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VASSAR INDUSTRIES EMPLOYEES UNION (VIEU), petitioner, Unions and Vassar Industries, Inc.

and Vassar Industries, Inc. which expired on May 15, 1977. Prior to
vs. such date, 111 of a total number of 150 employees of such firm disaffiliated
HON. FRANCISCO L. ESTRELLA; as Acting Director of the Bureau of from the former labor organization and formed their own union. Thereafter,
Labor Relations, ASSOCIATED LABOR UNIONS (ALU), and VASSAR they filed an application for registration of their union with the Bureau of
INDUSTRIES, INC., respondents. Labor Relations, complying with an the requirements of both the Labor Code
and its implementing regulations. While such application was pending,
FERNANDO, J.: petitioner Union filed a petition for certification as bargaining agent for the
rank-and-file employees of the company. The Med-Arbiter, on May 24, 1977,
There appears to be as yet a failure to grasp the scope and amplitude of the denied their plea on the ground that the union was not duly registered with
the Department of Labor. Then came a motion for reconsideration praying
constitutional right to freedom of association. 1 That seems to be the only
that the dismissal be set aside until action be taken on its pending application
explanation but certainly not the justification, for the refusal of respondent
for registration. On July 5, 1977, respondent Estrella, then Acting Director of
Francisco L. Estrella, then the Acting Director of the Bureau of Labor
the Bureau of Labor Relations, denied, as previously noted, the application
Relations, to register petitioner Vassar Industries Employees Union. 2 His
communication to that effect is worded thus: "We are hereby returning the for registration "on the ground that there is a registered collective bargaining
application for registration of the [Vassar Industries Employees Union] agent in the company." Hence this petition. It should also be noted that there
is this submission in the comment of the then Acting Solicitor General
together with all the accompanying documents with the information that the
Vicente V. Mendoza: "It may not be amiss to mention herein that before filing
application is denied on the ground that there is already a registered
the instant comment, prior consultation was made with Director Carmelo C.
collective bargaining agent in the company." 3 Petitioners prayed that a
Noriel of the Bureau of Labor Relations, and he shares our view on the
restraining order be issued, and, after hearing, that its application for
registration be given due course. Accordingly, in a resolution dated August matter leaving it to the undersigned to make the appropriate recommendation
29, 1977, this Court issued such restraining order and required comment in the premises to this Honorable Court." 7
from the respondents. The comment of the then Acting Solicitor General
Vicente V. Mendoza, 4 after setting forth the pertinent facts, submitted this The petition, to repeat, is impressed with merit. certiorari lies.
conclusion; "From the aforestated undisputed facts, it is the considered
opinion of this representation that the actuation of the then Acting [Bureau of 1. In U.E. Automotive Employees and Workers Union v. Noriel, 8 reference
Labor Relations] Director cannot be sustained for the following reasons: a) was made to the fact that a notable feature of our Constitution is that
the ground for the denial of the registration of petitioner union is the "freedom of association is explicitly ordained; it is not merely derivative,
existence of a registered collective bargaining agent, but this is erroneous peripheral or penumbral, as is the case in the United States. It can trace its
since the CBA expired on May 15, 1977, and the records do not show that origin to the Malolos Constitution." 9 An earlier decision, Federacion Obrera
[the Associated Labor Union] has been certified anew. v. Noriel, 10 sets forth the scope and amplitude of such right: "Clearly, what is
b) Besides, the registration of a labor union is not solely for the purpose of at stake is the constitutional right to freedom of association on the part of
qualifying the union as the exclusive collective bargaining agent since it is employees. Petitioner labor union was in the past apparently able to enlist
entitled to other rights and prerogatives as enumerated in Art. 243 of the the allegiance of the working force in the Anglo-American Tobacco
Labor Code. c) As long as an applicant union complies with all of the legal Corporation. Thereafter, a number of such individuals joined private
requirements for registration, it becomes the BIR's ministerial duty to so respondent labor union. That is a matter clearly left to their sole uncontrolled
register the union. d) No hearing, whatsoever, was conducted to ascertain judgment. There is this excerpt from Pan American World Airways, Inc. v.
the existence of a collective bargaining agent, thus depriving petitioner union Pan American Employees Association: "There is both a constitutional and
of its day in court." 5 His recommendation is "that the case be ordered statutory recognition that laborers have the right to form unions to take care
remanded to the BLR for the registration of the petitioner union." 6 The other of their interests vis-a-viz their employees. Their freedom to form
private respondents also submitted their comments but failed to meet organizations would be rendered nugatory if they could not choose their own
squarely the issue of the failure to comply with the constitutional mandate of leaders to speak on their behalf and to bargain for them." It cannot be
freedom of association. It is thus obvious that the petition is impressed with otherwise, for the freedom to choose which labor organization to join is an
merit. aspect of the constitutional mandate of protection to labor. Prior to the
Industrial Peace Act, there was a statute setting for the guidelines for the
There is no dispute on the facts. There was in existence a collective registration of labor unions. As implied in Manila Hotel Co. v. Court of
bargaining agreement between private respondents Associated Labor Industrial Relations, it was enacted pursuant to what is ordained in the
Constitution. Thus, in Umali v. Lovina, it was held that mandamus lies to employees of the Vassar Industries, Inc. ... ." 14 It is on that basis that a
compel the registration of a labor organization. There is this apt summary of dismissal of the petition is sought. It may be stated at the outset that while
what is signified in Philippine Land-Air-Sea Labor Union v. Court of Industrial such collective bargaining agreement was entered into during the pendency
Relations, "to allow a labor union to organize itself and acquire a personality of a restraining order issued by this Court as far back as August 29, 1977, it
distinct and separate from its members and to serve as an instrumentality to may be argued that there is no technical violation as the restraining order
conclude collective bargaining agreements ... ." It is no coincidence that in sought by petitioner labor union was limited to preventing the two private
the first decision of this Court citing the Industrial Peace Act, Pambujan respondents "from continuing to check-off the petitioner's members who
United Mine Workers v. Samar Mining Company, the role of a labor union as disaffiliated from the ALU of union dues and other assessments, until further
the agency for the expression of the collective will affecting its members both orders from this Honorable Court ... 15 Nonetheless, it is quite obvious that
present and prospective, was stressed. That statute certainly was much when the two parties entered into such a collective bargaining agreement,
more emphatic as to the vital aspect of such a right as expressly set forth in such a move was motivated by the desire to impart a moot and academic
the policy of the law. What is more, there is in such enactment this aspect to this petition. It should not therefore elicit the approval of this Court,
categorical provision on the right of employees to self-organization: especially so as upon the expiration oil the collective contract, it is made "the
"Employees shall have the right to self-organization and to form, join or assist duty of both parties to keep the status quo and to continue in full force and
labor organizations of their own choosing for the purpose of collective effect the terms and conditions of the existing agreement during the sixty-day
bargaining through representatives of their own choosing and to engage in period and/or until a new agreement is reached by the parties." 16 With a
concerted activities for the purpose of collective bargaining and other mutual pending petition for certification, any such agreement entered into by
aid or protection." The new Labor Code is equally explicit on the matter. management with a labor organization is fraught with the risk that such a
Thus: "The State shall assure the rights of workers to self-organization, labor union may not be chosen thereafter as the collective bargaining
collective bargaining, security of tenure and just and humane conditions of representative. That is the situation that is confronted by private respondents.
work." 11 Any other view would render nugatory the clear statutory policy to favor
certification election as the means of ascertaining a true expression of the
2. Equally so, whatever question may arise from the disaffiliation was set at will of the workers as to which labor organization would represent them. 17
rest by a recent decision of this Court in Philippine Labor Alliance Council v.
Bureau of Labor Relations. 12 Thus: "It is indisputable that the present 4. Now for the appropriate remedy. The prayer in the petition is limited to
controversy would not have arisen if there were no mass disaffiliation from ordering respondent official to give due course to petitioner's application for
petitioning union. Such a phenomenon is nothing new in the Philippine labor registration. 18 As this is a certiorari proceeding, equitable in character, this
movement. Nor is it open to any legal objection. It is implicit in the freedom of Court is empowered to grant the relief adequate and suitable under the
association explicitly ordained by the Constitution. There is then the circumstances so that justice in all its fullness could be achieved. There is
incontrovertible right of any individual to join an organization of his choice. this affirmation in the comment of the then Acting Solicitor General Vicente V.
That option belongs to him. A workingman is not to be denied that liberty. He Mendoza as counsel for respondent Estrella: "As long as an applicant union
may be, as a matter of fact, more in need of it the institution of collective complies with all of the legal requirements for registration, it becomes the
bargaining as an aspect of industrial democracy is to succeed. No obstacle BLR's ministerial duty to so register the union." 19 It suffices then to order that
that may possibly thwart the desirable objective of militancy in labor's petitioner Union be registered, there being no legal obstacle to such a step
struggle for better terms and conditions is then to be placed on his way. and the duty of the Bureau of Labor Relations being clear. Then there is this
Once the fact of disaffiliation has been demonstrated beyond doubt, as in this ruling in Philippine Labor Alliance Council v. Bureau of Labor
case, a certification election is the most expeditious way of determining Relations 20 that calls for application that "once the fact of disaffiliation has
which labor organization is to be the exclusive bargaining representative. It is been demonstrated beyond doubt, as in this case, a certification election is
as simple as that." 13 the most expeditious way of determining which labor organization is to be the
exclusive bargaining representative." 21In the meanwhile, if as contended by
3. The only novel feature of this case then is the fact that, as noted in the private respondent labor union the interim collective bargaining agreement,
comment of private respondent Associated Labor Unions, there was which it engineered and entered into on September 26, 1977, has much
subsequently entered into a collective bargaining agreement with the other more favorable terms for the workers of private respondent Vassar
private respondent Vassar Industries, Inc. on September 26, 1977, allegedly Industries, then it should continue in full force and effect until the appropriate
containing "substantial benefits for the employees, which contract (CBA) was bargaining representative is chosen and negotiations for a new collective
approved and ratified by the majority of the general membership or bargaining agreement thereafter concluded. This is one way of assuring that
both the social justice, 22 and the protection to labor provisions 23 would be
effectively implemented without sanctioning an attempt to frustrate the
exercise of this Court's jurisdiction in a pending case.

WHEREFORE, the writ of certiorari is granted and the Bureau of Labor

Relations ordered to conduct at the earliest practicable date of a certification
election with petitioner labor union, Vassar Industries Labor Union, and
private respondent labor union, Associated Labor Unions, participating
therein to determine the exclusive bargaining representative of the workers
employed in Vassar Industries, Inc. This decision is immediately executory.

BENJAMIN VICTORIANO, plaintiff-appellee,

ELIZALDE ROPE WORKERS' UNION and ELIZALDE ROPE FACTORY, prompted Appellee to file an action for injunction, docketed as Civil Case No.
INC., defendants, ELIZALDE ROPE WORKERS' UNION, defendant- 58894 in the Court of First Instance of Manila to enjoin the Company and the
appellant. Union from dismissing Appellee.1 In its answer, the Union invoked the "union
security clause" of the collective bargaining agreement; assailed the
ZALDIVAR, J.: constitutionality of Republic Act No. 3350; and contended that the Court had
no jurisdiction over the case, pursuant to Republic Act No. 875, Sections 24
and 9 (d) and (e).2 Upon the facts agreed upon by the parties during the pre-
Appeal to this Court on purely questions of law from the decision of the Court
trial conference, the Court a quo rendered its decision on August 26, 1965,
of First Instance of Manila in its Civil Case No. 58894.
the dispositive portion of which reads:
The undisputed facts that spawned the instant case follow:
IN VIEW OF THE FOREGOING, judgment is rendered
enjoining the defendant Elizalde Rope Factory, Inc. from
Benjamin Victoriano (hereinafter referred to as Appellee), a member of the dismissing the plaintiff from his present employment and
religious sect known as the "Iglesia ni Cristo", had been in the employ of the sentencing the defendant Elizalde Rope Workers' Union to
Elizalde Rope Factory, Inc. (hereinafter referred to as Company) since 1958. pay the plaintiff P500 for attorney's fees and the costs of this
As such employee, he was a member of the Elizalde Rope Workers' Union action.3
(hereinafter referred to as Union) which had with the Company a collective
bargaining agreement containing a closed shop provision which reads as
follows: From this decision, the Union appealed directly to this Court on purely
questions of law, assigning the following errors:
Membership in the Union shall be required as a condition of
I. That the lower court erred when it did not rule that
employment for all permanent employees workers covered
Republic Act No. 3350 is unconstitutional.
by this Agreement.

II. That the lower court erred when it sentenced appellant

The collective bargaining agreement expired on March 3, 1964 but was
herein to pay plaintiff the sum of P500 as attorney's fees and
renewed the following day, March 4, 1964.
the cost thereof.
Under Section 4(a), paragraph 4, of Republic Act No. 875, prior to its
In support of the alleged unconstitutionality of Republic Act No. 3350, the
amendment by Republic Act No. 3350, the employer was not precluded
Union contented, firstly, that the Act infringes on the fundamental right to
"from making an agreement with a labor organization to require as a
form lawful associations; that "the very phraseology of said Republic Act
condition of employment membership therein, if such labor organization is
3350, that membership in a labor organization is banned to all those
the representative of the employees." On June 18, 1961, however, Republic
Act No. 3350 was enacted, introducing an amendment to — paragraph (4) belonging to such religious sect prohibiting affiliation with any labor
subsection (a) of section 4 of Republic Act No. 875, as follows: ... "but such organization"4 , "prohibits all the members of a given religious sect from
joining any labor union if such sect prohibits affiliations of their members
agreement shall not cover members of any religious sects which prohibit
thereto"5 ; and, consequently, deprives said members of their constitutional
affiliation of their members in any such labor organization".
right to form or join lawful associations or organizations guaranteed by the
Bill of Rights, and thus becomes obnoxious to Article III, Section 1 (6) of the
Being a member of a religious sect that prohibits the affiliation of its members 1935 Constitution. 6
with any labor organization, Appellee presented his resignation to appellant
Union in 1962, and when no action was taken thereon, he reiterated his
Secondly, the Union contended that Republic Act No. 3350 is
resignation on September 3, 1974. Thereupon, the Union wrote a formal
unconstitutional for impairing the obligation of contracts in that, while the
letter to the Company asking the latter to separate Appellee from the service
Union is obliged to comply with its collective bargaining agreement
in view of the fact that he was resigning from the Union as a member. The
management of the Company in turn notified Appellee and his counsel that containing a "closed shop provision," the Act relieves the employer from its
unless the Appellee could achieve a satisfactory arrangement with the Union, reciprocal obligation of cooperating in the maintenance of union membership
as a condition of employment; and that said Act, furthermore, impairs the
the Company would be constrained to dismiss him from the service. This
Union's rights as it deprives the union of dues from members who, under the the terms of the closed shop agreement; 15 that the Act does not violate the
Act, are relieved from the obligation to continue as such members. 7 establishment of religion clause or separation of Church and State, for
Congress, in enacting said law, merely accommodated the religious needs of
Thirdly, the Union contended that Republic Act No. 3350 discriminatorily those workers whose religion prohibits its members from joining labor unions,
favors those religious sects which ban their members from joining labor and balanced the collective rights of organized labor with the constitutional
unions, in violation of Article Ill, Section 1 (7) of the 1935 Constitution; and right of an individual to freely exercise his chosen religion; that the
while said Act unduly protects certain religious sects, it leaves no rights or constitutional right to the free exercise of one's religion has primacy and
protection to labor organizations.8 preference over union security measures which are merely contractual 16 ;
that said Act does not violate the constitutional provision of equal protection,
for the classification of workers under the Act depending on their religious
Fourthly, Republic Act No. 3350, asserted the Union, violates the
tenets is based on substantial distinction, is germane to the purpose of the
constitutional provision that "no religious test shall be required for the
law, and applies to all the members of a given class; 17 that said Act, finally,
exercise of a civil right," in that the laborer's exercise of his civil right to join
does not violate the social justice policy of the Constitution, for said Act was
associations for purposes not contrary to law has to be determined under the
Act by his affiliation with a religious sect; that conversely, if a worker has to enacted precisely to equalize employment opportunities for all citizens in the
sever his religious connection with a sect that prohibits membership in a midst of the diversities of their religious beliefs." 18
labor organization in order to be able to join a labor organization, said Act
would violate religious freedom.9 I. Before We proceed to the discussion of the first assigned error, it is
necessary to premise that there are some thoroughly established principles
Fifthly, the Union contended that Republic Act No. 3350, violates the "equal which must be followed in all cases where questions of constitutionality as
protection of laws" clause of the Constitution, it being a discriminately obtains in the instant case are involved. All presumptions are indulged in
favor of constitutionality; one who attacks a statute, alleging
legislation, inasmuch as by exempting from the operation of closed shop
unconstitutionality must prove its invalidity beyond a reasonable doubt, that a
agreement the members of the "Iglesia ni Cristo", it has granted said
law may work hardship does not render it unconstitutional; that if any
members undue advantages over their fellow workers, for while the Act
reasonable basis may be conceived which supports the statute, it will be
exempts them from union obligation and liability, it nevertheless entitles them
at the same time to the enjoyment of all concessions, benefits and other upheld, and the challenger must negate all possible bases; that the courts
are not concerned with the wisdom, justice, policy, or expediency of a
emoluments that the union might secure from the employer. 10
statute; and that a liberal interpretation of the constitution in favor of the
constitutionality of legislation should be adopted. 19
Sixthly, the Union contended that Republic Act No. 3350 violates the
constitutional provision regarding the promotion of social justice. 11
1. Appellant Union's contention that Republic Act No. 3350 prohibits and
bans the members of such religious sects that forbid affiliation of their
Appellant Union, furthermore, asserted that a "closed shop provision" in a members with labor unions from joining labor unions appears nowhere in the
collective bargaining agreement cannot be considered violative of religious wording of Republic Act No. 3350; neither can the same be deduced by
freedom, as to call for the amendment introduced by Republic Act No. necessary implication therefrom. It is not surprising, therefore, that appellant,
3350; 12 and that unless Republic Act No. 3350 is declared unconstitutional, having thus misread the Act, committed the error of contending that said Act
trade unionism in this country would be wiped out as employers would prefer is obnoxious to the constitutional provision on freedom of association.
to hire or employ members of the Iglesia ni Cristo in order to do away with
labor organizations. 13
Both the Constitution and Republic Act No. 875 recognize freedom of
association. Section 1 (6) of Article III of the Constitution of 1935, as well as
Appellee, assailing appellant's arguments, contended that Republic Act No. Section 7 of Article IV of the Constitution of 1973, provide that the right to
3350 does not violate the right to form lawful associations, for the right to join form associations or societies for purposes not contrary to law shall not be
associations includes the right not to join or to resign from a labor abridged. Section 3 of Republic Act No. 875 provides that employees shall
organization, if one's conscience does not allow his membership therein, and have the right to self-organization and to form, join of assist labor
the Act has given substance to such right by prohibiting the compulsion of organizations of their own choosing for the purpose of collective bargaining
workers to join labor organizations; 14 that said Act does not impair the and to engage in concerted activities for the purpose of collective bargaining
obligation of contracts for said law formed part of, and was incorporated into, and other mutual aid or protection. What the Constitution and the Industrial
Peace Act recognize and guarantee is the "right" to form or join associations. agreement the employees belonging to any religious sects which prohibit
Notwithstanding the different theories propounded by the different schools of affiliation of their members with any labor organization. What the exception
jurisprudence regarding the nature and contents of a "right", it can be safely provides, therefore, is that members of said religious sects cannot be
said that whatever theory one subscribes to, a right comprehends at least compelled or coerced to join labor unions even when said unions have
two broad notions, namely: first, liberty or freedom, i.e., the absence of legal closed shop agreements with the employers; that in spite of any closed shop
restraint, whereby an employee may act for himself without being prevented agreement, members of said religious sects cannot be refused employment
by law; and second, power, whereby an employee may, as he pleases, join or dismissed from their jobs on the sole ground that they are not members of
or refrain from Joining an association. It is, therefore, the employee who the collective bargaining union. It is clear, therefore, that the assailed Act, far
should decide for himself whether he should join or not an association; and from infringing the constitutional provision on freedom of association, upholds
should he choose to join, he himself makes up his mind as to which and reinforces it. It does not prohibit the members of said religious sects from
association he would join; and even after he has joined, he still retains the affiliating with labor unions. It still leaves to said members the liberty and the
liberty and the power to leave and cancel his membership with said power to affiliate, or not to affiliate, with labor unions. If, notwithstanding their
organization at any time. 20It is clear, therefore, that the right to join a union religious beliefs, the members of said religious sects prefer to sign up with
includes the right to abstain from joining any union. 21Inasmuch as what both the labor union, they can do so. If in deference and fealty to their religious
the Constitution and the Industrial Peace Act have recognized, and faith, they refuse to sign up, they can do so; the law does not coerce them to
guaranteed to the employee, is the "right" to join associations of his choice, it join; neither does the law prohibit them from joining; and neither may the
would be absurd to say that the law also imposes, in the same breath, upon employer or labor union compel them to join. Republic Act No. 3350,
the employee the duty to join associations. The law does not enjoin an therefore, does not violate the constitutional provision on freedom of
employee to sign up with any association. association.

The right to refrain from joining labor organizations recognized by Section 3 2. Appellant Union also contends that the Act is unconstitutional for impairing
of the Industrial Peace Act is, however, limited. The legal protection granted the obligation of its contract, specifically, the "union security clause"
to such right to refrain from joining is withdrawn by operation of law, where a embodied in its Collective Bargaining Agreement with the Company, by virtue
labor union and an employer have agreed on a closed shop, by virtue of of which "membership in the union was required as a condition for
which the employer may employ only member of the collective bargaining employment for all permanent employees workers". This agreement was
union, and the employees must continue to be members of the union for the already in existence at the time Republic Act No. 3350 was enacted on June
duration of the contract in order to keep their jobs. Thus Section 4 (a) (4) of 18, 1961, and it cannot, therefore, be deemed to have been incorporated into
the Industrial Peace Act, before its amendment by Republic Act No. 3350, the agreement. But by reason of this amendment, Appellee, as well as others
provides that although it would be an unfair labor practice for an employer "to similarly situated, could no longer be dismissed from his job even if he should
discriminate in regard to hire or tenure of employment or any term or cease to be a member, or disaffiliate from the Union, and the Company could
condition of employment to encourage or discourage membership in any continue employing him notwithstanding his disaffiliation from the Union. The
labor organization" the employer is, however, not precluded "from making an Act, therefore, introduced a change into the express terms of the union
agreement with a labor organization to require as a condition of employment security clause; the Company was partly absolved by law from the
membership therein, if such labor organization is the representative of the contractual obligation it had with the Union of employing only Union members
employees". By virtue, therefore, of a closed shop agreement, before the in permanent positions, It cannot be denied, therefore, that there was indeed
enactment of Republic Act No. 3350, if any person, regardless of his religious an impairment of said union security clause.
beliefs, wishes to be employed or to keep his employment, he must become
a member of the collective bargaining union. Hence, the right of said According to Black, any statute which introduces a change into the express
employee not to join the labor union is curtailed and withdrawn. terms of the contract, or its legal construction, or its validity, or its discharge,
or the remedy for its enforcement, impairs the contract. The extent of the
To that all-embracing coverage of the closed shop arrangement, Republic change is not material. It is not a question of degree or manner or cause, but
Act No. 3350 introduced an exception, when it added to Section 4 (a) (4) of of encroaching in any respect on its obligation or dispensing with any part of
the Industrial Peace Act the following proviso: "but such agreement shall not its force. There is an impairment of the contract if either party is absolved by
cover members of any religious sects which prohibit affiliation of their law from its performance. 22 Impairment has also been predicated on laws
members in any such labor organization". Republic Act No. 3350 merely which, without destroying contracts, derogate from substantial contractual
excludes ipso jure from the application and coverage of the closed shop rights. 23
It should not be overlooked, however, that the prohibition to impair the people, and when the means adopted to secure that end are reasonable.
obligation of contracts is not absolute and unqualified. The prohibition is Both the end sought and the means adopted must be legitimate, i.e., within
general, affording a broad outline and requiring construction to fill in the the scope of the reserved power of the state construed in harmony with the
details. The prohibition is not to be read with literal exactness like a constitutional limitation of that power. 30
mathematical formula, for it prohibits unreasonable impairment only. 24 In
spite of the constitutional prohibition, the State continues to possess authority What then was the purpose sought to be achieved by Republic Act No.
to safeguard the vital interests of its people. Legislation appropriate to 3350? Its purpose was to insure freedom of belief and religion, and to
safeguarding said interests may modify or abrogate contracts already in promote the general welfare by preventing discrimination against those
effect. 25 For not only are existing laws read into contracts in order to fix the members of religious sects which prohibit their members from joining labor
obligations as between the parties, but the reservation of essential attributes unions, confirming thereby their natural, statutory and constitutional right to
of sovereign power is also read into contracts as a postulate of the legal work, the fruits of which work are usually the only means whereby they can
order. All contracts made with reference to any matter that is subject to maintain their own life and the life of their dependents. It cannot be gainsaid
regulation under the police power must be understood as made in reference that said purpose is legitimate.
to the possible exercise of that power. 26 Otherwise, important and valuable
reforms may be precluded by the simple device of entering into contracts for The questioned Act also provides protection to members of said religious
the purpose of doing that which otherwise may be prohibited. The policy of
sects against two aggregates of group strength from which the individual
protecting contracts against impairment presupposes the maintenance of a
needs protection. The individual employee, at various times in his working
government by virtue of which contractual relations are worthwhile a
life, is confronted by two aggregates of power — collective labor, directed by
government which retains adequate authority to secure the peace and good
a union, and collective capital, directed by management. The union, an
order of society. The contract clause of the Constitution must, therefore, be institution developed to organize labor into a collective force and thus protect
not only in harmony with, but also in subordination to, in appropriate the individual employee from the power of collective capital, is, paradoxically,
instances, the reserved power of the state to safeguard the vital interests of
both the champion of employee rights, and a new source of their frustration.
the people. It follows that not all legislations, which have the effect of
Moreover, when the Union interacts with management, it produces yet a third
impairing a contract, are obnoxious to the constitutional prohibition as to
aggregate of group strength from which the individual also needs protection
impairment, and a statute passed in the legitimate exercise of police power, — the collective bargaining relationship. 31
although it incidentally destroys existing contract rights, must be upheld by
the courts. This has special application to contracts regulating relations
between capital and labor which are not merely contractual, and said labor The aforementioned purpose of the amendatory law is clearly seen in the
contracts, for being impressed with public interest, must yield to the common Explanatory Note to House Bill No. 5859, which later became Republic Act
good. 27 No. 3350, as follows:

In several occasions this Court declared that the prohibition against impairing It would be unthinkable indeed to refuse employing a person
the obligations of contracts has no application to statutes relating to public who, on account of his religious beliefs and convictions,
subjects within the domain of the general legislative powers of the state cannot accept membership in a labor organization although
involving public welfare. 28 Thus, this Court also held that the Blue Sunday he possesses all the qualifications for the job. This is
Law was not an infringement of the obligation of a contract that required the tantamount to punishing such person for believing in a
employer to furnish work on Sundays to his employees, the law having been doctrine he has a right under the law to believe in. The law
enacted to secure the well-being and happiness of the laboring class, and would not allow discrimination to flourish to the detriment of
being, furthermore, a legitimate exercise of the police power. 29 those whose religion discards membership in any labor
organization. Likewise, the law would not commend the
deprivation of their right to work and pursue a modest means
In order to determine whether legislation unconstitutionally impairs contract of livelihood, without in any manner violating their religious
obligations, no unchanging yardstick, applicable at all times and under all faith and/or belief. 32
circumstances, by which the validity of each statute may be measured or
determined, has been fashioned, but every case must be determined upon
its own circumstances. Legislation impairing the obligation of contracts can
be sustained when it is enacted for the promotion of the general good of the
It cannot be denied, furthermore, that the means adopted by the Act to In Aglipay v. Ruiz 39 , this Court had occasion to state that the government
achieve that purpose — exempting the members of said religious sects from should not be precluded from pursuing valid objectives secular in character
coverage of union security agreements — is reasonable. even if the incidental result would be favorable to a religion or sect. It has
likewise been held that the statute, in order to withstand the strictures of
It may not be amiss to point out here that the free exercise of religious constitutional prohibition, must have a secular legislative purpose and a
profession or belief is superior to contract rights. In case of conflict, the latter primary effect that neither advances nor inhibits religion. 40 Assessed by
must, therefore, yield to the former. The Supreme Court of the United States these criteria, Republic Act No. 3350 cannot be said to violate the
has also declared on several occasions that the rights in the First constitutional inhibition of the "no-establishment" (of religion) clause of the
Amendment, which include freedom of religion, enjoy a preferred position in Constitution.
the constitutional system. 33 Religious freedom, although not unlimited, is a
fundamental personal right and liberty, 34 and has a preferred position in the The purpose of Republic Act No. 3350 is secular, worldly, and temporal, not
hierarchy of values. Contractual rights, therefore, must yield to freedom of spiritual or religious or holy and eternal. It was intended to serve the secular
religion. It is only where unavoidably necessary to prevent an immediate and purpose of advancing the constitutional right to the free exercise of religion,
grave danger to the security and welfare of the community that infringement by averting that certain persons be refused work, or be dismissed from work,
of religious freedom may be justified, and only to the smallest extent or be dispossessed of their right to work and of being impeded to pursue a
necessary to avoid the danger. modest means of livelihood, by reason of union security agreements. To help
its citizens to find gainful employment whereby they can make a living to
3. In further support of its contention that Republic Act No. 3350 is support themselves and their families is a valid objective of the state. In fact,
unconstitutional, appellant Union averred that said Act discriminates in favor the state is enjoined, in the 1935 Constitution, to afford protection to labor,
of members of said religious sects in violation of Section 1 (7) of Article Ill of and regulate the relations between labor and capital and industry. 41 More so
the 1935 Constitution, and which is now Section 8 of Article IV of the 1973 now in the 1973 Constitution where it is mandated that "the State shall afford
Constitution, which provides: protection to labor, promote full employment and equality in employment,
ensure equal work opportunities regardless of sex, race or creed and
regulate the relation between workers and employers. 42
No law shall be made respecting an establishment of
religion, or prohibiting the free exercise thereof, and the free
exercise and enjoyment of religious profession and worship, The primary effects of the exemption from closed shop agreements in favor
without discrimination and preference, shall forever be of members of religious sects that prohibit their members from affiliating with
allowed. No religious test shall be required for the exercise a labor organization, is the protection of said employees against the
of civil or political rights. aggregate force of the collective bargaining agreement, and relieving certain
citizens of a burden on their religious beliefs; and by eliminating to a certain
extent economic insecurity due to unemployment, which is a serious menace
The constitutional provision into only prohibits legislation for the support of
to the health, morals, and welfare of the people of the State, the Act also
any religious tenets or the modes of worship of any sect, thus forestalling
promotes the well-being of society. It is our view that the exemption from the
compulsion by law of the acceptance of any creed or the practice of any form
effects of closed shop agreement does not directly advance, or diminish, the
of worship, 35 but also assures the free exercise of one's chosen form of
religion within limits of utmost amplitude. It has been said that the religion interests of any particular religion. Although the exemption may benefit those
clauses of the Constitution are all designed to protect the broadest possible who are members of religious sects that prohibit their members from joining
labor unions, the benefit upon the religious sects is merely incidental and
liberty of conscience, to allow each man to believe as his conscience directs,
indirect. The "establishment clause" (of religion) does not ban regulation on
to profess his beliefs, and to live as he believes he ought to live, consistent
conduct whose reason or effect merely happens to coincide or harmonize
with the liberty of others and with the common good. 36 Any legislation whose
with the tenets of some or all religions. 43 The free exercise clause of the
effect or purpose is to impede the observance of one or all religions, or to
discriminate invidiously between the religions, is invalid, even though the Constitution has been interpreted to require that religious exercise be
burden may be characterized as being only indirect. 37 But if the stage preferentially aided. 44
regulates conduct by enacting, within its power, a general law which has for
its purpose and effect to advance the state's secular goals, the statute is We believe that in enacting Republic Act No. 3350, Congress acted
valid despite its indirect burden on religious observance, unless the state can consistently with the spirit of the constitutional provision. It acted merely to
accomplish its purpose without imposing such burden. 38 relieve the exercise of religion, by certain persons, of a burden that is
imposed by union security agreements. It was Congress itself that imposed the coverage of any closed shop agreement that a labor union may have
that burden when it enacted the Industrial Peace Act (Republic Act 875), and, entered into. How then can there be a religious test required for the exercise
certainly, Congress, if it so deems advisable, could take away the same of a right when no right need be exercised?
burden. It is certain that not every conscience can be accommodated by all
the laws of the land; but when general laws conflict with scrupples of We have said that it was within the police power of the State to enact
conscience, exemptions ought to be granted unless some "compelling state Republic Act No. 3350, and that its purpose was legal and in consonance
interest" intervenes. 45 In the instant case, We see no such compelling state with the Constitution. It is never an illegal evasion of a constitutional provision
interest to withhold exemption. or prohibition to accomplish a desired result, which is lawful in itself, by
discovering or following a legal way to do it. 49
Appellant bewails that while Republic Act No. 3350 protects members of
certain religious sects, it leaves no right to, and is silent as to the protection 5. Appellant avers as its fifth ground that Republic Act No. 3350 is a
of, labor organizations. The purpose of Republic Act No. 3350 was not to discriminatory legislation, inasmuch as it grants to the members of certain
grant rights to labor unions. The rights of labor unions are amply provided for religious sects undue advantages over other workers, thus violating Section
in Republic Act No. 875 and the new Labor Code. As to the lamented silence 1 of Article III of the 1935 Constitution which forbids the denial to any person
of the Act regarding the rights and protection of labor unions, suffice it to say, of the equal protection of the laws. 50
first, that the validity of a statute is determined by its provisions, not by its
silence 46; and, second, the fact that the law may work hardship does not
The guaranty of equal protection of the laws is not a guaranty of equality in
render it unconstitutional. 47
the application of the laws upon all citizens of the state. It is not, therefore, a
requirement, in order to avoid the constitutional prohibition against inequality,
It would not be amiss to state, regarding this matter, that to compel persons that every man, woman and child should be affected alike by a statute.
to join and remain members of a union to keep their jobs in violation of their Equality of operation of statutes does not mean indiscriminate operation on
religious scrupples, would hurt, rather than help, labor unions, Congress has persons merely as such, but on persons according to the circumstances
seen it fit to exempt religious objectors lest their resistance spread to other surrounding them. It guarantees equality, not identity of rights. The
workers, for religious objections have contagious potentialities more than Constitution does not require that things which are different in fact be treated
political and philosophic objections. in law as though they were the same. The equal protection clause does not
forbid discrimination as to things that are different. 51 It does not prohibit
Furthermore, let it be noted that coerced unity and loyalty even to the legislation which is limited either in the object to which it is directed or by the
country, and a fortiori to a labor — union assuming that such unity and loyalty territory within which it is to operate.
can be attained through coercion — is not a goal that is constitutionally
obtainable at the expense of religious liberty. 48 A desirable end cannot be The equal protection of the laws clause of the Constitution allows
promoted by prohibited means. classification. Classification in law, as in the other departments of knowledge
or practice, is the grouping of things in speculation or practice because they
4. Appellants' fourth contention, that Republic Act No. 3350 violates the agree with one another in certain particulars. A law is not invalid because of
constitutional prohibition against requiring a religious test for the exercise of a simple inequality. 52 The very idea of classification is that of inequality, so that
civil right or a political right, is not well taken. The Act does not require as a it goes without saying that the mere fact of inequality in no manner
qualification, or condition, for joining any lawful association membership in determines the matter of constitutionality. 53 All that is required of a valid
any particular religion or in any religious sect; neither does the Act require classification is that it be reasonable, which means that the classification
affiliation with a religious sect that prohibits its members from joining a labor should be based on substantial distinctions which make for real differences;
union as a condition or qualification for withdrawing from a labor union. that it must be germane to the purpose of the law; that it must not be limited
Joining or withdrawing from a labor union requires a positive act. Republic to existing conditions only; and that it must apply equally to each member of
Act No. 3350 only exempts members with such religious affiliation from the the class. 54 This Court has held that the standard is satisfied if the
coverage of closed shop agreements. So, under this Act, a religious objector classification or distinction is based on a reasonable foundation or rational
is not required to do a positive act — to exercise the right to join or to resign basis and is not palpably arbitrary. 55
from the union. He is exempted ipso jure without need of any positive act on
his part. A conscientious religious objector need not perform a positive act or
exercise the right of resigning from the labor union — he is exempted from
In the exercise of its power to make classifications for the purpose of The classification, introduced by Republic Act No. 3350, therefore, rests on
enacting laws over matters within its jurisdiction, the state is recognized as substantial distinctions.
enjoying a wide range of discretion. 56 It is not necessary that the
classification be based on scientific or marked differences of things or in their The classification introduced by said Act is also germane to its purpose. The
relation. 57 Neither is it necessary that the classification be made with purpose of the law is precisely to avoid those who cannot, because of their
mathematical nicety. 58 Hence legislative classification may in many cases religious belief, join labor unions, from being deprived of their right to work
properly rest on narrow distinctions, 59 for the equal protection guaranty does and from being dismissed from their work because of union shop security
not preclude the legislature from recognizing degrees of evil or harm, and agreements.
legislation is addressed to evils as they may appear.
Republic Act No. 3350, furthermore, is not limited in its application to
We believe that Republic Act No. 3350 satisfies the aforementioned conditions existing at the time of its enactment. The law does not provide that
requirements. The Act classifies employees and workers, as to the effect and it is to be effective for a certain period of time only. It is intended to apply for
coverage of union shop security agreements, into those who by reason of all times as long as the conditions to which the law is applicable exist. As
their religious beliefs and convictions cannot sign up with a labor union, and long as there are closed shop agreements between an employer and a labor
those whose religion does not prohibit membership in labor unions. Tile union, and there are employees who are prohibited by their religion from
classification rests on real or substantial, not merely imaginary or whimsical, affiliating with labor unions, their exemption from the coverage of said
distinctions. There is such real distinction in the beliefs, feelings and agreements continues.
sentiments of employees. Employees do not believe in the same religious
faith and different religions differ in their dogmas and cannons. Religious Finally, the Act applies equally to all members of said religious sects; this is
beliefs, manifestations and practices, though they are found in all places, and evident from its provision. The fact that the law grants a privilege to members
in all times, take so many varied forms as to be almost beyond imagination.
of said religious sects cannot by itself render the Act unconstitutional, for as
There are many views that comprise the broad spectrum of religious beliefs
We have adverted to, the Act only restores to them their freedom of
among the people. There are diverse manners in which beliefs, equally
association which closed shop agreements have taken away, and puts them
paramount in the lives of their possessors, may be articulated. Today the
in the same plane as the other workers who are not prohibited by their
country is far more heterogenous in religion than before, differences in religion from joining labor unions. The circumstance, that the other
religion do exist, and these differences are important and should not be
employees, because they are differently situated, are not granted the same
privilege, does not render the law unconstitutional, for every classification
allowed by the Constitution by its nature involves inequality.
Even from the phychological point of view, the classification is based on real
and important differences. Religious beliefs are not mere beliefs, mere ideas The mere fact that the legislative classification may result in actual inequality
existing only in the mind, for they carry with them practical consequences
is not violative of the right to equal protection, for every classification of
and are the motives of certain rules. of human conduct and the justification of
persons or things for regulation by law produces inequality in some degree,
certain acts. 60Religious sentiment makes a man view things and events in
but the law is not thereby rendered invalid. A classification otherwise
their relation to his God. It gives to human life its distinctive character, its
reasonable does not offend the constitution simply because in practice it
tone, its happiness or unhappiness its enjoyment or irksomeness. Usually, a results in some inequality. 61 Anent this matter, it has been said that
strong and passionate desire is involved in a religious belief. To certain whenever it is apparent from the scope of the law that its object is for the
persons, no single factor of their experience is more important to them than
benefit of the public and the means by which the benefit is to be obtained are
their religion, or their not having any religion. Because of differences in
of public character, the law will be upheld even though incidental advantage
religious belief and sentiments, a very poor person may consider himself
may occur to individuals beyond those enjoyed by the general public. 62
better than the rich, and the man who even lacks the necessities of life may
be more cheerful than the one who has all possible luxuries. Due to their
religious beliefs people, like the martyrs, became resigned to the inevitable 6. Appellant's further contention that Republic Act No. 3350 violates the
and accepted cheerfully even the most painful and excruciating pains. constitutional provision on social justice is also baseless. Social justice is
Because of differences in religious beliefs, the world has witnessed turmoil, intended to promote the welfare of all the people. 63 Republic Act No. 3350
civil strife, persecution, hatred, bloodshed and war, generated to a large promotes that welfare insofar as it looks after the welfare of those who,
extent by members of sects who were intolerant of other religious beliefs. because of their religious belief, cannot join labor unions; the Act prevents
their being deprived of work and of the means of livelihood. In determining for the exercise of power, and not a mere incidental result arising from its
whether any particular measure is for public advantage, it is not necessary exertion, is the criterion by which the validity of a statute is to be
that the entire state be directly benefited — it is sufficient that a portion of the measured. 71
state be benefited thereby.
II. We now pass on the second assignment of error, in support of which the
Social justice also means the adoption by the Government of measures Union argued that the decision of the trial court ordering the Union to pay
calculated to insure economic stability of all component elements of society, P500 for attorney's fees directly contravenes Section 24 of Republic Act No.
through the maintenance of a proper economic and social equilibrium in the 875, for the instant action involves an industrial dispute wherein the Union
inter-relations of the members of the community. 64 Republic Act No. 3350 was a party, and said Union merely acted in the exercise of its rights under
insures economic stability to the members of a religious sect, like the Iglesia the union shop provision of its existing collective bargaining contract with the
ni Cristo, who are also component elements of society, for it insures security Company; that said order also contravenes Article 2208 of the Civil Code;
in their employment, notwithstanding their failure to join a labor union having that, furthermore, Appellee was never actually dismissed by the defendant
a closed shop agreement with the employer. The Act also advances the Company and did not therefore suffer any damage at all . 72
proper economic and social equilibrium between labor unions and employees
who cannot join labor unions, for it exempts the latter from the compelling In refuting appellant Union's arguments, Appellee claimed that in the instant
necessity of joining labor unions that have closed shop agreements and case there was really no industrial dispute involved in the attempt to compel
equalizes, in so far as opportunity to work is concerned, those whose religion Appellee to maintain its membership in the union under pain of dismissal,
prohibits membership in labor unions with those whose religion does not and that the Union, by its act, inflicted intentional harm on Appellee; that
prohibit said membership. Social justice does not imply social equality, since Appellee was compelled to institute an action to protect his right to
because social inequality will always exist as long as social relations depend work, appellant could legally be ordered to pay attorney's fees under Articles
on personal or subjective proclivities. Social justice does not require legal 1704 and 2208 of the Civil Code. 73
equality because legal equality, being a relative term, is necessarily premised
on differentiations based on personal or natural conditions. 65 Social justice
The second paragraph of Section 24 of Republic Act No. 875 which is relied
guarantees equality of opportunity 66 , and this is precisely what Republic Act
upon by appellant provides that:
No. 3350 proposes to accomplish — it gives laborers, irrespective of their
religious scrupples, equal opportunity for work.
No suit, action or other proceedings shall be maintainable in
any court against a labor organization or any officer or
7. As its last ground, appellant contends that the amendment introduced by
member thereof for any act done by or on behalf of such
Republic Act No. 3350 is not called for — in other words, the Act is not organization in furtherance of an industrial dispute to which it
proper, necessary or desirable. Anent this matter, it has been held that a is a party, on the ground only that such act induces some
statute which is not necessary is not, for that reason, unconstitutional; that in
other person to break a contract of employment or that it is in
determining the constitutional validity of legislation, the courts are
restraint of trade or interferes with the trade, business or
unconcerned with issues as to the necessity for the enactment of the
employment of some other person or with the right of some
legislation in question. 67 Courts do inquire into the wisdom of
other person to dispose of his capital or labor. (Emphasis
laws. 68 Moreover, legislatures, being chosen by the people, are presumed to supplied)
understand and correctly appreciate the needs of the people, and it may
change the laws accordingly. 69 The fear is entertained by appellant that
unless the Act is declared unconstitutional, employers will prefer employing That there was a labor dispute in the instant case cannot be disputed for
members of religious sects that prohibit their members from joining labor appellant sought the discharge of respondent by virtue of the closed shop
unions, and thus be a fatal blow to unionism. We do not agree. The threat to agreement and under Section 2 (j) of Republic Act No. 875 a question
unionism will depend on the number of employees who are members of the involving tenure of employment is included in the term "labor dispute". 74 The
religious sects that control the demands of the labor market. But there is discharge or the act of seeking it is the labor dispute itself. It being the labor
really no occasion now to go further and anticipate problems We cannot dispute itself, that very same act of the Union in asking the employer to
judge with the material now before Us. At any rate, the validity of a statute is dismiss Appellee cannot be "an act done ... in furtherance of an industrial
to be determined from its general purpose and its efficacy to accomplish the dispute".The mere fact that appellant is a labor union does not necessarily
end desired, not from its effects on a particular case. 70 The essential basis mean that all its acts are in furtherance of an industrial dispute. 75 Appellant
Union, therefore, cannot invoke in its favor Section 24 of Republic Act No.
875. This case is not intertwined with any unfair labor practice case existing
at the time when Appellee filed his complaint before the lower court.

Neither does Article 2208 of the Civil Code, invoked by the Union, serve as
its shield. The article provides that attorney's fees and expenses of litigation
may be awarded "when the defendant's act or omission has compelled the
plaintiff ... to incur expenses to protect his interest"; and "in any other case
where the court deems it just and equitable that attorney's fees and
expenses of litigation should be recovered". In the instant case, it cannot be
gainsaid that appellant Union's act in demanding Appellee's dismissal
caused Appellee to incur expenses to prevent his being dismissed from his
job. Costs according to Section 1, Rule 142, of the Rules of Court, shall be
allowed as a matter of course to the prevailing party.

WHEREFORE, the instant appeal is dismissed, and the decision, dated

August 26, 1965, of the Court of First Instance of Manila, in its Civil Case No.
58894, appealed from is affirmed, with costs against appellant Union. It is so
KAPATIRAN SA MEAT AND CANNING DIVISION (TUPAS Local Chapter On October 12, 1987, the TUPAS staged a strike. ROBINA obtained an
No. 1027), petitioner, injunction against the strike, resulting in an agreement to return to work and
vs. for the parties to negotiate a new CBA.
AND CANNING DIVISION UNIVERSAL ROBINA CORPORATION and The next day, October 13, 1987, NEW ULO, claiming that it has "the majority
MEAT AND CANNING DIVISION NEW EMPLOYEES AND WORKERS of the daily wage rank and file employees numbering 191," filed a petition for
UNITED LABOR ORGANIZATION, respondents. a certification election at the Bureau of Labor Relations (Annex A).

RESOLUTION TUPAS moved to dismiss the petition for being defective in form and that the
members of the NEW ULO were mostly members of the Iglesia ni Kristo sect
GRIÑO-AQUINO, J.: which three (3) years previous refused to affiliate with any labor union. It also
accused the company of using the NEW ULO to defeat TUPAS' bargaining
The petitioner, Kapatiran sa Meat and Canning Division TUPAS Local rights (Annex B).
Chapter No. 1027) hereinafter referred to as "TUPAS," seeks a review of the
resolution dated January 27, 1988 (Annex D) of public respondent Pura On November 17, 1987, the Med-Arbiter ordered the holding of a certification
Ferrer-Calleja, Director of the Bureau of Labor Relations, dismissing its election within 20 days (Annex C).
appeal from the Order dated November 17, 1987 (Annex C) of the Med-
Arbiter Rasidali C. Abdullah ordering a certification election to be conducted TUPAS appealed to the Bureau of Labor Relations BLR. In the meantime, it
among the regular daily paid rank and file employees/workers of Universal was able to negotiate a new 3-year CBA with ROBINA, which was signed on
Robina Corporation-Meat and Canning Division to determine which of the December 3, 1987 and to expire on November 15, 1990.
contending unions:
On January 27, 1988, respondent BLR Director Calleja dismissed the appeal
a) Kapatiran sa Meat and Canning Division TUPAS Local (Annex D).
Chapter No. 1027 (or "TUPAS" for brevity);
TUPAS' motion for reconsideration (Annex E) was denied on March 17, 1988
b) Meat and Canning Division New Employees and Workers (Annex F). On April 30, 1988, it filed this petition alleging that the public
United Labor Organization (or "NEW ULO" for brevity); respondent acted in excess of her jurisdiction and with grave abuse of
discretion in affirming the Med-Arbiter's order for a certification election.
c) No union.
After deliberating on the petition and the documents annexed thereto, We
shall be the bargaining unit of the daily wage rank and file employees in the find no merit in the Petition. The public respondent did not err in dismissing
Meat and Canning Division of the company. the petitioner's appeal in BLR Case No. A-12-389-87. This Court's decision
in Victoriano vs. Elizalde Rope Workers' Union, 59 SCRA 54, upholding the
From 1984 to 1987 TUPAS was the sole and exclusive collective bargaining right of members of the IGLESIA NI KRISTO sect not to join a labor union for
representative of the workers in the Meat and Canning Division of the being contrary to their religious beliefs, does not bar the members of that
Universal Robina Corporation, with a 3-year collective bargaining agreement sect from forming their own union. The public respondent correctly observed
(CBA) which was to expire on November 15, 1987. that the "recognition of the tenets of the sect ... should not infringe on the
basic right of self-organization granted by the constitution to workers,
regardless of religious affiliation."
Within the freedom period of 60 days prior to the expiration of its CBA,
TUPAS filed an amended notice of strike on September 28, 1987 as a means
of pressuring the company to extend, renew, or negotiate a new CBA with it. The fact that TUPAS was able to negotiate a new CBA with ROBINA within
the 60-day freedom period of the existing CBA, does not foreclose the right
of the rival union, NEW ULO, to challenge TUPAS' claim to majority status,
On October 8, 1987, the NEW ULO, composed mostly of workers belonging
by filing a timely petition for certification election on October 13, 1987 before
to the IGLESIA NI KRISTO sect, registered as a labor union.
TUPAS' old CBA expired on November 15, 1987 and before it signed a new
CBA with the company on December 3, 1987. As pointed out by Med-Arbiter
Abdullah, a "certification election is the best forum in ascertaining the
majority status of the contending unions wherein the workers themselves can
freely choose their bargaining representative thru secret ballot." Since it has
not been shown that this order is tainted with unfairness, this Court will not
thwart the holding of a certification election (Associated Trade Unions [ATU]
vs. Noriel, 88 SCRA 96).

WHEREFORE, the petition for certiorari is denied, with costs against the
UST FACULTY UNION (USTFU), GIL Y. GAMILLA, CORAZON QUI, WHEREFORE, premises considered, judgment is hereby
NORMA CALAGUAS, IRMA POTENCIANO, LUZ DE GUZMAN, rendered declaring the election of USTFU officers conducted
REYES, CELSO NIERRA, GLICERIA BALDRES, MA. LOURDES on October 4, 1996 and its election results as null and void ab
ESPINA, ZENAIDA FAMORCA, PHILIP AGUINALDO, Accordingly, respondents Gil Gamilla, et al are hereby ordered
BENEDICTA ALAVA and LEONCIO CASAL, petitioners vs. Dir.
to cease and desist from acting and performing the duties and
Relations, Med-Arbiter TOMAS F. FALCONITIN of The National functions of the legitimate officers of [the] University of Santo
Capital Region, Department of Labor and Employment (DOLE), Tomas Faculty Union (USTFU) pursuant to [the] unions
EDUARDO J. MARIO JR., MA. MELVYN ALAMIS, NORMA constitution and by-laws (CBL).
MYRNA HILARIO, TERESITA MEER, FERNANDO PEDROSA, The Temporary Restraining Order (TRO ) issued by this Office
NILDA REDOBLADO, RENE SISON, EVELYN TIROL and ROSIE on December 11, 1996 in connection with the instant petition,
ALCANTARA, respondents. is hereby made and declared permanent. [3]

DECISION Likewise challenged is the October 30, 1997 Resolution[4]of Director Bitonio,
which denied petitioners Motion for Reconsideration.

There is a right way to do the right thing at the right time for the right
The Facts
reasons,[1] and in the present case, in the right forum by the right parties. While
grievances against union leaders constitute legitimate complaints deserving
appropriate redress, action thereon should be made in the proper forum at the proper
time and after observance of proper procedures. Similarly, the election of union The factual antecedents of the case are summarized in the assailed Resolution
officers should be conducted in accordance with the provisions of the unions as follows:
constitution and bylaws, as well as the Philippine Constitution and the Labor
Code. Specifically, while all legitimate faculty members of the University of Santo Petitioners-appellees [herein Private Respondents] Marino, et.
Tomas (UST) belonging to a collective bargaining unit may take part in a duly al. (appellees) are duly elected officers of the UST Faculty
convened certification election, only bona fide members of the UST Faculty Union
Union (USTFU). The union has a subsisting five-year
(USTFU) may participate and vote in a legally called election for union
officers. Mob hysteria, however well-intentioned, is not a substitute for the rule of Collective Bargaining Agreement with its employer, the
law. University of Santo Tomas (UST). The CBA was registered
with the Industrial Relations Division, DOLE-NCR, on 20
February 1995. It is set to expire on 31 May 1998.
The Case

On 21 September 1996, appellee Collantes, in her capacity as

The Petition for Certiorari before us assails the August 15, 1997 Secretary General of USTFU, posted a notice addressed to all
Resolution[2] of Director Benedicto Ernesto R. Bitonio Jr. of the Bureau of Labor USTFU members announcing a general assembly to be held
Relations (BLR) in BLR Case No. A-8-49-97, which affirmed the February 11, 1997 on 05 October 1996. Among others, the general assembly was
Decision of Med-Arbiter Tomas F. Falconitin. The med-arbiters Decision disposed called to elect USTFUs next set of officers. Through the
as follows:
notice, the members were also informed of the constitution of
a Committee on Elections (COMELEC) to oversee the The election of the appellants came about upon a motion of
elections. (Annex B, petition) one Atty. Lopez, admittedly not a member of USTFU, that the
USTFU CBL and 'the rules of the election be suspended and
On 01 October 1996, some of herein appellants filed a that the election be held [on] that day' (See --paragraph 39,
separate petition with the Med-Arbiter, DOLE-NCR, directed Idem.)
against herein appellees and the members of the
COMELEC. Docketed as Case No. NCR-OD-M-9610-001, the On 11 October 1996, appellees filed the instant petition
petition alleged that the COMELEC was not constituted in seeking injunctive reliefs and the nullification of the results of
accordance with USTFUs constitution and by-laws (CBL) and the 04 October 1996 election. Appellees alleged that the
that no rules had been issued to govern the conduct of the 05 holding of the same violated the temporary restraining order
October 1996 election. issued in Case No. NCR-OD-M-9610-001. Accusing appellants
of usurpation, appellees characterized the election as
On 02 October 1996, the secretary general of UST, upon the spurious for being violative of USTFUs CBL, specifically
request of the various UST faculty club presidents (See because the general assembly resulting in the election of
paragraph VI, Respondents Comment and Motion to Dismiss), appellants was not called by the Board of Officers of the
issued notices allowing all faculty members to hold a USTFU; there was no compliance with the ten-day notice rule
convocation on 04 October 1996 (See Annex C Petition; required by Section 1, Article VIII of the CBL; the supposed
Annexes 4 to 10, Appeal).Denominated as [a] general faculty elections were conducted without a COMELEC being
assembly, the convocation was supposed to discuss the state constituted by the Board of Officers in accordance with
of the unratified UST-USTFU CBA and status and election of Section 1, Article IX of the CBL; the elections were not by
USTFU officers (Annex 11, Appeal) secret balloting as required by Section 1, Article V and
Section 6, Article IX of the CBL, and, the general assembly
On 04 October 1996, the med-arbiter in Case No. NCR-OD-M- was convened by faculty members some of whom were not
9610-001 issued a temporary restraining order against herein members of USTFU, so much so that non-USTFU members
appellees enjoining them from conducting the election were allowed to vote in violation of Section 1, Article V of the
scheduled on 05 October 1996. CBL.

Also on 04 October 1996, and as earlier announced by the On 24 October 1996, appellees filed another urgent ex-parte
UST secretary general, the general faculty assembly was held motion for a temporary restraining order, this time alleging
as scheduled. The general assembly was attended by that appellants had served the former a notice to vacate the
members of the USTFU and, as admitted by the appellants, union office. For their part, appellants moved to dismiss the
also by 'non-USTFU members [who] are members in good original petition and the subsequent motion on jurisdictional
standing of the UST Academic Community Collective grounds. Both the petition and the motion were captioned to
Bargaining Unit' (See paragraph XI, Respondents Comment be for Prohibition, Injunction with Prayer for Preliminary
and Motion to Dismiss). On this occasion, appellants were Injunction and Temporary Restraining Order. According to the
elected as USTFUs new set of officers by acclamation and appellants, the med-arbiter has no jurisdiction over petitions
clapping of hands (See paragraphs 40 to 50, Annex '12', for prohibition, 'including the ancillary remedies of restraining
Appeal). order and/or preliminary injunction, which are merely
incidental to the main petition for PROHIBITION' (Paragraph issued a temporary restraining order directing the
XVIII3, Respondents Comment and Motion to respondents to cease and desist from performing any and all
Dismiss). Appellants also averred that they now constituted acts pertaining to the duties and functions of the officers and
the new set of union officers having been elected in directors of USTFU.
accordance with law after the term of office of appellees had
expired. They further maintained that appellees scheduling of In the meantime, appellants claimed that the new CBA was
the 5 October 1996 elections was illegal because no rules and purportedly ratified by an overwhelming majority of USTs
regulations governing the elections were promulgated as academic community on 12 December 1996 (Annexes 1 to 10,
required by USTFUs CBL and that one of the members of the Idem). For this reason, appellants moved for the dismissal of
COMELEC was not a registered member of USTFU. Appellants what it denominated as appellees petition for prohibition on
likewise noted that the elections called by the appellees the ground that this had become moot and academic.[5]
should have been postponed to allow the promulgation of
rules and regulations and to 'insure a free, clean, honest and Petitioners appealed the med-arbiters Decision to the labor secretary,[6] who
orderly elections and to afford at the same time the greater transmitted the records of the case to the Bureau of Labor Relations which, under
Department Order No. 9, was authorized to resolve appeals of intra-union cases,
majority of the general membership to participate' (See consistent with the last paragraph of Article 241 of the Labor Code. [7]
paragraph V, Idem). Finally, appellants contended that the
holding of the general faculty assembly on 04 October 1996
was under the control of the Council of College/Faculty Club The Assailed Ruling

Presidents in cooperation with the USTFU Reformist Alliance

and that they received the Temporary Restraining Order
Agreeing with the med-arbiter that the USTFU officers purported election held
issued in Case No. NCR-OD-M-9610-001 only on 07 October on October 4, 1994 was void for having been conducted in violation of the unions
1996 and were not aware of the same on 04 October 1996. Constitution and Bylaws (CBL), Public Respondent Bitonio rejected petitioners
contention that it was a legitimate exercise of their right to self-organization. He
On 03 December 1996, appellants and UST allegedly entered ruled that the CBL, which constituted the covenant between the union and its
members, could not be suspended during the October 4, 1996 general assembly of all
into another CBA covering the period from 01 June 1996 to 31
faculty members, since that assembly had not been convened or authorized by the
May 2001 (Annex 11, appellants Rejoinder to the Reply and USTFU.
Director Bitonio likewise held that the October 4, 1996 election could not be
legitimized by the recognition of the newly elected set of officers by UST or by the
Consequently, appellees again moved for the issuance of a alleged ratification of the new CBA by the general membership of the
temporary restraining order to prevent appellants from USTFU. Ruled Respondent Bitonio:
making further representations that [they] had entered into a
new agreement with UST. Appellees also reiterated their "This submission is flawed. The issue at hand is not collective
earlier stand that appellants were usurping the formers duties bargaining representation but union leadership, a matter that
and functions and should be stopped from continuing such should concern only the members of USTFU. As pointed out
acts. by the appellees, the privilege of determining who the union
officers will be belongs exclusively to the members of the
On 11 December 1996, over appellants insistence that the union. Said privilege is exercised in an election proceeding in
issue of jurisdiction should first be resolved, the med-arbiter accordance with the union's CBL and applicable law.
To accept appellants' claim to legitimacy on the foregoing (3) Whether the overwhelming ratification of the Collective
grounds is to invest in appellants the position, duties, Bargaining Agreement executed by the petitioners in behalf of
responsibilities, rights and privileges of USTFU officers the USTFU with the University of Santo Tomas has rendered
without the benefit of a lawful electoral exercise as defined in moot and academic the issue as to the validity of the
USTFU's CBL and Article 241(c) of the Labor Code. Not to suspension of the Constitution and By-Laws and the elections
mention the fact that labor laws prohibit the employer from of October 4, 1996 in the General Faculty Assembly[.]
interfering with the employees in the latter' exercise of their
right to self-organization. To allow appellants to become
USTFU officers on the strength of management's recognition The Courts Ruling

of them is to concede to the employer the power of

determining who should be USTFU's leaders. This is a clear The petition is not meritorious. Petitioners fail to convince this Court that
case of interference in the exercise by USTFU members of Director Bitonio gravely abused his discretion in affirming the med-arbiter and in
their right to self-organization.[8] refusing to recognize the binding effect of the October 4, 1996 general assembly
called by the UST administration.
Hence, this Petition.[9]

First Issue: Right to Self-Organization and Union Membership

The Issues

At the outset, the Court stresses that National Federation of Labor (NFL) v.
The main issue in this case is whether the public respondent committed grave Laguesma[11] has held that challenges against rulings of the labor secretary and those
abuse of discretion in refusing to recognize the officers elected during the October 4, acting on his behalf, like the director of labor relations, shall be acted upon by the
1996 general assembly. Specifically, petitioners in their Memorandum urge the Court of Appeals, which has concurrent jurisdiction with this Court over petitions
Court to resolve the following questions:[10] for certiorari. However, inasmuch as the memoranda in the instant case have been
filed prior to the promulgation and finality of our Decision in NFL, we deem it
proper to resolve the present controversy directly, instead of remanding it to the
(1) Whether the Collective Bargaining Unit of all the faculty Court of Appeals. Having disposed of the foregoing procedural matter, we now
members in that General Faculty Assembly had the right in tackle the issues in the present case seriatim.
that General Faculty Assembly to suspend the provisions of Self-organization is a fundamental right guaranteed by the Philippine
the Constitution and By-Laws of the USTFU regarding the Constitution and the Labor Code. Employees have the right to form, join or assist
elections of officers of the union[.] labor organizations for the purpose of collective bargaining or for their mutual aid
and protection.[12] Whether employed for a definite period or not, any employee shall
be considered as such, beginning on his first day of service, for purposes of
(2) Whether the suspension of the provisions of the
membership in a labor union.[13]
Constitution and By-Laws of the USTFU in that General
Faculty Assembly is valid pursuant to the constitutional right Corollary to this right is the prerogative not to join, affiliate with or assist a
labor union.[14] Therefore, to become a union member, an employee must, as a rule,
of the Collective Bargaining Unit to engage in peaceful not only signify the intent to become one, but also take some positive steps to realize
concerted activities for the purpose of ousting the corrupt that intent. The procedure for union membership is usually embodied in the unions
regime of the private respondents[.] constitution and bylaws.[15] An employee who becomes a union member acquires the
rights and the concomitant obligations that go with this new status and becomes
bound by the unions rules and regulations.
When a man joins a labor union (or almost any other The constitutional right to self-organization is better
democratically controlled group), necessarily a portion of his understood in the context of ILO Convention No. 87 (Freedom
individual freedom is surrendered for the benefit of all of Association and Protection of Right to Organize), to which
members. He accepts the will of the majority of the members the Philippines is signatory. Article 3 of the Convention
in order that he may derive the advantages to be gained from provides that workers organizations shall have the right to
the concerted action of all. Just as the enactments of the draw up their constitution and rules and to elect their
legislature bind all of us, to the constitution and by-laws of representatives in full freedom, free from any interference
the union (unless contrary to good morals or public policy, or from public authorities. The freedom conferred by the
otherwise illegal), which are duly enacted through democratic provision is expansive; the responsibility imposed on union
processes, bind all of the members. If a member of a union members to respect the constitution and rules they
dislikes the provisions of the by-laws, he may seek to have themselves draw up equally so. The point to be stressed is
them amended or may withdraw from the union; otherwise, he that the unions CBL is the fundamental law that governs the
must abide by them. It is not the function of courts to decide relationship between and among the members of the union. It
the wisdom or propriety of legitimate by-laws of a trade union. is where the rights, duties and obligations, powers, functions
and authority of the officers as well as the members are
On joining a labor union, the constitution and by-laws become defined. It is the organic law that determines the validity of
a part of the members contract of membership under which acts done by any officer or member of the union. Without
he agrees to become bound by the constitution and governing respect for the CBL, a union as a democratic institution
rules of the union so far as it is not inconsistent with degenerates into nothing more than a group of individuals
controlling principles of law. The constitution and by-laws of governed by mob rule.
an unincorporated trade union express the terms of a
contract, which define the privileges and rights secured to,
and duties assumed by, those who have become Union Election vs. Certification Election

members. The agreement of a member on joining a union to

abide by its laws and comply with the will of the lawfully A union election is held pursuant to the unions constitution and bylaws, and the
constituted majority does not require a member to submit to right to vote in it is enjoyed only by union members. A union election should be
the determination of the union any question involving his distinguished from a certification election, which is the process of determining,
personal rights.[16] through secret ballot, the sole and exclusive bargaining agent of the employees in the
appropriate bargaining unit, for purposes of collective bargaining. [18] Specifically, the
purpose of a certification election is to ascertain whether or not a majority of the
Petitioners claim that the numerous anomalies allegedly committed by the employees wish to be represented by a labor organization and, in the affirmative
private respondents during the latters incumbency impelled the October 4, 1996 case, by which particular labor organization.[19]
election of the new set of USTFU officers. They assert that such exercise was
pursuant to their right to self-organization. In a certification election, all employees belonging to the appropriate
bargaining unit can vote.[20] Therefore, a union member who likewise belongs to the
Petitioners frustration over the performance of private respondents, as well as appropriate bargaining unit is entitled to vote in said election. However, the reverse
their fears of a fraudulent election to be held under the latters supervision, could not is not always true; an employee belonging to the appropriate bargaining unit but who
justify the method they chose to impose their will on the union. Director Bitonio is not a member of the union cannot vote in the union election, unless otherwise
aptly elucidated:[17] authorized by the constitution and bylaws of the union. Verily, union affairs and
elections cannot be decided in a non-union activity.
In both elections, there are procedures to be followed. Thus, the October 4, ARTICLE IX - UNION ELECTION
1996 election cannot properly be called a union election, because the procedure laid
down in the USTFUs CBL for the election of officers was not followed. It could not
have been a certification election either, because representation was not the issue, Section 1. There shall be a Committee on Election (COMELEC)
and the proper procedure for such election was not followed. The participation of to be created by the Board of Officers at least thirty (30) days
non-union members in the election aggravated its irregularity. before any regular or special election. The functions of the
COMELEC include the following:

Second Issue: USTFUs Constitution and ByLaws Violated

a) Adopt and promulgate rules and regulations that will ensure a free,
clean, honest and orderly election, whether regular or special;

The importance of a unions constitution and bylaws cannot be b) Pass upon qualifications of candidates;
overemphasized. They embody a covenant between a union and its members and c) Rule on any question or protest regarding the conduct of the election
constitute the fundamental law governing the members rights and obligations.[21] As
subject to the procedure that may be promulgated by the Board of
such, the unions constitution and bylaws should be upheld, as long as they are not
Officers; and
contrary to law, good morals or public policy.
d) Proclaim duly elected officers.
We agree with the finding of Director Bitonio and Med-Arbiter Falconitin that
the October 4, 1996 election was tainted with irregularities because of the following
reasons. Section 2. The COMELEC shall be composed of a chairman
and two members all of whom shall be appointed by the Board
First, the October 4, 1996 assembly was not called by the USTFU. It was
merely a convocation of faculty clubs, as indicated in the memorandum sent of Officers.
to all faculty members by Fr. Rodel Aligan, OP, the secretary general of the
University of Santo Tomas.[22] It was not convened in accordance with the provision xxx xxx xxx[24]
on general membership meetings as found in the USTFUs CBL, which reads:
Third, the purported election was not done by secret balloting, in violation of
Section 6, Article IX of the USTFUs CBL, as well as Article 241 (c) of the Labor
The foregoing infirmities considered, we cannot attribute grave abuse of
Section 1. The Union shall hold regular general membership discretion to Director Bitonios finding and conclusion. In Rodriguez v. Director,
meetings at least once every three (3) months. Notices of the Bureau of Labor Relations,[25] we invalidated the local union elections held at the
meeting shall be sent out by the Secretary-General at least wrong date without prior notice to members and conducted without regard for duly
ten (10) days prior to such meetings by posting in prescribed ground rules. We held that the proceedings were rendered void by the
lack of due process -- undue haste, lack of adequate safeguards to ensure integrity of
conspicuous places, preferably inside Company premises,
the voting, and the absence of the notice of the dates of balloting.
said notices. The date, time and place for the meetings shall
be determined by the Board of Officers. [23]
Third Issue: Suspension of USTFUs CBL
Unquestionably, the assembly was not a union meeting. It was in fact a
gathering that was called and participated in by management and non-union
members. By no legal fiat was such assembly transformed into a union activity by Petitioners contend that the October 4, 1996 assembly suspended the unions
the participation of some union members. CBL. They aver that the suspension and the election that followed were in
accordance with their constituent and residual powers as members of the collective
Second, there was no commission on elections to oversee the election, as
bargaining unit to choose their representatives for purposes of collective bargaining.
mandated by Sections 1 and 2 of Article IX of the USTFUs CBL, which provide:
Again they cite the numerous anomalies allegedly committed by the private membership is very clearly spelled out in Article IV of USTFUs
respondents as USTFU officers. This argument does not persuade. CBL. Having become members, they could then draw
First, as has been discussed, the general faculty assembly was not the proper guidance from Ang Malayang Manggagawa Ng Ang Tibay v.
forum to conduct the election of USTFU officers. Not all who attended the assembly Ang Tibay, 103 Phil. 669. Therein the Supreme Court held that
were members of the union; some, apparently, were even disqualified from
if a member of the union dislikes the provisions of the by-laws
becoming union members, since they represented management. Thus, Director
Bitonio correctly observed: he may seek to have them amended or may withdraw from the
union; otherwise he must abide by them. Under Article XVII of
Further, appellants cannot be heard to say that the CBL was USTFUs CBL, there is also a specific provision for
effectively suspended during the 04 October 1996 general constitutional amendments.What is clear therefore is that
assembly. A union CBL is a covenant between the union and USTFUs CBL provides for orderly procedures and remedies
its members and among members (Johnson and Johnson which appellants could have easily availed [themselves] of
Labor Union-FFW, et al. v. Director of Labor Relations, 170 instead of resorting to an exercise of their so-called residual
SCRA 469). Where ILO Convention No. 87 speaks of a unions power'.[26]
full freedom to draw up its constitution and rules, it includes
Second, the grievances of the petitioners could have been brought up and
freedom from interference by persons who are not members
resolved in accordance with the procedure laid down by the unions CBL [27]and by
of the union. The democratic principle that governance is a the Labor Code.[28] They contend that their sense of desperation and helplessness led
matter for the governed to decide upon applies to the labor to the October 4, 1996 election. However, we cannot agree with the method they
movement which, by law and constitutional mandate, must be used to rectify years of inaction on their part and thereby ease bottled-up frustrations,
assiduously insulated against intrusions coming from both the as such method was in total disregard of the USTFUs CBL and of due process. The
end never justifies the means.
employer and complete strangers if the 'protection to labor
clause' of the constitution is to be guaranteed. By appellants We agree with the solicitor generals observation that the act of suspending the
own evidence, the general faculty assembly of 04 October constitution when the questioned election was held is an implied admission that the
election held on that date [October 4, 1996] could not be considered valid under the
1996 was not a meeting of USTFU. It was attended by existing USTFU constitution xxx.[29]
members and non-members alike, and therefore was not a
The ratification of the new CBA executed between the petitioners and the
forum appropriate for transacting union matters. The person
University of Santo Tomas management did not validate the void October 4, 1996
who moved for the suspension of USTFUs CBL was not a election. Ratified were the terms of the new CBA, not the issue of union leadership --
member of USTFU. Allowing a non-union member to initiate a matter that should be decided only by union members in the proper forum at the
the suspension of a unions CBL, and non-union members to proper time and after observance of proper procedures.
participate in a union election on the premise that the unions
CBL had been suspended in the meantime, is incompatible
with the freedom of association and protection of the right to
In dismissing this Petition, we are not passing upon the merits of the
If there are members of the so-called academic community mismanagement allegations imputed by the petitioners to the private respondents;
collective bargaining unit who are not USTFU members but these are not at issue in the present case. Petitioners can bring their grievances and
resolve their differences with private respondents in timely and appropriate
who would nevertheless want to have a hand in USTFUs
proceedings. Courts will not tolerate the unfair treatment of union members by their
affairs, the appropriate procedure would have been for them own leaders.When the latter abuse and violate the rights of the former, they shall be
to become members of USTFU first. The procedure for dealt with accordingly in the proper forum after the observance of due process.
TROPICAL HUT EMPLOYEES' UNION-CGW, JOSE ENCINAS, JOSE affiliation. Following such affiliation with NATU, Registration Certificate No.
LUIS TRIBINO, FELIPE DURAN, MANUEL MANGYAO, MAMERTO 5544-IP was issued by the Department of Labor in the name of the Tropical
CAHUCOM, NEMESIO BARRO, TEODULFO CAPAGNGAN, VICTORINO Hut Employees Union — NATU. It appears, however, that NATU itself as a
ABORRO, VIDAL MANTOS, DALMACIO DALDE, LUCIO PIASAN, labor federation, was not registered with the Department of Labor.
SALVADOR NERVA, BERNARDO ENGALAN, BONIFACIO CAGATIN, After several negotiations were conducted between THEU-NATU,
BENEDICTO VALDEZ, EUSEBIO SUPILANAS, ALFREDO HAMAYAN, represented by its local president and the national officers of the NATU,
ASUERO BONITO, GAVINO DEL CAMPO, ZACARIAS DAMING, particularly Ignacio Lacsina, President, Pacifico Rosal, Executive Vice-
PRUDENCIO LADION, FULGENCIO BERSALUNA, ALBERTO PERALES, President and Marcelino Lontok, Jr., Vice President, and respondent Tropical
ROMEO MAGRAMO, GODOFREDO CAMINOS, GILDARDO DUMAS, Hut Food Market, Incorporated, thru its President and General Manager,
JORGE SALDIVAR, GENARO MADRIO, SEGUNDINO KUIZON, LUIS Cesar Azcona, Sr., a Collective Bargaining Agreement was concluded
SANDOVAL, NESTOR JAPAY, ROGELIO CUIZON, RENATO ANTIPADO, between the parties on April 1, 1968, the term of which expired on March 31,
GREGORIO CUEVO, MARTIN BALAZUELA, CONSTANCIO CHU, 1971. Said agreement' contained these clear and unequivocal terms:
This Agreement made and entered into this __________ day of
___________, 1968, by and between:
ANICETO BAYLON, EDISON ANDRES, REYNALDO BAGOHIN, IRENEO The Tropical Hut Food Market, Inc., a corporation duly organized and
SUPANGAN, RODRIGO CAGATIN, TEODORO ORENCIO, ARMANDO existing under and by virtue of the laws of the Republic of the
LUAYON, JAIME NERVA, NARCISO CUIZON, ALFREDO DEL ROSARIO, Philippines, with principal office at Quezon City, represented in this
EDUARDO LORENZO, PEDRO ARANGO, VICENTE SUPANGAN, Act by its President, Cesar B. Azcona (hereinafter referred to as the
TRADE UNIONS (NATU), NATIONAL LABOR RELATIONS COMMISSION The Tropical Hut Employees Union — NATU, a legitimate labor
(NLRC), HON. DIEGO P. ATIENZA, GERONIMO Q. QUADRA, FEDERICO organization duly organized and existing in accordance with the laws
C. BORROMEO, AND HON. BLAS F. OPLE, respondents. of the Republic of the Philippines, and affiliated with the National
Association of Trade Unions, with offices at San Luis Terraces,
Ermita, Manila, and represented in this Act by its undersigned
MEDIALDEA, J.: officers (hereinafter referred to as the UNION)

This is a petition for certiorari under Rule 65 seeking to set aside the Witnesseth:
decisions of the public respondents Secretary of Labor and National Labor
Relations Commission which reversed the Arbitrators rulings in favor of xxx xxx xxx
petitioners herein.
Article I
The following factual background of this case appears from the record:
Coverage and Effectivity
On January 2, 1968, the rank and file workers of the Tropical Hut Food
Market Incorporated, referred to herein as respondent company, organized a Sec. 1. The COMPANY recognizes the UNION as the sole and
local union called the Tropical Hut Employees Union, known for short as the exclusive collective bargaining agent for all its workers and
THEU, elected their officers, adopted their constitution and by-laws and employees in all matters concerning wages, hours of work, and other
immediately sought affiliation with the National Association of Trade Unions terms and conditions of employment.
(NATU). On January 3, 1968, the NATU accepted the THEU application for
xxx xxx xxx 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
Article III 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
Union Membership and Union Check-off
latter's disaffiliation from the NATU and its affiliation with the Confederation
of General Workers (CGW). The letter was passed around among the
Sec. 1 —. . . Employees who are already members of the UNION at members of the THEU-NATU, to which around one hundred and thirty-seven
the time of the signing of this Agreement or who become so (137) signatures appeared as having given their consent to and
thereafter shall be required to maintain their membership therein as acknowledgment of the decision to disaffiliate the THEU from the NATU.
a condition of continued employment.
On January 1, 1974, the general membership of the so-called THEU-CGW
xxx xxx xxx held its annual election of officers, with Jose Encinas elected as President.
On January 3, 1974, Encinas, in his capacity as THEU-CGW President,
Sec. 3—Any employee who is expelled from the UNION for joining informed the respondent company of the result of the elections. On January
another federation or forming another union, or who fails or refuses 9, 1974, Pacifico Rosal, President of the Confederation of General Workers
to maintain his membership therein as required, . . . shall, upon (CGW), wrote a letter in behalf of complainant THEU-CGW to the respondent
written request of the UNION be discharged by the COMPANY. company demanding the remittance of the union dues collected by the
(Rollo, pp. 667-670) Tropical Hut Food Mart, Incorporated to the THEU-CGW, but this was
refused by the respondent company.
And attached to the Agreement as Appendix "A" is a check-off Authorization
Form, the terms of which are as follows: 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
We, the undersigned, hereby designate the NATIONAL Association President of the THEU-NATU in place of Jose Encinas, but the position was
of Trade Unions, of which the TROPICAL HUT EMPLOYEES UNION declined by Mantos. On the same day, Lontok, Jr., informed Encinas in a
is an affiliate as sole collective bargaining agent in all matters letter, concerning the request made by the NATU federation to the
relating to salary rates, hours of work and other terms and conditions respondent company to dismiss him (Encinas) in view of his violation of
of employment in the Tropical Hut Food Market, Inc. and we hereby Section 3 of Article III of the Collective Bargaining Agreement. Encinas was
authorize the said company to deduct the amount of Four (P also advised in the letter that NATU was returning the letter of disaffiliation on
4.00) Pesos each every month as our monthly dues and to deliver the ground that:
the amount to the Treasurer of the Union or his duly authorized
representatives. (Rollo, pp. 680-684) 1. Under the restructuring program NOT of the Bureau of Labor but
of the Philippine National Trade Union Center in conjunction with the
On May 21, 1971, respondent company and THEU-NATU entered into a new NATU and other established national labor centers, retail clerks and
Collective Bargaining Agreement which ended on March 31, 1974. This new employees such as our members in the Tropical Hut pertain to
CBA incorporated the previous union-shop security clause and the attached Industry II which by consensus, has been assigned already to the
check-off authorization form. jurisdiction of the NATU;

Sometime in July, 1973, Arturo Dilag, incumbent President of THEU-NATU, 2. The right to disaffiliate belongs to the union membership who —
was appointed by the respondent company as Assistant Unit Manager. On on the basis of verified reports received by — have not even been
July 24, 1973, he wrote the general membership of his union that for reason consulted by you regarding the matter;
of his present position, he was resigning as President of the THEU-NATU
effective that date. As a consequence thereof, his Vice-President, Jose 3. Assuming that the disaffiliation decision was properly reached;
Encinas, assumed and discharged the duties of the presidency of the THEU- your letter nevertheless is unacceptable in view of Article V, Section
NATU. 1, of the NATU Constitution which provides that "withdrawal from the
organization shall he valid provided three (3) months notice of However, no comment or reply was received from petitioners. In view of this,
intention to withdraw is served upon the National Executive Council." Estelita Que, President/General Manager of respondent company, upon
(p. 281, Rollo) 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,
In view of NATU's request, the respondent company, on the same day, which 1974, pending approval by the Secretary of Labor of the application for their
was January 11, 1974, suspended Encinas pending the application for dismissal.
clearance with the Department of Labor to dismiss him. On January 12,
1974, members of the THEU-CGW passed a resolution protesting the As a consequence thereof, NLRC Case Nos. LR-2971, LR-3015 and an
suspension of Encinas and reiterated their ratification and approval of their unnumbered case were filed by petitioners against Tropical Hut Food Market,
union's disaffiliation from NATU and their affiliation with the Confederation of Incorporated, Estelita Que, Hernando Sarmiento and Arturo Dilag.
General Workers (CGW). It was Encinas' suspension that caused the filing of
NLRC Case No. LR-2511 on January 11, 1974 against private respondents It is significant to note that the joint letter petition signed by sixty-seven (67)
herein, charging them of unfair labor practice. 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
On January 15,1974, upon the request of NATU, respondent company Tropical Hut Employee Union under Registration Certificate No. 5544 IP.
applied for clearance with the Secretary of Labor to dismiss the other officers Another letter signed by one hundred forty-six (146) members of THEU-CGW
and members of THEU-CGW. The company also suspended them effective was sent to the President of the Philippines informing him of the unfair labor
that day. NLRC Case No. LR-2521 was filed by THEU-CGW and individual practices committed by private respondents against THEU-CGW members.
complainants against private respondents for unfair labor practices.
After hearing the parties in NLRC Cases Nos. 2511 and 2521 jointly filed with
On January 19, 1974, Lontok, acting as temporary chairman, presided over the Labor Arbiter, Arbitrator Daniel Lucas issued an order dated March 21,
the election of officers of the remaining THEU-NATU in an emergency 1974, holding that the issues raised by the parties became moot and
meeting pending the holding of a special election to be called at a later date. academic with the issuance of NLRC Order dated February 25, 1974 in
In the alleged election, Arturo Dilag was elected acting THEU-NATU NLRC Case No. LR-2670, which directed the holding of a certification
President together with the other union officers. On February 14, 1974, these election among the rank and file workers of the respondent company
temporary officers were considered as having been elected as regular between the THEU-NATU and THEU-CGW. He also ordered: a) the
officers for the year 1974. reinstatement of all complainants; b) for the respondent company to cease
and desist from committing further acts of dismissals without previous order
On January 30, 1974, petitioner THEU-CGW wrote a letter to Juan Ponce from the NLRC and for the complainant Tropical Hut Employees UNION-
Enrile, Secretary of National Defense, complaining of the unfair labor CGW to file representation cases on a case to case basis during the freedom
practices committed by respondent company against its members and period provided for by the existing CBA between the parties (pp. 91-
requesting assistance on the matter. The aforementioned letter contained the 93, Rollo).
signatures of one hundred forty-three (143) members.
With regard to NLRC Case Nos. LR-2971, LR-3015, and the unnumbered
On February 24,1974, the secretary of THEU-NATU, notified the entire rank case, Arbitrator Cleto T. Villatuya rendered a decision dated October 14,
and file employees of the company that they will be given forty-eight (48) 1974, the dispositive portion of which states:
hours upon receipt of the notice within which to answer and affirm their
membership with THEU-NATU. When the petitioner employees failed to Premises considered, a DECISION is hereby rendered ordering
reply, Arturo Dilag advised them thru letters dated February 26, March 2 and respondent company to reinstate immediately the sixty three (63)
5, 1974, that the THEU-NATU shall enforce the union security clause set complainants to their former positions with back wages from the time
forth in the CBA, and that he had requested respondent company to dismiss they were illegally suspended up to their actual reinstatement without
them. loss of seniority and other employment rights and privileges, and
ordering the respondents to desist from further committing acts of
Respondent company, thereafter, wrote the petitioner employees demanding unfair labor practice. The respondent company's application for
the latter's comment on Dilag's charges before action was taken thereon. clearance filed with the Secretary of Labor to terminate the subject
complainants' services effective March 20 and 23, 1974, should be 1976, the Secretary of Labor rendered a decision affirming the findings of the
denied. Commission, which provided inter alia:

SO ORDERED. (pp. 147-148, Rollo) We find, after a careful review of the record, no sufficient justification
to alter the decision appealed from except that portion of the
From the orders rendered above by Abitrator Daniel Lucas in NLRC Cases dispositive part which states:
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, . . . this Commission . . . hereby orders respondent company
namely, petitioners herein, respondent company, NATU and Dilag appealed under pain of being cited for contempt for failure to do so, to
to the National Labor Relations Commission. give the individual complainants a second chance by
reemploying them upon their voluntary reaffirmation of
In a decision rendered on August 1, 1975, the National Labor Relations membership and loyalty to the Tropical Hut Employees
Commission found the private respondents' appeals meritorious, and UNION-NATU and the National Association of Trade Union
stated, inter alia: in the event it hires additional personnel.

WHEREFORE, in view of the foregoing premises, the Order of Compliance by respondent of the above undertaking is not
Arbitrator Lucas in NLRC CASE NOS. LR-2511, 2521 and the immediately feasible considering that the same is based on an
decision of Arbitrator Villatuya in NLRC CASE NOS. LR-2971, 3015 uncertain event, i.e., reemployment of individual complainants "in the
and the unnumbered Case are hereby REVERSED. Accordingly, the event that management hires additional personnel," after they shall
individual complainants are deemed to have lost their status as have reaffirmed their loyalty to THEU-NATU, which is unlikely.
employees of the respondent company. However, considering that
the individual complainants are not presumed to be familiar with nor In lieu of the foregoing, and to give complainants positive relief
to have anticipated the legal mesh they would find themselves in, pursuant to Section 9, Implementing Instruction No. 1. dated
after their "disaffiliation" from National Association of Trade Unions November 9, 1972, respondent is hereby ordered to grant to all the
and the THEU-NATU, much less the legal consequences of the said individual complainants financial assistance equivalent to one (1)
action which we presume they have taken in all good faith; month salary for every year of service.
considering, further, that the thrust of the new orientation in labor
relations is not towards the punishment of acts violative of WHEREFORE, with the modification as above indicated, the
contractual relations but rather towards fair adjustments of the Decision of the National Labor Relations Commission is hereby
resulting complications; and considering, finally, the consequent affirmed.
economic hardships that would be visited on the individual
complainants, if the law were to be strictly enforced against them, SO ORDERED.(pp. 317-318, Rollo)
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, From the various pleadings filed and arguments adduced by petitioners and
under pain of being cited for contempt for failure to do so, to give the respondents, the following issues appear to be those presented for resolution
individual complainants a second chance by reemploying them upon in this petition to wit: 1) whether or not the petitioners failed to exhaust
their voluntary reaffirmation of membership and loyalty to the administrative remedies when they immediately elevated the case to this
Tropical Hut Employees Union-NATU and the National Association Court without an appeal having been made to the Office of the President; 2)
of Trade Unions in the event it hires additional personnel. 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
SO ORDERED. (pp. 312-313, Rollo)
and constituted unfair labor practice on the part of respondent company and
The petitioner employees appealed the decision of the respondent National
Labor Relations Commission to the Secretary of Labor. On February 23,
We find the petition highly meritorious.
The applicable law then is the Labor Code, PD 442, as amended by PD 643 Constitution and the labor laws or rules or regulations, We have always
on January 21, 1975, which states: adopted the liberal approach which favors the exercise of labor rights.

Art. 222. Appeal — . . . Relevant on this point is the basic principle We have repeatedly in affirmed in
many rulings:
xxx xxx xxx
. . . The locals are separate and distinct units primarily designed to
Decisions of the Secretary of Labor may be appealed to the secure and maintain an equality of bargaining power between the
President of the Philippines subject to such conditions or limitations employer and their employee-members in the economic struggle for
as the President may direct. (Emphasis ours) the fruits of the joint productive effort of labor and capital; and the
association of the locals into the national union (PAFLU) was in
The remedy of appeal from the Secretary of Labor to the Office of the furtherance of the same end. These associations are consensual
President is not a mandatory requirement before resort to courts can be had, entities capable of entering into such legal relations with their
member. The essential purpose was the affiliation of the local unions
but an optional relief provided by law to parties seeking expeditious
into a common enterprise to increase by collective action the
disposition of their labor disputes. Failure to avail of such relief shall not in
common bargaining power in respect of the terms and conditions of
any way served as an impediment to judicial intervention. And where the
labor. Yet the locals remained the basic units of association, free to
issue is lack of power or arbitrary or improvident exercise thereof, decisions
of the Secretary of Labor may be questioned in a certiorari proceeding serve their own and the common interest of all, subject to the
without prior appeal to the President (Arrastre Security Association —TUPAS restraints imposed by the Constitution and By-Laws of the
Association, and free also to renounce the affiliation for mutual
v. Ople, No. L-45344, February 20, 1984, 127 SCRA 580). Since the instant
welfare upon the terms laid down in the agreement which brought it
petition raises the same issue of grave abuse of discretion of the Secretary of
into existence. (Adamson & Adamson, Inc. v. CIR, No. L-35120,
Labor amounting to lack of or in excess of jurisdiction in deciding the
January 31, 1984, 127 SCRA 268; Elisco-Elirol Labor Union
controversy, this Court can properly take cognizance of and resolve the
issues raised herein. (NAFLU) v. Noriel, No. L-41955, December 29, 1977, 80 SCRA 681;
Liberty Cotton Mills Workers Union v. Liberty Cotton Mills,
Inc., supra).
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, The inclusion of the word NATU after the name of the local union THEU in
We held that the validity of the dismissals pursuant to the union security 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
clause in the collective bargaining agreement hinges on the validity of the
the said local union cannot stand on its own. Neither can it be interpreted to
disaffiliation of the local union from the federation.
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
The right of a local union to disaffiliate from its mother federation is well- members and not to the federation to which it belongs.
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
When the local union withdrew from the old federation to join a new
circumstances warrant. This right is consistent with the constitutional
federation, it was merely exercising its primary right to labor organization for
guarantee of freedom of association (Volkschel Labor Union v. Bureau of
the effective enhancement and protection of common interests. In the
Labor Relations, No. L-45824, June 19, 1985, 137 SCRA 42).
absence of enforceable provisions in the federation's constitution preventing
disaffiliation of a local union a local may sever its relationship with its parent
All employees enjoy the right to self organization and to form and join labor (People's Industrial and Commercial Employees and Workers Organization
organizations of their own choosing for the purpose of collective bargaining (FFW) v. People's Industrial and Commercial Corporation, No. 37687, March
and to engage in concerted activities for their mutual aid or protection. This is 15, 1982, 112 SCRA 440).
a fundamental right of labor that derives its existence from the Constitution.
In interpreting the protection to labor and social justice provisions of the
There is nothing in the constitution of the NATU or in the constitution of the March 13, 1984, 128 SCRA 180). In the instant case, the factual findings of
THEU-NATU that the THEU was expressly forbidden to disaffiliate from the the arbitrator were correct against that of public respondents.
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 Further, there is no merit in the contention of the respondents that the act of
months notice of intention to withdraw did not produce the effect of nullifying disaffiliation violated the union security clause of the CBA and that their
the disaffiliation for the following grounds: firstly, NATU was not even a dismissal as a consequence thereof is valid. A perusal of the collective
legitimate labor organization, it appearing that it was not registered at that bargaining agreements shows that the THEU-NATU, and not the NATU
time with the Department of Labor, and therefore did not possess and federation, was recognized as the sole and exclusive collective bargaining
acquire, in the first place, the legal personality to enforce its constitution and agent for all its workers and employees in all matters concerning wages,
laws, much less the right and privilege under the Labor Code to organize and hours of work and other terms and conditions of employment (pp. 667-
affiliate chapters or locals within its group, and secondly, the act of non- 706, Rollo). Although NATU was designated as the sole bargaining agent in
compliance with the procedure on withdrawal is premised on purely technical the check-off authorization form attached to the CBA, this simply means it
grounds which cannot rise above the fundamental right of self-organization. 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
Respondent Secretary of Labor, in affirming the decision of the respondent which entered into contract with the respondent company. When the THEU
Commission, concluded that the supposed decision to disaffiliate was not the disaffiliated from its mother federation, the former did not lose its legal
subject of a free and open discussion and decision on the part of the THEU- personality as the bargaining union under the CBA. Moreover, the union
NATU general membership (p. 305, Rollo). This, however, is contradicted by security clause embodied in the agreements cannot be used to justify the
the evidence on record. Moreover, We are inclined to believe Arbitrator dismissals meted to petitioners since it is not applicable to the circumstances
Villatuya's findings to the contrary, as follows: 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
. . . . However, the complainants refute this allegation by submitting another union or who fails or refuses to maintain membership therein. The
the following: a) Letter dated December 20, 1.973 signed by 142 case at bar does not involve the withdrawal of merely some employees from
members (Exhs. "B to B-5") resolution dated January 12, 1974, the union but of the whole THEU itself from its federation. Clearly, since there
signed by 140 members (Exhs. "H to H-6") letter dated February 26, is no violation of the union security provision in the CBA, there was no
1974 to the Department of Labor signed by 165 members (Exhs. "I to sufficient ground to terminate the employment of petitioners.
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) Public respondents considered the existence of Arturo Dilag's group as the
letter dated March 6, 1974 signed by 146 members addressed to the remaining true and valid union. We, however, are inclined to agree instead
President of the Philippines (Exhs. "HH to HH-5"), to show that in with the Arbitrator's findings when he declared:
several instances, the members of the THEU-NATU have
acknowledged their disaffiliation from NATU. The letters of the . . . . Much more, the so-called THEU-NATU under Dilag's group
complainants also indicate that an overwhelming majority have freely which assumes to be the original THEU-NATU has a very doubtful
and voluntarily signed their union's disaffiliation from NATU, and questionable existence not to mention that the alleged president
otherwise, if there was really deception employed in securing their is performing supervisory functions and not qualified to be a bona
signatures as claimed by NATU/ Dilag, it could not be possible to get fide member of the rank and file union. (p. 146, Rollo)
their signatures in five different documents. (p. 144, Rollo)
Records show that Arturo Dilag had resigned in the past as President of
We are aware of the time-honored doctrine that the findings of the NLRC and THEU-NATU because of his promotion to a managerial or supervisory
the Secretary of Labor are binding on this Court if supported by substantial position as Assistant Unit Manager of respondent Company. Petitioner Jose
evidence. However, in the same way that the findings of facts unsupported Encinas replaced Dilag as President and continued to hold such position at
by substantial and credible evidence do not bind this Court, neither will We the time of the disaffiliation of the union from the federation. It is therefore
uphold erroneous conclusions of the NLRC and the Secretary of Labor when improper and contrary to law for Dilag to reassume the leadership of the
We find that the latter committed grave abuse of discretion in reversing the remaining group which was alleged to be the true union since he belonged to
decision of the labor arbiter (San Miguel Corporation v. NLRC, L-50321, 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 dismissal. This is certainly not in fulfillment of the mandate of due process,
Isabela Sugar Co., Inc. (BISCOM) v. Philippine Association of Free Labor which is to afford the employee to be dismissed an opportunity to be heard.
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 The prerogative of the employer to dismiss or lay-off an employee should be
union, he will be required to resign therefrom (Magalit, et al. v. Court of done without abuse of discretion or arbitrainess, for what is at stake is not
Industrial Relations, et al., L-20448, May 25, 1965,14 SCRA 72). 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
Public respondents further submit that several employees who disaffiliate the employee was not formally investigated and given the opportunity to
their union from the NATU subsequently retracted and reaffirmed their refute the alleged findings made by the company (De Leon v. NLRC, L-
membership with the THEU-NATU. In the decision which was affirmed by 52056, October 30, 1980, 100 SCRA 691). Likewise, an employer can be
respondent Secretary of Labor, the respondent Commission stated that: 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
. . . out of the alleged one hundred and seventy-one (171) members (Binalbagan-Isabela Sugar Co., Inc.,(BISCOM) v. Philippine Association of
of the THEU-CGW whose signatures appeared in the "Analysis of Free Labor Unions (PAFLU) et al., L-18782, August 29, 1963, 8 SCRA 700).
Various Documents Signed by Majority Members of the THEU-CGW,
(Annex "T", Complainants), which incidentally was relied upon by In view of the fact that the dispute revolved around the mother federation and
Arbitrator Villatuya in holding that complainant THEU-CGW its local, with the company suspending and dismissing the workers at the
commanded the majority of employees in respondent company, instance of the mother federation then, the company's liability should be
ninety-three (93) of the alleged signatories reaffirmed their limited to the immediate reinstatement of the workers. And since their
membership with the THEU-NATU and renounced whatever dismissals were effected without previous hearing and at the instance of
connection they may have had with other labor unions, (meaning the NATU, this federation should be held liable to the petitioners for the payment
complainant THEU-CGW) either through resolution or membership of their backwages, as what We have ruled in the Liberty Cotton Mills Case
application forms they have unwittingly signed." (p. 306, Rollo) (supra).

Granting arguendo, that the fact of retraction is true, the evidence on record ACCORDINGLY, the petition is hereby GRANTED and the assailed decision
shows that the letters of retraction were executed on various dates beginning of respondent Secretary of Labor is REVERSED and SET ASIDE, and the
January 11, 1974 to March 8, 1974 (pp. 278-280, Rollo). This shows that the respondent company is hereby ordered to immediately reinstate all the
retractions were made more or less after the suspension pending dismissal petitioner employees within thirty (30) days from notice of this decision. If
on January 11, 1974 of Jose Encinas, formerly THEU-NATU President, who reinstatement is no longer feasible, the respondent company is ordered to
became THEU-CGW President, and the suspension pending their dismissal pay petitioners separation pay equivalent to one (1) month pay for every year
of the other elected officers and members of the THEU-CGW on January 15, of service. The respondent NATU federation is directed to pay petitioners the
1974. It is also clear that some of the retractions occurred after the amount of three (3) years backwages without deduction or qualification. This
suspension of the first set of workers numbering about twenty-four (24) on decision shall be immediately executory upon promulgation and notice to the
March 5, 1974. There is no use in saying that the retractions obliterated the parties.
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
PHILIPPINE SKYLANDERS, INC., MARILES C. ROMULO and Several months later, pending settlement of the controversy, PSEA sent
FRANCISCO DAKILA, petitioners, vs. NATIONAL LABOR PAFLU a notice of disaffiliation citing as reason PAFLU's supposed
RELATIONS COMMISSION, LABOR ARBITER EMERSON deliberate and habitual dereliction of duty toward its members. Attached to
TUMANON, PHILIPPINE ASSOCIATION OF FREE LABOR the notice was a copy of the resolution adopted and signed by the officers
UNIONS (PAFLU) SEPTEMBER (now UNIFIED PAFLU) and and members of PSEA authorizing their local union to disaffiliate from its
SERAFIN AYROSO, respondents. mother federation.
PSEA subsequently affiliated itself with the National Congress of
Workers (NCW), changed its name to Philippine Skylanders Employees
Association - National Congress of Workers (PSEA-NCW), and to maintain
[G.R. No. 127431. January 31, 2002]
continuity within the organization, allowed the former officers of PSEA-
PAFLU to continue occupying their positions as elected officers in the newly-
forged PSEA-NCW.
PHILIPPINE SKYLANDERS AND WORKERS ASSOCIATION-NCW, On 17 March 1994 PSEA-NCW entered into a collective bargaining
MACARIO CABANIAS, PEPITO RODILLAS, SHARON CASTILLO, agreement with PSI which was immediately registered with the Department
NERISA MORTEL, TEOFILOQUIRONG, LEONARDO REYES, Meanwhile, apparently oblivious to PSEA's shift of allegiance, PAFLU
MANUEL CADIENTE and HERMINIA RIOSA, petitioners, vs. Secretary General Serafin Ayroso wrote Mariles C. Romulo requesting a
PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU) copy of PSI's audited financial statement.Ayroso explained that with the
SEPTEMBER (now UNIFIED PAFLU) and NATIONAL LABOR dismissal of PSEA-WATUs election protest the time was ripe for the parties
RELATIONS COMMISSION, SECOND DIVISION, respondents. to enter into a collective bargaining agreement.
On 30 July 1994 PSI through its personnel manager Francisco Dakila
DECISION denied the request citing as reason PSEA's disaffiliation from PAFLU and its
subsequent affiliation with NCW.
Agitated by PSI's recognition of PSEA-NCW, PAFLU through Serafin
This is a petition for seeking to set aside the 31 July 1996 Ayroso filed a complaint for unfair labor practice against PSI, its president
Decision[2] of the National Labor Relations Commission affirming the 30 June Mariles Romulo and personnel manager Francisco Dakila. PAFLU alleged
1995 Decision of the Labor Arbiter holding petitioners Philippine Skylanders, that aside from PSIs refusal to bargain collectively with its workers, the
Inc., Mariles C. Romulo[3] and Francisco Dakila as well as the elected officers company through its president and personnel manager, was also liable for
of the Philippine Skylanders Employees and Workers Association- interfering with its employees' union activities.[6]
PAFLU[4] guilty of unfair labor practice and ordering them to pay private Two (2) days later or on 6 October 1994 Ayroso filed another complaint
respondent Philippine Association of Free Labor Union (PAFLU) in behalf of PAFLU for unfair labor practice against Francisco
September[5] P150,000.00 as damages.Petitioners likewise seek the reversal Dakila. Through Ayroso PAFLU claimed that Dakila was present in PSEA's
of the 31 October 1996 Resolution of the NLRC denying their Motion for organizational meeting thereby confirming his illicit participation in union
Reconsideration. activities. Ayroso added that the members of the local union had unwittingly
In November 1993 the Philippine Skylanders Employees Association fallen into the manipulative machinations of PSI and were lured into
(PSEA), a local labor union affiliated with the Philippine Association of Free endorsing a collective bargaining agreement which was detrimental to their
Labor Unions (PAFLU) September (PAFLU), won in the certification election interests.[7] The two (2) complaints were thereafter consolidated.
conducted among the rank and file employees of Philippine Skylanders, Inc. On 1 February 1995 PAFLU amended its complaint by including the
(PSI). Its rival union, Philippine Skylanders Employees Association-WATU elected officers of PSEA-PAFLU as additional party respondents. PAFLU
(PSEA-WATU) immediately protested the result of the election before the averred that the local officers of PSEA-PAFLU, namely Macario Cabanias,
Secretary of Labor. Pepito Rodillas, Sharon Castillo, Danilo Carbonel, Manuel Eda, Rolando
Felix, Jocelyn Fronda, Ricardo Lumba, Joseph Mirasol, Nerisa Mortel, Teofilo
Quirong, Leonardo Reyes, Manuel Cadiente, and Herminia Riosa, were represent them before any proceedings. They further asserted that being an
equally guilty of unfair labor practice since they brazenly allowed themselves independent labor union PSEA may freely serve the interest of all its
to be manipulated and influenced by petitioner Francisco Dakila.[8] members and readily disaffiliate from its mother federation when
circumstances so warrant. This right, they averred, was consistent with the
PSI, its president Mariles C. Romulo, and its personnel manager Dakila constitutional guarantee of freedom of association.[12]
moved for the dismissal of the complaint on the ground that the issue of
disaffiliation was an inter-union conflict which lay beyond the jurisdiction of For their part, petitioners PSI, Romulo and Dakila alleged that their
the Labor Arbiter. On the other hand, PSEA-NCW took the cudgels for its decision to bargain collectively with PSEA-NCW was actuated, to a large
officers who were being sued in their capacities as former officers of PSEA- extent, by PAFLU's behavior. Having heard no objections or protestations
PAFLU and asserted that since PSEA was no longer affiliated with PAFLU, from PAFLU relative to PSEA's disaffiliation, they reckoned that PSEA's
Ayroso or PAFLU for that matter had no personality to file the instant subsequent association with NSW was done bona fide.[13]
complaint. In support of this assertion, PSEA-NCW submitted in evidence
a Katunayan signed by 111 out of 120 rank and file employees of PSI The Solicitor General filed a Manifestation in Lieu of
disauthorizing Ayroso or PAFLU from instituting any action in their behalf.[9] Comment recommending that both petitions be granted. In his Manifestation,
the Solicitor General argued against the Labor Arbiter's assumption of
In a Decision rendered on 30 June 1995 the Labor Arbiter declared jurisdiction citing the following as reasons: first, there was no employer-
PSEA's disaffiliation from PAFLU invalid and held PSI, PSEA-PAFLU and employee relationship between complainant Ayroso and PSI over which the
their respective officers guilty of unfair labor practice. The Decision explained Labor Arbiter could rightfully assert his jurisdiction; second, since the case
that despite PSEA-PAFLU's status as the sole and exclusive bargaining involved a dispute between PAFLU as mother federation and PSEA as local
agent of PSI's rank and file employees, the company knowingly sanctioned union, the controversy fell within the jurisdiction of the Bureau of Labor
and confederated with Dakila in actively assisting a rival union. This, Relations; and lastly, the relationship of principal-agent between PAFLU and
according to the Labor Arbiter, was a classic case of interference for which PSEA had been severed by the local union through the lawful exercise of its
PSI could be held responsible. As PSEA-NCW's personality was not right of disaffiliation.[14]
accorded recognition, its collective bargaining agreement with PSI was struck
down for being invalid. Ayroso's legal personality to file the complaint was Stripped of non-essentials, the fundamental issue tapers down to the
sustained on the ratiocination that under the Labor Code no petition legitimacy of PSEA's disaffiliation. To be more precise, may PSEA, which is
questioning the majority status of the incumbent bargaining agent shall be an independent and separate local union, validly disaffiliate from PAFLU
entertained outside of the sixty (60)-day period immediately before the expiry pending the settlement of an election protest questioning its status as the
date of such five (5)-year term of the collective bargaining agreement that the sole and exclusive bargaining agent of PSI's rank and file employees?
parties may enter into. Accordingly, judgment was rendered ordering PSI, At the outset, let it be noted that the issue of disaffiliation is an inter-
PSEA-PAFLU and their officers to pay PAFLU P150,000.00 in damages.[10] union conflict the jurisdiction of which properly lies with the Bureau of Labor
PSI, PSEA and their respective officers appealed to the National Labor Relations (BLR) and not with the Labor Arbiter.[15] Nonetheless, with due
Relations Commission (NLRC). But the NLRC upheld the Decision of the recognition of this fact, we deem it proper to settle the controversy at this
Labor Arbiter and conjectured that since an election protest questioning instance since to remand the case to the BLR would only mean intolerable
PSEA-PAFLU's certification as the sole and exclusive bargaining agent was delay for the parties.
pending resolution before the Secretary of Labor, PSEA could not validly The right of a local union to disaffiliate from its mother federation is not a
separate from PAFLU, join another national federation and subsequently novel thesis unillumined by case law. In the landmark case of Liberty Cotton
enter into a collective bargaining agreement with its employer-company.[11] Mills Workers Union vs. Liberty Cotton Mills, Inc.[16] we upheld the right of
Petitioners separately moved for reconsideration but both motions were local unions to separate from their mother federation on the ground that as
denied. Hence, these petitions for certiorari filed by PSI and PSEA-NCW separate and voluntary associations, local unions do not owe their creation
together with their respective officers pleading for a reversal of the NLRC's and existence to the national federation to which they are affiliated but,
Decision which they claimed to have been rendered in excess of instead, to the will of their members. The sole essence of affiliation is to
jurisdiction. In due time, both petitions were consolidated. increase, by collective action, the common bargaining power of local unions
for the effective enhancement and protection of their interests. Admittedly,
In these petitions, petitioner PSEA together with its officers argued that there are times when without succor and support local unions may find it
by virtue of their disaffiliation PAFLU as a mere agent had no authority to hard, unaided by other support groups, to secure justice for themselves.
Yet the local unions remain the basic units of association, free to serve law. For if it were otherwise, instead of protection, there would be disregard
their own interests subject to the restraints imposed by the constitution and and neglect of the lowly workingmen.
by-laws of the national federation, and free also to renounce the affiliation
upon the terms laid down in the agreement which brought such affiliation into WHEREFORE, the petitions of Philippine Skylanders, Inc. and of
existence. Philippine Skylanders and Workers Association-NCW, together with their
respective officers, are GRANTED. TheDecision of the National Labor
Such dictum has been punctiliously followed since then.[17] Relations Commission of 31 July 1996 affirming the Decision of the Labor
Arbiter of 30 June 1995 holding petitioners Philippine Skylanders and
Upon an application of the aforecited principle to the issue at hand, the Workers Association-NCW, Philippine Skylanders, Inc. and their respective
impropriety of the questioned Decisions becomes clearly apparent. There is officers, guilty of unfair labor practice and ordering them to pay damages to
nothing shown in the records nor is it claimed by PAFLU that the local union private respondent Philippine Association of Free Labor Unions (PAFLU)
was expressly forbidden to disaffiliate from the federation nor were there any September (now UNIFIED PAFLU) as well as the Resolution of 31 October
conditions imposed for a valid breakaway. As such, the pendency of an 1996 denying reconsideration is REVERSED and SET ASIDE. No costs.
election protest involving both the mother federation and the local union did
not constitute a bar to a valid disaffiliation. Neither was it disputed by PAFLU
that 111 signatories out of the 120 members of the local union, or an
equivalent of 92.5% of the total union membership supported the claim of
disaffiliation and had in fact disauthorized PAFLU from instituting any
complaint in their behalf. Surely, this is not a case where one (1) or two (2)
members of the local union decided to disaffiliate from the mother federation,
but it is a case where almost all local union members decided to disaffiliate.
It was entirely reasonable then for PSI to enter into a collective
bargaining agreement with PSEA-NCW. As PSEA had validly severed itself
from PAFLU, there would be no restrictions which could validly hinder it from
subsequently affiliating with NCW and entering into a collective bargaining
agreement in behalf of its members.
There is a further consideration that likewise argues for the granting of
the petitions. It stands unchallenged that PAFLU instituted the complaint for
unfair labor practice against the wishes of workers whose interests it was
supposedly protecting. The mere act of disaffiliation did not divest PSEA of
its own personality; neither did it give PAFLU the license to act independently
of the local union. Recreant to its mission, PAFLU cannot simply ignore the
demands of the local chapter and decide for its welfare. PAFLU might have
forgotten that as an agent it could only act in representation of and in
accordance with the interests of the local union. The complaint then for unfair
labor practice lodged by PAFLU against PSI, PSEA and their respective
officers, having been filed by a party which has no legal personality to
institute the complaint, should have been dismissed at the first instance for
failure to state a cause of action.
Policy considerations dictate that in weighing the claims of a local union
as against those of a national federation, those of the former must be
preferred. Parenthetically though, the desires of the mother federation to
protect its locals are not altogether to be shunned. It will however be to err
greatly against the Constitution if the desires of the federation would be
favored over those of its members. That, at any rate, is the policy of the
NATIVIDAD SAMPANG in her capacity as President of Gabay ng For reasons to be hereinafter set forth, the Court holds that the petition must
Manggagawa sa Insular Yebana-FOITAF, petitioner, be granted and the decision of Deputy Minister Amado G. Inciong, acting by
vs. authority of the then Minister of Labor and Employment, set aside.
HONORABLE AMADO G. INCIONG in his capacity as Deputy Minister of
Ministry of Labor and INSULAR YEBANA TOBACCO 1. The basis for the dismissal of petitioner Sampang as previously noted,
CORPORATION, respondents. citing the Comment of private respondent. was the "unexpected" character of
the strike on the evening of June 12, 1978, lasting until the next day a strike
FERNANDO, C.J.: the blame for which was attributed to petitioner, who allegedly instigated it. It
was further stated that the pleas made by the company supervisor for the
The Constitutional guarantee of security of tenure accorded labor under the employees to do overtime work was disregarded. As a result, according to an
present Constitution 1 points the way to the disposition of this certiorari Annex to the Comment of private respondent "the company lost an estimated
proceeding resulting from the dismissal of petitioner, Natividad Sampang. amount of P2,716.00 worth of unpacked cigarettes which were
She was the president of the labor union of the employees of private spoiled." 6 The same amount was mentioned in its memorandum to the
respondent Insular Yebana Tobacco Corporation. Regional Office IV of the then Department of Labor, in well-nigh Identical
language: "As a result of this concerted action, the Corporation suffered
irreparable losses in the amount of P2,761.00, more or less, worth of
She seeks the reversal of an order of the then Deputy Minister of Labor,
unfinished products in the form of unpacked and spoiled cigarettes. 7 What is
Amado G. Inciong, who sustained the Regional Director in his decision to
undeniable, therefore, is that for an unexpected strike lasting for two days
grant clearance for her dismissal, presumably for initiating "a concerted
action among the rank and file workers not to perform overtime work resulting in the loss of P2,761.00 more or less, an employee who has worked
[amounting] to gross insubordination" 2 That charge she denied, her version for thirty-one years was dismissed. The length of service of petitioner
Sampang is found in an affidavit attached as one of the annexes of her
being that she made "several representations with management, upon
memorandum. It reads thus: "That I am working for Insular Yebana Tobacco
request of the members of the union, to cut-off overtime work, as this would
Corporation, employed as cajista or cigar packer since 1948 or for more than
mean more days of work and additional living allowance for the workers, but
30 years." 8 There is here a case, therefore, of an employee, with more than
to no avail, that the overtime work was a device of management to avoid
compliance with P.D. 112; that there is no exigency for the rendering of thirty years service, having been dismissed for instigating a strike that lasted
for two days and caused the loss in the amount of P2,716.00. It is quite
overtime work, hence, the concerted refusal to work overtime cannot be
obvious then that the constitutional mandate on security of tenure was
recalled a strike." 3
violated. For even if her denial that she did not instigate such two-day strike
be disregarded, still the penalty imposed was grossly disproportionate to the
In the Comment submitted by private respondent La Yebana Tobacco offense imputed to her.
Corporation, there was admission that "the Gabay ng Manggagawa thru
petitioner Natividad Sampang [requested] for the cancellation of overtime
2. The first decision interpreting the security of tenure provision is Philippine
work and limit the work to eight (8) hours only." 4 It was, however, alleged
Air Lines, Inc. v. Philippine Air Lines Employees Association. 9 After referring
that the strike on "January 12, 1978, [was unexpected, having come] without
to the aforesaid security of tenure provision in the present Constitution, the
awaiting the results of the study program being prepared and undertaken by
its management's staff so that work schedule could finally be set to mutual opinion of the Court went on to state: It was not that specific in the 1935
satisfaction of both parties and upon petitioner's investigation the rank-and- Charter. The mandate was limited to the State affording 'protection to labor,
especially to working women and minors, ... If by virtue of the above, it would
file workers of the company [went on a strike after the eight hours working
not be legally justifiable to reverse the order of reinstatement, it becomes
period, despite pleadings of the company supervisors to finish their
even more readily apparent that such a conclusion is even more unwarranted
unfinished work. [The strike continued] up to the following day, January 13,
now. To reach it would be to show lack of fealty to a constitutional command.
1978." 5 In the Commend filed by the Solicitor General, it was contended that
there was authority both of the Regional Director as well as of the Deputy This is not to say that dismissal for cause is now outlawed. No such thing is
Minister of Labor to issue the assailed orders. It was likewise submitted in intimated in this opinion. It is merely to stress that where respondent Court of
Industrial Relations, in the fight of all the circumstances disclosed,
such Comment that there was no denial of procedural due process, as there
particularly that it was a first offense after seventeen years of service,
were position papers filed with the Regional Director, petitioner, therefore,
reached the conclusion, neither arbitrary nor oppressive, that dismissal was
having been afforded all the opportunity to present and support her case.
too severe a penalty, this Court should not view the matter differently." 10
3. Less than a month later, on July 25, 1974, to be precise, this Court WHEREFORE, the petition for certiorari is granted and the order of the then
promulgated its decision in Almira v. B.F. Goodrich Philippines, Deputy Minister of Labor, Amado Inciong, set aside and nullified. The Court
Inc., 11 affirming the above Philippine Airlines decision. There is this relevant hereby orders the reinstatement of petitioner Natividad Sampang to the last
excerpt from the opinion in Almira as to the liberal interpretation of the position she occupied or any other similar position of the same category and
security of tenure provision: "It would imply at the very least that where a the same compensation, if another employee has in the meanwhile. been
penalty less punitive would suffice, whatever missteps may be committed by appointed in her place. Private respondent is likewise ordered to pay her
labor ought not to be visited with a consequence so severe. It is not only backwages, the amount being for a three-year period. This decision is
because of the law's concern for the workingman. There is, in addition, his immediately executory. No costs.
family to consider. Unemployment brings untold hardships and sorrows on
those dependent on the wage-earner. The misery and pain attendant on the
loss of jobs then could be avoided if there be acceptance of the view that
under all the circumstances of this case, petitioners should not be deprived of
their means of livelihood. Nor is this to condone what had been done by
them. For all this while, since private respondent considered them separated
from the service, they had not been paid. From the strictly juridical
standpoint, it cannot be too strongly stressed, to follow Davis in his masterly
work, Discretionary Justice, that where a decision may be made to rest on
informed judgment rather than rigid rules, all the equities of the case must be
accorded their due weight. Finally, labor law determinations, to quote from
Bultmann, should be not only secundum rationem but also secundum
caritatem." 12

4. In the recent case of Bustillos v. Inciong, 13 it was held that petitioner, who
had been employed by private respondent for eighteen years ought not to
have been dismissed and that a two-year suspension would suffice. The
opinion likewise noted: "The length of service was accorded due
consideration in decisions of this Tribunal ordering reinstatement, twenty
years in De Leon v. National Labor Relations Commission and Reyes v.
Philippine Duplicators and twenty-two years in Union of Supervisors v.
Secretary of labor." 14 How then justify a dismissal in this case. Considering
all the circumstances, even a two-year period of suspension might be
considered excessive.

5. It is thus evident that the case could be decided without considering the
points raised by counsel for petitioner. It suffices to state that the
competence of the Deputy Minister of Labor to pass upon the appeal cannot
be disputed. He acted by "authority of" the Minister of Labor. A more
extended inquiry into the factual aspects could have shed more light on the
environmental circumstances. Nonetheless, since the appealed decision
could be set aside, there being a violation of the security of tenure provision,
the claim that; procedural due process was not observed does not call for
any further discussion, Suffice it to state that the motion for reconsideration.
not to mention the appeal, was curative in character as held by this Court in a
number of cases. UNITED PEPSI-COLA SUPERVISORY UNION (UPSU), petitioner, vs.
Types of Managerial Employees
The term manager generally refers to anyone who is responsible for
Petitioner is a union of supervisory employees. It appears that on March subordinates and other organization resources.[1] As a class, managers
20, 1995 the union filed a petition for certification election on behalf of the constitute three levels of a pyramid:
route managers at Pepsi-Cola Products Philippines, Inc. However, its petition
was denied by the med-arbiter and, on appeal, by the Secretary of Labor and Top Management
Employment, on the ground that the route managers are managerial
employees and, therefore, ineligible for union membership under the first _________________
sentence of Art. 245 of the Labor Code, which provides:
Middle Management
Ineligibility of managerial employees to join any labor organization; right of
supervisory employees. Managerial employees are not eligible to join, assist
or form any labor organization. Supervisory employees shall not be eligible _________________
for membership in a labor organization of the rank-and-file employees but
may join, assist or form separate labor organizations of their own. First Line

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

The right of the people, including those employed in the public and private
sectors, to form unions, associations, or societies for the purposes not
contrary to law shall not be abridged. Or Operating Employees

For this reason, the petition was referred to the Court en banc. FIRST-LINE MANAGERS The lowest level in an organization at which
individuals are responsible for the work of others is called first-line or first-
level management. First-line managers direct operating employees only; they
do not supervise other managers. Example of first-line managers are the
The Issues in this Case
foreman or production supervisor in a manufacturing plant, the technical
supervisor in a research department, and the clerical supervisor in a large
office. First-level managers are often called supervisors.
Two question are presented by the petition: (1) whether the route
managers at Pepsi-Cola Products Philippines, Inc. are managerial
MIDDLE MANAGERS The term middle management can refer to more than
employees and (2) whether Art. 245, insofar as it prohibits managerial
employees from forming, joining or assisting labor unions, violates Art. III, 8 one level in an organization. Middle managers direct the activities of other
of the Constitution. managers and sometimes also those of operating employees. Middle
managers principal responsibilities are to direct the activities that implement
In resolving these issues it would be useful to begin by defining who are their organizations policies and to balance the demands of their superiors
managerial employees and considering the types of managerial employees. with the capacities of their subordinates. A plant manager in an electronics
firm is an example of a middle manager.
TOP MANAGERS Composed of a comparatively small group of controlling. In the instant case, nothing on record will support the claim that
executives, top management is responsible for the overall management of the quality control manager, yard/transport manager and warehouse
the organization. It establishes operating policies and guides the operations manager are vested with said attributes. The warehouse
organizations interactions with its environment. Typical titles of top managers operations manager, for example, merely assists the plant finance manager
are chief executive officer, president, and senior vice-president. Actual titles in planning, organizing, directing and controlling all activities relative to
vary from one organization to another and are not always a reliable guide to development and implementation of an effective management control
membership in the highest management classification.[2] information system at the sale offices. The exercise of authority of the quality
control manager, on the other hand, needs the concurrence of the
As can be seen from this description, a distinction exist between those manufacturing manager
who have the authority to devise, implement and control strategic and
operational policies (top and middle managers) and those whose task is As to the route managers and accounting manager, we are convinced that
simply to ensure that such polices are carried out by the rank-and-file they are managerial employees. Their job descriptions clearly reveal so.
employees of an organization (first-level managers/supervisors). What
distinguishes them from the rank-and file employees is that they act in the On July 6, 1992, this finding was reiterated in Case No. OS-A-3-71-92,
interest of the employer in supervising such rank-and-file employees. entitled In Re: Petition for Direct Certification and/or Certification Election-
Managerial employees may therefore be said to fall into two distinct Route Managers/Supervisory Employees of Pepsi-Cola Products Phils. Inc.,
categories: the managers per se, who compose the former group described as follows:
above, and the supervisors who form the latter group. Whether they belong
to the first or second category, managers, vis--vis employers, are, likewise, The issue brought before us is not of first impression. At one time, we had
employees.[3] the occasion to rule upon the status of route manager in the same company
vis a vis the issue as to whether or not it is supervisory employee or a
The first question is whether route managers are managers are managerial employee. In the case of Workers Alliance Trade Unions (NATU)
managerial employees or supervisors. vs. Pepsi Cola Products, Phils., Inc. (OS-MA-A-10-318-91), 15 November
1991, we ruled that a route manager is a managerial employee within the
context of the definition of the law, and hence, ineligible to join, form or assist
Previous Administrative Determinations of the Question Whether Route Managers are Managerial Employees a union. We have once more passed upon the logic of our Decision
aforecited in the light of the issues raised in the instant appeal, as well as the
available documentary evidence on hand, and have come to the view that
It appears that this question was the subject of two previous there is no cogent reason to depart from our earlier holding. Route Managers
determinations by the Secretary of Labor and Employment, in accordance are, by the very nature of their functions and the authority they wield over
with which this case was decided by the med-arbiter. their subordinates, managerial employees. The prescription found in Art. 245
of the Labor Code, as amended therefore, clearly applies to them.[4]4
In Case No. OS-MA-10318-91, entitled Workerss Alliance Trade Union
(WATU) v. Pepsi-Cola Products Philippines, Inc., decided on November 13, Citing our ruling in Nasipit Lumber Co. v. National Labor Relations
1991, the Secretary of Labor found: Commission,[5]5 however, petitioner argues that these previous
administrative determinations do not have the effect of res judicata in this
We examined carefully the pertinent job description of the subject employees case, because "labor relations proceedings" are "non-litigious and summary
and other documentary evidence on record vis--vis paragraph (m), Article in nature without regard to legal technicalities."[6] Nasipit Lumber Co. involved
212 of the Labor Code, as amended, and we find that only those employees a clearance to dismiss an employee issued by the Department of Labor. The
occupying the position of route manager and accounting manager are question was whether in a subsequent proceeding for illegal dismissal, the
managerial employees. The rest i.e. quality control manager, yard/transport clearance was res judicata. In holding it was not, this Court made it clear that
manager and warehouse operations manager are supervisory employees. it was referring to labor relations proceedings of a non-adversary character,
To qualify as managerial employee, there must be a clear showing of the
exercise of managerial attributes under paragraph (m), Article 212 of the
Labor Code as amended. Designations or titles of positions are not
The requirement of a clearance to terminate employment was a creation of At the very least, the principle of finality of administrative determination
the Department of labor to carry out the Labor Code provisions on security of compels respect for the finding of the Secretary of Labor that route managers
tenure and termination of employment. The proceeding subsequent to the are managerial employees as defined by law in the absence of anything to
filing of an application for clearance to terminate employment was outlined in show that such determination is without substantial evidence to support it.
Book V, Rule XIV of the Rules and Regulations Implementing the Labor Nonetheless, the Court, concerned that employees who are otherwise
Code. The fact that said rule allowed a procedure for the approval of the supervisors may wittingly or unwittingly be classified as managerial
clearance with or without the opposition of the employee concerned (Secs. 7 personnel and thus denied the right of self- organization, has decided to
& 8), demonstrates the non-litigious and summary nature of the review the record of this case.
proceeding. The clearance requirement was therefore necessary only as an
expeditious shield against arbitrary dismissal without the knowledge and
supervision of the Department of Labor. Hence, a duly approved clearance DOLE's Finding that Route Managers are Managerial Employees Supported by Substantial Evidence in the
implied that the dismissal was legal or for cause (Sec. 2).[7]v. National Labor Record
Relations Commission, 177 SCRA 93, 100 (1989).7

But the doctrine of res judicata certainly applies to adversary The Court now finds that the job evaluation made by the Secretary of
administrative proceedings. As early as 1956, in Brillantes v. Castro,[8]8 we Labor is indeed supported by substantial evidence. The nature of the job of
sustained the dismissal of an action by a trial court on the basis of a prior route managers is given in a four-page pamphlet, prepared by the company,
administrative determination of the same case by the Wage Administration called "Route Manager Position Description," the pertinent parts of which
Service, applying the principle of res judicata. Recently, in Abad v. NLRC[9]9 read:
we applied the related doctrine of stare decisis in holding that the prior
determination that certain jobs at the Atlantic Gulf and Pacific Co. were A. BASIC PURPOSE
project employments was binding in another case involving another group of
employees of the same company. Indeed, in Nasipit Lumber Co., this Court
clarified toward the end of its opinion that "the doctrine of res judicata applies A Manager achieves objectives through others.
. . . to judicial or quasi judicial proceedings and not to the exercise of
administrative powers."[10]v. National Labor Relations As a Route Manager, your purpose is to meet the sales plan; and
Commission, supra note 7.10 Now proceedings for certification election, such you achieve this objective through the skillful MANAGEMENT OF
as those involved in Case No. OS-M-A-10-318-91 and Case No. OS-A-3-71- YOUR JOB AND THE MANAGEMENT OF YOUR PEOPLE.
92, are quasi judicial in nature and, therefore, decisions rendered in such
proceedings can attain finality.[11]v. B.F. Goodrich (Marikina Factory) These then are your functions as Pepsi-Cola Route
Confidential and Salaries Employees Union-NATU, 49 SCRA 532 (1973).11 Manager. Within these functions - managing your job and
managing your people - you are accountable to your District
Thus, we have in this case an expert's view that the employees Manager for the execution and completion of various tasks and
concerned are managerial employees within the purview of Art. 212 which activities which will make it possible for you to achieve your sales
provides: objectives.

(m) "managerial employee" is one who is vested with powers or prerogatives B. PRINCIPAL ACCOUNTABILITIES
to lay down and execute management policies and/or to hire, transfer,
suspend, lay off, recall, discharge, assign or discipline
employees. Supervisory employees are those who, in the interest of the 1.0 MANAGING YOUR JOB
employer, effectively recommend such managerial actions if the exercise of
such authority is not merely routinary or clerical in nature but requires the use The Route Manager is accountable for the following:
of independent judgment. All employees not falling within any of the above
definitions are considered rank-and-file employees for purposes of this Book. 1.1 SALES DEVELOPMENT

1.1.1 Achieve the sales plan.

1.1.2 Achieve all distribution and new account objectives. The Route Manager is accountable for the following:

1.1.3 Develop new business opportunities thru personal 2.1 Route Sales Team Development
contacts with dealers.
2.1.1 Conduct route rides to train, evaluate and develop all
1.1.4 Inspect and ensure that all assigned route salesmen and helpers at least 3 days
merchandizing [sic] objectives are achieved in all a week, to be supported by required route ride
outlets. documents/reports & back check/spot check at least
2 days a week to be supported by required
1.1.5 maintain and improve productivity of all cooling documents/reports.
equipment and kiosks.
2.1.2 Conduct sales meetings and morning huddles. Training
1.1.6 Execute and control all authorized promotions. should focus on the enhancement of effective sales
and merchandizing [sic] techniques of the salesmen
and helpers. Conduct group training at least 1 hour
1.1.7 Develop and maintain dealer goodwill.
each week on a designated day and of specific
1.1.8 Ensure all accounts comply with company suggested
retail pricing.
2.2 Code of Conduct
1.1.9 Study from time to time individual route coverage and
productivity for possible adjustments to maximize 2.2.1 Maintain the company's reputation through strict
utilization of resources. adherence to PCPPI's code of conduct and the
universal standards of unquestioned business
1.2 Administration
Earlier in this opinion, reference was made to the distinction between
1.2.1 Ensure the proper loading of route trucks before check- managers per se (top managers and middle managers) and supervisors
out and the proper sorting of bottles before check-in. (first-line managers). That distinction is evident in the work of the route
managers which sets them apart from supervisors in general. Unlike
1.2.2 Ensure the upkeep of all route sales reports and all other supervisors who basically merely direct operating employees in line with set
related reports and forms required on an accurate tasks assigned to them, route managers are responsible for the success of
and timely basis. the company's main line of business through management of their respective
sales teams. Such management necessarily involves the planning, direction,
1.2.3 Ensure proper implementation of the various company operation and evaluation of their individual teams and areas which the work
policies and procedures incl. but not limited to of supervisors does not entail.
shakedown; route shortage; progressive discipline;
The route managers cannot thus possibly be classified as mere
sorting; spoilages; credit/collection; accident;
supervisors because their work does not only involve, but goes far beyond,
the simple direction or supervision of operating employees to accomplish
objectives set by those above them. They are not mere functionaries with
1.2.4 Ensure collection of receivables and delinquent simple oversight functions but business administrators in their own right. An
accounts. idea of the role of route managers as managers per se can be gotten from a
memo sent by the director of metro sales operations of respondent company
2.0 MANAGING YOUR PEOPLE to one of the route managers. It reads:[13]
03 April 1995 teams, and so forth, - if they are to fulfill the company's expectations in the
"key result areas."
To : CESAR T. REOLADA Article 212(m) says that "supervisory employees are those who, in the
interest of the employer, effectively recommend such managerial actions if
From : REGGIE M. SANTOS the exercise of such authority is not merely routinary or clerical in nature but
requires the use of independent judgment." Thus, their only power is to
Subj : SALARY INCREASE recommend. Certainly, the route managers in this case more than merely
recommend effective management action. They perform operational, human
Effective 01 April 1995, your basic monthly salary of P11,710 will be resource, financial and marketing functions for the company, all of which
increased to P12,881 or an increase of 10%. This represents the involve the laying down of operating policies for themselves and their teams.
added managerial responsibilities you will assume due to the recent For example, with respect to marketing, route managers, in accordance with
restructuring and streamlining of Metro Sales Operations brought about B.1.1.1 to B.1.1.9 of the Route Managers Job Description, are charged,
by the continuous losses for the last nine (9) months. among other things, with expanding the dealership base of their respective
sales areas, maintaining the goodwill of current dealers, and distributing the
company's various promotional items as they see fit. It is difficult to see how
Let me remind you that for our operations to be profitable, we have to
supervisors can be given such responsibility when this involves not just the
sustain the intensity and momentum that your group and yourself have
routine supervision of operating employees but the protection and expansion
shown last March. You just have to deliver the desired volume
of the company's business vis-a-vis its competitors.
targets, better negotiated concessions, rationalized sustaining
deals, eliminate or reduced overdues, improved collections, more While route managers do not appear to have the power to hire and fire
cash accounts, controlled operating expenses, etc. Also, based on people (the evidence shows that they only "recommended" or "endorsed" the
the agreed set targets, your monthly performance will be closely taking of disciplinary action against certain employees), this is because this is
monitored. a function of the Human Resources or Personnel Department of the
company.[14]14 And neither should it be presumed that just because they are
You have proven in the past that your capable of achieving your given set benchmarks to observe, they are ipso facto supervisors. Adequate
targets thru better planning, managing your group as a fighting control methods (as embodied in such concepts as "Management by
team, and thru aggressive selling. I am looking forward to your Objectives [MBO]" and "performance appraisals") which require a delineation
success and I expect that you just have to exert your doubly best of the functions and responsibilities of managers by means of ready
in turning around our operations from a losing to a profitable one! reference cards as here, have long been recognized in management as
effective tools for keeping businesses competitive.
Happy Selling!! This brings us to the second question, whether the first sentence of Art.
245 of the Labor Code, prohibiting managerial employees from forming,
(Sgd.) R.M. SANTOS assisting or joining any labor organization, is constitutional in light of Art. III, 8
of the Constitution which provides:
The plasticized card given to route managers, quoted in the separate
opinion of Justice Vitug, although entitled "RM's Job Description," is only a The right of the people, including those employed in the public and private
summary of performance standards. It does not show whether route sectors, to form unions, associations, or societies for purposes not contrary
managers are managers per se or supervisors. Obviously, these to law shall not be abridged.
performance standards have to be related to the specific tasks given to route
managers in the four-page "Route Manager Position Description," and, when As already stated, whether they belong to the first category
this is done, the managerial nature of their jobs is fully revealed. Indeed, if (managers per se) or the second category (supervisors), managers are
any, the card indicates the great latitude and discretion given to route employees. Nonetheless, in the United States, as Justice Puno's separate
managers - from servicing and enhancing company goodwill to supervising opinion notes, supervisors have no right to form unions. They are excluded
and auditing accounts, from trade (new business) development to the from the definition of the term "employee" in 2(3) of the Labor-Management
discipline, training and monitoring of performance of their respective sales
Relations Act of 1947.[15]v. Bell Aerospace Co., 416 U.S. 281, n 11, 40 own choosing for the purpose of collective bargaining through
L.Ed.2d 134, 147, n. 11 (1974), thus: representatives of their own choosing and to engage in concerted activities
for the purpose of collective bargaining and other mutual aid and protection.
Supervisors are management people. They have distinguished Individuals employed as supervisors shall not be eligible for membership in a
themselves in their work. They have demonstrated their ability to take care of labor organization of employees under their supervision but may form
themselves without depending upon the pressure of collective action. No one separate organizations of their own.[17]
forced them to become supervisors. They abandoned the "collective security"
of the rank and file voluntarily, because they believed the opportunities thus
opened to them to be more valuable to them than such "security". It seems For its part, the Supreme Court upheld in several of its decisions the right of
wrong, and it is wrong, to subject people of this kind, who have demonstrated supervisors to organize for purposes of labor relations. [18]v. Filoil Supervisory
their initiative, their ambition and their ability to get ahead, to the leveling and Confidential Employees Association, 6 SCRA 522 (1972); Kapisanan ng
processes of seniority, uniformity and standardization that the Supreme mga Manggagawa sa Manila Railroad Co. v. CIR, 106 Phil 607 (1959).18
Court recognizes as being fundamental principles of unionism. (J.I. Case Although it had a definition of the term "supervisor," the Industrial Peace
Co. v. National Labor Relations Board, 321 U.S. 332, 88 L.Ed. 762, 64 S. Ct. Act did not define the term "manager." But, using the commonly-understood
576 (1994). It is wrong for the foremen, for it discourages the things in them concept of "manager," as above stated, it is apparent that the law used the
that made them foremen in the first place. For the same reason, that it term "supervisors" to refer to the sub-group of "managerial employees"
discourages those best qualified to get ahead, it is wrong for industry, and known as front-line managers. The other sub-group of "managerial
particularly for the future strength and productivity of our country.15 In the employees," known as managers per se, was not covered.
Philippines, the question whether managerial employees have a right of self-
organization has arisen with respect to first-level managers or supervisors, However, in Caltex Filipino Managers and Supervisors Association v.
as shown by a review of the course of labor legislation in this country. Court of Industrial Relations,[19]J.)19 the right of all managerial employees to
self-organization was upheld as a general proposition, thus:

Right of Self-Organization of Managerial Employees under Pre-Labor Code Laws It would be going too far to dismiss summarily the point raised by respondent
Company - that of the alleged identity of interest between the managerial
staff and the employing firm. That should ordinarily be the case, especially so
Before the promulgation of the Labor Code in 1974, the field of labor where the dispute is between management and the rank and file. It does not
relations was governed by the Industrial Peace Act (R.A. No. 875). necessarily follow though that what binds the managerial staff to the
corporation forecloses the possibility of conflict between them. There could
In accordance with the general definition above, this law defined be a real difference between what the welfare of such group requires and the
"supervisor" as follows: concessions the firm is willing to grant. Their needs might not be attended to
then in the absence of any organization of their own. Nor is this to indulge in
SECTION 2. . . . empty theorizing. The record of respondent Company, even the very case
cited by it, is proof enough of their uneasy and troubled
(k) "Supervisor" means any person having authority in the interest of an relationship. Certainly the impression is difficult to erase that an alien firm
employer, to hire, transfer, suspend, lay-off, recall, discharge, assign, failed to manifest sympathy for the claims of its Filipino executives. To
recommend, or discipline other employees, or responsibly to direct them, and predicate under such circumstances that agreement inevitably marks their
to adjust their grievances, or effectively to recommend such acts, if, in relationship, ignoring that discord would not be unusual, is to fly in the face of
connection with the foregoing, the exercise of such authority is not of a reality.
merely routinary or clerical nature but requires the use of independent
judgment.[16]16 . . . The basic question is whether the managerial personnel can
organize. What respondent Company failed to take into account is that the
The right of supervisors to form their own organizations was affirmed: right to self-organization is not merely a statutory creation. It is fortified by our
Constitution. All are free to exercise such right unless their purpose is
contrary to law. Certainly it would be to attach unorthodoxy to, not to say an
SEC. 3. Employees' Right to Self-Organization. -- Employees shall have the emasculation of, the concept of law if managers as such were precluded
right to self-organization and to form, join or assist labor organizations of their from organizing. Having done so and having been duly registered, as did
occur in this case, their union is entitled to all the rights under Republic Act Jr. Construction Engineer
No. 875.Considering what is denominated as unfair labor practice under
Section 4 of such Act and the facts set forth in our decision, there can be St. Sales Supervisor
only one answer to the objection raised that no unfair labor practice could be
committed by respondent Company insofar as managerial personnel is
Deport Supervisor A
concerned. It is, as is quite obvious, in the negative.[20]20
Terminal Accountant B
Actually, the case involved front-line managers or supervisors only, as
the plantilla of employees, quoted in the main opinion, [21]J.) (emphasis
added).21 clearly indicates: Merchandiser

CAFIMSA members holding the following Supervisory Payroll Position Dist. Sales Prom. Supvr.
Title are Recognized by the Company
Instr. - Merchandising
Payroll Position Title
Asst. Dist. Accountant B
Assistant to Mgr. - National Acct. Sales
Sr. Opers. Supervisor
Jr. Sales Engineer
Jr. Sales Engineer A
Retail Development Asst.
Asst. Bulk Ter. Supt.
Staff Asst. - 0 Marketing
Sr. Opers. Supvr.
Sales Supervisor
Credit Supervisor A
Supervisory Assistant
Asst. Stores Supvr. A
Jr. Supervisory Assistant
Ref. Supervisory Draftsman
Credit Assistant
Refinery Shift Supvr. B
Lab. Supvr. - Pandacan
Asst. Supvr. A - Operations (Refinery)
Jr. Sales Engineer B
Refinery Shift Supvr. B
Operations Assistant B
Asst. Lab. Supvr. A (Refinery)
Field Engineer
St. Process Engineer B (Refinery)
Sr. Opers. Supvr. - MIA A/S
Asst. Supvr. A - Maintenance (Refinery)
Purchasing Assistant
Asst. Supvr. B - Maintenance (Refinery) The practical effect of this synthesis of legal concepts was made
apparent in the Omnibus Rules Implementing the Labor Code which the
Supervisory Accountant (Refinery) Department of Labor promulgated on January 19, 1975. Book V, Rule II, 11
of the Rules provided:
Communications Supervisor (Refinery)
Supervisory unions and unions of security guards to cease operation. - All
Finally, also deemed included are all other employees excluded from existing supervisory unions and unions of security guards shall, upon the
the rank and file unions but not classified as managerial or otherwise effectivity of the Code, cease to operate as such and their registration
certificates shall be deemed automatically cancelled. However, existing
excludable by law or applicable judicial precedents.
collective agreements with such unions, the life of which extends beyond the
date of effectivity of the Code, shall be respected until their expiry date
insofar as the economic benefits granted therein are concerned.
Right of Self-Organization of Managerial Employees under the Labor Code

Members of supervisory unions who do not fall within the definition of

managerial employees shall become eligible to join or assist the rank and file
Thus, the dictum in the Caltex case which allowed at least for the labor organization, and if none exists, to form or assist in the forming of such
theoretical unionization of top and middle managers by assimilating them rank and file organization. The determination of who are managerial
with the supervisory group under the broad phrase "managerial personnel," employees and who are not shall be the subject of negotiation between
provided the lynchpin for later laws denying the right of self-organization not representatives of the supervisory union and the employer. If no agreement
only to top and middle management employees but to front line managers or is reached between the parties, either or both of them may bring the issue to
supervisors as well. Following the Caltex case, the Labor Code, promulgated the nearest Regional Office for determination.
in 1974 under martial law, dropped the distinction between the first and
second sub-groups of managerial employees. Instead of treating the terms
"supervisor" and "manager" separately, the law lumped them together and The Department of Labor continued to use the term "supervisory
called them "managerial employees," as follows: unions" despite the demise of the legal definition of "supervisor" apparently
because these were the unions of front line managers which were then
allowed as a result of the statutory grant of the right of self-organization
ART. 212. Definitions . . . . under the Industrial Peace Act. Had the Department of Labor seen fit to
similarly ban unions of top and middle managers which may have been
(k) "Managerial Employee" is one who is vested with powers or prerogatives formed following the dictum in Caltex, it obviously would have done so. Yet it
to lay down and execute management policies and/or to hire, transfer, did not, apparently because no such unions of top and middle managers
suspend, lay off, recall, discharge, assign or discipline employees, or to really then existed.
effectively recommend such managerial actions. All employees not falling
within this definition are considered rank and file employees for purposes of
this Book.[22]22 Real Intent of the 1986 Constitutional Commission

The definition shows that it is actually a combination of the commonly

understood definitions of both groups of managerial employees, This was the law as it stood at the time the Constitutional
grammatically joined by the phrase "and/or." Commission considered the draft of Art. III, 8. Commissioner Lerum sought
This general definition was perhaps legally necessary at that time for to amend the draft of what was later to become Art. III, 8 of the present
two reasons. First, the 1974 Code denied supervisors their right to self- Constitution:
organize as theretofore guaranteed to them by the Industrial Peace
Act. Second, it stood the dictum in the Caltex case on its head by prohibiting MR. LERUM. My amendment is on Section 7, page 2, line 19, which is to
all types of managers from forming unions. The explicit general prohibition insert between the words "people" and "to" the following: WHETHER
was contained in the then Art. 246 of the Labor Code. EMPLOYED BY THE STATE OR PRIVATE ESTABLISHMENTS. In other
words, the section will now read as follows: "The right of the people
WHETHER EMPLOYED BY THE STATE OR PRIVATE ESTABLISHMENTS I want to avoid also the possibility of having this interpreted as applicable
to form associations, unions, or societies for purposes not contrary to law only to the employed.
shall not be abridged."[23]23
MR. DE LOS REYES. Will the proponent accept an amendment to the
Explaining his proposed amendment, he stated: amendment, Madam President?

MR. LERUM. Under the 1935 Bill of Rights, the right to form associations is MR. LERUM. Yes, as long as it will carry the idea that the right of the
granted to all persons whether or not they are employed in the employees in the private sector is recognized.[24]
government. Under that provision, we allow unions in the government, in
government-owned and controlled corporations and in other industries in the Lerum thus anchored his proposal on the fact that (1) government
private sector, such as the Philippine Government Employees' Association, employees, supervisory employees, and security guards, who had the right
unions in the GSIS, the SSS, the DBP and other government-owned and to organize under the Industrial Peace Act, had been denied this right by the
controlled corporations. Also, we have unions of supervisory employees and Labor Code, and (2) there was a need to reinstate the right of these
of security guards. But what is tragic about this is that after the 1973 employees. In consonance with his objective to reinstate the right of
Constitution was approved and in spite of an express recognition of the right government, security, and supervisory employees to organize, Lerum then
to organize in P.D. No. 442, known as the Labor Code, the right of made his proposal:
government workers, supervisory employees and security guards to form
unions was abolished.
MR. LERUM. Mr. Presiding Officer, after a consultation with several
Members of this Commission, my amendment will now read as follows: "The
And we have been fighting against this abolition. In every tripartite right of the people INCLUDING THOSE EMPLOYED IN THE PUBLIC AND
conference attended by the government, management and workers, we have PRIVATE SECTORS to form associations, unions, or societies for purposes
always been insisting on the return of these rights.However, both the not contrary to law shall not be abridged. In proposing that amendment I ask
government and employers opposed our proposal, so nothing came out of to make of record that I want the following provisions of the Labor Code to be
this until this week when we approved a provision which states: automatically abolished, which read:

Notwithstanding any provision of this article, the right to self-organization ART. 245. Security guards and other personnel employed for the protection
shall not be denied to government employees. and security of the person, properties and premises of the employers shall
not be eligible for membership in a labor organization.
We are afraid that without any corresponding provision covering the private
sector, the security guards, the supervisory employees or majority ART. 246. Managerial employees are not eligible to join, assist, and form any
employees [sic] will still be excluded, and that is the purpose of this labor organization.
THE PRESIDING OFFICER (Mr. Bengzon). What does the Committee say?
I will be very glad to accept any kind of wording as long as it will amount to
absolute recognition of private sector employees, without exception, to
FR. BERNAS. The Committee accepts.
THE PRESIDING OFFICER. (Mr. Bengzon) The Committee has accepted
THE PRESIDENT. What does the Committee say?
the amendment, as amended.

FR. BERNAS. Certainly, the sense is very acceptable, but the point raised by Is there any objection? (Silence) The Chair hears none; the amendment, as
Commissioner Rodrigo is well-taken. Perhaps, we can lengthen this a little bit amended, is approved.[25]
more to read: "The right of the people WHETHER UNEMPLOYED OR
The question is what Commissioner Lerum meant in seeking to
"automatically abolish" the then Art. 246 of the Labor Code. Did he simply
want "any kind of wording as long as it will amount to absolute recognition of ART. 245. Security guards and other personnel employed for the protection
private sector employees, without exception, to organize"? [26] Or, did he and security of the person, properties and premises of the employers shall
instead intend to have his words taken in the context of the cause which not be eligible for membership in a labor organization.
moved him to propose the amendment in the first place, namely, the denial of
the right of supervisory employees to organize, because he said, "We are ART. 246. Managerial employees are not eligible to join, assist, and form any
afraid that without any corresponding provision covering the private sector, labor organization.[28]28
security guards, supervisory employees or majority [of] employees will still be
excluded, and that is the purpose of this amendment"?[27]
It would seem that Commissioner Lerum simply meant to restore the Implications of the Lerum Proposal

right of supervisory employees to organize. For even though he spoke of the

need to "abolish" Art. 246 of the Labor Code which, as already stated,
prohibited "managerial employees" in general from forming unions, the fact In sum, Lerum's proposal to amend Art. III, 8 of the draft Constitution by
was that in explaining his proposal, he repeatedly referred to "supervisory including labor unions in the guarantee of organizational right should be
employees" whose right under the Industrial Peace Act to organize had been taken in the context of statements that his aim was the removal of the
taken away by Art. 246. It is noteworthy that Commissioner Lerum never statutory ban against security guards and supervisory employees joining
referred to the then definition of "managerial employees" in Art. 212(m) of the labor organizations. The approval by the Constitutional Commission of his
Labor Code which put together, under the broad phrase "managerial proposal can only mean, therefore, that the Commission intended the
employees," top and middle managers and supervisors. Instead, his absolute right to organize of government workers, supervisory employees,
repeated use of the term "supervisory employees," when such term then was and security guards to be constitutionally guaranteed. By implication, no
no longer in the statute books, suggests a frame of mind that remained similar absolute constitutional right to organize for labor purposes should be
grounded in the language of the Industrial Peace Act. deemed to have been granted to top-level and middle managers. As to them
the right of self-organization may be regulated and even abridged
Nor did Lerum ever refer to the dictum in Caltex recognizing the right of conformably to Art. III, 8.
all managerial employees to organize, despite the fact that the Industrial
Peace Act did not expressly provide for the right of top and middle managers
to organize. If Lerum was aware of the Caltex dictum, then his insistence on
Constitutionality of Art. 245
the use of the term "supervisory employees" could only mean that he was
excluding other managerial employees from his proposal. If, on the other
hand, he was not aware of the Caltex statement sustaining the right to
organize to top and middle managers, then the more should his repeated use Finally, the question is whether the present ban against managerial
of the term "supervisory employees" be taken at face value, as it had been employees, as embodied in Art. 245 (which superseded Art. 246) of the
defined in the then Industrial Peace Act. Labor Code, is valid. This provision reads:

At all events, that the rest of the Commissioners understood his ART. 245. Ineligibility of managerial employees to join any labor organization;
proposal to refer solely to supervisors and not to other managerial right of supervisory employees. - Managerial employees are not eligible to
employees is clear from the following account of Commissioner Joaquin G. join, assist or form any labor organization.Supervisory employees shall not
Bernas, who writes: be eligible for membership in a labor organization of the rank-and-file
employees but may join, assist or form separate labor organizations of their
In presenting the modification on the 1935 and 1973 texts, Commissioner own.[29]29
Eulogio R. Lerum explained that the modification included three categories of
workers: (1) government employees, (2) supervisory employees, and (3) This provision is the result of the amendment of the Labor Code in 1989
security guards. Lerum made of record the explicit intent to repeal provisions by R.A. No. 6715, otherwise known as the Herrera-Veloso Law. Unlike the
of P.D. 442, the Labor Code. The provisions referred to were: Industrial Peace Act or the provisions of the Labor Code which it superseded,
R.A. No. 6715 provides separate definitions of the terms "managerial" and
"supervisory employees," as follows:
ART. 212. Definitions. . . . interests. The Union can also become company-dominated with the
presence of managerial employees in Union membership."[32]
(m) "managerial employee" is one who is vested with powers or prerogatives
to lay down and execute management policies and/or to hire transfer, To be sure, the Court in Philips Industrial was dealing with the right of
suspend, lay off, recall, discharge, assign or discipline confidential employees to organize. But the same reason for denying them
employees. Supervisory employees are those who, in the interest of the the right to organize justifies even more the ban on managerial employees
employer, effectively recommend such managerial actions if the exercise of from forming unions. After all, those who qualify as top or middle managers
such authority is not merely routinary or clerical in nature but requires the use are executives who receive from their employers information that not only is
of independent judgment. All employees not falling within any of the above confidential but also is not generally available to the public, or to their
definitions are considered rank-and-file employees for purposes of this Book. competitors, or to other employees. It is hardly necessary to point out that to
say that the first sentence of Art. 245 is unconstitutional would be to
Although the definition of "supervisory employees" seems to have been contradict the decision in that case.
unduly restricted to the last phrase of the definition in the Industrial Peace WHEREFORE, the petition is DISMISSED.
Act, the legal significance given to the phrase "effectively recommends"
remains the same. In fact, the distinction between top and middle managers,
who set management policy, and front-line supervisors, who are merely
responsible for ensuring that such policies are carried out by the rank and
file, is articulated in the present definition.[30]30 When read in relation to this
definition in Art. 212(m), it will be seen that Art. 245 faithfully carries out the
intent of the Constitutional Commission in framing Art. III, 8 of the
fundamental law.
Nor is the guarantee of organizational right in Art. III, 8 infringed by a
ban against managerial employees forming a union. The right guaranteed in
Art. III, 8 is subject to the condition that its exercise should be for purposes
"not contrary to law." In the case of Art. 245, there is a rational basis for
prohibiting managerial employees from forming or joining labor
organizations. As Justice Davide, Jr., himself a constitutional commissioner,
said in his ponencia in Philips Industrial Development, Inc. v. NLRC:[31]31

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

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

elaborated on this rationale, thus:

". . . The rationale for this inhibition has been stated to be, because if these NATIONAL ASSOCIATION OF TRADE UNIONS (NATU)-REPUBLIC
managerial employees would belong to or be affiliated with a Union, the latter PLANTERS BANK SUPERVISORS CHAPTER, petitioner,
might not be assured of their loyalty to the Union in view of evident conflict of vs.
HON. RUBEN D. TORRES, SECRETARY OF LABOR AND EMPLOYMENT On 23 March 1990, public respondent issued a decision partially granting the
and REPUBLIC PLANTERS BANK, respondents. appeal, which is now being challenged before us —

WHEREFORE, . . . the appeal is hereby partially granted.

BELLOSILLO, J.: Accordingly, the Order dated 17 August 1989 is modified to
the extent that Department Managers, Assistant Managers,
NATIONAL ASSOCIATION OF TRADE UNIONS (NATU)-REPUBLIC Branch Managers, Cashiers and Controllers are declared
PLANTERS BANK SUPERVISORS CHAPTER seeks nullification of the managerial employees. Perforce, they cannot join the union
decision of public respondent Secretary of Labor dated 23 March 1990, of supervisors such as Division Chiefs, Accounts Officers,
which modified the order of Med-Arbiter Manases T. Cruz dated 17 August Staff Assistants and OIC's (sic) unless the latter are regular
1989 as well as his order dated 20 April 1990 denying reconsideration. managerial employees . . . .2

On 17 March 1989, NATU filed a petition for certification election to NATU filed a motion for reconsideration but the same was denied on 20 April
determine the exclusive bargaining representative of respondent Bank's 1990.3 Hence this recourse assailing public respondent for rendering the
employees occupying supervisory positions. On 24 April 1989, the Bank decision of 23 March 1990 and the order of 20 April 1990 both with grave
moved to dismiss the petition on the ground that the supposed supervisory abuse of discretion.
employees were actually managerial and/or confidential employees thus
ineligible to join, assist or form a union, and that the petition lacked the 20% The crucial issue presented for our resolution is whether the Department
signatory requirement under the Labor Code. Managers, Assistant Managers, Branch Managers/OICs, Cashiers and
Controllers of respondent Bank are managerial and/or confidential
On 17 August 1989, Med-Arbiter Manases T. Cruz granted the petition thus employees hence ineligible to join or assist the union of petitioner.

NATU submits that an analysis of the decision of public respondent readily
WHEREFORE, . . . let a certification election be ordered yields certain flaws that result in erroneous conclusions. Firstly, a branch
conducted among all the regular employees of the Republic does not enjoy relative autonomy precisely because it is treated as one unit
Planters Bank occupying supervisory positions or the with the head office and has to comply with uniform policies and guidelines
equivalent within 20 days from receipt of a copy of this set by the bank itself. It would be absurd if each branch of a particular bank
Order. The choice shall be: (1) National Association of Trade would be adopting and implementing different policies covering multifarious
Unions (NATU)-Republic Planters Bank Supervisors banking transactions. Moreover, respondent Bank's own evidence clearly
Chapter; and (2) No Union. shows that policies and guidelines covering the various branches are set by
the head office. Secondly, there is absolutely no evidence showing that bank
policies are laid down through the collective action of the Branch Manager,
The payroll three months prior to the filing of this petition
shall be utilized in determining the list of eligible voters . . . .1 the Cashier and the Controller. Thirdly, the organizational setup where the
Branch Manager exercises control over branch operations, the Controller
controls the Accounting Division, and the Cashier controls the Cash Division,
Respondent Bank appealed the order to the Secretary of Labor on the main is nothing but a proper delineation of duties and responsibilities. This
ground that several of the employees sought to be included in the delineation is a Central Bank prescribed internal control measure intended to
certification election, particularly the Department Managers, Branch objectively establish responsibilities among the officers to easily pinpoint
Managers/OICs, Cashiers and Controllers were managerial and/or culpability in case of error. The "dual control" and "joint custody" aspects
confidential employees and thus ineligible to join, assist or form a union. It mentioned in the decision of public respondent are likewise internal control
presented annexes detailing the job description and duties of the positions in measures prescribed by the Central Bank.
question and affidavits of certain employees. It also invoked provisions of the
General Banking Act and the Central Bank Act to show the duties and
Neither is there evidence showing that subject employees are vested with
responsibilities of the bank and its branches.
powers or prerogatives to hire, transfer, suspend, lay off, recall, discharge,
assign or discipline employees. The bare allegations in the affidavits of
respondent Bank's Executive Assistant to the President4 and the Senior Respondent Bank has no legal personality to move for the dismissal of the
Manager of the Human Resource Management Department5 that those petition for certification election on the ground that its supervisory employees
powers and prerogatives are inherent in subject positions are self-serving. are in reality managerial employees. An employer has no standing to
Their claim cannot be made to prevail upon the actual duties and question the process since this is the sole concern of the workers. The only
responsibilities of subject employees. exception is where the employer itself has to file the petition pursuant to Art.
258 of the Labor Code because of a request to bargain collectively. 6
The other evidence of respondent Bank which purports to show that subject
employees exercise managerial functions even belies such claim. Insofar as Public respondent, invoking RA 6715 and the inherent functions of
Department Managers and Assistant Managers are concerned, there is Department Managers, Assistant Managers, Branch Managers, Cashiers and
absolutely no reason mentioned in the decision why they are managerial Controllers, held that these officers properly fall within the definition of
employees. Not even respondent Bank in its appeal questioned the inclusion managerial employees. The ratiocination in his Decision of 23 March 1990 7 is
of Assistant Managers among the qualified petitioning employees. Public that —
respondent has deviated from the real issue in this case, which is, the
determination of whether subject employees are managerial employees Republic Act No. 6715, otherwise known as the Herrera-
within the contemplation of the Labor Code, as amended by RA 6715; Veloso Law, restored the right of supervisors to form their
instead, he merely concentrated on the nature, conduct and management of own unions while maintaining the proscription on the right to
banks conformably with the General Banking Act and the Central Bank Act. self-organization of managerial employees. Accordingly, the
Labor Code, as amended, distinguishes managerial,
Petitioner concludes that subject employees are not managerial employees supervisory and rank-and-file employees thus:
but supervisors. Even assuming that they are confidential employees, there
is no legal prohibition against confidential employees who are not performing Art. 212 (m) — Managerial employee is one
managerial functions to form and join a union. who is vested with powers or prerogatives to
lay down and execute management policies
On the other hand, respondent Bank maintains that the Department and/or to hire, transfer, suspend, lay-off,
Managers, Branch Managers, Cashiers and Controllers are inherently recall, discharge, assign or discipline
possessed of the powers enumerated in Art. 212, par. (m), of the Labor employees. Supervisoryemployees are
Code. It relies heavily on the affidavits of its Executive Assistant to the those who, in the interest of the employer,
President and Senior Manager of the Human Resource Department. The effectively recommend such managerial
Branch Managers, Cashiers and Controllers are vested not only with policy- actions, if the exercise of such managerial
making powers necessary to run the affairs of the branch, given the authority is not routinary in nature but
independence and relative autonomy which it enjoys in the pursuit of its requires the use of independent
goals and objectives, but also with the concomitant disciplinary authority over judgment. All employees not falling within
the employees. any of the above definitions are considered
rank-and-file employees (emphasis
The Solicitor General argues that NATU loses sight of the fact that by virtue supplied).
of the appeal of respondent Bank, the whole case is thrown open for
consideration by public respondent. Even errors not assigned in the appeal, At first glance, pursuant to the above-definitions and based
such as the exclusion by the Med-Arbiter of Assistant Managers from the on their job descriptions as guideposts, there would seem to
managerial employees category, is within his discretion to consider as it is be no difficulty in distinguishing a managerial employee from
closely related to the errors properly assigned. The fact that Department that of a supervisor, or from that of a mere rank-and-file
Managers are managerial employees is borne out by the evidence of employee. Yet, this task takes on a different dimension when
petitioner itself. Furthermore, while it assails public respondent's finding that applied to banks, particularly the branches thereof. This is so
subject employees are managerial employees, petitioner never questioned because unlike ordinary corporations, a bank's
the fact that said officers also occupy confidential positions and thus remain organizational operation is governed and regulated by the
prohibited from forming or joining any labor organization. General Banking Act and the Central Bank Act, both special
laws . . . .
As pointed out by the respondent, in the banking industry, a 1166.6 of the Manual of Regulations for Banks and Other
branch is the microcosm of a banking institution, uniquely Financial Intermediaries.
autonomous and
self-governing. This structural set-up creates a triad of managerial authority
among the branch manager, cashier and controller. Hence,
This relative autonomy of a branch finds legal basis in no officer of the bank ". . . have (sic) complete authority and
Section 27 of the General Banking Act, as amended, thus: responsibility for handling all phases of any transaction from
beginning to end without some control or balance from some
. . . . The bank shall be responsible for all other part of the organization" (Section 1166.3, Division of
business conducted in such branches to the Duties and Responsibilities, Ibid). This aspect in the banking
same extent and in the same manner as system which calls for the division of duties and
though such business had all been responsibilities is a clear manifestation of managerial power
conducted in the head office. and authority. No operational transaction at branch level is
carried out by the singular act of the Branch Manager but
For the purpose of this Act, a bank and its rather through the collective act of the Branch Manager,
branches shall be treated as a Cashier/Controller (emphasis supplied).
unit(emphasis supplied).
Noteworthy is the "on call client" set up in banks. Under this
Conformably with the above, bank policies are laid down scheme, the branch manager is tasked with the
responsibility of business development and marketing of the
and/or executed through the collective action of the Branch
bank's services which place him on client call. During such
Manager, Cashier and Controller at the branch level. The
usual physical absences from the branch, the cashier
Branch Manager exercises over-all control and supervision
assumes the reins of branch control and administration. On
over branch operation being on the top of the branch's
pyramid structure. However, both the controller and the those occasions, the "dual control system" is clearly manifest
in the transactions and operations of the branch bank as it
cashier who are called in banking parlance as "Financial
will then require the necessary joint action of the controller
Managers" due to their fiscal functions are given such a
and the cashier.
share and sphere of responsibility in the operations of the
bank. The cashier controls and supervises the cash division
while the controller that of the Accounting Division. Likewise, The grave abuse of discretion committed by public respondent is at once
their assigned task is of great significance, without which a apparent. Art. 212, par. (m), of the Labor Code is explicit. A managerial
bank or branch for that matter cannot operate or function. employee is (a) one who is vested with powers or prerogatives to lay down
and execute management policies, or to hire, transfer, suspend, lay off,
recall, discharge, assign or discipline employees; or (b) one who is vested
Through the collective action of these three branch officers
operational transactions are carried out like: The two (2)- with both powers or prerogatives. A supervisory employee is different from a
signature requirement of the manager, on one hand, and managerial employee in the sense that the supervisory employee, in the
interest of the employer, effectively recommends such managerial actions, if
that of the controller or cashier on the other hand as required
the exercise of such managerial authority is not routinary in nature but
in bank's issuances and releases. This is the so-called "dual
requires the use of independent judgment.
control" through check-and-balance as prescribed by the
Central Bank, per Section 1166.6, Book I, Manual of
Regulations for Banks and Financial Intermediaries. Another Ranged against these definitions and after a thorough examination of the
is in the joint custody of the branch's cash in vault, evidence submitted by both parties, we arrive at a contrary conclusion.
accountable forms, collaterals, documents of title, deposit, Branch Managers, Cashiers and Controllers of respondent Bank are not
ledgers and others, among the branch manager and at least managerial employees but supervisory employees. The finding of public
two (2) officers of the branch as required under Section respondent that bank policies are laid down and/or executed through the
collective action of these employees is simply erroneous. His discussion on
the division of their duties and responsibilities does not logically lead to the
conclusion that they are managerial employees, as the term is defined in Art. purchased
212, par. (m). (DBP);17 and

Among the general duties and responsibilities of a Branch Manager is "[t]o (d) Memorandum issued by the same officer to all Branch
discharge his duties and authority with a high sense of responsibility and Managers regarding lending authority at the branch level and
integrity and shall at all times be guided by prudence like a good father of the the terms and conditions thereof.18
family, and sound judgment in accordance with and within the limitations of
the policy/policies promulgated by the Board of Directors and implemented As a consequence, the affidavit of the Executive Assistant cannot be given
by the Management until suspended, superseded, revoked or modified" (par. any weight at all.
5, emphasis supplied).8 Similarly, the job summary of a Controller states:
"Supervises the Accounting Unit of the branch; sees to the compliance by the
Neither do the Branch Managers, Cashiers and Controllers have the power
Branch with established procedures, policies, rules and regulations of the
to hire, transfer, suspend, lay off, recall, discharge, assign or discipline
Bank and external supervising authorities; sees to the strict implementation
employees. The Senior Manager of the Human Resource Management
of control procedures (emphasis supplied).9 The job description of a Cashier Department of respondent Bank, in her affidavit, stated that "the power to
does not mention any authority on his part to lay down policies, either. 10 On
hire, fire, suspend, transfer, assign or otherwise impose discipline among
the basis of the foregoing evidence, it is clear that subject employees do not
subordinates within their respective jurisdictions is lodged with the heads of
participate in policy-making but are given approved and established policies
the various departments, the branch managers and officers-in-charge, the
to execute and standard practices to observe,11 leaving little or no discretion
branch cashiers and the branch controllers. Inherent as it is in the
at all whether to implement said policies or not.12 It is the nature of the aforementioned positions, the authority to hire, fire, suspend, transfer, assign
employee's functions, and not the nomenclature or title given to his job, or otherwise discipline employees within their respective domains was
which determines whether he has rank-and-file, supervisory or managerial
deemed unnecessary to be incorporated in their individual job descriptions;
By way of illustration, on August 24, 1989, Mr. Renato A. Tuates, the Officer-
in-Charge/Branch Cashier of the Bank's Dumaguete Branch, placed under
Moreover, the bare statement in the affidavit of the Executive Assistant to the preventive suspension and thereafter terminated the teller of the same
President of respondent Bank that the Branch Managers, Cashiers and branch . . . . Likewise, on February 22, 1989, Mr. Francis D. Robite, Sr., the
Controllers "formulate and implement the plans, policies and marketing Officer-in-Charge of International Department, assigned the cable assistant
strategies of the branch towards the successful accomplishment of its profit of the International Department as the concurrent FCDU Accountable Forms
targets and objectives,"14 is contradicted by the following evidence submitted Custodian."19
by respondent Bank itself:
However, a close scrutiny of the memorandum of Mr. Tuates reveals that he
(a) Memorandum issued by respondent Bank's Assistant does not have said managerial power because as plainly stated therein, it
Vice President to all Regional Managers and Branch was issued "upon instruction from Head Office." 20 With regard to the
Managers giving them temporary discretionary authority to memorandum of Mr. Robite, Sr., it appears that the power he exercised was
grant additional interest over the prescribed board rates for merely in an isolated instance, taking into account the other evidence
both short-term and long-term CTDs subject, however, to submitted by respondent Bank itself showing lack of said power by other
specific limitations and guidelines set forth in the same Branch Managers/OICs:
(a) Memorandum from the Branch Manager for the
(b) Memorandum issued by respondent Bank's Executive AVP-Manpower Management Department expressing the
Vice President to all Regional Managers and Branch Officers opinion that a certain employee, due to habitual absenteeism
regarding the policy and guidelines on drawing against and tardiness, must be penalized in accordance with
uncollected deposits (DAUD);16 respondent Bank's Code of Discipline; and

(c) Memorandum issued by respondent Bank's President to

all Field Offices regarding the guidelines on domestic bills
(b) Memorandum from a Branch OIC for the Assistant Vice No statute can be enacted that can provide all the details
President recommending a certain employee's promotional involved in its application. There is always an omission that
adjustment to the present position he occupies. may not meet a particular situation. What is thought, at the
time of enactment, to be an all-embracing legislation may be
Clearly, those officials or employees possess only recommendatory powers inadequate to provide for the unfolding events of the future.
subject to evaluation, review and final action by higher officials. Therefore, So-called gaps in the law develop as the law is enforced.
the foregoing affidavit cannot bolster the stand of respondent Bank. One of the rules of statutory construction used to fill in the
gap is the doctrine of necessary implication . . . . Every
The positions of Department Managers and Assistant Managers were also statute is understood, by implication, to contain all such
provisions as may be necessary to effectuate its object and
declared by public respondent as managerial, without providing any basis
purpose, or to make effective rights, powers, privileges or
therefor. Petitioner asserts that the position of Assistant Manager was not
jurisdiction which it grants, including all such collateral and
even included in the appeal filed by respondent Bank. While we agree with
subsidiary consequences as may be fairly and logically
the Office of the Solicitor General that it is within the discretion of public
inferred from its terms. Ex necessitate
respondent to consider an unassigned issue that is closely related to an
legis . . . .
issue properly assigned, still, public respondent's error lies in the fact that his
finding has no leg to stand on. Anyway, inasmuch as the entire records are
before us, now is the opportunity to discuss this issue. In applying the doctrine of necessary implication, we took into consideration
the rationale behind the disqualification of managerial employees expressed
in Bulletin Publishing Corporation v. Sanchez,28 thus: ". . . if these managerial
We analyzed the evidence submitted by respondent Bank in support of its
claim that Department Managers are managerial employees 21 and employees would belong to or be affiliated with a Union, the latter might not
be assured of their loyalty to the Union in view of evident conflict of interests.
concluded that they are not. Like Branch Managers, Cashiers and
The Union can also become company-dominated with the presence of
Controllers, Department Managers do not possess the power to lay down
managerial employees in Union membership." Stated differently, in the
policies nor to hire, transfer, suspend, lay off, recall, discharge, assign or
collective bargaining process, managerial employees are supposed to be on
discipline employees. They occupy supervisory positions, charged with the
duty among others to "recommend proposals to improve and streamline the side of the employer, to act as its representatives, and to see to it that its
interests are well protected. The employer is not assured of such protection if
operations."22With respect to Assistant Managers, there is absolutely no
these employees themselves are union members. Collective bargaining in
evidence submitted to substantiate public respondent's finding that they are
such a situation can become one-sided.29 It is the same reason that impelled
managerial employees; understandably so, because this position is not
this Court to consider the position of confidential employees as included in
included in the appeal of respondent Bank.
the disqualification found in Art. 245 as if the disqualification of confidential
employees were written in the provision. If confidential employees could
As regards the other claim of respondent Bank that Branch Managers/OICs, unionize in order to bargain for advantages for themselves, then they could
Cashiers and Controllers are confidential employees, having control, custody be governed by their own motives rather than the interest of the employers.
and/or access to confidential matters, e.g., the branch's cash position, Moreover, unionization of confidential employees for the purpose of collective
statements of financial condition, vault combination, cash codes for bargaining would mean the extension of the law to persons or individuals
telegraphic transfers, demand drafts and other negotiable who are supposed to act "in the interest of" the employers. 30 It is not
instruments, 23 pursuant to Sec. 1166.4 of the Central Bank Manual farfetched that in the course of collective bargaining, they might jeopardize
regarding joint custody, 24 this claim is not even disputed by petitioner. A that interest which they are duty-bound to protect. Along the same line of
confidential employee is one entrusted with confidence on delicate matters, reasoning we held in Golden Farms, Inc. v. Ferrer-Calleja 31 reiterated
or with the custody, handling, or care and protection of the employer's in Philips Industrial Development, Inc. v. NLRC,32 that "confidential
property. 25 While Art. 245 of the Labor Code singles out managerial employees such as accounting personnel, radio and telegraph operators
employees as ineligible to join, assist or form any labor organization, under who, having access to confidential information, may become the source of
the doctrine of necessary implication, confidential employees are similarly undue advantage. Said employee(s) may act as spy or spies of either party
disqualified. This doctrine states that what is implied in a statute is as much a to a collective bargaining agreement."
part thereof as that which is expressed, as elucidated in several cases 26 the
latest of which is Chua v. Civil Service Commission 27 where we said:
In fine, only the Branch Managers/OICs, Cashiers and Controllers of
respondent Bank, being confidential employees, are disqualified from joining
or assisting petitioner Union, or joining, assisting or forming any other labor
organization. But this ruling should be understood to apply only to the
present case based on the evidence of the parties, as well as to those
similarly situated. It should not be understood in any way to apply to banks in

WHEREFORE, the petition is partially GRANTED. The decision of public

respondent Secretary of Labor dated 23 March 1990 and his order dated 20
April 1990 are MODIFIED, hereby declaring that only the Branch
Managers/OICs, Cashiers and Controllers of respondent Republic Planters
Bank are ineligible to join or assist petitioner National Association of Trade
Unions (NATU)-Republic Planters Bank Supervisors Chapter, or join, assist
or form any other labor organization.


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

SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION directed the conduct of separate certification elections among the
AND ERNESTO L. PONCE, President, petitioners, supervisors ranked as supervisory levels 1 to 4 (S1 to S4) and the exempt
vs. HONARABLE BIENVENIDO E. LAGUESMA IN HIS CAPACITY employees in each of the three plants at Cabuyao, San Fernando and Otis.
HONORABLE DANILO L. REYNANTE IN HIS CAPACITY AS On September 21, 1991, respondent company, San Miguel Corporation
MED-ARBITER AND SAN MIGUEL filed a Motion for Reconsideration with Motion to suspend proceedings.
CORPORATION, respondents. On March 11, 1993, an Order was issued by the public respondent
granting the Motion, citing the doctrine enunciated in Philips Industrial
DECISION Development, Inc. v. NLRC[2] case. Said Order reads in part:
x x x Confidential employees, like managerial employees, are
This is a Petition for Certiorari with Prayer for the Issuance of not allowed to form, join or assist a labor union for purposes
Preliminary Injunction seeking to reverse and set aside the Order of public of collective bargaining.
respondent, Undersecretary of the Department of Labor and Employment,
Bienvenido E. Laguesma, dated March 11, 1993, in Case No. OS MA A-2- In this case, S3 and S4 and the so-called exempt employees
70-91[1] entitled In Re: Petition for Certification Election Among the
Supervisory and Exempt Employees of the San Miguel Corporation Magnolia are admittedly confidential employees and therefore, they are
Poultry Plants of Cabuyao, San Fernando and Otis, San Miguel Corporation not allowed to form, join or assist a labor union for purposes
Supervisors and Exempt Union, Petitioner. The Order excluded the of collective bargaining following the above courts
employees under supervisory levels 3 and 4 and the so-called exempt ruling. Consequently, they are not allowed to participate in
employees from the proposed bargaining unit and ruled out their participation
the certification election.
in the certification election.
The antecedent facts are undisputed: WHEREFORE, the motion is hereby granted and the Decision
On October 5, 1990, petitioner union filed before the Department of of this Office dated 03 September 1991 is hereby modified to
Labor and Employment (DOLE) a Petition for District Certification or the extent that employees under supervisory levels 3 and 4
Certification Election among the supervisors and exempt employees of the (S3 and S4) and the so-called exempt employees are not
SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis.
allowed to join the proposed bargaining unit and are therefore
On December 19, 1990, Med-Arbiter Danilo L. Reynante issued an excluded from those who could participate in the certification
Order ordering the conduct of certification among the supervisors and
exempt employees of the SMC Magnolia Poultry Products Plants of
Cabuyao, San Fernando and Otis as one bargaining unit.
Hence this petition.
On January 18, 1991, respondent San Miguel Corporation filed a Notice
of Appeal with Memorandum on Appeal, pointing out, among others, the
For resolution in this case are the following issues:
Med-Arbiters error in grouping together all three (3) separate plants, Otis,
Cabuyao and San Fernando, into one bargaining unit, and in including 1. Whether Supervisory employees 3 and 4 and the exempt
supervisory levels 3 and above whose positions are confidential in nature. employees of the company are considered confidential
employees, hence ineligible from joining a union.
On July 23, 1991, the public respondent, Undersecretary Laguesma,
granted respondent companys Appeal and ordered the remand of the case to 2. If they are not confidential employees, do the employees of the
the Med-Arbiter of origin for determination of the true classification of each of three plants constitute an appropriate single bargaining unit.
the employees sought to be included in the appropriate bargaining unit.
On the first issue, this Court rules that said employees do not fall within
Upon petitioner-unions motion dated August 7, 1991, Undersecretary the term confidential employees who may be prohibited from joining a union.
Laguesma granted the reconsideration prayed for on September 3, 1991 and
There is no question that the said employees, supervisors and the An important element of the confidential employee rule is the employees
exempt employees, are not vested with the powers and prerogatives to lay need to use labor relations information. Thus, in determining the
down and execute management policies and/or to hire, transfer, suspend, confidentiality of certain employees, a key questions frequently considered is
layoff, recall, discharge or dismiss employees. They are, therefore, not the employees necessary access to confidential labor relations
qualified to be classified as managerial employees who, under Article information.[13]
245[4] of the Labor Code, are not eligible to join, assist or form any labor
organization. In the very same provision, they are not allowed membership in It is the contention of respondent corporation that Supervisory
a labor organization of the rank-and-file employees but may join, assist or employees 3 and 4 and the exempt employees come within the meaning of
form separate labor organizations of their own. The only question that need the term confidential employees primarily because they answered in the
be addressed is whether these employees are properly classified as affirmative when asked Do you handle confidential data or documents? in the
confidential employees or not. Position Questionnaires submitted by the Union.[14] In the same
questionnaire, however, it was also stated that the confidential information
Confidential employees are those who (1) assist or act in a confidential handled by questioned employees relate to product formulation, product
capacity, (2) to persons who formulate, determine, and effectuate standards and product specification which by no means relate to labor
management policies in the field of labor relations. [5] The two criteria are relations.[15]
cumulative, and both must be met if an employee is to be considered a
confidential employee that is, the confidential relationship must exist between Granting arguendo that an employee has access to confidential labor
the employees and his supervisor, and the supervisor must handle the relations information but such is merely incidental to his duties and
prescribed responsibilities relating to labor relations.[6] knowledge thereof is not necessary in the performance of such duties, said
access does not render the employee a confidential employee. [16] If access to
The exclusion from bargaining units of employees who, in the normal confidential labor relations information is to be a factor in the determination of
course of their duties, become aware of management policies relating to an employees confidential status, such information must relate to the
labor relations is a principal objective sought to be accomplished by the employers labor relations policies. Thus, an employee of a labor union, or of
confidential employee rule. The broad rationale behind this rule is that a management association, must have access to confidential labor
employees should not be placed in a position involving a potential conflict of information with respect to his employer, the union, or the association, to be
interests.[7] Management should not be required to handle labor relations regarded a confidential employee, and knowledge of labor relations
matters through employees who are represented by the union with the information pertaining to the companies with which the union deals, or which
company is required to deal and who in the normal performance of their the association represents, will not clause an employee to be excluded from
duties may obtain advance information of the companys position with regard the bargaining unit representing employees of the union or
to contract negotiations, the disposition of grievances, or other labor relations association.[17] Access to information which is regarded by the employer to
matters.[8] be confidential from the business standpoint, such as financial
information[18] or technical trade secrets, will not render an employee a
There have been ample precedents in this regard, thus in Bulletin confidential employee.[19]
Publishing Company v. Hon. Augusto Sanchez,[9] the Court held that if these
managerial employees would belong to or be affiliated with a Union, the latter Herein listed are the functions of supervisors 3 and higher:
might not be assured of their loyalty to the Union in view of evident conflict of
interest. The Union can also become company-dominated with the presence 1. To undertake decisions to discontinue/temporarily stop shift
of managerial employees in Union membership. The same rationale was operations when situations require.
applied to confidential employees in Golden Farms, Inc. v. Ferrer- 2. To effectively oversee the quality control function at the
Calleja[10] and in the more recent case of Philips Industrial Development, processing lines in the storage of chicken and other products.
Inc. v. NLRC[11] which held that confidential employees, by the very nature of
their functions, assist and act in a confidential capacity to, or have access to 3. To administer efficient system of evaluation of products in the
confidential matters of, persons who exercise managerial functions in the outlets.
field of labor relations. Therefore, the rationale behind the ineligibility of
4. To be directly responsible for the recall, holding and rejection of
managerial employees to form, assist or join a labor union was held equally
direct manufacturing materials.
applicable to them.[12]
5. To recommend and initiate actions in the maintenance of equity to the employer, indicate to be best suited to serve the reciprocal
sanitation and hygiene throughout the plant.[20] rights and duties of the parties under the collective bargaining provisions of
the law.[24]
It is evident that whatever confidential data the questioned employees
may handle will have to relate to their functions. From the foregoing A unit to be appropriate must effect a grouping of employees who have
functions, it can be gleaned that the confidential information said employees substantial, mutual interests in wages, hours, working conditions and other
have access to concern the employers internal business operations. As held subjects of collective bargaining.[25]
in Westinghouse Electric Corporation v. National Labor Relations
Board,[21] an employee may not be excluded from appropriate bargaining unit It is readily seen that the employees in the instant case have community
merely because he has access to confidential information concerning or mutuality of interest, which is the standard in determining the proper
employers internal business operations and which is not related to the field of constituency of a collective bargaining unit.[26] It is undisputed that they all
labor relations. belong to the Magnolia Poultry Division of San Miguel Corporation. This
means that, although they belong to three different plants, they perform work
It must be borne in mind that Section 3 of Article XIII of the 1987 of the same nature, receive the same wages and compensation, and most
Constitution mandates the State to guarantee to all workers the right to self- importantly, share a common stake in concerted activities.
organization. Hence, confidential employees who may be excluded from
bargaining unit must be strictly defined so as not to needlessly deprive many In light of these considerations, the Solicitor General has opined that
employees of their right bargain collectively through representatives of their separate bargaining units in the three different plants of the division will
choosing.[22] fragmentize the employees of the said division, thus greatly diminishing their
bargaining leverage. Any concerted activity held against the private
In the case at bar, supervisors 3 and above may not be considered respondent for a labor grievance in one bargaining unit will, in all probability,
confidential employees merely because they handle confidential data as not create much impact on the operations of the private respondent. The two
such must first be strictly classified as pertaining to labor relations for them to other plants still in operation can well step up their production and make up
fall under said restrictions. The information they handle are properly for the slack caused by the bargaining unit engaged in the concerted
classifiable as technical and internal business operations data which, to our activity. This situation will clearly frustrate the provisions of the Labor Code
mind, has no relevance to negotiations and settlement of grievances wherein and the Mandate of the Constitution.[27]
the interests of a union and the management are invariably
adversarial. Since the employees are not classifiable under the confidential The fact that the three plants are located in three different places,
type, this Court rules that they may appropriately form a bargaining unit for namely, in Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and in San
purposes of collective bargaining. Furthermore, even assuming that they are Fernando, Pampanga is immaterial.Geographical location can be completely
confidential employees, jurisprudence has established that there is no legal disregarded if the communal or mutual interests of the employees are not
prohibition against confidential employees who are not performing sacrificed as demonstrated in UP v. Calleja-Ferrer where all non-academic
managerial functions to form and join a union.[23] rank and file employees of the University of the Philippines inDiliman,
Quezon City, Padre Faura, Manila, Los Baos, Laguna and the Visayas were
In this connection, the issue of whether the employees of San Miguel allowed to participate in a certification election. We rule that the distance
Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, among the three plants is not productive of insurmountable difficulties in the
and Otis constitute a single bargaining unit needs to be threshed out. administration of union affairs. Neither are there regional differences that are
likely to impede the operations of a single bargaining representative.
It is the contention of the petitioner union that the creation of three (3)
separate bargaining units, one each for Cabuyao Otis and San Fernando as WHEREFORE, the assailed Order of March 11, 1993 is hereby SET
ruled by the respondent Undersecretary, is contrary to the one-company, ASIDE and the Order of the Med-Arbiter on December 19, 1990 is
one-union policy. It adds that Supervisors level 1 to 4 and exempt employees REINSTATED under which a certification election among the supervisors
of the three plants have a similarity or a community of interests. (level 1 to 4) and exempt employees of the San Miguel Corporation Magnolia
Poultry Products Plants of Cabuyao, San Fernando, and Otis as one
This Court finds the contention of the petitioner meritorious. bargaining unit is ordered conducted.
An appropriate bargaining unit may be defined as a group of employees
of a given employer, comprised of all or less than all of the entire body of
employees, which the collective interest of all the employees, consistent with
COOPERATIVE RURAL BANK OF DAVAO CITY, INC., petitioner, employees are disqualified from forming labor organizations for purposes of
vs. collective bargaining.
RELATIONS, MOLE, MANILA; FELIZARDO T. SERAPIO, MED-ARBITER On October 8, 1986, the private respondent filed a "Motion to Dismiss the
DESIGNATE, REGIONAL OFFICE NO. XI, MOLE, DAVAO CITY; and Appeal." On October 15, 1986, the petitioner filed its opposition to the said
FEDERATION OF FREE WORKERS, respondents. Motion.

Herbert P. Artes for petitioner. On February 11, 1987, the herein public respondent Bureau of Labor
Relations Director Pura Ferrer-Calleja issued a Resolution affirming the
The Solicitor General for Public respondent. Order of the Med-Arbiter and dismissing the Appeal. 3 The pertinent portions
of the said Resolution are as follows—

It is beyond doubt that respondent-appellant, Cooperative

GANCAYCO, J.: Rural Bank of Davao City falls within the purview of Article
212, paragraph C of the Labor Code, acting as such in the
This is a Petition for certiorari under Rule 65 of the Rules of Court where the interest of an employer. To argue otherwise would amount to
issue is whether or not the employees of a cooperative can organize closing one's eyes to the realities of today's cooperative
themselves for purposes of collective bargaining. banking institutions. ....

Moreover, basic is the right of every worker in any

The record of the case discloses that the herein petitioner Cooperative Rural
establishment whether operated for profit or not to organize
Bank of Davao City, Inc. is a cooperative banking corporation operating in
Davao City. It is owned in part by the Government and its employees are and engage in concerted activity, mutually beneficial to their
members and co-owners of the same. The petitioner has around 16 rank- interest. Such right is sacredly enshrined and protected in
our fundamental law, granting every worker the right to
and-file employees. As of August, 1986, there was no existing collective
organize into a collective group and engage in concerted
bargaining agreement between the said employees and the establishment.
activities for purposes of promoting their well being, subject
On the other hand, the herein private respondent Federation of Free Workers
only to such limitations as may be provided for by law.
is a labor organization registered with the Department of Labor and
Employment. It is interested in representing the said employees for purposes
of collective bargaining. xxx xxx xxx

On August 27, 1986, the private respondent filed with the Davao City As this Office has consistently ruled and applied in various
Regional Office of the then Ministry of Labor and Employment a verified cases, being a member of a cooperative organization does
Petition for certification election among the rank-and-file employees of the not preclude one from forming or joining a labor union
petitioner. 1 The same was docketed as Case No. R-325 ROXI MED-UR-73- provided that such person or persons are not among those
86. On September 18, 1986, the herein public respondent issued an Order disqualified by law. Nowhere in the records can we find any
granting the Petition for certification election. piece of evidence showing that the signatories in the petition
are among those disqualified to form or join a union.
On October 3, 1986, the petitioner filed an Appeal Memorandum and sought
a reversal of the Order of the Med-Arbiter.2 The petitioner argues therein Finally, we cannot give credence to (the) employer's
that, among others, a cooperative is not covered by the Rules governing allegation that two of the signatories thereof, are managerial
certification elections inasmuch as it is not an institution operating for profit. employees, since no evidence showing such fact can be
The petitioner also adds that two of the alleged rank-and-file employees found from the records.
seeking the certification election are managerial employees disqualified from
joining concerted labor activities. In sum, the petitioner insists that its xxx xxx xxx
In a Motion dated March 2, 1987, the petitioner asked for a reconsideration of After a careful examination of the entire record of the case, We find the
the said Resolution. 4 The petitioner reiterated therein its view that its instant Petition meritorious.
employees are disqualified from forming the labor organization so
contemplated. The petitioner also called attention to an Opinion rendered by Contrary to the view espoused by the Solicitor General, this case cannot be
then Solicitor General and Minister of Justice Estelito P. Mendoza dated considered moot and academic simply because the certification election
August 14, 1981.5 The Opinion states that employees of an electric sought to be enjoined went on as scheduled. The instant Petition is one for
cooperative who are themselves members/co-owners of the same cannot certiorari as a special civil action. Errors of jurisdiction on the part of the
form or join labor organizations for purposes of collective bargaining. The public respondents are alleged in the Petition itself. If the public respondents
Opinion also states that the duty to bargain exists only between an employer had indeed committed jurisdictional errors, the action taken by both the Med-
and his/its employees, and that an employer has no duty to bargain with his Arbiter and the Bureau Director will be deemed null and void ab initio. 11 And
co-owners of a corporation who are also its employees. The petitioner if this were so, the certification election would, necessarily, have no legal
submits that the said Opinion calls for application in the present controversy. justification. The arguments raised in the instant Petition strike at the very
heart of the validity of the certification election itself.
On March 26, 1987, director Calleja issued a Resolution denying the
reconsideration sought by the petitioner.6 Thus, the certification election was We come now to the main aspect of the case.
scheduled in the morning of April 23, 1987.
Article 243 of the Labor Code 12 enumerates who are eligible to form, join, or
Finding the action taken by the Bureau unsatisfactory, the petitioner brought assist labor organizations for purposes of collective bargaining, to wit —
the case directly to this Court on April 9, 1987 by way of the instant Petition
for certiorari. The petitioner maintains that the public respondents both acted ART. 243. Coverage and employees' right to self-
without jurisdiction or in excess thereof, or with grave abuse of discretion organization. — All persons employed in commercial,
amounting to lack of jurisdiction, in allowing the certification election sought
industrial and agricultural enterprises and in religious,
by the private respondent despite the arguments of the petitioner in
charitable, medical or educational institutions whether
opposition thereto. The petitioner reiterates its argument that employees of operating for profit or not, shall have the right to self-
cooperatives who are members and co-owners of the same cannot form and
organization and to form, join, or assist labor organizations
join labor organizations for purposes of collective bargaining.
of their own choosing for purposes of collective bargaining.
On April 15, 1987, this Court issued a temporary restraining order enjoining
the Bureau of Labor Relations from proceeding with the certification election The recognized exception to this enumeration is found in Article 245 of the
scheduled on April 23, 1987. 7 The certification election nonetheless pushed
same code, which provides for the ineligibility of managerial employees to
through as scheduled for the alleged reason that the temporary restraining
join any labor reorganization, viz-
order was not seasonably transmitted to Davao City. 8
ART. 245. Ineligibility of managerial employees to join any
This court also required the respondents to file their Comment on the labor organization. Managerial employees are not eligible to
Petition. The respondents complied as instructed. The Office of the Solicitor
join, assist or form any labor organization.
General represented the public respondents.
From the foregoing provisions of law it would appear at first blush that all the
The Solicitor General intimated to this Court that the instant Petition has rank and file employees of a cooperative who are not managerial employees
been rendered moot and academic inasmuch as the certification election are eligible to form, join or assist any labor organization of their own choosing
sought to be enjoined had already been conducted. The Solicitor General
for the purpose of collective bargaining.
added that the public respondents did not commit any jurisdictional error. 10
However, under Section 2 of P.D. No. 175, a cooperative is defined to mean
In due time, the parties submitted other pleadings. On January 6, 1988, the "organizations composed primarily of small producers and of consumers who
case was deemed submitted for decision. voluntarily join together to form business enterprises which they themselves
own, control, and patronize." Its creation and growth were declared as a
policy of the State as a means of increasing the income and purchasing It may be, further stated that the Department of Local Govemment and
power of the low-income sector of the population in order to attain a more Community Development through the Bureau of Cooperative Development is
equitable distribution of income and wealth . 13 The principles governing it vested with full authority to promulgate rules and regulations to cover the
are: promotion, organization, registration, regulation and supervision of all types
of cooperatives. 18 Electric cooperatives, however, are under the regulation
a) Open membership—"Should be voluntary and available and supervision of the National Electrification Ad. Administration, 19 while it is
without artificial restriction, or any social, political, racial or the Monetary Board of the Central Bank that has exclusive responsibility and
religious discrimination, to all persons who can make use of authority over the banking functions and operations of cooperative banks . 20
its services and are willing to accept responsibilities of
membership;" A cooperative, therefore, is by its nature different from an ordinary business
concern, being run either by persons, partnerships, or corporations. Its
b) Democratic control.—"Irrespective of the number of owners and/or members are the ones who run and operate the business
shares owned, each member can only cast one vote in while the others are its employees. As above stated, irrespective of the
deciding upon the affairs of the cooperative;" number of shares owned by each member they are entitled to cast one vote
each in deciding upon the affairs of the cooperative. Their share capital earn
c) Limited interests to capital.— "Share capital shall earn limited interests. They enjoy special privileges as — exemption from income
tax and sales taxes, preferential right to supply their products to State
only limited interest, the maximum rate of interest to be
agencies and even exemption from the minimum wages laws.
established by the Department of Local Government and
Community Development from time to time;" and
An employee therefore of such a cooperative who is a member and co-owner
d) Patronage refund — "Net income after the interest on thereof cannot invoke the right to collective bargaining for certainly an owner
cannot bargain with himself or his co-owners. In the opinion of August 14,
capital has been paid shall be redistributed among the
1981 of the Solicitor General he correctly opined that employees of
members in proposition to their patronage."14
cooperatives who are themselves members of the cooperative have no right
to form or join labor organizations for purposes of collective bargaining for
While cooperatives may exercise the same rights and privileges given to being themselves co-owners of the cooperative. 21
persons, partnership and corporations provided under existing laws, operate
business enterprises of all kinds, establish rural banks, enjoy all the
privileges and incentives granted by the NACIDA Act and other government However, in so far as it involves cooperatives with employees who are not
agencies to business organizations under existing laws, to expropriate idle members or co-owners thereof, certainly such employees are entitled to
exercise the rights of all workers to organization, collective bargaining,
urban or rural lands for its purposes, to own and dispose of properties, enter
negotiations and others as are enshrined in the Constitution and existing
into contracts, to sue and be sued and perform other acts necessary to
laws of the country.22
pursue its objectives, 15 such cooperatives enjoy such privileges as:

a) Exemption from income tax and sales taxes; The questioned ruling therefore of public respondent Pura Ferrer-Calleja
must be upheld insofar as it refers to the employees of petitioner who are not
members or co-owners of petitioner. It cannot extend to the other employees
b) Preferential right to supply rice, corn and other grains, and other who are at the same time its members or co-owners.
commodities produced by them to State agencies administering price
stabilization program; and
The Court upholds the findings of said public respondent that no persuasive
evidence has been presented to show that two of the signatories in the
c) In appropriate cases, exemption from application of minimum wage law petition for certification election are managerial employees who under the law
upon recommendation of the Bureau of Cooperative Development subject to are disqualified from pursuing union activities.
the approval of the Secretary of Labor. 16
WHEREFORE, the herein petition is hereby GRANTED and the resolution of
A cooperative development loan fund has been created for the development public respondent Pura Ferrer-Calleja, Director, Bureau of Labor Relations,
of the cooperative movement. 17
of February 11, 1987 is hereby MODIFIED to the effect that only the rank and
file employees of petitioner who are not its members or co-owners are
entitled to self-organization, collective bargaining, and negotiations, while the
other employees who are members or co-owners thereof can not enjoy such
PABLO ARIZALA, SERGIO MARIBAO, LEONARDO JOVEN, and FELINO Both criminal actions resulted in the conviction of the accused in separate
BULANDUS, petitioners, decisions. 8 They were each sentenced "to pay a fine of P 500.00 or to suffer
vs. subsidiary imprisonment in case of insolvency." They appealed to the Court
THE COURT OF APPEALS and THE PEOPLE OF THE of Appeals.9 Arizala's and Maribao's appeal was docketed as CA-G.R. No.
PHILIPPINES, respondents. 14724-CR; that of Joven and Bulandus, as CA-G.R. No. 14856-CR.

Januario T. Seno for petitioners. The appeals were consolidated on motion of the appellants, and eventuated
in a judgment promulgated on January 29, 1976 affirming the convictions of
all four appellants. The appellants moved for reconsideration. They argued
that when the so called "1973 Constitution" took effect on January 17, 1973
NARVASA, J.: pursuant to Proclamation No. 1104, the case of Arizala and Maribao was still
pending in the Court of Appeals and that of Joven and Bulandus, pending
decision in the City Court of Cebu; that since the provisions of that
Under the Industrial Peace Act, 1 government-owned or controlled constitution and of the Labor Code subsequently promulgated (eff.,
corporations had the duty to bargain collectively and were otherwise subject November 1, 1974), repealing the Industrial Peace Act-placed employees of
to the obligations and duties of employers in the private sector.2 The Act also all categories in government-owned or controlled corporations without
prohibited supervisors to become, or continue to be, members of labor distinction within the Civil Service, and provided that the terms and conditions
organizations composed of rank-and-file employees, 3 and prescribed of their employment were to be "governed by the Civil Service Law, rules and
criminal sanctions for breach of the prohibition. 4 regulations" and hence, no longer subject of collective bargaining, the
appellants ceased to fall within the coverage of the Industrial Peace Act and
It was under the regime of said Industrial Peace Act that the Government should thus no longer continue to be prosecuted and exposed to punishment
Service Insurance System (GSIS, for short) became bound by a collective for a violation thereof. They pointed out further that the criminal sanction in
bargaining agreement executed between it and the labor organization the Industrial Peace Act no longer appeared in the Labor Code. The
representing the majority of its employees, the GSIS Employees Association. Appellate Court denied their plea for reconsideration.
The agreement contained a "maintenance-of-membership" clause, 5 i.e., that
all employees who, at the time of the execution of said agreement, were Hence, the present petition for review on certiorari.
members of the union or became members thereafter, were obliged to
maintain their union membership in good standing for the duration of the
agreement as a condition for their continued employment in the GSIS. The crucial issue obviously is whether or not the petitioners' criminal liability
for a violation of the Industrial Peace Act may be deemed to have been
obliterated in virtue of subsequent legislation and the provisions of the 1973
There appears to be no dispute that at that time, the petitioners occupied and 1987 Constitutions.
supervisory positions in the GSIS. Pablo Arizala and Sergio Maribao were,
respectively, the Chief of the Accounting Division, and the Chief of the Billing
Section of said Division, in the Central Visayas Regional Office of the GSIS. The petitioners' contention that their liability had been erased is made to rest
Leonardo Joven and Felino Bulandus were, respectively, the Assistant Chief upon the following premises:
of the Accounting Division (sometimes Acting Chief in the absence of the
Chief) and the Assistant Chief of the Field Service and Non-Life Insurance 1. Section 1, Article XII-B of the 1973 Constitution does indeed provide that
Division (and Acting Division Chief in the absence of the Chief), of the same the "Civil Service embraces every branch, agency, subdivision and
Central Visayas Regional Office of the GSIS. Demands were made on all instrumentality of the government, including government-owned or controlled
four of them to resign from the GSIS Employees Association, in view of their corporations, .. administered by an independent Civil Service Commission.
supervisory positions. They refused to do so. Consequently, two (2) criminal
cases for violation of the Industrial Peace Act were lodged against them in 2. Article 292 of the Labor Code repealed such parts and provisions of the
the City Court of Cebu: one involving Arizala and Maribao 6 and the other, Industrial Peace Act as were "not adopted as part" of said Code "either
Joven and Bulandus. 7 directly or by reference." The Code did not adopt the provision of the
Industrial Peace Act conferring on employees of government-owned or
controlled corporations the right of self-organization and collective
bargaining; in fact it made known that the "terms and conditions of Supervisory employees were forbidden to join labor organizations composed
employment of all government employees, including employees of of employees under them, but could form their own unions. Considered
government-owned and controlled corporations," would thenceforth no longer "supervisors' were those 'having authority in the interest of an employer to
be fixed by collective bargaining but "be governed by the Civil Service Law, hire, transfer, suspend, lay-off, recall, discharge, assign, recommend, or
rules and regulations." 10 discipline other employees, or responsibly to direct them, and to adjust their
grievance or effectively to recommend such acts if, in connection with the
3. The specific penalty for violation of the prohibition on supervisors being foregoing, the exercise of such authority is not merely routinary or clerical in
members in a labor organization of employees under their supervision has nature but requires the use of independent judgment." 13
Republic Act No. 2260
4. The Code also modified the concept of unfair labor practice, decreeing that
thenceforth, "it shall be considered merely as an administrative offense Similar provisions were found in R.A. No. 2260, the Civil Service Act of 1959.
rather than a criminal offense (and that) (u)nfair labor practice complaints This Act declared that the "Philippine Civil Service ... (embraced) all
shall x x be processed like any ordinary labor disputes."11 branches, subdivisions and instrumentalities of the governmentincluding
government-owned and controlled corporations." 14
On the other hand, in justification of the Appellate Tribunal's affirmance of the
petitioners' convictions of violations of the Industrial Peace Act, the People- It prohibited such civil service employees who were "employed in
governmental functions" to belong to any labor organization which imposed
1) advert to the fact that said Labor Code also states that "all actions or on their members "the obligation to strike or to join strikes." And one of the
claims accruing prior to ... (its) effectivity ... shall be determined in first issuances of the President after the proclamation of martial law in
accordance with the laws in force at the time of their accrual;" and September, 1972, was General Order No. 5 which inter alia banned strikes in
vital industries," as well as 'all rallies, demonstrations and other forms of
2) argue that the legislature cannot generally intervene and vacate the group actions." 15
judgment of the courts, either directly or indirectly, by the repeal of the statute
under which said judgment has been rendered. Not so prohibited, however, were those "employed in proprietary functions of
the Government including, but not limited to, governmental
corporations."16 The Act also penalized any person who "violates, refuses or
The legal principles governing the rights of self-organization and collective
bargaining of rank-and-file employees in the government- particularly as neglects to comply with any ... provisions (of the Act) or rules (thereunder
promulgated) ... by a fine not exceeding one thousand pesos or by
regards supervisory, and high level or managerial employees have
imprisonment not exceeding six months or both such fine and imprisonment
undergone alterations through the years.
in the discretion of the court." 17
Republic Act No. 875
The 1973 Constitution
As already intimated, under RA 875 (the Industry Peace Act), 12 persons
"employed in proprietary functionsof the Government, including but not The 1973 Constitution laid down the broad principle that "(t)he State shall
assure the rights of workers to self-organization, collective bargaining,
limited to governmental corporations," had the right of self-organization and
collective bargaining, including the right to engage in concerted activities to security of tenure, and just and humane conditions of work," 18 and directed
attain their objectives, e.g. strikes. that the "National Assembly shall provide for the standardization of
compensation of government officials and employees, including those in
government-owned or controlled corporations, taking into account the nature
But those "employed in governmental functions" were forbidden to "strike for of the responsibilities pertaining to, and the qualifications required for, the
the purpose of securing changes or modification in their terms and conditions positions concerned." 19
of employment" or join labor organizations which imposed on their members
the duty to strike. The reason obviously was that the terms and conditions of
PD 442, The Labor Code
their employment were "governed by law" and hence could not be fixed,
altered or otherwise modified by collective bargaining.
The Labor Code of the Philippines, Presidential Decree No. 442, enacted government-owned and/or controlled corporations," without distinction as to
within a year from effectivity of the 1973 Constitution, 20 incorporated the function, were "exempted" (excluded is the better term) from "the right to self-
proposition that the "terms and conditions of employment of all government organization and to form, join or assist labor organizations for purposes of
employees, including employees of government-owned and controlled collective bargaining," and by implication, excluded as well from the right to
corporations ... (are) governed by the Civil Service Law, rules and engage in concerted activities, such as strikes, as coercive measures against
regulations." 21 It incorporated, too, the constitutional mandate that the their employers.
salaries of said employees "shall be standardized by the National Assembly."
Members of supervisory unions who were not managerial employees, were
The Labor Code, 22 however "exempted" government employees from the declared by the Labor Code to be "eligible to join or assist the rank and file
right to self-organization for purposes of collective bargaining. While the labor organization, and if none exists, to form or assist in the forming of such
Code contained provisions acknowledging the right of "all persons employed rank and file organization " 24 Managerial employees, on the other hand,
in commercial, industrial and agricultural enterprises, including religious, were pronounced as 'not eligible to join, assist or form any labor
medical or educational institutions operating for profit" to "self-organization organization." 25 A "managerial employee" was defined as one vested with
and to form, join or assist labor organizations for purposes of collective power or prerogatives to lay down and execute management policies and/or
bargaining," they "exempted from the foregoing provisions: to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees, or to effectively recommend such managerial actions." 26
a) security guards;
Presidential Decree No. 807
b) government employees, including employees of government government-
owned and/ or controlled corporations; Clarification of the matter seems to have been very shortly attempted by the
Civil Service Decree of the Philippines, Presidential Decree No. 807 (eff.,
c) managerial employees; and Oct. 6,1975) which superseded the Civil Service Law of 1959 (RA
2260) 27 and repealed or modified "all laws, rules and regulations or parts
d) employees of religious, charitable, medical and educational institutions not thereof inconsistent with the provisions" thereof. The Decree categorically
described the scope and coverage of the "Civil Service" as embracing 44
operating for profit, provided the latter do not have existing collective
every branch, agency, subdivision, and instrumentality of the
agreements or recognized unions at the time of the effectivity of the code or
government, including every government owned or controlled corporation
have voluntarily waived their exemption."23
whether performing governmental or propriety function. 28 The effect was
seemingly to prohibit government employees (including those "employed in
The reason for denying to government employees the right to "self- proprietary functions of the Government") to "strike for the purpose of
organization and to form, join or assist labor organizations for purposes of securing changes of their terms and conditions of employment," 29 something
collective bargaining" is presumably the same as that under the Industrial which, as aforestated, they were allowed to do under the Civil Service Act of
Peace Act, i.e., that the terms and conditions of government employment are 1959.30
fixed by law and not by collective bargaining.
Be this as it may it seems clear that PD 807 (the Civil Service Decree) did
Some inconsistency appears to have arisen between the Labor Code and the not modify the declared ineligibility of "managerial employees" from joining,
Civil Service Act of 1959. Under the Civil Service Act, persons "employed in assisting or forming any labor organization.
proprietary functions of the government including, but not limited to,
governmental corporations'-not being within "the policy of the Government
Executive Order No. 111
that the employees therein shall not strike for the purpose of securing
changes in their terms and conditions of employment"-could legitimately
bargain with their respective employers through their labor organizations, and Executive Order No. 111, issued by President Corazon C. Aquino on
corollarily engage in strikes and other concerted activities in an attempt to December 24, 1986 in the exercise of legislative powers under the Freedom
bring about changes in the conditions of their work. They could not however Constitution, modified the general disqualification above mentioned of
do so under the Labor Code and its Implementing Rules and Regulations; 'government employees, including employees of government-owned and/or
these provided that "government employees, including employees of controlled corporations" from "the right to self-organization and to form, join
or assist labor organizations for purposes of collective bargaining.' It granted or participation in the normal activities of their organization x x (and their)
to employees "of government corporations established under the Corporation employment shall not be subject to the condition that they shall not join or
Code x x the right to organize and to bargain collectively with their respective shall relinquish their membership in the employees' organizations. 37
employers." 31 To all 'other employees in the civil service, ... (it granted
merely) the right to form associations for purposes not contrary to law," 32not However, the concept of the government employees' right of self-
for "purposes of collective bargaining." organization differs significantly from that of employees in the private sector.
The latter's right of self-organization, i.e., "to form, join or assist labor
The 1987 Constitution organizations for purposes of collective bargaining," admittedly includes the
right to deal and negotiate with their respective employers in order to fix the
The provisions of the present Constitution on the matter appear to be terms and conditions of employment and also, to engage in concerted
somewhat more extensive. They declare that the "right to self organization activities for the attainment of their objectives, such as strikes, picketing,
shall not be denied to government employees;"33 that the State "shall boycotts. But the right of government employees to "form, join or assist
guarantee the rights of all workers to self-organization, collective bargaining employees organizations of their own choosing" under Executive Order No.
and negotiations, and peaceful concerted activities, including the right to 180 is not regarded as existing or available for "purposes of collective
strike in accordance with law;" and that said workers "shall be entitled to bargaining," but simply "for the furtherance and protection of their
security of tenure, humane conditions of work, and a living wage, ... (and) interests." 38
also participate in policy and decision-making processes affecting their rights
and benefits as may be provided by law. 34 In other words, the right of Government employees to deal and negotiate with
their respective employers is not quite as extensive as that of private
CSC Memorandum Circular No. 6 employees. Excluded from negotiation by government employees are the
"terms and conditions of employment ... that are fixed by law," it being only
those terms and conditions not otherwise fixed by law that "may be subject of
Memorandum Circular No. 6 of the Civil Service Commission, issued on April
negotiation between the duly recognized employees' organizations and
21, 1987 enjoined strikes by government officials and employees, to wit: 35
appropriate government authorities," 39 And while EO No. 180 concedes to
government employees, like their counterparts in the private sector, the right
... Prior to the enactment by Congress of applicable laws to engage in concerted activities, including the right to strike, the executive
concerning strike by government employees, and order is quick to add that those activities must be exercised in accordance
considering that there are existing laws which prohibit with law, i.e. are subject both to "Civil Service Law and rules" and "any
government officials and employees from resorting to strike, legislation that may be enacted by Congress," 40 that "the resolution of
the Commission enjoins, under pain of administrative complaints, grievances and cases involving government employees" is not
sanctions, all government officers and employees from ordinarily left to collective bargaining or other related concerted activities, but
staging strikes, demonstrations, mass leaves, walk-outs and to "Civil Service Law and labor laws and procedures whenever applicable;"
other forms of mass action which will result in temporary and that in case "any dispute remains unresolved after exhausting all
stoppage or disruption of public services. To allow otherwise available remedies under existing laws and procedures, the parties may
is to undermine or prejudice the government system. jointly refer the dispute to the (Public Sector Labor-Management) Council for
appropriate action."41What is more, the Rules and Regulations implementing
Executive Order No. 180 Executive Order No. 180 explicitly provide that since the "terms and
conditions of employment in the government, including any political
The scope of the constitutional right to self-organization of "government subdivision or instrumentality thereof and government-owned and controlled
employees" above mentioned, was defined and delineated in Executive corporations with original charters are governed by law, the employees
Order No. 180 (eff. June 1, 1987). According to this Executive Order, the therein shall not strike for the purpose of securing changes thereof. 42
right of self-organization does indeed pertain to all "employees of all
branches, subdivisions, instrumentalities and agencies of the Government, On the matter of limitations on membership in labor unions of government
including government-owned or controlled corporations with original employees, Executive Order No. 180 declares that "high level employees
charters;" 36 such employees "shall not be discriminated against in respect of whose functions are normally considered as policy making or managerial, or
their employment by reason of their membership in employees' organizations whose duties are of a highly confidential nature shall not be eligible to join
the organization of rank-and-file government employees. 43 A "high level the Corporation Law in so far as they are not otherwise inconsistent with
employee" is one "whose functions are normally considered policy other applicable law. 51 It is engaged essentially in insurance, a business that
determining, managerial or one whose duties are highly confidential in "is not inherently or exclusively a governmental function, ... (but) is on the
nature. A managerial function refers to the exercise of powers such as: 1. To contrary, in essence and practice, of a private nature and interest." 52
effectively recommend such managerial actions; 2. To formulate or execute
management policies and decisions; or 3. To hire, transfer, suspend, lay off, 1. The petitioners contend that the right of self-organization and
recall, dismiss, assign or discipline employees. 44 collectivebargaining had been withdrawn by the Labor Code from
government employees including those in government-owned and controlled
Republic Act No. 6715 corporations- chiefly for the reason that the terms and conditions of
government employment, all embraced in civil service, may not be modified
The rule regarding membership in labor organizations of managerial and by collective bargaining because set by law. It is therefore immaterial, they
supervisory employees just adverted to, was clarified and refined by Republic say, whether supervisors are members of rank-and-file unions or not; after
Act No. 6715, effective on March 21, 1989, further amending the Labor all, the possibility of the employer's control of the members of the union thru
Code. supervisors thus rendering collective bargaining illusory, which is the main
reason for the prohibition, is no longer of any consequence.
Under RA 6715 labor unions are regarded as organized either (a) "for
purposes of negotiation," or (b) "for furtherance and protection"of the This was true, for a time. As already discussed, both under the Labor Code
members' rights. Membership in unions organized "for purposes of and PD 807, government employees, including those in government-owned
negotiation" is open only to rank-and-file employees. "Supervisory or controlled corporations, were indeed precluded from bargaining as regards
employees" are ineligible "for membership in a labor organization of the rank- terms and conditions of employment because these were set by law and
and-file employees but may join, assist or form separate labor organizations hence could not possibly be altered by negotiation.
of their own," i.e., one organized "for furtherance and protection" of their
rights and interests. However, according to the Rules implementing RA 6715, But EO 111 restored the right to organize and to negotiate and bargain of
"supervisory employees who areincluded in an existing rank-and- file employees of "government corporations established under the Corporation
bargaining unit, upon the effectivity of Republic Act No. 6715 shall remain in Code." And EO 180, and apparently RA 6715, too, granted to all government
that unit ..." Supervisory employees are "those who, in the interest of the employees the right of collective bargaining or negotiation except as regards
employer, effectively recommend such managerial actions 45 if the exercise those terms of their employment which were fixed by law; and as to said
of such authority is not merely routinary or clerical in nature but requires the terms fixed by law, they were prohibited to strike to obtain changes thereof.
use of independent judgment. 46
2. The petitioners appear to be correct in their view of the disappearance
Membership in employees' organizations formed for purposes of negotiation from the law of the prohibition on supervisors being members of labor
are open to rank-and-file employees only, as above mentioned, and not organizations composed of employees under their supervision. The Labor
to high level employees. 47 Indeed, "managerial employees" or "high level Code (PD 442) allowed supervisors (if not managerial) to join rank-and-file
employees" are, to repeat, "not eligible to join, assist or form any labor unions. And under the Implementing Rules of RA 6715, supervisors who
organization" at all. 48A managerial employee is defined as "one who is were members of existing labor organizations on the effectivity of said RA
vested with powers or prerogatives to lay down and execute, management 6715 were explicitly authorized to "remain therein."
policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or
discipline employees."49 3. The correctness of the petitioners' theory that unfair labor practices
ceased to be crimes and were deemed merely administrative offenses in
This is how the law now stands, particularly with respect to supervisory virtue of the Labor Code, cannot be gainsaid. Article 250 of the Labor Code
employees vis a vis labor organizations of employees under them. did provide as follows:

Now, the GSIS performs proprietary functions. It is a non-stock corporation, ART. 250. Concept of unfair labor practice.-The concept of
managed by a Board of Trustees exercising the "usual corporate unfair labor practice is hereby modified. Henceforth, it shall
powers."50 In other words, it exercises all the powers of a corporation under be considered merely as an administrative offense rather
than a criminal offense. Unfair labor practice complaints became legal, this Court dismissed the criminal proceedings, pronouncing
shall, therefore, be processed like any ordinary labor the effects of the repeal to be as follows:
In the leading case of the United States vs. Cuna (12 Phil.
But unfair labor practices were declared to be crimes again by later 241), and Wing vs. United States(218 U.S. 272), the doctrine
amendments of the Labor Code effected by Batas Pambansa Blg. 70, was clearly established that in the Philippines repeal of a
approved on May 1, 1980. As thus amended, the Code now pertinently reads criminal act by its reenactment, even without a saving clause
as follows: would not destroy criminal liability. But not a single sentence
in either derision indicates that there was any desire to hold
ART. 248. Concept of unfair labor practice and procedure for that a person could be prosecuted convicted, and punished
prosecution thereof. — Unfair labor practices violate the right for acts no longer criminal.
of workers and employees to self organization, are inimical
to the legitimate interests of both labor and management There is no question that at common law and in America a
including their right to bargain collectively and otherwise deal much more favorable attitude towards the accused exists
with each other in an atmosphere of freedom and mutual relative to statutes that have been repealed than has been
respect, and hinder the promotion of healthy and stable labor adopted here. Our rule is more in conformity with the
management relations. Consequently, unfair labor practices Spanish doctrine, but even in Spain, where the offense
are not only violations of the civil rights of both labor and ceased to be criminal, petition cannot be had (1 Pacheco,
management but are also offenses against the State which Commentaries, 296).
shall be subject to prosecution and punishment as herein
provided. The repeal here was absolute and not a reenactment and
repeal by implication. Nor was there any saving clause. The
xxx xxx xxx legislative intent as shown by the action of the municipal is
that such conduct, formerly denounced, is no longer deemed
Recovery of civil liability in the administrative proceedings criminal, and it would be illogical for this court to attempt to
shall bar recovery under the Civil Code. sentence appellant for the offense that no longer exists.

No criminal prosecution under this title may be instituted We are therefore of the opinion that the proceedings against
without a final judgment, finding that an unfair labor practice appellant must be dismissed.
was committed having been first obtained in the preceding
paragraph. ... To the same effect and in even more unmistakable language is People v.
Almuete 54 where the defendants-appellees were charged under section 39
The decisive consideration is that at present, supervisors who were already of Republic Act No. 1199, as amended (the Agricultural Land Tenancy Law
members of a rank-and-file labor organization at the time of the effectivity of of 1954) which penalized pre-threshing by either agricultural tenant or his
R.A. No. 6715, are authorized to "remain therein." It seems plain, in other landlord. They sought and secured a dismissal on the ground, among others,
words, that the maintenance by supervisors of membership in a rank-and-file that there was no law punishing the act charged-a reference to the fact that
labor organization even after the enactment of a statute imposing a Republic Act No. 1199 had already been superseded by the Agricultural
prohibition on such membership, is not only not a crime, but is explicitly Land Reform Code of 1963 which instituted the leasehold system and
allowed, under present law. abolished share tenancy subject to certain conditions. On appeal by the
Government, this Court upheld the dismissal, saying:
Now, in a case decided as early as 1935, People v. Tamayo, 53 where the
appellants had appealed from a judgment convicting them of a violation of a The legislative intent not to punish anymore the tenant's act
municipal -ordinance, and while their appeal was pending, the ordinance was of pre-reaping and pre-threshing without notice to the
repealed such that the act complained of ceased to be a criminal act but landlord is inferable from the fact that, as already noted, the
Code of Agrarian Reforms did not reenact section 39 of the
Agricultural Tenancy Law and that it abolished share
tenancy which is the basis for penalizing clandestine pre-
reaping and pre-threshing.

xxx xxx xxx

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

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

xxx xxx xxx

The repeal of a penal law deprives the courts of jurisdiction

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

The foregoing precedents dictate absolution of the appellants of the offenses

imputed to them.

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

CA-G.R. No. 14856-CR, subject of the appeal, as well as those in Crim.
Case No. 5275-R and Crim. Case No. 4130-R rendered by the Trial Court,
are REVERSED and the accused-appellants ACQUITTED of the charges
against them, with costs de officio.
SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION (SSSEA), The court a quo, on June 11, 1987, issued a temporary restraining order
DIONISION T. BAYLON, RAMON MODESTO, JUANITO MADURA, pending resolution of the application for a writ of preliminary injunction [Rollo,
REUBEN ZAMORA, VIRGILIO DE ALDAY, SERGIO ARANETA, PLACIDO p. 71.] In the meantime, petitioners filed a motion to dismiss alleging the trial
AGUSTIN, VIRGILIO MAGPAYO, petitioner, court's lack of jurisdiction over the subject matter [Rollo, pp. 72-82.] To this
vs. motion, the SSS filed an opposition, reiterating its prayer for the issuance of
THE COURT OF APPEALS, SOCIAL SECURITY SYSTEM (SSS), HON. a writ of injunction [Rollo, pp. 209-222]. On July 22,1987, in a four-page
CEZAR C. PERALEJO, RTC, BRANCH 98, QUEZON CITY, respondents. order, the court a quo denied the motion to dismiss and converted the
restraining order into an injunction upon posting of a bond, after finding that
the strike was illegal [Rollo, pp. 83- 86]. As petitioners' motion for the
reconsideration of the aforesaid order was also denied on August 14, 1988
[Rollo, p. 94], petitioners filed a petition for certiorari and prohibition with
preliminary injunction before this Court. Their petition was docketed as G.R.
No. 79577. In a resolution dated October 21, 1987, the Court, through the
Primarily, the issue raised in this petition is whether or not the Regional Trial Third Division, resolved to refer the case to the Court of Appeals. Petitioners
Court can enjoin the Social Security System Employees Association filed a motion for reconsideration thereof, but during its pendency the Court
(SSSEA) from striking and order the striking employees to return to work. of Appeals on March 9,1988 promulgated its decision on the referred case
Collaterally, it is whether or not employees of the Social Security System [Rollo, pp. 130-137]. Petitioners moved to recall the Court of Appeals'
(SSS) have the right to strike. decision. In the meantime, the Court on June 29,1988 denied the motion for
reconsideration in G.R. No. 97577 for being moot and academic. Petitioners'
The antecedents are as follows: motion to recall the decision of the Court of Appeals was also denied in view
of this Court's denial of the motion for reconsideration [Rollo, pp. 141- 143].
On June 11, 1987, the SSS filed with the Regional Trial Court of Quezon City Hence, the instant petition to review the decision of the Court of Appeals
a complaint for damages with a prayer for a writ of preliminary injunction [Rollo, pp. 12-37].
against petitioners, alleging that on June 9, 1987, the officers and members
of SSSEA staged an illegal strike and baricaded the entrances to the SSS Upon motion of the SSS on February 6,1989, the Court issued a temporary
Building, preventing non-striking employees from reporting for work and SSS restraining order enjoining the petitioners from staging another strike or from
members from transacting business with the SSS; that the strike was pursuing the notice of strike they filed with the Department of Labor and
reported to the Public Sector Labor - Management Council, which ordered Employment on January 25, 1989 and to maintain the status quo [Rollo, pp.
the strikers to return to work; that the strikers refused to return to work; and 151-152].
that the SSS suffered damages as a result of the strike. The complaint
prayed that a writ of preliminary injunction be issued to enjoin the strike and The Court, taking the comment as answer, and noting the reply and
that the strikers be ordered to return to work; that the defendants (petitioners supplemental reply filed by petitioners, considered the issues joined and the
herein) be ordered to pay damages; and that the strike be declared illegal. case submitted for decision.

It appears that the SSSEA went on strike after the SSS failed to act on the The position of the petitioners is that the Regional Trial Court had no
union's demands, which included: implementation of the provisions of the old jurisdiction to hear the case initiated by the SSS and to issue the restraining
SSS-SSSEA collective bargaining agreement (CBA) on check-off of union order and the writ of preliminary injunction, as jurisdiction lay with the
dues; payment of accrued overtime pay, night differential pay and holiday Department of Labor and Employment or the National Labor Relations
pay; conversion of temporary or contractual employees with six (6) months or Commission, since the case involves a labor dispute.
more of service into regular and permanent employees and their entitlement
to the same salaries, allowances and benefits given to other regular
On the other hand, the SSS advances the contrary view, on the ground that
employees of the SSS; and payment of the children's allowance of P30.00,
the employees of the SSS are covered by civil service laws and rules and
and after the SSS deducted certain amounts from the salaries of the
regulations, not the Labor Code, therefore they do not have the right to strike.
employees and allegedly committed acts of discrimination and unfair labor
Since neither the DOLE nor the NLRC has jurisdiction over the dispute, the
practices [Rollo, pp. 21-241].
Regional Trial Court may enjoin the employees from striking.
In dismissing the petition for certiorari and prohibition with preliminary of the Constitutional Commission that drafted the 1987 Constitution would
injunction filed by petitioners, the Court of Appeals held that since the show that in recognizing the right of government employees to organize, the
employees of the SSS, are government employees, they are not allowed to commissioners intended to limit the right to the formation of unions or
strike, and may be enjoined by the Regional Trial Court, which had associations only, without including the right to strike.
jurisdiction over the SSS' complaint for damages, from continuing with their
strike. Thus, Commissioner Eulogio R. Lerum, one of the sponsors of the provision
that "[tlhe right to self-organization shall not be denied to government
Thus, the sequential questions to be resolved by the Court in deciding employees" [Art. IX(B), Sec. 2(5)], in answer to the apprehensions expressed
whether or not the Court of Appeals erred in finding that the Regional Trial by Commissioner Ambrosio B. Padilla, Vice-President of the Commission,
Court did not act without or in excess of jurisdiction when it took cognizance explained:
of the case and enjoined the strike are as follows:
MR. LERUM. I think what I will try to say will not take that
1. Do the employees of the SSS have the right to strike? long. When we proposed this amendment providing for self-
organization of government employees, it does not mean
2. Does the Regional Trial Court have jurisdiction to hear the case initiated that because they have the right to organize, they also have
by the SSS and to enjoin the strikers from continuing with the strike and to the right to strike. That is a different matter. We are only
order them to return to work? talking about organizing, uniting as a union. With regard to
the right to strike, everyone will remember that in the Bill of
These shall be discussed and resolved seriatim Rights, there is a provision that the right to form associations
or societies whose purpose is not contrary to law shall not be
abridged. Now then, if the purpose of the state is to prohibit
I the strikes coming from employees exercising government
functions, that could be done because the moment that is
The 1987 Constitution, in the Article on Social Justice and Human Rights, prohibited, then the union which will go on strike will be an
provides that the State "shall guarantee the rights of all workers to self- illegal union. And that provision is carried in Republic Act
organization, collective bargaining and negotiations, and peaceful concerted 875. In Republic Act 875, workers, including those from the
activities, including the right to strike in accordance with law" [Art. XIII, Sec. government-owned and controlled, are allowed to organize
31]. but they are prohibited from striking. So, the fear of our
honorable Vice- President is unfounded. It does not mean
By itself, this provision would seem to recognize the right of all workers and that because we approve this resolution, it carries with it the
employees, including those in the public sector, to strike. But the Constitution right to strike. That is a different matter. As a matter of fact,
itself fails to expressly confirm this impression, for in the Sub-Article on the that subject is now being discussed in the Committee on
Civil Service Commission, it provides, after defining the scope of the civil Social Justice because we are trying to find a solution to this
service as "all branches, subdivisions, instrumentalities, and agencies of the problem. We know that this problem exist; that the moment
Government, including government-owned or controlled corporations with we allow anybody in the government to strike, then what will
original charters," that "[t]he right to self-organization shall not be denied to happen if the members of the Armed Forces will go on
government employees" [Art. IX(B), Sec. 2(l) and (50)]. Parenthetically, the strike? What will happen to those people trying to protect
Bill of Rights also provides that "[tlhe right of the people, including those us? So that is a matter of discussion in the Committee on
employed in the public and private sectors, to form unions, associations, or Social Justice. But, I repeat, the right to form an organization
societies for purposes not contrary to law shall not abridged" [Art. III, Sec. 8]. does not carry with it the right to strike. [Record of the
Thus, while there is no question that the Constitution recognizes the right of Constitutional Commission, vol. 1, p. 569].
government employees to organize, it is silent as to whether such recognition
also includes the right to strike. It will be recalled that the Industrial Peace Act (R.A. No. 875), which was
repealed by the Labor Code (P.D. 442) in 1974, expressly banned strikes by
Resort to the intent of the framers of the organic law becomes helpful in employees in the Government, including instrumentalities exercising
understanding the meaning of these provisions. A reading of the proceedings
governmental functions, but excluding entities entrusted with proprietary by express provision of Memorandum Circular No. 6 and as implied in E.O.
functions: No. 180. [At this juncture, it must be stated that the validity of Memorandum
Circular No. 6 is not at issue].
.Sec. 11. Prohibition Against Strikes in the Government. —
The terms and conditions of employment in the But are employees of the SSS covered by the prohibition against strikes?
Government, including any political subdivision or
instrumentality thereof, are governed by law and it is The Court is of the considered view that they are. Considering that under the
declared to be the policy of this Act that employees therein 1987 Constitution "[t]he civil service embraces all branches, subdivisions,
shall not strike for the purpose of securing changes or instrumentalities, and agencies of the Government, including government-
modification in their terms and conditions of employment. owned or controlled corporations with original charters" [Art. IX(B), Sec. .2(l)
Such employees may belong to any labor organization which see also Sec. 1 of E.O. No. 180 where the employees in the civil service are
does not impose the obligation to strike or to join in denominated as "government employees"] and that the SSS is one such
strike: Provided, however, That this section shall apply only government-controlled corporation with an original charter, having been
to employees employed in governmental functions and not created under R.A. No. 1161, its employees are part of the civil service
those employed in proprietary functions of the Government [NASECO v. NLRC, G.R. Nos. 69870 & 70295, November 24,1988] and are
including but not limited to governmental corporations. covered by the Civil Service Commission's memorandum prohibiting strikes.
This being the case, the strike staged by the employees of the SSS was
No similar provision is found in the Labor Code, although at one time it illegal.
recognized the right of employees of government corporations established
under the Corporation Code to organize and bargain collectively and those in The statement of the Court in Alliance of Government Workers v. Minister of
the civil service to "form organizations for purposes not contrary to law" [Art. Labor and Employment [G.R. No. 60403, August 3, 1:983, 124 SCRA 11 is
244, before its amendment by B.P. Blg. 70 in 1980], in the same breath it relevant as it furnishes the rationale for distinguishing between workers in the
provided that "[t]he terms and conditions of employment of all government private sector and government employees with regard to the right to strike:
employees, including employees of government owned and controlled
corporations, shall be governed by the Civil Service Law, rules and
The general rule in the past and up to the present is that 'the
regulations" [now Art. 276]. Understandably, the Labor Code is silent as to
terms and conditions of employment in the Government,
whether or not government employees may strike, for such are excluded
including any political subdivision or instrumentality thereof
from its coverage [Ibid]. But then the Civil Service Decree [P.D. No. 807], is
are governed by law" (Section 11, the Industrial Peace Act,
equally silent on the matter. R.A. No. 875, as amended and Article 277, the Labor Code,
P.D. No. 442, as amended). Since the terms and conditions
On June 1, 1987, to implement the constitutional guarantee of the right of of government employment are fixed by law, government
government employees to organize, the President issued E.O. No. 180 which workers cannot use the same weapons employed by
provides guidelines for the exercise of the right to organize of government workers in the private sector to secure concessions from
employees. In Section 14 thereof, it is provided that "[t]he Civil Service law their employers. The principle behind labor unionism in
and rules governing concerted activities and strikes in the government private industry is that industrial peace cannot be secured
service shall be observed, subject to any legislation that may be enacted by through compulsion by law. Relations between private
Congress." The President was apparently referring to Memorandum Circular employers and their employees rest on an essentially
No. 6, s. 1987 of the Civil Service Commission under date April 21, 1987 voluntary basis. Subject to the minimum requirements of
which, "prior to the enactment by Congress of applicable laws concerning wage laws and other labor and welfare legislation, the terms
strike by government employees ... enjoins under pain of administrative and conditions of employment in the unionized private sector
sanctions, all government officers and employees from staging strikes, are settled through the process of collective bargaining. In
demonstrations, mass leaves, walk-outs and other forms of mass action government employment, however, it is the legislature and,
which will result in temporary stoppage or disruption of public service." The where properly given delegated power, the administrative
air was thus cleared of the confusion. At present, in the absence of any heads of government which fix the terms and conditions of
legislation allowing government employees to strike, recognizing their right to employment. And this is effected through statutes or
do so, or regulating the exercise of the right, they are prohibited from striking, administrative circulars, rules, and regulations, not through
collective bargaining agreements. [At p. 13; Emphasis Government employees may, therefore, through their unions or associations,
supplied]. either petition the Congress for the betterment of the terms and conditions of
employment which are within the ambit of legislation or negotiate with the
Apropos is the observation of the Acting Commissioner of Civil Service, in his appropriate government agencies for the improvement of those which are not
position paper submitted to the 1971 Constitutional Convention, and quoted fixed by law. If there be any unresolved grievances, the dispute may be
with approval by the Court in Alliance, to wit: referred to the Public Sector Labor - Management Council for appropriate
action. But employees in the civil service may not resort to strikes, walk-outs
It is the stand, therefore, of this Commission that by reason and other temporary work stoppages, like workers in the private sector, to
of the nature of the public employer and the peculiar pressure the Govemment to accede to their demands. As now provided
under Sec. 4, Rule III of the Rules and Regulations to Govern the Exercise of
character of the public service, it must necessarily regard the
the Right of Government- Employees to Self- Organization, which took effect
right to strike given to unions in private industry as not
after the instant dispute arose, "[t]he terms and conditions of employment in
applying to public employees and civil service employees. It
the government, including any political subdivision or instrumentality thereof
has been stated that the Government, in contrast to the
private employer, protects the interest of all people in the and government- owned and controlled corporations with original charters
public service, and that accordingly, such conflicting are governed by law and employees therein shall not strike for the purpose of
securing changes thereof."
interests as are present in private labor relations could not
exist in the relations between government and those whom
they employ. [At pp. 16-17; also quoted in National Housing II
Corporation v. Juco, G.R. No. 64313, January 17,1985,134
SCRA 172,178-179]. The strike staged by the employees of the SSS belonging to petitioner union
being prohibited by law, an injunction may be issued to restrain it.
E.O. No. 180, which provides guidelines for the exercise of the right to
organize of government employees, while clinging to the same philosophy, It is futile for the petitioners to assert that the subject labor dispute falls within
has, however, relaxed the rule to allow negotiation where the terms and the exclusive jurisdiction of the NLRC and, hence, the Regional Trial Court
conditions of employment involved are not among those fixed by law. Thus: had no jurisdiction to issue a writ of injunction enjoining the continuance of
the strike. The Labor Code itself provides that terms and conditions of
.SECTION 13. Terms and conditions of employment or employment of government employees shall be governed by the Civil Service
improvements thereof, except those that are fixed by law, Law, rules and regulations [Art. 276]. More importantly, E.O. No. 180 vests
may be the subject of negotiations between duly recognized the Public Sector Labor - Management Council with jurisdiction over
employees' organizations and appropriate government unresolved labor disputes involving government employees [Sec. 16].
authorities. Clearly, the NLRC has no jurisdiction over the dispute.

The same executive order has also provided for the general mechanism for This being the case, the Regional Trial Court was not precluded, in the
the settlement of labor disputes in the public sector to wit: exercise of its general jurisdiction under B.P. Blg. 129, as amended, from
assuming jurisdiction over the SSS's complaint for damages and issuing the
injunctive writ prayed for therein. Unlike the NLRC, the Public Sector Labor -
.SECTION 16. The Civil Service and labor laws and
Management Council has not been granted by law authority to issue writs of
procedures, whenever applicable, shall be followed in the
injunction in labor disputes within its jurisdiction. Thus, since it is the Council,
resolution of complaints, grievances and cases involving
government employees. In case any dispute remains and not the NLRC, that has jurisdiction over the instant labor dispute, resort
unresolved after exhausting all the available remedies under to the general courts of law for the issuance of a writ of injunction to enjoin
the strike is appropriate.
existing laws and procedures, the parties may jointly refer
the dispute to the [Public Sector Labor- Management]
Council for appropriate action. Neither could the court a quo be accused of imprudence or overzealousness,
for in fact it had proceeded with caution. Thus, after issuing a writ of
injunction enjoining the continuance of the strike to prevent any further
disruption of public service, the respondent judge, in the same order,
admonished the parties to refer the unresolved controversies emanating from
their employer- employee relationship to the Public Sector Labor -
Management Council for appropriate action [Rollo, p. 86].


In their "Petition/Application for Preliminary and Mandatory Injunction," and

reiterated in their reply and supplemental reply, petitioners allege that the
SSS unlawfully withheld bonuses and benefits due the individual petitioners
and they pray that the Court issue a writ of preliminary prohibitive and
mandatory injunction to restrain the SSS and its agents from withholding
payment thereof and to compel the SSS to pay them. In their supplemental
reply, petitioners annexed an order of the Civil Service Commission, dated
May 5, 1989, which ruled that the officers of the SSSEA who are not
preventively suspended and who are reporting for work pending the
resolution of the administrative cases against them are entitled to their
salaries, year-end bonuses and other fringe benefits and affirmed the
previous order of the Merit Systems Promotion Board.

The matter being extraneous to the issues elevated to this Court, it is Our
view that petitioners' remedy is not to petition this Court to issue an
injunction, but to cause the execution of the aforesaid order, if it has already
become final.

WHEREFORE, no reversible error having been committed by the Court of

Appeals, the instant petition for review is hereby DENIED and the decision of
the appellate court dated March 9, 1988 in CA-G.R. SP No. 13192 is
AFFIRMED. Petitioners' "Petition/Application for Preliminary and Mandatory
Injunction" dated December 13,1988 is DENIED.
ATLAS LITHOGRAPHIC SERVICES, INC., petitioner, from receipt hereof, subject to usual pre-election conference,
vs. with the following choices:
2. No union.
KATIPUNAN), respondents.
SO ORDERED. (Rollo, pp. 39-40)
The petitioners, as expected, appealed for the reversal of the above order.
The public respondent, however, issued a resolution affirming the Med-
This is a petition for certiorari under Rule 65 of the Rules of Court seeking
Arbiter's order.
the modification of the Order dated 14 December 1990 and the Resolution
dated 21 November 1990 issued by the public respondents.
The petitioners, in turn, filed a motion for reconsideration but the same was
denied. Hence, this petition for certiorari.
The antecedent facts of the case as gathered from the records are as
The sole issue to be resolved in this case is whether or not, under Article 245
of the Labor Code, a local union of supervisory employees may be allowed to
On July 16, 1990, the supervisory, administrative personnel, production,
affiliate with a national federation of labor organizations of rank-and-file
accounting and confidential employees of the petitioner Atlas Lithographic
employees and which national federation actively represents its affiliates in
Services, Inc. (ALSI) affiliated with private respondent Kaisahan ng
collective bargaining negotiations with the same employer of the supervisors
Manggagawang Pilipino, a national labor organization. The local union and in the implementation of resulting collective bargaining agreements.
adopted the name Atlas Lithographic Services, Inc. Supervisory,
Administrative, Personnel, Production, Accounting and Confidential
Employees Association or ALSI-SAPPACEA-KAMPIL in short and which we The petitioner argues that KAMPIL-KATIPUNAN already represents its rank-
shall hereafter refer to as the "supervisors" union. and-file employees and, therefore, to allow the supervisors of those
employees to affiliate with the private respondent is tantamount to allowing
the circumvention of the principle of the separation of unions under Article
Shortly thereafter, private respondent Kampil-Katipunan filed on behalf of the
245 of the Labor Code.
"supervisors" union a petition for certification election so that it could be the
sole and exclusive bargaining agent of the supervisory employees.
It further argues that the intent of the law is to prevent a single labor
organization from representing different classes of employees with conflicting
The petitioners opposed the private respondent's petition claiming that under interests.
Article 245 of the Labor bode the private respondent cannot represent the
supervisory employees for collective bargaining purposeless because the
private respondent also represents the rank-and-file employees' union. The public respondent, on the other hand, contends that despite affiliation
with a national federation, the local union does not lose its personality which
is separate, and distinct from the national federation. It cites as its legal basis
On September 18, 1990, the Med-Arbiter issued an order in favor of the the case of Adamson & Adamson, Inc. v. CIR (127 SCRA 268 [1984]).
private respondent, the dispositive portion of which provides:
It maintains that Rep. Act No. 6715 contemplates the principle laid down by
WHEREFORE, premises considered, a certification election this Court in the Adamson case interpreting Section 3 of Rep. Act No. 875
among the supervisory employees belonging to the (the Industrial Peace Act) on the right of a supervisor's union to affiliate. The
Administrative, Personnel, Production, Accounting private respondent asserts that the legislature must have noted
Departments as well as confidential employees performing the Adamson ruling then prevailing when it conceived the reinstatement in
supervisory functions of Atlas Lithographic Services,
Incorporated is hereby ordered conducted within 20 days
the present Labor Code of a similar provision on the right of supervisors to routinary or clerical in nature but requires the use of
organize. independent judgment. . . .

Under the Industrial Peace Act of 1953, employees were classified into three The rationale for the amendment is the government's recognition of the right
groups, namely: (1) managerial employees; (2) supervisors; and (3) rank-and of supervisors to organize with the qualification that they shall not join or
file employees. Supervisors, who were considered employees in relation to assist in the organization of rank-and-file employees. The reason behind the
their employer could join a union but not a union of rank-and-file employees. Industrial Peace Act provision on the same subject matter has been adopted
in the present statute. The interests of supervisors on the one hand, and the
With the enactment in 1974 of the Labor Code (Pres Decree No. 442), rank-and-file employees on the other, are separate and distinct. The
employees were classified into managerial and rank-and-file employees. functions of supervisors, being recommendatory in nature, are more
Neither the category of supervisors nor their right to organize under the old identified with the interests of the employer. The performance of those
statute were recognized. So that, in Bulletin Publishing Corporation functions may, thus, run counter to the interests of the rank-and-file.
v. Sanchez (144 SCRA 628 [1986]), the Court interpreted the superseding
labor law to have removed from supervisors the right to unionize among This intent of the law is made clear in the deliberations of the legislators on
themselves. The Court ruled: then Senate Bill 530 now enacted as Rep. Act No. 6715.

In the light of the factual background of this case, We are The definition of managerial employees was limited to those having authority
constrained to hold that the supervisory employees of to hire and fire while those who only recommend effectively the hiring or firing
petitioner firm may not, under the law, form a supervisors or transfers of personnel would be considered as closer to rank-and-file
union, separate and distinct from the existing bargaining unit employees. The exclusion, therefore, of middle level executives from the
(BEU), composed of the rank-and-file employees of the category of managers brought about a third classification, the supervisory
Bulletin Publishing Corporation. It is evident that most of the employees. These supervisory employees are allowed to form their own
private respondents are considered managerial employees. union but they are not allowed to join the rank-and-file union because of
Also, it is distinctly stated in Section 11, Rule II, of the conflict of interest (Journal of the Senate, First Regular Session, 1987, 1988,
Omnibus Rules Implementing the Labor Code, that Volume 3,
supervisory unions are presently no longer recognized nor p. 2245).
allowed to exist and operate as such. (pp. 633, 634)
In terms of classification, however, while they are more closely identified with
In Section 11, Rule II, Book V of the Omnibus Rules implementing Pres. the rank-and-file they are still not allowed to join the union of rank-and-file
Decree No. 442, the supervisory unions existing since the effectivity of the employees. To quote the Senate Journal:
New Code in January 1, 1975 ceased to operate as such and the members
who did not qualify as managerial employees under this definition in Article In reply to Sen. Guingona's query whether "supervisors" are
212 (k) therein became eligible to form, to join or assist a rank-and-file union. included in the term "employee", Sen. Herrera stated that
while they are considered as rank-and-file employees, they
A revision of the Labor Code undertaken by the bicameral Congress brought cannot join the union and they would have to form their own
about the enactment of Rep. Act No. 6715 in March 1989 in which supervisors' union pursuant to Rep. Act 875. (supra, p. 2288)
employees were reclassified into three groups, namely: (1) the managerial
employees; (2) supervisors; and (3) the rank and file employees. Under the The peculiar role of supervisors is such that while they are not managers,
present law, the category of supervisory employees is once again when they recommend action implementing management policy or ask for
recognized. Hence, Art. 212 (m) states: the discipline or dismissal of subordinates, they identify with the interests of
the employer and may act contrary to the interests of the rank-and-file.
(m) . . . Supervisory employees are those who, in the interest
of the employer, effectively recommend such managerial We agree with the petitioner's contention that a conflict of interest may arise
actions if the exercise of such authority is not merely in the areas of discipline, collective bargaining and strikes.
Members of the supervisory union might refuse to carry out disciplinary The Court construes Article 245 to mean that, as in Section 3 of the Industrial
measures against their co-member rank-and-file employees. Peace Act, supervisors shall not be given an occasion to bargain together
with the rank-and-file against the interests of the employer regarding terms
In the area of bargaining, their interests cannot be considered identical. The and conditions of work
needs of one are different from those of the other. Moreover, in the event of a
strike, the national federation might influence the supervisors' union to Second, the national union in the Adamson case did not actively represent its
conduct a sympathy strike on the sole basis of affiliation. local chapters. In the present case, the local union is actively represented by
the national federation. In fact, it was the national federation, the KAMPIL-
More important, the factual issues in the Adamson case are different from the KATIPUNAN, which initially filed a petition for certification in behalf of the
present case. First, the rank-and-file employees in the Adamson case are not respondent union.
directly under the supervisors who comprise the supervisors' union. In the
case at bar, the rank-and file employees are directly under the supervisors Thus, if the intent of the law is to avoid a situation where supervisors would
organized by one and the same federation. merge with the rank and-file or where the supervisors' labor organization
would represent conflicting interests, then a local supervisors' union should
The contemplation of the law in Sec. 3 of the Industrial Peace Act is to not be allowed to affiliate with the national federation of union of rank-and-file
prohibit supervisors from joining a labor organization of employees under employees where that federation actively participates in union activity in the
their supervision. Sec. 3 of the Industrial Peace Act provides: company.

Sec. 3 — Employees' Right to Self Organization. Employees The petitioner further contends that the term labor organization includes a
shall have the right to self-organization and to form, join or federation considering that Art. 212 (g) mentions "any union or association of
assist labor organizations of their own choosing for the employees."
purpose of collective bargaining through representatives of
their own choosing and to engage in concerted activities for The respondent, however, argues that the phrase refers to a local union only
the purpose of collective bargaining and other mutual aid or in which case, the prohibition in Art. 245 is inapplicable to the case at bar.
protection. Individuals employed as supervisors shall not be
eligible for membership in a labor organization of employees The prohibition against a supervisors' union joining a local union of rank-and-
under their supervision but may form separate organizations file is replete with jurisprudence. The Court emphasizes that the limitation is
of their own (Emphasis supplied). not confined to a case of supervisors wanting to join a rank-and-file local
union. The prohibition extends to a supervisors' local union applying for
This was not the consideration in the Adamson case because as mentioned membership in a national federation the members of which include local
earlier, the rank-and-file employees in the Adamson case were not under the unions of rank-and-file employees. The intent of the law is clear especially
supervision of the supervisors involved. where, as in the case at bar, the supervisors will be co-mingling with those
employees whom they directly supervise in their own bargaining unit.
Meanwhile, Article 245 of the Labor Code as amended by Rep. Act No. 6715
provides: Technicalities should not be allowed to stand in the way of equitably and
completely resolving the rights and obligations of the parties. (Rapid
Art. 245. Ineligibility of managerial employees to join any Manpower Consultants, Inc. v. NLRC, 190 SCRA 747 [1990]) What should
labor organization: right of supervisory employees. — be paramount is the intent behind the law, not its literal construction. Where
Managerial employees are not eligible to join, assist or form one interpretation would result in mischievous consequences while another
any labor organization. Supervisory employees shall not be would bring about equity, justice, and the promotion of labor peace, there can
eligible for membership in a labor organization of the rank- be no doubt as to what interpretation shall prevail.
and-file employees but may join, assist or form separate
labor organizations of their own. Finally, the respondent contends that the law prohibits the employer from
interfering with the employees' right to self-organization.
There is no question about this intendment of the law. There is, however, in
the present case, no violation of such a guarantee to the employee.
Supervisors are not prohibited from forming their own union. What the law
prohibits is their membership in a labor organization of rank-and-file
employees (Art. 245, Labor Code) or their joining a national federation of
rank-and-file employees that includes the very local union which they are not
allowed to directly join.

In a motion dated November 15, 1991 it appears that the petitioner has
knuckled under to the respondents' pressures and agreed to let the national
federation KAMPIL-KATIPUNAN represent its supervisors in negotiating a
collective bargaining agreement. Against the advise of its own counsel and
on the basis of alleged "industrial peace", the petitioner expressed a loss of
interest in pursuing this action. The petitioner is, of course, free to grant
whatever concessions it wishes to give to its employees unilaterally or
through negotiations but we cannot allow the resulting validation of an
erroneous ruling and policy of the Department of Labor and Employment
(DOLE) to remain on the basis of the petitioner's loss of interest. The
December 14, 1990 order and the November 21, 1990 resolution of DOLE
are contrary to law and must be declared as such.

WHEREFORE, the petition is hereby GRANTED. The private respondent is

disqualified from affiliating with a national federation of labor organizations
which includes the petitioner's rank-and-file employees.
PHILIPPINE PHOSPHATE FERTILIZER CORPORATION, petitioner, the mechanics of the election process and the qualifications and eligibility of
vs. those allowed to vote.
HON. RUBEN D. TORRES, Secretary of Labor and Employment, HON.
RODOLFO S. MILADO, Department of Labor and Employment Mediator- On 15 November 1989, PMPI filed an amended petition with the Mediator-
Arbiter for Region VIII, Tacloban, City, and PHILPHOS MOVEMENT FOR Arbiter wherein it sought to represent not only the supervisory employees of
PROGRESS, INC. (PMPI), respondents. petitioner but also its professional/technical and confidential employees. The
amended petition was filed in view of the amendment of the PMPI
BELLOSILLO, J.: Construction which included in its membership
the professional/technical and confidential employees.
assails the decision of the Secretary of Labor of 7 August 1990 affirming the On 14 December 1989, the parties therein agreed to submit their respective
order of the Mediator-Arbiter of 28 March 1990 which directed the immediate position papers and to consider the amended petition submitted for decision
conduct of a certification election among the supervisory, professional or on the basis thereof and related documents.
technical, and confidential employees of petitioner corporation.
On 28 March 1990, Mediator-Arbiter Milado issued an order granting the
On 7 July 1989, Philphos Movement for Progress, Inc. (PMPI for brevity), petition and directing the holding of a certification election among
filed with the Department of Labor and Employment a petition for certification the "supervisory, professional (engineers, analysts, mechanics, accountants,
election among the supervisory employees of petitioner, alleging that as a nurses, midwives, etc.), technical, and confidential employees" 1 to comprise
supervisory union duly registered with the Department of Labor and the proposed bargaining unit.
Employment it was seeking to represent the supervisory employees of
Philippine Phosphate Fertilizer Corporation. On 16 April 1990, PHILPHOS appealed the order of 28 March 1990 to the
Secretary of Labor and Employment who on 7 August 1990 rendered a
The petition for certification election filed by PMPI was not opposed by decision through Undersecretary Bienvenido Laguesma dismissing the
PHILPHOS. In fact, on 11 August 1989, PHILPHOS submitted a position appeal. PHILPHOS moved for reconsideration but the same was denied;
paper with the Mediator-Arbiter stating that its management welcomed the hence, the instant petition alleging grave abuse of discretion on the part of
creation of a supervisory employees' union provided the necessary requisites public respondents in rendering the assailed rulings.
of law were properly observed, but exempting from the union
its superintendents who were managerial and not supervisory employees as On 8 July 1991, this Court issued a temporary restraining order enjoining
they managed a division, subdivision or section, and were vested with respondents from holding the certification election among
powers or prerogatives to lay down and execute management policies. petitioner's supervisory, professional/technical, and confidential
PHILPHOS also asserted that its professional or technical employees were employees scheduled on 12 July 1991.
not within the definition of supervisory employees under the Labor Code as
they were immediately under the direction and supervision of its There are two (2) issues raised by petitioner: (1) whether it was denied due
superintendents and supervisors. Moreover, the professional and technical process in the proceedings before respondent Mediator-Arbiter; and, (2)
employees did not have a staff of workers under them. Consequently, whether its professional/technical and confidential employees may validly join
petitioner prayed for the exclusion of respondent PMPI union which is composed of supervisors.
its superintendents and professional/technical employees from the PMPI
supervisory union.
PHILPHOS claims that it was denied due process when respondent
Mediator-Arbiter granted the amended petition of respondent PMPI without
On 13 October 1989, Mediator-Arbiter Rodolfo S. Milado issued an order
according PHILPHOS a new opportunity to be heard.
directing the holding of a certification election among the supervisory
employees of petitioner, excluding therefrom the superintendents and
the professional and technical employees. He also directed the parties to We do not see it the way PHILPHOS does here. The essence of due process
attend the pre-election conference on 19 April 1990 for the determination of is simply an opportunity to be heard or, as applied to administrative
proceedings, an opportunity to explain one's side or an opportunity to seek a
reconsideration of the action or ruling complained of.2 Where, as in the
instant case, petitioner PHILPHOS agreed to file its position paper with the concepts, methods, systems and procedures in their
Mediator-Arbiter and to consider the case submitted for decision on the basis respective fields of specialization; who regularly and directly
of the position papers filed by the parties, there was sufficient compliance assist a managerial and/or supervisory employee, execute
with the requirement of due process, as petitioner was afforded reasonable under general supervision, work along specialized or
opportunity to present its side.3Moreover, petitioner could have, if it so technical lines requiring special training, experience or
desired, insisted on a hearing to confront and examine the witnesses of the knowledge, or execute under general supervision special
other party. But it did assignments and task . . . . They are immediately under the
not; 4 instead, it opted to submit its position paper with the Mediator-Arbiter. direction and supervision of supervisors or superintendents.
Besides, petitioner had all the opportunity to ventilate its arguments in its They have no men under them but are regularly called upon
appeal to the Secretary of Labor. by their supervisors or superintendents on some technical
As regards the second issue, we are with petitioner that being a supervisory
union, respondent PMPI cannot represent Moreover, Herculano, A. Duhaylungsod, Personnel Officer of petitioner,
the professional/technical and confidential employees of petitioner whose attested that there was no community of interests between the supervisors of
positions we find to be more of the rank and file than supervisory. petitioner and the professional/technical employees; that as of 25 July 1990,
personnel records showed that there were 125 supervisors and
With the enactment in March 1989 of R.A. 6715, employees were thereunder 271professional/technical employees; that of the 271 professional/technical
reclassified into three (3) groups, namely: (a) managerial employees, (b) employees, 150 were directly under and being supervised by supervisors,
supervisory employees, and (c) rank and file employees. The category of while the rest were staff members of superintendents.7
supervisory employees is once again recognized in the present law.
The certification of Personnel Officer Duhaylungsod that
Article 212, par. (m), of the Labor Code, as amended, provides, that its professional/technical employees occupy positions that are non-
"(s)upervisory employees are those who, in the interest of the employer, supervisory is evidence that said employees belong to the rank and
effectively recommend such managerial actions if the exercise of such file.8 Quite obviously, these professional/technical employees cannot
authority is not merely routinary or clerical in nature but requires the use of effectively recommend managerial actions with the use of independent
independent judgment." The definition of managerial employees is limited to judgment because they are under the supervision of superintendents and
those having authority to hire and fire, while those who only recommend supervisors. Because it is unrefuted that these professional/technical
effectively the hiring or firing or transfer of personnel; are considered closer employees are performing non-supervisory functions, hence considered
to rank and file employees. The exclusion therefore of mid-level executives admitted, they should be classified, at least for purposes of this case, as rank
from the category of managers has brought about a third classification, the and file employees. Consequently, these professional/technical
supervisory employees. The peculiar role of supervisors is such that while employees cannot be allowed to join a union composed of supervisors.
they are not managers, when they recommend action implementing Conversely, supervisory employees cannot join a labor organization of
management policy or ask for the discipline or dismissal of subordinates, employees under their supervision but may validly form a separate
they identify with the interests of the employer and may act contrary to the organization of their own.9 This is provided in Art. 245 of the Labor Code, as
interests of the rank and file.5 amended by R.A. No. 6715, to wit:

In its position paper submitted to the Mediator-Arbiter, petitioner described . . . Managerial employees are not eligible to join, assist or
the positions and functions of itsprofessional/technical employees, form any labor organization. Supervisory employees shall
(engineers, analysts, mechanics, accountants, nurses, and midwives). The not be eligible for membership in a labor organization of the
guidelines, which were not refuted by respondent PMPI, state: rank and file employees but may join, assist or form separate
labor organizations of their own.
. . . . Professional and Technical positions are those whose
primary duty consists of the performance of work directly Respondent PMPI is supposed to be a union of 125 supervisors. If
related to management programs; who customarily, regularly the professional/technical employees are included as members, and records
and routinarily exercise judgment in the application of show that they are 271 in all or much more than the supervisors, then PMPI
will turn out to be a rank and file union with the supervisors as members.
This is precisely the situation which the law prohibits. It would create an
obvious conflict of views among the members, or at least between two (2)
groups of members espousing opposing interests. The intent of the law is to
avoid a situation where supervisors would merge with the rank and file, or
where the supervisors' labor organization would represent conflicting
interests, especially where, as in the case at bar, the supervisors will be
commingling with those employees whom they directly supervise in their own
bargaining unit. Members of the supervisory union might refuse to carry out
disciplinary measures against their co-member rank and file employees. 10

Supervisors have the right to form their own union or labor organization.
What the law prohibits is a union whose membership comprises
of supervisors merging with the rank and file employees because this is
where conflict of interests may arise in the areas of discipline, collective
bargaining and strikes. 11 Theprofessional/technical employees of petitioner
therefore may join the existing rank and file union, or form a union separate
and distinct from the existing union organized by the rank and file employees
of the same company.

As to the confidential employees of the petitioner, the latter has not shown
any proof or compelling reason to exclude them from joining respondent
PMPI and from participating in the certification election, unless these
confidential employees are the same professional/technical employees
whom we find to be occupying rank and file positions.

WHEREFORE, the petition is GRANTED. The decision of respondent

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

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

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