITA
CAMPO, MARILYN CARILLO, RUTH DELA CRUZ, RITA CIJAS, LYDIA CASTOR,
VIRGIE CALUBAD, EMELITA CABERA, CRISTETA CRUZ, ERLINDA COGADAS,
IMELDA CALDERON, SUSIE LUZ CEZAR, ESTELA CHAVEZ, NORMA
CABRERA, ELDA DAGATAN, LEONISA DIMACUNA, ERNA DUGTONG,
FLORDELISA DIGMA, VIRGILIO DADIOS, LOLITA DAGTA, ADELAIDA DORADO,
CELSA DATUMANONG, VIRGINIA DOCTOLERO, EDNA SAN DIEGO, JULIETA
DANG, JULIETA DORANTINAO, LOLITA DAGANO, JUDITH DIAZ, MARIA
ENICANE, MARITA ESCARDE, ENRIMITA ESMAYOR, ROSARIO EPIRITU,
REMEDIOS EMBOLTORIO, IRENE ESTUITA, TERESITA ERESE, ERMELINDA
ELEZO, MARIA ESTAREJA, MERLITA ESQUERRA, YOLANDA FELICITAS,
FRUTO FRANCIA, MARTHA FRUTO, LILIA FLORES, SALVACION FORTALESA,
JUDITH FAJARDO, SUSANA FERNANDO, EDWIN FRANCISCO, NENITA
GREGORY, ROSA CAMILO, MARIVIC GERRARDO, CHARITA GOREMBALEM,
NORMA GRANDE, DOLORES GUTIERREZ, CHARLIE GARCIA, LUZ GALVEZ,
ADELAIDA GAMILLA, LUZ GAPULTOS, ERLINDA GARCIA, HELEN GARCIA,
ERLINDA GAUDIA, FRANCISCA GUILING, MINTA HERRERA, ASUNCION
HONOA, JUAN HERNANDEZ, LUCERIA ANNA MAE HERNANDEZ, JULIANA
HERNANDEZ, EDITHA IGNACIO, ANITA INOCENCIO, EULALIA INSORIO,
ESTELITA IRLANDA, MILAGROS IGNACIO, LINDA JABONILLO, ADELIMA JAEL,
ROWENA JARABJO, ROBERT JAVILINAR, CLARITA JOSE, CARMENCITA
JUNDEZ, SOFIA LALUCIS, GLORIA LABITORIA, ANGELITA LODES, ERLINDA
LATOGA, EVELYN LEGASPI, ROMEO LIMCHOCO, JESUS LARA, ESTRELLA DE
LUNA, LORETA LAREZA, JOSEPHINE ALSCO, MERCY DE LEON,
CONSOLACION LIBAO, MARILYN LIWAG, TERESITA LIZAZO, LILIA
MACAPAGAL, SALVACION MACAREZA, AMALIA MADO, TERESITA
MADRIAGA, JOVITA MAGNAYE, JEAN MALABAD, FRANCISCA MENDOZA,
NELCITA MANGANTANG, TERESITA NELLA, GENEROZA MERCADO,
CRISTETA MOJANA, BERNARDA MONGADO, LYDIA MIRANDA, ELISA
MADRILEJOS, LOIDA MAGSINO, AMELIA MALTO, JULITA MAHIBA, MYRNA
MAYORES, LUISA MARAIG, FLORENCIA MARAIG, EMMA MONZON, IMELDA
MAGDANGAN, VICTORIA MARTIN, NOEMI MANGUILLO, BASILIZA MEDINA,
VICTORIO MERCADO, ESTELA MAYPA, EMILIA MENDOZA, LINA MAGPANTAY,
FELICIANA MANLOLO, ELENA MANACOP, WILMA MORENO, JUANA
MENDOZA, EVELYN DEL MUNDO, ROSIE MATUTINA, MATILDE MANALO,
TERESITA MENDEZ, FELIPINA MAGONCIA, MARIA MANZANO, LIGAYA
MANALO, LETICIA MARCHA, MARINA MANDIGMA, LETICIA MANDASOC,
PRESCILLA MARTINEZ, JULIA MENDOZA, PACITA MAGALLANES, ANGELINA
MARJES, SHIRLEY MELIGRITO, IRENE MERCADO, ELISA MAATUBANG,
MARCELINA NICOLAS, AGUSTINA NICOLAS, ROSA NOLASCO, WILMA
NILAYE, VIOLETA ORACION, ANGELA OSTAYA, JUANITA OSAYOS,
MAGDALENA OCAMPO, MARDIANA OCTA, ROSELA OPAO, LIBRADA
OCAMPO, YOLANDA OLIVER, MARCIA ORLANDA, PAGDUNAN, RITA
PABILONA, MYRA PALACA, BETHLEHEM PALINES, GINA PALIGAR, NORMA
PALIGAR, DELMA PEREZ, CLAUDIA PRADO, JULIE PUTONG, LUDIVINA
PAGSALINGAN, MERLYN PANALIGAN, VIOLETA PANAMBITAN, NOREN PAR,
ERLINDA PARAGAS, MILA PARINO, REBECCA PENAFLOR, IMELDA
PENAMORA, JERMICILLIN PERALTA, REBECCA PIAPES, EDITHA PILAR,
MAROBETH PILLADO, DIOSCORO PIMENTEL, AURORA LAS PINAS,
EVANGELINA PINON, MA. NITA PONDOC, MA. MERCEDES PODPOD,
ANGELITO PANDEZ, LIGAYA PIGTAIN, LEONILA QUIAMBAO, ELENA QUINO,
MARITESS QUIJANO, CHOLITA REBUENO, LOLITA REYES, JOCELYN RAMOS,
ROSITA RAMIREZ, ELINORA RAMOS, ISABEL RAMOS, ANNABELLE
RESURRECCION, EMMA REYES, ALILY ROXAS, MARY GRACE DELOS REYES,
JOCELYN DEL ROSARIO, JOSEFINA RABUSA, ANGELITA ROTAIRO,
SAMCETA ROSETA, EDERLINA RUIZ, ZENAIDA ROSARIO, BENITA REBOLA,
ROSITA REVILLA, ROSITA SANTOS, ROWENA SALAZAR, EMILYN
SARMIENTO, ANA SENIS, ELOISA SANTOS, NARCISA SONGLIAD, ELMA
SONGALIA, AMPARA SABIO, JESSIE SANCHEZ, VIVIAN SAMILO, GLORIA
SUMALINOG, ROSALINA DELOS SANTOS, MARIETA SOMBRERO, HELEN
SERRETARIO, TEODORO SULIT, BELLA SONGUINES, LINDA SARANTAN,
ESTELLA SALABAR, MILAGROS SISON, GLORIA TALIDAGA, CECILIA
TEODORO, ROMILLA TUAZON, AMELITA TABULAO, MACARIA TORRES,
LUTGARDA TUSI, ESTELLA TORREJOS, VICTORIA TAN, MERLITA DELA
VEGA, WEVINA ORENCIA, REMEDIOS BALECHA, TERESITA TIBAR, LACHICA
LEONORA, JULITA YBUT, JOSEFINA ZABALA, WINNIE ZALDARIAGA, BENHUR
ANTENERO, MARCELINA ANTENERO, ANTONINA ALAPAN, EDITHA ANTOZO,
ROWENA ARABIT, ANDRA AQUINO, TERESITA ANGULO, MARIA ANGLO,
MYRNA ALBOS, ELENITA AUSTRIA, ANNA ABRIGUE, VIRGINIA ADOBAS,
VICTORIA ANTIPUESTO, REMEDIOS BOLECHE, MACARIA BARRIOS, THELMA
BELEN, ESTELLA BARRETTO, JOCELYN CHAVEZ, VIRGINIA CAPISTRANO,
BENEDICTA CINCO, YOLLY CATPANG, REINA CUEVAS, VICTORIA CALANZA,
FE CASERO, ROBERTA CATALBAS, LOURDES CAPANANG, CLEMENCIA
CRUZ, JOCELYN COSTO, MERCEDITA CASTILLO, EDITHA DEE, LUCITA
DONATO NORMA ESPIRIDION, LORETA FERNANDEZ, AURORA FRANCISCO,
VILMA FAJARDO, MODESTA GABRENTINA, TERESITA GABRIEL, SALVACION
72
GAMBOA, JOSEPHINE IGNACIO, SUSAN IBARRA, ESPERANZA JABSON,
OSCAR JAMBARO, ROSANNA JARDIN, CORAZON JALOCON, ZENAIDA
LEGASPI, DELLA LAGRAMADA, ROSITA LIBRANDO, LIGAYA LUMAYOT,
DELIA LUMBIS, LEONORA LANCHICA, RELAGIA LACSI, JOSEFINA LUMBO,
VIOLETA DE LUNA, EVELYN MADRID, TERESITA MORILLA, GEMMA
MAGPANTAY, EMILY MENDOZA, IRENEA MEDINA, NARCISA MABEZA,
ROSANNA MEDINA, DELIA MARTINEZ, ROSARIO MAG-ISA, EDITHA MENDOZA,
EDILBERTA MENDOZA, FIDELA PANGANIBAN, OFELIA PANGANIBAN,
AZUCENA POSTGO, LOURDES PACHECO, LILIA PADILLA, MARISSA PEREZ,
FLORDELIZA PUMARES, LUZ REYES, NORMA RACELIS, LEONOR RIZALDO,
JOSIE SUMASAR, NANCY SAMALA, EMERLITA SOLAYAO, MERCEDITA
SAMANIEGO, BLANDINA SIMBULAN, JOCELYN SENDING, LUISITA
TABERRERO, TERESITA TIBAR, ESTERLINA VALDEZ, GLORIA VEJERANO,
ILUMINADA VALENCIA, MERLITA DELA VEGA, VIRGIE LAITAN, JULIET
VILLARAMA, LUISISTA OCAMPO, NARIO ANDRES, ANSELMA TULFO, GLORIA
MATEO, FLANIA MENDOZA, CONNIE CANGO, EDITHA SALAZAR, MYRNA
DELOS SANTOS, TERESITA SERGIO, CHARITO GILLA, FLORENTINA
HERNAEZ, BERNARDINO VIRGINIA, AMPO ANACORITA, SYLVIA POASADAS,
ESTRELLA ESPIRITU, CONCORDIA LUZURIAGA, MARINA CERBITO, EMMA
REYES, NOEMI PENISALES, CLARITA POLICARPIO, BELEN BANGUIO,
HERMINIA ADVINCULA, LILIA MORTA, REGINA LAPIDARIO, LORNA LARGA,
TERESITA VINLUAN, MARITA TENOSO, NILDS SAYAT, THELMA SARONG,
DELMA REGALIS, SUSAN RAFAULO, ELENA RONDINA, MYRNA PIENDA,
VIOLETA DUMELINA, FLORENCIA ADALID, FILMA MELAYA, ERLINDA DE
BAUTISTA, MATILDE DE BLAS, DOLORES FACUNDO, REBECCA LEDAMA, MA.
FE MACATANGAY, EMELITA MINON, NORMA PAGUIO, ELIZA VASQUEZ,
GLORIA VILLARINO, MA. JESUS FRANCISCO, TERESITA GURPIDO, LIGAYA
MANALO, FE PINEDA, MIRIAM OCMAR, LUISA SEGOVIA, TEODY ATIENZA,
SOLEDA AZCURE, CARMEN DELA CRUZ, DMETRIA ESTONELO, MA. FLORIDA
LOAZNO, IMELDA MAHIYA, EDILBERTA MENDOZA, SYLVIA POSADAS,
SUSANA ORTEGA, JOSEPHINE D. TALIMORO, TERESITA LORECA, ARSENIA
TISOY, LIGAYA MANALO, TERESITA GURPIO, FE PINEDA, and MARIA JESUS
FRANCISCO, petitioners,
vs.
HON. CRESENCIO J. RAMOS, NATIONAL LABOR RELATIONS COMMISSION, M.
GREENFIELD (B), INC., SAUL TAWIL, CARLOS T. JAVELOSA, RENATO C.
PUANGCO, WINCEL LIGOT, MARCIANO HALOG, GODOFREDO PACENO, SR.,
GERVACIO CASILLANO, LORENZO ITAOC, ATTY. GODOFREDO PACENO, JR.,
MARGARITO CABRERA, GAUDENCIO RACHO, SANTIAGO IBANEZ, AND
RODRIGO AGUILING, respondents.
PURISIMA, J.:
At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court to annul
the decision of the National Labor Relations Commission in an unfair labor practice
case instituted by a local union against its employer company and the officers of its
national federation.
The petitioner, Malayang Samahan ng mga Manggagawa sa M. Greenfield, Inc., (B)
(MSMG), hereinafter referred to as the "local union", is an affiliate of the private
respondent, United Lumber and General Workers of the Philippines (ULGWP),
referred to as the "federation". The collective bargaining agreement between MSMG
and M. Greenfield, Inc., names the parties as follows:
This agreement made and entered into by and between:
M. GREENFIELD, INC. (B) a corporation duly organized in accordance with
the laws of the Republic of the Philippines with office address at Km. 14,
Merville Road, Parañaque, Metro Manila, represented in this act by its
General manager, Mr. Carlos T. Javelosa, hereinafter referred to as the
Company;
-and-
MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD
(B) (MSMG)/UNITED LUMBER AND GENERAL WORKERS OF THE
PHILIPPINES (ULGWP), a legitimate labor organization with address at
Suite 404, Trinity Building, T. M. Kalaw Street, Manila, represented in this act
by a Negotiating Committee headed by its National President, Mr. Godofredo
Paceno, Sr., referred to in this Agreement as the UNION.1
The CBA includes, among others, the following pertinent provisions:
Art. II-Union Security
Sec. 1. Coverage and Scope. All employees who are covered by this
Agreement and presently members of the UNION shall remain members of
the UNION for the duration of this Agreement as a condition precedent to
continued employment with the COMPANY.
xxx xxx xxx
Sec. 4. Dismissal. Any such employee mentioned in Section 2 hereof, who
fails to maintain his membership in the UNION for non-payment of UNION
dues, for resignation and for violation of UNION's Constitution and By-Laws
and any new employee as defined in Section 2 of this Article shall upon
written notice of such failure to join or to maintain membership in the UNION
and upon written recommendation to the COMPANY by the UNION, be
dismissed from the employment by the COMPANY; provided, however, that
the UNION shall hold the COMPANY free and blameless from any and all
liabilities that may arise should the dismissed employee question, in any
manner, his dismissal; provided, further that the matter of the employee's
dismissal under this Article may be submitted as a grievance under Article
XIII and, provided, finally, that no such written recommendation shall be
made upon the COMPANY nor shall COMPANY be compelled to act upon
73
 any such recommendation within the period of sixty (60) days prior to the
expiry date of this Agreement conformably to law.
Art. IX
Sec. 4. Program Fund — The Company shall provide the amount of
P10,000.00 a month for a continuing labor education program which shall be
remitted to the Federation . . .2
On September 12, 1986, a local union election was held under the auspices of the
ULGWP wherein the herein petitioner, Beda Magdalena Villanueva, and the other
union officers were proclaimed as winners. Minutes of the said election were duly filed
with the Bureau of Labor Relations on September 29, 1986.
On March 21, 1987, a Petition for Impeachment was filed with the national federation
ULGWP by the defeated candidates in the aforementioned election.
On June 16, 1987, the federation conducted an audit of the local union funds. The
investigation did not yield any unfavorable result and the local union officers were
cleared of the charges of anomaly in the custody, handling and disposition of the
union funds.1âwphi1.nêt
The 14 defeated candidates filed a Petition for Impeachment/Expulsion of the local
union officers with the DOLE NCR on November 5, 1987, docketed as NCR-OD-M-
11-780-87. However, the same was dismissed on March 2, 1988, by Med-Arbiter
Renato Parungo for failure to substantiate the charges and to present evidence in
support of the allegations.
On April 17, 1988, the local union held a general membership meeting at the
Caruncho Complex in Pasig. Several union members failed to attend the meeting,
prompting the Executive Board to create a committee tasked to investigate the non-
attendance of several union members in the said assembly, pursuant to Sections 4
and 5, Article V of the Constitution and By-Laws of the union, which read:
Seksyon 4. Ang mga kinukusang hindi pagdalo o hindi paglahok sa lahat ng
hakbangin ng unyon ng sinumang kasapi o pinuno ay maaaring maging
sanhi ng pagtitiwalag o pagpapataw ng multa ng hindi hihigit sa P50.00 sa
bawat araw na nagkulang.
Seksyon 5. Ang sinumang dadalo na aalis ng hindi pa natatapos ang pulong
ay ituturing na pagliban at maparusahan itong alinsunod sa Article V,
Seksyong 4 ng Saligang Batas na ito. Sino mang kasapi o pisyales na
mahuli and dating sa takdang oras ng di lalampas sa isang oras ay
magmumulta ng P25.00 at babawasin sa sahod sa pamamagitan ng salary
deduction at higit sa isang oras ng pagdating ng huli ay ituturing na
pagliban.3
On June 27, 1988, the local union wrote respondent company a letter requesting it to
deduct the union fines from the wages/salaries of those union members who failed to
attend the general membership meeting. A portion of the said letter stated:
xxx xxx xxx
In connection with Section 4 Article II of our existing Collective Bargaining
Agreement, please deduct the amount of P50.00 from each of the union
members named in said annexes on the payroll of July 2-8, 1988 as fine for
their failure to attend said general membership meeting. 4
In a Memorandum dated July 3, 1988, the Secretary General of the national
federation, Godofredo Paceño, Jr. disapproved the resolution of the local union
imposing the P50.00 fine. The union officers protested such action by the Federation
in a Reply dated July 4, 1988.
On July 11, 1988, the Federation wrote respondent company a letter advising the
latter not to deduct the fifty-peso fine from the salaries of the union members
requesting that:
. . . any and all future representations by MSMG affecting a number of
members be first cleared from the federation before corresponding action by
the Company.5
The following day, respondent company sent a reply to petitioner union's request in a
letter, stating that it cannot deduct fines from the employees' salary without going
against certain laws. The company suggested that the union refer the matter to the
proper government office for resolution in order to avoid placing the company in the
middle of the issue.
The imposition of P50.00 fine became the subject of bitter disagreement between the
Federation and the local union culminating in the latter's declaration of general
autonomy from the former through Resolution No. 10 passed by the local executive
board and ratified by the general membership on July 16, 1988.
In retaliation, the national federation asked respondent company to stop the
remittance of the local union's share in the education funds effective August 1988.
This was objected to by the local union which demanded that the education fund be
remitted to it in full.
The company was thus constrained to file a Complaint for Interpleader with a Petition
for Declaratory Relief with the Med-Arbitration Branch of the Department of Labor and
Employment, docketed as Case No. OD-M-8-435-88. This was resolved on October
28, 1988, by Med-Arbiter Anastacio Bactin in an Order, disposing thus:
WHEREFORE, premises considered, it is hereby ordered:
74
 1. That the United Lumber and General Workers of the Philippines (ULGWP)
through its local union officers shall administer the collective bargaining
agreement (CBA).
2. That petitioner company shall remit the P10,000.00 monthly labor
education program fund to the ULGWP subject to the condition that it shall
use the said amount for its intended purpose.
3. That the Treasurer of the MSMG shall be authorized to collect from the
356 union members the amount of P50.00 as penalty for their failure to
attend the general membership assembly on April 17, 1988.
However, if the MSMG Officers could present the individual written
authorizations of the 356 union members, then the company is obliged to
deduct from the salaries of the 356 union members the P50.00 fine.6
On appeal, Director Pura-Ferrer Calleja issued a Resolution dated February 7, 1989,
which modified in part the earlier disposition, to wit:
WHEREFORE, premises considered, the appealed portion is hereby
modified to the extent that the company should remit the amount of five
thousand pesos (P5,000.00) of the P10,000.00 monthly labor education
program fund to ULGWP and the other P5,000.00 to MSMG, both unions to
use the same for its intended purpose.7
Meanwhile, on September 2, 1988, several local unions (Top Form, M. Greenfield,
Grosby, Triumph International, General Milling, and Vander Hons chapters) filed a
Petition for Audit and Examination of the federation and education funds of ULGWP
which was granted by Med-Arbiter Rasidali Abdullah on December 25, 1988 in an
Order which directed the audit and examination of the books of account of ULGWP.
On September 30, 1988, the officials of ULGWP called a Special National Executive
Board Meeting at Nasipit, Agusan del Norte where a Resolution was passed placing
the MSMG under trusteeship and appointing respondent Cesar Clarete as
administrator.
On October 27, 1988, the said administrator wrote the respondent company informing
the latter of its designation of a certain Alfredo Kalingking as local union president and
"disauthorizing" the incumbent union officers from representing the employees. This
action by the national federation was protested by the petitioners in a letter to
respondent company dated November 11, 1988.
On November 13, 1988, the petitioner union officers received identical letters from the
administrator requiring them to explain within 72 hours why they should not be
removed from their office and expelled from union membership.
On November 26, 1988, petitioners replied:
(a) Questioning the validity of the alleged National Executive Board
Resolution placing their union under trusteeship;
(b) Justifying the action of their union in declaring a general autonomy from
ULGWP due to the latter's inability to give proper educational, organizational
and legal services to its affiliates and the pendency of the audit of the
federation funds;
(c) Advising that their union did not commit any act of disloyalty as it has
remained an affiliate of ULGWP;
(d) Giving ULGWP a period of five (5) days to cease and desist from further
committing acts of coercion, intimidation and harassment.8
However, as early as November 21, 1988, the officers were expelled from the
ULGWP. The termination letter read:
Effective today, November 21, 1988, you are hereby expelled from UNITED
LUMBER AND GENERAL WORKERS OF THE PHILIPPINES (ULGWP) for
committing acts of disloyalty and/or acts inimical to the interest and violative
to the Constitution and by-laws of your federation.
You failed and/or refused to offer an explanation inspite of the time granted
to you.
Since you are no longer a member of good standing, ULGWP is constrained
to recommend for your termination from your employment, and provided in
Article II Section 4, known as UNION SECURITY, in the Collective
Bargaining agreement.9
On the same day, the federation advised respondent company of the expulsion of the
30 union officers and demanded their separation from employment pursuant to the
Union Security Clause in their collective bargaining agreement. This demand was
reiterated twice, through letters dated February 21 and March 4, 1989, respectively, to
respondent company.
Thereafter, the Federation filed a Notice of Strike with the National Conciliation and
Mediation Board to compel the company to effect the immediate termination of the
expelled union officers.
On March 7, 1989, under the pressure of a threatened strike, respondent company
terminated the 30 union officers from employment, serving them identical copies of
the termination letter reproduced below:
We received a demand letter dated 21 November 1988 from the United
Lumber and General Workers of the Philippines (ULGWP) demanding for
your dismissal from employment pursuant to the provisions of Article II,
75
 Section 4 of the existing Collective Bargaining Agreement (CBA). In the said
demand letter, ULGWP informed us that as of November 21, 1988, you were
expelled from the said federation "for committing acts of disloyalty and/or
acts inimical to the interest of ULGWP and violative to its Constitution and
By-laws particularly Article V, Section 6, 9, and 12, Article XIII, Section 8.
In subsequent letters dated 21 February and 4 March 1989, the ULGWP
reiterated its demand for your dismissal, pointing out that notwithstanding
your expulsion from the federation, you have continued in your employment
with the company in violation of Sec. 1 and 4 of Article II of our CBA, and of
existing provisions of law.
In view thereof, we are left with no alternative but to comply with the
provisions of the Union Security Clause of our CBA. Accordingly, we hereby
serve notice upon you that we are dismissing you from your employment
with M. Greenfield, Inc., pursuant to Sections 1 and 4, Article II of the CBA
effective immediately.10
On that same day, the expelled union officers assigned in the first shift were
physically or bodily brought out of the company premises by the company's security
guards. Likewise, those assigned to the second shift were not allowed to report for
work. This provoked some of the members of the local union to demonstrate their
protest for the dismissal of the said union officers. Some union members left their
work posts and walked out of the company premises.
On the other hand, the Federation, having achieved its objective, withdrew the Notice
of Strike filed with the NCMB.
On March 8, 1989, the petitioners filed a Notice of Strike with the NCMB, DOLE,
Manila, docketed as Case No. NCMB-NCR-NS-03-216-89, alleging the following
grounds for the strike:
(a) Discrimination
(b) Interference in union activities
(c) Mass dismissal of union officers and shop stewards
(d) Threats, coercion and intimidation
(e) Union busting
The following day, March 9, 1989, a strike vote referendum was conducted and out of
2, 103 union members who cast their votes, 2,086 members voted to declare a strike.
On March 10, 1989, the thirty (30) dismissed union officers filed an urgent petition,
docketed as Case No. NCMB-NCR-NS-03-216-89, with the Office of the Secretary of
the Department of Labor and Employment praying for the suspension of the effects of
their termination from employment. However, the petition was dismissed by then
Secretary Franklin Drilon on April 11, 1989, the pertinent portion of which stated as
follows:
At this point in time, it is clear that the dispute at M. Greenfield is purely an
intra-union matter. No mass lay-off is evident as the terminations have been
limited to those allegedly leading the secessionist group leaving MSMG-
ULGWP to form a union under the KMU. . . .
xxx xxx xxx
WHEREFORE, finding no sufficient jurisdiction to warrant the exercise of our
extraordinary authority under Article 277 (b) of the Labor Code, as amended,
the instant Petition is hereby DISMISSED for lack of merit.
SO ORDERED.11
On March 13 and 14, 1989, a total of 78 union shop stewards were placed under
preventive suspension by respondent company. This prompted the union members to
again stage a walk-out and resulted in the official declaration of strike at around 3:30
in the afternoon of March 14, 1989. The strike was attended with violence, force and
intimidation on both sides resulting to physical injuries to several employees, both
striking and non-striking, and damage to company properties.
The employees who participated in the strike and allegedly figured in the violent
incident were placed under preventive suspension by respondent company. The
company also sent return-to-work notices to the home addresses of the striking
employees thrice successively, on March 27, April 8 and April 31, 1989, respectively.
However, respondent company admitted that only 261 employees were eventually
accepted back to work. Those who did not respond to the return-to-work notice were
sent termination letters dated May 17, 1989, reproduced below:
M. Greenfield Inc., (B)
Km. 14, Merville Rd., Parañaque, M.M.
May 17, 1989
xxx xxx xxx
On March 14, 1989, without justifiable cause and without due
notice, you left your work assignment at the prejudice of the
Company's operations. On March 27, April 11, and April 21, 1989,
76
 we sent you notices to report to the Company. Inspite of your
receipt of said notices, we have not heard from you up to this date.
Accordingly, for your failure to report, it is construed that you have
effectively abandoned your employment and the Company is,
therefore, constrained to dismiss you for said cause.
Very truly yours,
M. GREENFIELD, INC., (B)
By:
WENZEL STEPHEN LIGOT
Asst. HRD Manager12
On August 7, 1989, the petitioners filed a verified complaint with the Arbitration
Branch, National Capital Region, DOLE, Manila, docketed as Case No. NCR-00-09-
04199-89, charging private respondents of unfair labor practice which consists of
union busting, illegal dismissal, illegal suspension, interference in union activities,
discrimination, threats, intimidation, coercion, violence, and oppression.
After the filing of the complaint, the lease contracts on the respondent company's
office and factory at Merville Subdivision, Parañaque expired and were not renewed.
Upon demand of the owners of the premises, the company was compelled to vacate
its office and factory.
Thereafter, the company transferred its administration and account/client servicing
department at AFP-RSBS Industrial Park in Taguig, Metro Manila. For failure to find a
suitable place in Metro Manila for relocation of its factory and manufacturing
operations, the company was constrained to move the said departments to Tacloban,
Leyte. Hence, on April 16, 1990, respondent company accordingly notified its
employees of a temporary shutdown in operations. Employees who were interested in
relocating to Tacloban were advised to enlist on or before April 23, 1990.
The complaint for unfair labor practice was assigned to Labor Arbiter Manuel
Asuncion but was thereafter reassigned to Labor Arbiter Cresencio Ramos when
respondents moved to inhibit him from acting on the case.
On December 15, 1992, finding the termination to be valid in compliance with the
union security clause of the collective bargaining agreement, Labor Arbiter Cresencio
Ramos dismissed the complaint.
Petitioners then appealed to the NLRC. During its pendency, Commissioner Romeo
Putong retired from the service, leaving only two commissioners, Commissioner
Vicente Veloso III and Hon. Chairman Bartolome Carale in the First Division. When
Commissioner Veloso inhibited himself from the case, Commissioner Joaquin
Tanodra of the Third Division was temporarily designated to sit in the First Division for
the proper disposition of the case.
The First Division affirmed the Labor Arbiter's disposition. With the denial of their
motion for reconsideration on January 28, 1994, petitioners elevated the case to this
Court, attributing grave abuse of discretion to public respondent NLRC in:
I. UPHOLDING THE DISMISSAL OF THE UNION OFFICERS BY
RESPONDENT COMPANY AS VALID;
II. HOLDING THAT THE STRIKE STAGED BY THE PETITIONERS AS
ILLEGAL;
III. HOLDING THAT THE PETITIONER EMPLOYEES WERE DEEMED TO
HAVE ABANDONED THEIR WORK AND HENCE, VALIDLY DISMISSED
BY RESPONDENT COMPANY; AND
IV. NOT FINDING RESPONDENT COMPANY AND RESPONDENT
FEDERATION OFFICERS GUILTY OF ACTS OF UNFAIR LABOR
PRACTICE.
Notwithstanding the several issues raised by the petitioners and respondents in the
voluminous pleadings presented before the NLRC and this Court, they revolve around
and proceed from the issue of whether or not respondent company was justified in
dismissing petitioner employees merely upon the labor federation's demand for the
enforcement of the union security clause embodied in their collective bargaining
agreement.
Before delving into the main issue, the procedural flaw pointed out by the petitioners
should first be resolved.
Petitioners contend that the decision rendered by the First Division of the NLRC is not
valid because Commissioner Tanodra, who is from the Third Division, did not have
any lawful authority to sit, much less write the ponencia, on a case pending before the
First Division. It is claimed that a commissioner from one division of the NLRC cannot
be assigned or temporarily designated to another division because each division is
assigned a particular territorial jurisdiction. Thus, the decision rendered did not have
any legal effect at all for being irregularly issued.
Petitioners' argument is misplaced. Article 213 of the Labor Code in enumerating the
powers of the Chairman of the National Labor Relations Commission provides that:
The concurrence of two (2) Commissioners of a division shall be necessary
for the pronouncement of a judgment or resolution. Whenever the required
membership in a division is not complete and the concurrence of two (2)
commissioners to arrive at a judgment or resolution cannot be obtained, the
77
 Chairman shall designate such number of additional Commissioners from
the other divisions as may be necessary.
It must be remembered that during the pendency of the case in the First Division of
the NLRC, one of the three commissioners, Commissioner Romeo Putong, retired,
leaving Chairman Bartolome Carale and Commissioner Vicente Veloso III.
Subsequently, Commissioner Veloso inhibited himself from the case because the
counsel for the petitioners was his former classmate in law school. The First Division
was thus left with only one commissioner. Since the law requires the concurrence of
two commissioners to arrive at a judgment or resolution, the Commission was
constrained to temporarily designate a commissioner from another division to
complete the First Division. There is nothing irregular at all in such a temporary
designation for the law empowers the Chairman to make temporary assignments
whenever the required concurrence is not met. The law does not say that a
commissioner from the first division cannot be temporarily assigned to the second or
third division to fill the gap or vice versa. The territorial divisions do not confer
exclusive jurisdiction to each division and are merely designed for administrative
efficiency.
Going into the merits of the case, the court finds that the Complaint for unfair labor
practice filed by the petitioners against respondent company which charges union
busting, illegal dismissal, illegal suspension, interference in union activities,
discrimination, threats, intimidation, coercion, violence, and oppression actually
proceeds from one main issue which is the termination of several employees by
respondent company upon the demand of the labor federation pursuant to the union
security clause embodied in their collective bargaining agreement.
Petitioners contend that their dismissal from work was effected in an arbitrary, hasty,
capricious and illegal manner because it was undertaken by the respondent company
without any prior administrative investigation; that, had respondent company
conducted prior independent investigation it would have found that their expulsion
from the union was unlawful similarly for lack of prior administrative investigation; that
the federation cannot recommend the dismissal of the union officers because it was
not a principal party to the collective bargaining agreement between the company and
the union; that public respondents acted with grave abuse of discretion when they
declared petitioners' dismissals as valid and the union strike as illegal and in not
declaring that respondents were guilty of unfair labor practice.
Private respondents, on the other hand, maintain that the thirty dismissed employees
who were former officers of the federation have no cause of action against the
company, the termination of their employment having been made upon the demand of
the federation pursuant to the union security clause of the CBA; the expelled officers
of the local union were accorded due process of law prior to their expulsion from their
federation; that the strike conducted by the petitioners was illegal for noncompliance
with the requirements; that the employees who participated in the illegal strike and in
the commission of violence thereof were validly terminated from work; that petitioners
were deemed to have abandoned their employment when they did not respond to the
three return to work notices sent to them; that petitioner labor union has no legal
personality to file and prosecute the case for and on behalf of the individual
employees as the right to do so is personal to the latter; and that, the officers of
respondent company cannot be liable because as mere corporate officers, they acted
within the scope of their authority.
Public respondent, through the Labor Arbiter, ruled that the dismissed union officers
were validly and legally terminated because the dismissal was effected in compliance
with the union security clause of the CBA which is the law between the parties. And
this was affirmed by the Commission on appeal. Moreover, the Labor Arbiter declared
that notwithstanding the lack of a prior administrative investigation by respondent
company, under the union security clause provision in the CBA, the company cannot
look into the legality or illegality of the recommendation to dismiss by the union nd the
obligation to dismiss is ministerial on the part of the company. 13
This ruling of the NLRC is erroneous. Although this Court has ruled that union security
clauses embodied in the collective bargaining agreement may be validly enforced and
that dismissals pursuant thereto may likewise be valid, this does not erode the
fundamental requirement of due process. The reason behind the enforcement of
union security clauses which is the sanctity and inviolability of contracts 14 cannot
override one's right to due process.
In the case of Cariño vs. National Labor Relations Commission,15 this Court
pronounced that while the company, under a maintenance of membership provision of
the collective bargaining agreement, is bound to dismiss any employee expelled by
the union for disloyalty upon its written request, this undertaking should not be done
hastily and summarily. The company acts in bad faith in dismissing a worker without
giving him the benefit of a hearing.
The power to dismiss is a normal prerogative of the employer. However, this
is not without limitation. The employer is bound to exercise caution in
terminating the services of his employees especially so when it is made
upon the request of a labor union pursuant to the Collective Bargaining
Agreement, . . . Dismissals must not be arbitrary and capricious. Due
process must be observed in dismissing an employee because it affects not
only his position but also his means of livelihood. Employers should respect
and protect the rights of their employees, which include the right to labor.
In the case under scrutiny, petitioner union officers were expelled by the federation for
allegedly committing acts of disloyalty and/or inimical to the interest of ULGWP and in
violation of its Constitution and By-laws. Upon demand of the federation, the company
terminated the petitioners without conducting a separate and independent
investigation. Respondent company did not inquire into the cause of the expulsion
and whether or not the federation had sufficient grounds to effect the same. Relying
merely upon the federation's allegations, respondent company terminated petitioners
from employment when a separate inquiry could have revealed if the federation had
acted arbitrarily and capriciously in expelling the union officers. Respondent
company's allegation that petitioners were accorded due process is belied by the
termination letters received by the petitioners which state that the dismissal shall be
immediately effective.
78
As held in the aforecited case of Cariño, "the right of an employee to be informed of
the charges against him and to reasonable opportunity to present his side in a
controversy with either the company or his own union is not wiped away by a union
security clause or a union shop clause in a collective bargaining agreement. An
employee is entitled to be protected not only from a company which disregards his
rights but also from his own union the leadership of which could yield to the
temptation of swift and arbitrary expulsion from membership and mere dismissal from
his job.
While respondent company may validly dismiss the employees expelled by the union
for disloyalty under the union security clause of the collective bargaining agreement
upon the recommendation by the union, this dismissal should not be done hastily and
summarily thereby eroding the employees' right to due process, self-organization and
security of tenure. The enforcement of union security clauses is authorized by law
provided such enforcement is not characterized by arbitrariness, and always with due
process.16 Even on the assumption that the federation had valid grounds to expel the
union officers, due process requires that these union officers be accorded a separate
hearing by respondent company.
In its decision, public respondent also declared that if complainants (herein
petitioners) have any recourse in law, their right of action is against the federation and
not against the company or its officers, relying on the findings of the Labor Secretary
that the issue of expulsion of petitioner union officers by the federation is a purely
intra-union matter.
Again, such a contention is untenable. While it is true that the issue of expulsion of
the local union officers is originally between the local union and the federation, hence,
intra-union in character, the issue was later on converted into a termination dispute
when the company dismissed the petitioners from work without the benefit of a
separate notice and hearing. As a matter of fact, the records reveal that the
termination was effective on the same day that the termination notice was served on
the petitioners.
In the case of Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc.17, the
Court held the company liable for the payment of backwages for having acted in bad
faith in effecting the dismissal of the employees.
. . . Bad faith on the part of the respondent company may be gleaned from
the fact that the petitioner workers were dismissed hastily and summarily. At
best, it was guilty of a tortious act, for which it must assume solidary liability,
since it apparently chose to summarily dismiss the workers at the union's
instance secure in the union's contractual undertaking that the union would
hold it "free from any liability" arising from such dismissal.
Thus, notwithstanding the fact that the dismissal was at the instance of the federation
and that it undertook to hold the company free from any liability resulting from such a
dismissal, the company may still be held liable if it was remiss in its duty to accord the
would-be dismissed employees their right to be heard on the matter.
Anent petitioners contention that the federation was not a principal party to the
collective bargaining agreement between the company and the union, suffice it to say
that the matter was already ruled upon in the Interpleader case filed by respondent
company. Med-Arbiter Anastacio Bactin thus ruled:
After a careful examination of the facts and evidences presented by the
parties, this Officer hereby renders its decision as follows:
1.) It appears on record that in Collective Bargaining Agreement (CBA)
which took effect on July 1, 1986, the contracting parties are M. Greenfield,
Inc. (B) and Malayang Samahan ng Mga Manggagawa sa M. Greenfield, Inc.
(B) (MSMG)/United Lumber and General Workers of the Philippines
(ULGWP). However, MSMG was not yet registered labor organization at the
time of the signing of the CBA. Hence, the union referred to in the CBA is the
ULGWP.18
Likewise on appeal, Director Pura Ferrer-Calleja put the issue to rest as follows:
It is undisputed that ULGWP is the certified sole and exclusive collective
bargaining agent of all the regular rank-and-file workers of the company, M.
Greenfield, Inc. (pages 31-32 of the records).
It has been established also that the company and ULGWP signed a 3-year
collective bargaining agreement effective July 1, 1986 up to June 30, 1989. 19
Although the issue of whether or not the federation had reasonable grounds to expel
the petitioner union officers is properly within the original and exclusive jurisdiction of
the Bureau of Labor Relations, being an intra-union conflict, this Court deems it
justifiable that such issue be nonetheless ruled upon, as the Labor Arbiter did, for to
remand the same to the Bureau of Labor Relations would be to intolerably delay the
case.
The Labor Arbiter found that petitioner union officers were justifiably expelled from the
federation for committing acts of disloyalty when it "undertook to disaffiliate from the
federation by charging ULGWP with failure to provide any legal, educational or
organizational support to the local. . . . and declared autonomy, wherein they prohibit
the federation from interfering in any internal and external affairs of the local union."20
It is well-settled that findings of facts of the NLRC are entitled to great respect and are
generally binding on this Court, but it is equally well-settled that the Court will not
uphold erroneous conclusions of the NLRC as when the Court finds insufficient or
insubstantial evidence on record to support those factual findings. The same holds
true when it is perceived that far too much is concluded, inferred or deduced from the
bare or incomplete facts appearing of record.21
In its decision, the Labor Arbiter declared that the act of disaffiliation and declaration
of autonomy by the local union was part of its "plan to take over the respondent
79
federation." This is purely conjecture and speculation on the part of public
respondent, totally unsupported by the evidence.
A local union has the right to disaffiliate from its mother union or declare its autonomy.
A local union, being a separate and voluntary association, is free to serve the
interests of all its members including the freedom to disaffiliate or declare its
autonomy from the federation to which it belongs when circumstances warrant, in
accordance with the constitutional guarantee of freedom of association. 22
The purpose of affiliation by a local union with a mother union or a federation.
. . . is to increase by collective action the bargaining power in respect of the
terms and conditions of labor. Yet the locals remained the basic units of
association, free to serve their own and the common interest of all, subject to
the restraints imposed by the Constitution and By-Laws of the Association,
and free also to renounce the affiliation for mutual welfare upon the terms
laid down in the agreement which brought it into existence. 23
Thus, a local union which has affiliated itself with a federation is free to sever such
affiliation anytime and such disaffiliation cannot be considered disloyalty. In the
absence of specific provisions in the federation's constitution prohibiting disaffiliation
or the declaration of autonomy of a local union, a local may dissociate with its parent
union.24
The evidence on hand does not show that there is such a provision in ULGWP's
constitution. Respondents' reliance upon Article V, Section 6, of the federation's
constitution is not right because said section, in fact, bolsters the petitioner union's
claim of its right to declare autonomy:
Sec. 6. The autonomy of a local union affiliated with ULGWP shall be
respected insofar as it pertains to its internal affairs, except as provided
elsewhere in this Constitution.
There is no disloyalty to speak of, neither is there any violation of the federation's
constitution because there is nothing in the said constitution which specifically
prohibits disaffiliation or declaration of autonomy. Hence, there cannot be any valid
dismissal because Article II, Section 4 of the union security clause in the CBA limits
the dismissal to only three (3) grounds, to wit: failure to maintain membership in the
union (1) for non-payment of union dues, (2) for resignation; and (3) for violation of
the union's Constitution and By-Laws.
To support the finding of disloyalty, the Labor Arbiter gave weight to the fact that on
February 26, 1989, the petitioners declared as vacant all the responsible positions of
ULGWP, filled these vacancies through an election and filed a petition for the
registration of UWP as a national federation. It should be pointed out, however, that
these occurred after the federation had already expelled the union officers. The
expulsion was effective November 21, 1988. Therefore, the act of establishing a
different federation, entirely separate from the federation which expelled them, is but
a normal retaliatory reaction to their expulsion.
With regard to the issue of the legality or illegality of the strike, the Labor Arbiter held
that the strike was illegal for the following reasons: (1) it was based on an intra-union
dispute which cannot properly be the subject of a strike, the right to strike being
limited to cases of bargaining deadlocks and unfair labor practice (2) it was made in
violation of the "no strike, no lock-out" clause in the CBA, and (3) it was attended with
violence, force and intimidation upon the persons of the company officials, other
employees reporting for work and third persons having legitimate business with the
company, resulting to serious physical injuries to several employees and damage to
company property.
On the submission that the strike was illegal for being grounded on a non-strikeable
issue, that is, the intra-union conflict between the federation and the local union, it
bears reiterating that when respondent company dismissed the union officers, the
issue was transformed into a termination dispute and brought respondent company
into the picture. Petitioners believed in good faith that in dismissing them upon
request by the federation, respondent company was guilty of unfair labor practice in
that it violated the petitioner's right to self-organization. The strike was staged to
protest respondent company's act of dismissing the union officers. Even if the
allegations of unfair labor practice are subsequently found out to be untrue, the
presumption of legality of the strike prevails.25
Another reason why the Labor Arbiter declared the strike illegal is due to the
existence of a no strike no lockout provision in the CBA. Again, such a ruling is
erroneous. A no strike, no lock out provision can only be invoked when the strike is
economic in nature, i.e. to force wage or other concessions from the employer which
he is not required by law to grant.26 Such a provision cannot be used to assail the
legality of a strike which is grounded on unfair labor practice, as was the honest belief
of herein petitioners. Again, whether or not there was indeed unfair labor practice
does not affect the strike.
On the allegation of violence committed in the course of the strike, it must be
remembered that the Labor Arbiter and the Commission found that "the parties are
agreed that there were violent incidents . . . resulting to injuries to both sides, the
union and management."27 The evidence on record show that the violence cannot be
attributed to the striking employees alone for the company itself employed hired men
to pacify the strikers. With violence committed on both sides, the management and
the employees, such violence cannot be a ground for declaring the strike as illegal.
With respect to the dismissal of individual petitioners, the Labor Arbiter declared that
their refusal to heed respondent's recall to work notice is a clear indication that they
were no longer interested in continuing their employment and is deemed
abandonment. It is admitted that three return to work notices were sent by respondent
company to the striking employees on March 27, April 11, and April 21, 1989 and that
261 employees who responded to the notice were admitted back to work.
80
However, jurisprudence holds that for abandonment of work to exist, it is essential (1)
that the employee must have failed to report for work or must have been absent
without valid or justifiable reason; and (2) that there must have been a clear intention
to sever the employer-employee relationship manifested by some overt
acts.28 Deliberate and unjustified refusal on the part of the employee to go back to his
work post amd resume his employment must be established. Absence must be
accompanied by overt acts unerringly pointing to the fact that the employee simply
does not want to work anymore.29 And the burden of proof to show that there was
unjustified refusal to go back to work rests on the employer.
In the present case, respondents failed to prove that there was a clear intention on
the part of the striking employees to sever their employer-employee relationship.
Although admittedly the company sent three return to work notices to them, it has not
been substantially proven that these notices were actually sent and received by the
employees. As a matter of fact, some employees deny that they ever received such
notices. Others alleged that they were refused entry to the company premises by the
security guards and were advised to secure a clearance from ULGWP and to sign a
waiver. Some employees who responded to the notice were allegedly told to wait for
further notice from respondent company as there was lack of work.
Furthermore, this Court has ruled that an employee who took steps to protest his lay-
off cannot be said to have abandoned his work. 30 The filing of a complaint for illegal
dismissal is inconsistent with the allegation of abandonment. In the case under
consideration, the petitioners did, in fact, file a complaint when they were refused
reinstatement by respondent company.
Anent public respondent's finding that there was no unfair labor practice on the part of
respondent company and federation officers, the Court sustains the same. As earlier
discussed, union security clauses in collective bargaining agreements, if freely and
voluntarily entered into, are valid and binding. Corollary, dismissals pursuant to union
security clauses are valid and legal subject only to the requirement of due process,
that is, notice and hearing prior to dismissal. Thus, the dismissal of an employee by
the company pursuant to a labor union's demand in accordance with a union security
agreement does not constitute unfair labor practice.31
However, the dismissal was invalidated in this case because of respondent
company's failure to accord petitioners with due process, that is, notice and hearing
prior to their termination. Also, said dismissal was invalidated because the reason
relied upon by respondent Federation was not valid. Nonetheless, the dismissal still
does not constitute unfair labor practice.
Lastly, the Court is of the opinion, and so holds, that respondent company officials
cannot be held personally liable for damages on account of the employees' dismissal
because the employer corporation has a personality separate and distinct from its
officers who merely acted as its agents.
It has come to the attention of this Court that the 30-day prior notice requirement for
the dismissal of employees has been repeatedly violated and the sanction imposed
for such violation enunciated in Wenphil Corporation vs. NLRC32 has become an
ineffective deterrent. Thus, the Court recently promulgated a decision to reinforce and
make more effective the requirement of notice and hearing, a procedure that must be
observed before termination of employment can be legally effected.
In Ruben Serrano vs. NLRC and Isetann Department Store (G.R. No. 117040,
January 27, 2000), the Court ruled that an employee who is dismissed, whether or not
for just or authorized cause but without prior notice of his termination, is entitled to full
backwages from the time he was terminated until the decision in his case becomes
final, when the dismissal was for cause; and in case the dismissal was without just or
valid cause, the backwages shall be computed from the time of his dismissal until his
actual reinstatement. In the case at bar, where the requirement of notice and hearing
was not complied with, the aforecited doctrine laid down in the Serrano case applies.
WHEREFORE, the Petition is GRANTED; the decision of the National Labor
Relations Commission in Case No. NCR-00-09-04199-89 is REVERSED and SET
ASIDE; and the respondent company is hereby ordered to immediately reinstate the
petitioners to their respective positions. Should reinstatement be not feasible,
respondent company shall pay separation pay of one month salary for every year of
service. Since petitioners were terminated without the requisite written notice at least
30 days prior to their termination, following the recent ruling in the case of Ruben
Serrano vs. National Labor Relations Commission and Isetann Department Store, the
respondent company is hereby ordered to pay full backwages to petitioner-employees
while the Federation is also ordered to pay full backwages to petitioner-union officers
who were dismissed upon its instigation. Since the dismissal of petitioners was
without cause, backwages shall be computed from the time the herein petitioner
employees and union officers were dismissed until their actual reinstatement. Should
reinstatement be not feasible, their backwages shall be computed from the time
petitioners were terminated until the finality of this decision. Costs against the
respondent company.1âwphi1.nêt
SO ORDERED.
81
G.R. No. L-43495-99 January 20, 1990
TROPICAL HUT EMPLOYEES' UNION-CGW, JOSE ENCINAS, JOSE LUIS
TRIBINO, FELIPE DURAN, MANUEL MANGYAO, MAMERTO CAHUCOM,
NEMESIO BARRO, TEODULFO CAPAGNGAN, VICTORINO ABORRO, VIDAL
MANTOS, DALMACIO DALDE, LUCIO PIASAN, CANUTO LABADAN, TERESO
ROMERDE, CONRADO ENGALAN, SALVADOR NERVA, BERNARDO ENGALAN,
BONIFACIO CAGATIN, BENEDICTO VALDEZ, EUSEBIO SUPILANAS, ALFREDO
HAMAYAN, ASUERO BONITO, GAVINO DEL CAMPO, ZACARIAS DAMING,
PRUDENCIO LADION, FULGENCIO BERSALUNA, ALBERTO PERALES, ROMEO
MAGRAMO, GODOFREDO CAMINOS, GILDARDO DUMAS, JORGE SALDIVAR,
GENARO MADRIO, SEGUNDINO KUIZON, LUIS SANDOVAL, NESTOR JAPAY,
ROGELIO CUIZON, RENATO ANTIPADO, GREGORIO CUEVO, MARTIN
BALAZUELA, CONSTANCIO CHU, CRISPIN TUBLE, FLORENCIO CHIU, FABIAN
CAHUCOM, EMILIANO VILLAMOR, RESTITUTO HANDAYAN, VICTORINO
ESPEDILLA, NOEL CHUA, ARMANDO ALCORANO, ELEUTERIO TAGUIK,
SAMSON CRUDA, DANILO CASTRO, CENON VALLENAS, DANILO CAWALING,
SIMPLICIO GALLEROS, PERFECTO CUIZON, PROCESO LAUROS, ANICETO
BAYLON, EDISON ANDRES, REYNALDO BAGOHIN, IRENEO SUPANGAN,
RODRIGO CAGATIN, TEODORO ORENCIO, ARMANDO LUAYON, JAIME
NERVA, NARCISO CUIZON, ALFREDO DEL ROSARIO, EDUARDO LORENZO,
PEDRO ARANGO, VICENTE SUPANGAN, JACINTO BANAL AND BONIFACIO
PUERTO, petitioners,
vs.
TROPICAL HUT FOOD MARKET, INC., ESTELITA J. QUE, ARTURO DILAG,
MARCELINO LONTOK JR., NATIONAL ASSOCIATION OF TRADE UNIONS
(NATU), NATIONAL LABOR RELATIONS COMMISSION (NLRC), HON. DIEGO P.
ATIENZA, GERONIMO Q. QUADRA, FEDERICO C. BORROMEO, AND HON.
BLAS F. OPLE, respondents.
Pacifico C. Rosal for petitioners.
Marcelino Lontok, Jr. for private respondents.
Dizon, Vitug & Fajardo Law Office for Tropical Hut Food Market, Inc. and Que.
MEDIALDEA, J.:
This is a petition for certiorari under Rule 65 seeking to set aside the decisions of the
public respondents Secretary of Labor and National Labor Relations Commission
which reversed the Arbitrators rulings in favor of petitioners herein.
The following factual background of this case appears from the record:
On January 2, 1968, the rank and file workers of the Tropical Hut Food Market
Incorporated, referred to herein as respondent company, organized a local union
called the Tropical Hut Employees Union, known for short as the THEU, elected their
officers, adopted their constitution and by-laws and immediately sought affiliation with
the National Association of Trade Unions (NATU). On January 3, 1968, the NATU
accepted the THEU application for affiliation. Following such affiliation with NATU,
Registration Certificate No. 5544-IP was issued by the Department of Labor in the
name of the Tropical Hut Employees Union — NATU. It appears, however, that NATU
itself as a labor federation, was not registered with the Department of Labor.
After several negotiations were conducted between THEU-NATU, represented by its
local president and the national officers of the NATU, particularly Ignacio Lacsina,
President, Pacifico Rosal, Executive Vice-President and Marcelino Lontok, Jr., Vice
President, and respondent Tropical Hut Food Market, Incorporated, thru its President
and General Manager, Cesar Azcona, Sr., a Collective Bargaining Agreement was
concluded between the parties on April 1, 1968, the term of which expired on March
31, 1971. Said agreement' contained these clear and unequivocal terms:
This Agreement made and entered into this __________ day of
___________, 1968, by and between:
The Tropical Hut Food Market, Inc., a corporation duly organized and
existing under and by virtue of the laws of the Republic of the Philippines,
with principal office at Quezon City, represented in this Act by its President,
Cesar B. Azcona (hereinafter referred to as the Company)
—and—
The Tropical Hut Employees Union — NATU, a legitimate labor organization
duly organized and existing in accordance with the laws of the Republic of
the Philippines, and affiliated with the National Association of Trade Unions,
with offices at San Luis Terraces, Ermita, Manila, and represented in this Act
by its undersigned officers (hereinafter referred to as the UNION)
Witnesseth:
xxx xxx xxx
Article I
Coverage and Effectivity
Sec. 1. The COMPANY recognizes the UNION as the sole and exclusive
collective bargaining agent for all its workers and employees in all matters
concerning wages, hours of work, and other terms and conditions of
employment.
xxx xxx xxx
82
 Article III
Union Membership and Union Check-off
Sec. 1 —. . . Employees who are already members of the UNION at the time
of the signing of this Agreement or who become so thereafter shall be
required to maintain their membership therein as a condition of continued
employment.
xxx xxx xxx
Sec. 3—Any employee who is expelled from the UNION for joining another
federation or forming another union, or who fails or refuses to maintain his
membership therein as required, . . . shall, upon written request of the
UNION be discharged by the COMPANY. (Rollo, pp. 667-670)
And attached to the Agreement as Appendix "A" is a check-off Authorization Form,
the terms of which are as follows:
We, the undersigned, hereby designate the NATIONAL Association of Trade
Unions, of which the TROPICAL HUT EMPLOYEES UNION is an affiliate as
sole collective bargaining agent in all matters relating to salary rates, hours
of work and other terms and conditions of employment in the Tropical Hut
Food Market, Inc. and we hereby authorize the said company to deduct the
amount of Four (P 4.00) Pesos each every month as our monthly dues and
to deliver the amount to the Treasurer of the Union or his duly authorized
representatives. (Rollo, pp. 680-684)
On May 21, 1971, respondent company and THEU-NATU entered into a new
Collective Bargaining Agreement which ended on March 31, 1974. This new CBA
incorporated the previous union-shop security clause and the attached check-off
authorization form.
Sometime in July, 1973, Arturo Dilag, incumbent President of THEU-NATU, was
appointed by the respondent company as Assistant Unit Manager. On July 24, 1973,
he wrote the general membership of his union that for reason of his present position,
he was resigning as President of the THEU-NATU effective that date. As a
consequence thereof, his Vice-President, Jose Encinas, assumed and discharged the
duties of the presidency of the THEU-NATU.
On December 19,1973, NATU received a letter dated December 15, 1973, jointly
signed by the incumbent officers of the local union informing the NATU that THEU
was disaffiliating from the NATU federation. On December 20, 1973, the Secretary of
the THEU, Nemesio Barro, made an announcement in an open letter to the general
membership of the THEU, concerning the latter's disaffiliation from the NATU and its
affiliation with the Confederation of General Workers (CGW). The letter was passed
around among the members of the THEU-NATU, to which around one hundred and
thirty-seven (137) signatures appeared as having given their consent to and
acknowledgment of the decision to disaffiliate the THEU from the NATU.
On January 1, 1974, the general membership of the so-called THEU-CGW held its
annual election of officers, with Jose Encinas elected as President. On January 3,
1974, Encinas, in his capacity as THEU-CGW President, informed the respondent
company of the result of the elections. On January 9, 1974, Pacifico Rosal, President
of the Confederation of General Workers (CGW), wrote a letter in behalf of
complainant THEU-CGW to the respondent company demanding the remittance of
the union dues collected by the Tropical Hut Food Mart, Incorporated to the THEU-
CGW, but this was refused by the respondent company.
On January 11, 1974, the NATU thru its Vice-President Marcelino Lontok, Jr., wrote
Vidal Mantos, requiring the latter to assume immediately the position of President of
the THEU-NATU in place of Jose Encinas, but the position was declined by Mantos.
On the same day, Lontok, Jr., informed Encinas in a letter, concerning the request
made by the NATU federation to the respondent company to dismiss him (Encinas) in
view of his violation of Section 3 of Article III of the Collective Bargaining Agreement.
Encinas was also advised in the letter that NATU was returning the letter of
disaffiliation on the ground that:
1. Under the restructuring program NOT of the Bureau of Labor but of the
Philippine National Trade Union Center in conjunction with the NATU and
other established national labor centers, retail clerks and employees such as
our members in the Tropical Hut pertain to Industry II which by consensus,
has been assigned already to the jurisdiction of the NATU;
2. The right to disaffiliate belongs to the union membership who — on the
basis of verified reports received by — have not even been consulted by you
regarding the matter;
3. Assuming that the disaffiliation decision was properly reached; your letter
nevertheless is unacceptable in view of Article V, Section 1, of the NATU
Constitution which provides that "withdrawal from the organization shall he
valid provided three (3) months notice of intention to withdraw is served upon
the National Executive Council." (p. 281, Rollo)
In view of NATU's request, the respondent company, on the same day, which was
January 11, 1974, suspended Encinas pending the application for clearance with the
Department of Labor to dismiss him. On January 12, 1974, members of the THEU-
CGW passed a resolution protesting the suspension of Encinas and reiterated their
ratification and approval of their union's disaffiliation from NATU and their affiliation
with the Confederation of General Workers (CGW). It was Encinas' suspension that
caused the filing of NLRC Case No. LR-2511 on January 11, 1974 against private
respondents herein, charging them of unfair labor practice.
On January 15,1974, upon the request of NATU, respondent company applied for
clearance with the Secretary of Labor to dismiss the other officers and members of
83
THEU-CGW. The company also suspended them effective that day. NLRC Case No.
LR-2521 was filed by THEU-CGW and individual complainants against private
respondents for unfair labor practices.
On January 19, 1974, Lontok, acting as temporary chairman, presided over the
election of officers of the remaining THEU-NATU in an emergency meeting pending
the holding of a special election to be called at a later date. In the alleged election,
Arturo Dilag was elected acting THEU-NATU President together with the other union
officers. On February 14, 1974, these temporary officers were considered as having
been elected as regular officers for the year 1974.
On January 30, 1974, petitioner THEU-CGW wrote a letter to Juan Ponce Enrile,
Secretary of National Defense, complaining of the unfair labor practices committed by
respondent company against its members and requesting assistance on the matter.
The aforementioned letter contained the signatures of one hundred forty-three (143)
members.
On February 24,1974, the secretary of THEU-NATU, notified the entire rank and file
employees of the company that they will be given forty-eight (48) hours upon receipt
of the notice within which to answer and affirm their membership with THEU-NATU.
When the petitioner employees failed to reply, Arturo Dilag advised them thru letters
dated February 26, March 2 and 5, 1974, that the THEU-NATU shall enforce the
union security clause set forth in the CBA, and that he had requested respondent
company to dismiss them.
Respondent company, thereafter, wrote the petitioner employees demanding the
latter's comment on Dilag's charges before action was taken thereon. However, no
comment or reply was received from petitioners. In view of this, Estelita Que,
President/General Manager of respondent company, upon Dilag's request,
suspended twenty four (24) workers on March 5, 1974, another thirty seven (37) on
March 8, 1974 and two (2) more on March 11, 1974, pending approval by the
Secretary of Labor of the application for their dismissal.
As a consequence thereof, NLRC Case Nos. LR-2971, LR-3015 and an unnumbered
case were filed by petitioners against Tropical Hut Food Market, Incorporated, Estelita
Que, Hernando Sarmiento and Arturo Dilag.
It is significant to note that the joint letter petition signed by sixty-seven (67)
employees was filed with the Secretary of Labor, the NLRC Chairman and Director of
Labor Relations to cancel the words NATU after the name of Tropical Hut Employee
Union under Registration Certificate No. 5544 IP. Another letter signed by one
hundred forty-six (146) members of THEU-CGW was sent to the President of the
Philippines informing him of the unfair labor practices committed by private
respondents against THEU-CGW members.
After hearing the parties in NLRC Cases Nos. 2511 and 2521 jointly filed with the
Labor Arbiter, Arbitrator Daniel Lucas issued an order dated March 21, 1974, holding
that the issues raised by the parties became moot and academic with the issuance of
NLRC Order dated February 25, 1974 in NLRC Case No. LR-2670, which directed the
holding of a certification election among the rank and file workers of the respondent
company between the THEU-NATU and THEU-CGW. He also ordered: a) the
reinstatement of all complainants; b) for the respondent company to cease and desist
from committing further acts of dismissals without previous order from the NLRC and
for the complainant Tropical Hut Employees UNION-CGW to file representation cases
on a case to case basis during the freedom period provided for by the existing CBA
between the parties (pp. 91-93, Rollo).
With regard to NLRC Case Nos. LR-2971, LR-3015, and the unnumbered case,
Arbitrator Cleto T. Villatuya rendered a decision dated October 14, 1974, the
dispositive portion of which states:
Premises considered, a DECISION is hereby rendered ordering respondent
company to reinstate immediately the sixty three (63) complainants to their
former positions with back wages from the time they were illegally
suspended up to their actual reinstatement without loss of seniority and other
employment rights and privileges, and ordering the respondents to desist
from further committing acts of unfair labor practice. The respondent
company's application for clearance filed with the Secretary of Labor to
terminate the subject complainants' services effective March 20 and 23,
1974, should be denied.
SO ORDERED. (pp. 147-148, Rollo)
From the orders rendered above by Abitrator Daniel Lucas in NLRC Cases No. LR-
2511 and LR-2521 and by Arbitrator Cleto Villatuya in NLRC Cases Nos. LR-2971,
LR-3015, and the unnumbered case, all parties thereto, namely, petitioners herein,
respondent company, NATU and Dilag appealed to the National Labor Relations
Commission.
In a decision rendered on August 1, 1975, the National Labor Relations Commission
found the private respondents' appeals meritorious, and stated, inter alia:
WHEREFORE, in view of the foregoing premises, the Order of Arbitrator
Lucas in NLRC CASE NOS. LR-2511, 2521 and the decision of Arbitrator
Villatuya in NLRC CASE NOS. LR-2971, 3015 and the unnumbered Case
are hereby REVERSED. Accordingly, the individual complainants are
deemed to have lost their status as employees of the respondent company.
However, considering that the individual complainants are not presumed to
be familiar with nor to have anticipated the legal mesh they would find
themselves in, after their "disaffiliation" from National Association of Trade
Unions and the THEU-NATU, much less the legal consequences of the said
action which we presume they have taken in all good faith; considering,
further, that the thrust of the new orientation in labor relations is not towards
the punishment of acts violative of contractual relations but rather towards
fair adjustments of the resulting complications; and considering, finally, the
consequent economic hardships that would be visited on the individual
84
 complainants, if the law were to be strictly enforced against them, this
Commission is constrained to be magnanimous in this instant,
notwithstanding its obligation to give full force and effect to the majesty of the
law, and hereby orders the respondent company, under pain of being cited
for contempt for failure to do so, to give the individual complainants a second
chance by reemploying them upon their voluntary reaffirmation of
membership and loyalty to the Tropical Hut Employees Union-NATU and the
National Association of Trade Unions in the event it hires additional
personnel.
SO ORDERED. (pp. 312-313, Rollo)
The petitioner employees appealed the decision of the respondent National Labor
Relations Commission to the Secretary of Labor. On February 23, 1976, the
Secretary of Labor rendered a decision affirming the findings of the Commission,
which provided inter alia:
We find, after a careful review of the record, no sufficient justification to alter
the decision appealed from except that portion of the dispositive part which
states:
. . . this Commission . . . hereby orders respondent company under
pain of being cited for contempt for failure to do so, to give the
individual complainants a second chance by reemploying them
upon their voluntary reaffirmation of membership and loyalty to the
Tropical Hut Employees UNION-NATU and the National
Association of Trade Union in the event it hires additional
personnel.
Compliance by respondent of the above undertaking is not immediately
feasible considering that the same is based on an uncertain event, i.e.,
reemployment of individual complainants "in the event that management
hires additional personnel," after they shall have reaffirmed their loyalty to
THEU-NATU, which is unlikely.
In lieu of the foregoing, and to give complainants positive relief pursuant to
Section 9, Implementing Instruction No. 1. dated November 9, 1972,
respondent is hereby ordered to grant to all the individual complainants
financial assistance equivalent to one (1) month salary for every year of
service.
WHEREFORE, with the modification as above indicated, the Decision of the
National Labor Relations Commission is hereby affirmed.
SO ORDERED.(pp. 317-318, Rollo)
From the various pleadings filed and arguments adduced by petitioners and
respondents, the following issues appear to be those presented for resolution in this
petition to wit: 1) whether or not the petitioners failed to exhaust administrative
remedies when they immediately elevated the case to this Court without an appeal
having been made to the Office of the President; 2) whether or not the disaffiliation of
the local union from the national federation was valid; and 3) whether or not the
dismissal of petitioner employees resulting from their unions disaffiliation for the
mother federation was illegal and constituted unfair labor practice on the part of
respondent company and federation.
We find the petition highly meritorious.
The applicable law then is the Labor Code, PD 442, as amended by PD 643 on
January 21, 1975, which states:
Art. 222. Appeal — . . .
xxx xxx xxx
Decisions of the Secretary of Labor may be appealed to the President of the
Philippines subject to such conditions or limitations as the President may
direct. (Emphasis ours)
The remedy of appeal from the Secretary of Labor to the Office of the President is not
a mandatory requirement before resort to courts can be had, but an optional relief
provided by law to parties seeking expeditious disposition of their labor disputes.
Failure to avail of such relief shall not in any way served as an impediment to judicial
intervention. And where the issue is lack of power or arbitrary or improvident exercise
thereof, decisions of the Secretary of Labor may be questioned in
a certiorari proceeding without prior appeal to the President (Arrastre Security
Association —TUPAS v. Ople, No. L-45344, February 20, 1984, 127 SCRA 580).
Since the instant petition raises the same issue of grave abuse of discretion of the
Secretary of Labor amounting to lack of or in excess of jurisdiction in deciding the
controversy, this Court can properly take cognizance of and resolve the issues raised
herein.
This brings Us to the question of the legality of the dismissal meted to petitioner
employees. In the celebrated case of Liberty Cotton Mills Workers Union v. Liberty
Cotton Mills, L-33187, September 4, 1975, 66 SCRA 512, We held that the validity of
the dismissals pursuant to the union security clause in the collective bargaining
agreement hinges on the validity of the disaffiliation of the local union from the
federation.
The right of a local union to disaffiliate from its mother federation is well-settled. A
local union, being a separate and voluntary association, is free to serve the interest of
all its members including the freedom to disaffiliate when circumstances warrant. This
right is consistent with the constitutional guarantee of freedom of association
85
(Volkschel Labor Union v. Bureau of Labor Relations, No. L-45824, June 19, 1985,
137 SCRA 42).
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 and to
engage in concerted activities for their mutual aid or protection. This is a fundamental
right of labor that derives its existence from the Constitution. In interpreting the
protection to labor and social justice provisions of the Constitution and the labor laws
or rules or regulations, We have always adopted the liberal approach which favors the
exercise of labor rights.
Relevant on this point is the basic principle We have repeatedly in affirmed in many
rulings:
. . . The locals are separate and distinct units primarily designed to secure
and maintain an equality of bargaining power between the employer and
their employee-members in the economic struggle for the fruits of the joint
productive effort of labor and capital; and the association of the locals into
the national union (PAFLU) was in furtherance of the same end. These
associations are consensual entities capable of entering into such legal
relations with their member. The essential purpose was the affiliation of the
local unions into a common enterprise to increase by collective action the
common bargaining power in respect of the terms and conditions of labor.
Yet the locals remained the basic units of association, free to serve their own
and the common interest of all, subject to the restraints imposed by the
Constitution and By-Laws of the Association, and free also to renounce the
affiliation for mutual welfare upon the terms laid down in the agreement
which brought it into existence. (Adamson & Adamson, Inc. v. CIR, No. L-
35120, January 31, 1984, 127 SCRA 268; Elisco-Elirol Labor Union (NAFLU)
v. Noriel, No. L-41955, December 29, 1977, 80 SCRA 681; Liberty Cotton
Mills Workers Union v. Liberty Cotton Mills, Inc., supra).
The inclusion of the word NATU after the name of the local union THEU in the
registration with the Department of Labor is merely to stress that the THEU is NATU's
affiliate at the time of the registration. It does not mean that the said local union
cannot stand on its own. Neither can it be interpreted to mean that it cannot pursue its
own interests independently of the federation. A local union owes its creation and
continued existence to the will of its members and not to the federation to which it
belongs.
When the local union withdrew from the old federation to join a new federation, it was
merely exercising its primary right to labor organization for the effective enhancement
and protection of common interests. In the absence of enforceable provisions in the
federation's constitution preventing disaffiliation of a local union a local may sever its
relationship with its parent (People's Industrial and Commercial Employees and
Workers Organization (FFW) v. People's Industrial and Commercial Corporation, No.
37687, March 15, 1982, 112 SCRA 440).
There is nothing in the constitution of the NATU or in the constitution of the THEU-
NATU that the THEU was expressly forbidden to disaffiliate from the federation (pp.
62, 281, Rollo), The alleged non-compliance of the local union with the provision in
the NATU Constitution requiring the service of three months notice of intention to
withdraw did not produce the effect of nullifying the disaffiliation for the following
grounds: firstly, NATU was not even a legitimate labor organization, it appearing that
it was not registered at that time with the Department of Labor, and therefore did not
possess and acquire, in the first place, the legal personality to enforce its constitution
and laws, much less the right and privilege under the Labor Code to organize and
affiliate chapters or locals within its group, and secondly, the act of non-compliance
with the procedure on withdrawal is premised on purely technical grounds which
cannot rise above the fundamental right of self-organization.
Respondent Secretary of Labor, in affirming the decision of the respondent
Commission, concluded that the supposed decision to disaffiliate was not the subject
of a free and open discussion and decision on the part of the THEU-NATU general
membership (p. 305, Rollo). This, however, is contradicted by the evidence on record.
Moreover, We are inclined to believe Arbitrator Villatuya's findings to the contrary, as
follows:
. . . . However, the complainants refute this allegation by submitting the
following: a) Letter dated December 20, 1.973 signed by 142 members
(Exhs. "B to B-5") resolution dated January 12, 1974, signed by 140
members (Exhs. "H to H-6") letter dated February 26, 1974 to the
Department of Labor signed by 165 members (Exhs. "I to I-10"); d) letter
dated January 30, 1974 to the Secretary of the National Defense signed by
144 members (Exhs. "0 to 0-5") and; e) letter dated March 6, 1974 signed by
146 members addressed to the President of the Philippines (Exhs. "HH to
HH-5"), to show that in several instances, the members of the THEU-NATU
have acknowledged their disaffiliation from NATU. The letters of the
complainants also indicate that an overwhelming majority have freely and
voluntarily signed their union's disaffiliation from NATU, otherwise, if there
was really deception employed in securing their signatures as claimed by
NATU/ Dilag, it could not be possible to get their signatures in five different
documents. (p. 144, Rollo)
We are aware of the time-honored doctrine that the findings of the NLRC and the
Secretary of Labor are binding on this Court if supported by substantial evidence.
However, in the same way that the findings of facts unsupported by substantial and
credible evidence do not bind this Court, neither will We uphold erroneous
conclusions of the NLRC and the Secretary of Labor when We find that the latter
committed grave abuse of discretion in reversing the decision of the labor arbiter (San
Miguel Corporation v. NLRC, L-50321, March 13, 1984, 128 SCRA 180). In the
instant case, the factual findings of the arbitrator were correct against that of public
respondents.
Further, there is no merit in the contention of the respondents that the act of
disaffiliation violated the union security clause of the CBA and that their dismissal as a
consequence thereof is valid. A perusal of the collective bargaining agreements
86
shows that the THEU-NATU, and not the NATU federation, was recognized as the
sole and exclusive collective bargaining agent for all its workers and employees in all
matters concerning wages, hours of work and other terms and conditions of
employment (pp. 667-706, Rollo). Although NATU was designated as the sole
bargaining agent in the check-off authorization form attached to the CBA, this simply
means it was acting only for and in behalf of its affiliate. The NATU possessed the
status of an agent while the local union remained the basic principal union which
entered into contract with the respondent company. When the THEU disaffiliated from
its mother federation, the former did not lose its legal personality as the bargaining
union under the CBA. Moreover, the union security clause embodied in the
agreements cannot be used to justify the dismissals meted to petitioners since it is not
applicable to the circumstances obtaining in this case. The CBA imposes dismissal
only in case an employee is expelled from the union for joining another federation or
for forming another union or who fails or refuses to maintain membership therein. The
case at bar does not involve the withdrawal of merely some employees from the union
but of the whole THEU itself from its federation. Clearly, since there is no violation of
the union security provision in the CBA, there was no sufficient ground to terminate
the employment of petitioners.
Public respondents considered the existence of Arturo Dilag's group as the remaining
true and valid union. We, however, are inclined to agree instead with the Arbitrator's
findings when he declared:
. . . . Much more, the so-called THEU-NATU under Dilag's group which
assumes to be the original THEU-NATU has a very doubtful and
questionable existence not to mention that the alleged president is
performing supervisory functions and not qualified to be a bona fide member
of the rank and file union. (p. 146, Rollo)
Records show that Arturo Dilag had resigned in the past as President of THEU-NATU
because of his promotion to a managerial or supervisory position as Assistant Unit
Manager of respondent Company. Petitioner Jose Encinas replaced Dilag as
President and continued to hold such position at the time of the disaffiliation of the
union from the federation. It is therefore improper and contrary to law for Dilag to
reassume the leadership of the remaining group which was alleged to be the true
union since he belonged to the managerial personnel who could not be expected to
work for the betterment of the rank and file employees. Besides, managers and
supervisors are prohibited from joining a rank and file union (Binalbagan Isabela
Sugar Co., Inc. (BISCOM) v. Philippine Association of Free Labor Unions (PAFLU), et
al., L-18782, August 29, 1963, 8 SCRA 700). Correspondingly, if a manager or
supervisor organizes or joins a rank and file union, he will be required to resign
therefrom (Magalit, et al. v. Court of Industrial Relations, et al., L-20448, May 25,
1965,14 SCRA 72).
Public respondents further submit that several employees who disaffiliate their union
from the NATU subsequently retracted and reaffirmed their membership with the
THEU-NATU. In the decision which was affirmed by respondent Secretary of Labor,
the respondent Commission stated that:
. . . out of the alleged one hundred and seventy-one (171) members of the
THEU-CGW whose signatures appeared in the "Analysis of Various
Documents Signed by Majority Members of the THEU-CGW, (Annex "T",
Complainants), which incidentally was relied upon by Arbitrator Villatuya in
holding that complainant THEU-CGW commanded the majority of
employees in respondent company, ninety-three (93) of the alleged
signatories reaffirmed their membership with the THEU-NATU and
renounced whatever connection they may have had with other labor unions,
(meaning the complainant THEU-CGW) either through resolution or
membership application forms they have unwittingly signed." (p. 306, Rollo)
Granting arguendo, that the fact of retraction is true, the evidence on record shows
that the letters of retraction were executed on various dates beginning January 11,
1974 to March 8, 1974 (pp. 278-280, Rollo). This shows that the retractions were
made more or less after the suspension pending dismissal on January 11, 1974 of
Jose Encinas, formerly THEU-NATU President, who became THEU-CGW President,
and the suspension pending their dismissal of the other elected officers and members
of the THEU-CGW on January 15, 1974. It is also clear that some of the retractions
occurred after the suspension of the first set of workers numbering about twenty-four
(24) on March 5, 1974. There is no use in saying that the retractions obliterated the
act of disaffiliation as there are doubts that they were freely and voluntarily done
especially during such time when their own union officers and co-workers were
already suspended pending their dismissal.
Finally, with regard to the process by which the workers were suspended or
dismissed, this Court finds that it was hastily and summarily done without the
necessary due process. The respondent company sent a letter to petitioners herein,
advising them of NATU/Dilag's recommendation of their dismissal and at the same
time giving them forty-eight (48) hours within which to comment (p. 637, Rollo). When
petitioners failed to do so, respondent company immediately suspended them and
thereafter effected their dismissal. This is certainly not in fulfillment of the mandate of
due process, which is to afford the employee to be dismissed an opportunity to be
heard.
The prerogative of the employer to dismiss or lay-off an employee should be done
without abuse of discretion or arbitrainess, for what is at stake is not only the
employee's name or position but also his means of livelihood. Thus, the discharge of
an employee from his employment is null and void where the employee was not
formally investigated and given the opportunity to refute the alleged findings made by
the company (De Leon v. NLRC, L-52056, October 30, 1980, 100 SCRA 691).
Likewise, an employer can be adjudged guilty of unfair labor practice for having
dismissed its employees in line with a closed shop provision if they were not given a
proper hearing (Binalbagan-Isabela Sugar Co., Inc.,(BISCOM) v. Philippine
Association of Free Labor Unions (PAFLU) et al., L-18782, August 29, 1963, 8 SCRA
700).
In view of the fact that the dispute revolved around the mother federation and its local,
with the company suspending and dismissing the workers at the instance of the
mother federation then, the company's liability should be limited to the immediate
87
reinstatement of the workers. And since their dismissals were effected without
previous hearing and at the instance of NATU, this federation should be held liable to
the petitioners for the payment of their backwages, as what We have ruled in the
Liberty Cotton Mills Case (supra).

ACCORDINGLY, the petition is hereby GRANTED and the assailed decision of

respondent Secretary of Labor is REVERSED and SET ASIDE, and the respondent
company is hereby ordered to immediately reinstate all the petitioner employees
within thirty (30) days from notice of this decision. If reinstatement is no longer
feasible, the respondent company is ordered to pay petitioners separation pay
equivalent to one (1) month pay for every year of service. The respondent NATU
federation is directed to pay petitioners the amount of three (3) years backwages
without deduction or qualification. This decision shall be immediately executory upon
promulgation and notice to the parties.

88
G.R. No. 87266-69 July 30, 1990
ASSOCIATED WORKERS UNION-PTGWO, petitioner,
vs.
THE NATIONAL LABOR RELATIONS COMMISION (EN BANC), METRO PORT
SERVICE, INC., MARINA PORT SERVICES, INC., ADRIANO S. YUMUL and 10
OTHER INDIVIDUAL RESPONDENTS REPRESENTED BY ATTY. EPIFANIO
JACOSALEM, respondents.
G.R. Nos. 91223-26 JULY 30, 1990
MANILA PORT SERVICES, INC., petitioner,
vs.
HON. ARTHUR G. AMANSEC AND ADRIANO YUMUL, PABLITO REANDELAR,
MACARIO DE LUNA, JR., ADAN MENDOAZA, SMITH CARLOTA, EMERECIANO
VERGARA, ROMEO ABACAN, LEONARDO ROMULO, ELINO JOSE, and
CATINDIANO CALAUAG (COLLECTIVELY CALLED AWUM), respondents.
D.T. Dagum, Jr. and P.T. De Quiroz for petitioner in G.R. Nos. 87266-69.
Ramon N. Nalipay, Jr. for petitioner in G.R. Nos. 91223-26.
Cruz, Durian, Agabin, Atienza, Alday & Tuason for respondent MPSI.
Udarbe & Jacosalem for private respondents in G.R. Nos. 91223-26.
FELICIANO, J.:
These cases have been usually difficult for the Court, not because the issues posed
are in themselves intellectually demanding, but because of problems generated by
the procedure adopted by the parties in coming before this Court. The incidents
subject of these cases spawned multiple cases and petitions before the National
Labor Relations Commission ("NLRC"). After the NLRC rendered a consolidated
decision, the parties, in turn, filed multiple separate certioraripetitions to the Court —
on a staggered and piecemeal basis. This situation resulted in a number of discrete
discussions of issues actually inter-related, since the Court, at any one time, could
only see a small part of the whole picture and decide only on the basis of what it could
see. In what follows, we have tried to put the whole picture together and to render
comprehensive and substantial justice to all the parties.
On 26 October 1984, petitioner Associated Workers Union ("AWU")—PTGWO, the
then bargaining representative of the dockworkers at South Harbor, Port Area,
Manila, filed a Notice of Strike against respondent Metro Port Service, Inc. ("Metro"),
the then arrastre contractor in the South Harbor, on the issues, among others, of
unfilled vacancies and union busting. This was docketed as NLRC Case No. NCR-
NS-10-288-84.
On 3 April 1985, the abovementioned case was certified in an Order by the then
Minister of Labor and Employment to the NLRC for compulsory arbitration; the Order
also forbade the holding of strikes or lock-outs. 1 The case was docketed as Certified
NLRC Case No. 0403-85. In the latter case, one of the demands raised by AWU was
that Metro terminate the employment of respondents Adriano Yumul and ten (10)
others (individual respondents), for having organized, on 26 October 1984, the
Associated Workers Union in Metroport ("AWUM") among the rank-and-file
employees of Metro, ostensibly as a local or chapter of AWU. AWU had earlier
expelled individual respondents from membership in AUW for disloyalty and, pursuant
to the closed-shop provision of the existing AWU-Metro collective bargaining
agreement ("CBA"), sought the termination of their employment.
Metro initially resisted AWU's request to terminate the employment of individual
respondents, contending that the termination would be premature as individual
respondents had not been afforded due process, and that the termination would be
violative of the status quo agreement in NLRC Case No. NCR-NS-10-288-84. 2 Metro,
however, eventually relented and suspended individual respondents after AWU—
despite the express prohibition in the Order dated 3 April 1985—staged a strike
against it. On 18 April 1985, Metro executed a Compromise Agreement ("Agreement")
with AWU to end the strike, item No. 2 of which stipulated:
At the instance of the union, [Metro] agrees to preventively suspend
[individual respondents] effective immediately. 3
The Agreement was attested to by then Deputy Labor Minister Carmelo Noriel.
As a result of Metro's implementation of the Agreement, individual respondents on 30
April 1985 filed a complaint against Metro, docketed as NLRC Case No. NCR-4-1372-
85. Metro in that case filed in turn a third-party complaint against AWU and its
officers.
Metro in April 1985 also filed a complaint for illegal strike with damages against AWU
and its officers, docketed as NLRC Case No. NCR-4-1341-85. On 21 June 1985,
Labor Arbiter Ceferina Diosana in an Order directed Metro provisionally to reinstate
individual respondents pending resolution of the issues raised therein, with which
Order Metro complied.
On 15 July 1985, AWU filed a petition for injunction against Metro, docketed as NLRC
Injunction Case No. 993, praying for issuance of a temporary restraining order
stopping the implementation of the Order of provisional reinstatement, and for Metro's
compliance with the Agreement providing for the suspension of individual
respondents. On 1 August 1985, the NLRC in an En Banc Resolution directed Metro
to comply with the Agreement, and Metro complied and re-suspended individual
respondents. Individual respondents' petition before the NLRC for preliminary
mandatory injunction on 30 August 1985, praying "that pursuant to the Implementing
89
Rules of Batas Pambansa Blg. 130, [Metro] be ordered to pay their salaries and
allowances from and after their initial preventive suspension of thirty (30) days and
until their actual reinstatement," was not acted upon.
All the above-mentioned cases, to wit: (a) Certified NLRC Case No. 0403-85 (NCR
No. NS-10-288-84); (b) NLRC Case No. NCR-4-1341-85; (c) NLRC Case No. NCR-4-
1372-85; and (d) NLRC Injunction Case No. 993, were ordered consolidated before
the NLRC en banc.
On 4 September 1986, the NLRC rendered a consolidated Decision. In Certified
NLRC Case No. 0403-85, the NLRC ruled that: (a) respondent Metro cannot be
compelled to fill up vacancies with AWU's recommendees; (b) respondent Metro
cannot be held liable for union busting, the issue of the medically impaired workers
having become moot and academic; and (c) the compulsory retirement of AWUs
members who have reached the age of 60 years is a valid exercise of management
prerogative.
In NLRC Case No. NCR-4-1372-85, the NLRC, finding that AWU was a national
union, and that individual respondents have the right to organize themselves into a
local chapter thereof, the formation of which was a protected activity and could not be
considered as disloyalty, held the suspension or dismissal of individual respondents
as illegal and, in relation to NLRC Injuction Case No. 993, ordered their reinstatement
with backwages, to be paid solidarily by AWU and respondent Metro.
In NLRC Case No. NCR-4-1341-85, the NLRC found the strike staged by AWU not
illegal, holding that AWU was of the belief, although erroneously, that it could validly
stage a strike during the pendency of its motion for reconsideration of the Minister's
Order dated 3 April 1985 enjoining a strike or lockout.
Both AWU and Metro filed separate motions for reconsideration of the consolidated
Decision.
Meanwhile, on 21 July 1986, petitioner Marina Port Services, Inc. ("Marina"), by virtue
of a Special Permit issued by the Philippine Ports Authority, started operations as the
arrastre operator at the Manila South Harbor vice Metro. On November 1986,
individual respondents in a Motion/Manifestation prayed that Marina be included as
party-respondent.
On 27 July 1987, the NLRC in a Resolution denied AWU's and Metro's motions for
reconsideration of the consolidated Decision dated 4 September 1986, but (acting on
individual respondents' Motion/Manifestation) with the modification
limiting Metro's liability for backwages to wages accruing up to July 20, 1986 and
ordering Marina to reinstate individual respondents with backwages and allowances
starting from 21 July 1986. Marina complied with the Resolution by reinstating
individual respondents through its payroll retroactive to 21 July 1986.
AWU thereafter in G.R. Nos. 87266-69 filed with the Court a Petition for certiorari on
14 March 1989 praying for the reversal of the decision of the NLRC in NLRC Case
No. NCR-NS-10-288-84 and NLRC Injunction Case No. 993 (praying principally for
reversal of the order holding that respondent Metro could not be compelled to fill up
vacancies with AWUs recommendees) and in NLRC Case No. NCR-4-1372-85
(praying chiefly for reversal of the order reinstating the eleven [11] private
respondents to their former positions with backwages payable solidarily by AWU and
respondent Metro). These cases (G.R. Nos. 87266-69) were assigned to the Third
Division of the Court.
Marina, meantime, had gone to the Court on certiorari on 14 June 1988 in G.R. Nos.
81256-59 entitled "Marina Port Services, Inc. v. National Labor Relations
Commission, Metro Port Service, Inc, Associated Workers Union ["AWU"-PTGWO],
and Associated Workers Union in Metro Port [AWUM]" protesting, on grounds of
alleged denial of due process, its inclusion by the NLRC as a party in NLRC Case No.
NCR-4-1372-85 and its being required to reinstate individual respondents with
backwages. In dismissing these cases (G.R. Nos. 81256-59) on 3 August 1988, the
Court held that:
. . . [t]he decision to include Marina in the questioned [NLRC
Resolution dated 17 July 1987] is based on Par. "7" of the Special
Permit granted to Marina which states that "Labor and personnel of
previous operator, except those positions of trust and confidence,
shall be absorbed by the grantee." Besides, the petitioner was able
to file not only a Motion for Reconsideration of the Questioned
Resolution but also a Motion to Set Aside Motion/Manifestation and
Remarks on the Comment of Metro Port. The lack of due process at
the beginning, if any, was cured by the above motions that the
petitioner was able to file.4
On 13 April 1988, Metro in G.R. No. 82705 (entitled "Metro Port Services, Inc. v.
National Labor Relations Commission, Associated Workers Union-PTGWO, Marina
Port Services, Inc., and Adriano Yumul [and 10 others]") went to this court again and
assailed the NLRC ruling in NLRC Case No. NCR-4-1372-85 and NLRC Injunction
Case No. 993. Metro claimed that it should not have been held solidary liable with
AWU because it had merely suspended individual respondents pursuant to the
Agreement dated 18 April 1985 it had executed with AWU and, later, had merely
obeyed the Resolution of the NLRC dated 1 August 1985 ordering Metro to re-
suspend individual respondents. In similarly dismissing Metro's petition, the Court in
G.R. No. 82705, held:
. . . Considering that the petitioner was a party to the compromise
agreement with AWU which provided that "at the instance of the
union, the company agrees to preventively suspend Adriano S.
Yumul and eleven associates effective immediately" and
accordingly suspended the private respondents despite the
suspension being contrary to law, the petitioner should be made
solidarity liable with AWU for the backwages and allowances that
the private respondents may have been entitled to during their
suspension. The petitioner's liability, however, should not extend to
90
 the time that respondent NLRC ordered it to re-suspend the private
respondents. 5 (Emphasis supplied)
Judgment was entered in G.R. Nos. 81256-59 and G.R. No. 82705 on 23 September
1988 and 4 July 1989, respectively, and the cases were remanded to the Labor
Arbiter of origin for execution.
On 18 September 1989, the Labor Arbiter issued a writ of execution against Marina to
reinstate individual respondents and to pay them the amount of P154,357.00
representing salary adjustments. Marina moved to quash the writ of execution
questioning the award of P154,357.00, but without success. Marina thereafter
appealed to the NLRC assailing the Labor Arbiter's refusal to quash the writ of
execution.
On 23 November 1989, Marina received an Order from the Executive Labor Arbiter
dated 15 November 1989, requiring the release of any garnished deposit from its
bank, holding that no seasonable appeal from the 7 November 1989 Order denying
Marina's motion to quash had been taken. Marina filed a Manifestation dated 23
November 1989, arguing that it had filed an appeal with the NLRC within the 10-day
reglementary period.
On 6 December 1989, the Executive Labor Arbiter issued a writ of execution requiring
Marina: (a) to reinstate individual respondents and to pay them the amount of
P154,357.00 representing salary adjustments; and (b) to implement and honor the
legality of the organization and registration of AWUM as the local chapter of AWU.
Marina then once more went to the Court in G.R. Nos. 91223-26 and filed a Petition
for certiorari to invalidate the writ of execution, pleading that: (a) execution had been
ordered without due regard for its right of appeal from the Labor Arbiter's Order; and
(b) execution would result in its being made to pay more than what is called for by the
ruling of the Court in G.R. No. 82705, where the Court affirmed the NLRC ruling that
Marina "should be made solidarily liable with AWU for the backwages and allowances
that the private respondents may have been entitled to during their suspension
[although liability] should not extend to the time that respondent NLRC ordered it to
re-suspend the private respondents." These cases (G.R. Nos. 91223-26) were
assigned to the First Division of the Court. On 20 December 1989, a temporary
restraining order was issued by the First Division of the Court to enjoin the
implementation of the Executive Labor Arbiter's Order of 6 December 1989.
On 16 April 1990, G.R. Nos. 91223-26 were consolidated with G.R. Nos. 87266-69.
I Court therefore presumes that those who voted for their expulsion were bona
1. Deliberating on the instant Petition for Certiorari, the Court in G.R. Nos. 87266-69
considers that petitioner AWU has failed to show grave abuse of discretion or any act
without or in excess of jurisdiction on the part of the NLRC in Certified NLRC Case
No. 0403-85 (NCR No. NS-10-288-84). The NLRC was correct there in holding that
respondent Metro cannot be compelled to fill up vacancies with AWU's
recommendees, as the CBA between AWU and respondent Metro granted the latter
the right to "fill or not to fill-up vacancies"; that the issue of the medically impaired
employees had already been raised in another Notice of Strike filed by AWU against
respondent Metro on 16 September 1985, and both parties had agreed to abide by
the recommendation and decision of an examining physician selected by them; and
that the existing CBA grants respondent Metro the right to compulsorily retire any
member of AWU who had reached 60 years of age, which right has been exercised
by Metro.
2. The NLRC, however, misappreciated the relevant facts in NLRC Case No. NCR-4-
1372-85 and NLRC Injunction Case No. 993. While it is true that AWUM as a local
union, being an entity separate and distinct from AWU, is free to serve the interest of
all its members and enjoys the freedom to disaffiliate, such right to disaffiliate may be
exercised, and is thus considered a protected labor activity, only when warranted by
circumstances. 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.6 Even before the onset of the freedom period
(and despite the closed-shop provision in the CBA between the mother union and
management) disaffiliation may still be carried out, but such disaffiliation must be
effected by a majority of the members in the bargaining unit. 7 This happens when
there is a substantial shift in allegiance on the part of the majority of the members of
the union. In such a case, however, the CBA continues to bind the members of the
new or disaffiliated and independent union up to the CBA's expiration date. 8
The record does not show that individual respondents had disaffiliated during the
freedom period. The record does, however, show that only eleven (11) members of
AWU (individual respondents) had decided to disaffiliate from AWU and form AWUM.
Respondent Metro had about 4,000 employees, and around 2,000 of these were
members of AWU 9 It is evident that individual respondents had failed to muster
the necessary majority in order to justify their disaffiliation. (In fact, it was only
on 5 December 1985 that individual respondents were finally able to register an
independent union called Metroport Workers Union [MWU]. 10 Even then, in the
absence of allegation by AWUM [MWU] of the exact number of its members, the
Court presumes that only twenty percent [20%] of the employees of Metro had
joined MWU) 11 Thus, in the referendum held on 7 January 1985 at the PTGWO
compound (where representatives of the Ministry of Labor and Employment
were present) to determine whether individual respondents should be expelled
from AWU, 1,229 members (out of 1,695 members present) voted for expulsion
of individual respondents. 12
The individual respondents here have failed to present proof of their allegation that
the 1,695 members of AWU were not employees of respondent Metro alone; the
fide employees of respondent Metro. Moreover, individual respondents failed to allege
that their expulsion for disloyalty violated AWU's constitution and by-laws. 13 In sum,
the attempted disaffiliation of the eleven (11) private respondents from the petitioner
mother union and the effort to organize either a new local of the mother union or an
entirely new and separate union, did not, under the circumstances of this case,
constitute protected activities of the eleven (11) individual respondents.
91
 II
In view of the conclusion reached above in G.R. Nos. 87266-69, i.e., that AWU was
justified in expelling from its membership the eleven (11) individual respondents, the
question now arises: how and to what extent does such conclusion affect the liability
of Metro, and Marina (as successor-employer)? It will be recalled that the Resolutions
of this Court in G.R. Nos. 81256-59 and 82705 dismissing the Petitions
for certiorari of both Metro and Marina assailing the NLRC consolidated Decision of 4
September 1986 insofar as their (Metro's and Marina's) liability for reinstatement and
backwages of the individual respondents thereunder is concerned, became final and
judgment entered therein, sometime ago.
1. So far as concerns AWU's liability under the NLRC consolidated Decision, it should
in the first place be pointed out that the Court did not make any pronouncement either
in G.R. Nos. 81256-59 or in G.R. No. 82705 concerning AWU's liability. In G.R. No.
82705, the Court merely acted on the issue raised by petitioner Metro: that Metro
should not be liable at all for reinstatement and backwages considering that Metro
was only pressed into suspending individual respondents because of AWUs threat to
strike. In dismissing Metro's Petition, the Court in G.R. No. 82705 in effect merely
held that Metro, whatever the liability of AWU might be in respect of the expulsion of
individual respondents, could not escape liability by throwing all responsibility upon
AWU; and that Metro could not validly plead that it was under duress when it
executed the Agreement with AWU providing for, among other things, the preventive
suspension of individual respondents.
The Court is, of course, aware that AWU was a party-respondent in both G.R. Nos.
81256-59 and 82705, and that AWU had in fact filed a Comment in both G.R. Nos.
81256-59 and 82705. Nonetheless, the Court did not either in G.R. Nos. 82156-59 or
in G.R. No. 82705 in fact make a determination of the legality of AWU's expulsion of
individual respondents from its membership. The Court in G.R. No. 82705 held only
that the liability of Metro was solidary in nature, i.e., solidary with AWU, whatever
AWU's liability might be; and it may be well to recall that solidary liability is different
from secondary liability. In G.R. Nos. 81256-59, the Court simply held that Marina was
properly impleaded in the underlying cases and could not be absolved from
responsibility for reinstatement and backwages upon the ground of denial of due
process.
2. Thus, so far as concerns the liability of Metro and Marina for reinstatement with
backwages of individual respondents under the consolidated NLRC Decision, the pre-
eminent fact is that the Court's Resolutions in G.R. Nos. 81256-59 and 82705
dismissing their Petitions are already final. The liabilities of Metro and Marina for
reinstatement and backwages under the consolidated NLRC Decision have become
fixed and definite, with the modification decreed by the Court in G.R. No. 82705 in so
far as backwages were concerned. Thus, the conclusion we today have reached in
G.R. Nos. 87266-69 cannot benefit Metro and Marina and will not dissolve their
already fixed and definite liabilities.
3. Turning to the question of the backwages due to the eleven (11) individual
respondents, three (3) different time periods are relevant here and must be
distinguished from one another:
First Period: From 18 April 1985 to 21 June 1985: the Compromise
Agreement between Metro and AWU to end the strike, in which
Metro agreed to preventively suspend the eleven (11) individual
respondents, was effected on 18 April 1985 and implemented
immediately. The Labor Arbiter on 21 June 1985 ordered Metro to
reinstate provisionally the eleven (11) individual respondents and
Metro complied.
Second Period: From 1 August 1985 up to 27 July 1987: the NLRC,
pursuant to the urging of AWU, ordered Metro to re-suspend the
individual respondents on 1 August 1985 and Metro again complied
with this Order. Approximately two (2) years later, on 27 July 1987,
NLRC ordered Metro/Marina to reinstate the individual respondents
and Marina complied by reinstating the individual respondents on
the payroll, i.e., paying their salaries although they were not allowed
to work on their jobs.
Third Period: From 28 July 1987 to 18 September 1989: on 18
September 1989, the Labor Arbiter issued the questioned writ of
execution ordering, among other things, Marina to reinstate formally
the individual respondents.
Under the consolidated NLRC Decision, Metro/Marina are liable for the backwages
accruing during the First and Third Periods above indicated. In respect of the Second
Period, however, the Court in G.R. No. 82705, as already pointed out earlier, held that
Metro/Marina should not be held liable for backwages accruing during that period.
Strictly speaking, in view of our conclusion above that AWU was justified in expelling
individual respondents from its membership, neither AWU nor Metro/Marina would be
liable to individual respondents for the backwages accruing during this Second
Period.
4. In the interest of substantial and expeditious justice, however, we believe that the
backwages accruing during the Second Period should be paid and shared by AWU
and by Metro Marina, on a 50-50 basis. We here establish this equitable allocation of
ultimate responsibility in order to forestall further litigation between AWU and
Metro/Marina and individual respondents in respect of claims and countering claims
for payment or reimbursement or contribution and to put a definite end to this
prolonged and costly confrontation among the several parties.
The equitable considerations which impel us to hold AWU liable for one-half (½) of the
backwages during the Second Period include:
(a) the fact that Metro had been reluctant to comply with the
demand of AWU to terminate the services of individual respondents
92
 and had wanted to give the latter procedural due process, but gave
in to the demands of AWU;
(b) that AWU had pressed Metro very hard and indeed went on
strike against Metro when Metro refused simply to terminate the
services of the individual respondents;
(c) that AWU, instead of waiting for final judicial determination of the
legality of its expulsion of individual respondents, chose to
importune the NLRC to issue the order requiring the re-suspension
of the individual respondents on 1 August 1985, with which order
Metro eventually complied.
5. Turning to Metro/Marina we note that, apart from the finality of the Court's
Resolutions in G.R. Nos. 81256-59 and 82705, there is independent basis for holding
Metro/Marina responsible for reinstatement with backwages accruing throughout the
three (3) periods above indicated. The equitable considerations which lead us to hold
Metro/Marina responsible for one-half (½) of the backwages accruing during the
above Second Period relate to the failure of Metro to accord individual respondents
procedural due process by giving them reasonable opportunity to explain their side
before suspending or dismissing them. Such dismissal was accordingly in violation of
the Labor Code.14Notwithstanding AWU's closed-shop clause in the CBA, Metro was
bound to conduct its own inquiry to determine the existence of substantial basis for
terminating the employment of individual respondents. 15 That AWU, disregarding the
Minister of Labor and Employment's express order, had threatened to go on strike,
and indeed actually went on strike, if Metro had continued with the services of
individual respondents, did not relieve Metro from the duty to accord procedural due
process to individual respondents. 16
6. The portion of the Writ of Execution issued by the Executive Labor Arbiter requiring
Marina to pay salary differentials in the total amount of P154,357.00 accruing during
the period from 20 July 1986 up to October 1989, should be modified to conform with
the above legal and equitable allocation of liability for the backwages which had
accrued during the three (3) Periods above mentioned during which the individual
respondents were suspended. The salary differentials, as we understands it, refer to
increases in the prevailing wages accruing partly during the Second Period and partly
during the Third Period as above indicated. In other words, the salary differentials
accruing from 20 July 1986 up to 27 July 1987 should be borne on a 50-50 basis by
AWU on the one hand and Metro/Marina on the other. The salary differentials
accruing from 28 July 1987 up to 18 September 1989 shall be borne exclusively by
Marina.
7. The portion of the Writ of Execution issued by the Executive Labor Arbiter which
requires Marina to recognize the legality of the organization and registration of AWUM
(now MWU) as a local chapter of AWU, is inconsistent with the conclusions we have
set forth in Part I above, and must be deleted. What was in fact eventually established
by individual respondents was a separate, independent union called Metro Port
Workers Union (MWU) which was not entitled, during the time periods here relevant,
to recognition as the bargaining unit in CBA negotiations.
ACCORDINGLY, the Court Resolved:
In G.R. Nos. 87266-69:
(a) to DISMISS the Petition for Certiorari in respect of Certified
NLRC Case No. 0403-855 (NCR-NS-10-288-84) for lack of merit;
and
(b) to GRANT partially the Petition for Certiorari in respect of NLRC
Case No. NCR-4-1372-85 and NLRC Injunction Case No. 993. The
consolidated Decision of the NLRC dated 4 September 1986
ordering AWU and Marina to pay solidarily the backwages of
individual respondents, as well as the NLRC Resolution of 27 July
1987 denying AWUs and Metro's Motions for Reconsideration, are
hereby MODIFIED so as to require AWU and Metro/Marina to pay,
on a 50-50 basis, to individual respondents the backwages which
accrued during the Second Period, i.e., from 1 August 1985 up to
27 July 1987.
In G.R. Nos. 91223-26:
to GRANT partially the Petition. The Order of the Executive Labor
Arbiter dated 6 December 1989 is hereby MODIFIED so as (a) to
require AWU and Metro/Marina on a 50-50 basis to pay the salary
differentials accruing during the period from 20 July 1986 up to 27
July 1987, and Marina alone to pay the salary differentials accruing
from 28 July 1987 up to 31 October 1989, and so as (b) to delete
the portion requiring Marina to recognize AWU. (MWU) as the local
chapter of AWU. The Temporary Restraining Order issued by the
Court on 20 December 1989 is hereby LIFTED so as to permit
enforcement of the Order of the Executive Labor Arbiter as herein
modified.
No pronouncement as to costs.
SO ORDERED.
93
G.R. No. L-50283-84 April 20, 1983
DOLORES VILLAR, ROMEO PEQUITO, DIONISIO RAMOS, BENIGNO
MAMARALDO, ORLANDO ACOSTA, RECITACION BERNUS, ANSELMA ANDAN,
ROLANDO DE GUZMAN and RITA LLAGAS, petitioners,
vs.
THE HON. AMADO G. INCIONG, as Deputy Minister of the Ministry of Labor,
AMIGO MANUFACTURING INCORPORATED and PHILIPPINE ASSOCIATION OF
FREE LABOR UNIONS (PAFLU), respondents.
Aniceto Haber for petitioners.
Roberto T. Neri for respondents.
GUERRERO, J.:
Petition for review by certiorari to set aside the Order dated February 15, 1979 of
respondent Deputy Minister Amado G. Inciong affirming the Decision of the OIC of
Regional Office No. 4 dated October 14, 1978 which jointly resolved RO4-Case No.
T-IV-3549-T and RO4-Case No. RD 4-4088-77-T.
The facts are as follows:
Petitioners were members of the Amigo Employees Union-PAFLU, a duly registered
labor organization which, at the time of the present dispute, was the existing
bargaining agent of the employees in private respondent Amigo Manufacturing, Inc.
(hereinafter referred to as Company). The Company and the Amigo Employees
Union-PAFLU had a collective bargaining agreement governing their labor relations,
which agreement was then about to expire on February 28, 1977. Within the last sixty
(60) days of the CBA, events transpired giving rise to the present dispute.
On January 5, 1977, upon written authority of at least 30% of the employees in the
company, including the petitioners, the Federation of Unions of Rizal (hereinafter
referred to as FUR) filed a petition for certification election with the Med-Arbiter's
Office, Regional Office No. 4 of the Ministry of Labor and Employment. The petition
was, however, opposed by the Philippine Association of Free Labor Unions
(hereinafter referred to as PAFLU) with whom, as stated earlier, the Amigo
Employees Union was at that time affiliated. PAFLU's opposition cited the "Code of
Ethics" governing inter-federation disputes among and between members of the
Trade Unions Congress of the Philippines (hereinafter referred to as TUCP).
Consequently, the Med-Arbiter indorsed the case to TUCP for appropriate action but
before any such action could be taken thereon, the petitioners disauthorized FUR
from continuing the petition for certification election for which reason FUR withdrew
the petition.
On February 7, 1977, the same employees who had signed the petition filed by FUR
signed a joint resolution reading in toto as follows:
Sama-Samang Kapasiyahan
1. TUMIWALAG bilang kasaping Unyon ng Philippine Association
of Free Labor Unions (PAFLU) at kaalinsabay nito, inaalisan namin
ang PAFLU ng kapangyarihan na katawanin kami sa anumang
pakikipagkasundo (CBA) sa Pangasiwaan ng aming pinapasukan
at kung sila man ay nagkasundo o magkakasundo sa kabila ng
pagtitiwalag na ito, ang nasabing kasunduan ay hindi namin
pinagtitibay at tahasang aming itinatakwil/tinatanggihan;
2. BINABAWI namin ang aming pahintulot sa Federation of Unions
of Rizal (FUR) na katawanin kami sa Petition for Certification
Election (RO4-MED Case No. 743-77) at/o sa sama-samang
pakikipagkasundo sa aming patrons;
3. PANATILIHIN na nagsasarili (independent) ang aming samahan,
AMIGO EMPLOYEES' UNION, alinsunod sa Artikulo 240 ng Labor
Code;
4. MAGHAIN KAAGAD ang aming Unyong nagsasarili, sa
pamumuno ng aming pangsamantalang Opisyal na kinatawan, si
Ginang DOLORES VILLAR, ng Petition for Certification Election sa
Department of Labor, para kilalanin ang aming Unyong nagsasarili
bilang Tanging kinatawan ng mga manggagawa sa sama-samang
pakikipagkasundo (CBA);
5. BIGYAN ng kopya nito ang bawa't kinauukulan at ang mga
kapasiyahang ito ay magkakabisa sa oras na matanggap ng mga
kinauukulan ang kani-kanilang sipi nito.1
Immediately thereafter or on February 9, 1977, petitioner Dolores Villar, representing
herself to be the authorized representative of the Amigo Employees Union, filed a
petition for certification election in the Company before Regional Office No. 4, with the
Amigo Employees Union as the petitioner. The Amigo Employees Union-PAFLU
intervened and moved for the dismissal of the petition for certification election filed by
Dolores Villar, citing as grounds therefor, viz: (a) the petition lacked the mandatory
requisite of at least 30% of the employees in the bargaining unit; (2) Dolores Villar
had no legal personality to sign the petition since she was not an officer of the union
nor is there factual or legal basis for her claim that she was the authorized
representative of the local union; (3) there was a pending case for the same subject
matter filed by the same individuals; (4) the petition was barred by the new CBA
concluded on February 15, 1977; (5) there was no valid disaffiliation from PAFLU; and
(6) the supporting signatures were procured through false pretenses.
94
Finding that the petition involved the same parties and causes of action as the case
previously indorsed to the TUCP, the Med-Arbiter dismiss the petition filed by herein
petitioner Villar, which dismissal is still pending appeal before the Bureau of Labor
Relations.
In the meantime, on February 14, 1977, the Amigo Employees Union- PAFLU called a
special meeting of its general membership. A Resolution was thereby unanimously
approved which called for the investigation by the PAFLU national president, pursuant
to the constitution and by-laws of the Federation, of all of the petitioners and one
Felipe Manlapao, for "continuously maligning, libelling and slandering not only the
incumbent officers but even the union itself and the federation;" spreading 'false
propaganda' that the union officers were 'merely appointees of the management', and
for causing divisiveness in the union.
Pursuant to the Resolution approved by the Amigo Employees Union- PAFLU, the
PAFLU, through its national President, formed a Trial Committee to investigate the
local union's charges against the petitioners for acts of disloyalty inimical to the
interest of the local union, as well as directing the Trial Committee to subpoena the
complainants (Amigo Employees Union-PAFLU) and the respondents (herein
petitioners) for investigation, to conduct the said investigation and to submit its
findings and recommendations for appropriate action.
And on the same date of February 15, 1977, the Amigo Employees Union- PAFLU
and the Company concluded a new CBA which, besides granting additional benefits
to the workers, also reincorporated the same provisions of the existing CBA, including
the union security clause reading, to wit:
ARTICLE III
UNION SECURITY WITH RESPECT TO PRESENT MEMBERS
All members of the UNION as of the signing of this Agreement shall
remain members thereof in good standing. Therefore, any members
who shall resign, be expelled, or shall in any manner cease to be a
member of the UNION, shall be dismissed from his employment
upon written request of the UNION to the Company. 2
Subsequently, petitioners were summoned to appear before the
PAFLU Trial Committee for the aforestated investigation of the
charges filed against them by the Amigo Employees Union-PAFLU.
Petitioners, however, did not attend but requested for a "Bill of
Particulars" of the charges, which charges were stated by the
Chairman of the committee as follows:
1. Disaffiliating from PAFLU and affiliating with the Federation of
Unions of Rizal (FUR).
2. Filling petition for certification election with the Bureau of Labor
Relations and docketed as Case No. R04-MED-830-77 and
authorizing a certain Dolores Villar as your authorized
representative without the official sanction of the mother
Federation- PAFLU.
3. Maligning, libelling and slandering the incumbent officers of the
union as well as of the PAFLU Federation.
4. By spreading false propaganda among members of the Amigo
Employees Union-PAFLU that the incumbent union officers are
'merely appointees' of the management.
5. By sowing divisiveness instead of togetherness among members
of the Amigo Employees Union-PAFLU.
6. By conduct unbecoming as members of the Amigo Employees
Union- PAFLU which is highly prejudicial to the union as well as to
the PAFLU Federation.
All these charges were formalized in a resolution of the incumbent
officers of the Amigo Employees Union-PAFLU dated February 14,
1977. 3
Not recognizing PAFLU's jurisdiction over their case, petitioners again refused to
participate in the investigation rescheduled and conducted on March 9, 1979. Instead,
petitioners merely appeared to file their Answer to the charges and moved for a
dismissal.
Petitioners contend in their Answer that neither the disaffiliation of the Amigo
Employees Union from PAFLU nor the act of filing the petition for certification election
constitute disloyalty as these are in the exercise of their constitutional right to self-
organization. They further contended that PAFLU was without jurisdiction to
investigate their case since the charges, being intra-union problems within the Amigo
Employees Union-PAFLU, should be conducted pursuant to the provisions of Article
XI, Sections 2, 3, 4 and 5 of the local union's constitution and by-laws.
The complainants, all of whom were the then incumbent officers of the Amigo
Employees Union-PAFLU, however, appeared and adduced their evidence supporting
the charges against herein petitioners.
Based on the findings and recommendations of the PAFLU trial committee, the
PAFLU President, on March 15, 1977, rendered a decision finding the petitioners
guilty of the charges and disposing in the last paragraph thereof, to wit,
Excepting Felipe Manlapao, the expulsion from the AMIGO
EMPLOYEES UNION of all the other nine (9) respondents, Dionisio
Ramos, Recitation Bernus, Dolores Villar, Romeo Dequito, Rolando
de Guzman, Anselma Andan, Rita Llagas, Benigno Mamaradlo and
95
 Orlando Acosta is hereby ordered, and as a consequence the
Management of the employer, AMIGO MANUFACTURING, INC. is
hereby requested to terminate them from their employment in
conformity with the security clause in the collective bargaining
agreement. Further, the Trial Committee is directed to investigate
Felipe Manlapao when he shall have reported back for duty. 4
Petitioners appealed the Decision to the PAFLU, citing the same grounds as before,
and in addition thereto, argued that the PAFLU decision cannot legally invoke a CBA
which was unratified, not certified, and entered into without authority from the union
general membership, in asking the Company to terminate them from their
employment. The appeal was, likewise, denied by PAFLU in a Resolution dated
March 28, 1977.
After denying petitioner's appeal, PAFLU on March 28, 1977 sent a letter to the
Company stating, to wit,
We are furnishing you a copy of our Resolution on the Appeal of the
respondent in Administrative Case No. 2, Series of 1977, Amigo
Employees Union-PAFLU vs. Dionisio Ramos, et al.
In view of the denial of their appeal and the Decision of March 15,
1977 having become final and executory we would appreciate full
cooperation on your part by implementing the provision of our CBA
on security clause by terminating the respondents concerned from
their employment.5
This was followed by another letter from PAFLU to the Company dated April 25, 1977,
reiterating the demand to terminate the employment of the petitioners pursuant to the
security clause of the CBA, with a statement absolving the Company from any liability
or damage that may arise from petitioner's termination.
Acting on PAFLU's demand, the Company informed PAFLU that it will first secure the
necessary clearances to terminate petitioners. By letter dated April 28, 1977, PAFLU
requested the Company to put petitioners under preventive suspension pending the
application for said clearances to terminate the petitioners, upon a declaration that
petitioners' continued stay within the work premises will "result in the threat to the life
and limb of the other employees of the company." 6
Hence, on April 29, 1977, the Company filed the request for clearance to terminate
the petitioners before the Department of Labor, Regional Office No. 4. The
application, docketed as RO4-Case No. 7-IV-3549-T, stated as cause therefor,
"Demand by the Union Pursuant to the Union Security Clause," and further, as
effectivity date, "Termination-upon issuance of clearance; Suspension-upon receipt of
notice of workers concerned." 7 Petitioners were then informed by memorandum
dated April 29, 1977 that the Company has applied for clearance to terminate them
upon demand of PAFLU, and that each of them were placed under preventive
suspension pending the resolution of the said applications. The security guard was,
likewise, notified to refuse petitioners entry into the work premises. 8
In an earlier development, on April 25, 1977, or five days before petitioners were
placed under preventive suspension, they filed a complaint with application for
preliminary injunction before the same Regional Office No. 4, docketed as RO4-Case
No. RD-4-4088-77-T, praying that after due notice and hearing, "(1) A preliminary
injunction be issued forthwith to restrain the respondents from doing the act herein
complained of, namely: the dismissal of the individual complainants from their
employment; (2) After due hearing on the merits of the case, an Order be entered
denying and/or setting aside the Decision dated March 15, 1977 and the Resolution
dated March 28, 1977, issued by respondent Onofre P. Guevara, National President
of respondent PAFLU; (3) The Appeal of the individual complainants to the General
Membership of the complainant AMIGO EMPLOYEES UNION, dated March 22,
1977, pursuant to Sections 2, 3, 4 & 5, Article XI in relation of Section 1, Article XII of
the Union Constitution and By-Laws, be given due course; and (4) Thereafter, the
said preliminary injunction be made permanent, with costs, and with such further
orders/reliefs that are just and equitable in the premises." 9
In these two cases filed before the Regional Office No. 4, the parties adopted their
previous positions when they were still arguing before the PAFLU trial committee.
On October 14, 1977, Vicente Leogardo, Jr., Officer-in-Charge of Regional Office No.
4, rendered a decision jointly resolving said two cases, the dispositive portion of which
states, to wit,
IN VIEW OF THE FOREGOING, judgment is hereby rendered
granting the application of the Amigo Manufacturing, Inc., for
clearance to terminate the employment of Dolores D. Villar, Dionisio
Ramos, Benigno Mamaraldo, Orlando Acosta, Recitacion Bernus,
Anselma Andan, Rolando de Guzman, and Rita Llagas. The
application of oppositors, under RO4-Case No. RD-4-4088-77, for a
preliminary injunction to restrain the Amigo Manufacturing, Inc. from
terminating their employment and from placing them under
preventive suspension, is hereby DISMISSED. 10
Not satisfied with the decision, petitioners appealed to the Office of the Secretary of
Labor. By Order dated February 15, 1979, the respondent Amado G. Inciong, Deputy
Minister of Labor, dismissed their appeal for lack of merit. 11
Hence, the instant petition for review, raising the following issues:
A. Is it not error in both constitutional and statutory law by the
respondent Minister when he affirmed the decision of the RO4-
Officer-in-Charge allowing the preventive suspension and
subsequent dismissal of petitioners by reason of the exercise of
their right to freedom of association?
96
 B. Is it not error in law by the respondent Minister when he upheld
the decision of the RO4 OIC which sustained the availment of the
respondent PAFLU's constitution over that of the local union
constitution in the settlement of intra-union dispute?
C. Is it not error in law amounting to grave abuse of discretion by
the Minister in affirming the conclusion made by the RO4 OIC,
upholding the legal applicability of the security clause of a CBA over
alleged offenses committed earlier than its conclusion, and within
the 60-day freedom period of an old CBA? 12
The main thrust of the petition is the alleged illegality of the dismiss of the petitioners
by private respondent Company upon demand of PAFLU which invoked the security
clause of the collective bargaining agreement between the Company and the local
union, Amigo Employees Union-PAFLU. Petitioners contend that the respondent
Deputy Minister acted in grave abuse of discretion when he affirmed the decision
granting the clearance to terminate the petitioners and dismissed petitioners'
complaint, and in support thereof, allege that their constitutional right to self-
organization had been impaired. Petitioner's contention lacks merit.
It is true that disaffiliation from a labor union is not open to legal objection. It is implicit
in the freedom of association ordained by the Constitution. 13 But this Court has laid
down the ruling that a closed shop is a valid form of union security, and such
provision in a collective bargaining agreement is not a restriction of the right of
freedom of association guaranteed by the Constitution. 14
In the case at bar, it appears as an undisputed fact that on February 15, 1977, the
Company and the Amigo Employees Union-PAFLU entered into a Collective
Bargaining Agreement with a union security clause provided for in Article XII thereof
which is a reiteration of the same clause in the old CBA. The quoted stipulation for
closed-shop is clear and unequivocal and it leaves no room for doubt that the
employer is bound, under the collective bargaining agreement, to dismiss the
employees, herein petitioners, for non- union membership. Petitioners became non-
union members upon their expulsion from the general membership of the Amigo
Employees Union-PAFLU on March 15, 1977 pursuant to the Decision of the PAFLU
national president.
We reject petitioners' theory that their expulsion was not valid upon the grounds
adverted to earlier in this Decision. That PAFLU had the authority to investigate
petitioners on the charges filed by their co-employees in the local union and after
finding them guilty as charged, to expel them from the roll of membership of the
Amigo Employees Union-PAFLU is clear under the constitution of the PAFLU to which
the local union was affiliated. And pursuant to the security clause of the new CBA,
reiterating the same clause in the old CBA, PAFLU was justified in applying said
security clause. We find no abuse of discretion on the part of the OIC of Regional
Office No. 4 in upholding the validity of the expulsion and on the part of the
respondent Deputy Minister of Labor in sustaining the same. We agree with the OIC's
decision, pertinent portion of which reads:
Stripped of non-essentials, the basic and fundamental issue in this
case tapers down to the determination of WHETHER OR NOT
PAFLU HAD THE AUTHORITY TO INVESTIGATE OPPOSITORS
AND, THEREAFTER, EXPEL THEM FROM THE ROLL OF
MEMBERSHIP OF THE AMIGO EMPLOYEES UNION-PAFLU.
Recognized and salutary is the principle that when a labor union
affiliates with a mother union, it becomes bound by the laws and
regulations of the parent organization. Thus, the Honorable
Secretary of Labor, in the case of Amador Bolivar, et al. vs. PAFLU,
et al., NLRC Case No. LR-133 & MC-476, promulgated on
December 3, 1973, declared-
When a labor union affiliates with a parent organization or mother
union, or accepts a charter from a superior body, it becomes
subject to the laws of the superior body under whose authority the
local union functions. The constitution, by-laws and rules of the
parent body, together with the charter it issues pursuant thereto to
the subordinate union, constitute an enforceable contract between
the parent body and the subordinate union, and between the
members of the subordinate union inter se. (Citing Labor Unions,
Dangel and Shriber, pp. 279-280).
It is undisputable that oppositors were members of the Amigo
Employees Union at the time that said union affiliated with PAFLU;
hence, under the afore-quoted principle, oppositors are bound by
the laws and regulations of PAFLU.
Likewise, it is undeniable that in the investigation of the charges
against them, oppositors were accorded 'due process', because in
this jurisdiction, the doctrine is deeply entrenched that the term 'due
process' simply means that the parties were given the opportunity
to be heard. In the instant case, ample and unmistakable evidence
exists to show that the oppositors were afforded the opportunity to
present their evidence, but they themselves disdained or spurned
the said opportunity given to them.
PAFLU, therefore, correctly and legally acted when, pursuant to its
Constitution and By-Laws, it conducted and proceeded with the
investigation of the charges against the oppositors and found them
guilty of acts prejudicial and inimical to the interests of the Amigo
Employees Union- PAFLU, to wit: that of falsely and maliciously
slandering the officers of the union; spreading false propaganda
among the members of the Amigo Employees Union-PAFLU;
calling the incumbent officers as mere appointees and robots of
management; calling the union company-dominated or assisted
union; committing acts unbecoming of the members of the union
and destructive of the union and its members.
97
 Inherent in every labor union, or any organization for that matter, is
the right of self-preservation. When members of a labor union,
therefore, sow the seeds of dissension and strife within the union;
when they seek the disintegration and destruction of the very union
to which they belong, they thereby forfeit their rights to remain as
members of the union which they seek to destroy. Prudence and
equity, as well as the dictates of law and justice, therefore,
compelling mandate the adoption by the labor union of such
corrective and remedial measures in keeping with its laws and
regulations, for its preservation and continued existence; lest by its
folly and inaction, the labor union crumble and fall.
Correctly and legally, therefore, the PAFLU acted when, after
proper investigation and finding of guilt, it decided to remove the
oppositors from the list of members of the Amigo Employees Union-
PAFLU, and thereafter, recommended to the Amigo Manufacturing,
Inc.; the termination of the employment of the oppositors. 15
We see no reason to disturb the same.
The contention of petitioners that the charges against them being intra-union
problems, should have been investigated in accordance with the constitution and by-
laws of the Amigo Employees Union-PAFLU and not of the PAFLU, is not impressed
with merit. It is true that under the Implementing Rules and Regulations of the Labor
Code, in case of intra-union disputes, redress must first be sought within the
organization itself in accordance with its constitution and by-laws. However, it has
been held that this requirement is not absolute but yields to exception under varying
circumstances. Thus, in Kapisanan ng mga Manggagawa sa MRR vs. Hernandez, 20
SCRA 109, We held:
In the case at bar, noteworthy is the fact that the complaint was
filed against the union and its incumbent officers, some of whom
were members of the board of directors. The constitution and by-
laws of the union provide that charges for any violations thereof
shall be filed before the said board. But as explained by the lower
court, if the complainants had done so the board of directors would
in effect be acting as respondent investigator and judge at the same
time. To follow the procedure indicated would be a farce under the
circumstances, where exhaustion of remedies within the union itself
would practically amount to a denial of justice or would be illusory
or vain, it will not be insisted upon, particularly where property rights
of the members are involved, as a condition to the right to invoke
the aid of a court.
The facts of the instant petition stand on all fours with the aforecited case that the
principle therein enunciated applies here as well. In the case at bar, the petitioners
were charged by the officers of the Amigo Employees Union- PAFLU themselves who
were also members of the Board of Directors of the Amigo Employees Union-PAFLU.
Thus, were the petitioners to be charged and investigated according to the local
union's constitution, they would have been tried by a trial committee of three (3)
elected from among the members of the Board who are themselves the accusers.
(Section 2, Article 11, Constitution of the Local Union). Petitioners would be in a far
worse position had this procedure been followed. Nonetheless, petitioners admit in
their petition that two (2) of the six (6) charges, i.e. disaffiliation and filing a petition for
certification election, are not intra-union matters and, therefore, are cognizable by
PAFLU.
Petitioners insist that their disaffiliation from PAFLU and filing a petition for
certification election are not acts of disloyalty but an exercise of their right to self-
organization. They contend that these acts were done within the 60-day freedom
period when questions of representation may freely be raised. Under the peculiar
facts of the case, We find petitioners' insistence untenable.
In the first place, had petitioners merely disaffiliated from the. Amigo Employees
Union-PAFLU, there could be no legal objections thereto for it was their right to do so.
But what petitioners did by the very clear terms of their "Sama-Samang Kapasiyahan"
was to disaffiliate the Amigo Employees Union-PAFLU from PAFLU, an act which
they could not have done with any effective consequence because they constituted
the minority in the Amigo Employees Union-PAFLU.
Extant from the records is the fact that petitioners numbering ten (10), were among
the ninety-six (96) who signed the "Sama-Samang Kapasiyahan" whereas there are
two hundred thirty four (234) union members in the Amigo Employees Union-PAFLU.
Hence, petitioners constituted a small minority for which reason they could not have
successfully disaffiliated the local union from PAFLU. Since only 96 wanted
disaffiliation, it can be inferred that the majority wanted the union to remain an affiliate
of PAFLU and this is not denied or disputed by petitioners. The action of the majority
must, therefore, prevail over that of the minority members. 16
Neither is there merit to petitioners' contention that they had the right to present
representation issues within the 60-day freedom period. It is true, as contended by
petitioners, that under Article 257 of the Labor Code and Section 3, Rule 2, Book 2 of
its Implementing Rules, questions of exclusive bargaining representation are
entertainable within the sixty (60) days prior to the expiry date of an existing CBA, and
that they did file a petition for certification election within that period. But the petition
was filed in the name of the Amigo Employees Union which had not disaffiliated from
PAFLU, the mother union. Petitioners being a mere minority of the local union may
not bind the majority members of the local union.
Moreover, the Amigo Employees Union, as an independent union, is not duly
registered as such with the Bureau of Labor Relations. The appealed decision of OIC
Leogardo of Regional Office No. 4 states as a fact that there is no record in the
Bureau of Labor Relations that the Amigo Employees Union (Independent) is
registered, and this is not disputed by petitioners, notwithstanding their allegation that
the Amigo Employees Union is a duly registered labor organization bearing Ministry of
Labor Registration Certification No. 5290-IP dated March 27, 1967. But the
independent union organized after the "Sama-Samang Kapasiyahan" executed
February 7, 1977 could not have been registered earlier, much less March 27, 1967
98
under Registration Certificate No. 5290-IP. As such unregistered union, it acquires no
legal personality and is not entitled to the rights and privileges granted by law to
legitimate labor organizations upon issuance of the certificate of registration. Article
234 of the New Labor Code specifically provides:
Art. 234. Requirements of Registration.—Any applicant labor
organization, association, or group of unions or workers shall
acquire legal personality and shall be entitled to the rights and
privileges granted by law to legitimate labor organizations upon
issuance of the certificate of registration. ....
In Phil. Association of Free Labor Unions vs. Sec. of Labor, 27 SCRA 40, We had
occasion to interpret Section 23 of R.A. No. 875 (Industrial Peace Act) requiring of
labor unions registration by the Department of Labor in order to qualify as "legitimate
labor organization," and We said:
The theory to the effect that Section 23 of Republic Act No. 875
unduly curtails the freedom of assembly and association
guaranteed in the Bill of Rights is devoid of factual basis. The
registration prescribed in paragraph (b) of said section 17 is not a
limitation to the right of assembly or association, which may be
exercised with or without said registration. The latter is merely a
condition sine qua non for the acquisition of legal personality by
labor organizations, associations or unions and the possession of
the 'rights and privileges granted by law to legitimate labor
organizations.' The Constitution does not guarantee these rights
and privileges, much less said personality, which are mere statutory
creations, for the possession and exercise of which registration is
required to protect both labor and the public against abuses, fraud,
or impostors who pose as organizers, although not truly accredited
agents of the union they purport to represent. Such requirement is a
valid exercise of the police power, because the activities in which
labor organizations, associations and union or workers are engaged
affect public interest, which should be protected.
Simply put, the Amigo Employees Union (Independent) Which petitioners claim to
represent, not being a legitimate labor organization, may not validly present
representation issues. Therefore, the act of petitioners cannot be considered a
legitimate exercise of their right to self-organization. Hence, We affirm and reiterate
the rationale explained in Phil Association of Free Labor Unions vs. Sec. of Labor
case, supra, in order to protect legitimate labor and at the same time maintain
discipline and responsibility within its ranks.
The contention of petitioners that the new CBA concluded between Amigo Employees
Union-PAFLU and the Company on February 15, 1977 containing the union security
clause cannot be invoked as against the petitioners for offenses committed earlier
than its conclusion, deserves scant consideration. We find it to be the fact that the
union security clause provided in the new CBA merely reproduced the union security
clause provided in the old CBA about to expire. And since petitioners were expelled
from Amigo Employees Union-PAFLU on March 28, 1982 upon denial of their Motion
for Reconsideration of the decision expelling them, the CBA of February 15, 1977 was
already applicable to their case. The "closed-shop provision" in the CBA provides:
All members of the UNION as of the signing of this Agreement shall
remain members thereof in good standing. Therefore, any members
who shall resign, be expelled, or shall in any manner cease to be a
member of the UNION, shall be dismissed from his employment
upon written request of the UNION to the Company. (Art. III)
A closed-shop is a valid form of union security, and a provision therefor in a collective
bargaining agreement is not a restriction of the right of freedom of association
guaranteed by the Constitution. (Manalang, et al. vs. Artex Development Co., Inc., et
al., L-20432, October 30, 1967, 21 SCRA 561). Where in a closed-shop agreement it
is stipulated that union members who cease to be in good standing shall immediately
be dismissed, such dismissal does not constitute an unfair labor practice exclusively
cognizable by the Court of Industrial Relations. (Seno vs. Mendoza, 21 SCRA 1124).
Finally, We reject petitioners' contention that respondent Minister committed error in
law amounting to grave abuse of discretion when he affirmed the conclusion made by
the RO4 OIC, upholding the legal applicability of the security clause of a CBA over
alleged offenses committed earlier than its conclusion and within the 60-day freedom
period of an old CBA. In the first place, as We stated earlier, the security clause of the
new CBA is a reproduction or reiteration of the same clause in the old CBA. While
petitioners were charged for alleged commission of acts of disloyalty inimical to the
interests of the Amigo Employees Union-PAFLU in the Resolution of February 14,
1977 of the Amigo Employees Union- PAFLU and on February 15, 1977 PAFLU and
the Company entered into and concluded a new collective bargaining agreement,
petitioners may not escape the effects of the security clause under either the old CBA
or the new CBA by claiming that the old CBA had expired and that the new CBA
cannot be given retroactive enforcement. To do so would be to create a gap during
which no agreement would govern, from the time the old contract expired to the time
a new agreement shall have been entered into with the union. As this Court said
in Seno vs. Mendoza, 21 SCRA 1124, "without any agreement to govern the relations
between labor and management in the interim, the situation would well be productive
of confusion and result in breaches of the law by either party. "
The case of Seno vs. Mendoza, 21 SCRA 1124 mentioned previously needs further
citation of the facts and the opinion of the Court, speaking through Justice Makalintal
who later became Chief Justice, and We quote:
It appears that petitioners other than Januario T. Seno who is their
counsel, were members of the United Seamen's Union of the
Philippines. Pursuant to a letter-request of the Union stating that
they 'had ceased to be members in good standing' and citing a
closed shop clause in its bargaining agreement with respondent
Carlos A. Go Thong & Co., the latter dismissed said petitioners.
Through counsel, petitioners requested that they be reinstated to
their former positions and paid their backwages, otherwise they
99
 would picket respondents' offices and vessels. The request was
denied on the ground that the dismissal was unavoidable under the
terms of the collective bargaining agreement. ...

We, therefore, hold and rule that petitioners, although entitled to disaffiliate from their
union and form a new organization of their own, must, however, suffer the
consequences of their separation from the union under the security clause of the
CBA.

WHEREFORE, IN VIEW OF ALL THE FOREGOING, the Order appealed from

affirming the joint decision of the OIC of Regional Office No. 4 in RO4-Case No. T-IV-
3549-T and RO4 Case No. RD-4-4088-77-T granting clearance to terminate
petitioners as well as dismissing their complaint with application for preliminary
injunction, is hereby AFFIRMED. No costs.

SO ORDERED.

100
G.R. No. L-24189 August 30, 1968
ITOGON-SUYOC MINES, INC., petitioner,
vs.
SANGILO-ITOGON WORKERS' UNION in behalf of BARTOLOME MAYO,
BERNARDO AQUINO, ET AL.,respondents.
Reyes and Cabato for petitioner.
Benjamin C. Rillera for respondents.
SANCHEZ, J.:
Petitioner's appeal seeks reversal of the judgment of the Court of Industrial Relations
(CIR) directing reinstatement of the fifteen individual respondents "to their former
positions or substantially equivalent employment in the company, with full back wages
from the time of their dismissal to their actual reinstatement, without loss of seniority
and other privileges."
The controversy arose because prior to May 28, 1958, Itogon-Suyoc Mines, Inc.,
through its general superintendent Claude Fertig, had been dismissing from its
employ members of respondent Sañgilo-Itogon Workers' Union (Sañgilo, for short).
Fifty-four members of Sañgilo were already fired when Department of Labor
conciliators conferred with petitioner's representative to explore the possibility of their
reinstatement. Petitioner refused reinstatement, alleged that dismissal of the 54 was
for cause.
On May 28, 1958, sensing that its members were being eased out of employment one
by one, Sañgilo called a strike, accompanied by picketing carried out at or near
petitioner's mine premises in Itogon. Work was paralyzed. On the fourth or fifth day of
the strike, company policemen drove the strikers out of petitioner's premises. The
strike lasted until about June 2, 1958.
On that day, June 2, 1958, petitioner filed an injunction suit against some strikers in
the Court of First Instance of Baguio (Civil Case No. 774). Nothing clear appears of
record as to the present status of this suit.
On the same day, too, petitioner's officials conferred with the officers of the other
labor union in the company, the Itogon Labor Union. They hammered out an
agreement whereby all strikers were given fifteen (15) days from said date to return to
work. Thru a public address system, strikers were then urged to go back to their jobs.
Notices addressed to the strikers which read — "All of you are required to
report immediately to your respective work otherwise you will be considered AWOL
[absent without leave] and will be dropped from the rolls" 1 were posted on the Itogon
Labor Union bulletin board, the Itogon store, and at 1300 checkpoint — the main
entrance to the company's mining premises. These notices did rot contain the fifteen
(15) days' grace period aforesaid.
On November 18, 1958, a CIR prosecutor in behalf of Sañgilo charged petitioner and
Claude Fertig, its general superintendent, with unfair labor practice for the dismissal
of two company employees A. Manaois and Jose Baldo on June 9, 1957 and March
5, 1958, respectively, allegedly because of their affiliation with Sañgilo and for having
testified against petitioner in Certification Case No. 3-MC-Pang.2 The complaint
prayed for reinstatement and back wages. Petitioner asserted just cause in defense.
On October 5, 1960, CIR adjudged that the dismissal of A. Manaois was just and
legal, but that petitioner was guilty of unfair labor practice in dismissing Jose Baldo.
CIR thus ordered Baldo's reinstatement with back wages. The CIR judgment for Jose
Baldo was elevated by petitioner to this Court.3 On December 24, 1964, we affirmed.
Meanwhile, on March 3, 1961, CIR's prosecutor — on Sañgilo's charge filed with CIR
on July 12, 1960, — lodged an unfair labor practice complaint against herein
petitioner, its general superintendent Claude Fertig, and the Itogon Labor
Union.4 Averment was there made of the arbitrary dismissal of 107 of Sañgilo's
members because of membership and/or affiliation with said union and for having
testified or about to testify in Certification Case G.R. No. 3-MC-Pang.; that Sañgilo's
president, Bartolome Mayo, was dismissed also because of his refusal to dissolve the
union; and that said company and its general superintendent Claude Fertig "had
given aid and support to ... Itogon Labor Union, another labor organization" existing in
said company "by allowing the officers and members thereof, to hold meetings inside
the mine premises and the theatre building owned" by the company and also allowing
them to use the company's light facilities — privileges which were denied Sañgilo.
The prayer was for judgment declaring respondents therein guilty of unfair labor
practice; enjoining them from further committing unfair labor practice acts; ordering
the dissolution of Itogon Labor Union, "it being a company dominated union"; and
directing reinstatement of the dismissed 107 employees mentioned in the complaint,
with full back wages from the time of dismissal up to actual reinstatement.
The mining company and Claude Fertig in their answer aver that the May 27, 1958
strike was illegal; that thereafter "many of respondent company's workers left for their
respective home towns, abandoning their jobs, and never reported for work until the
present; that some of the persons listed in the complaint are still working; and some of
them left respondent company's employ even earlier than May 27, 1958 voluntarily or
were discharged for cause." The company's principal defense is that the action for
reinstatement with back wages is barred by laches.
Itogon Labor Union's defense is that the concessions it enjoyed were in pursuance of
a collective bargaining contract between said union and the company.
Of the 107 dismissed employees, 10 manifested in writing that they had never been
members of Sañgilo, were actually working with the company and not interested at all
in the prosecution of the suit.5 One of the named dismissed employees, Graciano
Mejia, died on October 26, 1957.6 Of the remaining individual complainants, only 15
appeared and testified in court. They were amongst the strikers.
101
Came the CIR decision of May 20, 1964. Associate Judge Jose S. Bautista there
observed that "the picketing was conducted peacefully, as the strikers did not commit
acts of violence or cause injuries to persons or damage to property" and that "the
union members staged the strike for the reason that their fellow members were being
eased out of employment little by little by respondent company." .
On the charge that the Itogon Labor Union was company dominated, CIR declared
that "the privilege of respondent union in holding meetings inside the company's mine
premises and theater building, and in using the company's light facilities, is one of the
concessions obtained by said union in accordance with the collective bargaining
agreement entered into by the respondent Company and the Itogon Labor Union." .
CIR's judgment thus directed "respondent Itogon-Suyoc Mines, Inc. to reinstate (1)
Bartolome Mayo, (2) Bernardo Aquino, (3) Florentino Ceralde, (4) Marcelo Datuin, (5)
Antonio Deogracias, (6) Domingo Deray, (7) Pedro Espiritu, (8) Mariano Idos, (9)
Antonio Laop, (10) Gregorio Laureta, (11) Chayon Pogay, (12) Roman Quinto, (13)
Jose Santos, (14) Simplicio Tambaoan, and (15) Tomas Valerio, to their former
positions or substantially equivalent employment in the company, with full backwages
from the time of their dismissal to their actual reinstatement, without loss of seniority
and other privileges. The complaint with respect to the remaining members of
complainant Sañgilo-Itogon Workers' Union and with respect to the company
domination charge against respondent Itogon Labor Union is hereby DISMISSED."
Its motion to reconsider having been denied by CIR en banc, petitioner appealed to
this Court.
1. Petitioner's brief 7 challenges Sañgilo's capacity to sue. Sañgilo, so petitioner says,
ceased to be a legitimate labor union on March 31, 1960 when the Department of
Labor cancelled the former's registration permit for failure to comply with statutory
requirements. Contrariwise Sañgilo avers that at the time the complaint below was
filed it was a legitimate labor organization, and continues to be so. 1äwphï1.ñët
Judicial inquiry was made by CIR on this issue. A subpoena duces tecum was issued
to the registrar of labor organizations of the Department of Labor requiring him or his
duly authorized representative "[t]o bring with [him] the following: (1) the list of
membership of the Sañgilo-Itogon Workers' Union; (2) the revocation, if any, of the
registration permit of the Sañgilo-Itogon Workers' Union dated March 22, 1960; and
(3) the cancellation proceedings of the Sañgilo-Itogon Workers' Union which took
place sometime in 1960."8
Atty. Narciso Fabella, the duly authorized representative, answered the subpoena.
With the record of the cancellation proceedings of Sañgilo with him, he testified before
the CIR hearing officer that on March 31, 1960, Sañgilo's registration permit [No.
2141-IP issued on May 21, 1957] was cancelled by the Department of Labor under
Cancellation Proceedings 1722;9 that his office then received a motion for
reconsideration of said cancellation; that on April 27, 1960, an order was issued
advising Sañgilo to comply with the requirement it failed to satisfy and which was the
cause of the cancellation of Sañgilo's permit; that on March 9, 1962, Sañgilo filed a
manifestation and motion to lift resolution with the request that it be given fifteen days
within which to present evidence of compliance; that on March 23, 1962, an order was
issued directing the union to submit, within fifteen days from notice, a copy of its
financial report for the period from May 12, 1957 to May 11, 1958, sworn to by its
treasurer, Ernesto Aragon, pursuant to Sangilo's constitution and by-laws and Section
17(k) of Republic Act 875; and that no financial report had been submitted to the
Department of Labor.
And then, the witness testified as follows:
ATTY. RILLERA [Counsel for Sañgilo]:
Q Now, Mr. Fabella, per your records, do you have the final order cancelling
the permit of the complainant union, or is the proceeding still going on?
WITNESS
A As far as the record is concerned, it seems that the proceeding is still
going on because there is no other order pertaining [to] the non-submittal of
the union of the financial report required within fifteen (15) days.10
So it is, that there is no order final in character cancelling Sañgilo's registration permit
and dropping its name from the roster of legitimate labor unions. Sangilo's status
does not appear in the record to have changed. Therefore, Sañgilo still enjoys all the
rights accorded by law to a legitimate labor union. One of those rights is the right to
sue. 1äwphï1.ñët
Even assuming that Sañgilo later lost its registration permit in the course of the
present proceedings, still Sañgilo may continue as a party without need of substitution
of parties, "subject however to the understanding that whatever decision may be
rendered therein will only be binding upon those members of the union who have not
signified their desire to withdraw from the case before its trial and decision on the
merits." 11
Really, we perceive of no reason why the judgment in favor of the fifteen individual
respondent laborers should be overturned simply because the union of which they
were members ceased to be a legitimate labor union. It cannot be disputed that CIR's
prosecutor brought this case not merely for Sañgilo; it was also on behalf of the 107
employees enumerated therein. This accounts for the fact that CIR's judgment for
reinstatement and backpay was rendered in favor of the fifteen respondent laborers.
To accept petitioner's argument as valid is to shunt aside substance to give way to
form. Error, if any, was harmless. It does not affect the substantial rights of the parties
in interest. It is no ground for reversal. 12 At this stage this Court may even strike out
Sañgilo-Itogon Workers' Union and leave the fifteen individual respondents alone. 13
2. Next to be considered is petitioner's claim that respondents were guilty of splitting
their cause of action.
102
Petitioner argues that the first unfair labor practice suit (CIR Case 50-ULP- Pang.)
heretofore mentioned covers the second unfair labor practice suit - the case at hand.
And this, because "[a]ll acts of unfair labor practice allegedly committed by the herein
petitioner [the company] prior to November 18, 1958 [when CIR Case 50-ULP-Pang.
was filed] against the members of respondent union [Sañgilo] constituted one single
cause of action." Petitioner continues onto say that since CIR Case 50-ULP-Pang,
has been finally decided by this Court in a decision promulgated on December 24,
1964, said case is a bar to the present action.
We do not go along with petitioner.
The rule against splitting of a cause of action applies only where the actions are
between the same parties. 14 Here, the parties in the two cases aforecited are
different. The first case involves only two (2) laborers, namely, Jose Baldo and A.
Manaois the second refers to the claim of other laborers numbering 107 in all. These
two cases, it is true, were brought in the name of Sañgilo. However, the real parties in
interest in both cases are the dismissed employees. Sañgilo merely represented its
members before CIR. 15 CIR found that the members "are not situated under similar
circumstances", and that their alleged dismissal "took pace on different
dates". 16 Each one of these employees has a cause of action arising from his
particular dismissal. And the cause of action of one is separate and distinct from the
others. 17 Although, of course, they may be joined and brought in the name of the
union. Res judicata has not attached.
3. Petitioner's averment that it gave out notices for a return to work would not be of
help to its cause. On this point, the court said: "The Court is aware of the offer of the
company to the strikers to return to work, but it is even more cognizant of the fact that
passions and emotions among the striking employees were running high at the heat
of the strike." 18 The validity of this reasoning we do not find cause to dispute.
And then, evidence there is that the individual respondents were driven out of and
denied admission into the company's mine premises because they staged a strike.
They were turned out of the bunkhouses they rented in the premises as living
quarters. They were virtually locked out. Evidence there is, too, that because of the
strike the laborers were not allowed to go back to their jobs. 19
4. Petitioner seeks to nullify individual respondents' right to reinstatement and
backpay upon the ground that they are guilty of laches. Really the present case was
started after the lapse of almost two years and two months after the
strike. 1äwphï1.ñët
Laches has been defined as "such delay in enforcing one's rights as works
disadvantage to another" and "in a general sense is the neglect, for an unreasonable
and unexplained length of time, under circumstances permitting diligence, to do what
in law should have been done." 20 As we go into the core of this problem, we are
reminded that for the doctrine of stale demand to apply, four essential requisites must
be present, viz: "(1) conduct on the part of the defendant, or of one under whom he
claims, giving rise to the situation of which complaint is made and for which the
complaint seeks a remedy; (2) delay in asserting the complainant's rights, the
complainant having had knowledge or notice of the defendant's conduct and having
been afforded an opportunity to institute a suit; (3) lack of knowledge or notice on the
part of the defendant that the complainant would assert the right on which he bases
his suit; and (4) injury or prejudice to the defendant in the event relief is accorded to
the complainant, or the suit is not held barred." 21
With these as guideposts, let us look at the facts.
It is true that CIR declared Sañgilo and its members who did not come to court and
testify guilty of laches. 22 But as to the 15 individual respondents, the question of
laches was passed by — sub silentio. Clearly implicit in this is that CIR is of the
opinion that laches is not a bar to reinstatement and recovery of back wages for these
15 individual respondents who actually testified in court. For CIR, despite a
categorical finding of laches on the part of the union and some of its complaining
members, proceeded to order reinstatement and back wages for the 15 respondents.
By and large, appreciation of laches rests mainly with the trial court. Absent a clear
abuse, we are not to disturb its ruling thereon.
Indeed, these fifteen respondents showed sufficient interest in their case. They went
to court and supported their cause by their own testimony. Delay in the filing of suit
should not hamper their suit. We must not for a moment forget that these fifteen
laborers' belong to the lower economic stratum of our society. They are not expected
to possess the intelligence or foresight of those who have been favored by high
formal education. 23 Individually, they may not be in a position to file suit; they may not
have the means. Thrown out of job, driven off, and refused entrance to, the
company's premises, each has to go his own way. They had to return — as most of
them did — to their families in the lowlands, far from the mine site. And yet they were
not remiss in their duty to report the matter to their president. But the president,
respondent Bartolome Mayo, was then in the Baguio General Hospital. Mayo lost no
time in reporting the laborers' plight to the union counsel. The laborers had every right
to assume that their union was doing something for them. They had done their part.
They had to depend on the action taken by their union leaders. A labor union certainly
would not be of much use if it does not act for the welfare of its members.
As to respondent Mayo himself, evidence appears on record that from the time of his
dismissal, he had personally and by telephone asked Superintendent Fertig for his
reinstatement. He was brushed off with the reply: "Your union went on strike". 24 On
one occasion after the strike, when Mayo met Fertig in Baguio, the former repeated
his request for reinstatement, but received the same answer: "You are still on
strike". 25
Laches, if any, we must say, is not solely to be laid at the door of respondents. The
company contributed too in the delay of the filing of the present suit. And this
because, as testified to by the union president in court, such delay in filing the present
ULP case was due to the fact that the legality of their strike precisely was being
litigated in the Court of First Instance of Baguio in Injunction Case 774 filed on June 2,
1958 by the very company itself against some of the strikers. Naturally, if the strike is
there declared illegal, the strikers including the herein fifteen respondents would lose
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their right to reinstatement and backpay. But as said suit became apparently dormant,
the union, on behalf of respondents, decided to lodge their present complaint with the
CIR.

Thus it is, that the taint of laches cannot attach to individual respondents. For the
second element required for the defense of laches to prosper is here absent.

5. The judgment below directs petitioner to pay individual respondents back wages
from the time of their dismissal to their actual reinstatement without loss of seniority
and privileges.

Since the dismissal of respondents in 1958, more than ten years had elapsed. It
would not seem out of place to restate the guidelines to be observed in the
ascertainment of the total back wages payable under the judgment below. These
are:.1äwphï1.ñët

First. To be deducted from the back wages accruing to each of the laborers
to be reinstated is the total amount of earnings obtained by him from other
employment(s) from the date of dismissal to the date of reinstatement.
Should the laborer decide that it is preferable not to return to work, the
deduction should be made up to the time judgment becomes final. And
these, for the reason that employees should not be permitted to enrich
themselves at the expense of their employer. 26 Besides, there is the "law's
abhorrence for double compensation." 27

Second. Likewise, in mitigation of the damages that the dismissed

respondents are entitled to, account should be taken of whether in the
exercise of due diligence respondents might have obtained income from
suitable remunerative employment. 28 We are prompted to give out this last
reminder because it is really unjust that a discharged employee should, with
folded arms, remain inactive in the expectation that a windfall would come to
him. A contrary view would breed idleness; it is conducive to lack of initiative
on the part of a laborer. Both bear the stamp of undesirability.

For the reasons given, the judgment under review is hereby affirmed.

Let the record of this case be returned to the Court of Industrial Relations with
instructions to forthwith ascertain the amount of back wages due individual
respondents in accordance with the guidelines herein set forth. Costs against
petitioner. So ordered. 1äwphï1.ñët

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Angeles and
Fernando, JJ., concur.

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