G.R. No. 178647 February 13, 2009 The petition is bereft of merit. Hence, we deny the Petition.

GENERAL SANTOS COCA-COLA PLANT FREE WORKERS UNION-TUPAS, Petitioner, Under Rule 45 of the Revised Rules on Civil Procedure, only questions of law may be raised in a Petition for Review on
vs. Certiorari.12
COCA-COLA BOTTLERS PHILS., INC. (GENERAL SANTOS CITY), THE COURT OF APPEALS and THE
NATIONAL LABOR RELATIONS COMMISSION, Respondents.
There is a question of law if the issue raised is capable of being resolved without need of reviewing the probative value of the
evidence. The resolution of the issue must rest solely on what the law provides on a given set of circumstances. Once it is clear
RESOLUTION that the issue invites a review of the evidence presented, the question posed is one of fact. If the query requires a re-evaluation of
the credibility of witnesses, or the existence or relevance of surrounding circumstances and their relation to one another, the issue
in that query is factual.13
NACHURA, J.:

An examination of the issues raised by petitioner reveals that they are questions of fact. The issues raised, i.e., whether JLBP is an
In this Petition for Review on Certiorari under Rule 45 of the Revised Rules on Civil Procedure, petitioner General Santos Coca-
independent contractor, whether CCBPI’s contracting-out of jobs to JLBP amounted to unfair labor practice, and whether such
Cola Plant Free Workers Union-Tupas (Union) is seeking the reversal of the April 18, 2006 Decision1 and May 30, 2007
action was a valid exercise of management prerogative, call for a re-examination of evidence, which is not within the ambit of this
Resolution2 of the Court of Appeals in CA-G.R. SP No. 80916. The CA affirmed the January 31, 2003 and August 29, 2003
Court’s jurisdiction.
Resolutions3 of the National Labor Relations Commission (NLRC) in favor of respondent Coca-Cola Bottlers Phil., Inc. (CCBPI).

Moreover, factual findings of the NLRC, an administrative agency deemed to have acquired expertise in matters within its
Sometime in the late 1990s, CCBPI experienced a significant decline in profitability due to the Asian economic crisis, decrease in
jurisdiction, are generally accorded not only respect but finality especially when such factual findings are affirmed by the CA.14
sales, and tougher competition. To curb the negative effects on the company, it implemented three (3) waves of an Early Retirement
Program.4 Meanwhile, there was an inter-office memorandum sent to all of CCBPI’s Plant Human Resources Managers/Personnel
Officers, including those of the CCBPI General Santos Plant (CCBPI Gen San) mandating them to put on hold "all requests for Furthermore, we find no reversible error in the assailed Decision.1avvphi1
hiring to fill in vacancies in both regular and temporary positions in [the] Head Office and in the Plants." Because several
employees availed of the early retirement program, vacancies were created in some departments, including the production
It is true that the NLRC erroneously concluded that the contracting- out of jobs in CCBPI Gen San was due to the GTM system,
department of CCBPI Gen San, where members of petitioner Union worked. This prompted petitioner to negotiate with the Labor
which actually affected CCBPI’s sales and marketing departments, and had nothing to do with petitioner’s complaint. However,
Management Committee for filling up the vacancies with permanent employees. No resolution was reached on the matter. 5
this does not diminish the NLRC’s finding that JLBP was a legitimate, independent contractor and that CCBPI Gen San engaged
the services of JLBP to meet business exigencies created by the freeze-hiring directive of the CCBPI Head Office.
Faced with the "freeze hiring" directive, CCBPI Gen San engaged the services of JLBP Services Corporation (JLBP), a company
in the business of providing labor and manpower services, including janitorial services, messengers, and office workers to various
On the other hand, the CA squarely addressed the issue of job contracting in its assailed Decision and Resolution. The CA itself
private and government offices.6
examined the facts and evidence of the parties15 and found that, based on the evidence, CCBPI did not engage in labor-only
contracting and, therefore, was not guilty of unfair labor practice.
On January 21, 2002, petitioner filed with the National Conciliation and Mediation Board (NCMB), Regional Branch 12, a Notice
of Strike on the ground of alleged unfair labor practice committed by CCBPI Gen San for contracting-out services regularly
The NLRC found – and the same was sustained by the CA – that the company’s action to contract-out the services and functions
performed by union members ("union busting"). After conciliation and mediation proceedings before the NCMB, the parties failed
performed by Union members did not constitute unfair labor practice as this was not directed at the members’ right to self-
to come to an amicable settlement. On July 3, 2002, CCBPI filed a Petition for Assumption of Jurisdiction with the Office of the
organization.
Secretary of Labor and Employment. On July 26, 2002, the Secretary of Labor issued an Order enjoining the threatened strike and
certifying the dispute to the NLRC for compulsory arbitration.71avvphi1
Article 248 of the Labor Code provides:
8
In a Resolution dated January 31, 2003, the NLRC ruled that CCBPI was not guilty of unfair labor practice for contracting out
jobs to JLBP. The NLRC anchored its ruling on the validity of the "Going-to-the-Market" (GTM) system implemented by the ART. 248. UNFAIR LABOR PRACTICE OF EMPLOYERS. – It shall be unlawful for an employer to commit any of the
company, which called for restructuring its selling and distribution system, leading to the closure of certain sales offices and the following unfair labor practices:
elimination of conventional sales routes. The NLRC held that petitioner failed to prove by substantial evidence that the system
was meant to curtail the right to self-organization of petitioner’s members. Petitioner filed a motion for reconsideration, which the
NLRC denied in a Resolution9 dated August 29, 2003. Hence, petitioner filed a Petition for Certiorari before the CA. xxx

The CA issued the assailed Decision10 on April 18, 2006 upholding the NLRC’s finding that CCBPI was not guilty of unfair labor
practice. The CA based its decision on the validity of CCBPI’s contracting out of jobs in its production department. It held that
the contract between CCBPI and JLBP did not amount to labor-only contracting. It found that JLBP was an independent contractor
and that the decision to contract out jobs was a valid exercise of management prerogative to meet exigent circumstances. On the
other hand, petitioner failed to adduce evidence to prove that contracting out of jobs by the company resulted in the dismissal of
petitioner’s members, prevented them from exercising their right to self-organization, led to the Union’s demise or that their group
was singled out by the company. Consequently, the CA declared that CCBPI was not guilty of unfair labor practice.
(c) To contract out services or functions being performed by union members when such will interfere with, restrain or coerce
employees in the exercise of their right to self-organization;
xxx
Unfair labor practice refers to "acts that violate the workers’ right to organize." The prohibited acts are related to the workers’ right
to self-organization and to the observance of a CBA. Without that element, the acts, even if unfair, are not unfair labor practices. 16

Its motion for reconsideration having been denied,11 petitioner now comes to this Court seeking the reversal of the CA Decision.

1
Both the NLRC and the CA found that petitioner was unable to prove its charge of unfair labor practice. It was the Union that had
the burden of adducing substantial evidence to support its allegations of unfair labor practice,17 which burden it failed to discharge.

WHEREFORE, the foregoing premises considered, the Petition is DENIED. The assailed Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 80916 are AFFIRMED.

SO ORDERED.

2
G.R. No. L-43495-99 January 20, 1990 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)
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 —and—
ENGALAN, SALVADOR NERVA, BERNARDO ENGALAN, BONIFACIO CAGATIN, BENEDICTO VALDEZ,
EUSEBIO SUPILANAS, ALFREDO HAMAYAN, ASUERO BONITO, GAVINO DEL CAMPO, ZACARIAS DAMING,
The Tropical Hut Employees Union — NATU, a legitimate labor organization duly organized and existing in
PRUDENCIO LADION, FULGENCIO BERSALUNA, ALBERTO PERALES, ROMEO MAGRAMO, GODOFREDO
accordance with the laws of the Republic of the Philippines, and affiliated with the National Association of Trade
CAMINOS, GILDARDO DUMAS, JORGE SALDIVAR, GENARO MADRIO, SEGUNDINO KUIZON, LUIS
Unions, with offices at San Luis Terraces, Ermita, Manila, and represented in this Act by its undersigned officers
SANDOVAL, NESTOR JAPAY, ROGELIO CUIZON, RENATO ANTIPADO, GREGORIO CUEVO, MARTIN
(hereinafter referred to as the UNION)
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, Witnesseth:
SIMPLICIO GALLEROS, PERFECTO CUIZON, PROCESO LAUROS, ANICETO BAYLON, EDISON ANDRES,
REYNALDO BAGOHIN, IRENEO SUPANGAN, RODRIGO CAGATIN, TEODORO ORENCIO, ARMANDO
xxx xxx xxx
LUAYON, JAIME NERVA, NARCISO CUIZON, ALFREDO DEL ROSARIO, EDUARDO LORENZO, PEDRO
ARANGO, VICENTE SUPANGAN, JACINTO BANAL AND BONIFACIO PUERTO, petitioners,
vs. Article I
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. Coverage and Effectivity
OPLE, respondents.
Sec. 1. The COMPANY recognizes the UNION as the sole and exclusive collective bargaining agent for all its workers
Pacifico C. Rosal for petitioners. and employees in all matters concerning wages, hours of work, and other terms and conditions of employment.
Marcelino Lontok, Jr. for private respondents.
xxx xxx xxx
Dizon, Vitug & Fajardo Law Office for Tropical Hut Food Market, Inc. and Que.
Article III

Union Membership and Union Check-off

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:
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.

3
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 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.
4
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
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:
5
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 (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 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:
6
. . . . 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 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.

SO ORDERED.

7
G.R. No. L-33987 September 4, 1975 On October 1, 1959, a Collective Bargaining Agreement2 was entered into by and between the Company and the Union represented
by PAFLU. Said Agreement contained these clear and unequivocal provisions:
LIBERTY COTTON MILLS WORKERS UNION, RAFAEL NEPOMUCENO, MARIANO CASTILLO, NELLY
ACEVEDO, RIZALINO CASTILLO and RAFAEL COMBALICER, petitioners, This Agreement, made and entered into this 1st day of October, 1959, in the City of Manila, by and between
vs.
LIBERTY COTTON MILLS, INC., PHILIPPINE ASSOCIATION OF FREE LABOR UNION (PAFLU) and the COURT
The LIBERTY COTTON MILLS INC., a corporation duly organized and existing
OF INDUSTRIAL RELATIONS, respondents.
under the laws of the Philippines, with principal office at 549 San Francisco Street,
Karuhatan, Polo, Bulacan, hereinafter referred to as the COMPANY, represented in
Carlos E. Santiago for petitioners. this Act by its President, Mr. RAFAEL GOSINGCO:

Paredes, Poblador, Nazareno, Azada, Tomacuz & Paredes for respondent Liberty Cotton Mills, Inc. Ernesto D. Llaguno for AND
respondent Union.
THE PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS, a legitimate labor
Jose K. Manguiat, Jr. for respondent Court. organization existing and operating under the laws of the Philippines, with postal
address at 1233 Tecson, Tindalo, Tondo, Manila, hereinafter referred to as the
UNION, represented in this Act by its National Treasurer and duly authorized
representative, Mr. CATALINO G. LUZANO, herein acting for and in behalf of its
affiliate the LIBERTY COTTON MILLS WORKERS UNION-PAFLU, and the
ESGUERRA, J.: employees of the Company in the appropriate bargaining unit hereinafter defined:

Petition for Certiorari to review the decision dated March 30, 1971 of the Court of Industrial Relations in Case No. 4216,
dismissing petitioners' complaint for unfair labor practice.
The factual background of this case is as follows:
The Liberty Cotton Mills Workers Union, hereinafter referred to as the Union, adopted its Constitution and By-laws on January 1,
1959.1 Among other things, the said Constitution provided:
ARTICLE I — NAME AND DOMICILE.
Section 1. The name of this organization shall be Liberty Cotton Mills Workers Union-PAFLU.
Section 2. This Union shall have its office at l233 Tecson, Tindalo, Tondo, Manila.
xxx xxx xxx
ARTICLE X — UNION AFFILIATION
Section 1. The Liberty Cotton Mills Workers Union-Paflu shall be affiliated with the Philippine Association
of Free Labor Unions, otherwise known as PAFLU, and shall remain an affiliate as long as ten or more of
its members evidence their desire to continue the said local union's affiliation, in accordance with the Paflu
Constitution, Article XI-Paragraph 11:15 thereof;
WITNESSETH:
I. UNION RECOGNITION
The COMPANY recognizes the UNION as the sole bargaining agent for all of its
employees, other than supervisors ... consonant with the certification of the said
UNION by the Court of Industrial Relations in Case No. 627-MC, entitled" In re
Petition for Certification Election, Liberty Cotton Mills, Inc., petitioner."
III. UNION SECURITY
All employees who, at the time of the signing of this Agreement are members of the
UNION, or who, at any time during the effectivity of this Agreement, may join the
UNION, shall as a condition for continued employment, remain members of the
UNION while this agreement remains in force; any employee, who, at any time
during the life of this agreement shall resign from the UNION or be expelled,
therefrom in accordance with its Constitution and By-Laws for non-payment of union
dues or other duly approved union assessments or for disloyalty to the UNION shall
be dismissed from employment by the COMPANY upon request in writing by the
UNION which shall hold the COMPANY free from any liability arising from or
caused by such dismissal.
XI. TERM

This Agreement shall be effective from October 1, 1959 to September 30, 1961,
ARTICLE XIII — CHARGES, TRIALS, AND IMPEACHMENT OF OFFICERS during which time it shall be binding upon the parties hereto and all the employees
AND MEMBERS: APPEALS. of COMPANY comprised within the appropriate bargaining unit defined above, and
may not be modified by court action, by concerted activities or by any other means.
Section 1. Any member or officer of the Liberty Cotton Mills Workers Union-Paflu may be charged, tried ... Should, either party fail to give written notice to the other of its desire to amend or
or impeached if an officer, in accordance with this and the PAFLU CONSTITUTION. discontinue this Agreement at least thirty (30) days from the expiry date set forth
above, this Agreement shall be continued in force for one (1) year, and thereafter for

8
 yearly terms unless written notice is given at least thirty (30) days from the expiration
of the contract.
The above Collective Bargaining Agreement was amended on February 28, 1964, thus:3
Article III. UNION SECURITY
Additional Clause
The Company agrees to encourage casual workers and non-union members to join
the Union which is the sole and exclusive agent for all the employees covered by this
Agreement.
Article XI. DURATION
The Duration of this Agreement shall be for two (2) years, that is from November 2,
1963 up to November, 1965.
The Agreements aforementioned bore the signatures of representatives of both the Company and the PAFLU, and the incumbent
President of the local union.
On March 13, 1964, while the Collective Bargaining Agreement was in full force, Marciano Castillo and Rafael Nepomuceno,
President and Vice-President, respectively, of the local union, wrote PAFLU, its mother federation, complaining about the legal
counsel assigned by the PAFLU to assist them in a ULP case (Case No. 4001) they filed against the Company. In said letter, the
local union expressed its dissatisfaction and loss of confidence in the PAFLU lawyers, claiming that PAFLU never lifted a finger
regarding this particular complaint.
On May 17, 1964, thirty two (32) out of the 36 members of the local union disaffiliated themselves from respondent PAFLU
pursuant to their local union's Constitution and By-Laws, specifically Article X thereof, supra (p. 12 Record). A copy of the signed
resolution of disaffiliation was furnished the Company as well as the Bureau of Labor Relations. The following day, the local
union wrote the Company and required the turn-over of the checked-off dues directly to its Treasurer.
On May 27, 1964, PAFLU, thru its National Secretary wrote the Company this letter:
This is to inform your good office that sometime last May 25, 1964, our federation was in receipt of a letter
signed by 32 persons and informing us of their desire to disaffiliate the local union from the mother
federation — PAFLU. The members and officers who made the letter have no right to do the same under
our existing contract and under the PAFLUs Constitution and By-Laws.
We wish to make it clear with the management that the contractural union in our contract which was signed
a few months ago is the Philippine Association of Free Labor Union (PAFLU). The actuation made by the
supposed union members is inconsistent with the present contract we have and under the provisions of
"Maintenance of Union Membership" they can an be dismissed. Under the PAFLUs Constitution that is null
and void. And in view of the disloyalty shown by those members, the mother federation will take over the
administration of the Union in dealing with the management especially.
We inform your goodself that the mother federation is not honoring the said letter and we request you do
the same under the circumstances.
Hence, all the communications pertaining to union business and other relative matters be coursed to the
mother federation for prompt action.
9
And on May 29,1964, PAFLU wrote the Company again, this time quoting en toto Article III of the Collective Bargaining
Agreement on "Union Security" and requesting the termination of the employment of Rafael Nepomuceno, Marciano Castillo,
Nelly Acevedo, Enrique Managan, Rizalino Castillo and Rafael Combalicer, all petitioners herein. PAFLU at the same time
expelled the aforementioned workers from their' union membership in the mother federation for allegedly "instigating union
disaffiliation.".
On May 30,1964, the Company terminated the employment of the members expelled by the PAFLU (Exhs. "D", "D-1" to "D-3"
pp. 14-17 Record). On the last day of May, 1964, counsel for the ousted workers wrote the Company requesting their reinstatement.
This was denied by the Company; hence the complaint for unfair labor practice filed with the Court of Industrial Relations.
After due hearing, the Court rendered its decision dismissing the complaint, but with a strong' recommendation for the
reinstatement of complainant workers in respondent Company. The workers (petitioners herein) being unsatisfied with the
decision, appealed to this Court and raised the following questions:
1. Under the Collective Bargaining Agreement, who between the PAFLU and the local union is the sole
bargaining agent of the workers of the Company?
2. Was the disaffiliation of the local union from the PAFLU valid and justified under the Constitution and
By-laws of the Union?
3. Was the disaffiliation of the Union from the PAFLU an act of disloyalty of the petitioners (workers)
which could be a valid ground for their expulsion from their own union and their dismissal from the
Company?
4. Does the PAFLU as the mother federation of the union possess the power to expel the officers and
members of the union under the Constitution and By-Laws? And assuming it has such powers, were the
petitioner workers validly expelled from the Union in accordance with the Constitution and By-Laws?
5. May the workers be summarily dismissed by the Company under the Collective Bargaining Agreement
even without valid proof of their valid expulsion from their own union?
6. Did not the dismissal of only the five (5) petitioner workers constitute discrimination, considering that
the disaffiliation was signed by more than the majority of the union members?
All these questions boil down to the single issue of whether or not the dismissal of the complaining employees, petitioners herein,
was justified or not. The resolution of this question hinges on a precise and careful analysis of the Collective Bargaining
Agreements. (Exhs. "H' and "I") In these contracts it appears that PAFLU has been recognized as the sole bargaining agent for all
the employees of the Company other than its supervisors and security guards. Moreover it likewise appears that "PAFLU,
represented in this Act by its National Treasurer, and duly authorized representative, ... (was) acting for and in behalf of its affiliate,
the Liberty Cotton Mills Workers Union and the employees of the Company, etc.' In other words, the PAFLU, acting for and in
behalf of its affiliate, had the status of an agent while the local union remained the basic unit of the association free to serve the
common interest of all its members including the freedom to disaffiliate when the circumstances warrant. This is clearly provided
in its Constitution and By-Laws, specifically Article X on Union Affiliation, supra. At this point, relevant is the ruling in an
American case:4
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 (as
PAFLU) was in furtherance of the same end. These associations are consensual 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 also to renounce the affiliation for mutual welfare upon the terms laid down in the complainants-workers' earnings elsewhere during the period of their illegal dismissal, the Court fixes the amount of backwages to
agreement which brought it into existence. (Emphasis supplied) be paid under this decision to the complainants-workers at three (3) years backwages without deduction or qualification.

This brings Us to the question of disaffiliation which was the root cause of the dismissal. It is claimed by PAFLU that the local
union could not have validly disaffiliated from it as the Union Security Clause so provided. We have meticulously read the
provision of the supposed union security clause and We cannot agree with both the stand of PAFLU and the respondent court. For
while it is correct to say that a union security clause did exist, this clause was limited by the provision in the Unions' Constitution
and By-Laws, which states:
WHEREFORE, the decision appealed from is reversed and set aside and the company is hereby ordered to immediately reinstate
complainant workers, within thirty (30) days from notice of this decision and failure to so reinstate the workers without valid and
just cause shall make respondent company liable to the workers for the payment of their wages from and after the expiration of
such thirty-day period. The mother federation respondent PAFLU is sentenced to pay complainants-workers the equivalent of three
(3) years backwages without deduction or qualification.

That the Liberty Cotton Mills Workers Union-PAFLU shall be affiliated with the PAFLU, and shall remain In view of the length of time that this dispute has been pending, this decision shall be immediately executory upon promulgation
an affiliate as long as ten (10) or more of its members evidence their desire to continue the said local unions and notice to the parties. Without pronouncement as to costs.
affiliation.

Record shows that only four (4) out of its members remained for 32 out of the 36 members of the Union signed the resolution of
disaffiliation on May 17, 1964, triggered by the alleged negligence of PAFLU in attending to the needs of its local union,
particularly its failure to assign a conscientious lawyer to the local to attend to the ULP case they filed against the Company. The
disaffiliation was, therefore, valid under the local's Constitution and By-Laws which, taken together with the Collective Bargaining
Agreement, is controlling. The Court of Industrial Relations likewise held in its decision that the act of disaffiliation did not have
any effect as the workers retracted from such act. As stated by the respondent court —

... it is believed that the effect of their retraction obliterates their participation in the resolution. Hence, under
Article X of the said Constitution and By-Laws, complainant union remained affiliated with respondent
union at the time termination of the services of complainant workers was requested and when they were
dismissed by the Company on May 30, 1964.

Although the fact of retraction is true, We find that the respondent court failed to notice the fact that not all signatories to the
resolution of disaffiliation dated May 17, 1964, took part in the retraction. Only a number of employees, 16 to be exact, retracted.
Also, and this is a significant factor, the retraction is dated June 3, 1964, or four days after the petitioners herein had been dismissed.
There is no use in saying that the retraction obliterated the act of disaffiliation when they were already out of the service when it
was done. The disaffiliation, coming as it did from the greater majority of its members, is more than enough to show the collective
desire of the members of the Liberty Cotton Mills Workers Union to sever their relations from the mother federation. The right of
disaffiliation is inherent in the compact and such act should not have been branded as an act of disloyalty, especially considering
the cause which impelled the union to take such a step.

Lastly, we will take up the process by which the workers were dismissed. We find that it was hastily and summarily done. The
PAFLU received the resolution to disaffiliate on or about May 25, 1964, after which it wrote the Company about its stand, first on
the 27th of May followed by its letter of the 29th requesting for the termination of petitioners herein for 'disloyalty in having
instigated disaffiliation'. The Company the acting on the request of the mother federation sent notices of termination to the officers
of the local union immediately on the day following, or on May 30, 1964, heavily relying on the Collective Bargaining Agreement,
viz:

... for disloyalty to the union shall be dismissed from employment by the Company upon request in writing
by the Union, which shall hold the COMPANY free from any liability arising from or caused by such
dismissal.

While the above quoted provision may have been the basis for the Company's actuation, as in fact it was alleged by the Company
in its Brief, We are of the opinion that such stipulation does not bind the courts much less released the Company from liability
should a finding for unfair labor practice be positive. In the case at bar, however, considering that the dispute revolved around the
mother federation and its local, with the company dismissing the workers at the instance of the mother federation, We believe that
the Company's liability should be limited to the immediate reinstatement of the workers.

Considering, however, that their dismissal was effected without previous hearing, and at the instance of PAFLU, this mother
federation should be, as it is hereby, held liable to the petitioners for the payment of their back wages. Following the precedent of
Mercury Drug Co. vs. CIR,5 of fixing an amount of net backwages and doing away with the protracted process of determining the

10
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 certiorari petitions 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
11
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 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 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
12
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
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 Court therefore presumes that those who voted for their expulsion were bona 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.
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.
13
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 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.14 Notwithstanding 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.

14
G.R. No. 196276 June 4, 2014
TAKATA (PHILIPPINES) CORPORATION, Petitioner,
vs.
BUREAU OF LABOR RELATIONS and SAMAHANG LAKAS MANGGAGAWA NG TAKATA (SALAMAT),
Respondents.
DECISION
PERALTA, J.:
Before us is a petition for review on certiorari filed by petitioner TAKATA Philippines Corporation assailing the Decision1 dated
December 22, 2010 and the Resolution2 dated March 28, 2011 of the Court of Appeals in CA-G.R. SP No. 112406.
On July 7, 2009, petitioner filed with the Department of Labor and Employment (DOLE) Regional Office a Petition3 for
Cancellation of the Certificate of Union Registration of Respondent Samahang Lakas Manggagawa ng Takata (SALAMA1) on
the ground that the latter is guilty of misrepresentation, false statement and fraud with respect to the number of those who
participated in the organizational meeting, the adoption and ratification of its Constitution and By-Laws, and in the election of its
officers. It contended that in the May 1, 2009 organizational meeting of respondent, only 68 attendees signed the attendance sheet,
and which number comprised only 17% of the total number of the 396 regular rank- and-file employees which respondent sought
to represent, and hence, respondent failed to comply with the 20% minimum membership requirement. Petitioner insisted that the
document "Pangalan ng mga Kasapi ng Unyon" bore no signatures of the alleged 119 union members; and that employees were
not given sufficient information on the documents they signed; that the document "Sama-Samang Pahayag ng Pagsapi" was not
submitted at the time of the filing of respondent's application for union registration; that the 119 union members were actually only
117; and, that the total number of petitioner's employees as of May 1, 2009 was 470, and not 396 as respondent claimed.4
Respondent denied the charge and claimed that the 119 union members were more than the 20% requirement for union registration.
The document "Sama-Samang Pahayag ng Pagsapi sa Unyon" which it presented in its petition for certification election5 supported
their claim of 119 members. Respondent also contended that petitioner was estopped from assailing its legal personality as it
agreed to a certification election and actively participated in the pre-election conference of the certification election proceedings.6
Respondent argued that the union members were informed of the contents of the documents they signed and that the 68 attendees
to the organizational meeting constituted more than 50% of the total union membership, hence, a quo rumexisted for the conduct
of the said meeting.7
On August 27, 2009, DOLE Regional Director, Atty. Ricardo S. Martinez, Sr., issued a Decision8 granting the petition for
cancellation of respondent's certificate of registration, the dispositive portion of which reads:
WHEREFORE, from the foregoing considerations, the petition is hereby GRANTED. Accordingly, the respondent Union
Certificate of Registration No. RO400A-2009-05-01-UR-LAG, dated May 19, 2009 is hereby REVOCKED (sic) and /or
CANCELLED pursuant to paragraph (a) & (b), Section 3, Rule XIV of Department Order No. 40-03 and the Samahang Lakas ng
Manggagawa ng TAKATA (SALAMAT) is hereby delisted from the roll of legitimate labor organization of this office.9
In revoking respondent's certificate of registration, the Regional Director found that the 68 employees who attended the
organizational meeting was obviously less than 20% of the total number of 396 regular rank-and-file employees which respondent
sought to represent, hence, short of the union registration requirement; that the attendance sheet which contained the signatures
and names of the union members totalling to 68 contradicted the list of names stated in the document denominated as "Pangalan
ng mga Kasaping Unyon." The document "Sama-Samang Pahayag ng Pagsapi" was not attached to the application for registration
as it was only submitted in the petition for certification election filed by respondent at a later date. The Regional Director also
found that the proceedings in the cancellation of registration and certification elections are two different and entirely separate and
independent proceedings which were not dependent on each other.
15
Dissatisfied, respondent, through Bukluran ng Manggagawang Pilipino (BMP) Paralegal Officer, Domingo P. Mole, filed a Notice
and Memorandum of Appeal10 with the Bureau of Labor Relations (BLR). However, on September 28,2009, respondent, through
its counsels, Attys.
Napoleon C. Banzuela, Jr. and Jehn Louie W. Velandrez, filed an Appeal Memorandum with Formal Entry of Appearance11 to
the Office of the DOLE Secretary, which the latter eventually referred to the BLR. Petitioner filed an Opposition to the Appeals12
praying for their dismissal on the ground of forum shopping as respondent filed two separate appeals in two separate venues; and
for failing to avail of the correct remedy within the period; and that the certificate of registration was tainted with fraud,
misrepresentation and falsification.
In its Answer,13 respondent claimed that there was no forum shopping as BMP's Paralegal Officer was no longer authorized to
file an appeal on behalf of respondent as the latter's link with BMP was already terminated and only the Union President was
authorized to file the appeal; and that it complied with Department Order No. 40-03.
On December 9, 2009, after considering respondent's Appeal Memorandum with Formal Entry of Appearance and petitioner's
Answer, the BLR rendered its Decision14 reversing the Order of the Regional Director, the decretal portion of which reads:
WHEREFORE, the appeal is hereby GRANTED. The Decision of Regional Director Ricardo S. Martinez, Sr., dated 27 August
2009, is hereby REVERSEDand SET ASIDE.
Accordingly, Samahang Lakas Manggagawa ng TAKATA (SALAMAT) shall remain in the roster of labor organizations.15
In reversing, the BLR found that petitioner failed to prove that respondent deliberately and maliciously misrepresented the number
of rank-and-file employees. It pointed out petitioner's basis for the alleged noncompliance with the minimum membership
requirement for registration was the attendance of 68 members to the May 1, 2009 organizational meeting supposedly comprising
only 17% of the total 396 regular rank-and-file employees. However, the BLR found that the list of employees who participated
in the organizational meeting was a separate and distinct requirement from the list of the names of members comprising at least
20% of the employees in the bargaining unit; and that there was no requirement for signatures opposite the names of the union
members; and there was no evidence showing that the employees assailed their inclusion in the list of union members.
Petitioner filed a motion for reconsideration, which was denied by the BLR in a Resolution16 dated January 8, 2010.
Undaunted, petitioner went to the CA via a petition for certiorari under Rule 65.
After the submission of the parties' respective pleadings, the case was submitted for decision.
On December 22, 2010, the CA rendered its assailed decision which denied the petition and affirmed the decision of the BLR.
Petitioner's motion for reconsideration was denied in a Resolution dated March 29, 2011.
Hence this petition for review filed by petitioner raising the following issues, to wit:
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND SERIOUS ERROR IN AFFIRMING THE
DECISION OF PUBLIC RESPONDENT BLR AND NOT FINDING ANY VIOLATION BY SAMAHANG LAKAS
MANGGAGAWA SA TAKATA (SALAMAT) OF THE RULE ON FORUM SHOPPING IN THE FILING OF TWO VERIFIED
APPEALS FOR AND ITS BEHALF. BOTH OF THE APPEALS SHOULD HAVE BEEN DISMISSED OUTRIGHT BY
PUBLIC RESPONDENT BLR, ON GROUND OF FORUM SHOPPING.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT THE APPLICATION FOR
REGISTRATION OF SAMAHANG LAKAS MANGGAGAWA SA TAKATA (SALAMAT) WAS COMPLIANT WITH THE
LAW. CONSIDERING THE CIRCUMSTANCES OBTAINING IN THE REGISTRATION OF SALAMAT, IT IS CLEAR
THAT THE SAME IS TAINTED WITH FRAUD, MISREPRESENTATION AND FALSIFICATION. SALAMAT DID NOT
POSSESS THE REQUIREDNUMBER OF MEMBERS AT THE TIME OF FILING OF ITS APPLICATION FOR We find no merit in the arguments.
REGISTRATION, HENCE, IT SHOULD BE HELD GUILTY OF MISREPRESENTATION, AND FALSE STATEMENTS
AND FRAUD IN CONNECTION THEREWITH.17
Art. 234 of the Labor Code provides:

Anent the first issue, petitioner contends that respondent had filed two separate appeals with two different representations at two
ART. 234. Requirements of Registration. - A federation, national union or industry or trade union center or an independent union
different venues, in violation of the rule on multiplicity of suits and forum shopping, and instead of dismissing both appeals, the
shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations
appeal erroneously filed before the Labor Secretary was the one held validly filed, entertained and even granted; that it is not
upon issuance of the certificate of registration based on the following requirements:
within the discretion of BLR to choose which between the two appeals should be entertained, as it is the fact of the filing of the
two appeals that is being prohibited and not who among the representatives therein possessed the authority.
(a) Fifty pesos (₱50.00)registration fee;
We are not persuaded.
(b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the
organizational meetings and the list of the workers who participated in such meetings;
We find no error committed by the CA in finding that respondent committed no forum shopping. As the CA correctly concluded,
to wit:
(c) In case the applicant is an independent union, the names of all its members comprising at least twenty percent (20%)
of all the employees in the bargaining unit where it seeks to operate;
It is undisputed that BMP Paralegal Officer Domingo P. Mole was no longer authorized to file an appeal on behalf of union
SALAMAT and that BMP was duly informed that its services was already terminated. SALAMAT even submitted before the BLR
its "Resolusyon Blg. 01-2009" terminating the services of BMP and revoking the representation of Mr. Domingo Mole in any of (d) If the applicant union has been in existence for one or more years, copies of its annual financial reports; and
the pending cases being handled by him on behalf of the union. So, considering that BMP Paralegal Officer Domingo P. Mole was
no longer authorized to file an appeal when it filed the Notice and Memorandum of Appeal to DOLE Regional Office No. IV-A,
the same can no longer be treated as an appeal filed by union SALAMAT. Hence, there is no forum shopping to speak of in this (e) Four copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and the
case as only the Appeal Memorandum with Formal Entry of Appearance filed by Atty. Napoleon C. Banzuela, Jr. and Atty. Jehn list of the members who participated in it."
Louie W. Velandrez is sanctioned by SALAMAT.18
And after the issuance of the certificate of registration, the labor organization's registration could be assailed directly through
Since Mole's appeal filed with the BLR was not specifically authorized by respondent, such appeal is considered to have not been cancellation of registration proceedings in accordance with Articles 238 and 239 of the Labor Code. And the cancellation of union
certificate of registration and the grounds thereof are as follows:
filed at all. It has been held that "if a complaint is filed for and in behalf of the plaintiff who is not authorized to do so, the complaint
is not deemed filed.
ART. 238. Cancellation of Registration. - The certificate of registration of any legitimate labor organization, whether national or
local, may be cancelled by the Bureau, after due hearing, only on the grounds specified in Article 239 hereof.
An unauthorized complaint does not produce any legal effect."19

Respondent through its authorized representative filed its Appeal Memorandum with Formal Entry of Appearance before the Labor ART. 239. Grounds for Cancellation of Union Registration. - The following may constitute grounds for cancellation of union
registration:
Secretary, and not with the BLR. As the appeal emanated from the petition for cancellation of certificate of registration filed with
the Regional Office, the decision canceling the registration is appealable to the BLR, and not with the Labor Secretary. However,
since the Labor Secretary motu propio referred the appeal with the BLR, the latter can now act on it. Considering that Mole's (a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and
appeal with the BLR was not deemed filed, respondent’s appeal, through Banzuela and Associates, which the Labor Secretary by-laws or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification;
referred to the BLR was the only existing appeal with the BLR for resolution. There is, therefore, no merit to petitioner's claim
that BLR chose the appeal of Banzuela and Associates over Mole's appeal.
(b) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of
officers, and the list of voters;
The case of Abbott Laboratories Philippines, Inc. v. Abbott Laboratories Employees Union20 cited by petitioner is not at all
applicable in this case as the issue therein is the authority of the Labor Secretary to review the decision of the Bureau of Labor
Relations rendered in the exercise of its appellate jurisdiction over decision of the Regional Director in cases involving (c) Voluntary dissolution by the members.
cancellations of certificate of registration of labor unions. We found no grave abuse of discretion committed by the Secretary of
Labor in not acting on therein petitioner's appeal. The decision of the Bureau of Labor Relations on cases brought before it on Petitioner's charge that respondent committed misrepresentation and fraud in securing its certificate of registration is a serious
appeal from the Regional Director are final and executory. Hence, the remedy of the aggrieved party is to seasonably avail of the charge and must be carefully evaluated. Allegations thereof should be compounded with supporting circumstances and evidence.21
special civil action of certiorari under Rule 65 and the Rules of Court. In this case, after the Labor Secretary motu propio referred We find no evidence on record to support petitioner's accusation.
respondent's appeal filed with it to the BLR which rendered its decision reversing the Regional Director, petitioner went directly
to the CA via a petition for certiorari under Rule 65.
Petitioner's allegation of misrepresentation and fraud is based on its claim that during the organizational meeting on May 1, 2009,
only 68 employees attended, while respondent claimed that it has 119 members as shown in the document denominated as
As to the second issue, petitioner seeks the cancellation of respondent's registration on grounds offraud and misrepresentation "Pangalan ng mga Kasapi ng Unyon;" hence, respondent misrepresented on the 20% requirement of the law as to its membership.
bearing on the minimum requirement of the law as to its membership, considering the big disparity in numbers, between the
organizational meeting and the list of members, and so misleading the BLR that it obtained the minimum required number of
employees for purposes of organization and registration. We do not agree.

16
It does not appear in Article 234 (b) of the Labor Code that the attendees in the organizational meeting must comprise 20% of the SO ORDERED.
employees in the bargaining unit. In fact, even the Implementing Rules and Regulations of the Labor Code does not so provide. It
is only under Article 234 (c) that requires the names of all its members comprising at least twenty percent (20%) of all the
employees in the bargaining unit where it seeks to operate. Clearly, the 20% minimum requirement pertains to the employees’
membership in the union and not to the list of workers who participated in the organizational meeting. Indeed, Article 234 (b) and
(c) provide for separate requirements, which must be submitted for the union's registration, and which respondent did submit.
Here, the total number of employees in the bargaining unit was 396, and 20% of which was about 79. Respondent submitted a
document entitled "Pangalan ng Mga Kasapi ng Unyon" showing the names of 119 employees as union members, thus respondent
sufficiently complied even beyond the 20% minimum membership requirement. Respondent also submitted the attendance sheet
of the organizational meeting which contained the names and signatures of the 68 union members who attended the meeting.
Considering that there are 119 union members which are more than 20% of all the employees of the bargaining unit, and since the
law does not provide for the required number of members to attend the organizational meeting, the 68 attendees which comprised
at least the majority of the 119 union members would already constitute a quorum for the meeting to proceed and to validly ratify
the Constitution and By-laws of the union. There is, therefore, no basis for petitioner to contend that grounds exist for the
cancellation of respondent's union registration. For fraud and misrepresentation to be grounds for cancellation of union registration
under Article 239 of the Labor Code, the nature of the fraud and misrepresentation must be grave and compelling enough to vitiate
the consent of a majority of union members.22

Petitioner's claim that the alleged union members signed documents without adequate information is not persuasive. The one who
alleges a fact has the burden of proving it and a mere allegation is not evidence.23 In fact, we note that not one of those listed in
the document denominated as "Pangalan ng Mga Kasaping Unyon" had come forward to deny their membership with respondent.
Notably, it had not been rebutted that the same union members had signed the document entitled "Sama-Samang Pahayag ng
Pagsapi," thus, strengtheningtheir desire to be members of the respondent union.

Petitioner claims that in the list of members, there was an employee whose name appeared twice and another employee who was
merely a project employee. Such could not be considered a misrepresentation in the absence of showing that respondent
deliberately did so for the purpose of increasing their union membership. In fact, even if those two names were not included in the
list of union members, there would still be 117 members which was still more than 20% of the 396 rank-and-file employees.

As to petitioner's argument that the total number of its employees as of May 1, 2009 was 470, and not396 as respondent claimed,
still the 117 union members comprised more than the 20% membership requirement for respondent's registration.

In Mariwasa Siam Ceramics v. Secretary of the Department of Labor and Employment,24 we said:

For the purpose of de-certifying a union such as respondent, it must be shown that there was misrepresentation, false statement or
fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto, the minutes of
ratification; or, in connection with the election of officers, the minutes of the election of officers, the list of voters, or failure to
submit these documents together with the list of the newly elected-appointed officers and their postal addresses to the BLR.

The bare fact that two signatures appeared twice on the list of those who participated in the organizational meeting would not, to
our mind, provide a valid reason to cancel respondent’s certificate of registration. The cancellation of a union’s registration
doubtless has an impairing dimension on the right of labor to self-organization. For fraud and misrepresentation to be grounds for
cancellation of union registration under the Labor Code, the nature of the fraud and misrepresentation must be grave and
compelling enough to vitiate the consent of a majority of union members.1âwphi1

In this case, we agree with the BLR and the CA that respondent could not have possibly committed misrepresentation, fraud, or
false statements. The alleged failure of respondent to indicate with mathematical precision the total number of employees in the
bargaining unit is of no moment, especially as it was able to comply with the 20% minimum membership requirement. Even if the
total number of rank-and-file employees of petitioner is 528, while respondent declared that it should only be 455, it still cannot
be denied that the latter would have more than complied with the registration requirement.25

WHEREFORE, premises considered, the petition for review is DENIED. The Decision dated December 22, 2010 and the
Resolution dated March 28, 2011 of the Court of Appeals, in CA-G.R. SP No. 112406, are AFFIRMED.

17
G.R. Nos. 76579-82 August 31, 1988 Benedicto Rodriguez, the Chairman of the Commission on Elections of the union, and the incumbent union officers, headed by
the president, Manolito Paran. Acting on the complaints, the Med-Arbiter issued on July 8, 1986 a restraining order against the
enforcement of the new rates of fees.
BENEDICTO RODRIGUEZ, etc., petitioner,
vs.
HON. DIRECTOR, BUREAU OF LABOR RELATIONS, CARLOS GALVADORES and LIVI MARQUEZ, respondents. Other BLR Cases: Nos. LRD-M-7-557-86 and LRD-M-7-55986

G.R. No. 80504 August 31, 1988 It appears that notwithstanding the cases questioning the candidates' fees, the elections for the provinces of Visayas and Mindanao
and certain areas of Luzon were nevertheless held on July 21 and 22, 1986, which are dates different from those specified by the
Legislative Council (i.e., July 14 to 18, 1986). The validity of the elections was very shortly challenged on the ground of lack of
REY C. SUMANGIL, VIRGILIO V. HERNANDEZ, et al., petitioners,
(1) due notice and (2) adequate ground rules. Carlos Galvadores and his fellow candidates filed on July 22, 1986 a petition with
vs.
the BLR, docketed as Case No. LRD-M-7557-86, praying that the Union's COMELEC be directed to promulgate ground rules for
MANOLITO PARAN, ROSALINDA DE GUZMAN, FREE TELEPHONE WORKERS UNION, PHILIPPINE LONG
the conduct of the provincial elections. On the day following, Livi Marquez, a candidate for vice-president, together with other
DISTANCE TELEPHONE CO., and HON. PURA FERRER-CALLEJA, respondents.
candidates in his ticket, filed another petition against the same Union COMELEC and Manolito Paran, the union president —
docketed as Case No. LRD-M-7-559-86 — seeking to restrain the holding of the elections scheduled on July 25, 1986 in the Metro
Conrado Leaño for petitioner in G.R No. 76579-82 and private respondent in G.R. No. 80504. Manila are until (1) ground rules therefor had been formulated and made known to all members of the labor organization, and (2)
the issue of the filing fees had been finally decided. In connection with these complaints, a temporary restraining order was issued
on July 23, 1986 prohibiting the holding of elections on July 25, 1986.
King Adorio Law Offices for petitioners in G.R. No. L-80504.

The restraining order notwithstanding, the Union COMELEC proceeded with the general elections in all the PLDT branches in
Potenciano Flores for private respondent Marquez in G.R. No. 76579-82.
Metro Manila on July 25, 1986. It then reported that as of July 15, 1986 the number of qualified voters was 9,429 of which 6,903
actually voted, the percentage of turn-out being 73%, and that those who obtained the highest number of votes for the various
The Solicitor General for public respondent. elective positions were:

Manolito Paran President 3,030 votes Eduardo de Leon 1st Vice-President 2,185 votes Efren de Lima 2nd Vice-President 2,806
votes Roger Rubio Secretary General 2,462 votes Virgilio Tulay Asst. Sec. General 2,924 votes Rosalinda de Guzman Treasurer
2,659 votes Filmore Dalisay Asst. Treasurer 2,525 votes Damiana Yalung Auditor 2,942 votes Jaime Pineda Asst. Auditor 3,082
NARVASA, J.: votes

The above entitled special civil actions of certiorari were separately instituted but have been consolidated because they involve Livi Marquez and Carlos Galvadores, and their respective groups, forthwith filed separate motions praying that the COMELEC
disputes among employees of the Philippines Long Distance Telephone Company (PLDT), who are members of the same union, be declared guilty of contempt for defying the temporary restraining order, and for the nullification not only of the Metro Manila
the Free Telephone Workers Union (FTWU). The disputes concern the validity of the general elections for union officers in 1986, elections of July 25, 1986 but also the provincial elections of July 21 and 22, 1986.
and the increase of union dues adopted and put into effect by the incumbent officers subsequent to said elections.

G.R. Nos. 76579-82: Controversy Respecting Elections of Officers
Assailed by the petitioners in G.R. No. 76579-82 are (1) the decision dated October 10, 1986 of the Director of Labor Relations
(BLR) annulling the elections of officers of the labor union above mentioned, FTWU, and (2) the resolution dated October 30,
1986, denying their motion for reconsideration of the decision.
The four (4) cases were jointly decided by Med-Arbiter Rasidali Abdullah on August 28,1986. His judgment denied the petitions
to nullify the elections, as well as the motion for contempt, but invalidated the increase in rates of filing fees for certificates of
candidacies. The judgment accorded credence to the Union COMELEC's averment that it had not received the restraining order
on time. It took account, too, of the fact that the turn-out of voters was 73%, much higher than the turn-out of 62% to 63% in prior
elections, which fact, in the Med-Arbiter's view was a clear manifestation of the union members' desire to go ahead with the
elections and express their will therein.

The union's by-laws provide for the election of officers every three (3) years, in the month of July. Pursuant thereto, the union's
Legislative Council set the provincial elections for its officers on July 14 to 18, 1986, and those for Metro Manila on July 25, 1986.
The same Council also quite drastically raised the fees for the filing of certificates of candidates which had therefore ranged from
P75.00 to P100.00. The filing fee for each candidate for president of the labor organization was increased to P3,000; that for each
candidate for vice-president, secretary general, treasurer and auditor, to P2,000.00; and that for assistant secretary, assistant
treasurer and assistant auditor, to P1,000.00 each.
Bureau of Labor Relations Cases: Nos. LRD-M-7-503-86 & LRD-M-7-504-86
This judgment was however overturned by the Officer-in-Charge of Labor Relations, on appeal seasonably taken. The OIC's
decision, dated October 10, 1986 nullified the general elections in the provinces and Metro Manila on the ground of (1) lack of
notice to the candidates and voters, (2) failure to disseminate the election ground rules to all parties concerned, and (3) disregard
of the temporary restraining order of the Med-Arbiter. The decision stressed the following points: 1
The undue haste with which the questioned general elections were held raises doubts as to its validity. In its
desire to conduct the elections as scheduled, the respondents unwittingly disregarded mandatory procedural
requirements. The respondents' pretensions that the appellants were duly furnished with the ground
rules/guidelines of the general elections and that the same were properly disseminated to the qualified voters
of the union are not supported by the records.

Although the increased fees were paid in due course by the candidates, no less than two complaints were filed with the Bureau of xxx xxx xxx
Labor Relations for their invalidation as excessive, prohibitive and arbitrary. One, docketed as Case No. LRD-M7-503-86, was
presented by Rey Sumangil, a candidate for president, and the members of his slate. The other, Case No. LRD-M- 7-504-86, was
filed by Carlos Galvadores, also a presidential candidate, and his group. Impleaded as respondents in both complaints were

18
 Moreover, the Union's Comelec did not follow the schedule of election outlined in the guidelines. BLR Case No. NCR-OD-M- 7-3-206-87
Specifically, the guidelines fixed the elections in Visayas-Mindanao on July 14, 16 and 18, 1986, in
Northern Luzon, on July 16, 17, 18 and 21, 1986 and in Southern Luzon on July 16, 17 and 18, 1986 (records,
Once again Rey Sumangil and his followers hide themselves off to the Bureau of Labor Relations. They filed a petition on March
pp. 67-70). Surprisingly, however, the Union's Comelec conducted the elections in Northern and Southern
26, 1987 challenging the resolution for the increase in union dues, docketed as BLR Case No. NCR-OD-M-73-206-87. They
Luzon on July 21, and 22, 1986 and in Visayas Mindanao on July 25, 1986 without proper notice to the
contended that since the terms of the members of the Legislative Council who approved the resolution had already expired in
appellants.
August, 1986, and their reelection had been nullified by the Bureau, they had no authority to act as members of the council;
consequently, it could not be said that the resolution for the increase of union dues had been approved by 2/3 vote of the Council
Accordingly, the unwarranted failure of the Union's Comelec to duly furnish the appellants the guidelines members, as provided by the union constitution and by laws; hence, the resolution was void. They further contended that there had
and properly disseminate the same to the voters, and the holding of the elections not in accordance with the been no valid ratification of the resolution because the plebiscite had been "rigged,"
schedule set by the guidelines and ill open defiance of the July 23, 1986 Restraining Order, precipitated an
uncalled for confusion among the appellants' supporters and unduly prevented them from adopting the
Once again Rey Sumangil and his group were unsuccessful in proceedings at the level of the Med-Arbiter. The latter denied their
appropriate electoral safeguards to protect their interests. Under the circumstances, this Office is constrained
petition on the ground of lack of support of at least 30% of all members of the union, citing Article 242 of the Labor Code which
to invalidate the general elections held on July 21, 22 and 25, 1986 and declare the results thereof null and
reads as follows:
void.

Art. 242. — Rights and conditions of membership in a labor organization. — ... Any violation of the above
Furthermore, only 6,903 out of the 9,426 qualified voters trooped to the polls during the July 21, 22 and 25,
rights and conditions of membership shall be a ground for cancellation of union registration and expulsion
1986 general elections. Considering the closeness of the result of the elections, the 2,056 qualified voters,
of officer from office, whichever is appropriate. At least thirty percent (30%) of all the members of a union
if they were able to cast their votes, could have drastically altered the results of the elections. But more
or any member or members specially concerned may report such violation to the Bureau. The Bureau shall
important, the disenfranchisement of the remaining 27% qualified voters is a curtailment of Trade Unionism
have the power to hear and decide any reported violation to mete the appropriate penalty.
implicitly ordained the worker's right to self-organization explicitly protected by the Constitution.

xxx xxx xxx
The submission of the respondents that they did not receive a copy of the injunctive order is completely
rebuffed by the records. It appears that the same was received and signed by a certain Cenidoza for
respondent Manolito Paran at 4:30 P.M. of July 23, 1986 and by respondent Benedicto Rodriguez himself,
also on July 23, 1986 at 4:30 P.M. In the case of Manolitao Paran, the restraining order in question was
served at his office/postal address at Rm. 310 Regina Bldg., Escolta, Manila.
It is this decision of the BLR Officer-in-Charge which is the subject of the certiorari actions filed in this Court by Benedicto
Rodriguez, the chairman of the Union COMELEC, and docketed as G.R. Nos. 76579-82. He claims the decision was rendered
with grave abuse of discretion considering that (a) the Med-Arbiter had found no fraud or irregularity in the elections; (b) the
election was participated in by more than 73% of the entire union membership; and (e) the petition for nullity was not supported
by 30% of the general membership.
G.R. No. 80504: Controversy Respecting Labor-Union Dues
The terms of office of the old officers (Manolito Paran, et al.) ended in August, 1986. However, the new set of officers (headed by
the same Manolito Paran) apparently could not assume office under a new term because of the proceedings assailing the validity
of the elections pending before the Bureau of Labor Relations. What happened was that the old officers continued to exercise the
functions of their respective offices under the leadership of Manolito Paran.
On January 17, 1987, the Legislative Council of the union passed a resolution which generated another controversy. That resolution
increased the amount of the union dues from P21.00 to P50.00 a month. It was then presented to the general membership for
ratification at a referendum called for the purpose. Rey Sumangil and his followers objected to the holding of the referendum.
When their objection went unheeded, they and their supporters, all together numbering 829 or so, boycotted the referendum and
formally reiterated their protest against it. Subsequently the union officers announced that the referendum has resulted in a
ratification of the increased union dues.
On March 1, 1987 Manolito Paran requested the PLDT to deduct the union dues at the new, increased rates, from the salaries of
all union members and dispense with their individual written authorizations therefor. PLDT acceded to the request and effected
the check-off of the increased dues for the payroll period from March 1 to March 15, 1987.
Again Sumangil and his group went up on appeal to the Director of Labor Relations, before whom they raised the issue of whether
or not the petition in fact had the support of at least 30% of the members, and said 30%-support was indeed a condition sine qua
non for acquisition by the Med-Arbiters (in the Labor Relations Division in a Regional Office of the MOLE) of jurisdiction over
the case. Again Sumangil and his followers were successful in their appeal.
On July 1, 1987 the Director of Labor Relations rendered a decision reversing that of the Med-Arbiter. The Director ordered the
cessation of the collection of the twenty-nine peso increase and the return of the amounts already collected. In the first place,
according to her, the petition was supported by 6,022 signatures, a number comprising more than 30% of the total membership of
the union (10,413). In the second place, the Director ruled, even assuming the contrary, the lack of 30%-support will not preclude
the BLR from taking cognizance of the petition where there is a clear violation of the rights and conditions of union membership
because Article 226 of the Labor Code, expressly confers on it the authority to act on all intra-union and inter-union conflicts and
grievances affecting labor and management relations, at the instance of either or both parties. The provision cited reads as follows:
Art. 226. — Bureau of Labor Relations. — The Bureau of Labor Relations and the Labor Relations division
in the Regional Offices of the Department of Labor shall have original and exclusive authority to act, at
their own initiative or upon request of either or both parties, on all inter-union and intra-union conflicts, and
all disputes, grievances or problems arising from or affecting labor management
relations ...
As regards Article 242 of the Labor Code, relied upon by the Med-Arbiter, the Director expressed the view that the 30% support
therein provided is not mandatory, and is not a condition precedent to the valid presentation of a grievance before the Bureau of
Labor Relations. The Director ruled, finally, that Sumangil and the other union members had a valid grievance calling for redress,
since the record disclosed no compliance with the requirement that the resolution for the increase of union dues be passed by at
least 2/3 vote of the members of the Legislative Council and be ratified by a majority of the entire membership at a plebiscite.
But not long afterwards, the Director reversed herself. The Manggagawa sa Komunikasyon sa Pilipinas (MKP) — with which
Paran's Union, the FTWU, is affiliated, — intervened in the case and moved for reconsideration of her decision. By resolution
dated October 1, 1987, the Director set aside her decision of July 1, 1987 and entered a new one dismissing the petition of Sumangil
and company, in effect affirming the Med-Arbiter's order. The Director opined that the intervenor (MKP) was correct in its
contention that there was no 30%-membership support for the petition, since only 829 members had signed their support therefor,
as correctly found by the Med-Arbiter, and because of this, the BLR never acquired jurisdiction over the case. According to her:
2

19
 The rationale for such requirement is not difficult to discern. It is to make certain that there is a prima facie
case against prospective respondents whether it be the union or its officers and thus forestall nuisance or
harassment petitions/complaints. The requirement was intended to shield the union from destabilization and
paralyzation coming from adventurous and ambitious members or non-members engaged in union politics
under the guise of working for the union welfare.
... As found out by the Med-Arbiter in the Office of origin all signatures except that of 829 were obtained
without the knowledge of the signatories. At this point we cannot permit 829 members to "rock the boat."
so to speak, of a union which has at present ten thousand four hundred and thirteen (10,413) passengers.
In an effort to set aside this reversing resolution of the Labor Relations Director, Rey Sumangil and his group have come to this
Court via the instant special civil action of certiorari. In their petition they insist that the support of 30% of the union membership
is not a jurisdictional requirement for the ventilation of their grievance before the BLR-1 and assuming the contrary, they have
proven that 3,501 workers had in fact joined in the petition, constituting 33% of the total membership. They also emphasize the
validity of their grievance, drawing attention to the absence of the requisite 2/3 vote essential for validity of any resolution
increasing the rates of union dues, and the doubtful result of the referendum at which the resolution had allegedly been ratified.
Three issues are thus presented to the Court in these cases. The first involves the validity of the 1986 general elections for union
officers; the second, whether or not 30%-membership support is indispensable for acquisition of jurisdiction by the Bureau of
Labor Relations of a complaint for alleged violation of rights and conditions of union members; and third, the validity of the
increase in union dues.
The General Elections of 1986
A review of the record fails to disclose any grave abuse of discretion tainting the adjudgment of respondent Director of Labor
Relations that the general elections for union officers held in 1986 were attended by grave irregularities, rendering the elections
invalid. That finding must thus be sustained.
The dates for provincial elections were set for July 14 to 18, 1986. But they were in fact held on July 21 to 22, 1986, without prior
notice to all voting members, and without ground rules duly prescribed therefor. The elections in Metro Manila were conducted
under no better circumstances. It was held on July 25, 1986 in disregard and in defiance of the temporary restraining order properly
issued by the Med-Arbiter on July 23, 1986, notice of which restraining order had been regularly served on the same date, as the
proofs adequately show, on both the Union, President, Manolito Paran, and the Chairman of the Union COMELEC, Benedicto
Rodriguez. Moreover, as in the case of the provincial elections, there were no ground rules or guidelines set for the Metro Manila
elections. Undue haste, lack of adequate safeguards to ensure integrity of the voting, and absence of notice of the dates of balloting,
thus attended the elections in the provinces and in Metro Manila. They cannot but render the proceedings void.
The claim that there had been a record-breaking voter turnout of 73%, even if true, cannot purge the elections of their grave
infirmities. The elections were closely contested. For example, in the presidential contest, Manolito Paran appeared to have won
over Rey Sumangil by only 803 votes, and in the vice-presidential race, Eduardo de Leon won over Dominador Munar by only
204 votes. These results would obviously have been affected by the ballots of the 2,056 voters who had been unable to cast their
votes because of lack of notice of actual dates of the elections.
It goes without saying that free and honest elections are indispensable to the enjoyment by employees and workers of their
constitutionally protected right to self-organization. That right "would be diluted if in the choice of the officials to govern ... (union)
affairs, the election is not fairly and honestly conducted," and the labor officers concerned and the courts have the duty "to see to
it that no abuse is committed by any official of a labor organization in the conduct of its affairs. 3
The Matter of 30%-Support for Complaints for Violations of Union Membership Rights
The respondent Director's ruling, however, that the assent of 30% of the union membership, mentioned in Article 242 of the Labor
Code, was mandatory and essential to the filing of a complaint for any violation of rights and conditions of membership in a labor
organization (such as the arbitrary and oppressive increase of union dues here complained of), cannot be affirmed and will be
20
reversed. The very article relied upon militates against the proposition. It states that a report of a violation of rights and conditions
of membership in a labor organization may be made by "(a)t least thirty percent (30%) of all the members of a union or any member
or members specially concerned." 4 The use of the permissive "may" in the provision at once negates the notion that the assent of
30% of all the members is mandatory. More decisive is the fact that the provision expressly declares that the report may be made,
alternatively by "any member or members specially concerned." And further confirmation that the assent of 30% of the union
members is not a factor in the acquisition of jurisdiction by the Bureau of Labor Relations is furnished by Article 226 of the same
Labor Code, which grants original and exclusive jurisdiction to the Bureau, and the Labor Relations Division in the Regional
Offices of the Department of Labor, over "all inter-union and intra-union conflicts, and all disputes, grievances or problems
arising from or affecting labor management relations," making no reference whatsoever to any such 30 % support requirement.
Indeed, the officials mentioned are given the power to act "on all inter-union and intra-union conflicts (1) "upon request of either
or both parties" as well as (2) "at their own initiative." There can thus be no question about the capacity of Rey Sumangil and his
group of more than eight hundred, to report and seek redress in an intra-union conflict involving a matter they are specially
concerned, i.e., the rates of union dues being imposed on them.
These considerations apply equally well to controversies over elections. In the cases at bar, the petition to nullify the 1986 union
elections could not be deemed defective because it did not have the assent of 30% of the union membership. The petition clearly
involved an intra-union conflict — one directly affecting the right of suffrage of more than 800 union members and the integrity
of the union elections — over which, as the law explicitly provides, jurisdiction could be assumed by the Labor Relations Director
or the Med-Arbiters "at their own initiative" or "upon request of either or both parties."
The assumption of jurisdiction by the Med-Arbiter and the Labor Relations Director over the cases at bar was entirely proper. It
was in fact their duty to do so, given the facts presented to them. So this Court has had occasion to rule: 5
The labor officials should not hesitate to enforce strictly the law and regulations governing trade unions
even if that course of action would curtail the so-called union autonomy and freedom from government
interference.
For the protection of union members and in order that the affairs of the union may be administered honestly,
labor officials should be vigilant and watchful in monitoring and checking the administration of union
affairs.
Laxity, permissiveness, neglect and apathy in supervising and regulating the activities of union officials
would result in corruption and oppression. Internal safeguards within the union can easily be ignored or
swept aside by abusive, arrogant and unscrupulous union officials to the prejudice of the members.
It is necessary and desirable that the Bureau of Labor Relations and the Ministry of Labor should exercise
close and constant supervision over labor unions, particularly the handling of their funds, so as to forestall
abuses and penalties.
As regards the final issue concerning the increase of union dues, the respondent Director found that the resolution of the union's
Legislative Council to this effect 6 does not bear the signature of at least two-thirds (2/3) of the members of the Council, contrary
to the requirement of the union constitution and by-laws; and that proof is wanting of proper ratification of the resolution by a
majority of the general union membership at a plebiscite called and conducted for that purpose, again in violation of the constitution
and by-laws. The resolution increasing the union dues must therefore be struck down, as illegal and void, arbitrary and oppressive.
The collection of union dues at the increased rates must be discontinued; and the dues thus far improperly collected must be
refunded to the union members or held in trust for disposition by them in accordance with their charter and rules, in line with this
Court's ruling in a parallel situation, 7 viz:
... All amounts already collected must be credited accordingly in favor of the respective members either for
their future legal dues or other assessments or even delinquencies, if any. And if this arrangement regarding
the actual refund of what might be excessive dues is not acceptable to the majority of the members, the
matter may be decided in a general meeting called for the purpose.
WHEREFORE, in G.R. Nos. 76579-82, the petition for certiorari is DISMISSED, no grave abuse of discretion or other serious
error having been shown in the decision of the respondent Director of Labor Relations, said decision — ordering the holding of
new elections for officers of the Free Telephone Worker Union — being on the contrary in accord with the facts and the law, but
in the G.R. No. 80504, the petition for certiorari is granted, the challenged order dated October 1, 1987 is set aside, and the
decision of July 1, 1987 of the Labor Relations Director reinstated, modified only as to the treatment of the excess collections
which shall be disposed of in the manner herein indicated. Costs against petitioner in G.R. Nos. 7657982 and private respondents
(except the PLDT) in G.R. No. 80504.

21
G.R. No. 85333 February 26, 1990 those union members who either did not sign any individual written authorization, or having signed one, subsequently withdrew
or retracted their signatures therefrom.
CARMELITO L. PALACOL, ET AL., petitioners,
vs. Petitioners assailed the 10% special assessment as a violation of Article 241(o) in relation to Article 222(b) of the Labor Code.
PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, MANILA CCBPI SALES FORCE UNION, and Article 222(b) provides as follows:
COCA-COLA BOTTLERS (PHILIPPINES), INC., respondents.
ART. 222. Appearances and Fees. —
Wellington B. Lachica for petitioners.
xxx xxx xxx
Adolpho M. Guerzon for respondent Union.
(b) No attorney's fees, negotiation fees or similar charges of any kind arising from
any collective bargaining negotiations or conclusion of the collective agreement shall
be imposed on any individual member of the contracting union; Provided, however,
that attorney's fees may be charged against union funds in an amount to be agreed
GANCAYCO, J.:
upon by the parties. Any contract, agreement or arrangement of any sort to the
contrary shall be null and void.
Can a special assessment be validly deducted by a labor union from the lump-sum pay of its members, granted under a collective
bargaining agreement (CBA), notwithstanding a subsequent disauthorization of the same by a majority of the union members?
On the other hand, Article 241(o) mandates that:
This is the main issue for resolution in the instant petition for certiorari.

ART. 241. Rights and conditions of membership in a labor organization. —

As gleaned from the records of the case, the pertinent facts are as follows:

xxx xxx xxx

On October 12, 1987, the respondent Manila CCBPI Sales Force Union (hereinafter referred to as the Union), as the collective
bargaining agent of all regular salesmen, regular helpers, and relief helpers of the Manila Plant and Metro Manila Sales Office of
the respondent Coca-Cola Bottlers (Philippines), Inc. (hereinafter referred to as the Company) concluded a new collective (o) Other than for mandatory activities under the Code, no special assessments,
bargaining agreement with the latter. 1 Among the compensation benefits granted to the employees was a general salary increase attorney's fees, negotiation fees or any other extraordinary fees may be checked off
to be given in lump sum including recomputation of actual commissions earned based on the new rates of increase. from any amount due to an employee without an individual written authorization duly
signed by the employee. The authorization should specifically state the amount,
purpose and beneficiary of the deduction;
On the same day, the president of the Union submitted to the Company the ratification by the union members of the new CBA and
authorization for the Company to deduct union dues equivalent to P10.00 every payday or P20.00 every month and, in addition,
10% by way of special assessment, from the CBA lump-sum pay granted to the union members. The last one among the As authority for their contention, petitioners cited Galvadores v. Trajano, 6 wherein it was ruled that no check-offs from any
aforementioned is the subject of the instant petition. amount due employees may be effected without individual written authorizations duly signed by the employees specifically stating
the amount, purpose, and beneficiary of the deduction.
As embodied in the Board Resolution of the Union dated September 29, 1987, the purpose of the special assessment sought to be
levied is "to put up a cooperative and credit union; purchase vehicles and other items needed for the benefit of the officers and the In its answer, the Union countered that the deductions not only have the popular indorsement and approval of the general
general membership; and for the payment for services rendered by union officers, consultants and others." 2 There was also an membership, but likewise complied with the legal requirements of Article 241 (n) and (o) of the Labor Code in that the board
additional proviso stating that the "matter of allocation ... shall be at the discretion of our incumbent Union President." resolution of the Union imposing the questioned special assessment had been duly approved in a general membership meeting and
that the collection of a special fund for labor education and research is mandated.
This "Authorization and CBA Ratification" was obtained by the Union through a secret referendum held in separate local
membership meetings on various dates. 3 The total membership of the Union was about 800. Of this number, 672 members Article 241(n) of the Labor Code states that —
originally authorized the 10% special assessment, while 173 opposed the same. 4
ART. 241. Rights and conditions of membership in a labor organization. —
Subsequently however, one hundred seventy (170) members of the Union submitted documents to the Company stating that
although they have ratified the new CBA, they are withdrawing or disauthorizing the deduction of any amount from their CBA
xxx xxx xxx
lump sum. Later, 185 other union members submitted similar documents expressing the same intent. These members, numbering
355 in all (170 + 185), added to the original oppositors of 173, turned the tide in favor of disauthorization for the special assessment,
with a total of 528 objectors and a remainder of 272 supporters. 5 (n) No special assessment or other extraordinary fees may be levied upon the members of a labor
organization unless authorized by a written resolution of a majority of all the members at a general
membership meeting duly called for the purpose. The secretary of the organization shall record the minutes
On account of the above-mentioned disauthorization, the Company, being in a quandary as to whom to remit the payment of the
of the meeting including the list of all members present, the votes cast, the purpose of the special assessment
questioned amount, filed an action for interpleader with the Bureau of Labor Relations in order to resolve the conflicting claims
or fees and the recipient of such assessments or fees. The record shall be attested to by the president;
of the parties concerned. Petitioners, who are regular rank-and-file employees of the Company and bona fide members of the
Union, filed a motion/complaint for intervention therein in two groups of 161 and 94, respectively. They claimed to be among

22
Med-Arbiter Manases T. Cruz ruled in favor of petitioners in an order dated February 15, 1988 whereby he directed the Company
to remit the amount it had kept in trust directly to the rank-and-file personnel without delay.
On appeal to the Bureau of Labor Relations, however, the order of the Med-Arbiter was reversed and set aside by the respondent-
Director in a resolution dated August 19, 1988 upholding the claim of the Union that the special assessment is authorized under
Article 241 (n) of the Labor Code, and that the Union has complied with the requirements therein.
Hence, the instant petition.
Petitioners allege that the respondent-Director committed a grave abuse of discretion amounting to lack or excess of jurisdiction
when she held Article 241 (n) of the Labor Code to be the applicable provision instead of Article 222(b) in relation to Article
241(o) of the same law.
According to petitioners, a cursory examination and comparison of the two provisions of Article 241 reveals that paragraph (n)
cannot prevail over paragraph (o). The reason advanced is that a special assessment is not a matter of major policy affecting the
entire union membership but is one which concerns the individual rights of union members.
Petitioners further assert that assuming arguendo that Article 241(n) should prevail over paragraph (o), the Union has nevertheless
failed to comply with the procedure to legitimize the questioned special assessment by: (1) presenting mere minutes of local
membership meetings instead of a written resolution; (2) failing to call a general membership meeting; (3) having the minutes of
three (3) local membership meetings recorded by a union director, and not by the union secretary as required; (4) failing to have
the list of members present included in the minutes of the meetings; and (5) failing to present a record of the votes cast. 7 Petitioners
concluded their argument by citing Galvadores.
After a careful review of the records of this case, We are convinced that the deduction of the 10% special assessment by the Union
was not made in accordance with the requirements provided by law.
Petitioners are correct in citing the ruling of this Court in Galvadores which is applicable to the instant case. The principle "that
employees are protected by law from unwarranted practices that diminish their compensation without their known edge and
consent" 8 is in accord with the constitutional principle of the State affording full protection to labor. 9
The respondent-Union brushed aside the defects pointed out by petitioners in the manner of compliance with the legal requirements
as "insignificant technicalities." On the contrary, the failure of the Union to comply strictly with the requirements set out by the
law invalidates the questioned special assessment. Substantial compliance is not enough in view of the fact that the special
assessment will diminish the compensation of the union members. Their express consent is required, and this consent must be
obtained in accordance with the steps outlined by law, which must be followed to the letter. No shortcuts are allowed.
The applicable provisions are clear. The Union itself admits that both paragraphs (n) and (o) of Article 241 apply. Paragraph (n)
refers to "levy" while paragraph (o) refers to "check-off" of a special assessment. Both provisions must be complied with. Under
paragraph (n), the Union must submit to the Company a written resolution of a majority of all the members at a general membership
meeting duly called for the purpose. In addition, the secretary of the organization must record the minutes of the meeting which,
in turn, must include, among others, the list of all the members present as well as the votes cast.
As earlier outlined by petitioners, the Union obviously failed to comply with the requirements of paragraph (n). It held local
membership meetings on separate occasions, on different dates and at various venues, contrary to the express requirement that
there must be a general membership meeting. The contention of the Union that "the local membership meetings are precisely the
very general meetings required by law" 10 is untenable because the law would not have specified a general membership meeting
had the legislative intent been to allow local meetings in lieu of the latter.
It submitted only minutes of the local membership meetings when what is required is a written resolution adopted at the general
meeting. Worse still, the minutes of three of those local meetings held were recorded by a union director and not by the union
secretary. The minutes submitted to the Company contained no list of the members present and no record of the votes cast. Since
23
it is quite evident that the Union did not comply with the law at every turn, the only conclusion that may be made therefrom is that
there was no valid levy of the special assessment pursuant to paragraph (n) of Article 241 of the Labor Code.
Paragraph (o) on the other hand requires an individual written authorization duly signed by every employee in order that a special
assessment may be validly checked-off. Even assuming that the special assessment was validly levied pursuant to paragraph (n),
and granting that individual written authorizations were obtained by the Union, nevertheless there can be no valid check-off
considering that the majority of the union members had already withdrawn their individual authorizations. A withdrawal of
individual authorizations is equivalent to no authorization at all. Hence, the ruling in Galvadores that "no check-offs from any
amounts due employees may be effected without an individual written authorization signed by the employees ... " is applicable.
The Union points out, however, that said disauthorizations are not valid for being collective in form, as they are "mere bunches of
randomly procured signatures, under loose sheets of paper." 11 The contention deserves no merit for the simple reason that the
documents containing the disauthorizations have the signatures of the union members. The Court finds these retractions to be valid.
There is nothing in the law which requires that the disauthorization must be in individual form.
Moreover, it is well-settled that "all doubts in the implementation and interpretation of the provisions of the Labor Code ... shall
be resolved in favor of labor."12 And as previously stated, labor in this case refers to the union members, as employees of the
Company. Their mere desire to establish a separate bargaining unit, albeit unproven, cannot be construed against them in relation
to the legality of the questioned special assessment. On the contrary, the same may even be taken to reflect their dissatisfaction
with their bargaining representative, the respondent-Union, as shown by the circumstances of the instant petition, and with good
reason.
The Med-Arbiter correctly ruled in his Order that:
The mandate of the majority rank and file have (sic) to be respected considering they are the ones directly
affected and the realities of the high standards of survival nowadays. To ignore the mandate of the rank and
file would enure to destabilizing industrial peace and harmony within the rank and file and the employer's
fold, which we cannot countenance.
Moreover, it will be recalled that precisely union dues are collected from the union members to be spent for
the purposes alluded to by respondent. There is no reason shown that the regular union dues being now
implemented is not sufficient for the alleged expenses. Furthermore, the rank and file have spoken in
withdrawing their consent to the special assessment, believing that their regular union dues are adequate for
the purposes stated by the respondent. Thus, the rank and file having spoken and, as we have earlier
mentioned, their sentiments should be respected.
Of the stated purposes of the special assessment, as embodied in the board resolution of the Union, only the collection of a special
fund for labor and education research is mandated, as correctly pointed out by the Union. The two other purposes, namely, the
purchase of vehicles and other items for the benefit of the union officers and the general membership, and the payment of services
rendered by union officers, consultants and others, should be supported by the regular union dues, there being no showing that the
latter are not sufficient to cover the same.
The last stated purpose is contended by petitioners to fall under the coverage of Article 222 (b) of the Labor Code. The contention
is impressed with merit. Article 222 (b) prohibits attorney's fees, negotiations fees and similar charges arising out of the conclusion
of a collective bargaining agreement from being imposed on any individual union member. The collection of the special assessment
partly for the payment for services rendered by union officers, consultants and others may not be in the category of "attorney's fees
or negotiations fees." But there is no question that it is an exaction which falls within the category of a "similar charge," and,
therefore, within the coverage of the prohibition in the aforementioned article. There is an additional proviso giving the Union
President unlimited discretion to allocate the proceeds of the special assessment. Such a proviso may open the door to abuse by
the officers of the Union considering that the total amount of the special assessment is quite considerable — P1,027,694.33
collected from those union members who originally authorized the deduction, and P1,267,863.39 from those who did not authorize
the same, or subsequently retracted their authorizations. 13 The former amount had already been remitted to the Union, while the
latter is being held in trust by the Company.
The Court, therefore, stakes down the questioned special assessment for being a violation of Article 241, paragraphs (n) and (o),
and Article 222 (b) of the Labor Code.

WHEREFORE, the instant petition is hereby GRANTED. The Order of the Director of the Bureau of Labor Relations dated August
19, 1988 is hereby REVERSED and SET ASIDE, while the order of the Med-Arbiter dated February 17, 1988 is reinstated, and
the respondent Coca-Cola Bottlers (Philippines), Inc. is hereby ordered to immediately remit the amount of P1,267,863.39 to the
respective union members from whom the said amount was withheld. No pronouncement as to costs. This decision is immediately
executory.

24