ROBERTO M. OCA, JR., ET AL.
* and PHILIPPINE TRANSPORT AND GENERAL or, in the alternative, to allow the three factions to operate independently of each
WORKERS ORGANIZATION (PTGWO-OCA GROUP), petitioners,
vs.
CRESENCIANO B. TRAJANO, Director of the BLR-MOLE ANDRES, L.
DINGLASAN, JR., ET AL.** and PHILIPPINE TRANSPORT AND GENERAL
WORKERS ORGANIZATION (PTGWO-DINGLASAN GROUP) and CARLOS T.
RULLAMAS (PTGWO-III) respondents.
FERNAN, C.J.:
"United we stand, divided we fall," could very well have been the motto of the
Philippine Transport and General Workers Organization (PTGWO). Founded in the
1950's by one of the Philippine labor movement's leading pillars, the late Roberto
Oca, Sr., the labor organization encompasses a good number of affiliate unions and
is one of the founding members of the Trade Union Congress of the Philippines. But
just like good things and good times, good organizations also come to an end. This
case chronicles PTGWO's story.
During the 11th PTGWO national convention held on April 22, 1979, herein private
respondent Andres L. Dinglasan, Jr. was elected National President while herein
petitioner Roberto M. Oca, Jr. was elected National Executive Vice President. Their
terms of office were both for three (3) years.
On February 26, 1982, Dinglasan convened an executive board meeting to thresh out
the mechanics of the national convention of PTGWO for that year. Of the thirty three
(33) voting members of the board, thirty one (31) were present. However, before the
body could agree on the date of the convention, a number of participants questioned
the qualifications of some members to sit on the board. To cut the heated argument
then ensuing, the meeting was adjourned. Thereafter, Oca and some members of the
board left the conference hall.
Nonetheless, the nineteen (19) members who remained asked Dinglasan to
reconvene the meeting, which he did. This body passed, among others, a resolution
to hold the national convention on April 18, 1982. On the other hand, Oca and his
group, in a special board meeting on March 19, 1982, decided to hold their
convention on April 4, 1982; thereby prompting Dinglasan and his group in their board
meeting of April 1, 1982 to advance their convention date also to April 4, 1982.
Hence, on April 4, 1982, the groups of Dinglasan and Oca held their respective
conventions at different venues and elected their own set of officers.
On April 15, 1982, PTGWO and Dinglasan filed a petition with the Bureau of Labor
Relations to declare the convention and election of officers held by the Oca group as
illegal, null and void.1
Pending resolution of the dispute, PTGWO-III a group of fifteen (15) local unions
headed by Carlos T. Rullamas and identified with the Dinglasan faction, moved to
intervene for the reason that its members had allegedly already "seceded" from the
camp of Dinglasan. Intervenor prayed that it be permitted to use the name PTGWO
other.
On May 15, 1986, herein respondent Director Cresenciano B. Trajano rendered a
decision, declaring both conventions of doubtful validity. Finding that the rift between
the two (2) factions had become unbridgeable so that a convention to unify them
might not be a workable solution, respondent Director concluded that there was no
other alternative but to recognize the "sad fact that the PTGWO, once a monolithic
labor confederation, has to be split into two: PTGWO-Oca and PTGWO-
Dinglasan".2 He went further to say that "with the division of PTGWO into Dinglasan
and Oca wings on 4 April 1982, PTGWO ceased to exist as PTGWO." 3 On this basis,
he disposed thus:4
WHEREFORE, the petition and motion above-referred to should be, as they
are hereby dismissed. The groups of Roberto M. Oca, Jr. and Andres L.
Dinglasan, Jr. are hereby ordered to secure new registration certificates as
Philippine Transport and General Workers Organization PTGWO-Oca and
Philippine Transport and General Workers' Organization PTGWO-Dinglasan
respectively, within thirty (30) days from receipt of this Decision. Intervenor
PTGWO-III is allowed to register as a separate labor federation under a
different name, but after compliance with the requirements of registration
under the Labor Code.
SO ORDERED.
Feeling aggrieved by the decision, all the parties filed their respective motions for
reconsideration. On July 22, 1986, Director Trajano issued an Order denying the
motion for reconsideration filed by Oca, Jr.5 The record does not indicate whether the
motion for reconsideration filed by Dinglasan, Jr. and the intervenor were resolved.
Alleging grave abuse of discretion amounting to lack of jurisdiction on the part of the
BLR Director, Roberto Oca, Jr., et al. and PTGWO-Oca are now before Us by way of
this petition for certiorari.
Petitioners and private respondents both assail the conclusion reached by respondent
BLR Director that PTGWO has ceased to exist as PTGWO. Each side, however,
insists on the validity of its convention, and consequently, its right to continue using
the name PTGWO and to operate under PTGWO's Registration Permit No. 1194-MM-
IP with all the privileges and benefits appurtenant thereto.
The crux of the petition hinges on the validity of either group's election of officers. On
the other hand, the latter depends upon the validity of the respective Executive Board
Meetings and National Conventions called.
Elementary is the rule that the Constitution and By-laws of an organization serve as a
contract that binds its members.1âwphi1 In this instance, the pertinent provisions of
the Constitution and By-Laws are as follows:6
ARTICLE VII-NATIONAL CONVENTION
 Section 24. DATE AND PLACE OF CONVENTION — The National
Convention shall hold (sic) every three years at a time during the first half of
April, the inclusive dates, time, place to be fixed by (sic) National Executive
Board which shall be at least sixty (60) days before its holding.
Section 34. SPECIAL CONVENTIONS — On fifteen (15) days notice,
special conventions may be called by the National Executive Board, or upon
petition of affiliates whose combined membership represent majority of the
entire membership of the organization as evidenced by the reports of the
National Secretary to the last Convention.
ARTICLE VIII-THE NATIONAL EXECUTIVE BOARD
Section 38. INTERIM AUTHORITY — between Conventions, supreme
authority, subject to the general policies (sic) down by the Convention, shall
be exercised by the National Executive Board.
Section 39. COMPOSITION — The National Executive Board shall be
composed of the National President, lst National Executive Vice President
for General Workers, 2nd National Executive Vice President for Transport,
four (4) National Vice Presidents for General Workers, four (4) National Vice
Presidents for Transport, a National Secretary, National Treasurer, ten (10)
National Executive Board (sic) for General Workers, ten (10 National
Executive Board (sic) for Transport, and all the appointive officers which
shall, however, have no vote.
Section 40. MEETINGS AND QUORUM — The National Executive Board
shall normally meet immediately after the close of the regular convention
and at least once every quarter thereafter, or upon call of the National
President, at his initiative or upon petition of at least one-fourth (¼) of its
members, for a special meeting. A majority of the members of the National
Executive Board shall constitute a quorum to transact business.
Section 46. APPOINTIVE OFFICERS. — The officers to be appointed by the
National President subject to confirmation by the National Executive Board
shall be:
a) Two National Assistant Secretaries, one each for Transport and General
Workers;
The presence of a quorum during petitioner Oca's and respondent Dinglasan's
respective Board meetings is questionable. As found by the public respondent
Director:7
... In both meetings the quorum requirement (majority of the members of the
national executive board (Section 40, Article VIII, PTGWO Constitution)-33,
elective and approximately 36, appointive (Section 39, Article VIII in relation
to section 46, Article IX, PTGWO Constitution) has not been met.
Moreover, petitioner Oca's Board Meeting and subsequent Convention were tainted
with invalidity. The call for "a special Board meeting to fix the special convention"
made by the National Secretary, Johnny Oca, was anomalous since only the National
President of the Union was empowered to call a special Board Meeting, "at his own
initiative or upon petition of at least one fourth (¼) of the Board members."
Petitioner argues that section 40 of the By-Laws provides alternately and
successively for:
a. The National Executive Board shall normally meet immediately after the
close of the regular convention;
b. At least once every quarter thereafter;
c. Or upon call of the National President at his initiative;
d. Or upon petition of at least ¼ of its members for a special meeting.8
Petitioner has apparently misread section 40. An analysis of the cited section shows
that what alternates are the instances when the Board shall meet, not the authority as
to who can call for such meeting. It would seem that petitioner has confused this
discretionary power properly lodged in the President with that of the Secretary's
ministerial duty to "call" or inform the Board members of a forthcoming meeting.
Considering the anomalous "call" for a special meeting made by the National
Secretary, matters taken up during said special meeting, such as the calling of a
national convention, are likewise tainted.
Still further, both Conventions were in violation of the sixty-day requirement imposed
by section 24 of the By-Laws. Said section clearly provides that the National
Convention's dates, time and place shall be fixed by the National Executive
Board which shall be at least sixty (60) days before the holding.9 As succinctly found
by the public respondent Labor Director:10
... On this score alone, the validity of the conventions called by petitioner and
respondents on 4 April 1982 is subject to question. The group headed by
petitioner Dinglasan fixed the final date of the convention barely three (3)
days before the holding, while respondents Oca did so only sixteen (16)
days prior to their convention.
The word used in the underscored phrase is "shall." According to Webster's Third
International Dictionary of the English Language the word "shall" means "ought to,
must, ... obligation-used to express a command or exhortation, used in laws,
regulations or directives to express what is mandatory.11 Thus, it was imperative for
both petitioners and private respondents to strictly follow the command therein with
respect to the period for calling a National Convention.
From the foregoing, it is apparent that respondent Labor Director's refusal to declare
the validity of the election of officers of either parties is not tainted with abuse of
discretion. However, that part of the decision which ordered the parties to "secure
new registration certificates as Philippine Transport and General Workers
Organization PTGWO-Oca and Philippine Transport and General Workers
Organization PTGWO-Dinglasan within thirty (30) days from receipt of this decision"
is without basis. No provision in the Labor Code sanctions such an act. For the
cancellation of a labor union's certificate of authority under Article 239 of the Labor
Code, the causes provided therein must be substantially proved, with the requisite
notices given and hearings held. In this case, such elementary elements of due
process were not observed.

In lieu thereof, reliance should have been made on the Union Constitution and By-
laws.1âwphi1 Sections 38 and 4712 provide:

Section 38. INTERIM AUTHORITY — Between conventions supreme

authority, subject to the general policies down (sic) by the Convention, shall
be exercised by the National Executive Board.

Section 47. TERMS OF OFFICE — The elective officers shall be installed at

the Convention at which they were elected and shall serve until their
successors shall have been elected and qualified and duly installed at the
next National Convention. The tenure of office of appointive officers shall
expire with each national convention and may be removed only under the
provisions of Section 41, Article VIII of its Constitution.

Since we have ruled that the Conventions/Board Meetings of both petitioners and
private respondents are tainted, then it necessarily follows that the incumbent officers
constituting the National Executive Board are entitled to remain in office, until their
successors have been elected, qualified and duly installed at a National Convention.

It appears from the manifestations filed by the parties that pending resolution of this
case, the two (2) factions had been able to negotiate collective bargaining
agreements with various companies. Considering that these CBA's were entered into
in good faith, each faction acting in the honest belief that it is entitled to operate as
the legitimate PTGWO and so as not to disturb the rights, benefits and privileges
accorded by the CBA's to the parties therein, the CBA's entered into by PTGWO-
Dinglasan and PTGWO-Oca are recognized as valid and binding until their respective
expiry dates.

WHEREFORE, premises considered, the decision of public respondent is hereby

MODIFIED. The Bureau of Labor Relations is directed to supervise the election of
officers of the Philippine Transport and General Workers Organization within sixty
(60) days from finality of this decision, without prejudice to the right of any group of
workers or unions to secede and to form their own or to affiliate with another
federation. The collective bargaining agreements entered into by PTGWO-Dinglasan
and PTGWO-Oca are recognized as valid and binding until their respective expiry
dates. This decision is immediately executory. No costs.
ALEX FERRER, RAFAEL FERRER HENRY DIAZ, DOMINGO BANCOLITA, GIL DE
GUZMAN, and FEDERATION OF DEMOCRATIC LABOR UNIONS,
(FEDLU), petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION), HUI KAM
CHANG (In his capacity as General Manager of Occidental Foundry
Corporation), OCCIDENTAL FOUNDRY CORPORATION, MACEDONIO S.
VELASCO (In his capacity as representative of the Federation of Free Workers),
GENARO CAPITLE, JESUS TUMAGAN, ERNESTO BARROGA, PEDRO LLENA,
GODOFREDO PACHECO, MARCELINO CASTILLO, GEORGE IGNAS, PIO
DOMINGO, and JAIME BAYNADO, respondents.
Genrosa P. Jacinto and Raymundo D. Mallilin for private respondents.
MELO, J.:
The petition for certiorari before us seeks to annul and set aside: (a) the decision
dated June 20, 1991 of the Second Division of the National Labor Relations
Commission (NLRC) (Penned by Commissioner Rustico L. Diokno and concurred in
by Presiding Commissioner Edna Bonto-Perez and Commissioner Domingo H.
Zapanta) which affirmed in toto the decision of April 5, 1990 of Labor Arbiter Eduardo
J. Carpio dismissing the complaint for illegal dismissal and unfair labor practice on the
ground that both the company and the union merely complied with the collective
bargaining agreement provision sanctioning the termination of any employee who
fails to retain membership in good standing with the union; and (b) the NLRC
resolution denying the motion for the reconsideration of said decision (NLRC NCR
Case No. 00-10-04855-89).
Petitioners were regular and permanent employees of the Occidental Foundry
Corporation (OFC) in Malanday, Valenzuela, Metro Manila which was under the
management of Hui Kam Chang. As piece workers, petitioners' earnings ranged from
P110 to P140 a day. They had been in the employ of OFC for about ten years at the
time of their dismissal in 1989 (p. 38, Rollo).
xxx xxx xxx
Sec. 3 — The parties agree that failure to retain membership in
good standing with the UNION shall be ground for the operation of
paragraph 1 hereof and the dismissal by the company of the
aforesaid employee upon written request by the union. The
aforesaid request shall be accompanied by a verified carbon
original of the Board of (sic) Resolution by the UNION signed by at
least a majority of its officers/directors. (p. 562, Rollo.)
On May 6, 1989, petitioner Alex Ferrer and the SAMAHAN, filed in the Department of
Labor and Employment (DOLE), a complaint for the expulsion from SAMAHAN of the
following officers: Genaro Capitle (president), Jesus Tumagan (vice-president),
Godofredo Pacheco (auditor), and Marcelino Pacheco (board member) (Case No.
NCR-00-M-89-11-01). The complaint was founded on said officers' alleged
inattentiveness to the economic demands of the workers. However, on September 4,
1989, petitioners Diaz and Alex Ferrer withdrew the petition (p. 590, Rollo).
On September 10, 1989, petitioners conducted a special election of officers of the
SAMAHAN (pp. 205 & 583, Rollo). Said election was, however, later questioned by
the FFW. Nonetheless, the elected set of officers tried to dissuade the OFC from
remitting union dues to the officers led by Capitle who were allied with the FFW.
Later, however, Romulo Erlano, one of the officers elected at the special election,
manifested to the DOLE that he was no longer objecting to the remittance of union
dues to the officers led by Capitle. Petitioners' move to stage a strike based on
economic demands was also later disowned by members of the SAMAHAN.
The intraunion squabble came to a head when, on September 11, 1989, a resolution
expelling petitioners from the SAMAHAN was issued by the aforesaid union officials
headed by Capitle, together with board members George Ignas, Pio Domingo, and
Jaime Baynado (pp. 286 & 599, Rollo). The following day, Capitle sent OFC the
following letter:

On January 5, 1989, the Samahang Manggagawa ng Occidental Foundry

Corporation-FFW (SAMAHAN) and the OFC entered into a collective bargaining
agreement (CBA) which would be effective for the three-year period between October
1, 1988 and September 30, 1991 (Memorandum for OFC and Hui Kam Chang, p.
6, Rollo; p. 551). Article II thereof provides for a union security clause thus:

Sec. 1 — The company agrees that all permanent and regular

factory workers in the company who are members in good standing
of the union or who thereafter may become members, shall as a
condition of continued employment, maintain their membership in
the union in good standing for the duration of the agreement.
 Mr. Hui Kam Chang
General Manager
Malanday, Valenzuela
Metro Manila
Dear Mr. Chang:
In compliance with Article II, Sec. 3 of the Union Security Clause as
enunciated in our Collective Bargaining Agreement, I would like you
to dismiss the following employees on the ground of failure to retain
membership in good standing:
1. Alex Ferrer
2. Gil de Guzman
3. Henry Diaz
4. Domingo Bancolita
5. Rafael Ferrer, Jr.
Attached herewith is the verified carbon original of the Board
Resolution of the union signed by the majority of its
officers/directors.
Thank you very much.
GENARO CAPITLE
President
(p. 66, Rollo.)
Although petitioners received this letter weeks after its date, it appears that on that
same date, they had learned about their dismissal from employment as shown by the
letter also dated September 13, 1989 which they sent the Federation of Democratic
Labor Unions (FEDLU). They volunteered therein to be admitted as members of the
FEDLU and requested that they be represented ("katawanin") by said federation
before the DOLE in the complaint which they intended to file against the union
(SAMAHAN), the FFW and the company for illegal dismissal, reinstatement, and
other benefits in accordance with law
(p. 74, Rollo).
Thereafter, on various dates, petitioners sent individual letters to Hui Kam Chang
professing innocence of the charges levelled against them by the SAMAHAN and the
FFW and pleading that they be reinstated (pp. 69-73, Rollo). Their letters appear to
have elicited no response.
Thus, contending that their dismissal was without cause and in utter disregard of their
right to due process of law, petitioners, through the FEDLU, filed a complaint for
illegal dismissal and unfair labor practice before the NLRC against Hui Kam Chang,
OFC, Macedonio S. Velasco (as representative of the FFW) the FFW, and the
SAMAHAN officers headed by Capitle (p. 75, Rollo).
In due course, after the case was ventilated through position papers and other
documents, the labor arbiter rendered a decision dismissing petitioners' complaint
(pp. 79-89, Rollo). He found that in dismissing petitioners, OFC was "merely
complying with the mandatory provisions of the CBA — the law between it and the
union." He added:
To register compliance with the said covenant, all that is necessary
is a written request of the union requesting dismissal of the
employees who have failed to retain membership in good standing
with the union. The matter or question, therefore of determining
why and how did complainants fail to retain membership in good
standing is not for the company to inquire via formal investigation.
By having the request of the union, a legal presumption that the
request was born out of a formal inquiry by the union that subject
employees failed to exist. This means generally that where a valid
closed shop or similar agreement is in force with respect to a
particular bargaining unit as in the case a quo, the employer shall
refuse to employ any person unless he is a member of the majority
union and the employer shall dismiss employees who fail to retain
their membership in the majority union. This must be deemed a just
cause recognized by law and jurisprudence. The effect is
discrimination to encourage membership in other unions. (pp. 86-
87, Rollo.)
Hence, the labor arbiter concluded, the dismissal of petitioners was an exercise of
legitimate management prerogative which cannot be considered as an unfair labor
practice. On whether the SAMAHAN and the FFW could be held liable for illegal
dismissal and unfair labor practice, the arbiter opined that since there was no
employer-employee relationship between petitioners and respondent unions, the
complaint against the latter has no factual and legal bases, because petitioners
"should not have confused expulsion from membership in the union as one and the
same incident to their subsequent employment termination."
Consequently, petitioners appealed to the NLRC on the grounds that there was prima
facie evidence of abuse of discretion on the part of the labor arbiter and that he
committed serious errors in his findings of facts.
On June 20, 1991, the NLRC rendered the herein questioned decision affirming in
toto the decision of the arbiter. Petitioners motion for the reconsideration of the NLRC
decision having been denied, they resorted to the instant petition for certiorari which
presents the issue of wether or not respondent Commision gravely abused its
discretion in affirming the decision of the labor arbiter which is allegedly in defiance of
the elementary principles of procedural due process as the petitioners were
summarily dismissed from employment without an investigation having been
conducted by the OFC on the veracity of the allegation of the SAMAHAN-FFW that
they violated the CBA.
A CBA is the law between the company and the union and compliance therewith is
mandated by the express policy to give protection to labor. Said policy should be
given paramount consideration unless otherwise provided for by law (Meycauayan
College vs. Drilon, 185 SCRA 50 [1990]. A CBA provision for a closed shop is a valid
form of union security and it is not a restriction on the right or freedom of association
guaranteed by the Constitution (Lirag Textile Mill, Inc. vs. Blanco, 109 SCRA 87
[1981]. However, in the implementation of the provisions of the CBA, both parties
thereto should see to it that no right is violated or impaired. In the case at bar, while it
is true that the CBA between OFC and the SAMAHAN provided for the dismissal of
employees who have not maintained their membership in the union, the manner in
which the dismissal was enforced left much to be desired in terms of respect for the
right of petitioners to procedural due process.
In the first place, the union has a specific provision for the permanent or temporary
"expulsion" of its erring members in its constitution and by-laws ("saligang batas at
alituntunin"). Under the heading membership and removal ("pag-aanib at
pagtitiwalag"), it states:
Sec. 4. Ang sinumang kasapi ay maaring itwalag (sic) ng Samahan
pangsamantala o tuluyan sa pamamagitan (sic) ng tatlo't ikaapat
(¾) na bahagi ng dami ng bilang ng Pamunuang
Tagapagpaganap. Pagkaraan lamang sa pandinig sa kanyang
kaso. Batay sa sumusunod:
(a) Sinumang gumawa ng mga bagay bagay na labag at lihis sa
patakaran ng Samahan.
(b) Sinumang gumawa ng mga bagay na maaaring ikabuwag ng
Samahan.
(c) Hindi paghuhulog ng butaw sa loob ng tatlong buwan na walang
sakit o Doctor's Certificate.
(d) Hindi pagbibigay ng abuloy na itinatadhana ng Samahan.
(e) Sinumang kasapi na natanggal sa kapisanan at gustong,
sumapi uli ay magpapanibago ng bilang, mula sa taon ng kanyang
pagsapi uli sa Samahan. (Emphasis supplied; Ibid., p. 177).
No hearing ("pandinig") was ever conducted by the SAMAHAN to look into petitioners'
explanation of their moves to oust the union leadership under Capitle, or their
subsequent affiliation with FEDLU. While it is true that petitioners' actions might have
precipitated divisiveness and, later, showed disloyalty to the union, still, the
SAMAHAN should have observed its own constitution and by-laws by giving
petitioners an opportunity to air their side and explain their moves. If, after an
investigation the petitioners were found to have violated union rules, then and only
then should they be subjected to proper disciplinary measures.
Here lies the distinction between the facts of this case and that of Cariño vs.
NLRC (185 SCRA 177 [1990]) upon which the Solicitor General heavily relies in
supporting the stand of petitioners. In Cariño, the erring union official was given the
chance to answer the complaints against him before an investigating committee
created for that purpose. On the other, hand, herein petitioners were not given even
one opportunity to explain their side in the controversy. This procedural lapse should
not have been overlooked considering the union security provision of the CBA.
What aggravated the situation in this case is the fact that OFC itself took for granted
that the SAMAHAN had actually conducted an inquiry and considered the CBA
provision for the closed shop as self-operating that, upon receipt of a notice that some
members of the SAMAHAN had failed to maintain their membership in good standing
in accordance with the CBA, it summarily dismissed petitioners. To make matters
worse, the labor arbiter and the NLRC shared the same view in holding that "(t)he
matter or question, therefore, of determining why and how did complainants fail to
retain membership in good standing is not for the company to inquire via formal
investigation" (pp. 87 & 135, Rollo). In this regard, the following words of my learned
brother, Mr. Justice Feliciano, in the Resolution in Cariño are apt:
4. Turning now to the involvement of the Company in the dismissal
of petitioner Cariño, we note that the Company upon being formally
advised in writing of the expulsion of petitioner Cariño from the
Union, in turn simply issued a termination letter to Cariño, the
termination being made effective the very next day. We believe that
the Company should have given petitioner Cariño an opportunity to
explain his side of the controversy with the Union. Notwithstanding
the Union's Security Clause in the CBA, the Company should have
reasonably satisfied itself by its own inquiry that the Union had not
been merely acting arbitrarily and capriciously in impeaching and
expelling petitioner Cariño . . .
xxx xxx xxx
5. We conclude that the Company had failed to accord to petitioner
Cariño the latter's right to procedural due process. The right of an
employee to be informed of the charges against him and to
reasonable opportunity to present his side in a controversy with
either the Company or his own Union, is not wiped away by a Union
Security Clause or a Union Shop Clause in a CBA. An employee is
entitled to be protected not only from a company which disregards
his rights but also from his own Union the leadership of which could
yield to the temptation of swift and arbitrary expulsion from
membership and hence dismissal from his job. (pp. 186 & 189.)
The need for a company investigation is founded on the consistent ruling of this Court
that the twin requirements of notice and hearing which are essential elements of due
process must be met in employment-termination cases. The employee concerned
must be notified of the employer's intent to dismiss him and of the reason or reasons
for the proposed dismissal. The hearing affords the employee an opportunity to
answer the charge or charges against him and to defend himself therefrom before
dismissal is effected (Kwikway Engineering Works vs. NLRC, 195 SCRA 526 [1991];
Salaw vs. NLRC, 202 SCRA 7 [1991]). Observance to the letter of company rules on
investigation of an employee about to be dismissed is not mandatory. It is enough
that there is due notice and hearing before a decision to dismiss is made (Mendoza
vs. NLRC, 195 SCRA 606 (1991]). But even if no hearing is conducted, the
requirement of due process would have been met where a chance to explain a party's
side of the controversy had been accorded him (Philippine Airlines, Inc. vs. NLRC,
198 SCRA 748 [1991]).
If an employee may be considered illegally dismissed because he was not accorded
fair investigation (Hellenic Philippine Shipping vs. Siete, 195 SCRA 179 (1991]), the
more reason there is to strike down as an inexcusable and disdainful rejection of due
process a situation where there is no investigation at all (See: Colegio del Sto. Niño
vs. NLRC, 197 SCRA 611 [1991]; Artex Development Co., Inc. vs. NLRC, 187 SCRA
611 [1990]). The need for the observance of an employee's right to procedural due
process in termination cases cannot be overemphasized. After all, one's employment,
profession, trade, or calling is a "property right" and the wrongful interference
therewith gives rise to an actionable wrong (Callanta vs. Carnation Philippines,
Inc., 145 SCRA 268 (1986]). Verily, a man's right to his labor is property within the
meaning of constitutional guarantees which he cannot be deprived of without due
process (Batangas Laguna Tayabas Bus Co. vs. Court of Appeals, 71 SCRA 470
[1976]).
While the law recognizes the right of an employer to dismiss employees in warranted
cases, it frowns upon arbitrariness as when employees are not accorded due process
(Tan, Jr. vs. NLRC, 183 SCRA 651 [1990]). Thus, the prerogatives of the OFC to
dismiss petitioners should not have been whimsically done for it unduly exposed itself
to a charge of unfair labor practice for dismissing petitioners in line with the closed
shop provision of the CBA, without a proper hearing (Tropical Hut Employees' Union-
CGW vs. Tropical Hut Food Market, Inc., 181 SCRA 173 [1990]; citing Binalbagan-
Isabela Sugar Co., Inc. (BISCOM) vs. Philippine Association of Free Labor Unions
(PAFLU), 8 SCRA 700 [1983]). Neither can the manner of dismissal be considered
within the ambit of managerial prerogatives, for while termination of employment is
traditionally considered a management prerogative, it is not an absolute prerogative
subject as it is to limitations founded in law, the CBA, or general principles of fair play
and justice (University of Sto. Tomas vs. NLRC, 190 SCRA 758 [1990]).
Under Rule XIV, Sections 2, 5, and 6 of the rules implementing Batas Pambansa Blg.
130, the OFC and the SAMAHAN should solidarity indemnify petitioners for the
violation of their right to procedural due process (Great Pacific Life Assurance
Corporation vs. NLRC, 187 SCRA 694[1990], citing Wenphil vs. NLRC, 170 SCRA 69
[1989], Cariño vs. NLRC, supra). However, such penalty may be imposed only where
the termination of employment is justified and not when the dismissal is illegal as in
this case where the damages are in the form of back wages.
As earlier discussed, petitioners' alleged act of sowing disunity among the members
of the SAMAHAN could have been ventilated and threshed out through a grievance
procedure within the union itself. But resort to such procedure was not pursued. What
actually happened in this case was that some members, including petitioners, tried to
unseat the SAMAHAN leadership headed by Capitle due to the latter's alleged
inattention to petitioners' demands for the implementation of the P25-wage increase
which took effect on July 1, 1989. The intraunion controversy was such that
petitioners even requested the FFW to intervene to facilitate the enforcement of the
said wage increase (Petition, p. 54; p. 55, Rollo).
Petitioners sought the help of the FEDLU only after they had learned of the
termination of their employment upon the recommendation of Capitle. Their alleged
application with federations other than the FFW (Labor Arbiter's Decision, pp. 4-5; pp.
82-83, Rollo) can hardly be considered as disloyalty to the SAMAHAN, nor may the
filing of such applications denote that petitioners failed to maintain in good standing
their membership in the SAMAHAN. The SAMAHAN is a different entity from FFW,
the federation to which it belonged. Neither may it, be inferred that petitioners
sought disaffiliation from the FFW for petitioners had not formed a union distinct from
that of the SAMAHAN. Parenthetically, the right of a local union to disaffiliate from a
federation in the absence of any provision in the federation's constitution preventing
disaffiliation of a local union is legal (People's Industrial and Commercial Employees
and Worker's Org. (FFW) vs. People's Industrial and Commercial Corp., 112 SCRA
440 (1982]). Such right is consistent with the constitutional guarantee of freedom of
association (Tropical Hut Employees Union-CGW vs. Tropical Hut Food Market, Inc.,
181 SCRA 173 [1990]).
Hence, while petitioners' act of holding a special election to oust Capitle, et al. may be
considered as an act of sowing disunity among the SAMAHAN members, and,
perhaps, disloyalty to the union officials, which could have been dealt with by the
union as a disciplinary matter, it certainly cannot be considered as constituting
disloyalty to the union. Faced with a SAMAHAN leadership which they had tried to
remove as officials, it was but a natural act of self-preservation that petitioners fled to
the arms of the FEDLU after the union and the OFC had tried to terminate their
employment. Petitioners should not be made accountable for such an act.
With the passage of Republic Act No. 6715 which took effect on March 21, 1989,
Article 279 of the Labor Code was amended to read as follows:
Security of Tenure. — In cases of regular employment, the
employer shall not terminate the services of an employee except for
a just cause or when authorized by this Title. An employee who is
unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or
their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual
reinstatement.
and as implemented by Section 3, Rule 8 of the 1990 New Rules of Procedure of the
National Labor Relations Commission, it would seem that the Mercury Drug Rule
(Mercury Drug Co., Inc. vs. Court of Industrial Relations, 56 SCRA 694 [1974]) which
limited the award of back wages of illegally dismissed workers to three (3) years
"without deduction or qualification" to obviate the need for further proceedings in the
course of execution, is no longer applicable.
A legally dismissed employee may now be paid his back wages, allowances, and
other benefits for the entire period he was out of work subject to the rule enunciated
before the Mercury Drug Rule, which is that the employer may, however, deduct any
amount which the employee may have earned during the period of his illegal
termination (East Asiatic Company, Ltd. vs. Court of Industrial Relations, 40 SCRA
521 [1971]). Computation of full back wages and presentation of proof as to income
earned elsewhere by the illegally dismissed employee after his termination and before
actual reinstatement should be ventilated in the execution proceedings before the
Labor Arbiter concordant with Section 3, Rule 8 of the 1990 new Rules of Procedure
of the National Labor Relations Commission.

Inasmuch as we have ascertained in the text of this discourse that the OFC
whimsically dismissed petitioners without proper hearing and has thus opened OFC
to a charge of unfair labor practice, it ineluctably follows that petitioners can receive
their back wages computed from the moment their compensation was withheld after
their dismissal in 1989 up to the date of actual reinstatement. In such a scenario, the
award of back wages can extend beyond the 3-year period fixed by the Mercury Drug
Rule depending, of course, on when the employer will reinstate the employees.

It may appear that Article 279 of the Labor Code, as amended by Republic Act No.
6715, has made the employer bear a heavier burden than that pronounced in the
Mercury Drug Rule, but perhaps Republic Act No. 6715 was enacted precisely for the
employer to realize that the employee must be immediately restored to his former
position, and to impress the idea that immediate reinstatement is tantamount to a
cost-saving measure in terms of overhead expense plus incremental productivity to
the company which lies in the hands of the employer.

WHEREFORE, the decision appealed from is hereby SET ASIDE and private
respondents are hereby ordered to reinstate petitioners to their former or equivalent
positions without loss of seniority rights and with full back wages, inclusive of
allowances and other benefits or their monetary equivalent, pursuant to Article 279 of
the Labor Code, as amended by Republic Act No. 6715.
EDUARDO TANCINCO, OSCAR E. BARTOLO, DANIEL DE LEON, EDDIE POE,
VIRGILIO SAN PEDRO, MA. LUISA QUIBIN, FE MUDLONG and HENRY
MADRIAGA, petitioners,
vs.
DIRECTOR PURA FERRER-CALLEJA, EDWIN LACANILAO, BOYET DALMACIO,
JOSEFINO ESGUERRA, TESSIE GATCHALIAN, LITO CUDIA and DING
PAGAYON, respondents.
GANCAYCO, J.:
This special civil action for certiorari seeks to annul the Resolution of February 12,
1987 and the Decision of December 10, 1986 of the Bureau of Labor Relations * in
BLR Case No. A922186, setting aside the order of July 25, 1986 which decreed the
inclusion and counting of the 56 segregated votes for the determination of the results
of the election of officers of Imperial Textile Mills Inc. Monthly Employees Association
(ITM-MEA).
Private respondents are the prime organizers of ITM-MEA. While said respondents
were preparing to file a petition for direct certification of the Union as the sole and
exclusive bargaining agent of ITM's bargaining unit, the union's Vice-President,
Carlos Dalmacio was promoted to the position of Department Head, thereby
disqualifying him for union membership. Said incident, among others led to a strike
spearheaded by Lacanilao group, respondents herein. Another group however, led by
herein petitioners staged a strike inside the company premises. After four (4) days the
strike was settled. On May 10, 1986 an agreement was entered into by the
representatives of the management, Lacanilao group and the Tancinco group the
relevant terms of which are as follows:
"1. That all monthly-paid employees shall be United under one
union, the ITM Monthly Employees Association (ITM-MEA), to be
affiliated with ANGLO;
2. That the management of ITM recognizes ANGLO as the sole and
exclusive bargaining agent of all the monthly-paid employees;
3. That an election of union officers shall be held on 26 May l986,
from 8:00 a.m. to 5:00 p.m.;
4. That the last day of filing of candidacy shall be on l9 May l986 at
4:00 p.m.;
5. That a final pre-election conference to finalize the list of qualified
voters shall be held on 19 May 1986, at 5:00 p.m.;" 1
On May 19, 1986, a pre-election conference was held, but the parties failed to agree
on the list of voters. During the May 21, 1986 pre-election conference attended by
MOLE officers, ANGLO through its National Secretary, a certain Mr. Cornelio A. Sy
made a unilateral ruling excluding some 56 employees consisting of the Manila office
employees, members of Iglesia ni Kristo, non-time card employees, drivers of Mrs.
Salazar and the cooperative employees of Mrs. Salazar. Prior to the holding of the
election of union officers petitioners, 2 through a letter addressed to the Election
Supervisor, MOLE San Fernando Pampanga, protested said ruling but no action was
taken. On May 26, 1986, the election of officers was conducted under the supervision
of MOLE wherein the 56 employees in question participated but whose votes were
segregated without being counted. Lacanilao's group won. Lacanilao garnered 119
votes with a margin of three (3) votes over Tancinco prompting petitioners to make a
protest. Thereafter, petitioners filed a formal protest with the Ministry of Labor
Regional Office in San Fernando, Pampanga 3 claiming that the determination of the
qualification of the 56 votes is beyond the competence of ANGLO. Private
respondents maintain the contrary on the premise that definition of union's
membership is solely within their jurisdiction.
On the basis of the position papers submitted by the parties MOLE's Med
Arbiter 4 issued an order dated July 25, 1986 directing the opening and counting of
the segregated votes. 5 From the said order private respondents appealed to the
Bureau of Labor Relations (BLR) justifying the disenfranchisement of the 56 votes.
Private respondents categorized the challenged voters into four groups namely, the
Manila Employees, that they are personal employees of Mr. Lee; the Iglesia ni Kristo,
that allowing them to vote will be anomalous since it is their policy not to participate in
any form of union activities; the non-time card employees, that they are managerial
employees; and the employees of the cooperative as non-ITM employees. 6 On
December 10, 1986, BLR rendered a decision 7 holding the exclusion of the 56
employees as arbitrary, whimsical, and wanting in legal basis 8 but set aside the
challenged order of July 26, 1986 on the ground that 51 ** of 56 challenged voters
were not yet union members at the time of the election per April 24, 1986 list
submitted before the Bureau. 9 The decision directed among others the proclamation
of Lacanilao's group as the duly elected officers and for ITM-MEA to absorb in the
bargaining unit the challenged voters unless proven to be managerial
employees. 10 Petitioners' motion for reconsideration was likewise denied.
Dissatisfied with the turn of events narrated above petitioners elevated the case to
this Court by way of the instant petition for certiorari under Rule 65 of the Rules of
Court. Petitioners allege that public respondent director of Labor Relations committed
grave abuse of discretion in ordering the Med-Arbiter to disregard the 56 segregated
votes and proclaim private respondents as the duly elected officers of ITM-MEA
whereas said respondent ruled that the grounds relied upon by ANGLO for the
exclusion of voters are arbitrary, whimsical and without legal basis.
The petition is impressed with merit. The record of the case shows that public
respondent categorically declared as arbitrary, whimsical and without legal basis the
grounds 11 relied upon by ANGLO in disenfranchising the 56 voters in question.
However, despite said finding public respondent ruled to set aside the Resolution of
July 25, 1986 of the Med-Arbiter based on its own findings 12 that 51 of the 56
disenfranchised voters were not yet union members at the time of the election of
union officers on May 26, 1986 on the ground that their names do not appear in the
records of the Union submitted to the Labor Organization Division of the Bureau of and hence will estop them later if ever, from questioning the CBA which petitioners
Labor on April 24, 1986. concurred with. Furthermore, the inclusion and counting of the 56 segregated votes
would not necessarily mean success in favor of herein petitioners as feared by private
The finding does not have a leg to stand on. Submission of the employees names respondents herein. Otherwise, could this be the very reason behind their fears why
with the BLR as qualified members of the union is not a condition sine qua non to they made it a point to nullify said votes?
enable said members to vote in the election of union's officers. It finds no support in
fact and in law. Per public respondent's findings, the April 24, 1986 list consists of 158 WHEREFORE, premises considered, the petition for certiorari is GRANTED. The
union members only 13 wherein 51 of the 56 challenged voters' names do not appear. temporary restraining order issued by this Court on May 13, 1987 is hereby made
Adopting however a rough estimate of a total number of union members who cast permanent. The questioned Resolution of February 12, 1987 and the Decision of
their votes of some 333 14 and excluding therefrom the 56 challenged votes, if the list December 10, 1986 are hereby set aside for being null and void and the Order of July
is to be the basis as to who the union members are then public respondent should 25, 1986 of the Mediator Arbiter is hereby declared immediately executory.
have also disqualified some 175 of the 333 voters. It is true that under article 242(c)
of the Labor Code, as amended, only members of the union can participate in the
election of union officers. The question however of eligibility to vote may be
determined through the use of the applicable payroll period and employee's status
during the applicable payroll period. The payroll of the month next preceding the labor
dispute in case of regular employees 15 and the payroll period at or near the peak of
operations in case of employees in seasonal industries. 16

In the case before Us, considering that none of the parties insisted on the use of the
payroll period-list as voting list and considering further that the 51 remaining
employees were correctly ruled to be qualified for membership, their act of joining the
election by casting their votes on May 26, 1986 after the May 10, 1986 agreement is
a clear manifestation of their intention to join the union. They must therefore be
considered ipso facto members thereof Said employees having exercised their right
to unionism by joining ITM-MEA their decision is paramount. Their names could not
have been included in the list of employee submitted on April 24, 1986 to the Bureau
of Labor for the agreement to join the union was entered into only on May 10, 1986.
Indeed the election was supervised by the Department of Labor where said 56
members were allowed to vote. Private respondents never challenged their right to
vote then.

The Solicitor General in his manifestation agreed with petitioners that public
respondent committed a grave abuse of discretion in deciding the issue on the basis
of the records of membership of the union as of April 24, 1986 when this issue was
not put forward in the appeal.

It is however the position of private respondents that since a collective bargaining

agreement (CBA) has been concluded between the local union and ITM management
the determination of the legal question raised herein may not serve the purpose which
the union envisions and may destroy the cordial relations existing between the
management and the union.

We do not agree. Existence of a CBA and cordial relationship developed between the
union and the management should not be a justification to frustrate the decision of the
union members as to who should properly represent them in the bargaining unit.
Neither may the inclusion and counting of the 56 segregated votes serve to disturb
the existing relationship with management as feared by herein private respondents.
Respondents themselves pointed out that petitioners joined the negotiating panel in
the recently concluded CBA. This fact alone is conclusive against herein petitioners
CARMELITO L. PALACOL, ET AL., petitioners,
vs.
PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, MANILA
CCBPI SALES FORCE UNION, and COCA-COLA BOTTLERS (PHILIPPINES),
INC., respondents.
Wellington B. Lachica for petitioners.
Adolpho M. Guerzon for respondent Union.
GANCAYCO, J.:
Can a special assessment be validly deducted by a labor union from the lump-sum
pay of its members, granted under a collective bargaining agreement (CBA),
notwithstanding a subsequent disauthorization of the same by a majority of the union
members? This is the main issue for resolution in the instant petition for certiorari.
As gleaned from the records of the case, the pertinent facts are as follows:
On October 12, 1987, the respondent Manila CCBPI Sales Force Union (hereinafter
referred to as the Union), as the collective bargaining agent of all regular salesmen,
regular helpers, and relief helpers of the Manila Plant and Metro Manila Sales Office
of the respondent Coca-Cola Bottlers (Philippines), Inc. (hereinafter referred to as the
Company) concluded a new collective bargaining agreement with the latter. 1Among
the compensation benefits granted to the employees was a general salary increase to
be given in lump sum including recomputation of actual commissions earned based
on the new rates of increase.
On the same day, the president of the Union submitted to the Company the
ratification by the union members of the new CBA and authorization for the Company
to deduct union dues equivalent to P10.00 every payday or P20.00 every month and,
in addition, 10% by way of special assessment, from the CBA lump-sum pay granted
to the union members. The last one among the aforementioned is the subject of the
instant petition.
As embodied in the Board Resolution of the Union dated September 29, 1987, the
purpose of the special assessment sought to be levied is "to put up a cooperative and
credit union; purchase vehicles and other items needed for the benefit of the officers
and the general membership; and for the payment for services rendered by union
officers, consultants and others." 2 There was also an additional proviso stating that
the "matter of allocation ... shall be at the discretion of our incumbent Union
President."
This "Authorization and CBA Ratification" was obtained by the Union through a secret
referendum held in separate local membership meetings on various dates. 3 The total
membership of the Union was about 800. Of this number, 672 members originally
authorized the 10% special assessment, while 173 opposed the same. 4
Subsequently however, one hundred seventy (170) members of the Union submitted
documents to the Company stating that although they have ratified the new CBA, they
are withdrawing or disauthorizing the deduction of any amount from their CBA lump
sum. Later, 185 other union members submitted similar documents expressing the
same intent. These members, numbering 355 in all (170 + 185), added to the original
oppositors of 173, turned the tide in favor of disauthorization for the special
assessment, with a total of 528 objectors and a remainder of 272 supporters. 5
On account of the above-mentioned disauthorization, the Company, being in a
quandary as to whom to remit the payment of the questioned amount, filed an action
for interpleader with the Bureau of Labor Relations in order to resolve the conflicting
claims of the parties concerned. Petitioners, who are regular rank-and-file employees
of the Company and bona fide members of the Union, filed a motion/complaint for
intervention therein in two groups of 161 and 94, respectively. They claimed to be
among those union members who either did not sign any individual written
authorization, or having signed one, subsequently withdrew or retracted their
signatures therefrom.
Petitioners assailed the 10% special assessment as a violation of Article 241(o) in
relation to Article 222(b) of the Labor Code. Article 222(b) provides as follows:
ART. 222. Appearances and Fees. —
xxx xxx xxx
(b) No attorney's fees, negotiation fees or similar
charges of any kind arising from any collective
bargaining negotiations or conclusion of the
collective agreement shall be imposed on any
individual member of the contracting union;
Provided, however, that attorney's fees may be
charged against union funds in an amount to be
agreed upon by the parties. Any contract,
agreement or arrangement of any sort to the
contrary shall be null and void.
On the other hand, Article 241(o) mandates that:
ART. 241. Rights and conditions of membership in a labor
organization. —
xxx xxx xxx
(o) Other than for mandatory activities under the
Code, no special assessments, attorney's fees,
 negotiation fees or any other extraordinary fees
may be checked off from any amount due to an
employee without an individual written
authorization duly signed by the employee. The
authorization should specifically state the
amount, purpose and beneficiary of the
deduction;
As authority for their contention, petitioners cited Galvadores v. Trajano, 6 wherein it
was ruled that no check-offs from any amount due employees may be effected
without individual written authorizations duly signed by the employees specifically
stating the amount, purpose, and beneficiary of the deduction.
In its answer, the Union countered that the deductions not only have the popular
indorsement and approval of the general membership, but likewise complied with the
legal requirements of Article 241 (n) and (o) of the Labor Code in that the board
resolution of the Union imposing the questioned special assessment had been duly
approved in a general membership meeting and that the collection of a special fund
for labor education and research is mandated.
Article 241(n) of the Labor Code states that —
ART. 241. Rights and conditions of membership in a labor
organization. —
xxx xxx xxx
(n) No special assessment or other extraordinary fees may be
levied upon the members of a labor organization unless authorized
by a written resolution of a majority of all the members at a general
membership meeting duly called for the purpose. The secretary of
the organization shall record the minutes of the meeting including
the list of all members present, the votes cast, the purpose of the
special assessment or fees and the recipient of such assessments
or fees. The record shall be attested to by the president;
Med-Arbiter Manases T. Cruz ruled in favor of petitioners in an order dated February
15, 1988 whereby he directed the Company to remit the amount it had kept in trust
directly to the rank-and-file personnel without delay.
On appeal to the Bureau of Labor Relations, however, the order of the Med-Arbiter
was reversed and set aside by the respondent-Director in a resolution dated August
19, 1988 upholding the claim of the Union that the special assessment is authorized
under Article 241 (n) of the Labor Code, and that the Union has complied with the
requirements therein.
Hence, the instant petition.
Petitioners allege that the respondent-Director committed a grave abuse of discretion
amounting to lack or excess of jurisdiction when she held Article 241 (n) of the Labor
Code to be the applicable provision instead of Article 222(b) in relation to Article
241(o) of the same law.
According to petitioners, a cursory examination and comparison of the two provisions
of Article 241 reveals that paragraph (n) cannot prevail over paragraph (o). The
reason advanced is that a special assessment is not a matter of major policy affecting
the entire union membership but is one which concerns the individual rights of union
members.
Petitioners further assert that assuming arguendo that Article 241(n) should prevail
over paragraph (o), the Union has nevertheless failed to comply with the procedure to
legitimize the questioned special assessment by: (1) presenting mere minutes of local
membership meetings instead of a written resolution; (2) failing to call a general
membership meeting; (3) having the minutes of three (3) local membership meetings
recorded by a union director, and not by the union secretary as required; (4) failing to
have the list of members present included in the minutes of the meetings; and (5)
failing to present a record of the votes cast. 7Petitioners concluded their argument by
citing Galvadores.
After a careful review of the records of this case, We are convinced that the deduction
of the 10% special assessment by the Union was not made in accordance with the
requirements provided by law.
Petitioners are correct in citing the ruling of this Court in Galvadores which is
applicable to the instant case. The principle "that employees are protected by law
from unwarranted practices that diminish their compensation without their known
edge and consent" 8 is in accord with the constitutional principle of the State affording
full protection to labor. 9
The respondent-Union brushed aside the defects pointed out by petitioners in the
manner of compliance with the legal requirements as "insignificant technicalities." On
the contrary, the failure of the Union to comply strictly with the requirements set out
by the law invalidates the questioned special assessment. Substantial compliance is
not enough in view of the fact that the special assessment will diminish the
compensation of the union members. Their express consent is required, and this
consent must be obtained in accordance with the steps outlined by law, which must
be followed to the letter. No shortcuts are allowed.
The applicable provisions are clear. The Union itself admits that both paragraphs (n)
and (o) of Article 241 apply. Paragraph (n) refers to "levy" while paragraph (o) refers
to "check-off" of a special assessment. Both provisions must be complied with. Under
paragraph (n), the Union must submit to the Company a written resolution of a
majority of all the members at a general membership meeting duly called for the
purpose. In addition, the secretary of the organization must record the minutes of the
meeting which, in turn, must include, among others, the list of all the members
present as well as the votes cast.
As earlier outlined by petitioners, the Union obviously failed to comply with the
requirements of paragraph (n). It held local membership meetings on separate
occasions, on different dates and at various venues, contrary to the express
requirement that there must be a general membership meeting. The contention of the
Union that "the local membership meetings are precisely the very general meetings
required by law" 10is untenable because the law would not have specified a general
membership meeting had the legislative intent been to allow local meetings in lieu of
the latter.
It submitted only minutes of the local membership meetings when what is required is
a written resolution adopted at the general meeting. Worse still, the minutes of three
of those local meetings held were recorded by a union director and not by the union
secretary. The minutes submitted to the Company contained no list of the members
present and no record of the votes cast. Since it is quite evident that the Union did not
comply with the law at every turn, the only conclusion that may be made therefrom is
that there was no valid levy of the special assessment pursuant to paragraph (n) of
Article 241 of the Labor Code.
Paragraph (o) on the other hand requires an individual written authorization duly
signed by every employee in order that a special assessment may be validly
checked-off. Even assuming that the special assessment was validly levied pursuant
to paragraph (n), and granting that individual written authorizations were obtained by
the Union, nevertheless there can be no valid check-off considering that the majority
of the union members had already withdrawn their individual authorizations. A
withdrawal of individual authorizations is equivalent to no authorization at all. Hence,
the ruling in Galvadores that "no check-offs from any amounts due employees may be
effected without an individual written authorization signed by the employees ... " is
applicable.
The Union points out, however, that said disauthorizations are not valid for being
collective in form, as they are "mere bunches of randomly procured signatures, under
loose sheets of paper." 11 The contention deserves no merit for the simple reason that
the documents containing the disauthorizations have the signatures of the union
members. The Court finds these retractions to be valid. There is nothing in the law
which requires that the disauthorization must be in individual form.
Moreover, it is well-settled that "all doubts in the implementation and interpretation of
the provisions of the Labor Code ... shall be resolved in favor of labor." 12 And as
previously stated, labor in this case refers to the union members, as employees of the
Company. Their mere desire to establish a separate bargaining unit, albeit unproven,
cannot be construed against them in relation to the legality of the questioned special
assessment. On the contrary, the same may even be taken to reflect their
dissatisfaction with their bargaining representative, the respondent-Union, as shown
by the circumstances of the instant petition, and with good reason.
The Med-Arbiter correctly ruled in his Order that:
The mandate of the majority rank and file have (sic) to be respected
considering they are the ones directly affected and the realities of
the high standards of survival nowadays. To ignore the mandate of
the rank and file would enure to destabilizing industrial peace and
harmony within the rank and file and the employer's fold, which we
cannot countenance.
Moreover, it will be recalled that precisely union dues are collected
from the union members to be spent for the purposes alluded to by
respondent. There is no reason shown that the regular union dues
being now implemented is not sufficient for the alleged expenses.
Furthermore, the rank and file have spoken in withdrawing their
consent to the special assessment, believing that their regular
union dues are adequate for the purposes stated by the
respondent. Thus, the rank and file having spoken and, as we have
earlier mentioned, their sentiments should be respected.
Of the stated purposes of the special assessment, as embodied in the board
resolution of the Union, only the collection of a special fund for labor and education
research is mandated, as correctly pointed out by the Union. The two other purposes,
namely, the purchase of vehicles and other items for the benefit of the union officers
and the general membership, and the payment of services rendered by union officers,
consultants and others, should be supported by the regular union dues, there being
no showing that the latter are not sufficient to cover the same.
The last stated purpose is contended by petitioners to fall under the coverage of
Article 222 (b) of the Labor Code. The contention is impressed with merit. Article 222
(b) prohibits attorney's fees, negotiations fees and similar charges arising out of the
conclusion of a collective bargaining agreement from being imposed on any individual
union member. The collection of the special assessment partly for the payment for
services rendered by union officers, consultants and others may not be in the
category of "attorney's fees or negotiations fees." But there is no question that it is an
exaction which falls within the category of a "similar charge," and, therefore, within the
coverage of the prohibition in the aforementioned article. There is an additional
proviso giving the Union President unlimited discretion to allocate the proceeds of the
special assessment. Such a proviso may open the door to abuse by the officers of the
Union considering that the total amount of the special assessment is quite
considerable — P1,027,694.33 collected from those union members who originally
authorized the deduction, and P1,267,863.39 from those who did not authorize the
same, or subsequently retracted their authorizations. 13 The former amount had
already been remitted to the Union, while the latter is being held in trust by the
Company.
The Court, therefore, stakes down the questioned special assessment for being a
violation of Article 241, paragraphs (n) and (o), and Article 222 (b) of the Labor Code.
WHEREFORE, the instant petition is hereby GRANTED. The Order of the Director of
the Bureau of Labor Relations dated August 19, 1988 is hereby REVERSED and SET
ASIDE, while the order of the Med-Arbiter dated February 17, 1988 is reinstated, and
the respondent Coca-Cola Bottlers (Philippines), Inc. is hereby ordered to
immediately remit the amount of P1,267,863.39 to the respective union members
from whom the said amount was withheld. No pronouncement as to costs. This
decision is immediately executory.
VOLKSCHEL LABOR UNION, petitioner,
vs.
BUREAU OF LABOR RELATIONS, ASSOCIATED LABOR UNION FOR METAL,
WORKERS, DMG, INC., PEOPLE'S CAR, INC., KARBAYAN INC., and RTC
TRADING, INC., respondents.
Ignacio P. Lacsina for petitioner.
William D. Dichoso for respondent DMG, Inc.
Abraham B. Drapiza for private respondent.
CUEVAS, J.:
Petition for certiorari to review the Resolutions dated January 25, 1977 and March 14,
1977 of the Bureau of Labor Relations.
On April 25. 1977, however, a Supplemental Petition was filed seeking the issuance
of —
(1) A preliminary mandatory injunction commanding respondents to
return to petitioner the union dues amounting to about P55,000.00
lawfully pertaining to it but illegally levied upon, collected and
handed over by respondent Bureau, acting through the NLRC
sheriff, to respondent Associated Labor Union for Metal workers,
with the collusion of respondents DMG, Inc., Karbayan, Inc. and
RTC Machineries, Inc.;
(2) A preliminary restraining order prohibiting respondents from
making further delivery to respondent Associated Labor Union for
Metal workers of Union dues collected or to be collected through
check-off from the wages of petitioner's members by respondents,
DMG, Inc., Karbayan, Inc., RTC Machineries, Inc., and People's
Car, Inc., under or by virtue of the questioned writ of execution
issued by respondent Bureau, dated April 4, 1977.
Petitioner was once affiliated with the Associated Labor Union for Metal Workers
(ALUMETAL for short). On August 1, 1975, both unions, using the name Volkschel
Labor Union Associated Labor Union for Metal Workers, jointly entered into a
collective bargaining agreement with respondent companies. One of the subjects
dealt with is the payment of union dues which is provided for in Section 3, Article 1, of
the CBA, which reads:
Section 3. CHECK-OFF. — The COMPANY agrees to make payroll
deductions not softener than twice a month of UNION membership
dues and such special assessments fees or fines as may be duly
authorized by the UNION, provided that the same is covered by the
individual check-off authorization of the UNION members. All said
deductions shall be promptly transmitted within five (5) days by the
COMPANY to the UNION Treasurer. The COMPANY shall prepare
two (2) checks. One (1) check will be under the name of the local
union as their local fund including local special assessment funds
and the other check will be for the ALU Regional Office regarding
the remittance of the UNION dues deduction.
On March 10, 1976, a majority of petitioner's members decided to disaffiliate from
respondent federation in order to operate on its own as an independent labor group
pursuant to Article 241 (formerly Article 240) of the Labor Code of the Philippines, the
pertinent portion of which reads:
Incumbent affiliates of existing federations or national unions may
disaffiliate only for the purpose of joining a federation or national
union in the industry or region in which it properly belongs or for the
purpose of operating as an independent labor group.
Accordingly, a resolution was adopted and signed by petitioner's members revoking
their check-off authorization in favor of ALUMETAL and notices thereof were served
on ALUMETAL and respondent companies.
Confronted with the predicament of whether or not to continue deducting from
employees' wages and remitting union dues to respondent, ALUMETAL which wrote
respondent companies advising them to continue deducting union dues and remitting
them to said federation, respondent companies sought the legal opinion of the
respondent Bureau as regards the controversy between the two unions. On
November 11, 1976, Med-Arbiter George A. Eduvalla of respondent Bureau rendered
a Resolution which in effect found the disaffiliation legal but at the same time gave the
opinion that, petitioner's members should continue paying their dues to ALUMETAL in
the concept of agency fees. 1
From the said Resolution, of the Med-Arbiter both petitioner and respondent
ALUMETAL appealed to the Director of respondent Bureau. Petitioner' contended that
the Med-Arbiter's opinion to the effect that petitioner's members remained obligated to
pay dues to respondent ALUMETAL was inconsistent with the dispositive finding that
petitioner's disaffiliation from ALUMETAL was valid. ALUMETAL, on the other hand,
assailed the Resolution in question asserting that the disaffiliation should have been
declared contrary to law.
On January 25, 1977, respondent Bureau, through its Acting Director, Francisco L.
Estrella, REVERSED the Med-Arbiter's Resolution., and declared that the Bureau
recognized "the continued affiliation of Volkschel Labor Union with the Associated
Labor Union for Metal Workers." 2
Petitioner appealed the Acting Director's Resolution to the Secretary of Labor know
Minister of Labor and Employment) who, treating the appeal as a Motion for
Reconsideration referred the same back to respondent Bureau On March 14, 1977,
the Bureau denied the appeal for lack of merit.
Hence, the instant petition.
Meanwhile, on April 4, 1977, on motion of ALUMETAL, the then Acting Secretary of
Labor, Amado Gat Inciong, issued a of execution commanding the Sheriff of the
National Labor Relations Commission to enforce and execute the order of January
25, 1977, which has become final and executory. 3 Pursuant thereto, the NLRC
Sheriff enforced and implemented the Order of January 25, 1977, as a result of which
respondent companies turned over and handed to respondent federation the union
dues and other assessments in accordance with the check-off provision of the CBA,
From the pleadings filed and arguments of counsel, the following issues present
themselves for this Court's resolution.
I
Is petitioner union's disaffiliation from respondent federation valid?
II
Do respondent companies have the right to effect union dues
collections despite revocation by the employees of the check-off
authorization? and
III
Is respondent federation entitled to union dues payments from
petitioner union's members notwithstanding their disaffiliation from
said federation?
We resolve the first issue in the affirmative.
The right of a local union to disaffiliate from its mother union is well-settled. In
previous cases, it has been repeatedly held that a local union, being a separate and
voluntary association, is free to serve the interest of all its members including the
freedom to disaffiliate when circumstances warrant. 4 This right is consistent with the
Constitutional guarantee of freedom of association (Article IV, Section 7, Philippine
Constitution).
Petitioner contends that the disaffiliation was not due to any opportunists motives on
its part. Rather it was prompted by the federation's deliberate and habitual dereliction
of duties as mother federation towards petitioner union. Employees' grievances were
allegedly left unattended to by respondent federation to the detriment of the
employees' rights and interests.
In reversing the Med-Arbiter's resolution, respondent Bureau declared: the
Department of Labor is set on a task to restructure the labor movement to the end
that the workers will unite themselves along industry lines. Carried to its complete
fruition, only one union for every industry will remain to bargain collectively for the
workers. The clear policy therefore even now is to conjoin workers and worker
groups, not to dismember them. 5 This policy is commendable. However, we must not
lose sight of the constitutional mandate of protecting labor and the workers' right to
self-organization. In the implementation and interpretation of the provisions of the
Labor Code and its implementing regulations, the workingman's welfare should be the
primordial and paramount consideration. In the case at bar, it would go against the
spirit of the labor law to restrict petitioner's right to self-organization due to the
existence of the CBA. We agree with the Med-Arbiter's opinion that "A disaffiliation
does not disturb the enforceability and administration of a collective agreement; it
does not occasion a change of administrators of the contract nor even an amendment
of the provisions thereof." 6 But nowhere in the record does it appear that the contract
entered into by the petitioner and ALUMETAL prohibits the withdrawal of the former
from the latter.
This now brings us to the second issue. Under Section 3, Article I, of the CBA, the
obligation of the respondent companies to deduct and remit dues to ALUMETAL is
conditioned on the individual check-off authorization of petitioner's members, In other
words, ALUMETAL is entitled to receive the dues from respondent companies as long
as petitioner union is affiliated with it and respondent companies are authorized by
their employees (members of petitioner union) to deduct union dues. Without said
affiliation, the employer has no link to the mother union. The obligation of an
employee to pay union dues is coterminous with his affiliation or membership. "The
employees' check-off authorization, even if declared irrevocable, is good only as long
as they remain members of the union concerned." 7 A contract between an employer
and the parent organization as bargaining agent for the employees is terminated by
the disaffiliation of the local of which the employees are members. 8 Respondent
companies therefore were wrong in continuing the check-off in favor of respondent
federation since they were duly notified of the disaffiliation and of petitioner's
members having already rescinded their check-off authorization.
With the view we take on those two issues, we find no necessity in dwelling further on
the last issue. Suffice it to state that respondent federation is not entitled to union
dues payments from petitioner's members. "A local union which has validly withdrawn
from its affiliation with the parent association and which continues to represent the
employees of an employer is entitled to the check-off dues under a collective
bargaining contract." 9
WHEREFORE, the Resolutions of the Bureau of Labor Relations of January 25, 1977
and March 14, 1977 are REVERSED and SET ASIDE. Respondent ALUMETAL is
ordered to return to petitioner union all the union dues enforced and collected through
the NLRC Sheriff by virtue of the writ of execution dated April 4, 1977 issued by
respondent Bureau.
ABS CBN SUPERVISORS EMPLOYEE UNION MEMBERS, petitioner, vs. ABS CBN
BROADCASTING CORP., HERBERT RIVERA, ALBERTO BERBON,
CINDY MUNOZ, CELSO JAMBALOS, SALVADOR DE VERA, ARNULFO
ALCAZAR, JAKE MADERAZO, GON CARPIO, OSCAR LANDRITO,
FRED GARCIA, CESAR LOPEZ and RUBEN BARRAMEDA, respondents.
DECISION
PURISIMA, J.:
At bar is a special civil action for Certiorari[1] seeking the reversal of the Order[2] dated
July 31, 1992 of public respondent Department of Labor and Employment Undersecretary
Bienvenido E. Laguesma[3] in Case No. NCR OD M 90 07 - 037.
From the records on hand, it can be gathered, that:
On December 7, 1989, the ABS-CBN Supervisors Emloyees Union (the Union),
represented by respondent Union Officers, and ABS-CBN Broadcasting Corporation (the
Company) signed and concluded a Collective Bargaining Agreement with the following
check-off provision, to wit:
Article XII The [C]ompany agrees to advance to the Union a sum
equivalent to 10% of the sum total of all the salary increases and
signing bonuses granted to the Supervisors under this collective
Bargaining Agreement and upon signing hereof to cover the Unions
incidental expenses, including attorneys fees and representation
expenses for its organization and (sic) preparation and conduct
hereof, and such advance shall be deducted from the benefits
granted herein as they accrue.
On September 19, 1990, Petitioners[4] filed with the Bureau of Labor Relations, DOLE-
NCR, Quezon City, a Complaint against the Union Officers[5] and ABS-CBN Broadcasting
corporation, praying that (1) the special assessment of ten percent (10%) of the sum total of all
salary increases and signing bonuses granted by respondent Company to the members of the
Union be declared illegal for failure to comply with the labor Code, as amended, particularly
Article 241, paragraphs (g), (n), and (o); and in utter violation of the Constitution and By-
Laws of the ABS-CBN Supervisors Employees Union; (2)respondent Company be ordered to
suspend further deductions from petitioners salaries for their shares thereof.
In their Answers, respondent Union Officers and Company prayed for the dismissal of
the Complaint for lack of merit. They argued that the check-off provision is in accordance
with law as majority of the Union members individually executed a written
authorization giving the Union officers and the Company a blanket authority to deduct subject
amount.
On January 21, 1991, Med-Arbiter Rasidali C. Abdula issued the following Order:[6]
WHEREFORE, premises considered, judgment is hereby rendered:
a) declaring the special assessment of 10% of the sum total of CBA
benefits as illegal;
b) ordering respondents union officers to refund to the complainants
and other union members the amount of five Hundred Thousand
Pesos (P500,000.00) advanced by the respondent Company as part of
the 10% sum total of CBA benefits without unnecessary delay;
c) ordering the respondent company to stop and desist from further
making advances and deductions from the union members salaries
their share in the advances already made to the union;
d) ordering the respondent Company to remit directly to the
complainants and other union members the amount already
deducted from the union members salaries as part of their share in
the advances already made to the union and which it had kept in
trust during the pendency of this case; and
e) directing the respondents union officers and respondent Company
to submit report on the compliance thereof.
SO ORDERED.
On appeal, respondent DOLE Undersecretary Bienvenido E. Laguesma handed down a
Decision[7] on July 1, 1991, disposing as follows:
WHEREFORE, the appeals are hereby denied, the Order of the Med-
Arbiter is affirmed en toto.
On July 5, 1991, the aforesaid Decision was received by the respondent Union Officers
and respondent Company. On July 13, 1991, they filed their Motion for Reconsideration
stating, inter alia that the questioned ten percent (10%) special assessment is valid pursuant to
the ruling in Bank of the Philippine Islands Employee Union ALU vs. NLRC.[8]
On July 31, 1992, Undersecretary B.E. Laguesma issued an Order [9]; resolving, thus:
"WHEREFORE, the Decision dated 01 July 1991 is hereby SET
ASIDE. In lieu thereof, a new one is hereby entered DISMISSING the
Complaint/Petition for lack of merit."
Hence, the present petition seeking to annul and set aside the above-cited Order of
public respondent Undersecretary B.E. Laguesma, for being allegedly tainted with grave abuse
of discretion amounting to lack of jurisdiction.
 Did the public respondent act with grave abuse of discretion in issuing the challenged
Order reversing his own Decision of July 1, 1991? Such is the sole issue posited,which we
resolve in the negative.The petition is unmeritorious.
Petitioners claim[10] that the Decision of the Secretary of Labor and Employment dated
July 1, 1991, affirming in toto the Order of Med-Arbiter Rasidali Abdullah dated January 31,
1991, cannot be a subject of a motion for reconsideration because it is final and unappealable
pursuant to Section 8, Rule VIII, Book V of the Omnibus Rule Implementing the Labor
Code. It is further argued that the only remedy of the respondent Union Officers' is to file a
petition for certiorari with this Court.
Section 8, Rule VIII, Book V of the Omnibus Rules Implementing the Labor Code,
provides:
"The Secretary shall have fifteen (15) calendar days within which to
decide the appeal from receipt of the records of the case. The
decision of the Secretary shall be final and inappealable."
[Underscoring supplied]. (Comment, p. 101)
The aforecited provision cannot be construed to mean that the Decision of the public
respondent cannot be reconsidered since the same is reviewable by writ of certiorari under
Rule 65 of the Rules of Court. As a rule, the law requires a motion for reconsideration to
enable the public respondent to correct his mistakes, if any. In Pearl S. Buck Foundation,
Inc., vs. NLRC,[11] this Court held:
"Hence, the only way by which a labor case may reach the Supreme
Court is through a petition for certiorari under Rule 65 of the Rules of
Court alleging lack or excess of jurisdiction or grave abuse of
discretion. Such petition may be filed within a reasonable time from
receipt of the resolution denying the motion for reconsideration of
the NLRC decision." [Underscoring; supplied].
Clearly, before a petition for certiorari under Rule 65 of the Rules of Court may be availed of,
the filing of a motion for reconsideration is a condition sine qua non to afford an opportunity
for the correction of the error or mistake complained of.
So also, considering that a decision of the Secretary of Labor is subject to judicial
review only through a special civil action of certiorari and, as a rule, cannot be resorted to
without the aggrieved party having exhausted administrative remedies through a motion for
reconsideration, the aggrieved party, must be allowed to move for a reconsideration of the
same so that he can bring a special civil action for certiorari before the Supreme Court.[12]
Furthermore, it appears that the petitioners filed with the public respondent a Motion for
Early Resolution[13] dated June 24, 1992. Averring that private respondents' Motion for
Reconsideration did not contain substantial factual or legal grounds for the reversal of subject
decision. Consequently, petitioners are now estopped from raising the issue sought for
resolution. In Alfredo Marquez vs. Secretary of Labor,[14] the Court said:
"xxx The active participation of the party against whom the action
was brought, coupled with his failure to object to the jurisdiction of
the court or quasi-judicial body where the action is pending, is
tantamount to an invocation of that jurisdiction and a willingness to
abide by the resolution of the case and will bar said party from later
on impugning the court or body's jurisdiction."
What is more, it was only when the public respondents issued the Order adverse to them
that the petitioners raised the question for the first time before this Court. Obviously, it is a
patent afterthought which must be abhorred.
Petitioners also argued that the check-off provision in question is illegal because it was
never submitted for consideration and approval to "all the members at a general membership
meeting called for the purpose"; and further alleged that the formalities mandated by Art. 241,
paragraphs (n) and (o) of the Labor Code, as amended, were not complied with.
"A check-off is a process or device whereby the employer, on agreement with the
Union, recognized as the proper bargaining representative, or on prior authorization from its
employees, deducts union dues or agency fees from the latter's wages and remits them directly
to the union."[15] Its desirability in a labor organization is quite evident. It is assured thereby of
continuous funding. As this Court has acknowledged, the system of check-off is primarily for
the benefit of the Union and only indirectly, for the individual employees.
The legal basis of check-off is found in statutes or in contracts.[16] The statutory
limitations on check-offs are found in Article 241, Chapter II, Title IV, Book Five of the
Labor Code, which reads:
"Rights and conditions of membership in a labor organization. - The
following are the rights and conditions of membership in a labor
organization:
xxx
(g) No officer, agent, member of a labor organization shall collect
any fees, dues, or other contributions in its behalf or make any
disbursement of its money or funds unless he is duly authorized
pursuant to its constitution and by-laws.
xxx
(n) No special assessment or other extraordinary fees may be levied
upon the members of a labor organization unless authorized by
a written resolution of a majority of all the members of a general
membership meeting duly called for the purpose. The secretary of
the organization shall record the minutes of the meeting including
the list of all members present, the votes cast, the purpose of the
special assessment or fees and the recipient of such assessment or
fees.The record shall be attested to by the president.
(o) Other than for mandatory activities under the Code, no special
assessments, attorney's fees, negotiation fees or any other
extraordinary fees may be checked off from any amount due to an
employee with an individual written authorization duly signed by the
employee. The authorization should specifically state the amount,
purpose and beneficiary of the deductions. [Underscoring; supplied]
Article 241 of the Labor Code, as amended, must be read in relation to Article 222,
paragraph (b) of the same law, which states:
"No attorney's fees, negotiation fees or similar charges of any kind
arising from collective bargaining negotiations or conclusion of the
collective agreement shall be imposed on any individual member of
the contracting union: Provided, however, that attorney's fees may
be charged against union funds in an amount to be agreed upon by
the parties. Any contract, agreement or arrangement of any sort to
the contrary shall be null and void." [Underscoring; supplied]
And this court elucidated the object and import of the said provision of law in Bank of
Philippine Islands Employees Union - Association Labor Union (BPIEU-ALU) vs. National
Labor Relations Commission:[17]
"The Court reads the afore-cited provision (Article 222 [b] of the
Labor Code) as prohibiting the payment of attorney's fees only when
it is effected through forced contributions from the workers from
their own funds as distinguished from the union funds. xxx"
Noticeably, Article 241 speaks of three (3) requisites that must be complied with in
order that the special assessment for Union's incidental expenses, attorney's fees and
representation expenses, as stipulated in Article XII of the CBA, be valid and upheld
namely: 1) authorization by a written resolution of the majority of all the members at the
general membership meeting duly called for the purpose; (2)secretary's record of the minutes
of the meeting; and (3) individual written authorization for check-off duly signed by the
employee concerned.
After a thorough review of the records on hand, we find that the three (3) requisites for
the validity of the ten percent (10%) special assessment for Union's incidental expenses,
attorney's fees and representation expenses were met.
It can be gleaned that on July 14, 1989, the ABS-CBN Supervisors Employee Union
held its general meeting, whereat it was agreed that a ten percent (10%) special assessment
from the total economic package due to every member would be checked-off to cover
expenses for negotiation, other miscellaneous expenses and attorney's fees. The minutes of the
said meeting were recorded by the Union's Secretary, Ma. Carminda M. Munoz, and noted by
its President, Herbert Rivera.[18]
On May 24, 1991, said Union held its General Membership Meeting, wherein majority
of the members agreed that "in as much as the Union had already paid Atty. P. Pascual the
amount of P500,000.00, the same must be shared by all the members until this is fully
liquidated."[19]
Eighty-five (85) members of the same Union executed individual written
authorizations for check-off, thus:
"Towards that end, I hereby authorize the Management and/or
Cashier of ABS-CBN BROADCASTING CORPORATION to deduct from
my salary the sum of P30.00 per month as my regular union dues and
said Management and/or Cashier are further authorize (sic) to deduct
a sum equivalent to 10% of all and whatever benefits that will
become due to me under the COLLECTIVE BARGAINING
AGREEMENT (CBA) that may be agreed upon by the UNION and
MANAGEMENT and to apply the said sum to the advance that
Management will make to our Union for incidental expenses such as
attorney's fees, representations and other miscellaneous expenses
pursuant to Article XII of the proposed CBA."[20]
Records do not indicate that the aforesaid check-off authorizations were executed by the
eighty-five (85) Union members under the influence of force or compulsion. There is then, the
presumption that such check-off authorizations were executed voluntarily by the signatories
thereto. Petitioners contention that the amount to be deducted is uncertain[21] is not persuasive
because the check-off authorization clearly stated that the sum to be deducted is equivalent to
ten percent (10%) of all and whatever benefits may accrue under the CBA. In other words,
although the amount is not fixed, it is determinable.
Petitioners further contend that Article 241 (n) of the Labor Code, as amended, on
special assessments, contemplates a general meeting after the conclusion of the collective
bargaining agreement.
Subject Article does not state that the general membership meeting should be called
after the conclusion of a collective bargaining agreement. Even granting ex gratia
argumenti that the general meeting should be held after the conclusion of the CBA, such
requirement was complied with since the May 24, 1991 General Membership Meeting was
held after the conclusion of the Collective Bargaining Agreement, which was signed and
concluded on December 7, 1989.
Considering that the three requisites afforesaid for the validity of a special assessment
were observed or met, we uphold the validity of the ten percent (10%) special assessment
authorized in Article XII of the CBA.
We also concur in the finding by public respondent that the Bank of the Philippine
Islands Employees Union ALU vs. NLRC[22] is apposite in this case. In BPIEU-ALU, the
petitioners, impugned the Order of the NLRC, holding that the validity of the five percent
(5%) special assessment for attorneys fees is contrary to Article 222, paragraph (b) of the
Labor Code, as amended. The court ratiocinated, thus:
The Court reads the aforecited provision as prohibiting the payment
of attorneys fees only when it is effected through forced
contributions from the workers from their own funds a distinguished
from the union funds. The purpose of the provision is to prevent
imposition on the workers of the duty to individually contribute their
respective shares in the fee to be paid the attorney for his services
on behalf of the union in its negotiations with the management. xxx
[Underscoring supplied]
In this case, the majority of the Union members gave their individual written check-off
authorizations for the ten percent (10%) special assessment. And they have never withdraw
their individual written authorizations for check-off.
There is thus cogent reason to uphold the assailed Order, it appearing from the records
of the case that twenty (20)[25] of the forty-two (42) petitioners executed as Compromise
Agreement[26] ratifying the controversial check-off provision in the CBA.
Premises studiedly considered, we are of the irresistable conclusion and, so find, that the
ruling in BPIEU-ALU vs. NLRC that (1) the prohibition against attorneys fees in Article 222,
paragraph (b) of the Labor Code applies only when the payment of attorneys fees is effected
through forced contributions from the workers; and (2) that no deductions must be taken from
the workers who did not sign the check-off authorization, applies to the case under
consideration.

However, the public respondent overlooked the fact that in the said case, the deduction WHEREFORE, the assailed Order, dated July 31, 1992, of DOLE Undersecretary B.E.
of the stipulated five percent (5%) of the total economic benefits under the new collective Laguesma is AFFIRMED except that no deductions shall be taken from the workers who did
bargaining agreement was applied only to workers who gave their individual signed not give their individual written check-off authorization. No pronouncement as to costs.
authorizations. The Court explained:

xxx And significantly, the authorized deduction affected only the

workers who adopted and signed the resolution and who were the
only ones from whose benefits the deductions were made by BPI. No
similar deductions were taken from the other workers who did not
sign the resolution and so were not bound by it. [Underscoring;
supplied]

While the court also finds merit in the finding by the public respondents that Palacol vs.
Ferrer-Calleja[23] is inapropos in the case under scrutiny, it does not subscribe to public
respondents reasoning that Palacol should not be retroactively applied to the present case in
the interest of justice, equity and fairplay.[24] The inapplicability of Palacol lies in the fact that
it has a different factual milieu from the present case. In Palacol, the check-off authorization
was declared invalid because majority of the Union members had withdrawn their individual
authorizations, to wit:

Paragraph (o) on the other hand requires an individual written

authorization duly signed by every employee in order that special
assessment maybe validly check-off. Even assuming that the special
assessment was validly levied pursuant to paragraph (n), and
granting that individual written authorizations were obtained by the
Union, nevertheless there can be no valid check-off considering that
the majority of the Union members had already withdrawn their
individual authorizations. A withdrawal of individual authorization is
equivalent to no authorization at all. xxx [Underscoring; supplied]
LITTON MILLS EMPLOYEES ASSOCIATION-KAPATIRAN AND ROGELIO
ABONG, petitioners,
vs.
HONORABLE PURA FERRER-CALLEJA, in her capacity as Director of the
Bureau of Labor Relations, RODOLFO UMALI AND LITTON MILLS,
INC., respondents.
PADILIA, J.:
This is a petition for review on certiorari, with prayer for preliminary injunction, seeking
to prevent private respondent Rodolfo Umali from affiliating the petitioner-union, Litton
Mills Employees Association-Kapatiran (LMEA-K, for short), with the National Union
of Garments, Textile Cordage and General Workers of the Philippines (GATCORD,
for short), and to enjoin the latter or any of its representatives from representing
petitioner-union in any capacity whatsoever. The petition also seeks to declare as null
and void petitioner union's affiliation with GATCORD: that LMEA-K union President,
Rodolfo Umali, be declared impeached, and that respondent company, Litton Mills,
Inc. (LMI, for short) be ordered by this Court to terminate Umali from his employment.
Petitioner union, LMEA-K, is a legitimate labor organization in the respondent
company, LMI, while individual petitioner, Rogelio Abong, and individual respondent,
Rodolfo Umali, are the vice- president, respectively, of LMEA-K.
The facts of the case are as follows:
On 14 August 1986, without the knowledge and approval of the general membership
of LMEA-K, Umali "Affiliated" petitioner-union with the federation of GATCORD. This
is evidenced by the Pledge of Allegiance signed by the union's newly appointed shop
steward, Norberto David, dated 14 August 1986, which was attested to by Timoteo
Aranjuez GATCORD's President, as inducting officer. 1
Umali then caused mimeographed leaflets to be distributed to the union-members,
urging them to continue affiliating with GATCORD, at the same time maligning
petitioner union's legal counsel Paterno D. Menzon, as well as Messrs. Badillo and
Abong, the former and incumbent vice-president of petitioner-union. 2
As a consequence, a majority of the union-members, numbering 725 3 out of a total
membership of 1,100, more or less, opposed the affiliation of LMEA-K with
GATCORD, and expressly manifested their intention to remain as an independent-
union, in a statement, "Sama-Samang Kapasiyahan", dated 18 August 1986 4which,
among others, also authorized petitioner Abong to take appropriate steps against
respondent Umali, including impeachment, should the latter continue the affiliation of
the petitioner-union with GATCORD.
Despite the opposition of a majority of the union membership to the petitioner- union's
affiliation with GATCORD, Umali continued with it, as evidenced by a letter he wrote
to LMI, dated 20 August 1986, which was written on paper with the letterhead of
GATCORD printed on it. The said letter, which was in reference to the number of
workers of LMI who were to be given regular appointments, and those who were to be
terminated and replaced, was again attested to by Timoteo Aranjuez GATCORD's
National
President. 5
Thereafter, Abong and the majority of the elected union officers signed a letter, dated
24 August 1986, addressed to Umali, accusing him of disloyalty by reasons of his
affiliation with GATCORD, and advising him to appear before them on August 1986 at
2:00 p.m. in the company canteen, to refute the charge of disloyalty against him. The
same letter warned Umali that his failure to attend said meeting would be interpreted
as an admission on his part of the charge levelled against him. Umali did not show up
at the appointed confrontation of 27 August 1986.
Consequently, the majority of the union officers, led by Abong, voted to impeach
Umali, who was informed of this fact by letter, dated 30 August 1986, addressed to
him, with copy furnished Mr. James Go, the senior vice-president of LMI. Abong also
wrote the latter, informing him, of Umali's impeachment, and invoking the provision of
the collective bargaining agreement on union security, i.e., that the petitioner union
may request LMI to dismiss an impeached officer or members of the union.
The company's position on the request of the petitioners, as stated in its letter to the
petitioners, dated 10 September 1986, was that the petitioner should first comply with
the provision of the CBA, to wit:
An employee who is expelled from the Union for cause shall, upon
demand by the Union, be terminated from employment, provided
that all pertinent requirements of the Ministry of Labor and
Employment are first complied with; provided that the Union shall
hold the company free from any liability that may arise due to said
termination 5-A
In other words, LMI required the petitioners to first thresh out the matter with the
proper office of the Department of Labor and Employment, before it could act on
petitioners' request to terminate Umali from his employment with LMI.
On 25 September 1986, petitioners lodged a complaint against Umali and LMI before
the med-arbiter section of the National Capital Region of the Department of Labor and
Employment, docketed as NCR-LRD-M-9-718-86, praying that, after notice and
hearing, an order be issued declaring as valid the impeachment of Rodolfo Umali and
that respondent company be ordered to comply with Sec. 5, par. b Article IV of the
CBA, by terminating the employment of Umali, and proclaiming Rogelio Abong, the
union's vice-president, as the new president of the union. 6
Umali filed his answer, after which petitioners filed their reply averring that Umali's
open defiance of the will of the majority of the union members for the union to remain
an independent union, and Umali's contention that the majority wanted to affiliate with
GATCORD, without submitting up to that time any evidence to support such
contention were clear evidence of his disloyalty to petitioner-union, for which he ought
to be impeached. Thereafter, petitioners filed a Supplemental Reply stating, among
others, that of the 700 signatures of union members eventually submitted by Umali,
as belonging to those who supported affiliation with GATCORD, a) 111 signatures
were forged or faked signatures, b) 6 were those of resigned employees, and c) 44
were by those who signed 2 or 3 times, summing up to a total of 161 signatures that
should be excluded from Umali's submission of 700 affirming signatures, thereby
leaving only 539 signatures in favor of affiliation with GATCORD.
Aside from averring unauthorized affiliation of LMEA-K with GATCORD, petitioner-
union (LMEAK) alleged in its supplemental reply that the mere use by Umali of
falsified signatures of union members was enough reason for his expulsion as
president of LMEA-K.
On 15 November 1986, Med-Arbiter Residali Abdullah issued an order declaring that
the issue of affiliation cannot be dealt with in the complaint filed by petitioners, and
that the impeachment of Umali was null and void.
The Med-Arbiter found no valid ground to sustain the impeachment of Rodolfo Umali
as president of the petitioner union, since Umali was not afforded his right to due
process, his impeachment having been approved without compliance with the
procedure laid down in the petitioner-union's constitution and by-laws. The Med-
Arbiter also considered the petitioner union's "Sama-Samang Kapasiyahan" as mere
declarations of some union members opposing the proposed affiliation of the union
with GATCORD, and stating their preference to remain an independent union, but not
as a petition charging respondent Umali with a specific offense against the union.
The Med-Arbiter further held that the letter-decision of the petitioner-union which
impeached respondent Umali was bereft of any legal merit, because the non-
appearance of Umali at the first scheduled meeting of 27 August 1986 cannot be
legally construed as an admission on his part of the charges levelled against him. The
Med-Arbiter then held thus:
Again, even on the assumption that respondent Umali urged the
general membership of the complainant union to join with him in his
move to affiliate the union with the federation but [sic] such act on
the part of Rodolfo Umali cannot to our mind be considered union
disloyalty to warrant his removal from office and his expulsion from
the union. It should be noted that Litton MiIIs Employees
Association-KAPATIRAN is an independent registered labor
organization without any affiliation. So that, respondent Umali
cannot be held liable under Par. (b), Section 5, Art. IV of the union's
constitution and by-laws as he was only trying to affiliate the union
with the federation for reason, perhaps, to avail [sic] the services
and assistance of the federation and not organizing or joining
another labor union. Organizing or joining another labor union is
different from affiliation of the union. The former implies
abandonment of the union membership as what the [sic]
respondent Umali did. On this score, respondent Umali cannot be
stripped of his membership much less to remove him (sic) from the
union presidency. ...
As to the second issue, it appearing that the impeachment of
respondent Umali is adjudged to be without valid ground, the union
security clause of the existing CBA does not apply. Hence, the
prayer of the complainants to terminate the employment of Rodolfo
Umali with Litton Mills, Inc. should not be given due course.
Petitioners appealed the Med-Arbiter's order to the public
respondent, who, in a Resolution, dated 13 February 1987,
dismissed the appeal for lack of merit, and affirmed in toto the order
of the Med-Arbiter, dated 17 November 1986. Petitioner's motion
for reconsideration was denied in an order, dated 1 April 1987.
Hence, the present recourse.
The controversy, in the case at bar stems from respondent Umali's act of affiliating
the petitioner-union with GATCORD, which caused the union officers to impeach
Umali for disloyalty to the union. The impeachment is anchored on a provision in the
petitioner union's Constitution and By-Laws, which reads as follows:
Art. IV, Section 5. Membership may be lost under the following
grounds:
xxx xxx xxx
b) Organizing or joining another labor union or any federation.
xxx xxx xxx 7-a
(Emphasis supplied)
One of the grounds for losing membership in the union, as aforestated, is by joining a
federation. There is no dispute in the present case that GATCORD is a labor
federation, to which respondent Umali affiliated the petitioner-union as evidenced by
mimeographed leaflets he caused to be distributed among the union-members, urging
them to continue affiliating with GATCORD, the Pledge of Allegiance of newly-
appointed Shop Steward Norberto David, and the letter of Umali to LMI, dated 20
August 1986, the last two (2) being attested to by GATCORD's National President
Timoteo Aranjuaez and the fact that the letter dated 20 August 1986 was written on
paper with GATCORD's letterhead Also, the affiliation of the petitioner union with
GATCORD was affirmed by Umali himself, when he presented the alleged 700
signatures of union-members who supported his move of affiliating the union LMEAK
with GATCORD. Hence, it cannot be denied that Umali did not only propose the
affiliation, but in fact affiliated the petitioner union with GATCORD, in contravention of
the above-cited prohibition in Section 5, Article IV of the petitioner union's Constitution
and By-Laws.
And yet, if the act of Umali in affiliating the petitioner-union with GATCORD, is with
the consent of a majority of the union membership, then any violation of the
petitioner-union's Constitution and By-Laws becomes of little consequence. It will
appear in such case that the union itself has ratified the act of affiliation. It will be
noted that Umali, albeit belatedly, presented the signatures of 700 members of the
union, as proof of the support he had from them for the union's affiliation with
GATCORD.
On the other hand, petitioners presented 725 signatures, or 65.9% of the entire union
membership, who signed the "Sama-Samang Kapasiyahan", as proof of those who
opposed the affiliation, in addition to petitioners' allegation that out of the 700
signatures presented by Umali, 161 signatures were either forged or faked, twice or
thrice written, or signatures of already resigned employees.
This Court takes notice of the fact that in all of the pleadings submitted by respondent
Umali, lie never bothered to refute the charge of the petitioners as to the questioned
161 signatures; neither has he denied that the union members who opposed the
affiliation were more than those who supported it. Hence, this Court finds that the
affiliation of the petitioner union with GATCORD was done by Umali without the
support of the majority of the union membership.
Furthermore, the Court notes that the collective bargaining agreement of the
petitioner-union LMEAK with LMI was to expire only on 31 October 1987, whereas,
Umali affiliated the union around August 1986, or about 14 months before the
expiration of said CBA. The affiliation of the petitioner-union with GATCORD
converted the former's status from that of an independent union to that of a local of a
labor federation. Such change in status not only affects the Identity of the petitioner
union but also its powers, duties and privileges, for as a local, it will have to contend
with and consult the federation, in matters affecting the union.
The act of affiliating with a federation is a major modification in the status of the
petition union. And such act is a violation of the rule that no modification of the CBA
can be made during its existence, unless either party serves written notice to
terminate or modify the agreement at least sixty (60) days prior to its expiration
date. 8 Hence, there was a violation of the existing CBA, on the part of Umali.
As to the impeachment of a union officer, Section 2, Article XV of the
petitioner-union's Constitution and By-Laws provides the procedures to be followed,
to wit: (1) Impeachment should be initiated by petition signed by at least 30% of
all bona fide members of the union, and addressed to the Chairman of the Executive
Board; (b) A general membership meeting shall be convened by the Board Chairman
to consider the impeachment of an officer; (c) Before any impeachment vote is finally
taken, the union officer against whom impeachment charges have been filed shall be
given ample opportunity to defend himself , and (d) A majority of all the members of
the union shall be required to impeach or recall union officers.
It clearly appears that the above cited procedure was not followed by the petitioners
when they impeached Umali. To be sure, there was difficulty on the part of the
petitioners in complying with the required procedure for impeachment, considering
that the petition to impeach had to be addressed to the Chairman of the Executive
Board of the Union, and that the majority membership which would decide on the
impeachment had to be convened only upon call of the Chairman of the Executive
Board who, in the case at bar, happened to be respondent Umali himself.
Nevertheless, despite the practical difficulties in complying with the said procedure,
petitioners should have shown substantial compliance with said impeachment
procedure, by giving Umali ample opportunity to defend himself, as contrasted to an
outright impeachment, right after he failed to appear before the first and only
investigation scheduled on 27 August 1986 in the Litton Canteen.
The above conclusions notwithstanding, the Court believes that the union-members
themselves know what is best for them, i.e., whether they still want respondent Umali
as their Union President, and whether they wish to affiliate their union with
GATCORD. And, the best and most appropriate means of ascertaining the will of the
union members is through a certification election.
Consistent with the foregoing observations, it appears from from the record that a
group of employees headed by petitioner Rogelio Abong broke away from the
petitioner-union and formed a new union, called Litton Mills Workers Union, and that
in a certification election that followed, said Litton Mills Workers Union, headed by
petitioner Abong, was chosen as the collective bargaining agent. 9
Because of this supervening event, it now appears clear that the majority of the
heretofore members of petitioner-union LMEAK do not wish respondent Umali to
continue as their president; neither do they wish their union to be affiliated with the
GATCORD federation. Consequently, the issues in this petition have become moot
and academic.
The Manifestation of the petitioners, dated 9 October 1987, after informing the Court
of the election of the Litton Mills Workers union headed by petitioner Abong, as the
collective bargaining representative in LMI, reiterates the prayer that respondent
Umali be considered and declared as impeached. This issue has, to the mind of the
Court, likewise become moot and academic for it is inconceivable that Umali will be
retained as president of the new collective bargaining agent, the Litton Mills Workers
Union, while Umali's continued presidency of LMEAIC as a minority union if still
existing in LMI, has ceased to be of any moment in the instant case.
WHEREFORE, the petition is DENIED for having become moot and academic.
Without pronouncement as to costs.
MIGUEL J. VILLAOR and CECILIO V. BAUTISTA, petitioners,
vs.
HON. CRESENCIANO B. TRAJANO, in his capacity as Director, Bureau of Labor
Relations of the Ministry of Labor and Employment; OCTAVIO A. PINEDA,
RAFAEL SAMSON, EDUARDO C. FLORA, MARIO S. SANTOS and CARLOS
BANDALAN, respondents.
PARAS, J.:
This is a petition to review on certiorari the November 14, 1984 decision of
respondent BLR Director Cresenciano B. Trajano in BLR Case No. A-182-84,
entitled "Miguel J. Villaor, et al., Petitioners vs. Octavio Pineda, et al., Respondents,
and Mario S. Santos, et al., Intervenors," setting aside the Med-Arbiters Orders of
June 27, 1984 and August 1, 1984.
The Philippine Air Lines Employees' Association (PALEA) is the bargaining agent of
the workers in the Philippine Air Lines (PAL). The union has a Board of Directors
composed of the president, vice-president, secretary, treasurer and 17 directors
elected for a term of three (3) years by members in "good standing" on the last
Thursday of February of the election year. It has also a Commission on Election
(COMELEC) whose members sit for a term of three (3) years. At present, the
COMELEC is composed of herein respondents Octavio Pineda, as chairman, and
Rafael Samson and Edwardo Flora, as members. The then incumbent president and
vice-president were herein respondents Mario S. Santos and Carlos Bandalan,
respectively,
On February 17-23, 1984, in Metro Manila and on February 20, 1984 in Cebu/Mactan
area, PALEA held its election for National Officers. Herein petitioner Miguel J. Villaor
won the election over respondent Mario S. Santos for the presidency, Villaor
obtaining 1,954 votes to Santos' 1,809 votes, or a difference of 145 votes. Likewise,
herein petitioner Cecilio V. Bautista won against Carlos V. Bandalan for the position
of vice-president, Bautista garnering 1,264 votes as against Bandalan's 1,220 votes,
or a difference of 44 votes, They were proclaimed on February 25, 1984.
Subsequently, the defeated candidates-respondent Mario S. Santos, for president;
respondent Carlos V. Bandalan, for vice-president; and Antonio Josue, for secretary,
filed their election protests with the PALEA COMELEC within the 30 day reglementary
period, as provided under the Constitution and By-Laws of the Association, on the
grounds that (1) a number of votes in precincts 1, 4 and 4-A were segregated and not
counted; and (2) a substantial number of PALEA members in Cebu/Mactan area were
not able to vote on February 20, 1984 by reason of the voting days having been
reduced from two (February 20-21, 1984) to just one day (February 20, 1984).
Respondent Mario S. Santos filed his protest on March 12, 1984; respondent Carlos
Bandalan filed his protest on February 27, 1984; and Antonio Josue on March 14,
1984, before PALEA COMELEC composed of the herein other respondents.
Meanwhile, on March 6, 1984, respondent Mario S. Santos sent petitioner Miguel J.
Villaor a letter, the body of which reads—
We formally turnover to you PALEA's CBA proposals in the ongoing
PAL-PALEA CBA negotiations. Other pertinent records are either
accompanying these proposals or on file with the office.
Other PALEA properties, including the President's car and another
vehicle, shall also be turned over to you at the appropriate time.
On the CBA negotiation, we would like to inform you that we are
filing a manifestation with the Director-Bureau of Labor Relations in
order to withdraw PALEA's declaration of deadlock. This will give
you and the other officers-elect a free hand to continue with the
PAL-PALEA CBA negotiation.
As we have the common objective of protecting and promoting the
interests of our members, we wish you all the luck and best of
everything for our members and our union.
On April 17, 1984, petitioners filed their joint Comment/Answer to the election protests
cases, and two (2) basic issues were joined, to wit:
1. Whether or not the more than 40 to 47 ballots cast by alleged
qualified PALEA members in Precincts 1, 4 and 4-A which were
segregated and invalidated actually resulted in the
disenfranchisement of said PALEA voters; and
2. Whether or not the qualified PALEA voters in the Cebu/Mactan
areas were deprived of their right to vote as a result of the sudden
change from the two day traditional election days in previous years
to just one day.
On the basis of the election protests and the Comment/Answer thereto, respondent
PALEA COMELEC members, in a letter dated April 25, 1984, informed the parties
that the ballot boxes in the questioned precincts would be opened and their voters list
retrieved on April 25, 1984 at 10:00 in the morning.
On April 24, 1984, herein petitioners Miguel J. Villaor and Cecilio V. Bautista, and
Ernesto P. Galang filed a complaint/petition with the Regional Office of the Ministry of
Labor and Employment (MOLE) against the PALEA COMELEC members, seeking
their disqualification from their positions as such on the ground of alleged partiality for
the protestants. The Regional Office summoned the parties to appear before Med-
Arbiter Renato D. Parungao "on the 25th of April at 9:30 a. m."
On April 25, 1984, herein petitioners Miguel J. Villaor and Cecilio V. Bautista, and
respondent PALEA COMELEC member Edwardo C. Flora appeared before the Med-
Arbiter who issued an Order "enjoining the respondents from opening the ballot boxes
subject of the controversy." On the same day, at 10:30 a.m., respondents Octavio
Pineda and Rafael Samson proceeded to open the ballot boxes.
On April 27, 1984, respondents, sitting en banc, resolved the election protests, the
dispositive portion of which reads-
WHEREFORE, AND IN VIEW OF ALL THE FOREGOING, THE
PALEA COMELEC HEREBY RESOLVES, AS IT HEREBY
RESOLVED-
1. To set aside the proclamation dated February 25, 1984 of Miguel
J. Villaor as PALEA President, Cecilio V. Bautista as Vice-President
and Ernesto P. Galang as Secretary;
2. To count the segregated votes of qualified PALEA members, as
verified, in Precincts 1, 4 and 4-A. The counting shall be held on
May 4, 1984 at 1300 H at the PALEA COMELEC Office;
3. To hold a special election on May 4, 1984 from 0500 H to 1700
H, in Cebu/Mactan to allow PALEA members, not able to vote on
February 20, 1984, to cast their votes for the positions of President,
Vice-President and Secretary; and
4. To proclaim the winning candidates for PALEA President Vice-
President and Secretary immediately after the election, counting
and canvassing of votes as hereinabove indicated.
SO RESOLVED.
On May 3, 1984, petitioners filed a motion with the Med-Arbiter to cite COMELEC
members for contempt, to suspend them from office, and to annul their Resolution of
April 27, 1984 "for being issued without jurisdiction." On the same day, a notice was
issued directing the parties and the petitioners' counsel to appear for hearing at 1:30
p.m. on May 3 and 4, 1984, On the May 3, 1984 scheduled hearing, none of the
parties appeared, and on the May 4, 1984 scheduled hearing, only the petitioners'
counsel appeared.
In conformity with the Resolution of April 27, 1984, respondents PALEA COMELEC
members counted the segregated ballots in precincts 1, 4 and 4-A on May 4, 1984
and likewise held on said date a special election in Cebu/Mactan area. As a result of
the election of May 4, 1984, Mario S. Santos, Carlos V. Bandalan and Ernesto
Galang, were proclaimed on May 5, 1984 as the duly elected President, Vice-
President and Secretary respectively by PALEA COMELEC.
On May 8, 1984, Petitioner Miguel J. Villaor filed a motion to annul the May 4, 1984
election and the proclamation of the winners contending that these were "premature"
as no action had yet been taken on the motion to declare the April 27, 1984
Resolution void.
On May 31, 1984, the respondents filed their omnibus answer to the petition and the
subsequent motions filed by the petitioners.
On the same date, May 31, 1984, herein respondents Mario S. Santos and Carlos V.
Bandalan filed their Notice To Admit Intervention (Record, p. 128) in the case filed by
Villaor, et al. against the PALEA COMELEC members. The intervention was allowed
when therein petitioners withdrew their opposition thereto. The intervenors likewise
manifested that they were adopting the position paper filed by the respondents
therein as their own.
On June 5, 1984, petitioners filed a motion for injunction alleging that Mario S. Santos
and "his cohorts" had inveigled the Board of Directors to adopt a resolution including
Santos in the union panel and that as a result thereof, the PAL refused to continue
negotiating with the union.
On June 8, 1984, herein respondents Mario S. Santos and Carlos V. Bandalan filed
their answer in intervention alleging that they were duly proclaimed officers of the
union and the ones recognized by the Board of Directors.
On the same day, June 8, 1984, the Med-Arbiter issued a temporary restraining order
"enjoining the respondents and the intervenors to cease and desist from acting as
PALEA President, Vice-President and Secretary in order to maintain the status quo
prevailing prior to the filing of the instant petition." The Med-Arbiter furthermore
directed them to show cause why injunction should not be granted in favor of the
petitioners. The intervenors filed an opposition on June 19, 1984.
On June 27, 1984, the Med-Arbiter issued a writ of preliminary injunction (Ibid., pp.
116-117) "enjoining both the respondents and intervenors to cease and desist from
further committing the acts complained of until the intra-union conflict and all its
attendant incidents are finally resolved." Moreover, the Med-Arbiter declared that
"Miguel J. Villaor remains as President of the Philippine Airlines Employees'
Association (PALEA) unless ordered otherwise."
The Med-Arbiter, after hearing, issued an Order dated August 1, 1984, (Ibid, pp. 119-
127) the dispositive portion of which reads-
WHEREFORE, premises considered the petition is hereby granted
and let an order issue, as it is hereby issued:
a) Declaring respondents Octavio Pineda, Rafael Samson and
Edwardo Flora as disqualified from their office as chairman and
members, respectively, of the PALEA Commission on Elections
and ordering them to desist from further performing their functions
as Comelec officers;
b) Declaring as null and void Resolution dated 27 April 1984,
promulgated ex-parte in complete violation of Sec. 6, Article XIX of
the PALEA Constitution and By-laws;
 c) Declaring the special election conducted by the respondents
(PALEA Comelec) on 4 May 1984 as invalid and that the results
thereof, proclaiming Mario S. Santos, Carlos V. Bandalan, as
President and Vice-President, respectively, as likewise declared
null and void;
d) The writ of preliminary injunction dated 27 June 1984, enjoining
intervenors Mario S. Santos and Carlos V. Bandalan as President
and Vice- President, of PALEA, but, also from interfering with the
on-going CBA negotiations between the PAL Management and
PALEA and also from interfering in any manner with the operation
of the activities of PALEA, shall continue to remain binding and
effective until this intra-union conflict and its attendant aspects are
finally resolved and terminated, in which case the said injunctive
writ shall likewise be dissolved.
Therein respondent PALEA COMELEC members and intervenors Mario S. Santos
and Carlos V. Bandalan appealed the said Order of the Med-Arbiter to the Bureau of
Labor Relations (BLR).
BLR Director Cresenciano B. Trajano, in a decision dated November 14, 1984,
(Ibid., pp. 33-42) set aside the Med-Arbiter's Orders of June 27, 1984 and August 1,
1984, and at the same time dismissed the petition of Miguel J. Villaor and Cecilio V.
Bautista for lack of merit. Hence, the instant petition (Ibid., pp. 56-115).
The First Division of this Court, in a Resolution dated January 16, 1985, resolved
without giving due course to the petition to require the respondents to comment within
ten (10) days from notice thereof (Ibid., p. 203).
In compliance with the said Resolution, private respondents filed their comment
(Ibid., pp. 237-247) on March 18, 1985.
On March 28, 1985, petitioners filed their "Reply" to the comment filed by the private
respondents.
On March 29, 1985, the Solicitor General filed his comment. In the same, the Solicitor
General concluded that it is his opinion that respondent BLR Director committed
reversible error in setting aside the Med-Arbiter's Orders, and recommended that the
instant petition be given due course.
Petitioners, in compliance with the Resolution of the First Division of this Court dated
April 22, 1985 (Ibid., p. 273) filed on May 17, 1985 their "Reply" to the "Comment"
filed by the Solicitor General.
Public respondent, in compliance with the June 16, 1985 Resolution of the First
Division of this Court, filed his comment (Ibid., pp. 327-374) on August 8, 1985.
The First Division of this Court, in a Resolution dated August 26,1985 (lbid., p. 374-a)
resolved (a) to give due course to the petition; and (b) to require the parties to submit
simultaneous memoranda within thirty (30) days from notice.
Petitioners filed their memorandum (Ibid., pp. 391-435) on October 28, 1985; Private
respondents filed their memorandum (Ibid., pp. 438-464) on November 5, 1985; and
public respondent, in a "Motion" dated November 19,1985 (Ibid., pp. 462-464),
respectfully moved that the comment he has filed be treated and considered as
memorandum, Said motion was granted by the First Division of this Court in its
Resolution of January 13,1986 (Ibid., p. 476).
The sole issue in this case is —
Whether or not the decision of public respondent Bureau of Labor
Relations Director issued on November 14, 1984 was promulgated
with grave abuse of discretion amounting to lack of jurisdiction.
In his Decision of November 14, 1984 (p. 7, Ibid., p. 39), Public respondent BLR
Director Cresenciano B. Trajano, in reversing Med-Arbiter Renato D. Parungos ruling
disqualifying therein respondents as members of the PALEA COMELEC stressed that
the Philippine Constitution assures the right of workers to self-organization and this
right implies the freedom of unions from interference by employers and the
government; that it includes the right of unions to elect their officers in full freedom
and guarantee that the government refrains from any interference which would restrict
this right or impede its lawful exercise; and that "It shall be unlawful for any person,"
Article 247 of the Labor Code states, "to unduly interfere with employees and workers
in their exercise of the right to self-organization." With the foregoing as his premise,
he opined that the right of self-organization is impaired when the government
dissolves a union COMELEC and proceeds to resolve an election protest pending
before it.
In this connection, attention is invited to Article 226 of the Labor Code, which reads-
ART. 226. Bureau of Labor Standards.-The Bureau of labor
Relations and the Labor Code relations divisions of the regional
offices of the Department of Labor (now the Ministry of Labor and
Employment) shall have original and exclusive authority to act, at
their own initiative or upon request of either or both parties, on all
inter-union and intra-union conflicts and all disputes arising from or
affecting labor-management relations in all workplaces whether
agricultural or non-agricultural, except those arising from the
implementation of collective bargaining agreements which shall be
the subject of grievance procedure and/or voluntary arbitration.
as supplemented by Policy Instruction No. 6-relating to the distribution of jurisdiction
over labor cases-
xxx xxx xxx
 3. The following cases are under the exclusive original jurisdiction
of the Med-Arbiter Section of the Regional Office:
xxx xxx xxx
b) Intra-union cases.
From the aforequoted provisions, it is safe to conclude that the freedom of the unions
from interference from the government presupposes that there is no inter-union or
intra-union conflict. In the instant case, there is no question that there is an intra-union
conflict.
Public respondent further opined that the COMELEC should have been allowed to
discharge its functions without prejudice to the right of petitioners to apply for relief
from the Board of Directors, He averred that under the union constitution, the Board
has the power to remove or discipline, by three-fourths' votes, any union officer
including the president himself or the members of the COMELEC, and accordingly
concluded that only after the remedy failed could the petitioners be allowed to bring
their case to the Med-Arbiter. In short, the petitioners should first exhaust
administrative remedies before bringing their case to the Med-Arbiter.
Anent this opinion of public respondent, petitioners averred that pursuant to Section 4
of Article VII of the PALEA Constitution and By-Laws, which reads:
Section 4-As a fact-finding body, the Chairman and members of the
Board of Inquiry (created by the President) shall have the sole
power to conduct investigation on involving an act specified under
Article 18, Section of this Constitution committed by any officer,
member of the board or members of the Association and submit
thereto reports and recommendations based on their findings to the
Board of Directors who shall have the sole power to render
decisions and impose penalty to whoever is guilty.
The Board of Inquiry, created by the President, has the sole power to investigate
cases involving acts committed by any officer, member of the Board or member of the
Association that the power of the Board to remove or discipline any union officer,
including the President himself or the COMELEC members cannot be exercised until
the Board of Inquiry submits its report and recommendation based on their findings
on the acts complained of after due investigation. With this as a premise, petitioners
claim that in their Reply and Opposition dated September 14, 1984, in connection
with the three (3) consolidated cases before Med-Arbiter Napoleon V. Fernando, Nos.
NLR-LRD-M-6-185-184, NLR-LRD-M6-156-84 and NLR-LRD-N-6-204-84, they called
attention to the fact that they have exhausted administrative remedies provided in the
PALEA Charter-On May 17, 1984, PALEA President Miguel J. Villaor created the
Special Board of Inquiry and appointed Rey Taggueg, as chairman, Ildefonso Medina
and Rodolfo de Guzman, as members, however, the Board refused to approve the
newly created Special Board of Inquiry for fear that they themselves may be the first
to be subjected to investigation for the acts complained of in Case No. NCR-LRD M-
6-156-84. This claim of petitioners was never denied by the private respondents.
Accordingly, there is no question that the Med-Arbiter rightly exercised jurisdiction
over the case.
Section 6 of Article XIX of the PALEA Constitution provides:
Sec. 6. In cases where a situation arises, whereby the losing
candidate does not concede to the result of the election he may, if
he so desires, submit in writing, his protest to the Commission on
Election within 30 days after the proclamation of the winning
candidates and the Commission on Election, sitting en banc, shall
hear and decide such protest. ...
From the aforequoted provision, as opined by the Solicitor General, "once a candidate
concedes the election, he is precluded from filing a protest." Private respondent Mario
S. Santos, prior to filing his election protest, in his letter of March 6, 1984 to herein
petitioner Miguel J. Villaor, had already unequivocably conceded the position of
president to the latter.
Likewise, from the aforequoted provision, it is mandatory for the PALEA COMELEC to
set the election protest for appropriate hearing on the issues raised before it could
finally resolve the case. In the instant case, it is undisputed that the PALEA
COMELEC, without conducting any formal hearing on the issues raised, on the basis
of the pleadings of the parties, informed the parties in a letter dated April 23, 1984
that the ballot boxes in the questioned precincts would be opened and their voters' list
retrieved on April 25, 1984 at 10:00 in the morning. Likewise, on April 27, 1984, the
PALEA COMELEC, without the benefit of formal hearing, resolved the election protest
by setting aside the proclamation dated February 25, 1984 of Miguel J. Villaor as
PALEA President, Cecilio V. Bautista as Vice-President, and Ernesto P. Galang as
Secretary; directing the canvassing of the segregated ballots in precincts 1, 4, and 4-
A; and directing the holding of a special election in Cebu and Mactan on May 4, 1984.
Besides, it appears that respondents Octavio Pineda and Rafael Samson intentionally
disregarded the summons of Med-Arbiter Renato D. Parungo to appear before him at
9:00 a.m. on April 25, 1984 so that they can carry out their plan to open the ballot
boxes. Please note that the herein petitioners alleged that Med-Arbiter Parungo
issued a restraining order enjoining the respondents, as PALEA COMELEC
members, to refrain from proceeding with their plan to open the ballot boxes. Said
restraining order was personally served on respondent Edwardo Flora who
immediately called the PALEA office and after respondent Octavio Pineda was on the
phone, Flora informed him, in the presence of Med-Arbiter Parungo, about the
restraining order served upon them. Notwithstanding said information, respondents
Pineda and Samson went ahead and opened the ballot boxes as planned. This
allegation of petitioners was never denied by the respondents. Respondent PALEA
COMELEC members, likewise disregarded Med-Arbiter Renato D. Parungos notice
for them to appear for hearing at 1:30 p.m. on May 3 and 4, 1984.
The May 4, 1984 special election in Cebu and Mactan is without factual and legal
justification As aptly observed by the Solicitor General, the same was resorted to only
to accommodate the herein other private respondents-
 There is absolutely no justification for calling the said May 4, 1984
election. There is no law which allows "piece meal" elections.
Obviously, such move was resorted to by the PALEA Comelec to
accommodate defeated candidates for president and vice-president
in the February 20, 1984 election, Mario and Carlos Bandalan
(respondent herein), and enable them to overcome the winning
margin of winning candidates therein, Villaor and Bautista (herein
petitioners), who won by only 145 and 44 votes, respectively,

It is the contention of the protestants that a great number of PALEA members were
deprived of their right to vote because it had been the tradition since 1969 to hold
election in Cebu and Mactan for two days; and that the holding of elections for only
one day was done without notice to all PALEA members in said station. On the other
hand, it is the contention of the petitioners that the change was agreed upon by all the
candidates concerned in a conference held at SMCD Office, Nichols Field, on
February 20, 1982. On said controversy, while public respondent found for the
protestants, the Solicitor General is for the petitioners. Be that as it may, it is a fact
that the PALEA COMELEC issued on February 15, 1984 a bulletin announcing that
the elections in that area would be only on February 20, 1984. Hence, it cannot be
said that the voters therein were not duly notified. In addition to this, worth mentioning
is the comment of the Solicitor General, which reads:

... Besides, we do not see how these 103 members could have
failed to know about the one-day election. It was held within the
office premises, and, surely, they must have been told of such fact
by the other members who voted in the election. It would appear
that these 193 members simply did not bother to vote for one
reason or another. And we do not see the necessity of holding a
two-day election in said areas with only 500 members, and hold a
one day election in Metro Manila area which has about 4,000
members. That it is the tradition to hold a two-day election in said
areas is not a valid argument. Tradition can always be overturned,
as what happened in the instant case.

The holding of the May 4, 1984 special election, when its legality is still pending
determination by the Med-Arbiter, therefore, further shows the partiality of the
respondent PALEA COMELEC members.

WHEREFORE, the assailed decision of respondent BLR Director is hereby SET

ASIDE and the Orders of June 27, 1984 and August 1, 1984 of Med-Arbiter Renato
D. Parungo are hereby REVIVED.
PEPSI-COLA SALES AND ADVERTISING UNION, petitioner,
vs.
HON. SECRETARY OF LABOR and ROBERTO ALISASIS, respondents.
NARVASA, C.J.:
In its Decision in G.R. No. 80587 (Wenphil Corporation v. NLRC), promulgated on
February 8, 1989, 1 this Court 2 laid down the doctrine governing an illegal dismissal
case where the employee satisfactorily establishes that his employment was
terminated without due process — i.e., without written notice to him of the charges
against him and without according him opportunity to defend himself personally or
through a representative — but the employer nevertheless proves the existence of
just cause for the employee's dismissal. The controlling principle in such a case is
that since the employee's dismissal was for just cause, he is entitled neither to
reinstatement or back wages nor separation pay or salaries for the unexpired portion
of his contract, being entitled only to the salaries earned up to the last day of
employment; at the same time, however, as a general proposition, the employer is
obliged, on account of its failure to comply with the requirements of due process in
terminating the services of the employee, to pay damages to the latter fixed at
P1,000.00, a sum deemed adequate for the purpose.
This doctrine, which has since been reaffirmed by this Court, 3 applies in the case at
bar, in resolution of the issue of whether or not the private respondent, Roberto
Alisasis, may be considered to have been dismissed for just cause within the
meaning of the charter papers organizing and governing a mutual aid program of
which he was a participant.
From 1964 until sometime about 1985, Alisasis was an employee of the Pepsi-Cola
Bottling Co., Inc. and later, of the Pepsi-Cola Products (Philippines) Inc., after the
latter had bought out the former. 4 He was also a member of the labor organization of
all regular route and truck salesmen and truck helpers of the company — the Pepsi
Cola Sales & Advertising Union (PSAU) — from June 1, 1965 up to the termination of
his employment in 1985. 5 As a member of the PSAU, he was also a participant in the
"Mutual Aid Plan" set up by said union sometime in 1980. During the entire period of
his employment, there were regularly deducted from his wages the amounts
corresponding to union dues as well as contributions to the fund of the Mutual Aid
Plan. 6
On May 7, 1986, Alisasis filed with the NLRC Arbitration Branch, Capital Region,
Manila, a complaint for illegal dismissal against Pepsi-Cola, Inc. 7 This resulted in a
judgment by the Labor Arbiter dated January 25, 1988 declaring him to have been
illegally dismissed and ordering the employer to reinstate him "to his former position
without loss of seniority rights and with full backwages for one (1) year from the time
he was not allowed to report for
work . . ." 8 The judgment was subsequently affirmed with modification. by the Fourth
Division of the NLRC dated December 29, 1989, 9 disposing of the appeal as
follows: 10
In view therefore of the foregoing considerations, the decision
appealed from is hereby modified in the sense that the order for
respondent to reinstate complainant is hereby set aside. The rest of
the decision shall stand.
The deletion of the relief of reinstatement was justified by the NLRC in the following
manner: 11
Certainly, with the actuations of complainant, respondent had
ample reason or enough basis then to lose trust and confidence in
him. Complainant, being a salesman, should be considered to have
occupied a position of responsibility so that, if respondent had lost
trust and confidence in him, the former could validly and legally
terminate the services of the latter (Lamaan Trading, Inc. vs.
Leodegario, Jr., G.R. 73245, September 30, 1986).
However, although there was valid and lawful cause in the
dismissal of complainant by respondent, the manner in which it was
effected was not in accordance with law. Complainant was not
given written notice by respondent but was only verbally advised,
thru its Field Sales Manager, sometime in May 1985 that he should
not report for work anymore, obviously, because there was a
charge against him. And this is what makes the dismissal of
complainant arbitrary and illegal for failure to comply with the notice
requirement under Batas Pambansa Blg. 130 on termination of
employees.
Ordinarily, when the dismissal of an employee is declared
unjustified or illegal, he is entitled to reinstatement and backwages
(Art. 279 of the Labor Code). However, in the instant
case, considering that respondent had already lost trust and
confidence in complainant which is founded on a reasonable
ground, as discussed earlier, there is no point in requiring
respondent to reinstate complainant to his former position. To do so
would be tantamount to compelling the management to employ
someone whom it can no longer trust, which is oppressive.
It appears that both Alisasis and Pepsi-Cola, Inc. accepted the NLRC's verdict and
complied therewith; that Pepsi-Cola gave Alisasis back wages for one (1) year; and
that, Alisasis issued the corresponding quitclaim and considered himself separated
from his employment.
Alisasis thereafter asked his labor organization, PSAU, to pay
him monetary benefits in accordance with Section 3, Article X of the "Amended By-
Laws of the Mutual Aid Plan of the Pepsi-Cola Sales & Advertising Union
(U.O.E.F.), 12 in an amount equal to "One (P1.00) Peso per year of service multiplied
by the number of member(s) . . ." 13 PSAU demurred, invoking in its turn Section 1,
Article XII of the same amended by-laws, declaring as disqualified from any
entitlement to the PLAN and . . (from any) Benefit or return of contributions . . under
any circumstances," inter alia, "(a)ny member dismissed for cause." 14
Alisasis thereupon filed a complaint against the union, PSAU, with the Med Arbitration
Unit, National Capital Region, Department of Labor and Employment, to compel the
latter to pay him his claimed benefits. 15 The principal defenses alleged by PSAU
were that Alisasis was disqualified to claim any benefits under the Mutual Aid
Plan, supra; and that the Med-Arbiter had no original jurisdiction over the case since
Alisasis' claim for financial assistance was not among the cases cognizable by Med-
Arbiters under the law "such as representation cases, internal union and inter-union
disputes . . (or) a violation of the union's constitution and by-laws and the rights and
conditions of membership in a labor organization." 16 After due proceedings, the Med-
Arbiter promulgated an Order on April 16, 1990, ruling that he had jurisdiction and
"ordering respondent . . (PSAU) to pay complainant Roberto Alisasis . . his claim for
financial assistance under the Mutual Aid Fund of the union." PSAU appealed to the
Secretary of Labor and Employment who, by Resolution dated July 25, 1990, denied
the appeal but reduced the Med-Arbiter's award from P18,669.00 to
P17,886.00. 17Nullification of the Med-Arbiter's Order of April 16, 1990 and the
respondent Secretary's Resolution of July 25, 1990 is the prayer sought by the
petitioner in the special civil action of certiorari at bar.
Resolving first the issue of whether or not the case at bar is within the original
jurisdiction of the Med-Arbiter of the Bureau of Labor Relations, the Court holds that it
is.
The jurisdiction of the Bureau of Labor Relations and its Divisions is set forth in the
first paragraph of Article 226 of the Labor Code, as amended, viz.:
Art. 226. Bureau of Labor Relations. — The Bureau of Labor
Relations and the Labor Relations Divisions in the regional offices
of the Department of Labor shall have original and exclusive
authority to act, at their own initiative or upon request of either or
both parties, on all inter-union and intra-union conflicts, and all
disputes, grievances or problems arising from or affecting labor
management relations in all workplaces whether agricultural or non-
agricultural, except those arising from the implementation or
interpretation of collective bargaining agreements which shall be
the subject of grievance procedure and/or voluntary arbitration.
xxx xxx xxx
It is evident that the case at bar does not concern a dispute, grievance or problem
"arising from or affecting labor-management relations." So, if it is to be deemed as
coming within the Med-Arbiter's jurisdiction, it will have to be as either an "intra-union"
or "inter-union" conflict.
No definition is given by law of these precise terms, "intra-union and inter-union
conflicts." It is known, however, that "intra-" and "inter-" are both combining forms,
prefixes — the first, "intra-," meaning "within, inside of [intramural, intravenous];" and
the other, "inter-, denoting "1. between or among: the second element is singular in
form [interstate] 2. with or on each other (or one another), together, mutual,
reciprocal, mutually, or reciprocally [interact]." 18 An intra-union conflict would
therefore refer to a conflict within or inside a labor union conflict would therefore refer
to a conflict within or inside a labor union, and an inter-union controversy or dispute,
one occurring or carried on between or among unions. In this sense, the controversy
between Alisasis and his union, PSAU — respecting the former's rights under the
latter's "Mutual Aid Plan" — would be an intra-union conflict under Article 226 of the
Labor Code and hence, within the exclusive, original jurisdiction of the Med-Arbiter of
the Bureau of Labor Relations whose decision, it may additionally be mentioned, is
appealable to the Secretary of Labor.
Certainly, said controversy is not one of those within the jurisdiction of the Labor
Arbiters in accordance with Article 217 of the Code, it not being an unfair labor
practice case, or a termination dispute, or one involving wages, rates of pay, hours of
work and other terms and conditions of employment (which is "accompanied with a
claim for reinstatement"), or one for damages arising from the employer-employee
relations, or one for a violation of Article 264 of the Code, or any other claim arising
from employer-employee relations, or from the interpretation or implementation of a
collective bargaining agreement or of company personnel policies.
The second issue relates to the character of Alisasis' dismissal from employment. The
Court holds that Alisasis had indeed been "dismissed for cause." His employer had
established this factual proposition by competent evidence to the satisfaction of both
the Labor Arbiter and the National Labor Relations Commission. In the Latter's view,
and in its own words, "Certainly, with the actuations of complainant, . . (Alisasis'
employer) had ample reason or enough basis to lose trust and confidence in him . . .
considering that (said employer) had already lost trust and confidence in complainant
which is founded on a reasonable ground, as discussed earlier, (and therefore) there
is no point in requiring respondent to reinstate complainant to his former position . .
(as to) do so would be tantamount to compelling the management to employ
someone whom it can no longer trust, which is oppressive."
It was merely "the manner in which such a dismissal from employment was effected .
. (that was deemed as) not in accordance with law, (there having been) failure to
comply with the notice requirement under Batas Pambansa Blg. 130 on termination of
employees." That imperfection is, however, a circumstance quite distinct from the
existence of what the NLRC has clearly and expressly conceded to be a "valid and
lawful cause in the dismissal of complainant by respondent." And this is precisely the
reason why, as already pointed out, the NLRC declined to accord to Alisasis all the
remedies or reliefs usually attendant upon an illegal termination of employment —
e.g., reinstatement, award of damages — although requiring payment by the
employer of the sum of P1,000.00 simply on account of its failure "to comply with the
notice requirement under Batas Pambansa Blg. 130 on termination of employees."
The situation is on all fours with that in the Wenphil Corporation Case, 19 cited in this
opinion's opening paragraph, in which the following pronouncements, among others,
were made:
Thus in the present case, where the private respondent, who
appears to be of violent temper, caused trouble during office hours
and even defied his superiors as they tried to pacify him, should not
be rewarded with re-employment and back wages. It may
encourage him to do even worse and will render a mockery of the
rules of discipline that employees are required to observe. Under
 the circumstances the dismissal of the private respondent for just
cause should be maintained. He has no right to return to his former
employer.

However, the petitioner (employer) must nevertheless be held to

account for failure to extend to private respondent his right to an
investigation before causing his dismissal. . . Thus, it must be
imposed a sanction for its failure to give a formal notice and
conduct an investigation as required by law before dismissing . .
(respondent) from employment. Considering the circumstances of
this case petitioner (employer) must indemnify the private
respondent (employee) the amount of P1,000.00. The measure of
this award depends on the facts of each case and the gravity of the
omission committed by the employer.

The petitioner union (PSAU) was therefore quite justified in considering Alisasis as a
"member dismissed for cause," and hence disqualified under its amended by-laws to
claim any "Benefit or return of contributions . . under any circumstances, . . ." The
ruling to the contrary of the Med-Arbiter and the Secretary of Labor and Employment
must thus be set aside as tainted with grave abuse of discretion.

WHEREFORE, the petition is granted and the writ of certiorari prayed for issued,
NULLIFYING and SETTING ASIDE the challenged Order of the Med-Arbiter dated
April 16, 1990 and the Resolution of the respondent Secretary of Labor and
Employment dated July 25, 1990, and DIRECTING THE DISMISSAL of Alisasis'
complaint in NLRC Case No. NCR-Od-M-90-01-037, without pronouncement as to
costs.
PHILIPPINE TELEGRAPH AND TELEPHONE CORPORATION, petitioner,
vs.
HON. BIENVENIDO E. LAGUESMA and PT & T SUPERVISORY EMPLOYEES
UNION-APSOTEU, respondents.
Leonard U. Sawal for private respondent.
BELLOSILLO, J.:
Can a petition for certification election filed by supervisory employees of an
unorganized establishment — one without a certified bargaining agent — be
dismissed on the ground that these employees are actually performing managerial
functions?
This is the issue for reconsideration in this petition for certiorari and mandamus, with
prayer for the issuance of a temporary restraining order, of
the Resolution of 11 June 19911 of then Acting Secretary of Labor and Employment
Nieves D. Confesor dismissing the appeal from the Order of 11 December 1990 2 of
the Med-Arbiter which granted the petition for certification election, and of the Order
of 15 August 19913 denying reconsideration.
On 22 October 1990, private respondent PT&T Supervisory Employees Union-
APSOTEU (UNION, for brevity) filed a petition before the Industrial Relations
Decision of the Department of Labor and Employment praying for the holding of a
certification election among the supervisory employees of petitioner Philippine
Telegraph & Telephone Corporation (PT&T, for brevity). On 29 October 1990, UNION
amended its petition to include the allegation that PT&T was an unorganized
establishment employing roughly 100 supervisory employees from whose ranks will
constitute the bargaining unit sought to be established.
On 22 November 1990, PT&T moved to dismiss the petition for certification election
on the ground that UNION members were performing managerial functions and thus
were not merely supervisory employees. Moreover, PT&T alleged that a certified
bargaining unit already existed among its rank-and-file employees which barred the
filing of the petition.
On 27 November 1990, respondent UNION opposed the motion to dismiss,
contending that under the Labor Code supervisory employees are not eligible to join
the Labor organization of the rank-and-file employees although they may form their
own.
On 4 December 1990, PT&T filed its reply to the opposition and manifested that it is
the function of an employee which is determinative of whether said employee is a
managerial or supervisory employee.
On 11 December 1990, the Med-Arbiter granted the petition and ordered that "a
certification election . . . (be) conducted among the supervisory personnel of the
Philippine Telegraph & Telephone Corporation (PT&T)." 4Petitioner PT&T appealed to
the Secretary of Labor and Employment.
On 24 May 1991, PT&T filed its supplemental appeal and attached copies of the job
descriptions and employment service records of these supervisory employees,
including samples of memoranda and notices they made which purportedly illustrate
their excercise of management prerogatives. On 31 May 1991, petitioner submitted
more job descriptions to further bolster its contention.
On 11 June 1991, the Acting Secretary of Labor and Employment Nieves R. Confesor
denied petitioner's appeal for lack of merit. However, she did not rule on the additional
evidence presented by PT&T. Instead, she directed that the evidence "should be
scrutinized and . . . considered during the exclusion-inclusion proceedings where the
employees who should be part of the bargaining unit . . . will be determined."5
On 15 August 1991, respondent Undersecretary of Labor and Employment
Bienvenido E. Laguesma denied reconsideration of the resolution dismissing the
appeal. Hence, the instant petition anchored on the ground that public respondent
committed grave abuse of discretion in failing to rule on the additional evidence
submitted by petitioner which would have buttressed its contention that there were no
supervisory employees in its employ and which, as a consequence, would have
barred the holding of a certification election.
The petition is devoid of merit.
The applicable provision of law in the case at bar is Art. 257 of the Labor Code. It
reads —
Art. 257. Petitions in unorganized establishments. — In any
establishment where there is no certified bargaining agent, a
certification election shall automatically be conducted by the Med-
Arbiter upon the filing of a petition by a legitimate labor organization
(emphasis supplied).
The supervisory employees of PT&T did not yet have a certified bargaining agent to
represent them at the time the UNION, which is legitimate labor organization duly
registered with the Department of Labor and Employment, 6 filed the petition for
certification election. Since no certified bargaining agent represented the supervisory
employees, PT&T may be deemed an unorganized establishment within the purview
of Art. 257 of the Labor Code.
The fact that petitioner's rank-and-file employees were already represented by a
certified bargaining agent doe not make PT&T an organized establishment vis-a-
vis the supervisory employees. After all, supervisory employees are "not . . . eligible
for membership in a labor organization of the rank-and-file employees."7
Consequently, the Med-Arbiter, as sustained by public respondent, committed no
grave abuse of discretion in granting the petition for certification election among the
supervisory employee of petitioner PT&T because Art. 257 of the Labor Code
provides that said election should be automatically conducted upon filing of the
petition. In fact, Sec. 6 of Rule V, Book V, of the Implementing Rules and Regulations
makes it mandatory for the Med-Arbiter to order the holding of a certification election.
It reads —
prerogatives for or against rank-and-file employees is not absolute
but merely recommendatory in character. Note that their reports
recommending or imposing disciplinary action against rank-and-file
employees always bore the concurrence of one or two superiors . .
. and the job descriptions . . . clearly stated that these supervisors
directly reported to a superior and were accountable to the
latter 12 (emphasis supplied).

Sec. 6. Procedure. — Upon receipt of a petition, the Regional
Director shall assign the case to a Med-Arbiter for appropriate
action. The Med-Arbiter, upon receipt of the assigned petition, shall
have twenty (20) working days from submission of the case for
resolution within which to dismiss or grant the petition.
In a petition filed by a legitimate organization involving an
unorganized establishment, the Med-Arbiter shall immediately order
the conduct of a certification election . . . (emphasis supplied)
Furthermore, PT&T did not possess the legal personality to file a motion to dismiss
the petition for certification election even if based on the ground that its supervisory
employees are in reality managerial employees. It is well-settled that an employer has
no standing to question a certification election8 since this is the sole concern of the
workers.9 The only exception to this rule is where the employer has to file the petition
for certification election itself pursuant to Art. 258 10 of the Labor Code because it was
requested to bargain collectively. But, other that this instance, the choice of a
collective bargaining agent is purely the internal affair of labor. 11
As the Med-Arbiter himself noted, "It is incredible that only rank-and-file and
managerial employees are the personnel of respondent firm, considering the line of
service it offers to the public" 13 and the fact that it employed 2,500 employees, more
or less, all over the country.
A word more. PT&T alleges that respondent UNION is affiliated with the same
national federation representing its rank-and-file employees. Invoking Atlas
Lithographic Services, Inc. v. Laguesma, 14 PT&T seeks the disqualification of
respondent UNION. Respondent, however, denied it was affiliated with the same
national federation of the rank-and-file employees union, the Associated Labor Union
or ALU. It clarified that the PT&T Supervisory Employees Union is affiliated with
Associated Professional, Supervisory Office, Technical Employees Union or
APSOTEU, which is a separate and distinct national federation from ALU.
IN VIEW OF THE FOREGOING, the Petition for Certiorari and Mandamus with prayer
for the issuance of a temporary restraining order is DENIED.

What PT&T should have done was to question the inclusion of any disqualified
employee in the certification election during the exclusion-inclusion proceedings
before the representation officer. Indeed, this is precisely the purpose of the
exclusion-inclusion proceedings, i.e., to determine who among the employees are
entitled to vote and be part of the bargaining unit sought to be certified.

Then Acting Secretary Nieves D. Confesor therefore did not abuse her discretion
when she opted not to act upon the additional evidence by petitioner PT&T. For, the
holding of a certification election in an unorganized establishment is mandatory and
must immediately be ordered upon petition by a legitimate labor organization, which is
the case here.

At any rate, the additional evidence presented by petitioner failed to sufficiently show
that the supervisory employees who sought to be included in the bargaining unit were
in fact performing managerial functions. On the contrary, while these supervisory
employees did excercise independent judgment which is not routinary or clerical in
nature, their authority was merely recommendatory in character. In all instances, they
were still accountable for their actions to a superior officer, i.e., their respective
superintendents. The Solicitor General succinctly puts it thus —

A perusal of petitioner's annexes . . . would readily show that the

power of said supervisors in matters relating to the excercise of
SAN MIGUEL FOODS, INC.-CEBU B-MEG FEED PLANT, petitioner, vs. HON.
BIENVENIDO E. LAGUESMA, Undersecretary of DOLE and ILAW AT
BUKLOD NG MANGGAGAWA (IBM), respondents.
DECISION
HERMOSISIMA, JR., J.:
This is a petition for certiorari under Rule 65 to review and set aside two
Resolutions of Mediator-Arbiter Achilles V. Manit, dated January 5, 1994 and April 6,
1994, and the affirmation Order on appeal of the public respondent, Undersecretary
Bienvenido E. Laguesma of the Department of Labor and Employment. The petition
below was entitled: In Re: Petition for Direct Certification as the Sole and Exclusive
Bargaining Agent of All Monthly Paid Employees of SMFI-Cebu B-Meg Feeds Plant,
docketed as OS-MA-A-3-51-94 (RO700-9309-RU-036).
The essential facts are not disputed.
On September 24, 1993, a petition for certification election among the monthly-
paid employees of the San Miguel Foods, Inc.-Cebu B-Meg Feeds Plant was filed by
private respondent labor federation Ilaw at Buklod ng Manggagawa (IBM, for brevity)
before Med-Arbiter Achilles V. Manit, alleging, inter alia, that it is a legitimate labor
organization duly registered with the Department of labor and Employment (DOLE)
under the Registration Certificate No. 5369-IP. SMFI-Cebu B-Meg Feeds Plant
(SMFI, for brevity), herein petitioner, is a business entity duly organized and existing
under the laws of the Philippines which employs roughly seventy-five (75) monthly
paid employees, almost all of whom support the present petition. It was submitted in
said petition that there has been no certification election conducted in SMFI to
determine the sole and exclusive bargaining agent thereat for the past two years and
that the proposed bargaining unit, which is SMFIs monthly paid employees, is an
unorganized one. It was also stated therein that petitioner IBM (herein private
respondent) has already complied with the mandatory requirements for the creation of
its local or affiliate in SMFIs establishment.
On October 25, 1993, herein petitioner SMFI filed a Motion to Dismiss the
aforementioned petition dated September 24, 1993 on the ground that a similar
petition remains pending between the same parties for the same cause of action
before Med-Arbiter Achilles V. Manit.
SMFI was referring to an evidently earlier petition, docketed as CE CASE NO
R0700-9304-RU-016, filed on April 28, 1993 before the office of Med-Arbiter
Manit. Indeed, both petitions involved the same parties, cause of action and relief
being prayed for, which is the issuance of an order by the Med-Arbiter allowing the
conduct of a certification election in SMFIs establishment. The contention is that the
judgment that may be rendered in the first petition would be determinative of the
outcome of the second petition, dated September 24, 1993.
On December 2, 1993, private respondent IBM filed its Opposition to SMFIs
Motion to Dismiss contending, among others, that the case referred to by SMFI had
already been resolved by Med-Arbiter Manit in his Resolution and Order date July 26,
1993[1] and September 2, 1993,[2] respectively, wherein IBMs first petition for
certification election was denied mainly due to IBMs failure to comply with certain
mandatory requirements of the law. This denial was affirmed by the Med-Arbiter in
another Order dated November 12, 1993[3] wherein the Resolutions dated July 26,
1993 and September 2, 1993 were made to stand. Thus, IBM argues that there
having been no similar petition pending before Med-Arbiter Manit, another petition for
certification election may be refiled as soon as the said requirements are met. These
requirements were finally satisfied before the second petition for certification election
was brought on September 24, 1993.
On January 5, 1994, Med-Arbiter Manit, this time, granted the second petition
for certification election of private respondent IBM in this wise:
Let, therefore, a certification election be conducted among
the monthly paid rank and file employees of SMFI-CEBU B-
MEG FEEDS PLANT at Lo-oc, Mandaue City. The choices
shall be: YES-for IBM AT SMFI-CEBU B-MEG; and NO-for No
Union.
The parties are hereby notified of the pre-election
conference which will take place on January 17,
1994 at 3:00 oclock in the afternoon to set the date and
time of the election and to thresh out the mechanics
thereof. On said date and time the respondent is directed to
submit the payroll of its monthly paid rank and file
employees for the month of June 1993 which shall be the
basis for the list of the eligible voters. The petitioner is
directed to be ready to submit a list of the monthly paid
rank and file employees of SMFI-CEBU B-MEG FEEDS PLANT
when the respondent fails to submit the required payroll.
SO ORDERED.[4]
Petitioner SMFI appealed the foregoing Order to the Secretary of Labor and
Employment alleging that the Med-Arbiter erred in directing the conduct of
certification election considering that the local or chapter of IBM at SMFI is still not a
legitimate labor organization with a right to be certified as the exclusive bargaining
agent in petitioners establishment based on two grounds: (1) the authenticity and due
execution of the Charter Certificate submitted by IBM in favor of its local at SMFI
cannot yet be ascertained as it is still now known who is the legitimate and authorized
representative of the IBM Federation who may validly issue said Charter Certificate;
and (2) a group of workers or a local union shall acquire legal personality only upon
the issuance of a Certificate of Registration by the Bureau of Labor Relations under
Article 234 of the Labor Code, which IBM at SMFI did not possess.
In a resolution dated April 6, 1994, public respondent Undersecretary
Bienvenido Laguesma, by authority of the Secretary of Labor and Employment,
denied petitioners appeal, viz.:
WHEREFORE, the appeal is hereby denied for lack of merit
and the Order of the Med-Arbiter is hereby affirmed.
 Let the records of this case be forwarded to the Regional
Office of origin for the immediate conduct of certification
election subject to the usual pre-election conference.
SO RESOLVED.[5]
Thereafter, a Motion for Reconsideration was filed which was also denied by the
public respondent in his Order dated May 24, 1994.[6]
Hence, the instant petition interposing the following justifications:
1) THE HONORABLE UNDERSECRETARY BIENVENIDO
E. LAGUESMA GRAVELY ABUSED HIS
DISCRETION WHEN HE ARBITRARILY RULED
THAT A LOCAL OR CHAPTER OF A LABOR
FEDERATION, LIKE RESPONDENT IBM, NEED NOT
OBTAIN A CERTIFICATE OF REGISTRATION FROM
THE BUREAU OF LABOR RELATIONS TO ACQUIRE
LEGAL PERSONALITY, WHEN ARTICLE 234 OF
THE LABOR CODE OF THE PHILIPPINES AND
SECTION 3 OF RULE II OF BOOK V OF THE RULES
IMPLEMENTING THE LABOR CODE, AS AMENDED,
CLEARLY PROVIDES THAT A GROUP OF
WORKERS OR A LOCAL UNION SHALL ACQUIRE
LEGAL PERSONALITY ONLY UPON THE ISSUANCE
OF THE CERTIFICATE OF REGISTRATION BY THE
BUREAU OF LABOR RELATIONS. AND,
2) THE HONORABLE UNDERSECRETARY BIENVENIDO
E. LAGUESMA GRAVELY ABUSED HIS
DISCRETION WHEN HE PREMATURELY AND
ARBITRARILY RULED THAT RESPONDENT IBM IS
A LEGITIMATE LABOR ORGANIZATION WHEN THE
AUTHENTICITY AND DUE EXECUTION OF THE
CHARTER CERTIFICATE SUBMITTED BY
RESPONDENT IBM CANNOT YET BE
ASCERTAINED BECAUSE IT IS STILL NOT KNOWN
WHO ARE THE LEGITIMATE OFFICERS OF THE
IBM FEDERATION WHO MAY VALIDLY ISSUE SAID
CHARTER CERTIFICATE AS THE CASE FILED TO
RESOLVE THE ISSUE ON WHO ARE THE
LEGITIMATE OFFICERS OF THE IBM
FEDERATION IS STILL PENDING RESOLUTION
BEFORE THIS HONORABLE SUPREME COURT.[7]
The petition has no merit.
Petitioner asserts that IBM at SMFI is not a legitimate labor organization
notwithstanding the fact that it is a local or chapter of the IBM Federation. This is so
because under Article 234 of the Labor Code, any labor organization shall acquire
legal personality upon the issuance of the Certificate of Registration by the Bureau of
Labor Relations.
We do not agree.
I
Article 212(h) of the Labor Code defines a legitimate labor organization as any
labor organization duly registered with the Department of Labor and Employment,
and includes any branch or local thereof.
It is important to determine whether or not a particular labor organization is
legitimate since legitimate labor organizations have exclusive rights under the law
which cannot be exercised by non-legitimate unions, one of which is the right to be
certified as the exclusive representative of all the employees in an appropriate
collective bargaining unit for purposes of collective bargaining. These rights are found
under Article 242 of the Labor Code, to wit:
ART. 242. Rights of legitimate organizations.--A legitimate labor
organization shall have the right:
(a) To act as the representative of its members for the purpose of
collective bargaining;
(b) To be certiified as the exclusive representative of all the
employees in an appropriate collective bargaining unit for purposes
of collective bargaining;
(c) To be furnished by the employer, upon written request, with his
annual audited financial statements, including the balance sheet and
the profit and loss statement, within thirty (30) calendar days from
the date of receipt of the request, after the union has been duly
recognized by the employer or certified as the sole and exclusive
bargaining representative of the employees in the bargaining unit, or
within sixty (60) calendar days before the expiration of the existing
collective bargaining agreement, or during the collective bargaining
negotiation;
(d) To own property, real or personal, for the use and benefit of the
labor organization and its members;
(e) To sue and be sued in its registered name; and
(f) To undertake all other activities designed to benefit the
organization and its members, including cooperative, housing
welfare and other projects not contrary to law.
x x x x x x x x x."
The pertinent question, therefore, must be asked: When does a labor
organization acquire legitimacy?
Ordinarily, a labor organization attains the status of legitamacy only upon the
issuance in its name of a Certificate of Registration by the Bureau of Labor Relations
pursuant to Articles 234 and 235 of the Labor Code, viz.:
ART. 234. Requirements of registration.--Any applicant labor
organization, association or group of unions or
workers shall acquire legal personality and shall be entitled
to the rights and privileges granted by law to legitimate
labor organizations upon issuance of the certificate of
registration based on the following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address
of the labor organization, the minutes of the organizational meetings
and the list of the workers who participated in such meetings;
(c) The names of all its members comprising at least twenty percent
(20%) of all the employees in the bargaining unit where it seeks to
operate;
(d) If the applicant union has been in existence for one or more
years, copies of its annual financial reports; and
(e) Four (4) copies of the constitution and by-laws of the applicant
union, minutes of its adoption or ratification, and the list of the
members who participated in it.
ART. 235. Action on application. -- The Bureau shall act on
all applications for registration within thirty (30) days from
filing.
All requisite documents and papers shall be certified under
oath by the secretary or the treasurer of the organization,
as the case may be, and attested to by its president.
The foregoing procedure is not the only way by which a labor union may
become legitimate, however. When an unregistered union becomes a branch, local or
chapter of a federation, some of the aforementioned requirements for registration are
no longer required.[8] Section 3, Rule II, Book V of the Implementing Rules of the
Labor Code governs the procedure for union affiliation, the relevant portions of which
provide:
Sec. 3. Union Affiliation: Direct Membership with National
Union. An affiliate of a labor federation or national union
may be a local or chapter thereof or an independently
registered union.
(a) The labor federation or national union concerned shall
issue a chapter certificate indicating the creation or
establishment of a local or chapter, copy of which shall be
submitted to the Bureau of Labor Relations within thirty (30)
days from issuance of such charter certificate.
(b) An independently registered union shall be considered
an affiliate of a labor federation or national union after
submission to the Bureau of the contract or agreement of
affiliation within thirty (30) days after its execution.
xxxxxxxxx
(e) The local or chapter of a labor federation or national
union shall have and maintain a constitution and by-laws,
set of officers and book of accounts. For reporting
purposes, the procedure governing the reporting of
independently registered unions, federations or national
unions shall be observed.
Paragraph (a) refers to a local or chapter of a federation which did not undergo
the rudiments of registration while paragraph (b) refers to an independently registered
union which affiliated with a federation. Implicit in the foregoing differentiation is the
fact that a local or chapter need not be independently registered. By force of law (in
this case, Article 212 [h]), such local or chapter becomes a legitimate labor
organization upon compliance with the aforementioned provisions of Section 3 [9] (a)
and (e), without having to be issued a Certificate of Registration in its favor by the
BLR.
The cases of Lopez Sugar Corporation v. Secretary of Labor and
Employment,[10] Phoenix Iron and Steel Corporation v. Secretary of Labor and
Employment,[11] and Protection Technology, Inc. v. Secretary, Department of Labor
and Employment,[12] all going back to our landmark holding in Progressive
Development Corporation v. Secretary, Department of Labor and
Employment,[13] unequivocably laid down the rule, thus:
 A local or chapter therefore becomes a legitimate labor
organization only upon submission of the following to the
BLR:
1) A charter certificate, within 30 days from its
issuance by the labor federation or national
union, and
2) The constitution and by-laws, a statement on the
set of officers, and the books of accounts all
of which are certified under oath by the
secretary or treasurer, as the case may be, of
such local or chapter, and attested to by its
president.
Absent compliance with these mandatory requirements, the
local or chapter does not become a legitimate labor
organization.
Corollarily, the satisfaction of all these requirements by the local or chapter shall
vest upon it the status of legitimacy with all its concomitant statutory privileges, one of
which is the right to be certified as the exclusive representative of all the employees in
an appropriate bargaining unit.
In the case at bench, public respondent Bienvenido E. Laguesma, in affirming
the finding of the Med-Arbiter that IBM at SMFI is a legitimate labor
organization,[14] made the following material pronouncements amply supported by the
records:
[t]he resolution of the issue raised by the respondent on
whether or not petitioner is a legitimate labor organization
will depend on the documents submitted by the petitioner in
the second petition.
A close scrutiny of the records shows that at the time of the
filing of the subject petition on 24 September 1993 by the
petitioner Ilaw at Buklod ng Manggagawa, for and in behalf
of its local affiliate IBM at SMFI-CEBU B-MEG, the latter has
been clothed with the status and/or character of a
legitimate labor organization. This is so, because on 19 July
1993, petitioner submitted to the Bureau of Labor Relations
(BLR), this Department, the following documents: charter
certificate, constitution and by-laws, names and addresses
of the union officers and a certification of the unions
secretary on the non-availability of the unions Books of
Accounts. Said documents (except the charter certificate)
are certified under oath and attested to by the local unions
secretary and President, respectively.[15]
Petitioner SMFI does not dispute the fact that IBM at SMFI has complied with
the second set of requirements, i.e., constitution, by-laws, et. al. What is controverted
is the non-compliance with the requirement as to the charter certificate which must be
submitted to the BLR within thirty (30) days from its issuance by the labor
federation. While the presence of a charter certificate is conceded, petitioner
maintains that the validity and authenticity of the same cannot yet be ascertained as it
is still not known who is the legitimate and authorized representative of the IBM
Federation who may validly issue said charter certificate in favor of its local, IBM at
SMFI. According to petitioner, there are two (2) contending sets of officers of the IBM
Federation at the time the charter certificate was issued in favor of IBM at SMFI, the
faction of Mr. Severino O. Meron and that of Mr. Edilberto B. Galvez.
On this point, public respondent, in upholding the legitimate status of IBM at
SMFI, backed up by the Solicitor General, had this to say:
The contention of the respondent that unless and until the
issue on who is the legitimate national president, of the
Ilaw at Buklod ng Manggagawa is resolved, the petitioner
cannot claim that it has a valid charter certificate
necessary for it to acquire legal personality is
untenable. We wish to stress that the resolution of the said
issue will not in any way affect the validity of the charter
certificate issued by the IBM in favor of the local union. It
must be borne in mind that the said charter certificate was
issued by the IBM in its capacity as a labor organization, a
juridical entity which has a separate and distinct legal
personality from its members. When as in this case, there is
no showing that the Federation acting as a separate entity
is questioning the legality of the issuance of the said
charter certificate, the legality of the issuance of the same
in favor of the local union is presumed. This,
notwithstanding the alleged controversy on the leadership
of the federation.[16]
We agree with this position of the public respondent and the Solicitor General. In
addition, private respondents Comment to this petition indicates that in the election of
officers held to determine the representatives of IBM, the faction of Mr. Meron lost to
the group of Mr. Edilberto Galvez, and the latter was acknowledged as the duly
elected IBM National President.[17]Thus, the authority of Mr. Galvez to sign the charter
certificate of IBM at SMFI, as President of the IBM Federation, [18] can no longer be
successfully questioned. A punctilious examination of the records presents no
evidence to the contrary and petitioner, instead of squarely refuting this point, skirted
the issue by insisting that the mere presence of two contending factions in the IBM
prevents the issuance of a valid and authentic charter certificate in favor of IBM at
SMFI. This averment of petitioner simply does not deserve any merit.
 II This is a factual issue which petitioner should have raised before the Med-
Arbiter so as to allow the private respondent ample opportunity to present evidence to
In any case, this Court notes that it is petitioner, the employer, which has offered the contrary. This Court is definitely not the proper venue to consider this matter for it
the most tenacious resistance to the holding of a certification election among its is not a trier of facts. It is noteworthy that petitioner did not challenge the legal
monthly-paid rank-and-file employees. This must not be so, for the choice of a personality of the federation in the proceedings before the Med-Arbiter. Nor was this
collective bargaining agent is the sole concern of the employees.[19] The only issue raised in petitioners appeal to the Office of the Secretary of Labor and
exception to this rule is where the employer has to file the petition for certification Employment. This matter is being raised for the first time in this petition. An issue
election pursuant to Article 258[20] of the Labor Code because it was requested to which was neither alleged in the pleadings nor raised during the proceedings below
bargain collectively,[21] which exception finds no application in the case before us. Its cannot be ventilated for the first time before this Court. It would be offensive to the
role in a certification election has aptly been described in Trade Unions of the basic rule of fair play, justice and due process.[33] Certiorari is a remedy narrow in its
Philippines and Allied Services (TUPAS) v. Trajano,[22] as that of a mere by-stander. It scope and inflexible in character. It is not a general utility tool in the legal
has no legal standing in a certification election as it cannot oppose the petition or workshop.[34] Factual issues are not a proper subject for certiorari, as the power of the
appeal the Med-Arbiters orders related thereto. An employer that involves itself in a Supreme Court to review labor cases is limited to the issue of jurisdiction and grave
certification election lends suspicion to the fact that it wants to create a company abuse of discretion.[35] It is simply unthinkable for the public respondent
union.[23] This Court should be the last agency to lend support to such an attempt at Undersecretary of Labor to have committed grave abuse of discretion in this regard
interference with a purely internal affair of labor.[24] when the issue as to the legal personality of the private respondent IBM Federation
While employers may rightfully be notified or informed of petitions of such was never interposed in the appeal before said forum.
nature, they should not, however, be considered parties thereto with the concomitant V
right to oppose it. Sound policy dictates that they should maintain a strictly hands-off
policy.[25] Finally, the certification election sought to be stopped by petitioner is, as of
now, fait accompli. The monthly paid rank-and-file employees of SMFI have already
It bears stressing that no obstacle must be placed to the holding of certification articulated their choice as to who their collective bargaining agent should be. In the
elections,[26] for it is a statutory policy that should not be circumvented.[27] The certification election held on August 20, 1994,[36] the SMFI workers chose IBM at
certification election is the most democratic and expeditious method by which the SMFI to be their sole and exclusive bargaining agent. This democratic decision
laborers can freely determine the union that shall act as their representative in their deserves utmost respect. Again, it bears stressing that labor legislation seeks in the
dealings with the establishment where they are working.[28] It is the appropriate main to protect the interest of the members of the working class. It should never be
means whereby controversies and disputes on representation may be laid to rest, by used to subvert their will.[37]
the unequivocal vote of the employees themselves. [29] Indeed, it is the keystone of
industrial democracy.[30] WHEREFORE, the petition is DENIED. Costs against petitioner.
III
Petitioner next asseverates that the Charter Certificate submitted by the private
respondent was defective in that it was not certified under oath and attested to by the
organizations secretary and President.
Petitioner is grasping at straws. Under our ruling in the Progressive
Development Corporation[31] case, what is required to be certified under oath by the
secretary or treasurer and attested to by the locals president are the constitution and
by-laws, a statement on the set of officers, and the books of accounts of the
organization. The charter certificate issued by the mother union need not be certified
under oath by the secretary or treasurer and attested to by the locals president.
IV
Petitioner, in its Reply to public respondents Comment, nevertheless calls the
attention of this court to the fact that, contrary to the assertion of private respondent
IBM that it is a legitimate labor federation and therefore has the capacity and authority
to create a local or chapter at SMFI, the Chief of the Labor Organizations Division of
the Bureau of Labor Relations Manila had allegedly issued a certification last January
17, 1995 to the effect that private respondent is not a legitimate labor federation. [32]
FEDERACION OBRERA DE LA INDUSTRIA TABAQUERA Y OTROS
TRABAJADORES DE FILIPINAS (FOITAF-ASSOCIATED ANGLO AMERICAN
CHAPTER), petitioner,
vs.
THE HONORABLE CARMELO NORIEL, in his capacity as Director of the Bureau
of Labor Relations, all officers acting in his behalf, and FEDERATION OF FREE
WORKERS (FFW-ANGLO AMERICAN EMPLOYEES CHAPTER), respondents.
Jose T. Maghari for petitioner.
F.F. Bonifacio Jr. for private respondent.
Solicitor General Estelito P. Mendoza, Assistant Solicitor General Reynaldo S. Puno
and Solicitor Ramon A. Barcelona for respondent Public Official.
FERNANDO, J:
An order of respondent Carmelo Noriel Director of the Bureau of Labor
Relations, 1 for the holding of a certification election is led in this certiorari proceeding
for its alleged failure to comply with the thirty percent requirement of the new Labor
Code. 2 It is admitted by petitioner labor union that there were enough signatures but
it is contended that there was a change of mind on the part of a number of the
employees involved resulting in the requirement of the law not being met. There is
thus, so it is submitted, a grave abuse of discretion amounting to arbitrarinesi
Respondent public official as well as private respondent labor union were required to
comment. In such pleading submitted by Solicitor General Estelito P. Mendoza 3 on
behalf of the former, characterized by a meticulous and detailed reference to the
background facts, there was an objective narration of what did transpire It did reduce
to the vanishing point whatever plausibility there was there was in the petition. What
clearly emerged was that petitioner labor union is loathe to have its former members
transfer their allegiance to private respondent union, a matter which could be even
more obvious if the certification election were held. There is thus no justification for
sustaining the stand taken by petitioner. To do so would be to disregard previous
authoritative doctrines on the matter, involving the basic constitutional right of
freedom of association, 4 made even more meaningful in labor matters by the
statutory device of certification election. That we are not disposed to do. We dismiss
the petition.
There was barely a mention of the relevant facts in the petition, the effort being
concentrated in the attempt to make out a case of arbitrary and improvident exercise
of authority on the part of respondent Director. It is quite gratifying, therefore, as was
mentioned above, to have the comment of respondent Director setting forth with
accuracy and particularly the events that led to the challenged order. That it is
impressed with accuracy is not just an assumption. Petitioner was given a chance to
refute the same after such comment, along with that of private respondent, was
admitted as an answer. It failed to do so.
According to the comment of i respondent official: "In order to afford this Honorable
Court with a clear perspective of what actually transpired summarized hereunder are
the antecedent and salient facts of the case. 1. On March 20, 1975, the Federation of
Free Workers (Associated Anglo-American Employees Chapter, hereinafter referred
to as FFW), filed a verified petition for certification election among the employees and
workers of the Anglo-American Tobacco Corporation (company for brevity), alleging
that more than 30% of its rank and file workers support the same. 2. On April 14,
1975, the company opposed the petition alleging that the petitioning union did not
have the support of at least 30% of the more than 1,000 workers of the company. 3.
At the hearing of the case on April 21, 1975, the company alleged that there are 941
rank and file workers under its employ. Since respondent FFW had then already
submitted 283 signatures, the Med-Arbiter ruled that FFW had complied with the 30%
written consent requirement On the same date, Federacion Obrera de la Industria
Tabaquera y Otros Trabajadores de Filipinos (FOITAF for short) — Associated Anglo-
American Chapter, moved to intervene alleging legal interest in the case and the
latter was granted time to substantiate its claim by way of employee's support. 4.
Subsequently, at the hearing on April 24, 1975, the list of the rank and file employees
of the company numbering 941, based on the payroll as of March 1975, was
submitted and it was agreed at said hearing that after the petitioner therein (FFW)
had submitted its position paper, and the Intervenor FOITAF its manifestation, the
case will be considered submitted for resolution .... On the same date, however,
FOITAF filed a motion and manifestation calling attention to an alleged retraction or
revocation of signatures to the petition coming from thirteen (13) employees attaching
thereto Annexes A, B, C, D, and E, the letters of said retracting employees, all claims
that they were forced to sign .... It is worthy of note that the letters of retraction by the
thirteen (13) employees were not under oath and none of them was presented during
the hearings to confirm their alleged retractions. 5. Thus, on April 30, 1975, the Med-
Arbiter assigned to the case, finding that FFW had submitted 283 signatures of the
company's labor force of 941, thereby complying with the 30% consent requirement,
ordered the certification election with the following contending unions: 1. FFW
Associated Anglo-American Employees Chapter), 2. Federacion Obrera de la
Industria Tabaquera y Otros Trabajadores de Filipinos FOITAF and, 3. No union
desired .... 6. On May 9, 1975, petitioner FOITAF filed a letter appeal from the
aforesaid order of the Med-Arbiter on the sole ground that FFW failed to comply with
the 30% requirement. This was opposed by FFW contending that the alleged
retraction of the 13 employees can only be determined in a secret balloting in a
certification election 7. Meanwhile on May 29, 1975, acting on a motion to stop the
holding of a certification election filed by FOITAF, the Bureau of Labor Relations in an
order of even date suspended the holding of a certification election .... 8. During the
pendency of the appeal, the case was again set for further hearing on June 10, 1975,
whereat four (4) additional signatures supporting the petition for certification election
were presented by FFW and at the same time the latter was permitted to submit its
opposition to the list of 941 employees submitted by the company. On the other hand,
FOITAF was allowed to submit its reply to FFW's opposition after which the matter
was considered submitted for resolution .... 9. In an addendum, a manifestation to
petitioner's (FFW's) opposition to appeal dated June 11, 1975, FFW prayed for the
exclusion of 124 employees submitted the company's list of 941 employees on the
grounds that some have either resigned, with double name entries, casual employees
with less than six months of service and still others are confidential employees or are
part of management. ... 10. FOITAF submitted its memorandum dated July 2, 1975,
reiterating that the petition be dismissed for FFW's failure to meet the 30%
requirement and alleging that an additional number of 32 workers have retracted their
signatures to the petition for certification election. Still later, on July 9, 1975, FOITAF
again filed a motion to dismiss, this time attaching merely an affidavit of its president,
a certain Timbungeo, to the effect that a total of 45 workers have retracted their
signatures. It is worthy of note that the signatures of these alleged 45 retractors were
not presented. 11. Meanwhile, in the subsequent hearings of the case, the company
was requested to submit the job descriptions or other proofs relative to the duties of
the 124 employees sought to be excluded by FFW from the company's list of 941 but
despite repeated request therefor, the company submitted only the job descriptions of
only 9 employees. Likewise, FOITAF did not present proof as to the alleged retraction
of the 45 workers .... 12. On the basis of the foregoing, therefore, the Bureau of Labor
Relations, on August 29, 1975, issued a resolution sustaining the previous order of
the Med-Arbiter for a certification election, the dispositive part of which reads.
"Premises considered, and in order not to delay any further the exercise of the
employee's right to form a labor organization of their own choosing, the appealed
order is affirmed. The Labor Organization Division, this Bureau, shall conduct the
election and the necessary exclusion and inclusion proceedings relative thereto.
Accordingly, the company is enjoined not to deal with any labor organization until
after the election has been conducted and the results have been conclusively
determined." ... 13. A motion for reconsideration of the aforesaid resolution, which
was opposed by respondent FFW was filed by the petitioner herein and on October 8,
1975, the Bureau of Labor Relations denied the same. 5
The glaring weakness of the petition is thus fully exposed. AU mentioned at the
outset, it should be dismissed for lack of merit.
1. Clearly, what is at stake is the constitutional right to freedom of association on the
part of employees. Petitioner labor union was in the past apparently able to enlist the
allegiance of the working force in the Anglo-American Tobacco Corporation.
Thereafter, a number of such individuals joined private respondent labor union. That
is a matter clearly left to their sole uncontrolled judgment. There is this excerpt
from Pan American World Airways, Inc. v. Pan American Employees
Association: 6 "There is both a constitutional and statutory recognition that laborers
have the right to form unions to take care of their interests vis-a-vis their employees.
Their freedom to form organizations would be rendered nugatory if they could not
choose their own leaders to speak on their behalf and to bargain for them." 7 It cannot
be otherwise, for the freedom to choose which labor organization to join is an aspect
of the Constitutional mandate of protection to labor. 8Prior to the Industrial Peace
Act, 9 there was a statute setting forth the guidelines for the registration of labor
unions. 10 , As implied in Manila Hotel Co. v. Court of Industrial Relations, 11 it was
enacted pursuant to what is ordained in the Constitution. Thus in Umali v. Lovina, 12 it
was held that mandamus lies to compel the registration of a labor organization. There
is this apt summary of what is signified in Philippine Land-Air-Sea Labor Union v.
Court of Industrial Relations, 13 "to allow a labor union to organize itself and acquire a
personality distinct and separate from its members and to serve as an instrumentality
to conclude collective bargaining agreements ... " 14 It is no coin cadence that in the
first decision of this Court citing the Industrial Peace Act, 15 Pambujan United Mine
Workers v. Samar Mining Company, 16 the role of a labor union as the agency for the
expression of the collective will affecting its members both present and prospective,
was stressed. That statute certainly was much more emphatic as to the vital aspect of
such a right as expressly set forth in the policy of the law. 17 What is more, there is in
such enactment this categorical provision on the right of employees to self
organization: "Employees shall have the right to self-organization and to form, join or
assist labor organizations of their own choosing for the purpose of collective
bargaining through representatives of their own choosing and to engage in concerted
activities for the purpose of collective bargaining and other mutual aid or
protection," 18 The new Labor Code, 19 is equally explicit on the matter. Thus: "The
State shall assure the rights of workers to self-organization, collective bargaining,
security of tenure and just and humane conditions of work." 20
2. It is thus of the very essence of the regime of industrial democracy sought to be
attained through the collective bargaining process that there be no obstacle to the
freedom Identified with the exercise of the right to self-organization. Labor is to be
represented by a union that can express its collective will. In the event, and this is
usually the case, that there is more than one such group fighting for that privilege, a
certification election must be conducted. That is the teaching of a recent decision,
under the new Labor Code, United Employees Union of Gelmart Industries v.
Noriel. 21 There is this relevant excerpt: "The institution of collective bargaining is, to
recall Cox a prime manifestation of industrial democracy at work. The two parties to
the relationship, labor and management, make their own rules by coming to terms.
That is to govern themselves in matters that really count. As labor, however, is
composed of a number of individuals, it is indispensable that they be represented by
a labor organization of their choice. Thus may be discerned how crucial is a
certification election. So our decisions from the earliest case of PLDT Employees
Union v. PLDT Co. Free Telephone Workers Union to the latest, Philippine
Communications Electronics & Electricity Workers' Federation (PCWF) v. Court of
Industrial Relations, have made clear." 22 An even later pronouncement in Philippine
Association of Free Labor Unions v. Bureau of Labor Relations 23 speaks similarly:
"Petitioner thus appears to be woefully lacking in awareness of the significance of a
certification election for the collective bargaining process. It is the fairest and most
effective way of determining which labor organization can truly represent the working
force. It is a fundamental postulate that the will of the majority, if given expression in
an honest election with freedom on the part of the voters to make their choice, is
controlling. No better device can assure the institution of industrial democracy with
the two parties to a business enterprise, management and labor, establishing a
regime of selfrule." 24
3. There can then be no legitimate objection to the holding of a certification election
not only in the light of the basic theory of labor statutes from Commonwealth Act 213
to the present Labor Code, but also in view of the factual finding that the verified
petition by private respondent labor union had the support of more than thirty percent
of the rank and file employees. Such being the case, it becomes, in the language of
the new Labor Code, "mandatory for the Bureau to conduct a certification election for
the purpose of determining the representative of the employees in the appropriate
bargaining unit and certify the winner as the exclusive collective bargaining
representative of all the employees in the unit." 25 It would run counter to the law then,
with the duty thus imposed on respondent Director, to ignore the demand that it be
held. It would follow, therefore, that no grave abuse of discretion, much leas
arbitrariness, could be imputed to the rejection of the plea of petitioner to set aside
the challenged order, there is persuasiveness, likewise, to the submission of Solicitor
General Mendoza in the comment filed, that the thirteen employees who allegedly
retracted were not even present before the medarbiter and that the alleged additional
forty-five employees who supposedly likewise changed their minds, were also not
called to testify to that effect, petitioner satisfying itself with their being named in an
affidavit executed by its president. That would make, so it is plausibly contended,
such alleged retraction to be highly dubious in character. There is this reinforcement
to the contention of respondent public official in this closing paragraph of such
comment: "Besides, the best forum for determining whether there were indeed
retractions from some of the laborers is in the certification election, itself wherein the
workers can freely express their choice in a secret ballot. If, wherefore, petitioner
herein is confident that it commands the majority of the workers in the collective
bargaining unit, why then does it vigorously oppose a certification election." 26

4. The lack of merit in the petition is equally obvious considering that what asked of
this Court is, in the final analysis, to set aside a factual finding arrived at by
respondent Director after a careful consideration of all the relevant matters pertinent
to the issue. Again, that is contrary to the constant holding of this Tribunal in a host of
cases starting from National Labor Union v. Dinglasan 27 to Adame v. Court of
Industrial Relations. 28

WHEREFORE, the petition is dismissed. This decision is immediately executory so as

to enable the holding forthwith of the certification election. The restraining order
issued on November 26, 1975 is hereby lifted. No costs.
AIR LINE PILOTS ASSOCIATION OF THE PHILIPPINES (GASTON J. C. Espinas & Associates for petitioner (Gaston Group)
GROUP), petitioner,
vs. Jose K. Manguiat Jr. for respondent Court, et al.
THE COURT OF INDUSTRIAL RELATIONS and AIR LINES PILOTS
ASSOCIATION OF THE PHILIPPINES (GOMEZ GROUP), respondents.
E. Morabe & Associate for respondent (Gomez Group).
G.R. No. L-35206 April 15, 1977

CESAR CHAVEZ, JUR FRANCISCO ACHONDOA, SERAFIN ADVINCULA,

MAXIMO R. AFABLE, ALFREDO AGBULOS, SOLOMON A. HERRERA, NEMESIO
ALMARIO, JULIUS AQUINO, RENE ARELLANO, CARLITO ARRIBE FERNANDO CASTRO, C.J.:
AYUBO GENEROSO BALTAZAR, EDDIE BATONG MALAQUE, URSO D. BELLO,
TOMAS BERNALES RUDOLFO BIDES AUGUSTO BLANCO, HORACIO BOBIS These are two petitions for certiorari (L-33705 and L-35206), consolidated for
ROMEO B. BONTUYAN ANTONINO E. BUENAVENTURA, PEDRO BUNI purposes of decision because they involve more or less the same parties and
ISABELO BUSTAMANTE, JOSE BUSTAMANTE, RICARDO BUSTAMANTE, interlocking issues.
ERNESTO D. BUZON TRANQUILINO CABE ISIDORO CALLEJA, CESAR
CARETA FERNANDO CARAG, ROGELIO CASINO, JOSE CASTILLO, NICANOR In L-33705 the petitioner Air Line Pilots Association of the Philippines (Gaston group)
CASTILLO, RAFAEL CASTRO, JOSE DE LA CONCEPCION, CARLOS CRUZ, maintains that the Court of Industrial Relations acted without jurisdiction in passing
WILFREDO CRUZ, MAGINOO CUSTODIO, TOMAS DE LA JOSE DE LEON,
upon (1) the question of which, in a certification proceeding, between the set of
BENJAMIN DELFIN, GREGORIO DELGADO, IRINEO DEROTAS DUMAGUIN
officers elected by the group of Philippine Air Lines pilots headed by Captain Felix
BENEDICTO FELICIANO, RODRIGO FRIAS JOSE GIL, ANTONIO GOMEZ, Gaston, on the one hand, and the set of officers elected by the group headed by
ROBERTO GONZALEZ, BIENVENIDO GOROSPE, AMADO R. GULOY JOSE Captain Ben Hur Gomez, on the other, is the duly elected set of officers of the Air
GUTIERREZ, ANTONIO IBARRETA MUSSOLINI IGNACIO, ROBERTO INIGO
Line Pilots Association of the Philippines, and (2) the question of which, between the
MATIAS JABIER ROGELIO JARAMILLO HARRY JISON, ALBERTO JOCSON, two groups, is entitled to the name, office and funds of the said Association.
VALENTIN LABATA JAIME LACSON, JORGE LACSON, FRANCISCO LANSANG
MENANDRO LAUREANO, JESUS LAQUINDANUM LEONARDO LONTOC, RAUL
LOPEZ, RENE LORENZO, OSBORNE LUCERO, ARISTON LUISTRO MANUEL In L-35206 the individual petitioners (numbering 127) and the Air Line Pilots
LUKBAN, VIRGILIO MABABA, MARIANO MAGTIBAY, EDGARDO MAJARAIS Association of the Philippines (hereinafter referred to as ALPAP) (Gaston maintain
EMILIO MALLARE LEONCIO MANARANG, ALFREDO MARBELLA, ALFREDO that the industrial Court acted without jurisdiction and with grave abuse of descretion
MARTINEZ, EDILBERTO MEDINA, CLEMENTE MIJARES, EDMUNDO MISA, in promulgating its resolution dated June 19, 1972 which suspended the hearing of
CONRADO MONTALBAN, FERNANDO NAVARRETE, EUGENIO NAVEA the said petitioners' plea below for reinstatement and/or return to work in the
ERNESTO TOMAS, NIERRAS PATROCINIO OBRA, VICTORINO ORGULLO Philippine Air Lines (hereinafter referred to as PAL) or, alternatively, the payment of
CLEMENTE PACIS, CESAR PADILLA, ROMEO PAJARILLO RICARDO their retirement and/or separation pay, as the case may be, until this Court, shall have
PANGILINAN, CIRILO PAREDES, AMANDO PARIS ALBERTO PAYUMO, PEDRO decided L-33705.
PENERA FRANCISCO PEPITO, ADOLFO PEREZ, DOMINGO POLOTAN
EDUARDO RAFAEL, SANTOS RAGAZA TEODORO RAMIREZ, RAFAEL RAVENA L-33705
ANTONIO REYES, GREGORIO RODRIGUEZ, LEONARDO SALCEDO, HENRY
SAMONTE, PAQUITO SAMSON, ARTHUR B. SANTOS, ARTURO T. SANTOS
On January 2, 1971, the Air Line Pilots Association of the Philippines, represented by
ANGELES SARTE, VALERIANO SEGURA, RUBEN SERRANO, LINO SEVERINO,
Ben Hur Gomez who claimed to be its President, filed a petition with the Court of
ANGEL SEVILLA, BENJAMIN SOLIS, PATROCINIO TAN, RAFAEL TRIAS
Industrial Relations praying for certification as the sole and exclusive collective
EDGARDO VELASCO, LORETO VERGEIRE RUBEN VICTORINO, ALEXANDER
bargaining representative of "all the pilots now under employment by the Philippine
VILLACAMPA, CAMILO VILLAGONZALO BAYANI VILLANUEVA, RIZAL
Air Lines, Inc, and are on active flight and/or operational assignments." The petition
VILLANUEVA, ROMULO VILLANUEVA, ROLANDO VILLANUEVA, CARLOS
which was docketed in the sala of Judge Joaquin M. Salvador as Case 2939-MC was
VILLAREAL, and ALFONSO SAPIRAIN AND OTHERS and AIR LINE PILOTS
opposed in the name of the same association by Felix C. Gaston (who also claimed
ASSOCIATION. OF THE PHILIPPINES (GASTON), petitioners,
to be its President) on the ground that the industrial court has no jurisdiction over the
vs.
subject-matter o" the petition "because a certification proceeding in the Court of
THE HONORABLE JUDGES ARSENIO I. MARTINEZ, AMANDO C. BUGAYONG
Industrial Relations is not the proper forum for the adjudication of the question as to
and JOAQUIN M. SALVADOR of the COURT OF INDUSTRIAL RELATIONS, BEN
who is the lawful president of a legitimate labor organization."
HUR GOMEZ, claiming to represent AIR LINE PILOTS ASSOCIATION OF THE
PHILIPPINES, CARLOS ORTIZ AND OTHERS, and PHILIPPINE AIR LINES
INC., respondents.
On May 29, 1971, after hearing the petition, Judge Salvador rendered a decision
certifying the —
... ALPAP composed only of pilots employed by PAL with Capt. Ben
Hur Gomez as its president, as the sole and exclusive Bargaining
representative of all the pilots employed by PAL and are on active
flights and/or operational assignments, and as such is entitled to all
the rights and privileges of a legitimate labor organization, including
the right to its office and its union funds.
The following circumstances were cited by Judge Salvador to justify the conclusions
reached by him in his decision, namely:
(a) that there has been no certification election within the Period of 12 months prior to
the date the petition for certification was filed;
(b) that the PAL entered into a collective bargaining agreement with ALPAP for "pilots
in the employ of the Company" only for the duration of the period from February 1,
1969 to January 31, 1972:
(c) that PAL pilots belonging to the Gaston, group, in defiance of court orders issued
in Case 101-IPA(B) (see L-35206, infra) retired/resigned en masse from the PAL and
retired/resigned accompanied this with actual acts of not reporting for work;
(d) that the pilots affiliated with the Gaston group tried to then deposits and other
funds from the ALPAP Cooperative Credit union on the ground that they have already
retired/resigned from PAL;
(e) that some of the members of the Gaston Group joined another airline after their
retirement/resignation;
(f) that the Gaston group claimed before the industrial court that the order enjoining
them from retiring or resigning constituted a violation of the prohibition against
involuntary servitude (see L-35206, infra);
(g) that the contention that the mess retirement or resignation was merely an
involuntary protest by those affiliated with the Gaston group is not borne out by the
evidence as, aside their aforementioned acts, the said group of pilots even filed a civil
complaint against the PAL in which the cessation of their employment with PAL was
strongly expressed by them.
It appears that prior to the filing of the certification petition below, a general ALPAP
membership meeting was held on October 30, 1970, at which 221 out of 270
members adopted a resolution amending ALPAP's constitution and by-laws by
providing in a new section thereof that —
Any active member who shall be forced to retire or forced to resign
or otherwise terminated for union activities as solely determine' by
the Association shall have the option to either continue to be and
remain as an active member in good standing or to resign in writing
his active membership with the Association. ...
According to ALPAP (Gaston), the foregoing amendment was adopted "In anticipation
on the fact that they may be forced to resign or retire because of their 'union
activities.' At this period of time, PAL and ALPAP were locked in a labor dispute
certified by the President to the Industrial court and docketed as Case 101-IPA(B)
(see L-35206, infra).
On December 12, 1970, despite a no-work-stoppage order of the industrial court, a
substantial majority of ALPAP members filed letters of retirement/resignation from the
PAL.
Thereafter, on December 18-22, 1970, an election of ALPAP officers was held.
resulting in the election of Felix C. Gaston as President by 180 votes. Upon the other
hand, on December 23, 1970, about 45 pilots who did not tender their retirement or
resignation the PAL gathered at the house of Atty. Morabe and elected Ben Hur
Gomez as ALPAP President.
On June 3, 1971, ALPAP (Gaston) filed an opposition in Case 101-IPAB to an
urgent ex parte motion of the PAL to enjoin the members of ALPAP from retiring or
resigning en masse It was claimed by ALPAP (Gaston) that —
1. Insofar as herein oppositors are concerned, the allegations of
respondent that their 'resignations' and 'retirements' are sham
resignations and retirements and that 'There is no honest or
genuine desire to terminate the employee relationship with PAL are
completely false. Their bona fide intention to terminate their
employer-employee relationship with PAL is conclusively shown by
the fact that they have not sought reinstatement in or re-
employment by PAL and also by the fact that they are either
seeking employment in another airline company;
2. Respondent in effect recognized such bona fide intention of the
herein oppositors as shown by the fact that it accepted said
resignations and retirements and did not initiate any contempt
proceedings against them; and
3. The action of herein oppositors in filing their resignations and
retirements was a legitimate exercise of their legal and
constitutional rights and the same, therefore, cannot be considered
as a valid ground to deprive them of benefits which they had
already earned including, among others, retirement benefits to
which they are entitled under the provisions of an existing contract
between petitioner and respondent. Such deprivation would
constitute impairment of the obligations of contract.
On June 15, 1971, the industrial court en banc, acting on a motion for reconsideration
filed by ALPAP (Gaston) in Case 2939-MC against the decision of Judge Salvador,
denied the same. The said court's resolution was then appealed to this Court (L-
33705).
L-35206
On October 3, 1970, the President of the Philippines certified a labor dispute between
members of ALPAP and the PAL to the Court of Industrial Relations. The dispute
which had to do with union economic demands was docketed as Case No. 101-
IPA(B) and was assigned to Judge Ansberto P. Paredes.
On October 7, 1970, after conferring with both parties for two days, Judge Paredes
issued a return-to-work order, the pertinent portions of which read as follows:
PALEA and ALPAP, their officers and members, and i 11
employees who have joined the present strike which resulted from
the labor disputes certified by the President to the Court, or who
have not reported for work as a result of the strikes, are hereby
ordered forthwith to call off the strikes and lift the picket lines ... and
return to work not later than Friday, October 9, 1970, and
management to admit them back to work under the same terms
and conditions of employment existing before the strikes, including
what has been earlier granted herein.
PAL is ordered not to suspend, dismiss or lay-off any employee as
a result of these strikes. Read into this order is the provision of
Section 19, C.A. 103, as amended, for the guidance of the parties,
xxx xxx xxx
Failure to comply with any provision of this Order shall constitute
contempt of court, and the employee failing or refusing to work by
October 9, 1970, without justifiable cause, shall immediately be
replaced by PAL, and may not be reinstated without prior Court
order and on justifiable grounds.
On October 10, 1970, Judge Paredes, having been informed that the strikes had not
been called off, issued another order directing the strikers to lift their pickets and
return to work and explaining that his order of October 7, 1970 partook of the nature
of amandatory injunction under the doctrine laid down in Philippine Association of
Free Labor Union (PAFLU) vs. Hon, Joaquin M. Salvador, et al., (L-29471 and L-
29487, September 28, 1968).
The strike, however, continued until the industrial court en banc denied, on October
19, 1970, ALPAP's motion for reconsideration of the said orders.
On October 22, 1970, the strikers returned to work, except (according to the PAL) two
pilots, one of them being Felix C. Gaston who allegedly refused to take the flights
assigned to him. Due to his refusal, among other reasons, PAL terminated Gaston's
services on October 27, 1970. His dismissal was reported to the industrial court on
October 29, 1970. Thereafter, the court a quo set the validity of Gaston's dimissal for
hearing, but, on several occassions, he refused to submit his side before the hearing
examiner, claiming that his case would be prosecuted through the proper forum at the
proper time.
On November 24, 1970, the PAL filed an urgent ex parte motion with the industrial
court to enjoin the members of ALPAP from proceeding with their intention to retire or
resign en masse. On November 26, 1970, Judge Paredes issued an order
commanding ALAPAP members —
... not to strike or in any way cause any stoppage in the operation
and service of PAL, under pain of dismisal and forfeiture of rights,
and privilieges accruing to their respective employments should
they disregard this Order; and PAL is also ordered not to lockout
any of such members and officers of ALPAP under pain of
contempt and cancellation of its franchise.
ALPAP filed a motion for the reconsideration of the foregoing order claiming, among
other, that it subjected them to involuntary servitude:
It is crystal-clear that the disputed Order in effect compels the
members of petiitioner to work against their will. Stated differently,
the members of petitioner association are bieng perced or forced by
the Trial Court to be in a state of slavery for the beneift of
respondent corporation. In this regard, therefore, the Trial Court
grossly violated a Constitutional mandate which states:
No involuntary servitude in any form shall exist except as a
punishment for c rime whereof the party shall have been duly
convicted. (Article III, Section 1 (13)).
The constitutional provision does not provide any condition as to
the cause or causes of the unwillingness to work. Suffice it to say
that an employee for whatever reason of his own. cannot be
compelled and forced to work against his will.
The court a quo however, denied the foregoing motion for reconsideration on
December 11, 1970.
Just the same, on December 12, 1970, a substantial majority of the members of
ALPAP staged a mass resignation and/or retirement from PAL
In vigorous protest to your provocative harrassment, unfair labor
tactics, the contemptuous lockout of our co-members and your
vicious and vindictive attitude towards labor most exemplified by
 the illegal termination of the services of our President, Capt, Felix
C. Gaston
The mentioned individual letters of retirement/resignation were accepted by PAL on
December 14, 1970, with the caveat that the pilots concerned will not be entitled to
any benefit or privilege to which they may otherwise be entitled by reason of their
employment with the PAL, as the pilots' acts constituted R violation of the November
26, 1970 order of the industrial court.
On December 28, 1970, Ben Hur Gomez, alleging that he was elected President of
ALPAP by its members who did not join the mass resignation and retirement, filed a
motion in Case 101 IPA by praying that he be allowed to represent the ALPAP which
was theretofore represented by Capt. Felix Gaston because the pilots who retired or
resigned from PAL ceased to be employees Thereof and no longer have any interest
in the subject-matter of the said case. This was later converted into a motion to
intervene on February 9, 1971.
On September 1, 1971, Felix Gaston filed a motion for Contempt against PAL stating
that his dismissal from PAL on October 27, 1970 was without just cause and violation
of the Order of the industrial court dated October 7, 1970 as well as section 19 of C.A.
103. He prayed that he be reinstated.
On October 23, 1971, twenty-one pilots who filed their retirement. from PAL filed a
petition in the 'Industrial court praying also that they be readmitted to PAL or, failing
so, that they be allowed to retire with the benefits provided for under the PAL
Retirement Plan or, if they are not yet e i b e to under said Plan, that they be given
separation pay, In their petition for reinstatement, said Pilots (who were later joined by
other pilots similarly situated) alleged, inter alia —
1. That they are some of the employees of the respondent
company and members of the petitioner union who resigned en
masse or retired en masse from the respondent after having been
led to believe in good faith by Capt. Felix Gaston who was then the
uncontested president of the petitioner union and their counsel that
such a mass resignation or mass retirement was a valid exercise of
their right to protest the dismissal of Capt. Gaston in connection
with the Certified dispute that was pending before the Court.
2. That later on they came to know that such a mass resignation or
surpass retirement was enjoined by this Honorable Court 'under the
pain of' dismissal and forfeiting of rights and privileges accruing to
their respective employment if they disregarded such order of
injunction,
3. That they did not deliberately disregard such injunction order and
if they failed to comply with it within a reasonable time, it was
because they were made to believe and assured by their leader
that such resignation or retirement was a lawful exercise of
concerted action that the full consequences of such act was not
explained to them by counsel: and in addition, they were told that
those who returned to the company would be expelled from the
union, and suffer the corresponding penalty.
xxx xxx xxx
ALPAP (Gomez) opposed the foregoing petitions. In this connection, the records
disclose that on August 20, 1971, 89 of the pilots who retired en masse from PAL filed
a complaint with the Court of First Instance of Manila in Case 15084 for the recovery
of retirement benefits due them under the PAL Retirement Plan. The complaint was
dismissed by the trial, court on PAL's motion. The records, however, do not disclose
the reason for the said dismissal.
On December 23, 1971, Judge Paredes issued an order deferring action on the
motion to dismiss the petitions for reinstatement on the ground that the matters
alleged in the said petitions would required the submission of proof. ALPAP (Gomez,)
filed a motion for reconsideration of this order but the same was denied by the
industrial court en banc for being pro forma.
On February 1, 1972, ALPAP (Gaston) joined and consolidated the mentioned
petitions for reinstatement, The same was opposed by both PAL and ALPAP
(Gomez),
On March 24, 1972, ALPAP (Gomez) filed a motion to suspend the proceedings in
Case 101-IPA(B) until the prejudicial question of who should prosecute the main case
(Case 101-IPA) is resolved. On April 18, 1972, Judge Paredes issued an order
deferring the hearing of the main case until this Court shall have decided L-33705, but
allowing other matters, including the consolidated petition for reinstatement, to be
heard.
On. May 5, 1972, ALPAP (Gomez) filed another motion to suspend the hearing on the
mentioned petition for reinstatement on the ground that this Court's decision in L-
33705 should be awaited. ALPAP (Gaston) opposed that motion on the ground that
the matter had already been denied twice and the order setting the case for hearing
was merely. On May 15, 1972, Judge Paredes denied the said motion to suspend the
hearing on the petition for reinstatement unless a countermanding Order is issued by
a higher Court."
On May 18, 1972, ALPAP (Gomez) filed a motion for reconsideration of Judge
Paredes' order, alleging that employee status of those who resigned or retired en
masse was an issue in mentioned Case 2939-MC decision on which is still pending
consideration before Court in L-33705.
On June 19, 1972, the industrial court en banc passed a resolution reversing Judge
Paredes' order on the ground that the question of the employee status of the pilots
who were seeking reinstatement with PAL has already been raised squarely in Case
2939-MC and resolved by the said tribunal found that the said pilots have already lost
their employee status as a consequence of their resignations and/or retirement from
PAL which had been duly accepted by the latter.
DISCUSSION
In 'Its brief before this Court, ALPAP (Gaston) states that it goes not question the
recognition extended by PAL to ALPAP (Gomez ) the collective bargaining agent of
all PAL pilots on active flight duty. Neither does it dispute the assumption by ALPAP
(Gomez) of the authority to manage and administer the collective bargaining
agreement between ALPAP and PAL (which at any rate had expired on January 31,
1972) nor the right of ALPAP (Gomez) to negotiate and conclude any other collective
bargaining agreement with PAL. What it disputes, however, is the authorization given
by the industrial court to ALPAP (Gomez), in a certification proceeding, to take over
the corporate name, office and funds of ALPAP.
This Court has always stressed that a certification proceeding is not a litigation, in the
sense in which this term is ordinarily understood, but an investigation of a non-
adversary, fact finding character in which the Court of Industrial Relations plays the
part of a disinterested investigator seeking merely to ascertain the desires of
employees as to the matter of their representation (National Labor Union vs. Go Soc
and Sons, 23 SCRA 436; Benguet Consolidated, Inc. vs. Bobok Lumber Jack Ass'n.,
L-11029, May 23, 1958; Bulakena Restaurant and Caterer vs. C.I.R., 45 SCRA 95;
LVN Pictures, Inc. vs. Philippine Musicians Guild (FFW) and C.I.R., 1 SCRA 132).
Such being the nature of a certification proceeding, we find no cogent reason that
should prevent the industrial court, in such a proceeding, from inquiring into and
satisfying itself about matters which may be relevant and crucial. though seemingly
beyond the purview of such a proceeding, to the complete realization of the well-
known purposes of a certification case.
Such a situation may arise, as it did in the case at bar, where a group of pilots of a
particular airline, allegedly anticipation their forced retirement or resignation on
account of strained relations with the airline arising from unfulfilled economic
demands, decided to adopt an amendment to their organization's constitution and by-
laws in order to enable them to retain their membership standing therein even after
the termination of their employment with the employer concerned. The industrial court
definitely should be allowed ample discretion to secure a disclosure of circumstances
which will enable it to act fairly in a certification case.
This Court nonetheless finds, after a close and dispassionate study of the facts on
record, that the industrial court's conclusion, that the mentioned amendment to the
ALPAP constitution and by-laws is illegal (a) because it was not adopted in
accordance with the procedure prescribed and (b) because member of labor
organization cannot adopt an amendment to their fundamental charter so as to
include non employees (of PAL) as member, is erroneous.
We have made a careful examination of the records of L-33705 and we find the
adoption of the resolution introducing the questioned amendment to be substancial
compliance with the ALPAP constitution and by-law. Indeed, there is no refutation of
the act that 221out of the 270 members of ALPAP did cast their votesin favor of the
said amendment on October 30, 1970 at the ALPAP general membership meeting.
Their Court cannot likewise subcribe to the restrictive interpretation made by the court
below of the term "labor organization," which Section 2(e) of R.A. 875 defines as any
union or association of employees which exist, in whole or in part, for the purpose of
the collective bargaining or dealing with employers concerning terms and conditions
of employment." The absence of the condition which the court below would attach to
the statutory concept of a labor organization, as being limited to the employees of
particular employer, is quite evident from the law. The emphasis of Industrial Peace
Act is clearly on the pourposes for which a union or association of employees
established rather than that membership therein should be limited only to the
employees of a particular employer. Trite to say, under Section 2(h) of R.A 875
"representative" is define as including "a legitimate labor organization or any officer or
agent of such organization, whether or not employed by the employer or
employeewhom he represents." It cannot be overemphasized likewise that labor
dispute can exist "regardless of whether the disputants stand in the proximate relation
of employer and employee. (Section 2(j), R.a. 875).
There is, furthermore, nothing in the constitution and by-laws of ALPAP which
indubitably restricts membership therein to PAL pilots alone. 1 Although according to
ALPAP (Gomez there has never been an instance when a non-PAL pilot became a
member of ALPAP, the complete lack of any such precondition for ALPAP
membership cannot but be interpreted as an unmistakable authority for the
association to accept pilots into its fold though they may not be under PAL's employ.
The fundamental assumptions relied upon by the industrial court as bases for
authorizing ALPAP (Gomez) to take over the office and funds of ALPAP being, in this
Court's opinion, erroneous, and, in the absence of any serious dispute that on
December 18-22, 1970 Felix C. Gaston, and four other pilots, were elected by the
required majority of ALPAP members as officers of their association, this Court
hereby rules that the mentioned authorization to ALPAP (Gomez) to take over the
office, funds and name of ALPAP was done with grave abuse of discretion.
Moreover, this Court cannot hold as valid and binding the election of Ben Hur Gomez
as President of ALPAP. He was elected at a meeting of only 45 ALPAP members
called just one day after the election of Felix C. Gaston as President of ALPAP who,
as shown, received a majority of 180 votes out of a total membership of 270. tender
the provisions of section 4, article in of the Constitution and By-Laws of ALPAP, duly
elected officers of that association shall remain in office for ac least one year;
The term of office of the officers of the Association shall start on the
first day of the fiscal year of the Association. It shall continue for
one year or until they are re-elected or until their successors have
been elected or appointed and takes office in accordance with the
Constitution and by-laws.
While this Court considers the ruling of the court below, on the matter of who has the
exclusive rights to the office, funds and name of ALPAP, as having been erroneously
made, we cannot hold, however, that those belonging to the group of ALPAP
(Gomez) do not possess any right at all over the office, funds and name of ALPAP of
which they are also members.
In our opinion, it is perfectly within the powers and prerogatives of a labor
organization, through its duly elected officers, to authorize a segment of that
organization to bargain collectively with a particular employer, particularly where
those constituting the segment share a common and distinguishable interest, apart
from the rest of their fellow union members, on matters that directly affect the terms
and conditions of their particular employment. As the circumstances pertinent to the
case at bar presently stand, ALPAP (Gaston) has extended recognition to ALPAP
(Gomez) to enter and conclude collective bargaining contracts with PAL. Having
given ALPAP (Gomez) this authority, it would be clearly unreasonable on the part of
ALPAP (Gaston) to disallow the former a certain use of the office, funds and name of
ALPAP when such use is necessary or would be required to enable ALPAP (Gomez)
to exercise, in a proper manner, its delegated authority to bargain collectively with
PAL. Clearly, an intelligently considered adjustment of grievances and integration of
the diverse and varying interests that not infrequently and, often, unavoidably
permeate the membership of a labor organization, will go a long way, in achieving
peace and harmony within the ranks of ALPAP. Of course, in the eventuality that the
pilots presently employed by PAL and who subscribe to the leadership of Ben Hur
Gomez should consider it to their better interest to have their own separate office,
name and union funds, nothing can prevent them from setting up a separate labor
union. In that eventuality, whatever vested rights, interest or participation they may
have in the assets, including cash funds, of ALPAP as a result of their membership
therein should properly be liquidated in favor of such withdrawing members of the
association.
On the matter of whether the industrial court also abuse its authority for allowing
ALPAP (Gomez) to appropriate the ALPAP name, it does not appear that the herein
petitioner has shown below any exclusive franchise or right to the use of that name.
Hence, there is no proper basis for correcting the action taken by the court below on
this regard.
L-35206
The threshold issue posed in L-35206 is whether the Court of Industrial Relations
acted without jurisdiction and with grave abuse of discretion in promulgating the
resolution dated June 19, 1972 suspending hearings on the mentioned petition for
reinstatement until this Court shall have decided L-33705.
We find no merit to the charge made.
While it is correct, as submitted by ALPAP (Gaston), that in the 1971 case
of Philippine Federation of Petroleum Workers (PFPW) vs. CIR (37 SCRA 716) this
Court held that in a certified labor dispute all issues involved in the same should be
determined in the case where the certified dispute was docketed and that the parties
should not be permitted to isolate other germane issues or demands and reserve
them for determination in the other cases pending before other branches of the
industrial court, non-compliance with this rule is at best an error in procedure, rather
than of jurisdiction, which is not beyond the power of this Court to review where
sufficient reasons exists, a situation not obtaining in the case at bar.
After a thoroughgoing study of the records of these two consolidated petitions, this
Court finds that the matter of the reinstatement of the pilots who retired or resigned
from PAL was ventilated fully and adequately in the certification case in all its
substantive aspects, including the allegation of the herein petitioners that they were
merely led to believe in good faith that in retiring or resigning from PAL they were
simply exercising their rights to engage in concerted activity. In the light of the
circumstances thus found below it can be safely concluded that the mass retirement
and resignation action of the herein petitioners was intentionally planned to abort the
effects of the October 7, 10 and 19, 1970 return-to-work orders of the industrial court
(which they, in fact, ignored for more than a week) by placing themselves beyond the
jurisdictional control of the said court through the umbrella of the constitutional,
prohibition against involuntary servitude, thereby enabling them to pursue their main
pressure objective of grounding most, if not all, PAL flight operations. Clearly, the
powers given to the industrial court in a certified labor dispute will be meaningless
and useless to pursue where its jurisdiction cannot operate.
We cannot consequently disagree with the court a quo when it concluded that the
actuations of the herein petitioners after they retired and resigned en masse — their
retrieval of deposits and other funds from the ALPAP Cooperative Credit Union on the
ground that they have already retired or resigned, their employment with another
airline, the filing of a civil suit for the recovery of their retirement pay where they
invoked the Provision against involuntary servitude to obtain payment thereof, and
their repeated manifestations before the industrial court that their retirement and
resignation were not sham, but voluntary, and intentional — are, in the aggregate,
indubitable indications that the said pilots did retire/resign from PAL with full
awareness of the Likely consequences of their acts. Their protestations of good faith,
after nearly a year of underscoring the fact that they were no longer employed with
PAL, cannot but appear to a reasonable mind as a late and regrettable ratiocination.
Parenthetically, contrary to ALPAP (Gaston)'s argument that the pilots' retirement'
resignation was a legitimate concerted activity , citing Section 2(1) of the Industrial
Peace Act which defines "strike" as "any temporary stoppage of work by the
concerted action of employees as a result of an industrial dispute," it is worthwhile to
observe that as the law defines it, a strike means only a "temporary stoppage of
work." What the mentioned pilots did, however, cannot be considered, in the opinion
of this Court, as mere "temporary stoppage of work." What they contemplated was
evidently a permanent cut-off of employment relationship with their erstwhile
employer, the Philippine Air Lines. In any event, the dispute below having been
certified as existing in an industry indispensable to the national interest, the said
pilots' rank disregard for the compulsory orders of the industrial court and their daring
and calculating venture to disengage themselves from that court's jurisdiction, for the
obvious purpose of satisfying their narrow economic demands to the prejudice of the
public interest, are evident badges of bad faith.
A legitimate concerted activity is a matter that cannot be used to circumvent judicial
orders or be tossed around like a plaything Definitely, neither employers nor
employees should be allowed to make of judicial authority a now-youve-got-it-now-
you-dont affair. The courts cannot hopefully effectuate and vindicate the sound
policies of the Industrial Peace Act and all our labor laws if employees, particularly
those who on account of their highly, advanced technical background and relatively
better life status are far above the general working class spectrum, will be permitted
to defy and invoke the jurisdiction of the courts whenever the alternative chosen will
serve to feather their pure and simple economic demands.
ACCORDINGLY, in L-33705 the resolution of the Court of Industrial Relations dated
June 15, 1971 upholding the decision of Judge Joaquin M. Salvador dated May 29,
1971 is hereby modified in accordance with the foregoing opinion. Felix 6. Gaston or
whoever may be the incumbent President of ALPAP is hereby ordered to give to any
member withdrawing his membership from ALPAP whatever right, interest or
participation such member may have in the assets, including cash funds, of ALPAP
as a result of his membership in that association.

In L-35206, the petition assailing the resolution of the Court of Industrial Relations
dated June 19, 1972, is hereby dismissed for lack of merit insofar as the petitioners'
allegations of their right to reinstatement with PAL is concerned. With reference to the
alternative action, re: payment of their claims for retirement or separation pay, the
Secretary of Labor, in accordance with the applicable procedure prescribed by law, is
hereby ordered to determine whether such claim is in order, particularly in view of
the caveat made by PAL, in accepting the petitioners' individual letters of
retirement/resignation, that said petitioners shall not be entitled to any benefit or
privilege to which they may otherwise be entitled by reason of their employment with
PAL as the former's acts constituted a violation of the order of the industrial court
dated November 26, 1970.
ALEXANDER REYES, ALBERTO M. NERA, EDGARDO M. GECA, and 138
others, petitioners,
vs.
CRESENCIANO B. TRAJANO, as Officer-in-Charge, Bureau of Labor Relations,
Med. Arbiter PATERNO ADAP, and TRI-UNION EMPLOYEES UNION, et
al., respondent.
NARVASA, C.J.:
The officer-in-charge of the Bureau of Labor Relations (Hon. Cresenciano Trajano)
sustained the denial by the Med Arbiter of the right to vote of one hundred forty-one
(141) members of the "Iglesia ni Kristo" (INK), all employed in the same company, at
a certification election at which two (2) labor organizations were contesting the right to
be the exclusive representative of the employees in the bargaining unit. That denial is
assailed as having been done with grave abuse of discretion in the special civil action
of certiorari at bar, commenced by the INK members adversely affected thereby.
The certification election was authorized to be conducted by the Bureau of Labor
Relations among the employees of Tri-Union Industries Corporation on October 20,
1987. The competing unions were Tri-Union Employees Union-Organized Labor
Association in Line Industries and Agriculture (TUEU-OLALIA), and Trade Union of
the Philippines and Allied Services (TUPAS). Of the 348 workers initially deemed to
be qualified voters, only 240 actually took part in the election, conducted under the
provision of the Bureau of Labor Relations. Among the 240 employees who cast their
votes were 141 members of the INK.
The ballots provided for three (3) choices. They provided for votes to be cast, of
course, for either of the two (2) contending labor organizations, (a) TUPAS and (b)
TUEU-OLALIA; and, conformably with established rule and practice, 1 for (c) a third
choice: "NO UNION."
The final tally of the votes showed the following results:
TUPAS 1
TUEU-OLALIA 95
NO UNION 1
SPOILED 1
CHALLENGED 141
The challenged votes were those cast by the 141 INK members. They were
segregated and excluded from the final count in virtue of an agreement
between the competing unions, reached at the pre-election conference, that
the INK members should not be allowed to vote "because they are not
members of any union and refused to participate in the previous certification
elections."
The INK employees promptly made known their protest to the exclusion of their votes.
They filed f a petition to cancel the election alleging that it "was not fair" and the result
thereof did "not reflect the true sentiments of the majority of the employees." TUEU-
OLALIA opposed the petition. It contended that the petitioners "do not have legal
personality to protest the results of the election," because "they are not members of
either contending unit, but . . . of the INK" which prohibits its followers, on religious
grounds, from joining or forming any labor organization . . . ."
The Med-Arbiter saw no merit in the INK employees 1 petition. By Order dated
December 21, 1987, he certified the TUEU-OLALIA as the sole and exclusive
bargaining agent of the rank-and-file employees. In that Order he decided the fact
that "religious belief was (being) utilized to render meaningless the rights of the non-
members of the Iglesia ni Kristo to exercise the rights to be represented by a labor
organization as the bargaining agent," and declared the petitioners as "not possessed
of any legal personality to institute this present cause of action" since they were not
parties to the petition for certification election.
The petitioners brought the matter up on appeal to the Bureau of Labor Relations.
There they argued that the Med-Arbiter had "practically disenfranchised petitioners
who had an overwhelming majority," and "the TUEU-OLALIA certified union cannot
be legally said to have been the result of a valid election where at least fifty-one
percent of all eligible voters in the appropriate bargaining unit shall have cast their
votes." Assistant Labor Secretary Cresenciano B. Trajano, then Officer-in-Charge of
the Bureau of Labor Relations, denied the appeal in his Decision of July 22, 1988. He
opined that the petitioners are "bereft of legal personality to protest their alleged
disenfrachisement" since they "are not constituted into a duly organized labor union,
hence, not one of the unions which vied for certification as sole and exclusive
bargaining representative." He also pointed out that the petitioners "did not participate
in previous certification elections in the company for the reason that their religious
beliefs do not allow them to form, join or assist labor organizations."
It is this Decision of July 22, 1988 that the petitioners would have this Court annul and
set aside in the present special civil action of certiorari.
The Solicitor General having expressed concurrence with the position taken by the
petitioners, public respondent NLRC was consequently required to file, and did
thereafter file, its own comment on the petition. In that comment it insists that "if the
workers who are members of the Iglesia ni Kristo in the exercise of their religious
belief opted not to join any labor organization as a consequence of which they
themselves can not have a bargaining representative, then the right to be
representative by a bargaining agent should not be denied to other members of the
bargaining unit."
Guaranteed to all employees or workers is the "right to self-organization and to form,
join, or assist labor organizations of their own choosing for purposes of collective
bargaining." This is made plain by no less than three provisions of the Labor Code of
the Philippines. 2 Article 243 of the Code provides as follows: 3
ART. 243. Coverage and employees right to self-organization. —
All persons employed in commercial, industrial and agricultural
enterprises and in religious, charitable, medical, or educational
institutions whether operating for profit or not, shall have the right to
self-organization and to form, join, or assist labor organizations of
their own choosing for purposes or collective bargaining. Ambulant,
intermittent and itinerant workers, self-employed people, rural
workers and those without any definite employers may form labor
organizations for their mutual aid and protection.
Article 248 (a) declares it to be an unfair labor practice for an employer, among
others, to "interfere with, restrain or coerce employees in the exercise of their right to
self-organization." Similarly, Article 249 (a) makes it an unfair labor practice for a
labor organization to "restrain or coerce employees in the exercise of their rights to
self-organization . . . "
The same legal proposition is set out in the Omnibus Rules Implementing the Labor
Code, as amended, as might be expected Section 1, Rule II (Registration of Unions),
Book V (Labor Relations) of the Omnibus Rules provides as follows; 4
Sec. 1. Who may join unions; exception. — All persons employed in
commercial, industrial and agricultural enterprises, including
employees of government corporations established under the
Corporation Code as well as employees of religious, medical or
educational institutions, whether operating for profit or not, except
managerial employees, shall have the right to self-organization and
to form, join or assist labor organizations for purposes of collective
bargaining. Ambulant, intermittent and without any definite
employers people, rural workers and those without any definite
employers may form labor organizations for their mutual aid and
protection.
xxx xxx xxx
The right of self-organization includes the right to organize or affiliate with a labor
union or determine which of two or more unions in an establishment to join, and to
engage in concerted activities with co-workers for purposes of collective bargaining
through representatives of their own choosing, or for their mutual aid and
protection, i.e., the protection, promotion, or enhancement of their rights and
interests. 5
Logically, the right NOT to join, affiliate with, or assist any union, and to disaffiliate or
resign from a labor organization, is subsumed in the right to join, affiliate with, or
assist any union, and to maintain membership therein. The right to form or join a labor
organization necessarily includes the right to refuse or refrain from exercising said
right. It is self-evident that just as no one should be denied the exercise of a right
granted by law, so also, no one should be compelled to exercise such a conferred
right. The fact that a person has opted to acquire membership in a labor union does
not preclude his subsequently opting to renounce such membership. 6
As early as 1974 this Court had occasion to expatiate on these self-evident
propositions in Victoriano v. Elizalde Rope Workers' Union, et al., 7 viz.:
. . .What the Constitution and Industrial Peace Act recognize and
guarantee is the "right" to form or join associations. Notwithstanding
the different theories propounded by the different schools of
jurisprudence regarding the nature and contents of a "right," it can
be safely said that whatever theory one subscribes to, a right
comprehends at least two broad notions, namely: first, liberty or
freedom, i.e., the absence of legal restraint, whereby an employee
may act for himself being prevented by law; second, power,
whereby an employee may, as he pleases, join or refrain from
joining an association. It is therefore the employee who should
decide for himself whether he should join or not an association; and
should he choose to join; and even after he has joined, he still
retains the liberty and the power to leave and cancel his
membership with said organization at any time (Pagkakaisa
Samahang Manggagawa ng San Miguel Brewery vs. Enriquez, et
al., 108 Phil. 1010, 1019). It is clear, therefore, that the right to join
a union includes the right to abstain from joining any union (Abo, et
al. vs. PHILAME [KG] Employees Union, et al., L-19912, January
20, 1965, 13 SCRA 120, 123, quoting Rothenberg, Labor
Relations). Inasmuch as what both the Constitution and the
Industrial Peace Act have recognized, the guaranteed to the
employee, is the "right" to join associations of his choice, it would
be absurd to say that the law also imposes, in the same breath,
upon the employee the duty to join associations. The law does not
enjoin an employee to sign up with any association.
The right to refuse to join or be represented by any labor organization is recognized
not only by law but also in the rules drawn up for implementation thereof. The original
Rules on Certification promulgated by the defunct Court of Industrial Relations
required that the ballots to be used at a certification election to determine which of
two or more competing labor unions would represent the employees in the
appropriate bargaining unit should contain, aside from the names of each union, an
alternative choice of the employee voting, to the effect that he desires not to which of
two or more competing labor unions would represent the employees in the
appropriate bargaining unit should contain, aside from the names of each union, an
alternative choice of the employee voting, to the effect that he desires not to be
represented by any union. 8And where only one union was involved, the ballots were
required to state the question — "Do you desire to be represented by said union?" —
as regards which the employees voting would mark an appropriate square, one
indicating the answer, "Yes" the other, "No."
To be sure, the present implementing rules no longer explicitly impose the
requirement that the ballots at a certification election include a choice for "NO
UNION" Section 8 (rule VI, Book V of the Omnibus Rules) entitled "Marketing and
canvassing of votes," pertinently provides that:
. . . (a) The voter must write a cross (X) or a check (/) in the square
opposite the union of his choice. If only one union is involved, the
voter shall make his cross or check in the square indicating "YES"
or "NO."
xxx xxx xxx
Withal, neither the quoted provision nor any other in the Omnibus Implementing Rules
expressly bars the inclusion of the choice of "NO UNION" in the ballots. Indeed it is
doubtful if the employee's alternative right NOT to form, join or assist any labor
organization or withdraw or resign from one may be validly eliminated and he be
consequently coerced to vote for one or another of the competing unions and be
represented by one of them. Besides, the statement in the quoted provision that "(i)f
only one union is involved, the voter shall make his cross or check in the square
indicating "YES" or "NO," is quite clear acknowledgment of the alternative possibility
that the "NO" votes may outnumber the "YES" votes — indicating that the majority of
the employees in the company do not wish to be represented by any union — in
which case, no union can represent the employees in collective bargaining. And
whether the prevailing "NO" votes are inspired by considerations of religious belief or
discipline or not is beside the point, and may not be inquired into at all.
The purpose of a certification election is precisely the ascertainment of the wishes of
the majority of the employees in the appropriate bargaining unit: to be or not to be
represented by a labor organization, and in the affirmative case, by which particular
labor organization. If the results of the election should disclose that the majority of the
workers do not wish to be represented by any union, then their wishes must be
respected, and no union may properly be certified as the exclusive representative of
the workers in the bargaining unit in dealing with the employer regarding wages,
hours and other terms and conditions of employment. The minority employees — who
wish to have a union represent them in collective bargaining — can do nothing but
wait for another suitable occasion to petition for a certification election and hope that
the results will be different. They may not and should not be permitted, however, to
impose their will on the majority — who do not desire to have a union certified as the
exclusive workers' benefit in the bargaining unit — upon the plea that they, the
minority workers, are being denied the right of self-organization and collective
bargaining. As repeatedly stated, the right of self-organization embraces not only the
right to form, join or assist labor organizations, but the concomitant, converse
right NOT to form, join or assist any labor union.
That the INK employees, as employees in the same bargaining unit in the true sense
of the term, do have the right of self-organization, is also in truth beyond question, as
well as the fact that when they voted that the employees in their bargaining unit
should be represented by "NO UNION," they were simply exercising that right of self-
organization, albeit in its negative aspect.
The respondents' argument that the petitioners are disqualified to vote because they
"are not constituted into a duly organized labor union" — "but members of the INK
which prohibits its followers, on religious grounds, from joining or forming any labor
organization" — and "hence, not one of the unions which vied for certification as sole
and exclusive bargaining representative," is specious. Neither law, administrative rule
nor jurisprudence requires that only employees affiliated with any labor organization
may take part in a certification election. On the contrary, the plainly discernible
intendment of the law is to grant the right to vote to all bona fide employees in the
bargaining unit, whether they are members of a labor organization or not. As held
in Airtime Specialists, Inc. v. Ferrer-Calleja: 9
In a certification election all rank-and-file employees in the
appropriate bargaining unit are entitled to vote. This principle is
clearly stated in Art. 255 of the Labor Code which states that the
"labor organization designated or selected by the majority of the
employees in an appropriate bargaining unit shall be the exclusive
representative of the employees in such unit for the purpose of
collective bargaining." Collective bargaining covers all aspects of
the employment relation and the resultant CBA negotiated by the
certified union binds all employees in the bargaining unit. Hence, all
rank-and-file employees, probationary or permanent, have a
substantial interest in the selection of the bargaining representative.
The Code makes no distinction as to their employment for
certification election. The law refers to "all" the employees in the
bargaining unit. All they need to be eligible to support the petition is
to belong to the "bargaining unit".
Neither does the contention that petitioners should be denied the right to vote
because they "did not participate in previous certification elections in the company for
the reason that their religious beliefs do not allow them to form, join or assist labor
organizations," persuade acceptance. No law, administrative rule or precedent
prescribes forfeiture of the right to vote by reason of neglect to exercise the right in
past certification elections. In denying the petitioners' right to vote upon these
egregiously fallacious grounds, the public respondents exercised their discretion
whimsically, capriciously and oppressively and gravely abused the same.
WHEREFORE, the petition for certiorari is GRANTED; the Decision of the then
Officer-in-Charge of the Bureau of Labor Relations dated December 21, 1987
(affirming the Order of the Med-Arbiter dated July 22, 1988) is ANNULLED and SET
ASIDE; and the petitioners are DECLARED to have legally exercised their right to
vote, and their ballots should be canvassed and, if validly and properly made out,
counted and tallied for the choices written therein. Costs against private respondents.
PHILIPPINE FRUITS AND VEGETABLE INDUSTRIES, INC., petitioner, 1989. Copies of said Order were furnished the parties (p. 118,
vs. NLRC, Records) and on December 12, 1988 the notice of
HON. RUBEN D. TORRES, in his capacity as Secretary of the Department of certification election was duly posted. One hundred sixty eight (168)
Labor and Employment and TRADE UNION OF THE PHILIPPINES AND ALLIED of the questioned workers actually voted on election day.
SERVICES (TUPAS), respondents.
In the scheduled certification election, petitioner objected to the
proceeding, through a Manifestation (p. 262, NLRC, Records) filed
with the Representation Officer before the close of the election
PARAS, J.: proceedings. Said Manifestation pertinently reads:

This petition for review on certiorari with prayer for the issuance of a temporary
restraining order and/or preliminary injunction assails the following:
(1) The Resolution dated December 12, 1989 of public respondent Secretary of
Labor 1 affirming on appeal the Order dated March 7, 1989 issued by Med-Arbiter
Danilo T. Basa, and certifying private respondent Trade Union of the Philippines and
Allied Services (or TUPAS) as the sole and exclusive bargaining agent of all regular
rank-and-file and seasonal workers at Philippine Fruits and Vegetable Industries, Inc.
(or PFVII), petitioner herein; and
(2) The Order dated February 8, 1990 issued by public respondent Secretary of
Labor 2 denying petitioner's Urgent Motion for Reconsideration.
Petitioner PFVII contends the questioned resolution and order are null and void as
they are contrary to law and have been issued with grave abuse of discretion, and
having no other plain, speedy and adequate remedy in the ordinary course of law, it
filed with this Court the petition now at hand.
The posting of the list of eligible voters authorized
to participate in the certification election was
short of the five (5) days provided by law
considering that it was posted only on December
12, 1988 and the election was held today,
December 16, 1988 is only four days prior to the
scheduled certification election.
By agreement of petitioner and TUPAS, workers whose names
were inadvertently omitted in the list of qualified voters were
allowed to vote, subject to challenge (p. 263, NLRC, Records).
Thirty eight of them voted on election day.
Initial tally of the election results excluding the challenged votes
showed the following:
Total No. of the Votes 291

The facts of the case are well-stated in the Comment filed by the Solicitor General, Yes votes 40
and are thus reproduced hereunder, as follows: No votes 38
Spoiled 7
Challenged (Regular) 38
On October 13, 1988, Med-Arbiter Basa issued an Order granting ——
the petition for Certification election filed by the Trade Union of the Total No. of Votes Cast 123
Philippines and Allied Services (TUPAS). Said order directed the
holding of a certification election among the regular and seasonal
workers of the Philippine Fruits and Vegetables, Inc. (p. 42, NLRC, On January 6, 1989, Management and TUPAS agreed to have the
Records). 36 challenged votes of the regular rank-and-file employees opened
and a canvass thereof showed:
After a series of pre-election conferences, all issues relative to the
conduct of the certification election were threshed out except that Yes votes 20
which pertains to the voting qualifications of the hundred ninety four No votes 14
(194) workers enumerated in the lists of qualified voters submitted Spoiled 4
by TUPAS. ——
Total 38
After a late submission by the parties of their respective position
papers, Med-Arbiter Basa issued an Order dated December 9, Added to the initial election results of December 16, 1988, the
1988 allowing 184 of the 194 questioned workers to vote, subject to canvass of results showed:
challenge, in the certification election to be held on December 16,
 Yes 60
No 52
Spoiled 11
——
Total 123
Based on the foregoing results, the yes votes failed to obtain the
majority of the votes cast in said certification election, hence, the
necessity of opening the 168 challenged votes to determine the
true will of the employees.
On January 20, 1989, petitioner filed a position paper arguing
against the opening of said votes mainly because said voters are
not regular employees nor seasonal workers for having allegedly
rendered work for less than 180 days.
Trade Union of the Philippines and Allied Services (TUPAS), on the
other hand, argued that the employment status of said employees
has been resolved when Labor Arbiter Ricardo N. Martinez, in his
Decision dated November 26, 1988 rendered in NLRC Case No.
Sub-Rab-01-09-7-0087-88, declared that said employees were
illegally dismissed.
In an Order dated February 2, 1989 (pp. 278-280, NLRC, Records)
Med-Arbiter Basa ordered the opening of said 168 challenged votes
upon his observation that said employees were illegally dismissed
in accordance with the foregoing Decision of Labor Arbiter
Martinez. As canvassed, the results showed
Yes votes 165
No votes 0
Spoiled 3
——
Total 168
On February 23, 1989, petitioner formally filed a Protest (pp.
284-287, NLRC, Records) claiming that the required five day
posting of notice was not allegedly complied with and that the list of
qualified voters so posted failed to include fifty five regular workers
agreed upon by the parties as qualified to vote. The Protest further
alleged that voters who were ineligible to vote were allowed to vote.
Med-Arbiter Basa, in his Order dated March 7, 1989, dismissed
said Protest which Order was affirmed on appeal in the Resolution
dated December 12, 1989 of then Secretary of Labor, Franklin
Drillon.
Petitioner's Motion for Reconsideration was denied for lack of merit
in public respondent's Order dated February 28, 1990.
(pp. 84-88, Rollo)3
The instant petition has, for its Assignment of Errors, the following:
(1) The Honorable Secretary of Labor and Employment acted with
grave abuse of discretion amounting to lack of jurisdiction and
committed manifest error in upholding the certification of TUPAS as
the sole bargaining agent mainly on an erroneous ruling that the
protest against the canvassing of the votes cast by 168 dismissed
workers was filed beyond the reglementary period.
(2) The Honorable Secretary of Labor committed an abuse of
discretion in completely disregarding the issue as to whether or not
non-regular seasonal workers who have long been separated from
employment prior to the filing of the petition for certification election
would be allowed to vote and participate in a certification election. 4
The Court finds no merit in the petition.
For it is to be noted that the formal protest of petitioner PFVII was filed beyond the
reglementary period. A close reading of Sections 3 and 4, Rule VI, Book V of the
Implementing Rules of the Labor Code, which read as follows:
Sec. 3. Representation officer may rule on any-on-the-spot
questions. — The Representation officer may rule on any on-the-
spot question arising from the conduct of the election. The
interested party may however, file a protest with the representation
officer before the close of the proceedings.
Protests not so raised are deemed waived. Such protest shall be
contained in the minutes of the proceedings. (Emphasis supplied)
Sec. 4. Protest to be decided in twenty (20) working days. —
Where the protest is formalized before the med-arbiter with five (5)
days after the close of the election proceedings, the med-arbiter
shall decide the same within twenty (20) working days from the
date of formalization. If not formalized within the prescribed period,
the protest shall be deemed dropped. The decision may be
appealed to the Bureau in the same manner and on the same
grounds as provided under Rule V. (Emphasis supplied)
would readily yield, as a matter of procedure, the following requirements in order that
a protest filed thereunder would prosper, to wit:
(1) The protest must be filed with the representation officer and
made of record in the minutes of the proceedings before the close
of election proceedings, and
 (2) The protest must be formalized before the Med-Arbiter within
five (5) days after the close of the election proceedings.
The records before Us quite clearly disclose the fact that petitioner, after filing a
manifestation of protest on December 16, 1988, election day, only formalized the
same on February 20, 1989, or more than two months after the close of election
proceedings (i.e., December 16, 1988). We are not persuaded by petitioner's
arguments that election proceedings include not only casting of votes but necessarily
includes canvassing and appreciation of votes cast and considering that the
canvassing and appreciation of all the votes cast were terminated only on February
16, 1989, it was only then that the election proceedings are deemed closed, and thus,
when the formal protest was filed on February 20, 1989, the five-day period within
which to file the formal protest still subsisted and its protest was therefore formalized
within the reglementary period. 5
As explained correctly by the Solicitor General, the phrase "close of election
proceedings" as used in Sections 3 and 4 of the pertinent Implementing Rules refers
to that period from the closing of the polls to the counting and tabulation of the votes
as it could not have been the intention of the Implementing Rules to include in the
term "close of the election proceedings" the period for the final determination of the
challenged votes and the canvass thereof, as in the case at bar which may take a
very long period. 6 Thus, if a protest can be formalized within five days after a final
determination and canvass of the challenged votes have been made, it would result in
an undue delay in the affirmation of the employees' expressed choice of a bargaining
representative. 7
WHEREFORE, premises considered, the appeal is hereby denied
and the Med-Arbiter's order dated 7 March 1989 affirmed. Petitioner
TUPAS is hereby certified as the sole and exclusive bargaining
agent of all regular rank-and-file and seasonal workers at Philippine
Fruits and Vegetable Industries, Inc. 9 (p. 26, Rollo)
At any rate, it is now well-settled that employees who have been improperly laid off
but who have a present, unabandoned right to or expectation of re-employment, are
eligible to vote in certification elections. 10 Thus, and to repeat, if the dismissal is
under question, as in the case now at bar whereby a case of illegal dismissal and/or
unfair labor practice was filed, the employees concerned could still qualify to vote in
the elections. 11
And finally, the Court would wish to stress once more the rule which it has
consistently pronounced in many earlier cases that a certification election is the sole
concern of the workers and the employer is regarded as nothing more than a
bystander with no right to interfere at all in the election. The only exception here is
where the employer has to file a petition for certification election pursuant to Article
258 of the Labor Code because it is requested to bargain collectively. Thus, upon the
score alone of the "Bystander Rule", the instant petition would have been dismissed
outright.
WHEREFORE, the petition filed by Philippine Fruits and Vegetable Industries, Inc.
(PFVII) in hereby DISMISSED for lack of merit.

Petitioner would likewise bring into issue the fact that the notice of certification
election was posted only on December 12, 1988 or four days before the scheduled
elections on December 16, 1988, instead of the five-day period as required under
Section 1 of Rule VI, Book V of the Implementing Rules. But it is not disputed that a
substantial number, or 291 of 322 qualified voters, of the employees concerned were
informed, thru the notices thus posted, of the elections to be held on December 16,
1988, and that such employees had in fact voted accordingly on election day. Viewed
thus in the light of the substantial participation in the elections by voter-employees,
and further in the light of the all-too settled rule that in interpreting the Constitution's
protection to labor and social justice provisions and the labor laws and rules and
regulations implementing the constitutional mandate, the Supreme Court adopts the
liberal approach which favors the exercise of labor rights, 8 We find the lack of one
day in the posting of notices insignificant, and hence, not a compelling reason at all in
nullifying the elections.

As regards the second assignment of error, the public respondent Secretary of Labor
did not completely disregard the issue as to the voting rights of the alleged separated
employees for precisely, he affirmed on appeal the findings of the Med-Arbiter when
he ruled

The election results indicate that TUPAS obtained majority of the

valid votes cast in the election — 60 plus 165, or a total of 225
votes out of a possible total of 291.
SANDOVAL SHIPYARDS, INC. and VICENTE SANDOVAL, petitioners, vs. PRISCO
PEPITO, FREDELINO SOCO, ALBERTO MONIVA, FLAVIANO CANETE,
JOSE JUDILLA, ARNULFO TRADIO, PRIMO AUMAN, ALEJANDRO
TAPDASAN, GERRY CALVO, MARLON ABELLAR, MANOLO
VILLEGAS, BONIFACIO CANO, RODELIO MONDEJAR, RICARDO
IBALE, PAULINO LABRA, ANTONIO ALINSUG, PIO CAPAROSO,
MAXIMO PANUGAN, SILVESTRE IGOT, DANILO CASAS, ROLIE
BENOLA, RUDINO MOLATO, LEONARDO QUIMOD, ELPIDIO LINAO,
AURELIO GOC-ONG, NESTOR BASAKA, RODRIGO AUMAN,
ILUMINADO ABUCAY, ANASTACIO TRADIO, JR., EDUARDO
SUGAROL, JUAN FORMINTIRA, ROSENDO SOCO, JIMMY MONDIEGO,
CELSO JUDAYA, MARCIAL GONZAGA, APOLONIO ARCENAL,
SIMEON ANTOLIJAO, MARCELO SUGAROL, ERNESTO SENO, MARIO
BASAKA, GORGONIO CUYOS, ROGELIO EDAR, JAIME IBALE,
PATRICIO CANO, FELIX SARME, WILFREDO CANTERO, LORETO
JUDAYA, CARIS MUSOR, RICKY ERMAC, LUIS MONLEON, CIRILO
AGUIPO, PEDRO QUINAPONDON, CHRISTOPHER JUDAYA, GERRY
AUMAN, ALFIN IGOT, NELSON ALIVIO, LIMUEL LIBERIAGA, DANILO
MAQUILAN, DANIEL RIVERA, ROMEO BASAKA, PAULINO FLORES,
JUAN CODENERA, SEVERINO GOMEZ, EDUARDO IBALE, RONITO
CAPAROSO, GALO IBALE, ALEJANDRE MULIG, EUSTAQUIO DIOLA,
EUDILO LAURON, ALEXANDER AGUIPO, GILBERTO DESUCATAN,
CRISPULO ENTERINA, FLORINTINO CODINERO, SAMUEL AUMAN,
MARGARITO LABISTE, SERGIO SOCO, SILVERIO IBALE, JOSELITO
SUGAROL, GARY IBALE, NONITO GARBO, LORETO PEPITO, ANRITO
MONARES, NICANOR CUYOS, OSCAR ALIMPO-OS, REYNALDO
PEPITO, PEDRO VILLEGAS, JR., REY HENDERSON, JOSE ALEX
MAGLASANG, and the HONORABLE COURT OF APPEALS, respondents.
DECISION
KAPUNAN, J.:
Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure. Petitioners assail the Decision of the Court of Appeals, Former Fifteenth Division,
dated December 20, 1999 in CA-G.R. SP No. 51729,[1] and its resolution, dated May 15, 2000
denying petitioners motion for reconsideration.
The facts of the case are as follows:
Sometime in 1992, the National Federation of Labor (NFL) filed with the Department of
Labor and Employment (DOLE) a petition for certification election, alleging that its members,
which included private respondents Prisco Pepito, et al., were regular employees of petitioner
Sandoval Shipyards, Inc. (SSI). Finding that the NFL members were rank-and-file employees
of SSI, the Med-Arbiter issued an order directing that a certification election be held.
However, in a Resolution dated 25 November 1992, then Undersecretary Bienvenido
Laguesma reversed the Med-Arbiters Order and ruled that there was a valid subcontracting
agreement between SSI and its subcontractors, and that no employer-employee relationship
existed between SSI and private respondents, since the latter were the employees of the
subcontractors.[2]
In 1993, several cases for illegal dismissal were filed by private respondents against SSI
and its President, petitioner Vicente Sandoval. Private respondents alleged that they were
employees of SSI and that sometime in 1985, some sections of the company were temporarily
closed while others remained open. Later, some of them were told to secure a Mayors Permit
then were made parties to contracts with SSI stipulating that they were labor-only
contractors. They averred further that after they organized a workers union in 1992 to protect
themselves against SSIs persistent violation of labor standards, the company did not allow
them to report for work. Consequently, SSIs employees, including private respondent, went on
strike on March 26, 1992. On April 6, 1992, SSI accepted its employees back to work, except
those who were identified as officers and members of the union. The company claimed that
these persons were not its employees but those of the contractors. In their complaint, private
respondents prayed for reinstatement with backwages, damages and attorneys fees.
On December 27, 1996, the Labor Arbiter rendered its Decision in the illegal dismissal
cases. He found that while private respondents were illegally dismissed, they were not entitled
to reinstatement with backwages, damages and attorneys fees. The Labor Arbiter ruled that
there was no employer-employee relationship between SSI and private respondents, reasoning
that said issue has been laid to rest in the November 25, 1992 resolution of Undersecretary
Laguesma in the certification election case.[3]
Private respondents then appealed the decision of the Labor Arbiter to the National
Labor Relations Commission (NLRC), which affirmed the Labor Arbiters decision.[4]
Not satisfied with the decision of the NLRC, private respondents appealed the same to
the Court of Appeals. The appellate court reversed the decision of the NLRC and held that SSI
is the direct employer of private respondents.[5] Petitioners filed a motion for reconsideration
but the same was denied for lack of merit.[6]
Hence, the present appeal. Petitioners contend that the Court of Appeals erred in
applying this Courts pronouncement in Manila Golf & Country Club vs. Intermediate
Appellate Court[7] that a decision in a certification election case regarding the existence of an
employer-employee relationship does not foreclose all further dispute between the parties as to
the existence or non-existence of such relationship.They contend that such pronouncement
is obiter dictum since the issue involved therein was whether or not the persons rendering
caddying services for the golf clubs members and their guests in the clubs courses or premises
are employees of Manila Golf and Country Club and therefore within the compulsory
coverage of the Social Security System, not the correctness of the Med-Arbiters finding in the
certification election case that no employer-employee relationship existed between the golf
club and the caddies.[8]
The Court does not agree with petitioner.
Our pronouncement in the Manila Golf case that the decision in a certification election
case, by the very nature of such proceeding, does not foreclose further dispute regarding the
existence or non-existence of an employer-employee relationship, was not obiter dictum as
petitioners suggest, but rather was part of the resolution of the main issue in said case.
Manila Golf involved three separate proceedings initiated by a group of caddies against
Manila Golf and Country Club, Inc.: (1) a petition for certification election, (2) a petition for
compulsory arbitration, and (3) a petition for compulsory social security coverage. In the
certification election proceeding, the Med-Arbiter found that an employer-employee
relationship existed between the golf club and the caddies. On the other hand, the petition for
compulsory arbitration was dismissed by the Labor Arbiter upon finding that no employer-
employee relationship existed between Manila Golf and the caddies, which dismissal was later
affirmed by the NLRC. The Social Security Commission also dismissed the caddies petition
for compulsory social security coverage, stating that the caddies were not employees of the
golf club, but this ruling was later reversed by the Intermediate Appellate Court.[9]
One of the questions in said case which this Court had to address in order to resolve the
main issue was which of the three proceedings should be recognized as being decisive of the
issue regarding the existence of an employer-employee relationship. It was in this context that
the questioned pronouncement in said case was made.
Clearly, such pronouncement was not obiter dictum since the determination as to
whether the finding of the Med-Arbiter in the certification election case operates as res
adjudicata, or bar by prior judgment, was necessary in resolving the main issue therein.
The Court of Appeals correctly applied the ruling in Manila Golf & Country Club vs.
IAC that however final it may become, the decision in a certification election case, by the very
nature of such proceeding, is not such as to foreclose all further dispute as to the existence, or
non-existence of an employer-employee relationship[10] between SSI and private respondents
herein.
It is established doctrine that for res adjudicata to apply, the following requisites must
concur: (1) the former judgment or order must be final; (2) the court which rendered said
judgment or order must have jurisdiction over the subject matter and the parties; (3) said
judgment or order must be on the merits; and (4) there must be between the first and second
actions identity of parties, subject matter and cause of action. [11]
This Court further explained in the Manila Golf case:
Clearly, implicit in these requisites is that the action or proceedings
in which is issued the prior Judgment that would operate in bar of a
subsequent action between the same parties for the same cause,
be adversarial, or contentious, one having opposing parties; (is)
contested, as distinguished from an ex parte hearing or proceeding.
*** of which the party seeking relief has given legal notice to the
other party and afforded the latter an opportunity to contest it, and a
certification case is not such a proceeding, as this Court has already
ruled:
A certification proceeding is not a litigation in the sense in which
this term is commonly understood, but a mere investigation of a non-
adversary, fact-finding character, in which the investigating agency
plays the part of a disinterested investigator seeking merely to
ascertain the desires of the employees as to the matter of their
representation. The court enjoys a wide discretion in determining
the procedure necessary to insure the fair and free choice of
bargaining representatives by the employees. (Citations omitted.)[12]
Considering the foregoing, both the Labor Arbiter and the NLRC therefore erred in
relying on the pronouncement of then Undersecretary Laguesma in the certification
proceeding that there was no employer-employee relationship between SSI and private
respondents.
Moreover, the appellate court found that: (1) the so-called subcontractors do not have a
license to engage in subcontracting; (2) the salaries of private respondents are actually paid by
SSI and are given to the subcontractors who in turn give the salaries to the private
respondents; (3) it was SSI which hired the private respondents and placed them under their
respective subcontractors; and (4) private respondents use SSIs tools and equipment in their
work.[13]
Based on these findings, the Court of Appeals was correct in declaring that the alleged
subcontractors are in effect labor-only contractors and are thus mere agents of petitioner
SSI. The last paragraph of Article 106 of the Labor Code is clear on this point:
There is labor-only contracting where the person supplying workers
to an employer does not have substantial capital or investment in
the form of tools, equipment, machineries, work premises, among
others, and the workers recurited and placed by such person are
performing activites which arwe directly related to the principal
business of such employer. In such cases, the person or
intermediary shall be considered merely as an agent of the employer
who shall be responsible to the workers in the same manner and
extent as if the latter were directly employed by him.
The appellate court properly noted that the issue as to whether private respondents were
illegally dismissed, which was resolved in the affirmative by the Labor Arbiter, was not
appealed by petitioners.Such ruling has therefore attained finality. Thus, SSI, as the direct
employer of private respondents, is liable to either reinstate them and pay them backwages or
to pay them separation pay. However, because there is not enough evidence on this matter,
there is a need to remand the case to the Labor Arbiter for further proceedings to determine
whether or not there are jobs still available for private respondents in SSI.
WHEREFORE, the petition is hereby DISMISSED and the decision of respondent
Court of Appeals is hereby AFFIRMED.
SO ORDERED.
UST FACULTY UNION (USTFU), GIL Y. GAMILLA, CORAZON QUI, NORMA
CALAGUAS, IRMA POTENCIANO, LUZ DE GUZMAN, REMEDIOS
GARCIA, RENE ARNEJO, EDITHA OCAMPO, CESAR REYES, CELSO
NIERRA, GLICERIA BALDRES, MA. LOURDES MEDINA, HIDELITA
GABO, MAFEL YSRAEL, LAURA ABARA, NATIVIDAD SANTOS,
FERDINAND LIMOS, CARMELITA ESPINA, ZENAIDA FAMORCA,
PHILIP AGUINALDO, BENEDICTA ALAVA and LEONCIO
CASAL, petitioners vs. Dir. BENEDICTO ERNESTO R. BITONIO JR. of the
Bureau of Labor Relations, Med-Arbiter TOMAS F. FALCONITIN of The
National Capital Region, Department of Labor and Employment (DOLE),
EDUARDO J. MARIO JR., MA. MELVYN ALAMIS, NORMA
COLLANTES, URBANO ALABAGIA, RONALDO ASUNCION, ZENAIDA
BURGOS, ANTHONY CURA, FULVIO M. GUERRERO, MYRNA
HILARIO, TERESITA MEER, FERNANDO PEDROSA, NILDA
REDOBLADO, RENE SISON, EVELYN TIROL and ROSIE
ALCANTARA, respondents.
DECISION
PANGANIBAN, J.:
There is a right way to do the right thing at the right time for the right 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 officers should be conducted in accordance with the provisions of the
unions constitution and bylaws, as well as the Philippine Constitution and the Labor
Code. Specifically, while all legitimate faculty members of the University of Santo Tomas
(UST) belonging to a collective bargaining unit may take part in a duly convened certification
election, only bona fide members of the UST Faculty Union (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 law.
The Case
The Petition for Certiorari before us assails the August 15, 1997 Resolution [2] of
Director Benedicto Ernesto R. Bitonio Jr. of the Bureau of Labor Relations (BLR) in BLR
Case No. A-8-49-97, which affirmed the February 11, 1997 Decision of Med-Arbiter Tomas
F. Falconitin. The med-arbiters Decision disposed as follows:
WHEREFORE, premises considered, judgment is hereby rendered
declaring the election of USTFU officers conducted on October 4,
1996 and its election results as null and void ab initio.
Accordingly, respondents Gil Gamilla, et al are hereby ordered to
cease and desist from acting and performing the duties and
functions of the legitimate officers of [the] University of Santo
Tomas Faculty Union (USTFU) pursuant to [the] unions constitution
and by-laws (CBL).
The Temporary Restraining Order (TRO ) issued by this Office on
December 11, 1996 in connection with the instant petition, is hereby
made and declared permanent.[3]
Likewise challenged is the October 30, 1997 Resolution[4]of Director Bitonio, which
denied petitioners Motion for Reconsideration.
The Facts
The factual antecedents of the case are summarized in the assailed Resolution as
follows:
Petitioners-appellees [herein Private Respondents] Marino, et. al.
(appellees) are duly elected officers of the UST Faculty Union
(USTFU). The union has a subsisting five-year Collective Bargaining
Agreement with its employer, the 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.
On 21 September 1996, appellee Collantes, in her capacity as
Secretary General of USTFU, posted a notice addressed to all USTFU
members announcing a general assembly to be held on 05 October
1996. Among others, the general assembly was called to elect
USTFUs next set of officers. Through the notice, the members were
also informed of the constitution of a Committee on Elections
(COMELEC) to oversee the elections. (Annex B, petition)
On 01 October 1996, some of herein appellants filed a separate
petition with the Med-Arbiter, DOLE-NCR, directed against herein
appellees and the members of the COMELEC. Docketed as Case No.
NCR-OD-M-9610-001, the petition alleged that the COMELEC was not
constituted in accordance with USTFUs constitution and by-laws
(CBL) and that no rules had been issued to govern the conduct of the
05 October 1996 election.
On 02 October 1996, the secretary general of UST, upon the request
of the various UST faculty club presidents (See paragraph VI,
Respondents Comment and Motion to Dismiss), issued notices
allowing all faculty members to hold a convocation on 04 October
1996 (See Annex C Petition; Annexes 4 to 10, Appeal).Denominated
as [a] general faculty assembly, the convocation was supposed to
discuss the state of the unratified UST-USTFU CBA and status and
election of USTFU officers (Annex 11, Appeal)
On 04 October 1996, the med-arbiter in Case No. NCR-OD-M-9610-001
issued a temporary restraining order against herein appellees
enjoining them from conducting the election scheduled on 05
October 1996.
Also on 04 October 1996, and as earlier announced by the UST
secretary general, the general faculty assembly was held as
scheduled. The general assembly was attended by members of the
USTFU and, as admitted by the appellants, also by 'non-USTFU
members [who] are members in good standing of the UST Academic
Community Collective Bargaining Unit' (See paragraph XI,
Respondents Comment and Motion to Dismiss). On this occasion,
appellants were elected as USTFUs new set of officers by
acclamation and clapping of hands (See paragraphs 40 to 50, Annex
'12', Appeal).
The election of the appellants came about upon a motion of one Atty.
Lopez, admittedly not a member of USTFU, that the USTFU CBL and
'the rules of the election be suspended and that the election be held
[on] that day' (See --paragraph 39, Idem.)
On 11 October 1996, appellees filed the instant petition seeking
injunctive reliefs and the nullification of the results of the 04 October
1996 election. Appellees alleged that the holding of the same
violated the temporary restraining order issued in Case No. NCR-OD-
M-9610-001. Accusing appellants of usurpation, appellees
characterized the election as spurious for being violative of USTFUs
CBL, specifically because the general assembly resulting in the
election of appellants was not called by the Board of Officers of the
USTFU; there was no compliance with the ten-day notice rule
required by Section 1, Article VIII of the CBL; the supposed elections
were conducted without a COMELEC being constituted by the Board
of Officers in accordance with Section 1, Article IX of the CBL; the
elections were not by secret balloting as required by Section 1,
Article V and Section 6, Article IX of the CBL, and, the general
assembly was convened by faculty members some of whom were not
members of USTFU, so much so that non-USTFU members were
allowed to vote in violation of Section 1, Article V of the CBL.
On 24 October 1996, appellees filed another urgent ex-parte motion
for a temporary restraining order, this time alleging that appellants
had served the former a notice to vacate the union office. For their
part, appellants moved to dismiss the original petition and the
subsequent motion on jurisdictional grounds. Both the petition and
the motion were captioned to be for Prohibition, Injunction with
Prayer for Preliminary Injunction and Temporary Restraining Order.
According to the appellants, the med-arbiter has no jurisdiction over
petitions for prohibition, 'including the ancillary remedies of
restraining order and/or preliminary injunction, which are merely
incidental to the main petition for PROHIBITION' (Paragraph XVIII3,
Respondents Comment and Motion to Dismiss). Appellants also
averred that they now constituted the new set of union officers
having been elected in accordance with law after the term of office
of appellees had expired. They further maintained that appellees
scheduling of the 5 October 1996 elections was illegal because no
rules and regulations governing the elections were promulgated as
required by USTFUs CBL and that one of the members of the
COMELEC was not a registered member of USTFU. Appellants
likewise noted that the elections called by the appellees should have
been postponed to allow the promulgation of rules and regulations
and to 'insure a free, clean, honest and orderly elections and to
afford at the same time the greater majority of the general
membership to participate' (See 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 Presidents in cooperation with the USTFU
Reformist Alliance and that they received the Temporary Restraining
Order issued in Case No. NCR-OD-M-9610-001 only on 07 October
1996 and were not aware of the same on 04 October 1996.
On 03 December 1996, appellants and UST allegedly entered into
another CBA covering the period from 01 June 1996 to 31 May 2001
(Annex 11, appellants Rejoinder to the Reply and Opposition).
Consequently, appellees again moved for the issuance of a
temporary restraining order to prevent appellants from making
further representations that [they] had entered into a new agreement
with UST. Appellees also reiterated their earlier stand that
appellants were usurping the formers duties and functions and
should be stopped from continuing such acts.
On 11 December 1996, over appellants insistence that the issue of
jurisdiction should first be resolved, the med-arbiter issued a
temporary restraining order directing the respondents to cease and
desist from performing any and all acts pertaining to the duties and
functions of the officers and directors of USTFU.
In the meantime, appellants claimed that the new CBA was
purportedly ratified by an overwhelming majority of USTs academic
community on 12 December 1996 (Annexes 1 to 10, Idem). For this
reason, appellants moved for the dismissal of what it denominated
as appellees petition for prohibition on the ground that this had
become moot and academic.[5]
Petitioners appealed the med-arbiters Decision to the labor secretary,[6]who 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, consistent with the last paragraph of
Article 241 of the Labor Code.[7]
The Assailed Ruling
Agreeing with the med-arbiter that the USTFU officers purported election held on
October 4, 1994 was void for having been conducted in violation of the unions Constitution
and Bylaws (CBL), Public Respondent Bitonio rejected petitioners contention that it was a
legitimate exercise of their right to self-organization. He 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 faculty members, since that assembly had not been convened
or authorized by the 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 alleged ratification of
the new CBA by the general membership of the USTFU. Ruled Respondent Bitonio:
"This submission is flawed. The issue at hand is not collective
bargaining representation but union leadership, a matter that should
concern only the members of USTFU. As pointed out by the
appellees, the privilege of determining who the union officers will be
belongs exclusively to the members of the union. Said privilege is
exercised in an election proceeding in accordance with the union's
CBL and applicable law.
To accept appellants' claim to legitimacy on the foregoing grounds is
to invest in appellants the position, duties, responsibilities, rights
and privileges of USTFU officers without the benefit of a lawful
electoral exercise as defined in USTFU's CBL and Article 241(c) of
the Labor Code. Not to mention the fact that labor laws prohibit the
employer from 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 of them
is to concede to the employer the power of determining who should
be USTFU's leaders. This is a clear case of interference in the
exercise by USTFU members of their right to self-organization.[8]
Hence, this Petition.[9]
The Issues
The main issue in this case is whether the public respondent committed grave abuse of
discretion in refusing to recognize the officers elected during the October 4, 1996 general
assembly. Specifically, petitioners in their Memorandum urge the Court to resolve the
following questions:[10]
(1) Whether the Collective Bargaining Unit of all the faculty members
in that General Faculty Assembly had the right in that General
Faculty Assembly to suspend the provisions of the Constitution and
By-Laws of the USTFU regarding the elections of officers of the
union[.]
(2) Whether the suspension of the provisions of the Constitution and
By-Laws of the USTFU in that General Faculty Assembly is valid
pursuant to the constitutional right of the Collective Bargaining Unit
to engage in peaceful concerted activities for the purpose of ousting
the corrupt regime of the private respondents[.]
(3) Whether the overwhelming ratification of the Collective
Bargaining Agreement executed by the petitioners in behalf of the
USTFU with the University of Santo Tomas has rendered moot and
academic the issue as to the validity of the suspension of the
Constitution and By-Laws and the elections of October 4, 1996 in the
General Faculty Assembly[.]
The Courts Ruling
The petition is not meritorious. Petitioners fail to convince this Court that Director
Bitonio gravely abused his discretion in affirming the med-arbiter and in refusing to recognize
the binding effect of the October 4, 1996 general assembly called by the UST administration.
First Issue: Right to Self-Organization and Union Membership
At the outset, the Court stresses that National Federation of Labor (NFL) v.
Laguesma[11] has held that challenges against rulings of the labor secretary and those acting on
his behalf, like the director of labor relations, shall be acted upon by the Court of Appeals,
which has concurrent jurisdiction with this Court over petitions 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 Court of Appeals. Having disposed of the foregoing procedural
matter, we now tackle the issues in the present case seriatim.
Self-organization is a fundamental right guaranteed by the Philippine Constitution and
the Labor Code. Employees have the right to form, join or assist 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 membership in a labor union.[13]
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, not only signify
the intent to become one, but also take some positive steps to realize that intent. The procedure
for union membership is usually embodied in the unions 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 democratically
controlled group), necessarily a portion of his individual freedom is
surrendered for the benefit of all members. He accepts the will of the
majority of the members in order that he may derive the advantages
to be gained from the concerted action of all. Just as the
enactments of the legislature bind all of us, to the constitution and
by-laws of the union (unless contrary to good morals or public policy,
or otherwise illegal), which are duly enacted through democratic
processes, bind all of the members. If a member of a union dislikes
the provisions of the by-laws, he may seek to have them amended or
may withdraw from the union; otherwise, he must abide by them. It is
not the function of courts to decide the wisdom or propriety of
legitimate by-laws of a trade union.
On joining a labor union, the constitution and by-laws become a part
of the members contract of membership under which he agrees to
become bound by the constitution and governing rules of the union
so far as it is not inconsistent with controlling principles of law. The
constitution and by-laws of 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
members. The agreement of a member on joining a union to abide by
its laws and comply with the will of the lawfully constituted majority
does not require a member to submit to the determination of the
union any question involving his personal rights.[16]
Petitioners claim that the numerous anomalies allegedly committed by the private
respondents during the latters incumbency impelled the October 4, 1996 election of the new
set of USTFU officers. They assert that such exercise was pursuant to their right to self-
organization.
Petitioners frustration over the performance of private respondents, as well as their fears
of a fraudulent election to be held under the latters supervision, could not justify the method
they chose to impose their will on the union. Director Bitonio aptly elucidated:[17]
The constitutional right to self-organization is better understood in
the context of ILO Convention No. 87 (Freedom of Association and
Protection of Right to Organize), to which the Philippines is
signatory. Article 3 of the Convention provides that workers
organizations shall have the right to draw up their constitution and
rules and to elect their representatives in full freedom, free from any
interference from public authorities. The freedom conferred by the
provision is expansive; the responsibility imposed on union members
to respect the constitution and rules they themselves draw up
equally so. The point to be stressed is that the unions CBL is the
fundamental law that governs the relationship between and among
the members of the union. It is where the rights, duties and
obligations, powers, functions and authority of the officers as well as
the members are defined. It is the organic law that determines the
validity of acts done by any officer or member of the union. Without
respect for the CBL, a union as a democratic institution degenerates
into nothing more than a group of individuals governed by mob rule.
Union Election vs. Certification Election
A union election is held pursuant to the unions constitution and bylaws, and the right to
vote in it is enjoyed only by union members. A union election should be distinguished from a
certification election, which is the process of determining, 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 employees wish to be represented by a labor organization and,
in the affirmative case, by which particular labor organization.[19]
In a certification election, all employees belonging to the appropriate bargaining unit
can vote.[20] Therefore, a union member who likewise belongs to the appropriate bargaining
unit is entitled to vote in said election. However, the reverse is not always true; an employee
belonging to the appropriate bargaining unit but who is not a member of the union cannot vote
in the union election, unless otherwise 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, 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, and the proper procedure
for such election was not followed. The participation of non-union members in the election
aggravated its irregularity.
Second Issue: USTFUs Constitution and ByLaws Violated
The importance of a unions constitution and bylaws cannot be overemphasized. They
embody a covenant between a union and its members and constitute the fundamental law
governing the members rights and obligations.[21] As such, the unions constitution and bylaws
should be upheld, as long as they are not contrary to law, good morals or public policy.
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.
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 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 on general membership meetings as found in the
USTFUs CBL, which reads:
ARTICLE VIII-MEETINGS OF THE UNION
Section 1. The Union shall hold regular general membership
meetings at least once every three (3) months. Notices of the
meeting shall be sent out by the Secretary-General at least ten (10)
days prior to such meetings by posting in conspicuous places,
preferably inside Company premises, said notices. The date, time
and place for the meetings shall be determined by the Board of
Officers.[23]
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 the participation of some union members.
Second, there was no commission on elections to oversee the election, as mandated by
Sections 1 and 2 of Article IX of the USTFUs CBL, which provide:
ARTICLE IX - UNION ELECTION
Section 1. There shall be a Committee on Election (COMELEC) to be
created by the Board of Officers at least thirty (30) days before any
regular or special election. The functions of the COMELEC include
the following:
a) Adopt and promulgate rules and regulations that will ensure a free, clean,
honest and orderly election, whether regular or special;
b) Pass upon qualifications of candidates;
c) Rule on any question or protest regarding the conduct of the election subject to
the procedure that may be promulgated by the Board of Officers; and
d) Proclaim duly elected officers.
Section 2. The COMELEC shall be composed of a chairman and two
members all of whom shall be appointed by the Board of Officers.
xxx xxx xxx[24]
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 Code.
The foregoing infirmities considered, we cannot attribute grave abuse of discretion to
Director Bitonios finding and conclusion. In Rodriguez v. Director, Bureau of Labor
Relations,[25] we invalidated the local union elections held at the wrong date without prior
notice to members and conducted without regard for duly 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 the voting, and the absence of the notice of the dates
of balloting.
Third Issue: Suspension of USTFUs CBL
 Petitioners contend that the October 4, 1996 assembly suspended the unions 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 bargaining unit to choose their
representatives for purposes of collective bargaining. Again they cite the numerous anomalies
allegedly committed by the private respondents as USTFU officers. This argument does not
persuade.
First, as has been discussed, the general faculty assembly was not the proper forum to
conduct the election of USTFU officers. Not all who attended the assembly were members of
the union; some, apparently, were even disqualified from becoming union members, since
they represented management. Thus, Director Bitonio correctly observed:
Further, appellants cannot be heard to say that the CBL was
effectively suspended during the 04 October 1996 general
assembly. A union CBL is a covenant between the union and its
members and among members (Johnson and Johnson Labor Union-
FFW, et al. v. Director of Labor Relations, 170 SCRA 469). Where ILO
Convention No. 87 speaks of a unions full freedom to draw up its
constitution and rules, it includes freedom from interference by
persons who are not members of the union. The democratic principle
that governance is a matter for the governed to decide upon applies
to the labor movement which, by law and constitutional mandate,
must be assiduously insulated against intrusions coming from both
the employer and complete strangers if the 'protection to labor
clause' of the constitution is to be guaranteed. By appellants own
evidence, the general faculty assembly of 04 October 1996 was not a
meeting of USTFU. It was attended by members and non-members
alike, and therefore was not a forum appropriate for transacting
union matters. The person who moved for the suspension of USTFUs
CBL was not a member of USTFU. Allowing a non-union member to
initiate the suspension of a unions CBL, and non-union members to
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 organize.
If there are members of the so-called academic community
collective bargaining unit who are not USTFU members but who
would nevertheless want to have a hand in USTFUs affairs, the
appropriate procedure would have been for them to become
members of USTFU first. The procedure for membership is very
clearly spelled out in Article IV of USTFUs CBL. Having become
members, they could then draw guidance from Ang Malayang
Manggagawa Ng Ang Tibay v. Ang Tibay, 103 Phil. 669. Therein the
Supreme Court held that if a member of the union dislikes the
provisions of the by-laws he may seek to have them amended or may
withdraw from the union; otherwise he must abide by them. Under
Article XVII of USTFUs CBL, there is also a specific provision for
constitutional amendments.What is clear therefore is that USTFUs
CBL provides for orderly procedures and remedies which appellants
could have easily availed [themselves] of instead of resorting to an
exercise of their so-called residual power'.[26]
Second, the grievances of the petitioners could have been brought up and resolved in
accordance with the procedure laid down by the unions CBL[27]and by the Labor
Code.[28] They contend that their sense of desperation and helplessness led to the October 4,
1996 election. However, we cannot agree with the method they used to rectify years of
inaction on their part and thereby ease bottled-up frustrations, as such method was in total
disregard of the USTFUs CBL and of due process. The end never justifies the means.
We agree with the solicitor generals observation that the act of suspending the
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 existing USTFU
constitution xxx.[29]
The ratification of the new CBA executed between the petitioners and the University of
Santo Tomas management did not validate the void October 4, 1996 election. Ratified were
the terms of the new CBA, not the issue of union leadership -- a matter that should be decided
only by union members in the proper forum at the proper time and after observance of proper
procedures.
Epilogue
In dismissing this Petition, we are not passing upon the merits of the mismanagement
allegations imputed by the petitioners to the private respondents; 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 proceedings. Courts will not tolerate the unfair
treatment of union members by their own leaders.When the latter abuse and violate the rights
of the former, they shall be dealt with accordingly in the proper forum after the observance of
due process.
WHEREFORE, the Petition is hereby DISMISSED and the assailed
Resolutions AFFIRMED. Costs against petitioners.
CENTRAL NEGROS ELECTRIC COOPERATIVE, INC. (CENECO), petitioner,
vs.
HONORABLE SECRETARY, DEPARTMENT OF LABOR AND EMPLOYMENT,
and CENECO UNION OF RATIONAL EMPLOYEES (CURE), respondents.
Enrique S. Tabino for petitioner.
Edmundo G. Manlapao for private respondent.
REGALADO, J.:
In this special civil action for certiorari, petitioner Central Negros Electric Cooperative,
Inc. (CENECO) seeks to annul the order1 issued by then Acting Secretary of Labor
Bienvenido E. Laguesma on June 6, 1990, declaring the projected certification
election unnecessary and directing petitioner CENECO to continue recognizing
private respondent CENECO Union of Rational Employees (CURE) as the sole and
exclusive bargaining representative of all the rank-and-file employees of petitioner's
electric cooperative for purposes of collective bargaining.
It appears from the records that on August 15, 1987, CENECO entered into a
collective bargaining agreement with CURE, a labor union representing its rank-and-
file employees, providing for a term of three years retroactive to April 1, 1987 and
extending up to March 31, 1990. On December 28, 1989, CURE wrote CENECO
proposing that negotiations be conducted for a new collective bargaining agreement
(CBA).
On January 18, 1990, CENECO denied CURE's request on the ground that, under
applicable decisions of the Supreme Court, employees who at the same time are
members of an electric cooperative are not entitled to form or join a union. 2
Prior to the submission of the proposal for CBA renegotiation, CURE members, in a
general assembly held on December 9, 1989, approved Resolution No. 35 whereby it
was agreed that 'tall union members shall withdraw, retract, or recall the union
members' membership from Central Negros Electric Cooperative, Inc. in order to avail
(of) the full benefits under the existing Collective Bargaining Agreement entered into
by and between CENECO and CURE, and the supposed benefits that our union may
avail (of) under the renewed CBA.3 This was ratified by 259 of the 362 union
members. CENECO and the Department of Labor and Employment, Bacolod District,
were furnished copies of this resolution.
However, the withdrawal from membership was denied by CENECO on February 27,
1990 under Resolution No. 90 "for the reason that the basis of withdrawal is not
among the grounds covered by Board Resolution No. 5023, dated November 22,
1989 and that said request is contrary to Board Resolution No. 5033 dated December
13, 1989, ..."4
By reason of CENECO's refusal to renegotiate a new CBA, CURE filed a petition for
direct recognition or for certification election, supported by 282 or 72% of the 388
rank-and-file employees in the bargaining unit of CENECO.
CENECO filed a motion to dismiss on the ground that there are legal constraints to
the filing of the certification election, citing the ruling laid down by this Court
in Batangas I Electric Cooperative Labor Union vs. Romeo A. Young,5 (BATANGAS
case) to the effect that "employees who at the same time are members of an electric
cooperative are not entitled to form or join unions for purposes of collective bargaining
agreement, for certainly an owner cannot bargain with himself or his co-owners."
Med-Arbiter Felizardo T. Serapio issued an order,6 granting the petition for
certification election which, in effect, was a denial of CENECO's motion to dismiss,
and directing the holding of a certification election between CURE and No Union.
CENECO appealed to the Department of Labor and Employment which issued the
questioned order modifying the aforestated order of the med-arbiter by directly
certifying CURE as the exclusive bargaining representative of the rank-and-file
employees of CURE.
Hence, this petition.
Petitioner CENECO argues that respondent Secretary committed a grave abuse of
discretion in not applying to the present case the doctrine enunciated in the
BATANGAS case that employees of an electric cooperative who at the same time are
members of the electric cooperative are prohibited from forming or joining labor
unions for purposes of a collective bargaining agreement. While CENECO recognizes
the employees' right to self-organization, it avers that this is not absolute. Thus, it
opines that employees of an electric cooperative who at the same time are members
thereof are not allowed to form or join labor unions for purposes of collective
bargaining. However, petitioner does not hesitate to admit that the prohibition does
not extend to employees of an electric cooperative who are not members of the
cooperative.
The issue, therefore, actually involves a determination of whether or not the
employees of CENECO who withdrew their membership from the cooperative are
entitled to form or join CURE for purposes of the negotiations for a collective
bargaining agreement proposed by the latter.
As culled from the records, it is the submission of CENECO that the withdrawal from
membership in the cooperative and, as a consequence, the employees' acquisition of
membership in the union cannot be allowed for the following reasons:
1. It was made as a subterfuge or to subvert the ruling in the BATANGAS
case:
2. To allow the withdrawal of the members of CENECO from the cooperative
without justifiable reason would greatly affect the objectives and goals of
petitioner as an electric cooperative;
 3. The Secretary of Labor, as well as the Med-Arbiter, has no jurisdiction
over the issue of the withdrawal from membership which is vested in the
National Electrification Administration (NEA) which has direct control and
supervision over the operations of electric cooperatives; and
4. Assuming that the Secretary has jurisdiction, CURE failed to exhaust
administrative remedies by not referring the matter of membership
withdrawal to the NEA.
The petition is destitute of merit; certiorari will not lie.
We first rule on the alleged procedural infirmities affecting the instant case. CENECO
avers that the med-arbiter has no jurisdiction to rule on the issue of withdrawal from
membership of its employees in the cooperative which, it claims, is properly vested in
the NEA which has control and supervision over all electric cooperatives.
From a perusal of petitioner's motion to dismiss filed with the med-arbiter, it becomes
readily apparent that the sole basis for petitioner's motion is the illegality of the
employees' membership in respondent union despite the fact that they allegedly are
still members of the cooperative. Petitioner itself adopted the aforesaid argument in
seeking the dismissal of the petition for certification election filed with the med-arbiter,
and the finding made by the latter was merely in answer to the arguments advanced
by petitioner. Hence, petitioner is deemed to have submitted the issue of membership
withdrawal from the cooperative to the jurisdiction of the med-arbiter and it is now
estopped from questioning that same jurisdiction which it invoked in its motion to
dismiss after obtaining an adverse ruling thereon.
Under Article 256 of the Labor Code, to have a valid certification election at least a
majority of all eligible voters in the unit must have cast their votes. It is apparent that
incidental to the power of the med-arbiter to hear and decide representation cases is
the power to determine who the eligible voters are. In so doing, it is axiomatic that the
med-arbiter should determine the legality of the employees' membership in the union.
In the case at bar, it obviously becomes necessary to consider first the propriety of
the employees' membership withdrawal from the cooperative before a certification
election can be had.
Lastly, it is petitioner herein who is actually questioning the propriety of the withdrawal
of its members from the cooperative. Petitioner could have brought the matter before
the NEA if it wanted to and. if such remedy had really been available, and there is
nothing to prevent it from doing so. It would be absurd to fault the employees for the
neglect or laxity of petitioner in protecting its own interests.
The argument of CENECO that the withdrawal was merely to subvert the ruling of this
Court in the BATANGAS case is without merit. The case referred to merely declared
that employees who are at the same time members of the cooperative cannot join
labor unions for purposes of collective bargaining. However, nowhere in said case is it
stated that member-employees are prohibited from withdrawing their membership in
the cooperative in order to join a labor union.
As discussed by the Solicitor General, Article I, Section 9 of the Articles of
Incorporation and By- Laws of CENECO provides that "any member may withdraw
from membership upon compliance with such uniform terms and conditions as the
Board may prescribe." The same section provides that upon withdrawal, the member
is merely required to surrender his membership certificate and he is to be refunded
his membership fee less any obligation that he has with the cooperative. There
appears to be no other condition or requirement imposed upon a withdrawing
member. Hence, there is no just cause for petitioner's denial of the withdrawal from
membership of its employees who are also members of the union. 7
The alleged board resolutions relied upon by petitioner in denying the withdrawal of
the members concerned were never presented nor their contents disclosed either
before the med-arbiter or the Secretary of Labor if only to prove the ratiocination for
said denial. Furthermore, CENECO never averred non-compliance with the terms and
conditions for withdrawal, if any. It appears that the Articles of Incorporation of
CENECO do not provide any ground for withdrawal from membership which
accordingly gives rise to the presumption that the same may be done at any time and
for whatever reason. In addition, membership in the cooperative is on a voluntary
basis. Hence, withdrawal therefrom cannot be restricted unnecessarily. The right to
join an organization necessarily includes the equivalent right not to join the same.
The right of the employees to self-organization is a compelling reason why their
withdrawal from the cooperative must be allowed. As pointed out by CURE, the
resignation of the member- employees is an expression of their preference for union
membership over that of membership in the cooperative. The avowed policy of the
State to afford fall protection to labor and to promote the primacy of free collective
bargaining mandates that the employees' right to form and join unions for purposes of
collective bargaining be accorded the highest consideration.
Membership in an electric cooperative which merely vests in the member a right to
vote during the annual meeting becomes too trivial and insubstantial vis-a-vis the
primordial and more important constitutional right of an employee to join a union of his
choice. Besides, the 390 employees of CENECO, some of whom have never been
members of the cooperative, represent a very small percentage of the cooperative's
total membership of 44,000. It is inconceivable how the withdrawal of a negligible
number of members could adversely affect the business concerns and operations of
CENECO.
We rule, however, that the direct certification ordered by respondent Secretary is not
proper. By virtue of Executive Order No. 111, which became effective on March 4,
1987, the direct certification originally allowed under Article 257 of the Labor Code
has apparently been discontinued as a method of selecting the exclusive bargaining
agent of the workers. This amendment affirms the superiority of the certification
election over the direct certification which is no longer available now under the
change in said provision.8
We have said that where a union has filed a petition for certification election, the mere
fact that no opposition is made does not warrant a direct certification.9 In said case
which has similar features to that at bar, wherein the respondent Minister directly
certified the union, we held that:
 ... As pointed out by petitioner in its petition, what the respondent Minister
achieved in rendering the assailed orders was to make a mockery of the
procedure provided under the law for representation cases because: ... (c)
By directly certifying a Union without sufficient proof of majority
representation, he has in effect arrogated unto himself the right, vested
naturally in the employee's to choose their collective bargaining
representative. (d) He has in effect imposed upon the petitioner the
obligation to negotiate with a union whose majority representation is under
serious question. This is highly irregular because while the Union enjoys the
blessing of the Minister, it does not enjoy the blessing of the employees.
Petitioner is therefore under threat of being held liable for refusing to
negotiate with a union whose right to bargaining status has not been legally
established.

While there may be some factual variances, the rationale therein is applicable to the
present case in the sense that it is not alone sufficient that a union has the support of
the majority. What is equally important is that everyone be given a democratic space
in the bargaining unit concerned. The most effective way of determining which labor
organization can truly represent the working force is by certification election.10

WHEREFORE, the questioned order for the direct certification of respondent CURE
as the bargaining representative of the employees of petitioner CENECO is hereby
ANNULLED and SET ASIDE. The med-arbiter is hereby ordered to conduct a
certification election among the rank-and- file employees of CENECO with CURE and
No Union as the choices therein.
ILAW AT BUKLOD NG MANGGAGAWA (IBM) LOCAL NO. 56, petitioner,
vs.
HON. PURA FERRER-CALLEJA, in her capacity as Director, BUREAU OF
LABOR RELATIONS, and SAN MIGUEL CORPORATION, respondents.
E.N.A Cruz & Associates for petitioner.
Siguion Reyna, Montecillo & Ongsiako for private respondent.
GRIÑO-AQUINO, J.:
This is a special civil action of certiorari with a prayer for the issuance of a writ of
preliminary injunction to annul the orders dated February 22, 1988 and June 23,
1988, of the Med-Arbiter and the Bureau of Labor Relations (BLR), respectively, for
the holding of a certification election in the Calasiao Beer Region of the San Miguel
Corporation.
On September 7, 1987, petitioner Union, formerly registered with the Labor
Organization Division of the Bureau of Labor Relations, as the San Miguel
Corporation Sales Force Union Calasiao Beer Region-IBM Local No. 56, a local union
of Ilaw at Buklod ng Manggagawa (IBM), which is a national union, requested San
Miguel Corporation for voluntary recognition as the sole and exclusive bargaining
representative of all the covered employees which consist of the monthly and daily-
paid employees of the Calasiao Sales Office, now Dagupan Sales Office. As the
territorial coverage of the Calasiao Beer Region embraces the regional sales office
and the six (6) sales offices in Calasiao, Carmen, Alaminos, Tarlac, Cabanatuan and
San Isidro, SMC denied the union's request and instead, suggested that it avail of a
certification election. So, on November 27, 1987, SMC, through its North-Central
Luzon Sales Operations Manager, filed a petition for certification election among the
sales personnel of the Region only, excluding the daily-paid and monthly paid
employees, but including the sales offices of the entire beer region.
The Union filed a motion to dismiss alleging that the petition for certification election
was premature as it did not ask SMC to bargain collectively with it. It cited Article 258
of the Labor Code which provides:
ART. 258. When an employer may file petition. — When requested
to bargain collectively, an employer may petition the Bureau for an
election. If there is no existing certified collective bargaining
agreement in the unit, the Bureau shall, after hearing, order a
certification election.
All certification cases shall be decided within twenty (20) working
days.
The Bureau shall conduct a certification election within twenty (20)
days in accordance with the rules and regulations prescribed by the
Secretary of Labor.
On February 22, 1988, the Med-Arbiter issued an order, the dispositive portion of
which reads as follows:
IN VIEW OF ALL THE FOREGOING, let therefore, a certification
election be conducted among the sales force personnel of the
SMC-North Central Luzon Beer Region covering the following sales
offices: Dagupan City, Carmen, Alaminos, Tarlac, Cabanatuan and
San Isidro, within twenty (20) days from receipt hereof with the
following choices:
1. San Miguel Corporation Sales Force Labor
Union Calasiao Beer Region — Ilaw at Bukod ng
Manggagawa (IBM) Local No. 56;
2. No union.
Parties are hereby directed to attend a pre-election conference
which shall be called by this Office one (1) week before the actual
conduct of said election, with corresponding notices to be sent to
them. (p. 6, Rollo.)
Petitioner appealed the order to the Bureau of Labor Relations (BLR) which denied
the appeal on June 23, 1988 for lack of merit. Hence, this petition for certiorari
alleging that the Director of the BLR gravely abused her discretion in ordering the
holding of a certification election. Parenthetically, the certification election was
actually conducted on September 19, 1988 resulting in "NO UNION" as the winner.
The petition has no merit. Ordinarily, in an unorganized establishment like the SMC
Calasiao Beer Region, it is the union that files a petition for a certification election if
there is no certified bargaining agent for the workers in the establishment. If a union
asks the employer to voluntarily recognize it as the bargaining agent of the
employees, as the petitioner did, it in effect asks the employer to certify it as the
bargaining representative of the employees — a certification which the employer has
no authority to give, for it is the employees' prerogative (not the employer's) to
determine whether they want a union to represent them, and, if so, which one it
should be.
The petitioner's request for voluntary recognition as the bargaining representative of
the employees was in effect a request to bargain collectively, or the first step in that
direction, hence, the employer's request for a certification election was in accordance
with Article 258 of the Labor Code, and the public respondents did not abuse their
discretion in granting the request.
WHEREFORE, the petition for certiorari is dismissed for lack of merit. Costs against
the petitioner.
CATALINO ALGIRE and OTHER OFFICERS OF UNIVERSAL ROBINA TEXTILE
MONTHLY SALARIED EMPLOYEES UNION (URTMSEU), petitioners,
vs.
REGALADO DE MESA, et al., and HON. SECRETARY OF LABOR, respondents.
C.A. Montano Law Office for petitioner.
Cabio and Ravanes Law Offices and Jaime D. Lauron for private respondents.
ROMERO, J.:
This petition for certiorari seeks to nullify and set aside the decision dated January 31,
1991 of the Secretary of Labor which reversed on appeal the Order dated December
20, 1990 issued by Med-arbiter Rolando S. dela Cruz declaring petitioners as the
duly-elected officers of the Universal Robina Textile Monthly Salaried Employees
union (URTMSEU) as well as the order dated March 5, 1991 denying petitioner
Catalino Algire's motion for reconsideration.
The case arose out of the election of the rightful officers to represent the union in the
Collective Bargaining Agreement (CBA) with the management of Universal Robina
Textile at its plant in Km. 50, Bo. San Cristobal, Calamba, Laguna.
Universal Robina Textile Monthly Salaried Employees Union, (URTMSEU), through
private respondent Regalado de Mesa, filed on September 4, 1990 a petition for the
holding of an election of union officers with the Arbitration Branch of the Department
of Labor and Employment (DOLE). Acting thereon, DOLE's med-arbiter Rolando S.
de la Cruz issued an Order dated October 19, 1990 directing that such an election be
held.
In the pre-election conference, it was agreed that the election by secret ballot be
conducted on November 15, 1990 between petitioners (Catalino Algire, et al.) and
private respondents (Regalado de Mesa, et al.) under the supervision of DOLE
through its duly appointed representation officer.
The official ballot contained the following pertinent instructions:
Nais kong pakatawan sa grupo ni:
LINO ALGIRE REGALADO
and DE MESA
his officers and his
officers
1. Mark Check (/) or cross (x) inside the box specified above who
among the two contending parties you desire to be represented for
the purpose of collecting bargaining.
1
2. This is a secret ballot. Don't write any other markings.
The result of the election were as follows:
Lino Algire group — 133
Regalado de Mesa — 133
Spoiled — 6
———
Total votes cast 272
On November 19, 1990, Catalino Algire filed a Petition and/or Motion (RO 400-9009-
AU-002), which DOLE's Med Arbitration unit treated as a protest, to the effect that
one of the ballots wherein one voter placed two checks inside the box opposite the
phrase "Lino Algire and his officers," hereinafter referred to as the "questioned ballot,"
should not have been declared spoiled, as the same was a valid vote in their favor.
The group argued that the two checks made even clearer the intention of the voter to
exercise his political franchise in favor of Algire's group.
During the schedules hearing thereof, both parties agreed to open the envelope
containing the spoiled ballots and it was found out that, indeed, one ballot contained
two (2) checks in the box opposite petitioner Algire's name and his officers.
On December 20, 1990, med-arbiter de la Cruz issued an order declaring the
questioned ballot valid, thereby counting the same in Algire's favor and accordingly
certified petitioner's group as the union's elected officers. 2
Regalado de Mesa, et al. appealed from the decision of the med-arbiter to the
Secretary of Labor in Case No. OS-A-1-37-91 (RO 400-9009-AU-002). On January
31, 1991, the latter's office granted the appeal and reversed the aforesaid Order. In its
stead, it entered a new one ordering "the calling of another election of officers of the
Universal Robina Textile Monthly Salaried Employees Union (URTMSEU), with the
same choices as in the election of
15 November, 1990, after the usual pre-election conference." 3
Director Maximo B. Lim of the Industrial Relations Division, Regional Office No. IV of
the DOLE set the hearing for another pre-election conference on March 22, 1991,
reset to April 2, 1991, and finally reset to April 5, 1991.
Catalino Algire's group filed a motion for reconsideration of the Order. It was denied
for lack of merit and the decision sought to be reconsidered was sustained.
Algire, et al. filed this petition on the following issues:
(1) the Secretary of Labor erred in applying Sections 1 and 8 (6),
Rule VI, Book V of the Rules and Regulations implementing the
Labor Code to the herein case, considering that the case is an
intra-union activity, which act constitutes a grave abuse in the
exercise of authority amounting to lack of jurisdiction.
(2) the assailed decision and order are not supported by law and
evidence.
with an ex-parte motion for issuance of a temporary restraining order, alleging that the
assailed decision of the office of the Secretary of Labor as public respondent is by
nature immediately executory and the holding of an election at any time after April 5,
1991, would render the petition moot and academic unless restrained by this Court.
On April 5, 1991, we issued a temporary restraining order enjoining the holding of
another election of union officers pursuant to the January 31, 1991 decision. 4
If indeed petitioner's group had any opposition to the representation officer's ruling
that the questioned ballot was spoiled, it should have done so seasonably during the
canvass of votes. Its failure or inaction to assail such ballot's validity shall be deemed
a waiver of any defect or irregularity arising from said election. Moreover, petitioners
even question at this stage the clear instruction to mark a check or cross opposite the
same of the candidate's group, arguing that such instruction was not clear, as two
checks "may be interpreted that a voter may vote for Lino Algire but not with (sic) his
officers or
vice-versa,"6 notwithstanding the fact that a pre-election conference had already been
held where no such question was raised.
In any event, the choice by the majority of employees of the union officers that should
best represent them in the forthcoming collective bargaining negotiations should be
achieved through the democratic process of an election, the proper forum where the
true will of the majority may not be circumvented but clearly defined. The workers
must be allowed to freely express their choice once and for all in a determination
where anything is open to their sound judgment and the possibility of fraud and
misrepresentation is minimized, if not eliminated, without any unnecessary delay
and/or maneuvering.

There is no merit in the petition. WHEREFORE, the petition is DENIED and the challenged decision is hereby
AFFIRMED.
The contention of the petitioner is that a representation officer (referring to a person
duly authorized to conduct and supervise certification elections in accordance with
Rule VI of the Implementing Rules and Regulations of the Labor Code) can validly
rule only on on-the-spot questions arising from the conduct of the elections, but the
determination of the validity of the questioned ballot is not within his competence.
Therefore, any ruling made by the representation officer concerning the validity of the
ballot is deemed an absolute nullity because — such is the allegation — it was done
without or in excess of his functions amounting to lack of jurisdiction.

To resolve the issue of union representation at the Universal Robina Textile plant,
what was agreed to be held at the company's premises and which became the root of
this controversy, was a consent election, not a certification election.

It is unmistakable that the election held on November 15, 1990 was a consent
election and not a certification election. It was an agreed one, the purpose being
merely to determine the issue of majority representation of all the workers in the
appropriate collective bargaining unit. It is a separate and distinct process and has
nothing to do with the import and effort of a certification election. 5

The ruling of DOLE's representative in that election that the questioned ballot is
spoiled is not based on any legal provision or rule justifying or requiring such action
by such officer but simply in pursuance of the intent of the parties, expressed in the
written instructions contained in the ballot, which is to prohibit unauthorized markings
thereon other than a check or a cross, obviously intended to identify the votes in order
to preserve the sanctity of the ballot, which is in fact the objective of the contending
parties.
CONFEDERATION OF CITIZENS LABOR UNIONS (CCLU) and REDSON
EMPLOYEES AND LABORERS ASSOCIATION, petitioners,
vs.
Hon. CARMELO C. NORIEL, Officer-in-Charge of the Bureau of Labor Relations,
MARGARITA C. ENRIQUEZ, Election Supervisor of the Ministry of Labor and
Employment, ASSOCIATED LABOR UNIONS (ALU) and REDSON TEXTILE
MANUFACTURING CORPORATION, respondents.
Oliver B. Gesmundo for petitioners.
Solicitor General Estelito P. Mendoza, Asst. Solicitor General Ramon A. Barcelona
and Solicitor Dennis M. Taningco for respondents.
AQUINO, J.:
These special civil actions of certiorari and prohibition deal with the alleged irregular
holding of a certification election.
Petitioner Confederation of Labor Unions (CCLU) was one of the four unions wanting
to be certified as the collective bargaining representative of the employees in the
Redson Textile Manufacturing Corporation with place of business at Brixton Hill
Street, Capitolyo, Pasig, Metro Manila. Its co-petitioner, the Redson Employees and
Laborers Association, is a CCLU local in the said corporation.
The other unions aspiring to become the collective bargaining representative were the
National Union of Garments Textile and General Workers of the Philippines
(GATCORD) the National Trade Union (NATU) and the Associated Labor Unions
(ALU).
On August 7, 1980, a certification election was held in the premises of the corporation
from eight-twenty in the morning to five-thirty in the afternoon. Out of the 831 votes
cast, CCLU garnered 356 votes; ALU 338 votes; NATU, 82 votes and GATCORD 42
votes. Eight votes were spoiled and five votes were challenged or segregated.
As no union obtained a majority vote, CCLU and ALU, which had the two largest
number of votes, agreed in a pre-election conference on September 2, 1980 that a
run-off election would be held on November 6, 1980 from six o'clock in the morning to
six o'clock in the evening. CCLU requested that the certification election be conducted
for two days but ALU objected to that request.
On November 6, 1980, Margarita C. Enriquez, Reynaldo F. de Luna and one
Francisco, three election supervisors from the Ministry of Labor and Employment,
arrived at around seven o'clock in the morning near the Redson Textile compound but
they were not allowed by the security guard to enter the company premises in spite of
the heavy rain. So, after consulting through the phone with their chief, a certain
Attorney Padilla. the said election supervisors decided to hold the certification election
"outside the premises of the company in a small store outside of the annex building"
(Annex C, Rollo, p. 27). They used as ballot box "an improvised carton box." The
union representatives did not object to the improvised polling place and ballot box.
Voting started at eleven o'clock. During the election and just before it was closed at
six-thirty in the evening, the ALU representative, Sebastian P. Taneo, executed a
written protest or manifestation, alleging that the management of Redson Textile did
not allow the run-off election to be held within its premises; that the company
prevented fifty percent of the workers from voting by not allowing them to get out of
the company premises and inducing them to work overtime; that its security guards
"manhandled" the ALU vice-president and that their "active intervention" caused
"chaos and confusion" for around thirty minutes; that the company refused to furnish
election paraphernalia like the polling place and the ballot box and that the election
supervisors declared the election closed in spite of ALU's objection.
Taneo prayed that the votes should not be counted, that another day be scheduled
for the continuation of the election and that the company be ordered to allow its
workers to vote (Rollo pp. 29-35).
At around seven-thirty in the evening, the votes cast were canvassed. Of the 692
votes cast, ALU got 366 votes as against CCLU's 313 votes, or a margin of 53 votes.
There were 1,010 voters. Because ALU won, its representative, Taneo, withdrew his
protest or manifestation by writing on the minutes of the proceeding that his protest or
manifestation was withdrawn "before the close of the proceedings". On the other
hand, the CCLU representatives refused to sign the minutes of the election.
On the following day, November 7, CCLU through its representative, Juan L.
Fresnoza filed with the Bureau of Labor Relations a protest wherein he prayed that
the November 6 certification election as well as the "continuation of the election" on
November 7 be annulled.
Fresnoza alleged that the previous day's certification election was irregular and
disorderly because (a) no booths were provided for by the company; (b) the election
started much later than the hour agreed upon by the parties, and (c) ALU distributed
white T-shirts printed with "ALU TAYO", gave free tricycle rides to ALU voters and
hired around fifteen husky men and around twenty-five women who "forced" voters to
vote for ALU.
According to Fresnoza, when he and Oscar Sanchez, the acting president of Redson
Employees and Laborers Association (RELA-CCLU), protested against those
activities before election supervisor Margarita C, Enriquez, the latter allegedly
retorted, "Wala akong magagawa, magagalit na naman si Mr. Taneo" (,Rollo, pp. 36-
37).
On November 10, 1980, Fresnoza and Sanchez filed with the Bureau of labor
Relations a joint affidavit attesting to what transpired during the certification election
as alleged in the aforesaid protest and added therein that when they protested before
the election supervisors, the latter told them to "place their protest in writing so that
they (supervisors) could consolidate the protests in their election report" (Rollo, pp. were overzealous in wooing the employees to vote in their favor by resorting to such
38-39). tactics as giving free tricycle rides and T-shirts.

On February 19, 1981, CCLU informed the Bureau of Labor Relations that the
election was conducted without regard to the provisions of section 6, Rule VI, Book V
of the Rules and Regulations Implementing the Labor Code.
Carmelo C. Noriel, Officer-in-Charge of the Bureau of Labor Relations, in his
resolution of February 26, 1981, dismissed CCLU's protest for lack of merit. He
observed that CCLU failed to submit the pleadings and evidences required in the
hearing on January 19, 1981 and that CCLU failed to file a protest either "before or
during the election proceeding" and, therefore, pursuant to section 3, Rule VI, Book V
of the aforementioned rules, CCLU is deemed to have waived its right to protest.
Noriel in his resolution of March 26, 1981, denying CCLU's motion for
reconsideration, certified ALU as the exclusive bargaining representative of the
employees in Redson Textile Manufacturing Corporation.
On June 6, 1981 CCLU and RELA-CCLU filed the instant petition for certiorari and
prohibition to annul the certification election. They complained that the certification
election was conducted in violation of the following provisions of Rule VI, Book V of
the Rules and Regulations Implementing the Labor Code:
The purpose of a certification election is to give the employees "true representation in
their collective bargaining with an employer" (51 C.J.S. 969). That purpose was not
achieved in the run-off election because many employees or union members were not
able to vote and the employer, through apathy or deliberate intent, did not render
assistance in the holding of the election.
It should be noted that ALU's written protest (later withdrawn) was based on the same
grounds invoked by CCLU in its protest. That fact alone should have alerted Noriel to
disregard the technicality that CCLU's protest was not filed on time.
WHEREFORE, the resolutions of the Officer-in-Charge of the Bureau of Labor
Relations dated February 26 and March 19, 1981 are hereby set aside. Another run-
off certification election should be conducted inside the premises of Redson Textile
Manufacturing Corporation. The management is ordered to allow all its employees to
participate in the certification election and to assist in the holding of an orderly
election. The election supervisors or representation officers are also enjoined to fulfill
their duties under the Labor Code and the rules and regulations implementing the
same.

SEC. 6. Duties of representation officer.— Before the actual voting

commences the representation officer shall inspect the polling
place, the ballot boxes, and the polling booths to insure secrecy of
balloting. The parties shall be given opportunity to witness the
inspection proceedings. After the examination of the ballot box, the
representation officer shall lock it with three keys one of which he
shall keep and the rest forthwith given one each to the employer's
representative and the representative of the labor organization. If
more than one union is involved, the holder of the third shall be
determined by drawing of lots. The key shall remain in the
possession of the representation officer and the parties during the
entire proceedings and thereafter until all the controversies
concerning the conduct of the election shall have been definitely
resolved.

The Solicitor General in his comment contends that the certification election should
be upheld because CCLU, by not filing a protest with the election supervisor before
the close of the election proceeding, waived its right to protest (Sec. 3, Rule VI, Book
V of Implementing Rules and Regulations).

We hold that the certification election is invalid because of certain irregularities such
as that (1) the workers on the night shift (ten p.m. to six a.m.) and some of those in
the afternoon shift were not able to vote, so much so that out of 1,010 voters only 692
voted and about 318 failed to vote (p. 88, Rollo); (2) the secrecy of the ballot was not
safeguarded; (3) the election supervisors were remiss in their duties and were
apparently "intimidated" by a union representative and (4) the participating unions
NATIONAL CONGRESS OF UNIONS IN THE SUGAR INDUSTRY OF THE
PHILIPPINES (NACUSIP)-TUCP, petitioner,
vs.
DIR. CRESENCIANO B. TRAJANO, Bureau of Labor Relations, Ministry of Labor
and Employment, Manila, FEDERATION OF UNIONS OF RIZAL (FUR)-TUCP, and
CALINOG REFINERY CORPORATION (NASUREFCO), respondents.
MEDIALDEA, J.:
This petition for certiorari seeks to annul and set aside the decision rendered by the
respondent Director Cresenciano B. Trajano of the Bureau of Labor Relations,
Ministry of Labor and Employment, dated November 18, 1983 affirming the order of
Med-Arbiter Demetrio Correa dated May 2, 1983 giving due course to the petition for
certification election filed by private respondent Federation of Unions of Rizal (FUR)-
TUCP; and the order dated March 21, 1984 denying the motion for reconsideration for
lack of merit.
The antecedent facts are as follows:
Petitioner National Congress of Unions in the Sugar Industry of the Philippines
(NACUSIP)-TUCP is the certified exclusive bargaining representative of the rank and
file workers of Calinog Refinery Corporation. Private respondent Federation of Unions
of Rizal (FUR)-TUCP is a labor organization duly registered with the Department of
Labor and Employment while private respondent Calinog Refineries Employees
Union (CREU)-NACUSIP is the certified exclusive bargaining representative of the
rank and file workers of the private respondent Calinog Refinery Corporation by virtue
of the certification election held on March 30, 1981.
On June 21, 1982, petitioner union filed a petition for deadlock in collective bargaining
with the Ministry of Labor and Employment (now Department of Labor and
Employment). In order to obviate friction and tension, the parties agreed to submit the
petition for deadlock to compulsory arbitration on July 14, 1982 and was docketed as
RAB Case No. VI-0220-82.
On July 21, 1982, private respondent FUR-TUCP filed with the Regional Office No.
VI, MOLE (now DOLE), Iloilo City a petition for certification election among the rank
and file employees of private respondent company, alleging that: (1) about forty-five
percent (45%) of private respondent company's employees had disaffiliated from
petitioner union and joined private respondent union; (2) no election had been held for
the past twelve (12) months; and (3) while petitioner union had been certified as the
sole collective bargaining agent, for over a year it failed to conclude a collective
bargaining agreement with private respondent company. Petitioner union filed a
motion to intervene in the petition for certification election filed by private respondent
union.
By order dated July 23, 1982, the Acting Med-Arbiter Pacifico V. Militante dismissed
the petition for certification election for lack of merit since the petition is barred by a
pending bargaining deadlock.
On August 25, 1982, private respondent union filed an appeal to the Bureau of Labor
Relations, Manila.
The Bureau of Labor Relations through respondent Director Cresenciano B. Trajano
rendered a decision on September 30, 1982 setting aside the order of the Acting
Med-Arbiter and remanding the case to Regional Office VI, Iloilo City for hearing and
reception of evidence.
On May 2, 1983, Honorable Med-Arbiter Demetrio Correa issued an order in LRD
Case No. 4293 giving due course to the petition of private respondent FUR-TUCP
and ordering that an election be held within 20 days from receipt of the order.
From the order of Med-Arbiter Correa, petitioner interposed an appeal to the Bureau
of Labor Relations.
During the pendency of the appeal or on September 10, 1983, a collective bargaining
agreement was entered and executed by the management of the National Sugar
Refineries Co., Inc. and petitioner union and was subsequently ratified by a majority
of the rank and file employees. On the basis of the concluded CBA, the Honorable
Executive Labor Arbiter Celerino Grecia II issued an award dated September 12,
1983 adopting the submitted agreement as the CBA between the parties.
On November 18, 1983, respondent Director Trajano rendered a decision affirming
with qualification the order of Med-Arbiter Correa dated May 2, 1983, the pertinent
portions of which provide as follows:
It appears that the Calinog Refinery Employees, Union-NACUSIP-
TUCP no longer commands the support of the majority of the
employees. This observation is buttressed by the fact that more
than seventy five percent (75%) of the workers have disaffiliated
from the intervenor and joined the ranks of the petitioner. Thus,
intervenor's status as sole and exclusive bargaining representative
is now of doubtful validity.
For the above-mentioned reason, we stand obliged to resort to the
most expeditious, practical and democratic option open to us, that
is, the conduct of a certification election. Through this forum, the
true sentiments of the workers as to which labor organization
deserves their loyalty can be fairly ascertained. In any event, it is
our view that the 10 September 1983 collective agreement should
be respected by the union that shall prevail in the election not only
because it is an arbitration award but also because substantial
benefits are provided thereunder. Otherwise stated, the winning
union shall administer said agreement. In passing, it may be
pointed out that CAREFCO has been included as one of the
 contending parties in the election. We feel that it is error for the
acting Med-Arbiter to do so considering that the company is a mere
bystander in this representation dispute.
WHEREFORE, as above qualified, the Order dated 2 May 1983 is
affirmed.
SO DECIDED. (Rollo, pp. 40-41)
From the decision of respondent Director Trajano, petitioner filed a motion for
reconsideration dated December 6, 1983.
The respondent Director in his order dated March 21, 1984 denied the motion for
reconsideration for lack of merit and affirmed the Bureau's decision of November 18,
1983.
Hence, this petition.
This Court in a resolution dated December 10, 1984 resolved to grant the urgent
motion of petitioner for the issuance of a restraining order and issued a temporary
restraining order enjoining the respondents from conducting and holding the
certification election on December 17, 1984 among the rank and file employees of
respondent company (see Rollo, p. 99).
Petitioner maintains that respondent Director Trajano committed grave abuse of
discretion amounting to lack of jurisdiction when it rendered a decision affirming the
order of Med-Arbiter Correa finding that the deadlock is "nothing but a mere
subterfuge to obstruct the exercise of the workers of their legitimate right to self-
organization, a last minute maneuver to deny the workers the exercise of their
constitutional rights" (Rollo, p. 28) and ordering a certification election among the rank
and file workers of respondent company.
Furthermore, petitioner stresses that the finding that the contract (deadlock) bar rule
has no room for application in the instant case, runs counter to the provision of
Section 3 of the Rules Implementing Batas Pambansa Blg. 130 which prohibits the
filing of a petition for certification election during the pendency of a bargaining
deadlock.
In conformity with the petitioner's contentions, the Solicitor General insists that the
respondent Director has acted arbitrarily in issuing the assailed decision and order. In
addition, it argues that the CBA concluded on September 10, 1983 has a life span of
three (3) years and constitutes a bar to the petition for certification election pursuant
to Section 3 of the Rules Implementing Batas Pambansa Blg. 130.
The pivotal issue therefore, is whether or not a petition for certification election may
be filed during the pendency of a bargaining deadlock submitted to arbitration or
conciliation.
After a careful review of the records of this case, the Court finds the petition
meritorious and holds that the respondent Director gravely abused his discretion
when he affirmed the order of Med-Arbiter Correa calling for a certification election
among the rank and file workers of private respondent company.
The law on the matter is Section 3, Book V, Rule V of the Omnibus Rules
Implementing the Labor Code, to wit:
Sec. 3. When to file. — In the absence of a collective bargaining
agreement duly registered in accordance with Article 231 of the
Code, a petition for certification election may be filed at any time.
However, no certification election may be held within one year from
the date of issuance of a final certification election result. Neither
may a representation question be entertained if, before the filing of
a petition for certification election, a bargaining deadlock to which
an incumbent or certified bargaining agent is a party had been
submitted to conciliation or arbitration or had become the subject of
valid notice or strike or lockout.
If a collective bargaining agreement has been duly registered in
accordance with Article 231 of the Code, a petition for certification
election or a motion for intervention can only be entertained within
sixty (60) days prior to the expiry date of such agreement.
The clear mandate of the aforequoted section is that a petition for certification election
may be filed at any time, in the absence of a collective bargaining agreement.
Otherwise put, the rule prohibits the filing of a petition for certification election in the
following cases:
(1) during the existence of a collective bargaining agreement except within the
freedom period;
(2) within one (1) year from the date of issuance of declaration of a final certification
election result; or
(3) during the existence of a bargaining deadlock to which an incumbent or certified
bargaining agent is a party and which had been submitted to conciliation or arbitration
or had become the subject of a valid notice of strike or lockout.
The Deadlock Bar Rule simply provides that a petition for certification election can
only be entertained if there is no pending bargaining deadlock submitted to
conciliation or arbitration or had become the subject of a valid notice of strike or
lockout. The principal purpose is to ensure stability in the relationship of the workers
and the management.
In the case at bar, a bargaining deadlock was already submitted to arbitration when
private respondent FUR-TUCP filed a petition for certification election. The same
petition was dismissed for lack of merit by the Acting Med-Arbiter in an order dated
July 23, 1982 on the sole ground that the petition is barred by a pending bargaining
deadlock. However, respondent Director set aside the same order and subsequently
affirmed an order giving due course to the petition for certification election and
ordering that an election be held.

The law demands that the petition for certification election should fail in the presence
of a then pending bargaining deadlock.

A director of the Bureau of Labor Relations, by the nature of his functions, acts in a
quasi-judicial capacity. We find no reason why his decision should be beyond this
Court's review. Administrative officials, like the director of the Bureau of Labor
Relations are presumed to act in accordance with law but this Court will not hesitate
to pass upon their work where there is a showing of abuse of authority or discretion in
their official acts or when their decisions or orders are tainted with unfairness or
arbitrariness.

Noteworthy is the fact that a certification was issued by Executive Labor Arbiter
Celerino Grecia II on October 21, 1982 certifying that the petition for deadlock in RAB
Case No. VI-0220-82 was forwarded to the Executive Labor Arbiter for compulsory
arbitration (see Rollo, p. 19). The respondent Director erred in finding that the order
issued by the Med-Arbiter dismissing the petition for certification election was
irregular and was merely based on information.

All premises considered, the Court is convinced that the assailed decision and order
of the respondent Director is tainted with arbitrariness that would amount to grave
abuse of discretion.

ACCORDINGLY, the petition is GRANTED; the decision dated November 18, 1983
and order dated March 21, 1984 of the respondent Director Cresenciano B. Trajano
are hereby nullified and the order of Med-Arbiter Militante dated July 23, 1982
dismissing the petition for certification election is hereby reinstated.
CAPITOL MEDICAL CENTER ALLIANCE OF CONCERNED EMPLOYEES - Arbiter Paterno Adap issued an Order dated February 4 , 1993 which declared
UNIFIED FILIPINO SERVICE WORKERS , ( CMC - ACE - respondent union s certificate of registration as null and
UFSW ) , petitioners , vs . HON . BIENVENIDO void . [8] However , this order was reversed on appeal by the Officer - in -
E . LAGUESMA , Undersecretary of the Department of Labor and Charge of the Bureau of Labor Relations in her Order issued on April
Employment ; CAPITOL MEDICAL CENTER EMPLOYEES 13 , 1993 . The said Order dismissed the motion for cancellation of the
ASSOCIATION - ALLIANCE OF FILIPINO WORKERS AND CAPITOL certificate of registration of respondent union and declared that it was not only a bona
MEDICAL CENTER INCORPORATED AND DRA . THELMA fide affiliate or local of a federation ( AFW ) , but a duly registered union as
CLEMENTE , President , respondents . well . Subsequently , this case reached this Court in Capitol Medical
Center , Inc . v . Hon . Perlita
DECISION Velasco , G . R . No . 110718 , where we issued a Resolution dated
December 13 , 1993 , dismissing the petition of CMC for failure to sufficiently
HERMOSISIMA , JR . , J . : show that public respondent committed grave abuse of discretion . [9] The motion
for reconsideration filed by CMC was likewise denied in our Resolution dated
February 2 , 1994 . [10] Thereafter , on March 23 , 1994 , we issued an
This petition for certiorari and prohibition seeks to reverse and set aside the
entry of judgment certifying that the Resolution dated December 13 , 1993 has
Order dated November 18 , 1994 of public respondent Bienvenido
become final and executory . [11]
E . Laguesma , Undersecretary of the Department of Labor and
Employment , in Case No . OS - A - 136 - 94[1] which dismissed the Respondent union , after being declared as the certified bargaining agent of
petition for certification election filed by petitioner for lack of merit and further directed the rank - and - file employees of respondent CMC by Med - Arbiter
private respondent hospital to negotiate a collective bargaining agreement with Cruz , presented economic proposals for the negotiation of a collective bargaining
respondent union , Capitol Medical Center Employees Association - Alliance of agreement ( CBA ) . However , respondent CMC contended that CBA
Filipino Workers . negotiations should be suspended in view of the Order issued on February
4 , 1993 by Med - Arbiter Adap declaring the registration of respondent union as
The antecedent facts are undisputed .
null and void . In spite of the refusal of respondent CMC , respondent union
On February 17 , 1992 , Med - Arbiter Rasidali C . Abdullah issued still persisted in its demand for CBA negotiations , claiming that it has already
an Order which granted respondent union s petition for certification election among been declared as the sole and exclusive bargaining agent of the rank - and - file
the rank - and - file employees of the Capitol Medical Center . [2] Respondent employees of the hospital .
CMC appealed the Order to the Office of the Secretary by questioning the legal status
Due to respondent CMC s refusal to bargain collectively , respondent
of respondent union s affiliation with the Alliance of Filipino
union filed a notice of strike on March 1 , 1993 . After complying with the other
Workers ( AFW ) . To correct any supposed infirmity in its legal
legal requirements , respondent union staged a strike on April
status , respondent union registered itself independently and withdrew the petition
15 , 1993 . On April 16 , 1993 , the Secretary of Labor assumed
which had earlier been granted . Thereafter , it filed another petition for
jurisdiction over the case and issued an order certifying the same to the National
certification election .
Labor Relations Commission for compulsory arbitration where the said case is still
On May 29 , 1992 , Med - Arbiter Manases T . Cruz issued an order pending . [12]
granting the petition for certification election . [3] Respondent CMC again appealed
It is at this juncture that petitioner union , on March 24 , 1994 , filed a
to the Office of the Secretary which affirmed[4] the Order of the Med - Arbiter
petition for certification election among the regular rank - and - file employees of
granting the certification election .
the Capitol Medical Center Inc . It alleged in its petition that : 1 ) three
On December 9 , 1992 , elections were finally held with respondent union hundred thirty one ( 331 ) out of the four hundred ( 400 ) total rank -
garnering 204 votes , 168 in favor of no union and 8 spoiled ballots out of a total of and - file employees of respondent CMC signed a petition to conduct a
380 votes cast . Thereafter , on January 4 , 1993 , Med - Arbiter Cruz certification election ; and 2 ) that the said employees are withdrawing their
issued an Order certifying respondent union as the sole and exclusive bargaining authorization for the said union to represent them as they have joined and formed the
representative of the rank and file employees at CMC . [5] union Capitol Medical Center Alliance of Concerned Employees ( CMC -
ACE ) . They also alleged that a certification election can now be conducted
Unsatisfied with the outcome of the elections , respondent CMC again as more that 12 months have lapsed since the last certification election was
appealed to the Office of the Secretary of Labor which appeal was denied on held . Moreover , no certification election was conducted during the
February 26 , 1993 . [6] A subsequent motion for reconsideration filed by twelve ( 12 ) months prior to the petition , and no collective bargaining
respondent CMC was likewise denied on March 23 , 1993 . [7] agreement has as yet been concluded between respondent union and respondent
CMC despite the lapse of twelve months from the time the said union was voted as
Respondent CMC s basic contention was the supposed pendency of its the collective bargaining representative .
petition for cancellation of respondent union s certificate of registration in Case
No . NCR - OD - M - 92211 - 028 . In the said case , Med -
 On April 12 , 1994 , respondent union opposed the petition and moved for
its dismissal . It contended that it is the certified bargaining agent of the rank -
and - file employees of the Hospital , which was confirmed by the Secretary of
Labor and Employment and by this Court . It also alleged that it was not remiss in
asserting its right as the certified bargaining agent for it continuously demanded the
negotiation of a CBA with the hospital despite the latter s avoidance to bargain
collectively . Respondent union was even constrained to strike on April
15 , 1993 , where the Secretary of Labor intervened and certified the dispute for
compulsory arbitration . Furthermore , it alleged that majority of the signatories
who supported the petition were managerial and confidential employees and not
members of the rank - and - file , and that there was no valid disaffiliation of
its members , contrary to petitioner s allegations .
Petitioner , in its rejoinder , claimed that there is no legal impediment to
the conduct of a certification election as more than twelve ( 12 ) months had
lapsed since respondent union was certified as the exclusive bargaining agent and no
CBA was as yet concluded . It also claimed that the other issues raised could only
be resolved by conducting another certification election .
In its surrejoinder , respondent union alleged that the petition to conduct a
certification election was improper , immoral and in manifest disregard of the
decisions rendered by the Secretary of Labor and by this Court . It claimed that
CMC employed legal obstructionism s in order to let twelve months pass
without a CBA having been concluded between them so as to pave the way for the
entry of petitioner union .
On May 12 , 1994 , Med - Arbiter Brigida Fadrigon , issued an Order
granting the petition for certification election among the rank and file
employees . [13] It ruled that the issue was the majority status of respondent
union . Since no certification election was held within one year from the date of
issuance of a final certification election result and there was no bargaining deadlock
between respondent union and the employees that had been submitted to conciliation
or had become the subject of a valid notice of strike or lock out , there is no bar to
the holding of a certification election . [14]
Respondent union appealed from the said Order , alleging that the Med -
Arbiter erred in granting the petition for certification election and in holding that this
case falls under Section 3 , Rule V , Book V of the Rules Implementing the
CMC contended that in certification election proceedings , the employer
cannot be ordered to bargain collectively with a union since the only issue involved is
the determination of the bargaining agent of the employees .
Petitioner union claimed that to completely disregard the will of the 331 rank -
and - file employees for a certification election would result in the denial of their
substantial rights and interests . Moreover , it contended that public
respondent s indictment that petitioner capitalize ( sic ) on the
ensuing delay which was caused by the Hospital , . xxx was unsupported
by the facts and the records .
On January 11 , 1995 , public respondent issued a Resolution which
denied the two motions for reconsideration , hence this petition . [18]
The pivotal issue in this case is whether or not public respondent committed
grave abuse of discretion in dismissing the petition for certification election , and in
directing the hospital to negotiate a collective bargaining agreement with the said
respondent union .
Petitioner alleges that public respondent Undersecretary Laguesma denied it
due process when it ruled against the holding of a certification election . It further
claims that the denial of due process can be gleaned from the manner by which the
assailed resolution was written , i . e . , instead of the correct name of the
mother federation UNIFIED , it was referred to as UNITED ; and that the
respondent union s name CMCEA - AFW was referred to as CMCEA -
AFLO . Petitioner maintains that such errors indicate that the assailed resolution
was prepared with indecent haste .
We do not subscribe to petitioner s contention .
The errors pointed to by petitioner can be classified as mere typographical
errors which cannot materially alter the substance and merit of the assailed
resolution .
Petitioner cannot merely anchor its position on the aforementioned
erroneous names just to attain a reversal of the questioned resolution . As
correctly observed by the Solicitor General , petitioner is merely nit -
picking , vainly trying to make a monumental issue out of a negligible error of the
public respondent . [19]

Labor Code . [15] It also prayed that the said provision must not be applied strictly in
view of the facts in this case . Petitioner also assails public respondents findings that the
former capitalize ( sic ) on the ensuing delay which was caused by the
Petitioner union did not file any opposition to the appeal . hospital and which resulted in the non - conclusion of a CBA within the certification
[20] It further argues that the denial of its motion for a fair hearing was a
year .
On November 18 , 1994 , public respondent rendered a Resolution clear case of a denial of its right to due process .
granting the appeal . [16] He ratiocinated that while the petition was indeed filed
after the lapse of one year form the time of declaration of a final certification Such contention of petitioner deserves scant consideration .
result , and that no bargaining deadlock had been submitted for conciliation or
arbitration , respondent union was not remiss on its right to enter into a CBA for it A perusal of the record shows that petitioner failed to file its opposition to
was the CMC which refused to bargain collectively . [17] oppose the grounds for respondent union s appeal .

CMC and petitioner union separately filed motions for reconsideration of the said It was given an opportunity to be heard but lost it when it refused to file an
Order . appellee s memorandum .
 Petitioner insists that the circumstances prescribed in Section 3 , Rule
V , Book V of the Rules Implementing the Labor Code where a certification
election should be conducted , viz : ( 1 ) that one year had lapsed since
the issuance of a final certification result ; and ( 2 ) that there is no
bargaining deadlock to which the incumbent or certified bargaining agent is a party
has been submitted to conciliation or arbitration , or had become the subject of a
valid notice of strike or lockout , are present in this case . It further claims that
since there is no evidence on record that there exists a CBA deadlock , the law
allowing the conduct of a certification election after twelve months must be given
effect in the interest of the right of the workers to freely choose their sole and
exclusive bargaining agent .
While it is true that , in the case at bench , one year had lapsed since the
time of declaration of a final certification result , and that there is no collective
bargaining deadlock , public respondent did not commit grave abuse of discretion
when it ruled in respondent union s favor since the delay in the forging of the CBA
could not be attributed to the fault of the latter . paragraph paragraph paragraph
A scrutiny of the records will further reveal that after respondent union was
certified as the bargaining agent of CMC , it invited the employer hospital to the
bargaining table by submitting its economic proposal for
CBA . However , CMC refused to negotiate with respondent union and instead
challenged the latter s legal personality through a petition for cancellation of the
certificate of registration which eventually reached this Court . The decision
affirming the legal status of respondent union should have left CMC with no other
recourse but to bargain collectively , but still it did not . Respondent union was
left with no other recourse but to file a notice of strike against CMC for unfair labor
practice with the National Conciliation and Mediation Board . This eventually led
to a strike on April 15 , 1993 .
Petitioner union on the other hand , after this Court issued an entry of
judgment on March 23 , 1994 , filed the subject petition for certification election
on March 24 , 1994 , claiming that twelve months had lapsed since the last
certification election .
Was there a bargaining deadlock between CMC and respondent
union , before the filing of petitioner of a petition for certification election , which
had been submitted to conciliation or had become the subject of a valid notice of
strike or lockout ?
In the case of Divine Word University of Tacloban v . Secretary of Labor and
Employment , [21] we had the occasion to define what a deadlock is , viz :
A deadlock is xxx the counteraction of things producing
entire stoppage ; xxx There is a deadlock when there is a
complete blocking or stoppage resulting from the action of equal and
opposed forces xxx . The word is synonymous with the word
impasse , which xxx presupposes reasonable effort at good
faith bargaining which , despite noble intentions , does not
conclude in agreement between the parties .
Although there is no deadlock in its strict sense as there is
no counteraction of forces present in this case nor reasonable effort at
good faith bargaining , such can be attributed to CMC s fault as the
bargaining proposals of respondent union were never answered by CMC . In
fact , what happened in this case is worse than a bargaining deadlock for CMC
employed all legal means to block the certification of respondent union as the
bargaining agent of the rank - and - file ; and use it as its leverage for its
failure to bargain with respondent union . Thus , we can only conclude that
CMC was unwilling to negotiate and reach an agreement with respondent
union . CMC has not at any instance shown willingness to discuss the economic
proposals given by respondent union . [22]
As correctly ratiocinated by public respondent , to wit :
For herein petitioner to capitalize on the ensuing delay which
was caused by the hospital and which resulted in the non -
conclusion of a CBA within the certification year , would be to
negate and render a mockery of the proceedings undertaken before
a this Department and to put an unjustified premium on the failure of
the respondent hospital to perform its duty to bargain collectively as
mandated in Article 252 of the Labor Code , as
amended , which states .
Article 252 . Meaning of duty to bargain collectively - the
duty to bargain collectively means the performance of a mutual
obligation to meet and convene promptly and expeditiously in good
faith for the purpose of negotiating an agreement with respect to
wages , hours of work and all other terms and conditions of
employment including proposals for adjusting any grievance or
questions arising under such agreement and executing a contract
incorporating such agreements if requested by either party but such
duty does not compel any party to agree to a proposal or to make
any concession .
The duly certified bargaining agent , CMCEA - AFW , should
not be made to further bear the brunt flowing from the respondent
hospital s reluctance and thinly disguised refusal to
bargain . [23]
If the law proscribes the conduct of a certification election when there is a
bargaining deadlock submitted to conciliation or arbitration , with more reason
should it not be conducted if , despite attempts to bring an employer to the
negotiation table by the certified bargaining agent , there was no reasonable
effort in good faith on the employer to bargain
collectively . paragraph paragraph paragraph
 In the case of Kaisahan ng Manggagawang Pilipino vs . Trajano , 201 The order for the hospital to bargain is based on its failure to bargain collectively
SCRA 453 ( 1991 ) , penned by Chief Justice Andres with respondent union .
R . Narvasa , the factual milieu of which is similar to this case , this Court
allowed the holding of a certification election and ruled that the one year period WHEREFORE , the Resolution dated November 18 , 1994 of public
known as the certification year has long since expired . We also respondent Laguesma is AFFIRMED and the instant petition is hereby
ruled , that : DISMISSED .

xxx prior to the filing of the petition for election in this

case , there was no such bargaining deadlock
xx ( which ) had been submitted to conciliation or arbitration
or had become the subject of a valid notice of strike or
lockout . To be sure , there are in the record assertions by
NAFLU that its attempts to bring VIRON to the negotiation table had
been unsuccessful because of the latter s recalcitrance , and
unfulfilled promises to bargain collectively ; but there is no proof
that it had taken any action to legally coerce VIRON to comply with
its statutory duty to bargain collectively . It could have charged
VIRON with unfair labor practice ; but it did not . It could have
gone on a legitimate strike in protest against VIRON s refusal to
bargain collectively and compel it to do so ; but it did
not . There are assertions by NAFLU , too , that its
attempts to bargain collectively had been delayed by continuing
challenges to the resolution pronouncing it the sole bargaining
representative in VIRON ; but there is no adequate substantiation
thereof , or of how it did in fact prevent initiation of the
bargaining process between it and VIRON

Although the statements pertinent to this case are merely obiter , still the fact
remains that in the Kaisahan case , NAFLU was counselled by this Court on the
steps that it should have undertaken to protect its interest , but which it failed to do
so .
This is what is strikingly different between the Kaisahan case and the case at
bench for in the latter case , there was proof that the certified bargaining
agent , respondent union , had taken an action to legally coerce the employer
to comply with its statutory duty to bargain collectively , i . e . , charging
the employer with unfair labor practice and conducting a strike in protest against the
employer s refusal to bargain . [25] It is only just and equitable that the
circumstances in this case should be considered as similar in nature to
a bargaining deadlock when no certification election could be held . This is
also to make sure that no floodgates will be opened for the circumvention of the law
by unscrupulous employers to prevent any certified bargaining agent from negotiating
a CBA . Thus , Section 3 , Rule V , Book V of the Implement Rules
should be interpreted liberally so as to include a circumstance , e . g . where
a CBA could not be concluded due to the failure of one party to willingly perform its
duty to bargain collectively .
NATIONAL CONGRESS OF UNIONS IN THE SUGAR INDUSTRY OF THE
PHILIPPINES (NACUSIP)-TUCP, petitioner,
vs.
HON. PURA FERRER-CALLEJA, in her capacity as Director of the Bureau of
Labor Relations; and the NATIONAL FEDERATION OF SUGAR WORKERS
(NFSW)-FGT-KMU, respondents.
Zoilo V. De la Cruz, Jr., Beethoven R. Buenaventura and Pedro E. Jimenez for
petitioner.
Manlapao, Drilon, Ymballa and Chavez for private respondent.
MEDIALDEA, J.:
This is a petition for certiorari seeking the nullification of the resolution issued by the
respondent Director of the Bureau of Labor Relations Pura Ferrer-Calleja dated June
26, 1989 setting aside the order of the Med-Arbiter dated February 8, 1989 denying
the motion to dismiss the petition and directing the conduct of a certification election
among the rank and file employees or workers of the Dacongcogon Sugar and Rice
Milling Co. situated at Kabankalan, Negros Occidental.
The antecedent facts giving rise to the controversy at bar are as follows:
Petitioner National Congress of Unions in the Sugar Industry of the Philippines
(NACUSIP-TUCP) is a legitimate national labor organization duly registered with the
Department of Labor and Employment. Respondent Honorable Pura Ferrer-Calleja is
impleaded in her official capacity as the Director of the Bureau of Labor Relations of
the Department of Labor and Employment, while private respondent National
Federation of Sugar Workers (NFSW-FGT-KMU) is a labor organization duly
registered with the Department of Labor and Employment.
Dacongcogon Sugar and Rice Milling Co., Inc. (Dacongcogon) based in Kabankalan,
Negros Occidental employs about five hundred (500) workers during milling season
and about three hundred (300) on off-milling season.
On November 14, 1984, private respondent NFSW-FGT-KMU and employer
Dacongcogon entered into a collective bargaining agreement (CBA) for a term of
three (3) years, which was to expire on November 14, 1987.
When the CBA expired, private respondent NFSW-FGT-KMU and Dacongcogon
negotiated for its renewal. The CBA was extended for another three (3) years with
reservation to negotiate for its amendment, particularly on wage increases, hours of
work, and other terms and conditions of employment.
However, a deadlock in negotiation ensued on the matter of wage increases and
optional retirement. In order to obviate friction and tension, the parties agreed on a
suspension to provide a cooling-off period to give them time to evaluate and further
study their positions. Hence, a Labor Management Council was set up and convened,
with a representative of the Department of Labor and Employment, acting as
chairman, to resolve the issues.
On December 5, 1988, petitioner NACUSIP-TUCP filed a petition for direct
certification or certification election among the rank and file workers of Dacongcogon.
On January 27, 1989, private respondent NFSW-FGT-KMU moved to dismiss the
petition on the following grounds, to wit:
The Petition was filed out of time;
II
There is a deadlocked (sic) of CBA negotiation between forced
intervenor and respondent-central. (Rollo, p. 25)
On February 6, 1989, Dacongcogon filed an answer praying that the petition be
dismissed.
By an order dated February 8, 1989, the Med-Arbiter denied the motion to dismiss
filed by private respondent NFSW-FGT-KMU and directed the conduct of certification
election among the rank and file workers of Dacongcogon, the dispositive portion of
which provides as follows:
WHEREFORE, premises considered, the Motion to Dismiss the
present petition is, as it is hereby DENIED. Let therefore a
certification election among the rank and file employees/workers of
the Dacongcogon Sugar and Rice Milling Co., situated at
Kabankalan, Neg. Occ., be conducted with the following choices:
(1) National Congress of Unions in the Sugar
Industry of the Philippines (NACUSIP-TUCP);
(2) National Federation of Sugar Workers
(NFSW);
(3) No Union.
The designated Representation Officer is hereby directed to call the
parties for a pre-election conference to thresh out the mechanics of
the election and to conduct and supervise the same within twenty
 (20) days from receipt by the parties of this Order. The latest payroll
shall be used to determine the list of qualified voters.
SO ORDERED. (Rollo, p. 34)
On February 9, 1989, private respondent filed a motion for reconsideration and/or
appeal alleging that the Honorable Med-Arbiter misapprehended the facts and the law
applicable amounting to gross incompetence. Hence, private respondent prayed that
the order of the Med-Arbiter be set aside and the motion to dismiss be reconsidered.
On February 27, 1989, petitioner filed its opposition to the motion for reconsideration
praying that the motion for reconsideration and/or appeal be denied for lack of merit.
On June 26, 1989, respondent Director of the Bureau of Labor Relations rendered a
resolution reversing the order of the Med-Arbiter, to wit:
WHEREFORE, premises considered, the Order of the Med-Arbiter
dated 8 February 1989 is hereby set aside and vacated, and a new
one issued dismissing the above-entitled petition for being filed out
of time.
SO ORDERED. (Rollo, p. 46)
Hence, this petition raising four (4) issues, to wit:
I. RESPONDENT HON. PURA FERRER-CALLEJA, IN HER
CAPACITY AS DIRECTOR OF THE BUREAU OF LABOR
RELATIONS, COMMITTED GRAVE ABUSE OF DISCRETION IN
RENDERING HER RESOLUTION DATED 26 JUNE 1989
REVERSING THE ORDER DATED FEBRUARY 8, 1989 OF MED-
ARBITER FELIZARDO SERAPIO.
II. THAT THE AFORESAID RESOLUTION DATED 26 JUNE 1989
OF RESPONDENT PURA FERRER-CALLEJA IS CONTRARY TO
LAW AND JURISPRUDENCE.
III. THAT THE AFORESAID RESOLUTION DATED 26 JUNE 1989
OF RESPONDENT DIRECTOR PURA FERRER-CALLEJA
DENIES THE RANK AND FILE EMPLOYEES OF THE
DACONGCOGON SUGAR & RICE MILLING COMPANY, AND
THE HEREIN PETITIONER NACUSIP-TUCP, THEIR LEGAL AND
CONSTITUTIONAL RIGHTS.
IV. THAT RESPONDENT DIRECTOR PURA FERRER-CALLEJA,
IN RENDERING HER SAID RESOLUTION DATED 26 JUNE 1989
WAS BIASED AGAINST PETITIONER NACUSIP-TUCP. (Rollo,
p. 2)
The controversy boils down to the sole issue of whether or not a petition for
certification election may be filed after the 60-day freedom period.
Petitioner maintains that respondent Director Calleja committed grave abuse of
discretion amounting to excess of jurisdiction in rendering the resolution dated June
26, 1989 setting aside, vacating and reversing the order dated February 8, 1989 of
Med-Arbiter Serapio, in the following manner:
1) by setting aside and vacating the aforesaid Order dated
February 8, 1989 of Med-Arbiter Felizardo Serapio and in effect
dismissing the Petition for Direct or Certification Election of
Petitioner NACUSIP-TUCP (Annex "A" hereof) without strong valid,
legal and factual basis;
2) by giving a very strict and limited interpretation of the provisions
of Section 6, Rule V, Book V of the Implementing Rules and
Regulations of the Labor Code, as amended, knowing, as she
does, that the Labor Code, being a social legislation, should be
liberally interpreted to afford the workers the opportunity to exercise
their legitimate legal and constitutional rights to self-organization
and to free collective bargaining;
3) by issuing her questioned Resolution of June 26, 1989 knowing
fully well that upon the effectivity of Rep. Act No. 6715 on 21 March
1989 she had no longer any appellate powers over decisions of
Med-Arbiters in cases of representation issues or certification
elections;
4) by ignoring intentionally the applicable ruling of the Honorable
Supreme Court in the case of Kapisanan ng Mga Manggagawa sa
La Suerte-FOITAF vs. Noriel, L-45475, June 20, 1977;
5) by clearly failing to appreciate the significance (sic) of the fact
that for more than four (4) years there has been no certification
election involving the rank and file workers of the Company; and,
6) by frustrating the legitimate desire and will of the workers of the
Company to determine their sole and exclusive collective
bargaining representative through secret balloting. (Rollo, pp. 9-10)
However, the public respondent through the Solicitor General stresses that the
petition for certification election was filed out of time. The records of the CBA at the
Collective Agreements Division (CAD) of the Bureau of Labor Relations show that the
CBA between Dacongcogon and private respondent NFSW-FGT-KMU had expired
on November 14, 1987, hence, the petition for certification election was filed too late,
that is, a period of more than one (1) year after the CBA expired.
The public respondent maintains that Section 6 of the Rules Implementing Executive
Order No. 111 commands that the petition for certification election must be filed within
the last sixty (60) days of the CBA and further reiterates and warns that any petition
filed outside the 60-day freedom period "shall be dismissed outright." Moreover,
Section 3, Rule V, Book V of the Rules Implementing the Labor Code enjoins the
filing of a representation question, if before a petition for certification election is filed, a
bargaining deadlock to which the bargaining agent is a party is submitted for
conciliation or arbitration.
Finally, the public respondent emphasizes that respondent Director has jurisdiction to
entertain the motion for reconsideration interposed by respondent union from the
order of the Med-Arbiter directing a certification election. Public respondent contends
that Section 25 of Republic Act No. 6715 is not applicable, "(f)irstly, there is as yet no
rule or regulation established by the Secretary for the conduct of elections among the
rank and file of employer Dacongcogon; (s)econdly, even the mechanics of the
election which had to be first laid out, as directed in the Order dated February 8, 1989
of the Med-Arbiter, was aborted by the appeal therefrom interposed by respondent
union; and (t)hirdly, petitioner is estopped to question the jurisdiction of respondent
Director after it filed its opposition to respondent union's Motion for Reconsideration
(Annex
'F,' Petition) and without, as will be seen, in any way assailing such jurisdiction. . . ."
(Rollo, p.66)
We find the petition devoid of merit.
A careful perusal of Rule V, Section 6, Book V of the Rules Implementing the Labor
Code, as amended by the rules implementing Executive Order No. 111 provides that:
Sec. 6. Procedure — . . .
In a petition involving an organized establishment or enterprise
where the majority status of the incumbent collective bargaining
union is questioned by a legitimate labor organization, the Med-
Arbiter shall immediately order the conduct of a certification election
if the petition is filed during the last sixty (60) days of the collective
bargaining agreement. Any petition filed before or after the sixty-
day freedom period shall be dismissed outright.
The sixty-day freedom period based on the original collective
bargaining agreement shall not be affected by any amendment,
extension or renewal of the collective bargaining agreement for
purposes of certification election.
xxx xxx xxx
The clear mandate of the aforequoted section is that the petition for certification
election filed by the petitioner NACUSIP-TUCP should be dismissed outright, having
been filed outside the 60-day freedom period or a period of more than one (1) year
after the CBA expired.
It is a rule in this jurisdiction that only a certified collective bargaining agreement —
i.e., an agreement duly certified by the BLR may serve as a bar to certification
elections. (Philippine Association of Free Labor Unions (PAFLU) v. Estrella, G.R. No.
45323, February 20, 1989, 170 SCRA 378, 382) It is noteworthy that the Bureau of
Labor Relations duly certified the November 14, 1984 collective bargaining
agreement. Hence, the contract-bar rule as embodied in Section 3, Rule V, Book V of
the rules implementing the Labor Code is applicable.
This rule simply provides that a petition for certification election or a motion for
intervention can only be entertained within sixty days prior to the expiry date of an
existing collective bargaining agreement. Otherwise put, the rule prohibits the filing of
a petition for certification election during the existence of a collective bargaining
agreement except within the freedom period, as it is called, when the said agreement
is about to expire. The purpose, obviously, is to ensure stability in the relationships of
the workers and the management by preventing frequent modifications of any
collective bargaining agreement earlier entered into by them in good faith and for the
stipulated original period. (Associated Labor Unions (ALU-TUCP) v. Trajano, G.R. No.
77539, April 12, 1989, 172 SCRA 49, 57 citing Associated Trade Unions (ATU v.
Trajano, G.R. No. L-75321, 20 June 1988, 162 SCRA 318, 322-323)
Anent the petitioner's contention that since the expiration of the CBA in 1987 private
respondent NFSW-FGT-KMU and Dacongcogon had not concluded a new CBA, We
need only to stress what was held in the case of Lopez Sugar Corporation
v. Federation of Free Workers, Philippine Labor Union Association (G.R. No. 75700-
01, 30 August 1990, 189 SCRA 179, 191) quoting Article 253 of the Labor Code that
"(i)t shall be the duty of both parties to keep the status quo and to continue in full
force and effect the terms and conditions of the existing agreement during the 60-day
period and/or until a new agreement is reached by the parties." Despite the lapse of
the formal effectivity of the CBA the law still considers the same as continuing in force
and effect until a new CBA shall have been validly executed. Hence, the contract bar
rule still applies.
Besides, it should be emphasized that Dacongcogon, in its answer stated that the
CBA was extended for another three (3) years and that the deadlock was submitted
to the Labor Management Council.
All premises considered, the Court is convinced that the respondent Director of the
Bureau of Labor Relations did not commit grave abuse of discretion in reversing the
order of the Med-Arbiter.
ACCORDINGLY, the petition is DENIED and the resolution of the respondent Director
of the Bureau of Labor Relations is hereby AFFIRMED.
ASSOCIATED LABOR UNIONS (ALU) petitioner,
vs.
HON. PURA FERRER-CALLEJA, as Director of the Bureau of Labor Relations,
Ministry of Labor and Employment; PHILIPPINE SOCIAL SECURITY LABOR
UNION (PSSLU); SOUTHERN PHILIPPINES FEDERATION OF LABOR (SPFL)
and GAW TRADING, INC., respondents.
Romeo S. Occena, Leonard U. Sawal, Edgemelo C. Rosales and Ernesto Carreon for
petitioner.
Henrick F. Gingoyon for respondent SPFL.
Wilfredo L. Orcullo for respondent Southern Philippines Federation of Labor.
Miguel A. Enrique, Jr. for respondent GAW Trading, Inc.
REGALADO, J.:
Petitioner Associated Labor Unions (ALU, for brevity) instituted this special civil action
for certiorari and prohibition to overturn the decision of the respondent
direcstor 1 dated December 10, 1986, which ordered the holding of a certification
election among the rank-and-file workers of the private respondent GAW Trading, Inc.
The averments in the petition therefor, which succinctly but sufficiently detail the
relevant factual antecedents of this proceedings, justify their being quoted in full, thus:
1. The associated Labor Unions (ALU) thru its regional Vice-
Presidents Teofanio C. Nuñez, in a letter dated May 7, 1986
(ANNEX C) informed GAW Trading, Inc. that majority of the latter's
employees have authorized ALU to be their sole and exclusive
bargaining representative, and requested GAW Trading Inc., in the
same Letter for a conference for the execution of an initial
Collective Bargaining Agreement (CBA);
2. GAW Trading Inc. received the Letter of ALU aforesaid on the
same day of May 7, 1986 as acknowledged thereunder and
responded (sic) ALU in a letter dated May 12, 1986 (Annex D)
indicating its recognition of ALU as the sole and exclusive
bargaining agent for the majority of its employees and for which it
set the time for conference and/or negotiation at 4:00 P.M. on May
12, 1986 at the Pillsbury Office, Aboitiz Building Juan Luna Street,
Cebu City;
3. On the following day of May13, 1986, ALU in behalf of the
majority of the employees of GAW Trading Inc. signed and excuted
the Collective Bargaining (ANNEX F) ...
4. On May 15, 1986, ALU in behalf of the majority of the employees
of GAW Trading Inc. and GAW Trading Inc. signed and executed
the Collective Bargaining Agreements (ANNEX F) . . . .
5. In the meantime, at about 1:00 P.M. of May 9, 1986, the
Southern Philippines Federation of Labor (SPFL) together with
Nagkahiusang Mamumuo sa GAW (NAMGAW) undertook a ...
Strike ... after it failed to get the management of GAW Trading Inc.
to sit for a conference respecting its demands presented at 11:
A.M. on the same day in an effort to pressure GAW Trading Inc. to
make a turnabout of its standign recognition of ALU as the sole and
exclusive bargaining representative of its employees, as to which
strike GAW Trading Inc. filed a petition for Restraining
Order/Preliminary Injunction, dfated June 1, 1986 (Annex H) and
which strike Labor Arbiter Bonifacio B. Tumamak held as illegal in a
decision dated August 5, 1986 (ANNEX I);
6. On May 19, 1986, GAW Lumad Labor Union (GALLU-PSSLU)
Federation ... filed a Certification Election petition (ANNEX J), but
as found by Med-Arbiter Candido M. Cumba in its (sic) Order dated
Ju ne 11, 1986 (ANNEX K), without having complied (sic) the
subscription requirement for which it was merely considered an
intervenor until compliance thereof in the other petition for direct
recogbnition as bargaining agent filed on MAy 28, 1986 by southern
Philippines Federation of Labor (SPFL) as found in the same order
(ANNEX K);
7. Int he meantime, the Collective Bargaining Agreement executed
by ALU and GAW Trading Inc. (ANNEX F) was duly filed May 27,
1986 with the Ministry of Labor and Employment in Region VII,
Cebu city;
8. Nevertheless, Med-Arbiter Candido M. Cumba in his order of
June 11, 1986 (Annex K) ruled for the holding of a ceritfication
election in all branches of GAW Trading Inc. in Cebu City, as to
which ALU filed a Motion for Reconsideration dated June 19, 1986
(ANNEX L) which was treated as an appeal on that questioned
Order for which reason the entire record of subject certification
case was forwarded for the Director, Bureau of LAbor Relations,
Ministry of Labor and Employment, Manila (ANNEX M);
9. Bureau of Labor Relations Director Cresencio B. Trajano,
rendered a Decision on August 13, 1986 (Annex B) granting ALU's
appeal (Motion for Reconsideration) and set aside the questioned
Med-Arbiter Order of June 11, 1986 (Annex K), on the ground that
the CBA has been effective and valid and the contract bar rule
applicable;
10. But the same Decision of Director Crecensio B. Trajano was
sought for reconsideratrion both by Southern Philippines Federation
 of Labor (SPFL) on August 26, 1986 (ANNEX N), supplemented by
the 'SUBMISSION OD ADDITIONAL EVIDENCE' dated September
29, 1986 (ANNEX O), and the Philppine Social Security Labor
Union (PSSLU) on October 2, 1986 (ANNEX P), which were
opposed by both GAW Trading, Inc. on September 2, 1986
(ANNEX Q) and ALU on September 12, 1986 (ANNEX R); 2
The aforesaid decision of then Director Trajano was thereafter reversed by
respondent director in her aforecited decision which is now assailed in this action. A
motion for reconsideration of ALU 3 appears to have been disregarded, hence, its
present resort grounded on grave abuse of discretion by public respondent.
Public respondent ordered the holding of a certification election ruling that the
"contract bar rule" relied upon by her predecessor does not apply in the present
controversy. According to the decision of said respondent, the collective bargaining
agreement involved herein is defective because it "was not duly submitted in
accordance with Section I, Rule IX, Book V of the Implementing Rules of Batas
Pambansa Blg. 130." It was further observed that "(t)here is no proof tending to show
that the CBA has been posted in at least two conspicuous places in the 1
establishment at least five days before its ratification and that it has been ratified by
the majority of the employees in the bargaining unit."
We find no reversible error in the challenged decision of respondent director. A
careful consideration of the facts culled from the records of this case, especially the
allegations of petitioner itself as hereinabove quoted, yields the conclusion that the
collective bargaining agreement in question is indeed defective hence unproductive of
the legal effects attributed to it by the former director in his decision which was
subsequently and properly reversed.
We have previously held that the mechanics of collective bargaining are set in motion
only when the following jurisdictional preconditions are present, namely, (1)
possession of the status of majority representation by the employees' representative
in accordance with any of the means of selection and/or designation provided for by
the Labor Code; (2) proof of majority representation; and (3) a demand to bargain
under Article 251, paragraph (a), of the New Labor Code. 4 In the present case, the
standing of petitioner as an exclusive bargaining representative is dubious, to say the
least. It may be recalled that respondent company, in a letter dated May 12, 1986 and
addressed to petitioner, merely indicated that it was "not against the desire of (its)
workers" and required petitioner to present proof that it was supported by the majority
thereof in a meeting to be held on the same date. 5 The only express recognition of
petitioner as said employees' bargaining representative that We see in the records is
in the collective bargaining agreement entered into two days thereafter. 6 Evidently,
there was precipitate haste on the part of respondent company in recognizing
petitioner union, which recognition appears to have been based on the self-serving
claim of the latter that it had the support of the majority of the employees in the
bargaining unit. Furthermore, at the time of the supposed recognition, the employer
was obviously aware that there were other unions existing in the unit. As earlier
stated, respondent company's letter is dated May 12, 1986 while the two other
unions, Southern Philippine Federation of Labor (hereafter, SPFL and Philippine
Social Security Labor Union (PSSLU, for short), went on strike earlier on May 9,
1986. The unusual promptitude in the recognition of petitioner union by respondent
company as the exclusive bargaining representative of the workers in GAW Trading,
Inc. under the fluid and amorphous circumstances then obtaining, was decidedly
unwarranted and improvident.
It bears mention that even in cases where it was the then Minister of Labor himself
who directly certified the union as the bargaining representative, this Court voided
such certification where there was a failure to properly determine with legal certainty
whether the union enjoyed a majority representation. In such a case, the holding of a
certification election at a proper time would not necessarily be a mere formality as
there was a compelling reason not to directly and unilaterally certify a union. 7
An additional infirmity of the collective bargaining agreement involved was the failure
to post the same in at least two (2) conspicuous places in the establishment at least
five days before its ratification. 8 Petitioners rationalization was that "(b)ecause of the
real existence of the illegal strike staged by SPFL in all the stores of GAW Trading,
Inc. it had become impossible to comply with the posting requirement in so far as the
realization of tits purpose is concerned as there were no impartial members of the unit
who could be appraised of the CBA's contents. " 9 This justification is puerile and
unacceptable.
In the first place, the posting of copies of the collective bargaining agreement is the
responsibility of the employer which can easily comply with the requirement through a
mere mechanical act. The fact that there were "no impartial members of the unit" is
immaterial. The purpose of the requirement is precisely to inform the employees in
the bargaining unit of the contents of said agreement so that they could intelligently
decide whether to accept the same or not. The assembly of the members of ALU
wherein the agreement in question was allegedly explained does not cure the defect.
The contract is intended for all employees and not only for the members of the
purpoted representative alone. It may even be said the the need to inform the non-
members of the terms thereof is more exigent and compelling since, in all likehood,
their contact with the persons who are supposed to represent them is limited.
Moreover, to repeat, there was an apparent and suspicious hurry in the formulation
and finalization of said collective bargaining accord. In the sforementioned letter
where respondent company required petitioner union to present proof of its support
by the employees, the company already suggested that petitioner ALU at the same
time submit the proposals that it intended to embody in the projected agreement. This
was on May 12, 1986, and prompltly on thre following day the negoltiation panel;
furnish respondent company final copies of the desired agreement whcih, with equal
dispatch, was signed on May 15, 1986.
Another potent reason for annulling the disputed collective bargaining is the finding of
respondent director that one hundred eighty-one( 181) of the two hundred eighty-one
(281) workers who "ratified" the same now " strongly and vehemently deny and/or
repudiate the alleged negotiations and ratification of the CBA. " 10Although petitioner
claims that only sev en (7) of the repudiating group of workers belong to the total
number who allegedly ratified the agreement, nevertheless such substantiated
contention weighed against the factujal that the controverted contract will not promote
industrial stability . The Court has long since declared that:
 ... Basic to the contract bar rule is the proposition that the delay of
the right to select represen tatives can be justified only where
stability is deemed paramount. Excepted from the contract which
do not foster industrial stability, such as contracts where the identity
of the representative is in doubt. Any stability derived from such
contracts must be subordinated to the employees' freedom of
choice because it does nto establish the type of industrial peace
contemplated by the law. 11

At this juncture, petitioner should be reminded that the technical rules of rpocedure do
not strictly apply in the adjudication of labor disputes. 12 Consequently, its objection
that the evidence with respect to the aforesaid repudiiation of the supposed collective
bargaining agreement cannot be considered for the first time on appeal on the Bureau
of Labor Relations should be disregarded, especially considering the weighty
significance thereof.

Both petitioner and private respondent GAW Trading, Inc. allege that the employees
of the latter are now enjoying the benefits of the collective bargaining agreement that
both parties had forged. However, We cannot find sufficient evidence of record to
support this contention. The only evidence cited by petitioner is supposed payment of
union fees by said employees, a premise too tenuous to sustain the desired
conclusion. Even the actual number of workers in the respondent company is not
clear from the records. Said private respondent claims that it is two hundred eighty-
one (281)13 but petitioner suggests that it is more than that number. The said parties
should be aware that this Court is not an adjudicator of facts. Worse, to borrow a trite
but apt phrase, they would heap the Ossa of confusion upon the Pelion of uncertainty
and still expect a definitive ruling on the matter thus confounded.

Additionally, the inapplicability of the contract bar rule is further underscored by the
fact that when the disputed agreement was filed before the Labor Regional Office on
May 27, 1986, a petition for certification election had already been filed on May 19,
1986. Although the petition was not supported by the signatures of thirty percent
(30%) of the workers in the bargaining unit, the same was enough to initiate said
certification election.

WHEREFORE, the order of the public respondent for the conduct of a certification
election among the rank-and-file workers of respondent GAW Trading Inc. is
AFFIRMED. The temporary restraining order issued in this case pursuant to the
Resolution of March 25, 1987 is hereby lifted.
IN THE MATTER OF PETITION FOR DIRECT CERTIFICATION OR
CERTIFICATION ELECTION. FIRESTONE TIRE & RUBBER COMPANY
EMPLOYEES' UNION (FEU), petitioner,
vs.
THE HON. FRANCISCO L. ESTRELLA, as Acting Director of the Bureau of Labor
Relations, FIRESTONE TIRE & RUBBER COMPANY OF THE PHILIPPINES and
ASSOCIATED LABOR UNIONS (ALU), respondents.
FIRESTONE TIRE & RUBBER COMPANY EMPLOYEES UNION, represented by
Romulo Ramos as President, petitioner,
vs.
THE HON. FRANCISCO L. ESTRELLA, as Acting Director of the Bureau of Labor
Relations, and ASSOCIATED LABOR UNIONS (ALU), respondents.
Avelino D. Latosa for petitioner.
Venerando B. Briones for private respondent.
ANTONIO, J.:
Petition to set aside two Resolutions issued by respondent Acting Director Francisco
L. Estrella of the Bureau of Labor Relations in BLR Cases Nos. A-070-76 and 2106-
76.
The petition alleges that on June 21, 1973, the National Labor Relations Commission
certified a three-year collective bargaining agreement between respondents
Associated Labor Union (ALU) and Firestone Tire & Rubber Company of the
Philippines. Said collective bargaining agreement was to be effective from February
1, 1973 to January 31, 1976.
On February 1, 1974, the aforementioned respondents entered into a "Supplemental
Agreement" extending the fife of the collective bargaining agreement for one year,
making it effective up to January 31, 1977. The extension was not ratified by the
covered employees nor submitted to the Department of Labor for classification.
Within the sixty-day period prior to the original expiry date of the agreement, some
233 out of about 400 rank-and-file employees of respondent Company resigned from
respondent ALU. subsequently, the number of these employees who resigned from
the union was increased to 276 and, by way of letter to the Director of the Bureau of
Labor Relations, they requested for the issuance of a certificate of registration in favor
of petitioner Firestone Tire & Rubber Company Employees' Union (FEU).
On January 28, 1976, Registration Permit No. 8571-IP was issued to petitioner FEU.
On February 10, 1976, ten (10) days after the original expiry date of the collective
bargaining agreement, petitioner FEU filed a petition with the Bureau of Labor
Relations for direct certification or certification election, 1 with the written consent of
308 employees, or 77% of the 400-man bargaining unit.
On February 20, 1976, respondent ALU filed with the Bureau of Labor Relations a
petition for the cancellation of the registration certificate of petitioner FEU, 2 alleging
that at the time of FEU's registration, respondent ALU was the recognized and
certified collective bargaining agent in the unit, and that FEU had not submitted the
required sworn statement that there is no recognized or certified collective bargaining
agent therein.
On February 23, 1976, respondent ALU prayed for the dismissal of R04-MED-143-76
on the grounds, among others, that it has a pending petition for the cancellation of
FEU's registration certificate and that there is an existing collective bargaining
agreement, due to expire on January 31, 1977, which constitutes a valid bar to the
holding of a certification election.
Respondent Company likewise opposed the holding of a certification election on the
ground, however, that the petition therefor was filed late, considering that it was filed
ten (10) days after the expiry date of the collective bargaining agreement.
On April 6, 1976, the Med-Arbiter issued an Order granting the petition for certification
election, Respondents ALU and the Company filed separate appeals from the order
before the Bureau of Labor Relations.
The Order of the Med-Arbiter was affirmed by the Honorable Director Carmelo C.
Noriel on September 23, 1976, and Motions for Reconsideration were filed by ALU
and the Company on October 1, 1976.
On January 25, 1977, respondent Acting BLR Director Francisco L. Estrella issued a
Resolution reversing the Order of the Med-Arbiter which was affirmed by Director
Noriel, and holding:
... that there indeed exists a prejudicial question involving the very
legal personality of the petitioner union. In BLR Case No. 210676,
the validity of the registration certificate of petitioner is at issue. It is
therefore obvious that the present representation question should
wait for the final disposition of the issue on petitioner's legal
personality, if only to forestall what may prove to be unnecessary
proceedings. 3
The issue of whether or not there was an existing collective bargaining agreement
which serves as a bar to the holding of a certification election was not resolved by
respondent Acting Director Francisco L. Estrella.
On June 8, 1976, BLR Case No. 2106-76 for the cancellation of petitioner FEU's
certificate of registration was dismissed by the Med-Arbiter. Respondents ALU and
the Company appealed to the Bureau of Labor Relations, but the appeals were
dismissal by Director Carmelo C. Noriel. Motions for Reconsideration were filed by
the same respondents and on January 25, 1977, respondent Acting Director Franco
L. Estrella entered a Resolution reversing the decision of Director Noriel and revoking
the certificate of registration of petitioner FEU. Respondent Acting Director Estrella
ruled that according to Section 4, Rule II, Book V of the Rules of Implementing the
Labor Code, no union may be registered when there is in the bargaining unit a or
certified collective bargaining agent. The Acting Director found that there was such a
bargaining agent in the unit (ALU), and that there was in fact a collective bargaining
agreement which was yet to expire on January 31, 1977. On that score, it was held
that FEU's application for registration was premature, and that it should have waited
for the expiration of the collective bargaining agreement.
The two Resolution issued by Respondent Acting Director Francisco L. Estrella are
subject of the instant petition for review by way of certiorari.
It is petitioner's contention that the issue of whether or not there was an existing
contract or collective agreement to validity bar the holding of a certification election
should have been resolved by respondent Acting Director in BLR Case No. A-070-76,
as it was already intertwined with the issue of petitioner's legal personality as assailed
in BLR Case No. 2106-76. According to petitioner, 'if the petition for certification
election in this case is not barred by the contract in question, then the registration
certificate of petitioner, acquired as it was within the sixty-day freedom period of such
contract must, of necessity, be likewise not barred or denied as premature." Likewise,
petitioner alleges that 'there being no pronouncement on the applicability of the
'contract bar' rule in this case, the cancellation of the registration certificate of
petitioner is devoid of legal basis, hence it was done by the respondent BLR Acting
Director in grave abuse of discretion."
Further, it is petitioner's stand that the Acting Director erred in concluding that the
collective bargaining agreement was to expire on January 31, 1977, for which n he
held that petitioner's application for registration was premature. The expiry date of
January 31, 1977, according to petitioner, was unauthorized because the extension of
the contract for a period of one year was not certified by the Department of Labor and
was "used to foil the constitutional right of the workers to self-organization and to
engage in collective bargaining."
The petition prays that the Resolutions of respondent Acting Director, both dated
January 25, 1977, be set aside, and the orders/decisions of Director Carmelo C.
Noriel, dated September 23, 1976 and October 8, 1976, be affirmed.
Respondent Firestone Tire and Rubber Company of the Philippines filed its Comment
to the instant petition, contending, mainly, that petitioner FEU had no legal personality
as a union because its non-compliance with Section 4, Rule 11, Book V of the Rules
and Regulations Implementing the Labor Code is sufficient ground for the cancellation
of its registration certificate.
Respondent ALU likewise filed its Comment, reiterating the contention that FEU had
no legal personality to ask for a direct certification or certification election because its
certificate of registration was obtained fraudulently and has, in fact, been cancelled.
In the meantime, due to the fact that the collective bargaining agreement had already
expired, respondent ALU demanded that respondent Company negotiate with it for a
new agreement. The Company requested for specific advice on the proper course of
action from the department of Labor. In response to the request, the Department
answered that "in the absence of any adjudication from competent authority and in
accordance with existing jurisprudence
... there is no legal impediment for (the) Company to negotiate a
new collective bargaining agreement with the Associated Labor
Unions.
Accordingly, a new collective bargaining agreement was entered into between ALU
and the Company on April 1, 1977.
It appears that on January 31, 1977, FEU filed with Regional Office No. 4 Case No.
R04-MED-808-77, a petition for direct certification/certification election, utilizing its
questioned Registration Permit No. 8571-IP, dated January 26, 1976.
We find this petition meritorious. In BLR Case No. 2160-76, Director Carmelo C.
Noriel, resolving the pivotal issue of whether or not the failure of FEU to submit "a
sworn statement ... to the effect that there is no recognized or certified collective
bargaining agent in the bargaining unit condemned warrants the revocation of its
registration, said:
This Bureau answers in the negative.
... notwithstanding the existence of a certified or recognized
collective bargaining agent, the policy of this Office sanctions a
registration of new union during the freedom period especially if it
has become apparent that a substantial number of union members
has decide(, to form a new labor organization, as aptly illustrated in
the case at bar. If the rule were otherwise, no recourse whatsoever
hall be accorded to members of a bargaining unit who would like to
make a free choice of their bargaining representative, thereby
placing the constitutional rights of the workers to self-organization
and collective bargaining in mockery, if not, in utter illusion.
This view is supported by precedents, it seems to be the better view that a contract
does not operate as a bar to representation proceedings, where it is shown that
because of a schism in the union the contract can no longer serve to promote
industrial stability, and the direction of the election is in the interest of industrial
stability as well as in the interest of the employees' right in the selection of their
bargaining representatives. 4 Basic to the contract bar rule is the proposition that the
delay of the right to select representatives can be justified only where stability is
deemed paramount. Excepted from the contract bar rule are certain types of contracts
which do not foster industrial stability, such as contracts where the Identity of the
representative is in doubt. Any stability derived from such contracts must be
subordinated to the employees' freedom of choice because it does not establish the
type of industrial peace contemplated by the law. 5
In the case at bar, it is doubtful if any contract that may have been entered into
between respondent ALU and respondent Company will foster stability in the
bargaining unit, in view of the fact that a substantial number of the employees therein
have resigned from ALU and joined petitioner FEU. At any rate, this is a matter that
must be finally determined by means of a certification election.
In Foamtex Labor Union-TUPAS vs. Noriel, 6 We said:
... The question of whether or not the disaffiliation was validly made
appears not to be of much significance, considering that the petition
for direct certification is supported by eighty (80) out of a total of
one hundred twenty (120) of the rank and file employees of the unit.
Pursuant to Article 256 of the Labor Code, 'if there is any
reasonable doubt as to whom the employees have chosen as their
representative for the purpose of collective bargaining, the Bureau
shall order a secret ballot election to be conducted by the Bureau to
ascertain who is the freely chosen representative of the employees
concerned, ... It is very clear from the aforementioned
circumstances that there is actually a reasonable doubt as to whom
the employees have chosen as their representative for the purpose
of collective bargaining.
Similarly, in Philippine Labor Alliance Council (PLAC) vs. Bureau of Labor Relations,
et al., 7 it was held that once the fact of disaffiliation has been demonstrated beyond
doubt, a certification election is the most expeditious way of determining which labor
organization is to be the exclusive bargaining representative.
It appearing that the extension of the life of the collective bargaining agreement for a
period of one year was not certified by the Bureau of Labor Relations, it cannot,
therefore, also bar the certification election. Only a certified collective bargaining
agreement would serve as a bar to such election. 8
Corollarily, therefore, petitioner's application for registration was not premature, as it
need not have waited for the expiration of the one-year extension, the agreement
having expired on January 31, 1976.
WHEREFORE the instant petition for certiorari is granted. The two Resolutions, both
dated January 25, 1977 in BLR Cases Nos. A060-76 and 2106-76 are hereby
REVERSED and set aside. Costs against private respondents.

As to whether or not the disaffiliation was actually and validly made,

or whether Foamtex Labor Union of respondent Belga is the true
collective bargaining representative of the employee are questions
that need not be resolved independently of each other. Such
questions may be answered once and for all the moment is
determined, by means of the secret ballot election, the union to
which the majority of the employees have really reposed their
allegiance. The important factor here is the true choice of the
employees, and . the most expeditious and effective manner of
determining this is by means of the certification election, as it is for
this very reason that such procedure has been incorporated in the
law. To order that a separate secret ballot election be conducted for
the purpose of determining the question of policy, i.e., whether or
not the majority of the employees desire to disaffiliate from the
mother union, should be merely a circuitous way of ascertaining the
majority's true choice.

As observed PAFLU v. Bureau of labor Relation (69 SCRA 132,

139), a certification election for the collective bargaining process is
one of the fairest and most effective way of determining which labor
organization can truly represent the working force. It is a
fundamental postulate that the will of the majority, if given in an
honest election with freedom on the part of the voters to make their
choice, is controlling. No better device can assure the institution of
industrial democracy with the two parties to a business enterprise,
management and labor, establishing a regime of self-rule.
UNITED CMC TEXTILE WORKERS UNION, Petitioner, v. BUREAU OF
LABOR RELATIONS, HON. CARMELO NORIEL, PHILIPPINE
ASSOCIATION OF FREE LABOR UNIONS, (JULY
CONVENTION), Respondents.
Jose L. Simon for Petitioner.
Wilfredo Y. Guevarra and Edward P. David for Private Respondent.
SYLLABUS
1. LABOR AND SOCIAL LEGISLATION; LABOR LAWS; BUREAU OF LABOR
RELATIONS; PENDENCY OF UNFAIR LABOR PRACTICE CASE, A
PREJUDICIAL QUESTION TO CERTIFICATION ELECTION; CASE AT BAR. —
Under settled jurisprudence, the pendency of a formal charge of company
domination is a prejudicial question that, until decided, bars proceedings
for a certification election, the reason being that the votes of the members
of the dominated union would not be free. The ULP Case herein was filed
on August 31, 1978, or anterior to the Certification Case, which was
presented on September 5, 1978. The pendency of the charge was known
to respondent public official by virtue of the Motion to Dismiss filed by
petitioner as intervenor in the Certification Case. No allegation has been
made that said ULP Case was instituted in bad faith to forestall the
Certification Case.
DECISION
MELENCIO-HERRERA, J.:
The question to resolve is whether or not public respondent acted with
grave abuse of discretion in affirming the Order of the Med-Arbiter calling
for a certification election despite: (a) the pendency of an unfair labor
practice case filed by petitioner charging respondent PAFLU as being
company-dominated; (b) the existence of a deadlock in negotiations for
renewal of the collective bargaining agreement between petitioner and the
Central Textile Mills, Inc. (CENTEX, for short); and (c) a reasonable doubt
as to whether the 30% requirement for holding a certification election has
been met.
Petitioner is a legitimate labor organization, the incumbent collective
bargaining representative of all rank and file workers of CENTEX since
1956. Respondent PAFLU is also a legitimate labor organization seeking
representation as the bargaining agent of the rank and file workers of
CENTEX.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
On August 31, 1978, petitioner filed a complaint for Unfair Labor Practice
(R4-LRD-C-8-1493-78) (the ULP Case, for brevity) against CENTEX and
PAFLU alleging that CENTEX had "helped and cooperated in the
organization of the Central Textile Mills, Inc. Local PAFLU by allowing the
organizing members of the PAFLU to solicit signatures of employees of the
company who are members of the complainant union to disaffiliate from
complainant union and join the respondent PAFLU, during company time
and inside the company premises on August 21, 1978 and the following
days thereafter." 1
While the ULP Case was pending, PAFLU, on September 5, 1978, filed a
Petition for Certification Election (R4-LRD-M-9432-78) (the Certification
Case, for short) among the rank and file workers of CENTEX, alleging that:
1) there has been no certification election during the 12 months period
prior to the filing of the petition; 2) the petition is supported by signatures
of 603 workers, or more than 30% of the rank and file workers of CENTEX;
3) the collective bargaining agreement between CENTEX and petitioner will
expire on October 31, 1978; 4) the petition is filed within the 60-day-
freedom-period immediately preceding the expiration of the CBA, and 6)
there is no legal impediment to the filing of the petition. 2
Petitioner intervened in the Certification Case and filed a Motion to Dismiss
on September 27, 1978 on the grounds that: 1) the ULP Case charging
that PAFLU is a company-dominated union is a prejudicial question and
bars the holding of the certification election; and 2) PAFLU failed to comply
with the 30% requirement for mandatory certification election since only
440 of the 603 are valid signatures and that 719 signatories are required
as constitutive of 30% of the rank and file workers totalling 2,397 and not
1,900 as alleged by PAFLU. 3
On October 16, 1978, petitioner filed a Notice of Strike with the Bureau of
Labor Relations for deadlock in the CBA negotiations with CENTEX. The
parties having failed to effect a conciliation, the Labor Minister assumed
jurisdiction on November 9, 1978 in Case No. AJML-033-78 4 (referred to
hereafter as the Deadlock Case)cralawnad
A Supplemental Motion to Dismiss in the Certification Case was filed by
petitioner on December 7, 1978 alleging that the Labor Minister had
already taken cognizance of the deadlock in the CBA negotiations and
constituted an impediment to the holding of a certification election. 5
On December 18, 1978, in the Deadlock Case, the Deputy Minister of
Labor released a Decision directing petitioner and CENTEX to execute and
sign a CBA to take effect on November 1, 1978 up to October 30, 1981
based on the guidelines enumerated therein, and to furnish the Office of
the Minister of Labor with a signed copy of the renewed agreement not
later than January 31, 1979. 6
On January 23, 1979, in the Certification Case, the Med-Arbiter issued an
Order for the holding of a certification election among CENTEX rank and
file workers, whereby qualified voters could choose either PAFLU or
petitioner as the collective bargaining representative or No Union at all. 7
This was affirmed by respondent Director of the Bureau of Labor Relations
on appeal, in the challenged Resolution, dated May 25, 1979, stating that:
1) the Bureau has discretion to order certification election where several
unions are contending for representation and when there is doubt as to
whether the 30% requirement has been met; and 2) to preclude the filing
of a petition for certification election the notice of strike for deadlock in
CBA negotiations must occur prior to the petition. 8
A Motion for Reconsideration filed by petitioner was denied for lack of
merit in the Resolution of August 20, 1979 9 , also assailed herein.
Hence, this petition, on the general proposition that public respondent has
committed serious error of law and acted with grave abuse of discretion,
and that petitioner has no plain and adequate remedy in the ordinary
course of law.
We issued a Temporary Restraining Order enjoining the conduct of the
certification election, and eventually gave the Petition due course.
The issues raised are: (1) is the pendency of the ULP Case charging a
participating union in the certification election proceedings as company-
dominated a prejudicial question to the conduct of the election? (2) Does
the decision in the Deadlock Case directing the parties to execute a CBA
have the effect of barring the certification election? (3) Does respondent
Director have the discretion to call for a certification election even if the
30% consent requirement is lacking?
The case can be resolved on the basis of the first issue alone, which must
be answered in the affirmative. Under settled jurisprudence, the pendency
of a formal charge of company domination is a prejudicial question that,
until decided, bars proceedings for a certification election 10 , the reason
being that the votes of the members of the dominated union would not be
free. 11 The ULP Case herein was filed on August 31, 1978, or anterior to
the Certification Case, which was presented on September 5, 1978. The
pendency of the charge was known to respondent public official by virtue
of the Motion to Dismiss filed by petitioner as intervenor in the
Certification Case. No allegation has been made that said ULP Case was
instituted in bad faith to forestall the Certification Case. The following
ruling is thus squarely in point:jgc:chanrobles.com.ph
"There is no assertion that such complaint was flimsy, or made in bad faith
or filed purposely to forestall the certification election. So, no reason
existed for the Industrial Court to depart from its established practice of
suspending the election proceeding. And this seems to be accepted rule in
the law of labor relations, the reason being, in the words of Mr. Justice
Montemayor, `if there is a union dominated by the company, to which
some of the workers belong, an election among workers and employees of
the company would not reflect the true sentiment and wishes of the said
workers and employees because the votes of the members of the
dominated union would not be free.’ (Manila Paper Mills Employees v.
Court of Industrial Relations, 104 Phil. 10)
"And we have held, through Mr. Justice J.B.L. Reyes, that such charge of
company domination is a prejudicial question that until decided, shall
suspend or bar proceedings for certification election. (Standard Cigarette
Workers’ Union v. Court of Industrial Relations, 101 Phil. 126)
"Indeed, if as a result of the Pelta’s complaint in Case No. 255-ULP, the
Workers Union should be ordered dissolved as a company dominated
union, any election held in the meantime would be a waste of energy and
money to all parties concerned." 12
The rationale for the suspension of the election proceedings has been
further amplified as follows:jgc:chanrobles.com.ph
"What is settled law, dating from the case of Standard Cigarette Workers’
Union v. Court of Industrial Relations (101 Phil. 126), decided in 1957, is
that if it were a labor organization objecting to the participation in a
certification election of a company-dominated union, as a result of which a
complaint for an unfair labor practice case against the employer was filed,
the status of the latter union must be first cleared in such a proceeding
before such voting could take place. In the language of Justice J.B.L.
Reyes as ponente: `As correctly pointed out by Judge Lanting in his
dissenting opinion on the denial of petitioner’s motion for reconsideration,
a complaint for unfair labor practice may be considered a prejudicial
question in a proceeding for certification election when it is charged
therein that one or more labor unions participating in the election are
being aided, or are controlled, by the company or employer. The reason is
that the certification election may lead to the selection of an employer-
dominated or company union as the employees’ bargaining representative,
and when the court finds that said union is employer-dominated in the
unfair labor practice case, the union selected would be decertified and the
whole election proceedings would be rendered useless and nugatory.’
(Ibid., 128). The next year, the same jurist had occasion to reiterate such
doctrine in Manila Paper Mills Employees and Workers Association v. Court
of Industrial Relations (104 Phil. 10 [1958]), thus: `We agree with the CIR
on the reasons given in its order that only a formal charge of company
domination may serve as a bar to and stop a certification election, the
reason being that if there is a union dominated by the Company, to which
some of the workers belong, an election among the workers and
employees of the company would not reflect the true sentiment and
wishes of the said workers and employees from the standpoint of their
welfare and interest, because as to the members of the company
dominated union, the vote of the said members in the election would not
be free. It is equally true, however, that the opposition to the holding of a
certification election due to a charge of company domination can only be
filed and maintained by the labor organization which made the charge of
company domination, because it is the entity that stands to lose and suffer
prejudice by the certification election, the reason being that its members
might be overwhelmed in the voting by the other members controlled and
dominated by the Company,’ (Ibid., 15). It is easily understandable why it
should be thus. There would be an impairment of the integrity of the
collective bargaining process if a company-dominated union were allowed
to participate in a certification election. The timid, the timorous, and the
faint-hearted in the ranks of labor could easily be tempted to cast their
votes in favor of the choice of management. Should it emerge victorious,
and it becomes the exclusive representative of labor at the conference
table, there is a frustration of the statutory scheme. It takes two to
bargain. There would be instead a unilateral imposition by the employer.
There is need therefore to inquire as to whether a labor organization that
aspires to be the exclusive bargaining representative is company-
dominated before the certification election." 13

With the suspension of the certification proceedings clearly called for by

reason of a prejudicial question, the necessity of passing upon the
remaining issues is obviated.chanrobles.com.ph : virtual law library

WHEREFORE, the Resolution of August 20, 1979 issued by public

respondent affirming the Order of the Med-Arbiter, dated January 23,
1979, calling for a certification election is hereby REVERSED and SET
ASIDE. The Temporary Restraining Order heretofore issued by this Court
shall continue to be in force and effect until the status is cleared of
respondent Philippine Association of Free Labor Unions (July Convention)
in Case No. R4-LRD-M-9-432-78 entitled "In the Matter of Certification
Election Among Rank and File Workers of Central Textile Mills, Inc.,
Philippine Association of Free Labor Unions, Petitioner, United CMC Textile
Workers Union, Intervenor."cralaw virtua1aw library
TRADE UNIONS OF THE PHILIPPINES/FEBRUARY SIX MOVEMENT
TUPAS/FSM), petitioner,
vs.
HON BIENVENIDO LAGUESMA, TRANSUNION CORPORATION-GLASS
DIVISION, AND INTEGRATED LABOR ORGANIZATION (ILO-
PHILIPPINES), respondents.
Alar, Comia, Manalo and Associates Law Offices for petitioner.
Arcaya & Associates for Transunion Corp.-Glass Division.
Francisco A. Mercado, Jr. for Integrated Labor Organization (ILO-Phils.)
PUNO, J.:
Petitioner Trade Unions of the Philippines-February Six Movement (TUPAS-FSM)
seeks the reversal of the Resolution, dated July 25, 1990, rendered by then Secretary
of Labor and Employment Ruben D. Torres, In OS-MA-A-5-167-90, which dismissed
the petition for certification election filed by petitioner TUPAS-FSM for being
prematurely filed. 1
The controlling facts, as culled from the records, are as follows:
On March 23, 1990 TUPAS-FSM filed a petition for certification election with the
Regional Office No. IV of the Department of Labor and Employment (DOLE), for the
purpose of choosing a bargaining representative for the rank-and-file employees of
Transunion Corporation's industrial plant, situated in Canlubang, Laguna, known as
the Transunion Corporation-Glassware Division. Petitioner had then secured a
Certification , dated
March 22, 1990, issued by Tomas B. Bautista, Jr., Director IV of DOLE (Region IV),
that "Transunion Corporation" has no existing collective bargaining agreement with
any labor organization. 2
It appears, however, that before the filing of said petition, or on November 15,
1989, Integrated Labor Organization (ILO-Phils.) was duly certified by DOLE as the
sole and exclusive bargaining agent of the rank-and-file employees of Transunion
Corporation-Glassware Division. 3 On November 28, 1989, a collective bargaining
agreement (CBA) was the forged between Transunion-Glassware Division and ILO-
Phils. covering the company's rank-and-file employees, The CBA, with a five-year
term from December 1, 1989 to December 1, 1994, was ratified by a great majority of
the rank-and -filers on December 8, 1989. 4 In the meantime, the President of ILO-
PHILS died. An inter-union conflict followed and the subject CBA was filed with
DOLE, for registration purposes, only on March 14, 1990, more or less, three (3)
months from its execution. Finally, on May 4, 1990, the Certification of Registration
was issued by DOLE through Regional Director Romeo A. Young. 5
ILO-Phils., intervened in the certification election proceedings initiated by TUPAS-
FSM. It opposed the petition in view of the existing CBA between ILO and the
Transunion Corporation-Glassware Division. It stresses that the petition for
certification election should be entertained only during the freedom period, or sixty
day before the expiration of the CBA. Med-Arbiter Orlando S. deal Cruz dismissed the
petition on the ground of prematurity.
TUPAS-FSM appealed contending: (1) that pursuant to Article 231 of the Labor Code.
CBAs shall be file with the Regional Office of the DOLE within thirty (30) days from
the date of signing thereof; (2) that said requirement is mandatory, although it would
not affect the enforceability of the CBA as between the parties thereto; and (3) since
the CBA was filed outside the 30-day period specified under Article 231 of the Labor
Code, the prohibition against certification election under Article 232 of the same Code
should not apply to third parties such as petitioner.
As stated earlier, the Secretary of Labor and Employment affirmed the impugned
Order of the Med-Arbiter, ruling that the belated submission of the CBA was
excusable and that the requirement of the law was substantially complied with upon
the filing of a copy of the CBA prior to the filing of the petition for certification election.
TUPAS-FSM then filed a motion for reconsideration, but it was also denied, Hence,
this petition for certiorari where petitioner alleged:
GRAVE ABUSE OF DISCRETION ON THE PART OF THE
PUBLIC RESPONDENTS AMOUNTING TO LOSS OF
JURISDICTION; and
THE RESOLUTION IS CONTRARY TO THE FACTS AND THE
LAW.
The petition lacks merit.
Petitioner raises both factual and legal issues in this present petition.
First, the factual issues. Relying on the March 22, 1990 Dole Certification issued by
Director Bautista, Jr., supra, petitioner insists there was no existing CBA between
Transunion Corporation and any labor organization when it filed its petition for
certification election on March 23, 1990. To further strengthen its position, petitioner
charges that the filing of the CBA was antedated to march 14, 1990, to make it
appear that the same was already existing and filed before the filing of the petition for
certification election. Petitioner also claims that since Article 231 of the Labor Code
mandates DOLE to act on the CBA filed in its office within Five (5) days from date of
filing thereof, the subject CBA was filed on April 30, 1990, or five (5) days before its
registration on May 4, 1990.
The argument deserves scant consideration. It is elementary that the special civil
action for certiorari under Rule 65 of the Revised Rules of Court can be availed of to
nullify or modify the proceedings before the concerned tribunal, board, or officer
exercising judicial functions who has acted without or in excess of its jurisdiction or
with grave abuse of discretion and there is no appeal, nor any plain, speedy, and
adequate remedy in the ordinary course of law. This Court is not a trier of facts and it
is not its function to examine and evaluate the probative value of all evidence
presented to the concerned tribunal which formed the basis of its impugned decision,
resolution or order. 6 Following this hoary rule, it is inappropriate to review the factual
findings of the Med-arbiter and the Secretary of Labor, regarding the date of filing of
the CBA on March 14, 1990 prior to the filing of the petition for certification election;
the company's voluntary recognition and DOLE's certification of ILO-PHILS. as the
sole and exclusive bargaining representative of the rank-and-file employees of
Transunion Corporation-Glassware Division; and the subsequent registration of the
CBA. They are binding on this Court as they are supported by substantial evidence.
In contrast, petitioner’s bare allegation pertaining to the "antedating" of the date of
filing of the CBA is unsubstantiated and based purely on conjectures.
It is crystal clear from the records that the rank-and- file employees of private
respondent's Glassware Division are, at present, represented by ILO-PHILS. Hence,
petitioner's reliance on the March 22, 1990 Certification issued by Director Bautista,
Jr., is misplaced. The existence and filing of their CBA was confirmed in a
Certification, dated April 24, 1990, issued by Director Romeo A. Young of DOLE-
Region IV. 7The Certification of ILO-PHILS. "as the sole and exclusive bargaining
agent of the rank-and-file workers of Transunion-Glassware Division," means it shall
remain as such during the existence of the CBA, to the exclusion of other labor
organizations, including petitioner, and no petition questioning the majority status of
the incumbent bargaining agent shall be entertained, nor shall certification election be
conducted, outside of the fifty-day freedom period immediately before the expiry date
of the five-year term of the CBA. 8
We now resolved the legal issue. Petitioner points out that the subject CBA was filed
beyond the 30-day period prescribed under Article 231 of the Labor Code. It also
insists that under Article 232 of the Labor Code, the prohibition on the filing of a
petition for certification election applies when the CBA had been duly registered and,
in this case, since the CBA was not registered in accordance with the Art. 231, the
prohibition will not apply. We disagree.
Article 231 an s232 of the Labor Code read:
Art. 231. — Registry of unions and file of collective agreements. - . .
..
Within thirty (30) days from the execution of a Collective Bargaining
Agreement, the parties shall submit copies of the same directly to
the Bureau or the Regional Office of the Department of Labor and
Employment for registration accompanied with verified proofs of its
posting n two conspicuous places in the place of work and
ratification by the majority of all the workers in the bargaining unit.
The Bureau or Regional Office shall act upon the application for
registration of such Collective Bargaining Agreement within five (5)
days from receipts thereof. The Regional Office shall furnish the
Bureau with a copy of the Collective Bargaining agreement within
five (5) days form its submission.
xxx xxx xxx
Art. 232. — Prohibition on Certification Election. — The Bureau
shall not entertain any petition for certification election or any other
action which may disturb the administration of duly registered
existing collective bargaining agreement affecting the parties
except under Articles 253, 253-A and 256 of this Code.
Corollary thereto, Article 253-A of the same Code reads:
Art. 253-A. — Any Collective Bargaining Agreement that the parties
may enter into shall, insofar as the representation aspect is
concerned, be for a term of five (5) years. No petition questioning
agent shall be entertained and no certification election shall be
conducted by the Department of Labor and Employment outside
the sixty-day period immediately before the date of expiry of such
five year term of the Collective Bargaining Agreement. . . . .
It appears that the procedural requirement of filing the CBA within 30 days from date
of execution under Article 231 was not met. The subject CBA was executed on
November 28, 1989. It was ratified on December 8, 1989, and then filed with DOLE
for registration purposes on March 14, 1990. Be that as it may, the delay in the filing
of the CBA was sufficiently explained, i.e., there was an inter-union conflict on who
would succeed to the presidency of ILO-PHILS. The CBA was registered by the
DOLE only on May 4, 1990. It would be injudicious for us to assume, as what
petitioner did, that the said CBA was filed only on April 30, 1990, or five (5) days
before its registration, on the unsupported surmise that it was done to suit the law that
enjoins Regional Offices of Dole to act upon an application for registration of a CBA
within five (5) days from its receipt thereof. In the absence of any substantial evidence
that DOLE officials or personnel, in collusion with private respondent, had antedated
the filing date of the CBA, the presumption on regularity in the performance of official
functions hold.
More importantly, non-compliance with the cited procedural requirement should not
adversely affect the substantive validity of the CBA between ILO-PHILS and the
Transunion Corporation-Glassware Division covering the company's rank and file
employees. A collective bargaining agreement is more than a contract. It is highly
impressed with public interest for it is an essential instrument to promote industrial
peace. Hence, it bears the blessings not only of the employer and employees
concerned but even the Department of Labor and Employment. To set it aside on
technical grounds is not conducive to the public good.
IN VIEW WHEREOF, the impugned July 25, 1990 Resolution, and August 23, 1990
Order of Secretary Ruben D. Torres and Undersecretary Bienvenido E. Laguesma.
respectively, in OS-MA-A-5-167-90, is AFFIRMED in toto. Costs against petitioned.
SUNDOWNER DEVELOPMENT CORPORATION, petitioner,
vs.
HON. FRANKLIN M. DRILON, in his capacity as Secretary of the Department of
Labor and Employment, NATIONAL UNION OF WORKERS IN HOTEL,
RESTAURANT AND ALLIED INDUSTRIES, (NUWHRAIN), HOTEL MABUHAY
CHAPTER, THE CHAPTER OFFICERS AND MEMBERS, HOTEL MABUHAY, INC.
and MR. MARIANO PENANO, President of Hotel Mabuhay, Inc., respondents.
Carmelita S. Bautista-Lozada for petitioner.
Paterno D. Menzon Law Office for private respondent NUWHRAIN.
GANCAYCO, J.:
The principal issue in this case is whether or not the purchaser of the assets of an
employer corporation can be considered a successor employer of the latter's
employees.
Private respondent Hotel Mabuhay, Inc. (Mabuhay for short,) leased the premises
belonging to Santiago Syjuco, Inc. (Syjuco for short) located at 1430 A. Mabini St.,
Ermita, Manila. However, due to non-payment of rentals, a case for ejectment was
filed by Syjuco against Mabuhay in the Metropolitan Trial Court of Manila. Mabuhay
offered to amicably settle the case by surrendering the premises to Syjuco and to sell
its assets and personal property to any interested party.
Syjuco offered the said premises for lease to petitioner. The negotiation culminated
with the execution of the lease agreement on April 16, 1987 to commence on May 1,
1987 and to expire on April 30,1992.1 Mabuhay offered to sell its assets and personal
properties in the premises to petitioner to which petitioner agreed. A deed of
assignment of said assets and personal properties was executed by Mabuhay on
April 29,1987 in favor of petitioner. 2
On same date Syjuco formally turned over the possession of the leased premises to
petitioner who actually took possession and occupied the same on May 1, 1987.
On May 4, 1987, respondent National Union of Workers in Hotel, Restaurant and
Allied Services (NUWHRAIN for short) picketed the leased premises, barricaded the
entrance to the leased premises and denied petitioner's officers, employees and
guests free access to and egress from said premises. Thus, petitioner wrote a letter-
complaint to Syjuco.
A complaint for damages with preliminary injunction and/or temporary restraining
order was filed by petitioner on May 7, 1987 with the Regional Trial Court of Manila
docketed as Civil Case No. 87-40436. On the same day, the Executive Judge of said
court issued a restraining order against respondent NUWHRAIN and its officers and
members as prayed for in the petition. Nevertheless, NUWHRAIN maintained their
strike on the subject premises but filed an answer to the complaint.
On May 14, 1987, an order was issued by public respondent Secretary of Labor
assuming jurisdiction over the labor dispute pursuant to Article 263(g) of the Labor
Code as amended and in the interim, requiring all striking employees to return to work
and for respondent Mabuhay to accept all returning employees pending final
determination of the issue of the absorption of the former employees of Mabuhay.
The parties were also directed to submit their respective position papers within ten
(10) days from receipt of the order.
On May 25, 1987, Mabuhay submitted its position paper alleging among others that it
had sold all its assets and personal properties to petitioner and that there was no sale
or transfer of its shares whatsoever and that Mabuhay completely ceased operation
effective April 28,1987 and surrendered the premises to petitioner so that there exists
a legal and physical impossibility on its part to comply with the return to work order
specifically on absorption.
On June 26, 1987, petitioner in order to commence its operation, signed a tri-partite
agreement so the workers may lift their strike, by and among petitioner, respondents
NUWHRAIN and Mabuhay whereby the latter paid to respondent NUWHRAIN the
sum of P 638,000.00 in addition to the first payment in the sum of P 386,447.11, for
which reason respondent NUWHRAIN agreed to lift the picket . 3
Respondent NUWHRAIN on July 13, 1987 filed its position paper alleging connivance
between Mabuhay and petitioner in selling the assets and closing the hotel to escape
its obligations to the employees of Mabuhay and so it prays that petitioner accept the
workforce of Mabuhay and pay backwages from April 15,1986 to April 28,1987, the
day Mabuhay stopped operation.
On the other hand, petitioner filed a "Partial Motion for Reconsideration and Position
Paper," alleging that it was denied due process; that there were serious errors in the
findings of fact which would cause grave and irreparable damage to its interest; as
well as on questions of law. On January 20, 1988, the public respondent issued an
order requiring petitioner to absorb the members of the union and to pay backwages
from the time it started operations up to the date of the order. 4
Petitioner filed on January 27,1988 a motion for reconsideration of the aforesaid order
alleging that the theory of implied acceptance and assumption of statutory wrong
does not apply in the instant case; that the prevailing doctrine that there is no law
requiring bona fide purchasers of the assets of an on-going concern to absorb in its
employ the employees of the latter should be applied in this case; that the order for
absorption of the employees of Mabuhay as well as the payment of their backwages
is contrary to law. Respondent NUWHRAIN also filed a motion for clarification of the
aforesaid order.
On March 8, 1988, the public respondent denied said motion for reconsideration and
motion for clarification for lack of merit.
Hence, this petition for review by certiorari with prayer for preliminary injunction
and/or temporary restraining order filed by petitioner in this Court. Petitioner presents
seven issues for resolution which all revolve about the singular issue of whether or
not under the circumstances of this case the petitioner may be compelled to absorb
the employees of respondent Mabuhay.
On March 23, 1988, this Court, without giving due course to the petition, required
respondents to comment thereon within ten (10) days from notice and issued a
temporary restraining order enjoining public respondent or his duly authorized
representatives from executing and implementing the orders dated January 20, 1988
and March 8, 1988.
The petition is impressed with merit.
The rule is that unless expressly assumed, labor contracts such as employment
contracts and collective bargaining agreements are not enforceable against a
transferee of an enterprise, labor contracts being in personam, thus binding only
between the parties .5 A labor contract merely creates an action in personally and
does not create any real right which should be respected by third parties. This
conclusion draws its force from the right of an employer to select his employees and
to decide when to engage them as protected under our Constitution, and the same
can only be restricted by law through the exercise of the police power. 6
As a general rule, there is no law requiring a bona fide purchaser of assets of an on-
going concern to absorb in its employ the employees of the latter. 7
However, although the purchaser of the assets or enterprise is not legally bound to
absorb in its employ the employers of the seller of such assets or enterprise, the
parties are liable to the employees if the transaction between the parties is colored or
clothed with bad faith. 8
In the case at bar, contrary to the claim of the public respondent that the transaction
between petitioner and Mabuhay was attended with bad faith, the court finds no
cogent basis for such contention. Thus, the absorption of the employees of Mabuhay
may not be imposed on petitioner.
It is undisputed that when Mabuhay surrendered the leased premises to Syjuco and
asked Syjuco to offer same to other lessees it was Syjuco who found petitioner and
persuaded petitioner to lease said premises. Mabuhay had nothing to do with the
negotiation and consummation of the lease contract between petitioner and Syjuco.
It was only when Mabuhay offered to sell its assets and personal properties in the
premises to petitioner that they came to deal with each other. It appears that
petitioner agreed to purchase said assets of respondent Mabuhay to enable Mabuhay
to pay its obligations to its striking employees and to Syjuco. Indeed, in the deed of
assignment that was executed by Mabuhay in favor of petitioner on April 14, 1 987 for
and in consideration of P2,500,000.00, it is specifically provided therein that the same
is "purely for and in consideration of the sale/transfer and assignment of the personal
properties and assets of Hotel Mabuhay, Inc. listed . . . " and "in no way involves any
assumption or undertaking on the part of Second Party (petitioner) of any debts or
liabilities whatsoever of Hotel Mabuhay, Inc." 9 The liabilities alluded to in this
agreement should be interpreted to mean not only any monetary liability of Mabuhay
but any other liability or obligation arising from the operation of its business including
its liability to its employees.
Moreover, in the tripartite agreement that was entered into by petitioner with
respondents NUWHRAIN and Mabuhay, it is clearly stipulated as follows:
8. That, immediately after the execution of this Agreement, the
FIRST PARTY shall give a list of its members to the THIRD PARTY
that it desires to recommend for employment so that the latter can
consider them for employment, with no commitment whatsoever on
the part of the THIRD PARTY to hire them in the business that it
will operate in the premises formerly occupied by the Hotel
Mabuhay; 10
From the foregoing, it is clear that petitioner has no liability whatsoever to the
employees of Mabuhay And its responsibility if at all, is only to consider them for re-
employment in the operation of the business in the same premises. There can be no
implied acceptance of the employees of Mabuhay by petitioner and acceptance of
statutory wrong as it is expressly provided in the agreement that petitioner has no
commitment or duty to absorb them.
Moreover, the court does not subscribe to the theory of public respondent that
petitioner should have informed NUWHRAIN of its lease of the premises and its
purchase of the assets and personal properties of Mabuhay therein so that said
employees could have taken steps to protect their interest. The court finds no such
duty on the part of petitioner and its failure to notify said employees cannot be
an indicium of bad faith.
Much less is there any evidence that petitioner and respondent Mabuhay are joint
tortfeasors as found by public respondent. While it is true that petitioner is using the
leased property for the same type of business as that of respondent Mabuhay, there
can be no continuity of the business operations of the predecessor employer by the
successor employer as respondent Mabuhay had not retained control of the business.
Petitioner is a corporation entirely different from Mabuhay. It has no controlling
interest whatever in respondent Mabuhay. Petitioner and Mabuhay have no privity
and are strangers to each other.
What is obvious is that the petitioner, by purchasing the assets of respondent
Mabuhay in the hotel premises, enabled Mabuhay to pay its obligations to its
employees. There being no employer-employee relationship between the petitioner
and the Mabuhay employees, the petition must fail. Petitioner can not be compelled to
absorb the employees of Mabuhay and to pay them backwages.
BENGUET CONSOLIDATED, INC., plaintiff-appellant,
vs.
BCI EMPLOYEES and WORKERS UNION-PAFLU, PHILIPPINE ASSOCIATION OF
FREE LABOR UNIONS, CIPRIANO CID and JUANITO GARCIA, defendants-
appellees.
Ross, Selph, Del Rosario, Bito and Misa for plaintiff-appellant.
Cipriano Cid and Associates for defendants-appellees.
BENGZON, J.P., J.:
The contending parties in this case —Benguet Consolidated, Inc., ("BENGUET") on
the one hand, and on the other, BCI Employees & Workers Union ("UNION") and the
Philippine Association of Free Labor Unions ("PAFLU") —do not dispute the following
factual settings established by the lower court.
On June 23, 1959, the Benguet-Balatoc Workers Union ("BBWU"), for and in behalf of
all BENGUET employees in its mines and milling establishment located at Balatoc,
Antamok and Acupan, Municipality of Itogon, Mt. Province, entered into a Collective
Bargaining Contract, Exh. "Z" ("CONTRACT") with BENGUET. Pursuant to its very
terms, said CONTRACT became effective for a period of four and a half (4-½) years,
or from June 23, 1959 to December 23, 1963. It likewise embodied a No-Strike, No-
Lockout clause. 1
About three years later, or on April 6, 1962, a certification election was conducted by
the Department of Labor among all the rank and file employees of BENGUET in the
same collective bargaining units. UNION obtained more than 50% of the total number
of votes, defeating BBWU, and accordingly, the Court of Industrial Relations, on
August 18, 1962, certified UNION as the sole and exclusive collective bargaining
agent of all BENGUET employees as regards rates of pay, wages, hours of work and
such other terms and conditions of employment allowed them by law or contract.
Subsequently, separate meetings were conducted on November 22, 23 and 24, 1962
at Antamok, Balatoc and Acupan Mines respectively by UNION. The result thereof
was the approval by UNION members of a resolution 2 directing its president to file a
notice of strike against BENGUET for:
1. [Refusal] to grant any amount as monthly living allowance for the workers;
2. Violation of Agreements reached in conciliation meetings among which is
the taking down of investigation [sic] and statements of employees without
the presence of union representative;
3. Refusal to dismiss erring executive after affidavits had been presented,
thereby company showing [sic] bias and partiality to company personnel;
4. Discrimination against union members in the enforcement of disciplinary
actions.
The Notice of Strike 3 was filed on December 28, 1962. Three months later, in the
evening of March 2, 1963, UNION members who were BENGUET employees in the
mining camps at Acupan, Antamok and Balatoc, went on strike. Regarding the
conduct of the strike, the trial court reports: 4
... Picket lines were formed at strategic points within the premises of the
plaintiff. The picketers, by means of threats and intimidation, and in some
instances by the use of force and violence, prevented passage thru the
picket lines by personnel of the plaintiff who were reporting for work. Human
blocks were formed on points of entrance to working areas so that even
vehicles could not pass thru, while the officers of the plaintiff were not
allowed for sometime to leave the "staff" area.
The strikers forming picket lines bore placards with the letters BBWU-PAFLU
written thereon. As a general rule, the picketers were unruly, aggressive and
uttered threatening remarks to staff members and non-strikers who desire to
pass thru the picket lines. On some occasions, the picketers resorted to
violence by pushing back the car wherein staff officers were riding who
would like to enter the mine working area. The picketers lifted one side of the
vehicle and were in the act of overturning it when they were prevented from
doing so by the timely intervention of PC soldiers, who threw tear gas bombs
to make the crowd disperse. Many of the picketers were apprehended by the
PC soldiers and criminal charges for grave coercion were filed against them
before the Court of First Instance of Baguio. Two of the strike leaders and
twenty-two picketers, however, were found guilty of light coercion while
nineteen other accused were acquitted.
There was a complete stoppage of work during the strike in all the mines.
After two weeks elapsed, repair and maintenance of the water pump was
allowed by the strikers and some of the staff members were permitted to
enter the mines, who inspected the premises in the company of PC soldiers
to ascertain the extent of the damage to the equipment and losses of
company property.
xxx xxx xxx
On May 2, 1963, the parties agreed to end the raging dispute. Accordingly,
BENGUET and UNION executed the AGREEMENT, Exh. 1. PAFLU placed its
conformity thereto and said agreement was attested to by the Director of the Bureau
of Labor Relations. About a year later or on January 29, 1964, a collective bargaining
contract was finally executed between UNION-PAFLU and BENGUET. 5
Meanwhile, as a result, allegedly, of the strike staged by UNION and its members,
BENGUET had to incur expenses for the rehabilitation of mine openings, repair of
mechanical equipment, cost of pumping water out of the mines, value of explosives,
tools and supplies lost and/or destroyed, and other miscellaneous expenses, all
amounting to P1,911,363.83. So, BENGUET sued UNION, PAFLU and their
respective Presidents to recover said amount in the Court of First Instance of
Manila, on the sole premise that said defendants breached their undertaking in the
existing CONTRACT not to strike during the effectivity thereof .
In answer to BENGUET's complaint, defendants unions and their respective
presidents put up the following defenses: (1) they were not bound by the CONTRACT
which BBWU, the defeated union, had executed with BENGUET; (2) the strike was
due, inter alia, to unfair labor practices of BENGUET; and (3) the strike was lawful
and in the exercise of the legitimate rights of UNION-PAFLU under Republic Act 875.
Issues having been joined, trial commenced. On February 23, 1965, the trial court
rendered judgment dismissing the complaint on the ground that the CONTRACT,
particularly the No-Strike clause, did not bind defendants. The latters' counterclaim
was likewise denied. Failing to get a reconsideration of said decision, BENGUET
interposed the present appeal.
The several errors assigned by BENGUET basically ask three questions:
(1) Did the Collective Bargaining Contract executed between BENGUET and
BBWU on June 23, 1959 and effective until December 23,
1963 automatically bind UNION-PAFLU upon its certification, on August 18,
1962, as sole bargaining representative of all BENGUET employees?
(2) Are defendants labor unions and their respective presidents liable for the
illegal acts committed during the course of the strike and picketing by some
union members?
(3) Are defendants liable to pay the damages claimed by BENGUET?
In support of an affirmative answer to the first question, BENGUET first invokes the
so-called "Doctrine of Substitution" referred to in General Maritime Stevedores' Union
v. South Sea Shipping Lines, L-14689, July 26, 1960. There it was remarked:
xxx xxx xxx
We also hold that where the bargaining contract is to run for more than two
years, the principle of substitution may well be adopted and enforced by the
CIR to the effect that after two years of the life of a bargaining agreement, a
certification election may be allowed by the CIR; that if a bargaining agent
other than the union or organization that executed the contract, is elected,
said new agent would have to respect said contract, but that it may bargain
with the management for the shortening of the life of the contract if it
considers it too long, or refuse to renew the contract pursuant to an
automatic renewal clause. (Emphasis supplied)
xxx xxx xxx
The submission utterly fails to persuade Us. The above-quoted pronouncement
was obiter dictum. The only issue in the General Maritime Stevedores' Union case
was whether a collective bargaining agreement which had practically run for 5 years
constituted a bar to certification proceedings. We held it did not and accordingly
directed the court a quo to order certification elections. With that, nothing more was
necessary for the disposition of the case. Moreover, the pronouncement adverted to
was rather premature. The possible certification of a union different from that which
signed the bargaining contract was a mere contingency then since the elections were
still to be held. Clearly, the Court was not called upon to rule on possible effects of
such proceedings on the bargaining agreement. 6
But worse, BENGUET's reliance upon the Principle of Substitution is totally
misplaced. This principle, formulated by the NLRB 7 as its initial compromise solution
to the problem facing it when there occurs a shift in employees' union allegiance after
the execution of a bargaining contract with their employer, merely states that even
during the effectivity of a collective bargaining agreement executed between
employer and employees thru their agent, the employees can change said agent but
the contract continues to bind them up to its expiration date. They may bargain
however for the shortening of said expiration date. 8
In formulating the "substitutionary" doctrine, the only consideration involved was the
employees' interest in the existing bargaining agreement. The agent's interest never
entered the picture. In fact, the justification 9for said doctrine was:
... that the majority of the employees, as an entity under the statute, is the
true party in interest to the contract, holding rights through the agency of the
union representative. Thus, any exclusive interest claimed by the agent is
defeasible at the will of the principal.... (Emphasis supplied)
Stated otherwise, the "substitutionary" doctrine only provides that the employees
cannot revoke the validly executed collective bargaining contract with their employer
by the simple expedient of changing their bargaining agent. And it is in the light of this
that the phrase "said new agent would have to respect said contract" must be
understood. It only means that the employees, thru their new bargaining agent,
cannot renege on their collective bargaining contract, except of course to negotiate
with management for the shortening thereof.
The "substitutionary" doctrine, therefore, cannot be invoked to support the contention
that a newly certified collective bargaining agent automatically assumes all the
personal undertakings — like the no-strike stipulation here — in the collective
bargaining agreement made by the deposed union. When BBWU bound itself and its
officers not to strike, it could not have validly bound also all the other rival unions
existing in the bargaining units in question. BBWU was the agent of the employees,
not of the other unions which possess distinct personalities. To consider UNION
contractually bound to the no-strike stipulation would therefore violate the legal maxim
that res inter alios nec prodest nec nocet. 10
Of course, UNION, as the newly certified bargaining agent, could always voluntarily
assume all the personal undertakings made by the displaced agent. But as the lower
court found, there was no showing at all that, prior to the strike, 11 UNION formally
adopted the existing CONTRACT as its own and assumed all the liability ties imposed
by the same upon BBWU.
BENGUET also alleges that UNION is now in estoppel to claim that it is not
contractually bound by the CONTRACT for having filed on September 28, 1962, in
Civil Case No. 1150 of the Court of First Instance of Baguio, entitled "Bobok Lumber
Jack Ass'n. vs. Benguet Consolidated, Inc. and BCI Employees Workers Union-
PAFLU" 12 a motion praying for the dissolution of the ex parte writ of preliminary
injunction issued therein, wherein the following appears:
In that case, the CIR transfered the contactual rights of the BBWU to the
defendant union. One of such rights transferred was the right to the modified
union-shop — checked off union dues arrangement now under injunction.
The collective bargaining contract mentioned in the plaintiff's complaint did
not expire by the mere fact that the defendant union was certified as
bargaining agent in place of the BBWU. The Court of Industrial Relations in
the case above mentioned made it clear that the collective bargaining
contract would be respected unless and until the parties act otherwise. In
effect, the defendant union by act of subrogation took the place of the BBWU
as the UNION referred to in the contract. (Emphasis supplied)
There is no estoppel. UNION did not assert the above statement against BENGUET
to force it to rely upon the same to effect the union check-off in its favor. UNION and
BENGUET were together as co-defendants in said Civil Case No. 1150. Rather, the
statement was directed against Bobok Lumber Jack Ass'n., plaintiff therein, to
weaken its cause of action. Moreover, BENGUET did not rely upon said statement.
What prompted Bobok Lumber Jack Ass'n. to file the complaint for declaratory relief
was the fact that "... the defendants [UNION and BENGUET] are planning to agree to
the continuation of a modified union shop in the three camps mentioned above
without giving the employees concerned the opportunity to express their wishes on
the matter ..." BENGUET even went further in its answer filed on October 18, 1962,
by asserting that "... defendants have already agreed to the continuation of the
modified union shop provision in the collective bargaining agreement...." 13
Neither can we accept BENGUET's contention that the inclusion of said aforequoted
motion in the record on appeal filed in said Civil Case No. 1150, now on appeal
before Us docketed as case No. L-24729, refutes UNION's allegation that it has
subsequently abandoned its stand against Bobok Lumber Jack Ass'n., in said case.
The mere appearance of such motion in the record on appeal is but a compliance
with the procedural requirement of Rule 41, Sec. 6, of the Rules of Court, that all
matters necessary for a proper understanding of the issues involved be included in
the record on appeal. This therefore cannot be taken as a rebuttal of the UNION's
explanation.
There is nothing then, in law as well as in fact, to support plaintiff BENGUET's
contention that defendants are contractually bound by the CONTRACT. And the
stand taken by the trial court all the more becomes unassailable in the light of Art.
1704 of the Civil Code providing that:
In the collective bargaining, the labor union or members of the board or
committee signing the contract shall be liable for non-fulfillment thereof.
(Emphasis supplied)
There is no question, defendants were not signatories nor participants in the
CONTRACT.
Lastly, BENGUET contends, citing Clause II in connection with Clause XVIII of the
CONTRACT, that since all the employees, as principals, continue being bound by the
no-strike stipulation until the CONTRACT's expiration, UNION, as their agent, must
necessarily be bound also pursuant to the Law on Agency. This is untenable. The
way We understand it, everything binding on a duly authorized agent, acting as such,
is binding on the principal; not vice-versa, unless there is a mutual agency, or unless
the agent expressly binds himself to the party with whom he contracts. As the Civil
Code decrees it: 14
The agent who acts as such is not personally liable to the party with whom
he contracts, unless he expressly binds himself or exceeds the limits of his
authority without giving such party sufficient notice of his powers. (Emphasis
supplied)1äwphï1.ñët
Here, it was the previous agent who expressly bound itself to the other party,
BENGUET. UNION, the new agent, did not assume this undertaking of BBWU.
In view of all the foregoing, We see no further necessity of delving further into the
other less important points raised by BENGUET in connection with the first question.
On the second question, it suffices to consider, in answer thereto, that the rule of
vicarious liability has, since the passage of Republic Act 875, been expressly
legislated out. 15 The standing rule now is that for a labor union and/or its officials and
members to be liable, there must be clear proof of actual participation in, or
authorization or ratification of the illegal acts. 16 While the lower court found that some
strikers and picketers resorted to intimidation and actual violence, it also found that
defendants presented uncontradicted evidence that before and during the strike, the
strike leaders had time and again warned the strikers not to resort to violence but to
conduct peaceful picketing only. 17 Assuming that the strikers did not heed these
admonitions coming from their leaders, the failure of the union officials to go against
the erring union members pursuant to the UNION and PAFLU constitutions and by-
laws exposes, at the most, only a flaw or weakness in the defense which, however,
cannot be the basis for plaintiff BENGUET to recover.
Lastly, paragraph VI of the Answer 18 sufficiently traverses the material allegations in
paragraph VI of the Complaint, 19 thus precluding a fatal admission on defendants'
part. The purpose behind the rule requiring specific denial is obtained: defendants
have set forth the matters relied upon in support of their denial. Paragraph VI of the
Answer may not be a model pleading, but it suffices for purposes of the rule.
Pleadings should, after all, be liberally construed. 20
Since defendants were not contractually bound by the no-strike clause in the
CONTRACT, for the simple reason that they were not parties thereto, they could not
be liable for breach of contract to plaintiff. The lower court therefore correctly
absolved them from liability.
LIBERTY FLOUR MILLS EMPLOYEES, ANTONIO EVARISTO and POLICARPIO
BIASCAN, petitioners,
vs.
LIBERTY FLOUR MILLS, INC. PHILIPPINE LABOR ALLIANCE COUNCIL (PLAC)
and NATIONAL LABOR RELATIONS COMMISSION, (NLRC), respondents.
Julius A. Magno for petitioners.
De Leon, Diokno & Associates for respondent Liberty Flour Mills, Inc.
CRUZ, J.:
In this petition for certiorari, the resolution of the public respondent dated August 3,
1978, is faulted for: (a) affirming the decision of the labor arbiter dismissing the
employees' claim for emergency allowance for lack of jurisdiction; and (b) modifying
the said decision by disallowing the award of back wages to petitioners Policarpio
Biascan and Antonio Evaristo.
The basic facts are as follows:
On February 6, 1974, respondent Philippine Labor Alliance Council (PLAC) and
respondent Liberty Flour Mills, Inc. entered into a three-year collective bargaining
agreement effective January 1, 1974, providing for a daily wage increase of P2.00 for
1974, Pl.00 for 1975 and another Pl.00 for 1976. The agreement contained a
compliance clause, which will be explained later in this opinion. Additionally, the
parties agreed to establish a union shop by imposing "membership in good standing
for the duration of the CBA as a condition for continued employment" of workers. 1
On October 18, 1974, PLAC filed a complaint against the respondent company for
non-payment of the emergency cost of living allowance under P.D. No. 525. 2 A
similar complaint was filed on March 4, 1975, this time by the petitioners, who
apparently were already veering away from PLAC.3
On March 20, 1975, petitioners Evaristo and Biascan, after organizing a union caged
the Federation of National Democratic Labor Unions, filed with the Bureau of Labor
Relations a petition for certification election among the rank-and-file employees of the
respondent company 4 PLAC then expelled the two for disloyalty and demanded their
dismissal by the respondent company, which complied on May 20, 1975. 5
The objection of Evaristo and Biascan to their termination were certified for
compulsory arbitration and assigned to Labor Arbiter Apolinario N. Lomabao, Jr.
Meanwhile, the claims for emergency allowance were referred for voluntary arbitration
to Edmundo Cabal, who eventually dismissed the same on the ground that the
allowances were already absorbed by the wage increases. This latter case was
ultimately also certified for compulsory arbitration and consolidated with the
termination case being heard by Lomabao. His decision was, on appeal, dealt with by
the NLRC as above stated, 6 and the motion for reconsideration was denied on
August 26, 1981.7
At the outset, we note that the petitioners are taking an ambivalent position
concerning the CBA concluded in 1974. While claiming that this was entered into in
bad faith and to forestall the payment of the emergency allowances expected to be
decreed, they nonetheless invoke the same agreement to support their contention
that their complaint for emergency allowances was invalidly referred to voluntary
arbitrator Cabal rather than Froilan M. Bacungan.
We find there was no such violation as the choice of the voluntary arbitrator was not
limited to Bacungan although he was probably the first preference. Moreover, the
petitioners are estopped from raising this objection now because they did not
seasonably interpose it and instead willingly submitted to Cabal's jurisdiction when he
undertook to hear their complaint.
In sustaining Labor Arbiter Lomabao, the NLRC agreed that the decision of voluntary
Arbiter Cabal was final and unappealable under Article 262-A of the Labor Code and
so could no longer be reviewed by it. True enough. However, it is equally true that the
same decision is not binding on this Court, as we held in Oceanic Bic Division (FFW)
v. Romero 8 and reiterated in Mantrade/FMMC Division Employees and Workers
Union v. Bacungan. 9 The rule as announced in these cases is reflected in the
following statements:
In spite of statutory provisions making "final" the decision of certain
administrative agencies, we have taken cognizance of petitions
questioning these decisions where want of jurisdiction, grave abuse
of discretion, violation of due process, denial of substantial justice,
or erroneous interpretation of the law were brought to our attention.
xxx xxx xxx
A voluntary arbitrator by the nature of her functions acts in a quasi-
judicial capacity. There is no reason why her decisions involving
interpretation of law should be beyond this Court's review.
Administrative officials are presumed to act in accordance with law
and yet we do not hesitate to pass upon their work where a
question of law is involved or where a showing of abuse of authority
or discretion in their official acts is properly raised in petitions
for certiorari.
Accordingly, the validity of the voluntary arbiter's finding that the emergency
allowance sought by the petitioners are already absorbed in the stipulated wage
increases will now be examined by the Court itself.
The position of the company is that the emergency allowance required by P.D. No.
525 is already covered by the wage increases prescribed in the said CBA.
Furthermore, pursuant to its Article VIII, such allowances also include all other
statutory minimum wage increases that might be decreed during the lifetime of the
said agreement.
That agreement provided in Section 2 thereof as follows:
Section 2. The wage increase in the amounts and during the period
above set forth shall, in the event of any statutory increase of the
minimum wage, either as allowance or as basic wage, during the
life of this Agreement, be considered compliance and payment of
such required statutory increase as far as it will go and under no
circumstances will it be cumulative nor duplication to the differential
amount involved consequent to such statutory wage increase.
The Court holds that such allowances are indeed absorbed by the wage increases
required under the agreement. This is because Section 6 of the Interpretative Bulletin
on LOI No. 174 specifically provides:
Sec. 6. Allowances under LOI. — -All allowances, bonuses, wage
adjustments and other benefits given by employers to their
employees shall be treated by the Department of Labor as in
substantial compliance with the minimum standards set forth in LOI
No. 174 if:
(a) they conform with at least the minimum
allowances scales specified in the immediately
preceding Section; and
(b) they are given in response to the appeal of
the President in his speech on 4 January 1974,
or to countervail the quantum jump in the cost of
living as a result of the energy crisis starting in
November 1973, or pursuant to Presidential
Decree No. 390; Provided, That the payment is
retroactive to 18 February 1974 or earlier.
The allowances and other benefits may be granted unilaterally by
the employer or through collective bargaining, and may be paid at
the same time as the regular wages of the employees.
Allowances and other benefits which are not given in substantial
compliance with the LOI as interpreted herein shall not be treated
by the Department of Labor as emergency allowances in the
contemplation of the LOI unless otherwise shown by sufficient
proof. Thus, without such proof, escalation clauses in collective
bargaining agreements concluded before the appeal of the
President providing for automatic or periodic wage increases shall
not be considered allowances for purposes of the LOI. (Emphasis
supplied.)
The "immediately preceding section" referred to above states:
SEC. 5. Determination of Amount of Allowances. — In determining the amount of
allowances that should be given by employers to meet the recommended minimum
standards, the LOI has classified employers into three general categories. As an
implementation policy, the Department of Labor shall consider as sufficient
compliance with the scales of allowances recommended by the LOI if the following
monthly allowances are given by employers:
(a) P50.00 or higher where the authorized capital
stock of the corporation, or the total assets in the
case of other undertakings, exceeds P 1 million;
(b) P 30.00 or higher where the authorized capital
stock of the corporation, or the total assets in the
case of other undertakings, is not less than
P100,000.00 but not more than P1million; and
(c) P15.00 or higher where the authorized capital
stock or total assets, as the case may be, is less
than P100,000.00.
It is not denied that the company falls under paragraph (a), as it has a capitalization of
more than P l million, 10 and so must pay a minimum allowance of P50.00 a month.
This amount is clearly covered by the increases prescribed in the CBA, which
required a monthly increase (on the basis of 30 days) of P60.00 for 1974, to be
increased by P30.00 in 1975 (to P90.00) and another P 30.00 in 1976 (to P120.00).
The first increase in 1974 was already above the minimum allowance of P50.00,
which was exceeded even more with the increases of Pl.00 for each of the next two
years.
Even if the basis used were 26 days a month (excluding Sundays), the conclusion
would remain unchanged as the raise in wage would be P52.00 for 1974, which
amount was increased to P78.00 in 1975 and to P104.00 in 1976.
But the petitioners contend that the wage increases were the result of negotiation
undertaken long before the promulgation of P.D. No. 525 and so should not be
considered part of the emergency allowance decreed. In support of this contention,
they cite Section 15 of the Rules implementing P.D. No. 525, providing as follows:
Nothing herein shall prevent the employer and his employees, from
entering into any agreement with terms more favorable to the
employees than those provided herein, or be construed to sanction
the diminution of any benefits granted to the employees under
existing laws, agreements, and voluntary practice.
Obviously, this section should not be read in isolation but must be related to the other
sections above-quoted, to give effect to the intent and spirit of the decree. The
meaning of the section simply is that any benefit over and above the prescribed
allowances may still be agreed upon by the employees and the employer or, if
already granted, may no longer be withdrawn or diminished.
The petitioners also maintain that the above-quoted Section 2 of CBA is invalid
because it constitutes a waiver by the laborers of future benefits that may be granted
them by law. They contend this cannot be done because it is contrary to public policy.
While the principle is correct, the application is not, for there are no benefits being
waived under the provision. The benefits are already included in the wage increases.
It is the law itself that considers these increases, under the conditions prescribed in
LOI No. 174, as equivalent to, or in lieu of, the emergency allowance granted by P.D.
No. 525.
In fact, the company agreed to grant the emergency allowance even before the
obligation was imposed by the government. What the petitioners claim they are being
made to waive is the additional P50.00 allowance but the truth is that they are not
entitled to this because they are already enjoying the stipulated increases. There is
no waiver of these increases.
Moreover, Section 2 provides that the wage increase shall be considered payment of
any statutory increase of the minimum wage "as far as it will go," which means that
any amount not covered by such wage increase will have to be made good by the
company. In short, the difference between the stipulated wage increase and the
statutory minimum wage will have to be paid by the company notwithstanding and,
indeed, pursuant to the said article. There is no waiver as to this.
Curiously, Article 2 was produced verbatim in the collective bargaining agreement
concluded by the petitioners with the company in 1977 after PLAC had been replaced
by the new labor union formed by petitioners Evaristo and Biascan. 11 It is difficult to
understand the petitioners' position when they blow hot and cold like this.
Coming now to the second issue, we find that it must also be resolved against the
petitioners.
Evaristo and Biascan claim they were illegally dismissed for organizing another labor
union opposed to PLAC, which they describe as a company union. Arguing that they
were only exercising the right to self organization as guaranteed by the Constitution,
they insist they are entitled to the back wages which the NLRC disallowed while
affirming their reinstatement.
In its challenged decision, the public respondent held that in demanding the dismissal
of Evaristo and Biascan, PLAC had acted prematurely because the 1974 CBA
providing for union shop and pursuant to which the two petitioners were dismissed
had not yet been certified. 12 The implication is that it was not yet in effect and so
could not be the basis of the action taken against the two petitioners. This conclusion
is erroneous. It disregards the ruling of this Court in Tanduay Distillery Labor Union v.
NLRC, 13 were we held:
The fact, therefore, that the Bureau of Labor Relations (BLR) failed
to certify or act on TDLU's request for certification of the CBA in
question is of no moment to the resolution of the issues presented
in this case. The BLR itself found in its order of July 8, 1982, that
the (un)certified CBA was duly filed and submitted on October 29,
1980, to last until June 30, 1982 is certifiable for having complied
with all the requirements for certification. (Emphasis supplied.)
The CBA concluded in 1974 was certifiable and was in fact certified on April 11, 1975,
It bears stressing that Evaristo and Biascan were dismissed only on May 20, 1975,
more than a month after the said certification.
The correct view is that expressed by Commissioner Cecilio P. Seno in his concurring
and dissenting opinion, 14 viz.:
I cannot however subscribe to the majority view that the 'dismissal
of complainants Biascan and Evaristo, ... was, to say the least, a
premature action on the part of the respondents because at the
time they were expelled by PLAC the contract containing the union
security clause upon which the action was based was yet to be
certified and the representation status of the contracting union was
still in question.
Evidence on record show that after the cancellation of the
registration certificate of the Federation of Democratic Labor
Unions, no other union contested the exclusive representation of
the Philippine Labor Alliance Council (PLAC), consequently, there
was no more legal impediment that stood on the way as to the
validity and enforceability of the provisions of the collective
bargaining agreement entered into by and between respondent
corporation and respondent union. The certification of the collective
bargaining agreement by the Bureau of Labor Relations is not
required to put a stamp of validity to such contract. Once it is duly
entered into and signed by the parties, a collective bargaining
agreement becomes effective as between the parties regardless of
whether or not the same has been certified by the BLR.
To be fair, it must be mentioned that in the certification election held at the Liberty
Flour Mills, Inc. on December 27, 1976, the Ilaw at Buklod ng Manggagawa, with
which the union organized by Biascan and Evaristo was affiliated, won
overwhelmingly with 441 votes as against the 5 votes cast for PLAC. 15However, this
does not excuse the fact that the two disaffiliated from PLAC as early as March 1975
and thus rendered themselves subject to dismissal under the union shop clause in the
CBA.
The petitioners say that the reinstatement issue of Evaristo and Biascan has become
academic because the former has been readmitted and the latter has chosen to await
the resolution of this case. However, they still insist on the payment of their back
wages on the ground that their dismissal was illegal. This claim must be denied for
the reasons already given. The union shop clause was validly enforced against them
and justified the termination of their services.

It is the policy of the State to promote unionism to enable the workers to negotiate
with management on the same level and with more persuasiveness than if they were
to individually and independently bargain for the improvement of their respective
conditions. To this end, the Constitution guarantees to them the rights "to self-
organization, collective bargaining and negotiations and peaceful concerted actions
including the right to strike in accordance with law." There is no question that these
purposes could be thwarted if every worker were to choose to go his own separate
way instead of joining his co-employees in planning collective action and presenting a
united front when they sit down to bargain with their employers. It is for this reason
that the law has sanctioned stipulations for the union shop and the closed shop as a
means of encouraging the workers to join and support the labor union of their own
choice as their representative in the negotiation of their demands and the protection
of their interest vis-a-vis the employer.

The Court would have preferred to resolve this case in favor of the petitioners, but the
law and the facts are against them. For all the concern of the State, for the well-being
of the worker, we must at all times conform to the requirements of the law as long as
such law has not been shown to be violative of the Constitution. No such violation has
been shown here.

WHEREFORE, the petition is DISMISSED, without any pronouncement as to costs. It

is so ordered.
 METROPOLITAN BANK & TRUST COMPANY EMPLOYEES UNION-
ALU-TUCP and ANTONIO V. BALINANG, Petitioners, vs. NATIONAL
LABOR RELATIONS COMMISSION (2nd Division) and
METROPOLITAN BANK and TRUST COMPANY, Respondents.
Gilbert P. Lorenzo for petitioners.chanrobles virtual law library
Marcial G. dela Fuente for private respondents.
VITUG, J.:
In this petition for certiorari, the Metropolitan Bank & Trust Company
Employees Union-ALU-TUCP (MBTCEU) and its president, Antonio V.
Balinang, raise the issue of whether or not the implementation by the
Metropolitan Bank and Trust Company of Republic Act No. 6727,
mandating an increase in pay of P25 per day for certain employees in the
private sector, created a distortion that would require an adjustment under
said law in the wages of the latter's other various groups of
employees.chanroblesvirtualawlibrarychanrobles virtual law library
On 25 May 1989, the bank entered into a collective bargaining agreement
with the MBTCEU, granting a monthly P900 wage increase effective 01
January 1989, P600 wage increase 01 January 1990, and P200 wage
increase effective 01 January 1991. The MBTCEU had also bargained for
the inclusion of probationary employees in the list of employees who would
benefit from the first P900 increase but the bank had adamantly refused to
accede thereto. Consequently, only regular employees as of 01 January
1989 were given the increase to the exclusion of probationary
employees.chanroblesvirtualawlibrarychanrobles virtual law library
Barely a month later, or on 01 January 1989, Republic Act 6727, "an act to
rationalize wage policy determination be establishing the mechanism and
proper standards thereof, . . . fixing new wage rates, providing wage
incentives for industrial dispersal to the countryside, and for other
purposes," took effect. Its provisions, pertinent to this case, state:
Sec. 4. (a) Upon the effectivity of this Act, the statutory minimum wage
rates of all workers and employees in the private sector, whether
agricultural or non-agricultural, shall be increased by twenty-five pesos
(P25) per day, . . .: Provided, That those already receiving above the
minimum wage rates up to one hundred pesos(P100.00) shall also receive
an increase of twenty-five pesos (P25.00) per day, . . .
xxx xxx xxxchanrobles virtual law library
(d) If expressly provided for and agreed upon in the collective bargaining
agreements, all increase in the daily basic wage rates granted by the
employers three (3) months before the effectivity of this Act shall be
credited as compliance with the increases in the wage rates prescribed
herein, provided that, where such increases are less than the prescribed
increases in the wage rates under this Act, the employer shall pay the
difference. Such increase shall not include anniversary wage increases,
merit wage increase and those resulting from the regularization or
promotion of employees.chanroblesvirtualawlibrarychanrobles virtual law
library
Where the application of the increases in the wage rates under this Section
results in distortions as defined under existing laws in the wage structure
within an establishment and gives rise to a dispute therein, such dispute
shall first be settled voluntarily between the parties and in the event of a
deadlock, the same shall be finally resolved through compulsory
arbitration by the regional branches of the National Labor Relations
Commission (NLRC) having jurisdiction over the
workplace.chanroblesvirtualawlibrarychanrobles virtual law library
It shall be mandatory for the NLRC to conduct continous hearings and
decide any dispute arising under this Section within twenty (20) calendar
days from the time said dispute is formally submitted to it for arbitration.
The pendency of a dispute arising from a wage distortion shall not in any
way delay the applicability of the increase in the wage rates prescribed
under this Section.
Pursuant to the above provisions, the bank gave the P25 increase per day,
or P750 a month, to its probationary employees and to those who had
been promoted to regular or permanent status before 01 July 1989 but
whose daily rate was P100 and below. The bank refused to give the same
increase to its regular employees who were receiving more than P100 per
day and recipients of the P900 CBA
increase.chanroblesvirtualawlibrarychanrobles virtual law library
Contending that the bank's implementation of Republic Act 6727 resulted
in the categorization of the employees into (a) the probationary employees
as of 30 June 1989 and regular employees receiving P100 or less a day
who had been promoted to permanent or regular status before 01 July
1989, and (b) the regular employees as of 01 July 1989, whose pay was
over P100 a day, and that, between the two groups, there emerged a
substantially reduced salary gap, the MBTCEU sought from the bank the
correction of the alleged distortion in pay. In order to avert an impeding
strike, the bank petitioned the Secretary of Labor to assume jurisdiction
over the case or to certify the same to the National Labor Relations
Commission (NLRC) under Article 263 (g) of the Labor Code. 1 The parties
ultimately agreed to refer the issue for compulsory arbitration to the
NLRC.chanroblesvirtualawlibrarychanrobles virtual law library
The case was assigned to Labor Arbiter Eduardo J. Carpio. In his decision
of 05 February 1991, the labor arbiter disregard with the bank's contention
that the increase in its implementation of Republic Act 6727 did not
constitute a distortion because "only 143 employees or 6.8% of the bank's
population of a total of 2,108 regular employees" benefited. He stressed
that "it is not necessary that a big number of wage earners within a
company be benefited by the mandatory increase before a wage distortion
may be considered to have taken place," it being enough, he said, that
such increase "result(s) in the severe contraction of an intentional
quantitative difference in wage between employee groups."chanrobles
virtual law library
The labor arbiter concluded that since the "intentional quantitative
difference" in wage or salary rates between and among groups of
employees is not based purely on skills or length of service but also on
"other logical bases of differentiation, a P900.00 wage gap intentionally
provided in a collective bargaining agreement as a quantitative difference
in wage between those who WERE regular employees as of January 1,
1989 and those who WERE NOT as of that date, is definitely a logical basis
of differentiation (that) deserves protection from any distorting statutory
wage increase." Otherwise, he added, "a minimum wage statute that seek
to uplift the economic condition of labor would itself destroy the
mechanism of collective bargaining which, with perceived stability, has
been labor's constitutional and regular source of wage increase for so long
a time now." Thus, since the "subjective quantitative difference" between
wage rates had been reduced from P900.00 to barely P150.00, correction
of the wage distortion pursuant to Section 4(c) of the Rules Implementing
Republic Act 6727 should be made.chanroblesvirtualawlibrarychanrobles
virtual law library
The labor arbiter disposed of the case, thus:
WHEREFORE, premises considered, the respondent is hereby directed to
restore to complainants and their members the Nine Hundred (P900.00)
Pesos CBA wage gap they used to enjoy over non-regular employees as of
January 1, 1989 by granting them a Seven Hundred Fifty (P750.00) Pesos
monthly increase effective July 1,
1989.chanroblesvirtualawlibrarychanrobles virtual law library
SO ORDERED. 2chanrobles virtual law library
The bank appealed to the NLRC. On 31 May 1991, the NLRC Second
Division, by a vote of 2 to 1, reversed the decision of the Labor Arbiter.
Speaking, through Commissioners Rustico L. Diokno and Domingo H.
Zapanta, the NLRC said:
. . . a wage distortion can arise only in a situation where the salary
structure is characterized by intentional quantitative differences among
employee groups determined or fixed on the basis of skills, length of
service, or other logical basis of differentiation and such differences or
distinction are obliterated (In Re: Labor Dispute at the Bank of the
Philippine Islands, NCMB-RB-7-11-096-89, Secretary of Labor and
Employment, February 18, 1991).chanroblesvirtualawlibrarychanrobles
virtual law library
As applied in this case, We noted that in the new wage salary structure,
the wage gaps between Level 6 and 7 levels 5 and 6, and levels 6 and 7
(sic) were maintained. While there is a noticeable decrease in the wage
gap between levels 2 and 3, Levels 3 and 4, and Levels 4 and 5, the
reduction in the wage gaps between said levels is not significant as to
obliterate or result in severe contraction of the intentional quantitative
differences in salary rates between the employees groups. For this reason,
the basis requirement for a wage in this case. Moreover, there is nothing
in the law which would justify an across-the-board adjustment of P750.00
as ordered by the labor Arbiter.chanroblesvirtualawlibrarychanrobles
virtual law library
WHEREFORE, premises considered, the appealed decision is hereby set
aside and a new judgment is hereby entered, dismissing the complaint for
lack of merit.chanroblesvirtualawlibrarychanrobles virtual law library
SO ORDERED. 3chanrobles virtual law library
In her dissent, Presiding Commissioner Edna Bonto-Perez opined:
There may not be an obliteration nor elimination of said quantitative
distinction/difference aforecited but clearly there is a contraction. Would
such contraction be severe as to warrant the necessary correction
sanctioned by the law in point, RA 6727? It is may considered view that
the quantitative intended distinction in pay between the two groups of
workers in respondent company was contracted by more than fifty (50%)
per cent or in particular by more or less eighty-three (83%) per cent
hence, there is no doubt that there is an evident severe contraction
resulting in the complained of wage
distortion.chanroblesvirtualawlibrarychanrobles virtual law library
Nonetheless, the award of P750.00 per month to all of herein individual
complainants as ordered by the Labor Arbiter below, to my mind is not the
most equitable remedy at bar, for the same would be an across the board
increase which is not the intention of RA 6727. For that matter, herein
complainants cannot by right claim for the whole amount of P750.00 a
month or P25.00 per day granted to the workers covered by the said law
in the sense that they are not covered by the said increase mandated by
RA 6727. They are only entitled to the relief granted by said law by way of
correction of the pay scale in case of distortion in wages by reason
thereof.chanroblesvirtualawlibrarychanrobles virtual law library
Hence, the formula offered and incorporated in Wage Order No. IV-02
issued on 21 May 1991 by the Regional Tripartite Wages and Productivity
Commission for correction of pay scale structures in case of wage
distortion as in the case at bar which is:
Minimum Wage = % x Prescribed = Distortion
------ Increased Adjustment
Actual Salary
would be the most equitable and fair under the circumstances obtaining in
this case.chanroblesvirtualawlibrarychanrobles virtual law library
For this very reason, I register my dissent from the majority opinion and
opt for the modification of the Labor Arbiter's decision as afore-
discussed. 4chanrobles virtual law library
The MBTCEU filed a motion for reconsideration of the decision of the NLRC;
having been denied, the MBTCEU and its president filed the instant petition
for certiorari, charging the NLRC with gave abuse of discretion by its
refusal (a) "to acknowledge the existence of a wage distortion in the wage
or salary rates between and among the employee groups of the
respondent bank as a result of the bank's partial implementation" of
Republic Act 6727 and (b) to give due course to its claim for an across-
the-board P25 increase under Republic Act No. 6727. 5chanrobles virtual
law library
We agree with the Solicitor General that the petition is impressed with
merit.6chanrobles virtual law library
The term "wage distortion", under the Rules Implementing Republic Act
6727, is defined, thus:
(p) Wage Distortion means a situation where an increase in prescribed
wage rates results in the elimination or severe contradiction of intentional
quantitative differences in wage or salary rates between and among
employee groups in an establishment as to effectively obliterate the
distinctions embodied in such wage structure based on skills, length of
service, or other logical bases of differentiation.
The issue of whether or not a wage distortion exists as a consequence of
the grant of a wage increase to certain employees, we agree, is, by and
large, a question of fact the determination of which is the statutory
function of the NLRC. 7 Judicial review of labor cases, we may add, does
not go beyond the evaluation of the sufficiency of the evidence upon which
the labor official's findings rest. 8 As such, factual findings of the NLRC are
generally accorded not only respect but also finality provided that its
decision are supported by substantial evidence and devoid of any taint of
unfairness of arbitrariness. 9When, however, the members of the same
labor tribunal are not in accord on those aspects of a case, as in this case,
this Court is well cautioned not to be as so conscious in passing upon the
sufficiency of the evidence, let alone the conclusions derived
therefrom.chanroblesvirtualawlibrarychanrobles virtual law library
In this case, the majority of the members of the NLRC, as well as its
dissenting member, agree that there is a wage distortion arising from the
bank's implementation of the P25 wage increase; they do differ, however,
on the extent of the distortion that can warrant the adoption of corrective
measures required by law.chanroblesvirtualawlibrarychanrobles virtual law
library
The definition of "wage distortion," 10 aforequoted, shows that such
distortion can so exist when, as a result of an increase in the prescribed
wage rate, an "elimination or severe contraction of intentional quantitative
differences in wage or salary rates" would occur "between and among
employee groups in an establishment as to effectively obliterate the
distinctions embodied in such wage structure based on skills, length of
service, or other logical bases of differentiation." In mandating an
adjustment, the law did not require that there be an elimination or total
abrogation of quantitative wage or salary differences; a severe contraction
thereof is enough. As has been aptly observed by Presiding Commissioner
Edna Bonto-Perez in her dissenting opinion, the contraction between
personnel groupings comes close to eighty-three (83%), which cannot, by
any stretch of imagination, be considered less than
severe.chanroblesvirtualawlibrarychanrobles virtual law library
The "intentional quantitative differences" in wage among employees of the
bank has been set by the CBA to about P900 per month as of 01 January
1989. It is intentional as it has been arrived at through the collective
bargaining process to which the parties are thereby concluded. 11 The
Solicitor General, in recommending the grant of due course to the petition,
has correctly emphasized that the intention of the parties, whether the
benefits under a collective bargaining agreement should be equated with
those granted by law or not, unless there are compelling reasons
otherwise, must prevail and be given effect. 12chanrobles virtual law
library
In keeping then with the intendment of the law and the agreement of the
parties themselves, along with the often repeated rule that all doubts in
the interpretation and implementation of labor laws should be resolved in
favor of labor, 13 we must approximate an acceptable quantitative
difference between and among the CBA agreed work levels. We, however,
do not subscribe to the labor arbiter's exacting prescription in correcting
the wage distortion. Like the majority of the members of the NLRC, we are
also of the view that giving the employees an across-the-board increase of
P750 may not be conducive to the policy of encouraging "employers to
grant wage and allowance increases to their employees higher than the
minimum rates of increases prescribed by statute or administrative
regulation," particularly in this case where both Republic Act 6727 and the
CBA allow a credit for voluntary compliance. As the Court, through
Associate Justice Florentino Feliciano, also pointed out in Apex Mining
Company, Inc. v. NLRC: 14

. . . . (T)o compel employers simply to add on legislated increases in

salaries or allowances without regard to what is already being paid, would
be to penalize employers who grant their workers more than the
statutorily prescribed minimum rates of increases. Clearly, this would be
counter-productive so far as securing the interests of labor is concerned. .
..

We find the formula suggested then by Commissioner Bonto-Perez, which

has also been the standard considered by the regional Tripartite Wages
and Productivity Commission for the correction of pay scale structures in
cases of wage distortion, 15 to well be the appropriate measure to balance
the respective contentions of the parties in this instance. We also view it
as being just and equitable.chanroblesvirtualawlibrarychanrobles virtual
law library

WHEREFORE, finding merit in the instant petition for certiorari, the same is
GRANTED DUE PROCESS, the questioned NLRC decision is hereby SET
ASIDE and the decision of the labor arbiter is REINSTATED subject to the
MODIFICATION that the wage distortion in question be corrected in
accordance with the formula expressed in the dissenting opinion of
Presiding Commissioner Edna Bonto-Perez. This decision is immediately
executory.
SAMAHANG MANGGAGAWA SA TOP FORM MANUFACTURING UNITED
WORKERS OF THE PHILIPPINES (SMTFM-UWP), its officers and
members, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, HON. JOSE G. DE VERA and
TOP FORM MANUFACTURING PHIL., INC., respondents.
ROMERO, J.:
The issue in this petition for certiorari is whether or not an employer committed an
unfair labor practice by bargaining in bad faith and discriminating against its
employees. The charge arose from the employer's refusal to grant across-the-board
increases to its employees in implementing Wage Orders Nos. 01 and 02 of the
Regional Tripartite Wages and Productivity Board of the National Capital Region
(RTWPB-NCR). Such refusal was aggravated by the fact that prior to the issuance of
said wage orders, the employer allegedly promised at the collective bargaining
conferences to implement any government-mandated wage increases on an across-
the-board basis.
Petitioner Samahang Manggagawa sa Top Form Manufacturing — United Workers of
the Philippines (SMTFM) was the certified collective bargaining representative of all
regular rank and file employees of private respondent Top Form Manufacturing
Philippines, Inc. At the collective bargaining negotiation held at the Milky Way
Restaurant in Makati, Metro Manila on February 27, 1990, the parties agreed to
discuss unresolved economic issues. According to the minutes of the meeting, Article
VII of the collective bargaining agreement was discussed. The following appear in
said Minutes:
Art. VII, Wages
Sect. 1. — Defer —
Sect. 2. Status quo
Sec. 3. Union proposed that any future wage increase given by the
government should be implemented by the company across-the-
board or non-conditional.
Management requested the union to retain this provision since their
sincerity was already proven when the P25.00 wage increase was
granted across-the-board. The union acknowledges management's
sincerity but they are worried that in case there is a new set of
management, they can just show their CBA. The union decided to
defer this provision. 1
In their joint affidavit dated January 30, 1992, 2 union members Salve L. Barnes,
Eulisa Mendoza, Lourdes Barbero and Concesa Ibañez affirmed that at the
subsequent collective bargaining negotiations, the union insisted on the incorporation
in the collective bargaining agreement (CBA) of the union proposal on "automatic
across-the-board wage increase." They added that:
11. On the strength of the representation of the negotiating panel of
the company and the above undertaking/promise made by its
negotiating panel, our union agreed to drop said proposal relying on
the undertakings made by the officials of the company who
negotiated with us, namely, Mr. William Reynolds, Mr. Samuel
Wong and Mrs. Remedios Felizardo. Also, in the past years, the
company has granted to us government mandated wage increases
on across-the-board basis.
On October 15, 1990, the RTWPB-NCR issued Wage Order No. 01 granting an
increase of P17.00 per day in the salary of workers. This was followed by Wage
Order No. 02 dated December 20, 1990 providing for a P12.00 daily increase in
salary.
As expected, the union requested the implementation of said wage orders. However,
they demanded that the increase be on an across-the-board basis. Private
respondent refused to accede to that demand. Instead, it implemented a scheme of
increases purportedly to avoid wage distortion. Thus, private respondent granted the
P17.00 increase under Wage Order No. 01 to workers/employees receiving salary of
P125.00 per day and below. The P12.00 increase mandated by Wage Order No. 02
was granted to those receiving the salary of P140.00 per day and below. For
employees receiving salary higher than P125.00 or P140.00 per day, private
respondent granted an escalated increase ranging from P6.99 to P14.30 and from
P6.00 to P10.00, respectively. 3
On October 24, 1991, the union, through its legal counsel, wrote private respondent a
letter demanding that it should "fulfill its pledge of sincerity to the union by granting an
across-the-board wage increases (sic) to all employees under the wage orders." The
union reiterated that it had agreed to "retain the old provision of CBA" on the strength
of private respondent's "promise and assurance" of an across-the-board salary
increase should the government mandate salary increases. 4 Several conferences
between the parties notwithstanding, private respondent adamantly maintained its
position on the salary increases it had granted that were purportedly designed to
avoid wage distortion.
Consequently, the union filed a complaint with the NCR NLRC alleging that private
respondent's act of "reneging on its undertaking/promise clearly constitutes act of
unfair labor practice through bargaining in bad faith." It charged private respondent
with acts of unfair labor practices or violation of Article 247 of the Labor Code, as
amended, specifically "bargaining in bad faith," and prayed that it be awarded actual,
moral and exemplary damages.5 In its position paper, the union added that it was
charging private respondent with "violation of Article 100 of the Labor Code." 6
Private respondent, on the other hand, contended that in implementing Wage Orders
Nos. 01 and 02, it had avoided "the existence of a wage distortion" that would arise
from such implementation. It emphasized that only "after a reasonable length of time
from the implementation" of the wage orders "that the union surprisingly raised the
question that the company should have implemented said wage orders on an across-
the-board basis." It asserted that there was no agreement to the effect that future
wage increases mandated by the government should be implemented on an across-
the-board basis. Otherwise, that agreement would have been incorporated and
expressly stipulated in the CBA. It quoted the provision of the CBA that reflects the
parties' intention to "fully set forth" therein all their agreements that had been arrived
at after negotiations that gave the parties "unlimited right and opportunity to make
demands and proposals with respect to any subject or matter not removed by law
from the area of collective bargaining." The same CBA provided that during its
effectivity, the parties "each voluntarily and unqualifiedly waives the right, and each
agrees that the other shall not be obligated, to bargain collectively, with respect to any
subject or matter not specifically referred to or covered by this Agreement, even
though such subject or matter may not have been within the knowledge or
contemplation of either or both of the parties at the time they negotiated or signed this
Agreement." 7
On March 11, 1992, Labor Arbiter Jose G. de Vera rendered a decision dismissing
the complaint for lack of merit. 8 He considered two main issues in the case: (a)
whether or not respondents are guilty of unfair labor practice, and (b) whether or not
the respondents are liable to implement Wage Orders Nos. 01 and 02 on an across-
the-board basis. Finding no basis to rule in the affirmative on both issues, he
explained as follows:
The charge of bargaining in bad faith that the complainant union
attributes to the respondents is bereft of any certitude inasmuch as
based on the complainant union's own admission, the latter
vacillated on its own proposal to adopt an across-the-board stand
or future wage increases. In fact, the union acknowledges the
management's sincerity when the latter allegedly implemented
Republic Act 6727 on an across-the-board basis. That such union
proposal was not adopted in the existing CBA was due to the fact
that it was the union itself which decided for its deferment. It is,
therefore, misleading to claim that the management
undertook/promised to implement future wage increases on an
across-the-board basis when as the evidence shows it was the
union who asked for the deferment of its own proposal to that
effect.
The alleged discrimination in the implementation of the subject
wage orders does not inspire belief at all where the wage orders
themselves do not allow the grant of wage increases on an across-
the-board basis. That there were employees who were granted the
full extent of the increase authorized and some others who received
less and still others who did not receive any increase at all, would
not ripen into what the complainants termed as discrimination. That
the implementation of the subject wage orders resulted into an
uneven implementation of wage increases is justified under the law
to prevent any wage distortion. What the respondents did under the
circumstances in order to deter an eventual wage distortion without
any arbitral proceedings is certainly commendable.
The alleged violation of Article 100 of the Labor Code, as amended,
as well as Article XVII, Section 7 of the existing CBA as herein
earlier quoted is likewise found by this Branch to have no basis in
fact and in law. No benefits or privileges previously enjoyed by the
employees were withdrawn as a result of the implementation of the
subject orders. Likewise, the alleged company practice of
implementing wage increases declared by the government on an
across-the-board basis has not been duly established by the
complainants' evidence. The complainants asserted that the
company implemented Republic Act No. 6727 which granted a
wage increase of P25.00 effective July 1, 1989 on an across-the-
board basis. Granting that the same is true, such isolated single act
that respondents adopted would definitely not ripen into a company
practice. It has been said that "a sparrow or two returning to
Capistrano does not a summer make."
Finally, on the second issue of whether or not the employees of the
respondents are entitled to an across-the-board wage increase
pursuant to Wage Orders Nos. 01 and 02, in the face of the above
discussion as well as our finding that the respondents correctly
applied the law on wage increases, this Branch rules in the
negative.
Likewise, for want of factual basis and under the circumstances
where our findings above are adverse to the complainants, their
prayer for moral and exemplary damages and attorney's fees may
not be granted.
Not satisfied, petitioner appealed to the NLRC that, in turn, promulgated the assailed
Resolution of April 29, 1993 9 dismissing the appeal for lack of merit. Still dissatisfied,
petitioner sought reconsideration which, however, was denied by the NLRC in the
Resolution dated January 17, 1994. Hence, the instant petition
for certiorari contending that:
-A-
THE PUBLIC RESPONDENTS GROSSLY ERRED IN NOT
DECLARING THE PRIVATE RESPONDENTS GUILTY OF ACTS
OF UNFAIR LABOR PRACTICES WHEN, OBVIOUSLY, THE
LATTER HAS BARGAINED IN BAD FAITH WITH THE UNION
AND HAS VIOLATED THE CBA WHICH IT EXECUTED WITH THE
HEREIN PETITIONER UNION.
-B-
 THE PUBLIC RESPONDENTS SERIOUSLY ERRED IN NOT
DECLARING THE PRIVATE RESPONDENTS GUILTY OF ACTS
OF DISCRIMINATION IN THE IMPLEMENTATION OF NCR
WAGE ORDER NOS. 01 AND 02.
-C-
THE PUBLIC RESPONDENTS SERIOUSLY ERRED IN NOT
FINDING THE PRIVATE RESPONDENTS GUILTY OF HAVING
VIOLATED SECTION 4, ARTICLE XVII OF THE EXISTING CBA.
-D-
THE PUBLIC RESPONDENTS GRAVELY ERRED IN NOT
DECLARING THE PRIVATE RESPONDENTS GUILTY OF
HAVING VIOLATED ARTICLE 100 OF THE LABOR CODE OF
THE PHILIPPINES, AS AMENDED.
-E-
ASSUMING, WITHOUT ADMITTING THAT THE PUBLIC
RESPONDENTS HAVE CORRECTLY RULED THAT THE
PRIVATE RESPONDENTS ARE GUILTY OF ACTS OF UNFAIR
LABOR PRACTICES, THEY COMMITTED SERIOUS ERROR IN
NOT FINDING THAT THERE IS A SIGNIFICANT DISTORTION IN
THE WAGE STRUCTURE OF THE RESPONDENT COMPANY.
-F-
THE PUBLIC RESPONDENTS ERRED IN NOT AWARDING TO
THE PETITIONERS HEREIN ACTUAL, MORAL, AND
EXEMPLARY DAMAGES AND ATTORNEY'S FEES.
As the Court sees it, the pivotal issues in this petition can be reduced into two, to wit:
(a) whether or not private respondent committed an unfair labor practice in its refusal
to grant across-the-board wage increases in implementing Wage Orders Nos. 01 and
02, and (b) whether or not there was a significant wage distortion of the wage
structure in private respondent as a result of the manner by which said wage orders
were implemented.
With respect to the first issue, petitioner union anchors its arguments on the alleged
commitment of private respondent to grant an automatic across-the-board wage
increase in the event that a statutory or legislated wage increase is promulgated. It
cites as basis therefor, the aforequoted portion of the Minutes of the collective
bargaining negotiation on February 27, 1990 regarding wages, arguing additionally
that said Minutes forms part of the entire agreement between the parties.
The basic premise of this argument is definitely untenable. To start with, if there was
indeed a promise or undertaking on the part of private respondent to obligate itself to
grant an automatic across-the-board wage increase, petitioner union should have
requested or demanded that such "promise or undertaking" be incorporated in the
CBA. After all, petitioner union has the means under the law to compel private
respondent to incorporate this specific economic proposal in the CBA. It could have
invoked Article 252 of the Labor Code defining "duty to bargain," thus, the duty
includes "executing a contract incorporating such agreements if requested by either
party." Petitioner union's assertion that it had insisted on the incorporation of the
same proposal may have a factual basis considering the allegations in the
aforementioned joint affidavit of its members. However, Article 252 also states that
the duty to bargain "does not compel any party to agree to a proposal or make any
concession." Thus, petitioner union may not validly claim that the proposal embodied
in the Minutes of the negotiation forms part of the CBA that it finally entered into with
private respondent.
The CBA is the law between the contracting parties 10 — the collective bargaining
representative and the employer-company. Compliance with a CBA is mandated by
the expressed policy to give protection to labor. 11 In the same vein, CBA provisions
should be "construed liberally rather than narrowly and technically, and the courts
must place a practical and realistic construction upon it, giving due consideration to
the context in which it is negotiated and purpose which it is intended to serve." 12 This
is founded on the dictum that a CBA is not an ordinary contract but one impressed
with public interest. 13 It goes without saying, however, that only provisions embodied
in the CBA should be so interpreted and complied with. Where a proposal raised by a
contracting party does not find print in the CBA, 14 it is not a part thereof and the
proponent has no claim whatsoever to its implementation.
Hence, petitioner union's contention that the Minutes of the collective bargaining
negotiation meeting forms part of the entire agreement is pointless. The Minutes
reflects the proceedings and discussions undertaken in the process of bargaining for
worker benefits in the same way that the minutes of court proceedings show what
transpired therein. 15 At the negotiations, it is but natural for both management and
labor to adopt positions or make demands and offer proposals and counter-proposals.
However, nothing is considered final until the parties have reached an agreement. In
fact, one of management's usual negotiation strategies is to ". . . agree tentatively as
you go along with the understanding that nothing is binding until the entire agreement
is reached." 16 If indeed private respondent promised to continue with the practice of
granting across-the-board salary increases ordered by the government,
such promise could only be demandable in law if incorporated in the CBA.
Moreover, by making such promise, private respondent may not be considered in bad
faith or at the very least, resorting to the scheme of feigning to undertake the
negotiation proceedings through empty promises. As earlier stated, petitioner union
had, under the law, the right and the opportunity to insist on theforeseeable fulfillment
of the private respondent's promise by demanding its incorporation in the CBA.
Because the proposal was never embodied in the CBA, the promise has remained
just that, a promise, the implementation of which cannot be validly demanded under
the law.
Petitioner's reliance on this Court's pronouncements 17 in Kiok Loy v. NLRC 18 is,
therefore, misplaced. In that case, the employer refused to bargain with the collective
bargaining representative, ignoring all notices for negotiations and requests for
counter proposals that the union had to resort to conciliation proceedings. In that
case, the Court opined that "(a) Company's refusal to make counter-proposal, if
considered in relation to the entire bargaining process, may indicate bad faith and this
is specially true where the Union's request for a counter-proposal is left unanswered."
Considering the facts of that case, the Court concluded that the company was
"unwilling to negotiate and reach an agreement with the Union." 19
In the case at bench, however, petitioner union does not deny that discussion on its
proposal that all government-mandated salary increases should be on an across-the-
board basis was "deferred," purportedly because it relied upon the "undertaking" of
the negotiating panel of private respondent. 20 Neither does petitioner union deny the
fact that "there is no provision of the 1990 CBA containing a stipulation that the
company will grant across-the-board to its employees the mandated wage increase."
They simply assert that private respondent committed "acts of unfair labor practices
by virtue of its contractual commitment made during the collective bargaining
process." 21 The mere fact, however, that the proposal in question was not included in
the CBA indicates that no contractual commitment thereon was ever made by private
respondent as no agreement had been arrived at by the parties. Thus:
Obviously the purpose of collective bargaining is the reaching of an
agreement resulting in a contract binding on the parties; but the
failure to reach an agreement after negotiations continued for a
reasonable period does not establish a lack of good faith. The
statutes invite and contemplate a collective bargaining contract, but
they do not compel one. The duty to bargain does not include the
obligation to reach an agreement. . . . 32
With the execution of the CBA, bad faith bargaining can no longer be imputed upon
any of the parties thereto. All provisions in the CBA are supposed to have been jointly
and voluntarily incorporated therein by the parties. This is not a case where private
respondent exhibited an indifferent attitude towards collective bargaining because the
negotiations were not the unilateral activity of petitioner union. The CBA is proof
enough that private respondent exerted "reasonable effort at good faith bargaining." 23
Indeed, the adamant insistence on a bargaining position to the point where the
negotiations reach an impasse does not establish bad faith. Neither can bad faith be
inferred from a party's insistence on the inclusion of a particular substantive provision
unless it concerns trivial matters or is obviously intolerable. 24
The question as to what are mandatory and what are merely
permissive subjects of collective bargaining is of significance on the
right of a party to insist on his position to the point of stalemate. A
party may refuse to enter into a collective bargaining contract
unless it includes a desired provision as to a matter which is a
mandatory subject of collective bargaining; but a refusal to contract
unless the agreement covers a matter which is not a mandatory
subject is in substance a refusal to bargain about matters which are
mandatory subjects of collective bargaining, and it is no answer to
the charge of refusal to bargain in good faith that the insistence on
the disputed clause was not the sole cause of the failure to agree or
that agreement was not reached with respect to other disputed
clauses. 25
On account of the importance of the economic issue proposed by petitioner union, it
could have refused to bargain and to enter into a CBA with private respondent. On
the other hand, private respondent's firm stand against the proposal did not mean that
it was bargaining in bad faith. It had the right "to insist on (its) position to the point of
stalemate." On the part of petitioner union, the importance of its proposal dawned on
it only after the wage orders were issued after the CBA had been entered into.
Indeed, from the facts of this case, the charge of bad faith bargaining on the part of
private respondent was nothing but a belated reaction to the implementation of the
wage orders that private respondent made in accordance with law. In other words,
petitioner union harbored the notion that its members and the other employees could
have had a better deal in terms of wage increases had it relentlessly pursued the
incorporation in the CBA of its proposal. The inevitable conclusion is that private
respondent did not commit the unfair labor practices of bargaining in bad faith and
discriminating against its employees for implementing the wage orders pursuant to
law.
The Court likewise finds unmeritorious petitioner union's contention that by its failure
to grant across-the-board wage increases, private respondent violated the provisions
of Section 5, Article VII of the existing CBA 26 as well as Article 100 of the Labor
Code. The CBA provision states:
Sec. 5. The COMPANY agrees to comply with all the applicable
provisions of the Labor Code of the Philippines, as amended, and
all other laws, decrees, orders, instructions, jurisprudence, rules
and regulations affecting labor.
Art. 100 of the Labor Code on prohibition against elimination or diminution of
benefits provides that "(n)othing in this Book shall be construed to eliminate
or in any way diminish supplements, or other employee benefits being
enjoyed at the time of promulgation of this Code."
We agree with the Labor Arbiter and the NLRC that no benefits or privileges
previously enjoyed by petitioner union and the other employees were withdrawn as a
result of the manner by which private respondent implemented the wage orders.
Granted that private respondent had granted an across-the-board increase pursuant
to Republic Act No. 6727, that single instance may not be considered an established
company practice. Petitioner union's argument in this regard is actually tied up with its
claim that the implementation of Wage Orders Nos. 01 and 02 by private respondent
resulted in wage distortion.
The issue of whether or not a wage distortion exists is a question of
fact 27 that is within the jurisdiction of the quasi-judicial tribunals below. Factual
findings of administrative agencies are accorded respect and even finality in this
Court if they are supported by substantial evidence. 28 Thus, in Metropolitan Bank and WHEREFORE, the instant petition for certiorari is hereby DISMISSED and the
Trust Company, Inc. v. NLRC, the Court said: questioned Resolutions of the NLRC AFFIRMED. No costs.

The issue of whether or not a wage distortion exists as a

consequence of the grant of a wage increase to certain employees,
we agree, is, by and large, a question of fact the determination of
which is the statutory function of the NLRC. Judicial review of labor
cases, we may add, does not go beyond the evaluation of the
sufficiency of the evidence upon which the labor officials' findings
rest. As such, the factual findings of the NLRC are generally
accorded not only respect but also finality provided that its
decisions are supported by substantial evidence and devoid of any
taint of unfairness or arbitrariness. When, however, the members of
the same labor tribunal are not in accord on those aspects of a
case, as in this case, this Court is well cautioned not to be as so
conscious in passing upon the sufficiency of the evidence, let alone
the conclusions derived
therefrom. 29

Unlike in above-cited case where the Decision of the NLRC was not unanimous, the
NLRC Decision in this case which was penned by the dissenter in that case,
Presiding Commissioner Edna Bonto-Perez unanimously ruled that no wage
distortions marred private respondent's implementation of the wage orders. The
NLRC said:

On the issue of wage distortion, we are satisfied that there was a

meaningful implementation of Wage Orders Nos. 01 and 02. This
debunks the claim that there was wage distortion as could be
shown by the itemized wages implementation quoted above. It
should be noted that this itemization has not been successfully
traversed by the appellants. . . . . 30

The NLRC then quoted the labor arbiter's ruling on wage distortion.

We find no reason to depart from the conclusions of both the labor arbiter and the
NLRC. It is apropos to note, moreover, that petitioner's contention on the issue of
wage distortion and the resulting allegation of discrimination against the private
respondent's employees are anchored on its dubious position that private
respondent's promise to grant an across-the-board increase in government-mandated
salary benefits reflected in the Minutes of the negotiation is an enforceable part of the
CBA.

In the resolution of labor cases, this Court has always been guided by the State policy
enshrined in the Constitution that the rights of workers and the promotion of their
welfare shall be protected. 31 The Court is likewise guided by the goal of attaining
industrial peace by the proper application of the law. It cannot favor one party, be it
labor or management, in arriving at a just solution to a controversy if the party has no
valid support to its claims. It is not within this Court's power to rule beyond the ambit
of the law.
ASSOCIATED LABOR UNIONS (ALU) petitioner,
vs.
HON. PURA FERRER-CALLEJA, as Director of the Bureau of Labor Relations,
Ministry of Labor and Employment; PHILIPPINE SOCIAL SECURITY LABOR
UNION (PSSLU); SOUTHERN PHILIPPINES FEDERATION OF LABOR (SPFL)
and GAW TRADING, INC., respondents.
Romeo S. Occena, Leonard U. Sawal, Edgemelo C. Rosales and Ernesto Carreon for
petitioner.
Henrick F. Gingoyon for respondent SPFL.
Wilfredo L. Orcullo for respondent Southern Philippines Federation of Labor.
Miguel A. Enrique, Jr. for respondent GAW Trading, Inc.
REGALADO, J.:
Petitioner Associated Labor Unions (ALU, for brevity) instituted this special civil action
for certiorari and prohibition to overturn the decision of the respondent
direcstor 1 dated December 10, 1986, which ordered the holding of a certification
election among the rank-and-file workers of the private respondent GAW Trading, Inc.
The averments in the petition therefor, which succinctly but sufficiently detail the
relevant factual antecedents of this proceedings, justify their being quoted in full, thus:
1. The associated Labor Unions (ALU) thru its regional Vice-
Presidents Teofanio C. Nuñez, in a letter dated May 7, 1986
(ANNEX C) informed GAW Trading, Inc. that majority of the latter's
employees have authorized ALU to be their sole and exclusive
bargaining representative, and requested GAW Trading Inc., in the
same Letter for a conference for the execution of an initial
Collective Bargaining Agreement (CBA);
2. GAW Trading Inc. received the Letter of ALU aforesaid on the
same day of May 7, 1986 as acknowledged thereunder and
responded (sic) ALU in a letter dated May 12, 1986 (Annex D)
indicating its recognition of ALU as the sole and exclusive
bargaining agent for the majority of its employees and for which it
set the time for conference and/or negotiation at 4:00 P.M. on May
12, 1986 at the Pillsbury Office, Aboitiz Building Juan Luna Street,
Cebu City;
3. On the following day of May13, 1986, ALU in behalf of the
majority of the employees of GAW Trading Inc. signed and excuted
the Collective Bargaining (ANNEX F) ...
4. On May 15, 1986, ALU in behalf of the majority of the employees
of GAW Trading Inc. and GAW Trading Inc. signed and executed
the Collective Bargaining Agreements (ANNEX F) . . . .
5. In the meantime, at about 1:00 P.M. of May 9, 1986, the
Southern Philippines Federation of Labor (SPFL) together with
Nagkahiusang Mamumuo sa GAW (NAMGAW) undertook a ...
Strike ... after it failed to get the management of GAW Trading Inc.
to sit for a conference respecting its demands presented at 11:
A.M. on the same day in an effort to pressure GAW Trading Inc. to
make a turnabout of its standign recognition of ALU as the sole and
exclusive bargaining representative of its employees, as to which
strike GAW Trading Inc. filed a petition for Restraining
Order/Preliminary Injunction, dfated June 1, 1986 (Annex H) and
which strike Labor Arbiter Bonifacio B. Tumamak held as illegal in a
decision dated August 5, 1986 (ANNEX I);
6. On May 19, 1986, GAW Lumad Labor Union (GALLU-PSSLU)
Federation ... filed a Certification Election petition (ANNEX J), but
as found by Med-Arbiter Candido M. Cumba in its (sic) Order dated
Ju ne 11, 1986 (ANNEX K), without having complied (sic) the
subscription requirement for which it was merely considered an
intervenor until compliance thereof in the other petition for direct
recogbnition as bargaining agent filed on MAy 28, 1986 by southern
Philippines Federation of Labor (SPFL) as found in the same order
(ANNEX K);
7. Int he meantime, the Collective Bargaining Agreement executed
by ALU and GAW Trading Inc. (ANNEX F) was duly filed May 27,
1986 with the Ministry of Labor and Employment in Region VII,
Cebu city;
8. Nevertheless, Med-Arbiter Candido M. Cumba in his order of
June 11, 1986 (Annex K) ruled for the holding of a ceritfication
election in all branches of GAW Trading Inc. in Cebu City, as to
which ALU filed a Motion for Reconsideration dated June 19, 1986
(ANNEX L) which was treated as an appeal on that questioned
Order for which reason the entire record of subject certification
case was forwarded for the Director, Bureau of LAbor Relations,
Ministry of Labor and Employment, Manila (ANNEX M);
9. Bureau of Labor Relations Director Cresencio B. Trajano,
rendered a Decision on August 13, 1986 (Annex B) granting ALU's
appeal (Motion for Reconsideration) and set aside the questioned
Med-Arbiter Order of June 11, 1986 (Annex K), on the ground that
the CBA has been effective and valid and the contract bar rule
applicable;
10. But the same Decision of Director Crecensio B. Trajano was
sought for reconsideratrion both by Southern Philippines Federation
 of Labor (SPFL) on August 26, 1986 (ANNEX N), supplemented by
the 'SUBMISSION OD ADDITIONAL EVIDENCE' dated September
29, 1986 (ANNEX O), and the Philppine Social Security Labor
Union (PSSLU) on October 2, 1986 (ANNEX P), which were
opposed by both GAW Trading, Inc. on September 2, 1986
(ANNEX Q) and ALU on September 12, 1986 (ANNEX R); 2
The aforesaid decision of then Director Trajano was thereafter reversed by
respondent director in her aforecited decision which is now assailed in this action. A
motion for reconsideration of ALU 3 appears to have been disregarded, hence, its
present resort grounded on grave abuse of discretion by public respondent.
Public respondent ordered the holding of a certification election ruling that the
"contract bar rule" relied upon by her predecessor does not apply in the present
controversy. According to the decision of said respondent, the collective bargaining
agreement involved herein is defective because it "was not duly submitted in
accordance with Section I, Rule IX, Book V of the Implementing Rules of Batas
Pambansa Blg. 130." It was further observed that "(t)here is no proof tending to show
that the CBA has been posted in at least two conspicuous places in the 1
establishment at least five days before its ratification and that it has been ratified by
the majority of the employees in the bargaining unit."
We find no reversible error in the challenged decision of respondent director. A
careful consideration of the facts culled from the records of this case, especially the
allegations of petitioner itself as hereinabove quoted, yields the conclusion that the
collective bargaining agreement in question is indeed defective hence unproductive of
the legal effects attributed to it by the former director in his decision which was
subsequently and properly reversed.
We have previously held that the mechanics of collective bargaining are set in motion
only when the following jurisdictional preconditions are present, namely, (1)
possession of the status of majority representation by the employees' representative
in accordance with any of the means of selection and/or designation provided for by
the Labor Code; (2) proof of majority representation; and (3) a demand to bargain
under Article 251, paragraph (a), of the New Labor Code. 4 In the present case, the
standing of petitioner as an exclusive bargaining representative is dubious, to say the
least. It may be recalled that respondent company, in a letter dated May 12, 1986 and
addressed to petitioner, merely indicated that it was "not against the desire of (its)
workers" and required petitioner to present proof that it was supported by the majority
thereof in a meeting to be held on the same date. 5 The only express recognition of
petitioner as said employees' bargaining representative that We see in the records is
in the collective bargaining agreement entered into two days thereafter. 6 Evidently,
there was precipitate haste on the part of respondent company in recognizing
petitioner union, which recognition appears to have been based on the self-serving
claim of the latter that it had the support of the majority of the employees in the
bargaining unit. Furthermore, at the time of the supposed recognition, the employer
was obviously aware that there were other unions existing in the unit. As earlier
stated, respondent company's letter is dated May 12, 1986 while the two other
unions, Southern Philippine Federation of Labor (hereafter, SPFL and Philippine
Social Security Labor Union (PSSLU, for short), went on strike earlier on May 9,
1986. The unusual promptitude in the recognition of petitioner union by respondent
company as the exclusive bargaining representative of the workers in GAW Trading,
Inc. under the fluid and amorphous circumstances then obtaining, was decidedly
unwarranted and improvident.
It bears mention that even in cases where it was the then Minister of Labor himself
who directly certified the union as the bargaining representative, this Court voided
such certification where there was a failure to properly determine with legal certainty
whether the union enjoyed a majority representation. In such a case, the holding of a
certification election at a proper time would not necessarily be a mere formality as
there was a compelling reason not to directly and unilaterally certify a union. 7
An additional infirmity of the collective bargaining agreement involved was the failure
to post the same in at least two (2) conspicuous places in the establishment at least
five days before its ratification. 8 Petitioners rationalization was that "(b)ecause of the
real existence of the illegal strike staged by SPFL in all the stores of GAW Trading,
Inc. it had become impossible to comply with the posting requirement in so far as the
realization of tits purpose is concerned as there were no impartial members of the unit
who could be appraised of the CBA's contents. " 9 This justification is puerile and
unacceptable.
In the first place, the posting of copies of the collective bargaining agreement is the
responsibility of the employer which can easily comply with the requirement through a
mere mechanical act. The fact that there were "no impartial members of the unit" is
immaterial. The purpose of the requirement is precisely to inform the employees in
the bargaining unit of the contents of said agreement so that they could intelligently
decide whether to accept the same or not. The assembly of the members of ALU
wherein the agreement in question was allegedly explained does not cure the defect.
The contract is intended for all employees and not only for the members of the
purpoted representative alone. It may even be said the the need to inform the non-
members of the terms thereof is more exigent and compelling since, in all likehood,
their contact with the persons who are supposed to represent them is limited.
Moreover, to repeat, there was an apparent and suspicious hurry in the formulation
and finalization of said collective bargaining accord. In the sforementioned letter
where respondent company required petitioner union to present proof of its support
by the employees, the company already suggested that petitioner ALU at the same
time submit the proposals that it intended to embody in the projected agreement. This
was on May 12, 1986, and prompltly on thre following day the negoltiation panel;
furnish respondent company final copies of the desired agreement whcih, with equal
dispatch, was signed on May 15, 1986.
Another potent reason for annulling the disputed collective bargaining is the finding of
respondent director that one hundred eighty-one( 181) of the two hundred eighty-one
(281) workers who "ratified" the same now " strongly and vehemently deny and/or
repudiate the alleged negotiations and ratification of the CBA. " 10Although petitioner
claims that only sev en (7) of the repudiating group of workers belong to the total
number who allegedly ratified the agreement, nevertheless such substantiated
contention weighed against the factujal that the controverted contract will not promote
industrial stability . The Court has long since declared that:
 ... Basic to the contract bar rule is the proposition that the delay of
the right to select represen tatives can be justified only where
stability is deemed paramount. Excepted from the contract which
do not foster industrial stability, such as contracts where the identity
of the representative is in doubt. Any stability derived from such
contracts must be subordinated to the employees' freedom of
choice because it does nto establish the type of industrial peace
contemplated by the law. 11

At this juncture, petitioner should be reminded that the technical rules of rpocedure do
not strictly apply in the adjudication of labor disputes. 12 Consequently, its objection
that the evidence with respect to the aforesaid repudiiation of the supposed collective
bargaining agreement cannot be considered for the first time on appeal on the Bureau
of Labor Relations should be disregarded, especially considering the weighty
significance thereof.

Both petitioner and private respondent GAW Trading, Inc. allege that the employees
of the latter are now enjoying the benefits of the collective bargaining agreement that
both parties had forged. However, We cannot find sufficient evidence of record to
support this contention. The only evidence cited by petitioner is supposed payment of
union fees by said employees, a premise too tenuous to sustain the desired
conclusion. Even the actual number of workers in the respondent company is not
clear from the records. Said private respondent claims that it is two hundred eighty-
one (281)13 but petitioner suggests that it is more than that number. The said parties
should be aware that this Court is not an adjudicator of facts. Worse, to borrow a trite
but apt phrase, they would heap the Ossa of confusion upon the Pelion of uncertainty
and still expect a definitive ruling on the matter thus confounded.

Additionally, the inapplicability of the contract bar rule is further underscored by the
fact that when the disputed agreement was filed before the Labor Regional Office on
May 27, 1986, a petition for certification election had already been filed on May 19,
1986. Although the petition was not supported by the signatures of thirty percent
(30%) of the workers in the bargaining unit, the same was enough to initiate said
certification election.

WHEREFORE, the order of the public respondent for the conduct of a certification
election among the rank-and-file workers of respondent GAW Trading Inc. is
AFFIRMED. The temporary restraining order issued in this case pursuant to the
Resolution of March 25, 1987 is hereby lifted.
LAKAS NG MANGGAGAWANG MAKABAYAN (LAKAS), petitioner,
vs.
MARCELO ENTERPRISES and MARCELO TIRE & RUBBER CORP., MARCELO
RUBBER AND LATEX PRODUCTS, MARCELO STEEL, CORPORATION,
MARCELO CHEMICAL & PIGMENT CORP., POLARIS MARKETING
CORPORATION and THE COURT OF INDUSTRIAL RELATIONS, respondents,
G.R. No. L-38260 November 19, 1982
MARCELO TIRE & RUBBER CORPORATION, MARCELO RUBBER & LATEX
PRODUCTS, INC., MARCELO STEEL CORPORATION, POLARIS MARKETING
CORPORATION, MARCELO CHEMICAL AND PIGMENT CORP., MARCELO
ENTERPRISES, under which name or style they are also known, petitioners,
vs.
LAKAS NG MANGGAGAWANG MAKABAYAN (LAKAS) AND THE HONORABLE
COURT OF INDUSTRIAL RELATIONS, respondents.
GUERRERO, J.:
Separate appeals by certiorari from the Decision of the Court of Industrial Relations
(Manila) dated July 20, 1973, as well as the Resolution of the court en banc dated
January 24, 1974 denying the reconsideration thereof rendered in ULP Case No.
4951 entitled, "Lakas ng Manggagawang Makabayan, Petitioner, versus Marcelo
Enterprises and Marcelo Tire and Rubber Corporation, Marcelo Rubber and Latex
Products, Marcelo Steel Corporation, Polaris Marketing Corporation, and Marcelo
Chemical and Pigment Corporation, Respondents. "
The antecedent facts as found by the respondent Court of Industrial Relations
embodied in the appealed Decision are correct, supported as they are by the
evidence on record. Nevertheless, We find it necessary to make a re-statement of the
facts that are integrated and inter-related, drawn from the voluminuous records of
these cases which are herein jointly decided, since it would only be from a statement
of all the relevant facts of the cases made in all fullness, collectively and
comprehensively, can the intricate issues posed in these appeals be completely and
judiciously resolved.
It appears that prior to May 23, 1967, the date which may be stated as the start of the
labor dispute between Lakas ng Manggagawang Makabayan (hereinafter referred to
as complainant LAKAS) and the management of the Marcelo Tire and Rubber
Corporation, Marcelo Rubber and Latex Products, Inc., Polaris Marketing
Corporation, Marcelo Chemical and Pigment Corporation, and the Marcelo Steel
Corporation (Nail Plan) (hereinafter referred to as respondent Marcelo Companies)
the Marcelo Companies had existing collective bargaining agreements (CBAs) with
the local unions then existing within the appropriate bargaining units, viz: (1) the
respondent Marcelo Tire and Rubber Corporation, with the Marcelo Camelback Tire
and Foam Union (MACATIFU); (2) the respondent Marcelo Rubber and Latex
Products, Inc., with the Marcelo Free Workers Union (MFWU); and (3) the respondent
Marcelo Steel Corporation with the United Nail Workers Union (UNWU). These
existing CBAs were entered into by and between the parties while the aforestated
local unions were then affiliated with a national federation, the Philippine Social
Security Labor Union (PSSLU).
It is well to note from the records that when the aforestated CBAs of the said local
unions were nearing their respective expiration dates (March 15,1967) for MACATIFU
and UNWU, and June 5, 1967 for MFWU), the general situation within the ranks of
labor was far from united. The MACATIFU in respondent Marcelo Tire and Rubber
Corporation, then headed by Augusto Carreon, did not enjoy the undivided support of
all the workers of the respondent corporation, as there existed a rival union, the
Marcelo United Employees and Workers Association (MUEWA) whose president was
then Paulino Lazaro. As events would later develop, the members of the MACATIFU
of Augusto Carreon joined the MUEWA of Paulino Lazaro, after the latter filed a
petition for direct certification which was granted by the industrial court's Order of July
5, 1967 recognizing and certifying MUEWA as the sole and exclusive bargaining
representative of all the regular workers of the respondent corporation. The union
rivalry between MACATIFU and MUEWA did not, however, end with the Order of July
5. 1967, but more than ever developed into a more pressing problem of union
leadership because Augusto Carreon also claimed to be the president of the MUEWA
by virtue of the affiliation of his MACATIFU members with MUEWA. The records also
reveal that even the ranks of MFWU in respondent Marcelo Rubber and Latex
Products, Inc. was divided between those supporting Ceferino Ramos and Cornelio
Dizon who both claimed the presidency in said union. Only the UNWU in respondent
Marcelo Steel Corporation was then enjoying relative peace as Jose Roque was
solely recognized as the union's president. The events that followed are hereinafter
stated in chronological order for a clearer understanding of the present situation.
On March 14, 1967, the management of respondent Marcelo Steel Corporation
received a letter requesting the negotiation of a new CBA together with a draft
thereof, from the PSSLU president, Antonio Diaz, for and in behalf of UNWU whose
CBA was to expire the following day. Similar letters and proposals were, likewise,
sent to the management of respondent Marcelo Tire and Rubber Corporation for and
in behalf of MACATIFU, and to respondent Marcelo Rubber and Latex Products for
and in behalf of MFWU, whose respective CBAs were both to expire on June 5, 1967.
However, on that very same day of March 14, 1967, the management of respondent
Marcelo Tire and Rubber Corporation received a letter from the UNWU president,
Jose Roque, disauthorizing the PSSLU from representing his union.
Then, on April 14, 1967, Paulino Lazaro of MUEWA requested negotiation of a new
CBA with respondent Marcelo Tire and Rubber Corporation, submitting therewith his
union's own proposals.
Again, on May 3, 1967, the management of respondents Marcelo Tire and Rubber
Corporation and Marcelo Rubber and Latex Products, Inc., received another letter
requesting negotiation of new CBAs also for and in behalf of the MACATIFU and the
MFWU from J.C. Espinas & Associates.
Finally, on May 23, 1967, the management of all the respondent Marcelo Companies
received a letter from Prudencio Jalandoni, the alleged president of the complainant
LAKAS. In this letter of May 23, 1967, the complainant LAKAS informed management
of the affiliation of the Marcelo United Labor Union (MULU) with it. Included therein
was a 17-points demand for purposes of the requested collective bargaining with
management.
Confronted with a problem of whom to recognize as the bargaining representative of
all its workers, the management of all the respondent Marcelo Companies
understandably dealt with the problem in this wise, viz: (1) it asked proof of authority
to represent the MFWU and the MACATIFU from J.C. Espinas & Associates; and (2)
in a letter dated May 25, 1967, it apprised PSSLU, Paulino Lazaro of MUEWA and
complainant LAKAS of the fact of the existing conflicting demands for recognition as
the bargaining representative in the appropriate units involved, consequently
suggesting to all to settle the question by filing a petition for certification election
before the Court of Industrial Relations, with an assurance that the management will
abide by whatever orders the industrial court may issue thereon.
PSSLU demurred to management's stand and informed them of its intention to file an
unfair labor practice case because of management's refusal to bargain with it,
pointedly stating that it was with the PSSLU that the existing CBAs were entered into.
Again, as events later developed, on or about the middle of August 1981, PSSLU filed
a Notice of Strike which became the subject of conciliation with the respondent
companies. In the case of MUEWA, Paulino Lazaro threatened that his union will
declare a strike against respondent Marcelo Tire and Rubber Corporation. On the
other hand, complainant LAKAS for MULU filed on June 13, 1967 before the Bureau
of Labor Relations a Notice of Strike against all the respondent Marcelo Companies,
alleging as reasons therefore harrassment of union officers and members due to
union affiliation and refusal to bargain. This aforestated Notice of Strike was,
however, withdrawn on July 14, 1967.
In the meantime, as stated earlier in this Decision, the MUEWA filed a petition for
direct certification before the industrial court. There being no other union or interested
person appearing before the court except the MUEWA, and finding that MUEWA
represented more than the majority of the workers in respondent Marcelo Tire and
Rubber Corporation, the court granted the petition and by Order of July 5, 1967,
certified MUEWA of Paulino Lazaro as the sole and exclusive bargaining
representative of all the regular workers in said respondent.
On July 11, 1967, Augusto Carreon of MACATIFU wrote the management of
respondent Marcelo Tire and Rubber Corporation expressly stating that no one was
yet authorized to submit proposals for and in behalf of the union for the renewal of its
CBA, adding that "(a)ny group representing our Union is not authorized and should
not be entertained."
On July 14, 1967, as earlier stated, the Notice of Strike filed by complainant LAKAS
was withdrawn pursuant to a Memorandum Agreement signed on the same day by
management and LAKAS.
Thereafter, or on July 20, 1967, letters of proposal for collective bargaining were sent
by Prudencio Jalandoni of LAKAS to all the respondent Marcelo companies. In
answer thereto, management wrote two (2) letters, both dated July 24, 1967,
addressed to Jalandoni, expressing their conformity to sit down in conference on the
points to be negotiated as soon as LAKAS can present evidence of authority to
represent the employees of respondent corporations in said conference. The records
disclose that it was in the atmosphere of constant reservation on the part of
management as to the question of representation recognition that complainant
LAKAS and management sat down for CBA negotiations.
The first conference was held on August 14, 1967, followed by one on August 16,
1967 whereby management, in formal reply to union's economic demands, stated its
willingness to give pay adjustments and suggested renewal of other provisions of the
old CBAs. A third conference was set although no one from LAKAS or the local
unions appeared. On August 29, 1967, the fourth conference was held where, from a
letter dated August 30, 1967 from Jose Delfin of Management to Jose B. Roque of
UNWU, can be inferred that in the conference of August 29, 1967, the management
with respect to respondent Marcelo Steel Corporation, agreed to give pay
adjustments from P0.15 to P0.25 to meritorious cases only, and to increase its
contribution to the retirement fund from 1-1/2% to 3% provided the employees'
contribution will be increased from 1% to 2%. Management likewise suggested the
renewal of the other provisions of the existing CBA. Management's offers were not
accepted by complainant LAKAS who insisted on the grant of all its economic
demands and in all of the Marcelo Companies.
As it would later appear during the trial of the ULP case below, and as found as a fact
by the respondent court, only the economic proposals of complainant LAKAS were
the matters taken up in all these CBA conferences.
Less than a week after the fourth CBA conference, or on September 4, 1967, the
complainant LAKAS declared a strike against all the respondent Marcelo Companies.
Acts of violence and vandalism attended the picketing. Ingress and egress at the
respondents' premises were successfully blocked. One worker, Plaridel Tiangco, was
manhandled by the strikers and was hospitalized. Windows of the Chemical Plant
were badly damaged. As a consequence, ten (10) strikers were later charged before
the Municipal Court of Malabon, Rizal, four of whom were convicted while the others
were at large.
On September 13, 1967, the respondent Marcelo Companies obtained a writ of
preliminary injunction from the Court of First Instance of Rizal enjoining the strikers
from preventing the ingress and egress at the respondents' premises. The following
day, a "Return to Work Agreement" (Exhibit "A") was executed by and among the
management, represented by Jose P. Marcelo and Jose A. Delfin, and the local
unions, together with complainant LAKAS, represented by Prudencio Jalandoni for
LAKAS, Jose B. Roque for UNWU, Cornelio Dizon for MFWU and Augusto Carreon
for MUEWA, the representations of the latter two, however, being expressly subjected
by management to non-recognition. Aside from providing for the immediate lifting of
the picket lines, the agreement, more pertinently provides, to wit,
 4. The management agrees to accept all employees who struck
without discrimination or harassment consistent with an orderly
operation of its various plants, provided it is understood that
management has not waived and shall continue to exercise freely
its rights and prerogatives to punish, discipline and dismiss its
employees in accordance with law and existing rules and
regulations that cases filed in court will be allowed to take their
normal course.
By virtue of this agreement, the respondent Marcelo Companies resumed operations
and the strikers went back to work. As found by the respondent court, all strikers were
admitted back to work, except four (4) namely, Wilfredo Jarquio, Leonardo Sakdalan,
Jesus Lim and Arlington Glodeviza, who chose not to report for work because of the
criminal charges filed against them before the municipal court of Malabon and
because of the administrative investigation conducted by management in connection
with the acts of violence and vandalism committed during the September 4 strike.
Together with Jesus Lim, three other strikers who reported for work and were
admitted, namely, Jose Roque, Alfredo Cabel and Ramon Bataycan, were convicted
in said criminal case.
After the resumption of normal business, the management of the respondent Marcelo
Companies, the complainant LAKAS together with the local unions resumed their
bargaining negotiations subject to the conditions earlier mentioned. On October 4,
1967, the parties met and discussed the bargaining unit to be covered by the CBA in
case one is entered into, union shop arrangement, check-off, waiver of the employer
of the notice requirement in case of employees' separation, separation pay in cash
equivalent to 12-days pay for every year of service, retirement plan, and one or two
years duration of the CBA. It was also agreed in that meeting not to negotiate with
respect to respondent Marcelo Tire and Rubber Corporation inasmuch as a CBA had
already been entered into by management with the MUEWA of Paulino Lazaro, the
recently certified union in said respondent.
Finally, on October 13, 1967, the negotiations reached its final stage when the
management of respondents Marcelo Rubber and Latex Products, Inc. and Marcelo
Steel Corporation gave the complainant LAKAS a copy of management's drafts of the
collective bargaining proposals for MFWU and UNWU, respectively.
Unexpectedly and without filing a notice of strike, complainant LAKAS declared
another strike against the respondent Marcelo Companies on November 7, 1967,
resulting in the complete paralyzation of the business of said respondents. Because
of this second strike, conciliation conferences were again set by the Conciliation
Service Division of the Department of Labor on November 8, November 23, and
December 4, 1967. On the last aforementioned date, however, neither complainant
LAKAS nor the local unions appeared.
Instead, on December 13, 1967, Prudencio Jalandoni of complainant LAKAS, in
behalf of the striking unions, coursed a letter (Exhibit "B") to Jose P. Marcelo of
management advising that, "on Monday, December 18, 1967, at 7:00 o'clock in the
morning, all your striking workers and employees will return to work under the same
terms and conditions of employment before the strike." The letter was attested to by
Cornelio Dizon for MFWU, Jose Roque for UNWU and Augusto Carreon for MUEWA.
On December 15,1967, the Bureau of Labor Relations was informed by the
complainant LAKAS who requested for the Bureau's representative to witness the
return of the strikers to their jobs.
The records reveal that in the meantime, prior to December 13, 1967, some of the
strikers started going back to work and were admitted; and that as early as December
4, 1967, the management started posting notices at the gates of the respective
premises of the respondents for strikers to return back to work, Similar notices were
also posted on December 18 and December 27, 1967.
Upon their return, the reporting strikers were requested to fill up a certain form
(Exhibit "49") wherein they were to indicate the date of their availability for work in
order that they may be scheduled. According to the respondent Marcelo Companies,
this requirement was asked of the strikers for legitimate business reasons within
management prerogative. Several of the strikers filled up the required form and were
accordingly scheduled for work. The remaining others, led and supported by
complainant LAKAS, refused and insisted that they be all admitted back to work
without complying with the aforestated requirement, alleging that the same
constituted a "screening" of the striking workers. As matters stood, Management
refused to forego the requirement; on the other hand, the remaining strikers
demanded to be readmitted without filing up the form for scheduling.
These then constitute the factual background when the complainant LAKAS,
represented by its counsel, Atty. Benjamin C. Pineda, on December 26, 1967 , filed
before the respondent court a charge for unfair labor practice against the respondent
Marcelo Companies, alleging non-readmission of the striking members of the three
(3) affiliated local unions despite the unconditional offer to return to work after the
strike of November 7, 1967. Based on the allegations of the foregoing charge and
after a preliminary investigation conducted by the acting Prosecutor of said
respondent court, the acting Chief Prosecutor, Atty. Antonio Tria Tirona, filed on
February 12, 1968 the instant complaint under authority of Section 5(b) of Republic
Act 875, otherwise known as the Industrial Peace Act.
The Complaint below alleges, among others, to wit:
1. That complainant is a legitimate labor organization, with its
affiliates, namely: Marcelo Free Workers Union, United Nail
Workers Union, and Marcelo United Employees Unions, whose
members listed in Annexes "A", "B", and "C" of this complaint are
considered employees of respondent within the meaning of the Act;
2. ...
xxx xxx xxx
xxx xxx xxx
3. That individual complaints listed in Annexes "A", "B", and "C" of
this complaint are members of the Marcelo United Employees and
Workers Association, Marcelo Free Workers Union, and United Nail
Workers Union, respectively; that the members of the Marcelo
United Employees and Workers Union are workers of respondent
Marcelo Tire and Rubber Corporation; that the members of the
Marcelo Free Workers Union compose the workers of the Marcelo
Rubber and Latex Products, Polaris Marketing Corporation, and the
members of the United Nail Workers Union compose the workers of
the Marcelo Steel Corporation (Nail Plant);
4. That each of the aforesaid local unions, before their affiliation
with the complainant union LAKAS, had a collective bargaining
agreement with respondents; that after the expiration of the
collective bargaining agreement above-mentioned and after the
above-mentioned local unions affiliated with the complainant
LAKAS, the said federation sent to respondents' president, Jose P.
Marcelo, on May 23, 1967, a letter, requesting for a negotiation for
collective bargaining, together with union proposals thereof, but
respondents refused;
5. That after respondents knew of the affiliation of the
aforementioned local unions with the LAKAS, the said respondents,
thru their officers and agents began harassing the union members,
discriminated against them by transferring some of its officers and
members from one section to another in such a way that their work
was reduced to manual labor, and by suspending them without
justifiable cause. in spite of long years of service with said
respondents;
6. That as a result of the abovementioned unfair labor practice of
respondents, and after complainant sent communication thereto,
protesting against the acts of the above-mentioned, complainant
decided to stage a strike on September 4, 1967, after filing a notice
of strike with the Department of Labor;
7. That on September 14, 1967, however, Jose P. Marcelo, and
Jose A. Delfin, president and vice-president of the respondents,
respectively, on one hand and the presidents of the three local
unions above-mentioned and the national president of complainant
union on the other, entered into a Return-to-Work Agreement.
providing among others, as follows:
4. The management agrees to accept all
employees who struck without discrimination or
harassment consistent with an orderly operation
of its various plants provided it is understood that
management has not waived and shall continue
to exercise freely its rights and prerogatives to
punish, discipline and dismiss its employees in
accordance with law and existing rules and
regulations and that cases filed in Court will be
allowed to take their normal course.
8. That, contrary to the above Return-to-Work agreement, and in
violation thereof, respondents refused to admit the members of the
three striking local unions; that in admitting union members back to
work, they were screened in spite of their long employment with
respondent, but respondents gave preference to the casual
employees;
9. That, because of the refusal of the respondents to accept some
union members, in violation of the above-mentioned Return-to-
Work agreement and refusal of respondents to bargain in good faith
with complainant, the latter, together with the members of the three
local unions above-mentioned, again staged a strike on November
7, 1967;
10. That on December 13, 1967, complainant sent a letter to
respondents that the members of the striking unions
abovementioned offered to return to work on December 18, 1967
without any condition, but respondents likewise refused, and still
continue to refuse to reinstate them up to the present;
11. That here to attached are the list of names of the members of
the three local unions above-mentioned who were not admitted
back to work by respondents, marked as Annexes "A ", "B ", and "C
and made as an integral part of this complaint;
12. That the union members listed in Annexes "A", "B", and "C"
hereof were not able to secure substantial employment in spite of
diligent efforts exerted by them;
13. That the above unfair labor practice acts of respondents are in
violation of Section 4, subsections 1, 4 and 6 in relation to Sections
13, 14 and 15 of Republic Act No. 875.
The complaint prayed "that after due hearing, judgment be rendered, declaring
respondents guilty of unfair labor practice, and
(a) Ordering respondents to cease and desist from further
committing the acts complained of;
(b) Ordering respondents to comply with the Return-to-Work
agreement dated September 14, 1967, and to admit back to work
the workers listed in annexes "A", "B " and "C" hereof, with back
wages, without loss of seniority rights and privileges thereof;
 (c) Ordering respondents to bargain in good faith with complainant
union; and
(d) Granting complainant and its complaining members thereof
such other affirmative reliefs and remedies equitable and proper, in
order to effectuate the policies of the Industrial Peace Act.
On March 16, 1968, after an Urgent Motion for Extension of Time to File Answer, the
respondents filed their Answer denying the material allegations of the Complaint and
alleging as affirmative defenses,
I. That the Collective Bargaining Agreement between respondent
Marcelo Steel Corporation and the United Nail Workers Union
expired on March 15, 1967; The Collective Bargaining Agreement
between the United Rubber Workers Union (which eventually
became the Marcelo Free Workers Union) and the respondent
Marcelo Rubber and Latex Products, Inc., expired on June 5, 1967;
the Collective Bargaining Agreement between Marcelo Camelback
Tire and Foam Union and the Marcelo Tire and Rubber Corporation
expired on June 5, 1967;
II. That on May 23, 1967, one Mr. Prudencio Jalandoni of
complainant addressed a communication to Mr. Jose P. Marcelo of
respondents informing him of the alleged affiliation of the Marcelo
United Labor Union with complainant and submitting a set of
collective bargaining proposal to which counsel for respondents
replied suggesting that a petition for certification election be filed
with the Court of Industrial Relations in view of the several
demands for representation recognition;
III. That the transfers of workers from one job to another were made
in accordance with needs of the service. Respondents afforded
union officers and members affected by the transfers the privilege
to watch out for vacancies and select positions they prefer to be in.
No suspensions without justifiable cause were made as alleged in
the Complaint;
IV. That between May 23, 1967, the date of their first demand for
negotiations, and September 4, 1967, the start of the first strike,
proposals and counter-proposals were had. Respondents are not
aware of whether or not a notice of strike was filed with the Court of
Industrial Relations;
V. That Mr. Jose P. Marcelo is the President of Marcelo Rubber
and Latex Products, Inc., Marcelo Tire and Rubber Corporation,
and Marcelo Steel Corporation, while Mr. Jose A. Delfin is the
acting Personnel Manager of respondent Marcelo Rubber and
Latex Products, Inc., Marcelo Tire and Rubber Corporation,
Marcelo Steel Corporation and Marcelo Chemical and Pigment
Corporation;
VI. That respondents did not refuse to admit members of the
striking union. Only four (4) workers who had criminal cases filed
against them voluntarily failed to report to the Personnel
Department for administrative investigation;
VII. That after September 14, 1967, all workers of the different
respondent corporations returned to work except the four
mentioned in the preceding paragraph hereof who have pending
criminal cases; between September 14, 1967, and November 7,
1967 another strike was declared without justifiable cause;
VIII. That on November 28, 1967, respondent obtained an
injunction from the Court of First Instance of Rizal, Caloocan City
Branch, against the illegal picketing of the local unions; in the first
week of December, 1967, the striking workers began returning to
work; on December 13, 1967, a letter was received from
complainant advising respondents that its striking workers were
calling off, lifting the picket line and returning to work, that from the
first week of December, 1967, respondents invited the striking
workers desiring to return to work to fill out an information sheet
stating therein their readiness to work and the exact dates they
were available so that proper scheduling could be done; a number
of workers showed no interest in reporting to work; management
posted in the Checkpoint, Bulletin Boards, and the gates notices
calling all workers to return to work but a number of workers
obviously were not interested in returning anymore;
IX. That respondents posted several times lists of names of
workers who had not returned to work with the invitation to return to
work, but they did not return to work;
X. That a number of workers in the list Annexes "A", "B" and "C"
have resigned after they found more profitable employment
elsewhere;
XI. That the local unions referred to in the Complaint if they ever
had affiliated with complainant union had subsequently disaffiliated
therefrom;
XII. That the strikes called and declared by the striking unions were
illegal;
XIII. That the local unions were bargaining in bad faith with
respondents,
and praying for the dismissal of the Complaint as well as for the declaration of
illegality of the two (2) strikes called by the striking unions.
Thereafter, the trial commenced. Then on October 24, 1968, a development occurred
which gave a peculiar aspect to the case at bar. A Manifestation and Motion signed
by the respective officers and members of the MUEWA, headed by Paulino Lazaro,
was filed by the said union, alleging, to wit,
l. That the above-entitled case purportedly shows that the Marcelo
United Employees and Workers Association is one of the
Complainants being represented by the Petitioner Lakas ng
Manggagawang Makabayan (LMM);
2. That it likewise appears in the above-entitled case that the
services of the herein Petitioner was sought by a certain Augusto
Carreon together with his cohorts who are not members of the
Marcelo United Employees and Workers Association much less
connected with the Marcelo Tire and Rubber Corporation wherein
the Marcelo United Employees and Workers Association has an
existing Collective Bargaining Agreement;
3. That to set the records of this Honorable Court straight, the
undersigned officers and members of the Marcelo United
Employees and Workers Association respectfully manliest that the
aforesaid organization has no complaint whatsoever against any of
the Marcelo Enterprises;
4. ...
5. ..., the Complaint filed by the Petitioner in the above-entitled case
in behalf of the Marcelo United Employees and Workers
Association is without authority from the latter and therefore the
officers and/or representatives of the petitioning labor organization
should be cited for Contempt of Court;
6. ...., the Complaint filed by the Petitioner in the above-entitled
case in behalf of the Marcelo United and Employees and Workers
Association should be considered as withdrawn;
xxx xxx xxx
This was followed by another Manifestation and Motion flied on November 6, 1968
and signed by the officers and members of the UNWU, headed by its President, Juan
Balgos, alleging, to wit,
1. That the above-entitled case purportedly shows that the United
Nail Workers Union is being represented by the Petitioner Lakas ng
Manggagawang Makabayan for the alleged reason that the former
is one of the affiliates of the latter;
2. That on January 15, 1968, all the Officers and members of the
United Nail Workers Union disaffiliated from the herein Petitioning
labor organization for the reason that Petitioning labor organization
could not serve the best interest of the Officers and members of the
United Nail Workers Union and as such is a stumbling block to a
harmonious labor- management relations within all the Marcelo
enterprises; ...
3. That the filing of the above-entitled case by the herein Petitioning
labor organization was made over and above the objections of the
officers and members of the United Nail Workers Union;
4. That in view of all the foregoing, the Officers and members of the
United Nail Workers Union do hereby disauthorize the Petitioner of
the above-entitled case (Re:: Lakas ng Manggagawang
Makabayan) from further representing the United Nail Workers
Union in the above-entitled case;
5. That in view further of the fact that the filing of the above-entitled
case was made over and above the objections of the Officers and
members of the United Nail Workers Union, the latter therefore
manifest their intention to cease and desist as they hereby ceased
and desisted from further prosecuting the above-entitled case in the
interest of a harmonius labor-management relation within the
Marcelo Enterprises;
xxx xxx xxx
Likewise, a Manifestation and Motion signed by the Officers and members of the
MFWU, headed by its president, Benjamin Mañaol, dated October 28, 1968 and filed
November 6, 1968, stated the same allegations as the Manifestation and Motion filed
by the UNWU quoted above, except that the disaffiliation of the MFWU from LAKAS
was made effective January 25, 1968. The Resolutions of Disaffiliation of both MFWU
and UNWU were attached to these Manifestations.
On November 19, 1968, complainant LAKAS filed an Opposition to these
Manifestations and Motions, materially alleging that, to wit:
1. That complainants respectfully stated that when Charge No.
2265 was filed on December 26, 1967 in this case, giving rise to the
instant complaint, the alleged officers of the union-movants were
not yet officers on the filing of said Charge No. 2265,...
2. That the alleged officers and members who signed the three (3)
Manifestations and Motions are the very employees who were
accepted back to work by the respondents during the strike by the
 complainants on September 4, 1967 and November 7, 1967, and
the said alleged officers and members who signed the said
manifestations and motions are still working up to the present in the
establishments of the respondents.
3. That precisely because of the acceptance back to work of these
alleged officers and members of the union-movants, and the refusal
of respondents to accept back to work all the individual
complainants in this case mentioned in Annexes "A", "B" and "C" of
the instant complaint, inspite of the offer to return to work by the
complainants herein made to the respondents without any
conditions at the time of the strike, as per complainants' letter of
December 13, 1967 (Exh. "B", for the complainants), which fact
precisely gave rise to the filing of this case.
xxx xxx xxx
On January 31, 1969, after the submission of their respective Memoranda on the
motions asking for the dismissal and withdrawal of the complaint, the Court of
Industrial Relations issued an Order deferring the resolution of the Motions until after
the trial on the merits. To this Order, two separate Motions for Reconsideration were
filed by the respondent companies and the movant-unions, which motions were,
however, denied by the court en banc by its Resolution dated March 5, 1969.
After the trial on the merits of the case, and after submission by the parties of their
respective memoranda, the respondent court rendered on July 20, 1973 the Decision
subject of these petitions. On the motions for dismissal or withdrawal of the complaint
as prayed for by MUEWA, UNWU and MFWU, the respondent court denied the same
on the ground that the instant case was filed by the Lakas ng Manggagawang
Makabayan for and in behalf of the individual employees concerned and not for the
movants who were not authorized by said individual complainants to ask for the
dismissal. On the merits of the case, while the Decision contained opinions to the
effect that the respondent Marcelo Companies were not remiss in their obligation to
bargain, and that the September 4, 1967 strike as well as the November 7, 1967
strike, were economic strikes, and were, therefore, illegal because of lack of the
required notices of strike before the strikes were declared in both instances, the
Decision, nevertheless, on the opinion that the "procedure of scheduling adopted by
the respondents was in effect a screening of those who were to be readmitted,"
declared respondent Marcelo Companies guilty of unfair labor practice in
discriminating against the employees named in Annexes "A", "B", and "C" by refusing
to admit them back to work other strikers were admitted back to work after the strike
of November 7, 1967. The dispositive portion of the appealed Decision states, to wit,
WHEREFORE, in view of all the foregoing, respondents should be,
as they are hereby, declared guilty of unfair labor practice only for
the discrimination on terms or conditions of employment as
hereinbefore discussed in connection with the return of the strikers
complainants back to work after the second strike, and, therefore,
ordered to pay the individual complainants appearing in Annexes
"A", "B" and "C" of the Complaint, except Arlington Glodeviza,
Jesus Lim, Wilfredo Jarquio, Leonardo Sakdalan, Jose Roque,
Alfredo Cabel, and those still working, were dismissed for cause,
whose contracts expired or who had resigned as above indicated,
their back wages from December l8, 1967 but only up to June 29,
1970 when this case was submitted for decision, without
reinstatement, minus their earnings elsewhere for the same period.
As to those who died without having been re-employed, the back
wages shall be from December 18, 1967 up to the date of their
demise, as indicated in the body of this Decision, but not beyond
June 20, 1970, likewise less their earnings elsewhere.
The Chief Auditing Examiner of this Court, or his duly authorized
representative, is hereby directed to proceed to the premises of
respondent companies to examine their books, payrolls, vouchers
and other pertinent papers or documents as may be necessary to
compute the back wages due the individual complainant in line with
this Decision, and to submit his Report thereon not later than
twenty (20) days after completion of such examination for further
disposition of the Court.
SO ORDERED.
On August 9, 1973, counsel for respondent Marcelo Companies filed a Motion for
Reconsideration of the above Decision assigning as errors, to wit,
I. The trial court erred in not finding that complainant Lakas ng
Manggagawang Makabayan (Lakas) has no authority to file and/or
to prosecute the Complaint against respondents in representation
of the local unions and/or individual complainants and/or members
of local unions in their individual capacities and in not dismissing
the complaint on that ground upon motions of the local unions
concerned and/or their members.
II. The trial court erred in finding that respondent discriminated
against individual complainants who were not readmitted to work
after the November 7, 1967 strike while others were able to return
to their former employment and in holding that the procedure
adopted by respondents was in effect a screening of those who
were readmitted and in finding respondents guilty of unfair labor
practice by reason thereof. "
On August 14, 1973, the individual complainants who had earlier disauthorized the
counsel of record, Atty. Benjamin Pineda, from further representing them and from
amicably settling their claims, on their own behalf filed their arguments in support of
their Motion for Reconsideration, through a newly retained counsel, Atty. Pablo B.
Castillon. Assigned as errors are, to wit,
 I. The findings of the trial court excluding some of the employees
from the aforementioned Decision as well as from the benefits
resulting therefrom is not in accordance with law and the facts.
II. The findings of the trial court declaring the strikes of September
4 and November 7, 1967 as illegal for being an economic strike is
not in accordance with law and the facts adduced in this case.
III. The Honorable trial court in ordering the reduction of the back
wages, without reinstatement, appears to have departed from the
substantial evidence rule and established jurisprudence.
By Resolution of January 24, 1974, the Court en banc denied the two (2) Motions for
Reconsideration filed by both the respondent Marcelo Companies and the individual
complainants. On February 19, 1974 and on February 20, 1974, both parties filed
their respective Notices of Appeals. Hence, these petitions.
In L-38258, the petition filed by complainant Lakas ng Manggagawang Makabayan
(LAKAS), the following were assigned as reversible errors, to wit,
I. The respondent court erred in finding the strikes of September 4
and November 7, 1967 to be economic strikes and declaring the
said strikes illegal for non-compliance with the procedural
requirement of Section 14(d) of Republic Act 875, although its
illegality was condoned or waived because of the Return-to-Work
agreement on the first strike, and the discriminatory rehiring of the
striking employees after the second strike.
II. The respondent court erred in denying reinstatement to the
striking complainants in Case No. 4951-ULP, and limiting the
computation of their backwages from December 18, 1967 to June
29, 1970 only, despite its findings of unfair labor practice against
private respondents herein as a consequence of the discriminatory
rehiring of the striking employees after the November 7, 1967
strike.
III. The respondent court erred in excluding the other individual
complainants, except those who are still working, those who
resigned on or before December 18, 1967, and those whose
employment contract expired, and denying to these individual
complainants the benefits resulting therefrom.
On the other hand, in L-38260 which is the petition filed by respondents Marcelo
Enterprises, Marcelo Tire and Rubber Corporation, Marcelo Rubber & Latex
Products, Marcelo Steel Corporation, Marcelo Chemical & Pigment Corporation, and
Polaris Marketing Corporation, the following is the alleged assignment of errors, to
wit,
I. Respondent court erred in not finding that respondent Lakas ng
Manggagawang Makabayan (LAKAS) had no authority to file and/or
to prosecute the complaint against the petitioners herein in
representation of the local unions and/or individual complainants
and/or members of local unions in their individual capacities and in
not dismissing the complaint in Case No. 4951-ULP of respondent
court on that ground upon motions of the local unions concerned
and/or their officers and members.
II. Respondent court erred in finding that petitioners herein
discriminated against individual complainants in Case No. 4951-
ULP of respondent court who were not readmitted to work after the
November 7, 1967 strike, while others were able to return to their
former employment and in holding that the procedure adopted by
petitioners herein was in effect a screening of those who were
readmitted and in finding petitioners herein guilty of unfair labor
practice by reasons thereof.
III. Respondent court erred in rendering judgment ordering
petitioners herein to pay individual complainants in Case No. 4951-
ULP of respondent court backwages from December 18, 1967, to
June 29, 1970, minus their earnings elsewhere, except those who
have resigned, those who have been dismissed for cause, those
whose contracts have expired and those who are already working.
IV. Respondent court erred in holding that petitioners herein have
waived their right to declare the strikes of September 4, 1967 and
November 7, 1967, illegal.
From the aforecited assignments of errors respectively made in both petitions before
Us, We find that there are only two basic issues posed for Our resolution, viz: (1)
whether or not the complaint filed by LAKAS against the Marcelo Companies can be
sustained, in view of the alleged fact that its authority to file and prosecute the same
has been squarely raised in issue at the first instance before the respondent court;
and (2) whether or not the Marcelo Companies are guilty of unfair labor practice, for
which they should be made liable for backwages and be obliged to reinstate the
employees appearing in Annexes "A", "B", and "C " of the complaint, taking into
consideration the prayer of LAKAS anent the correct payment of said backwages and
the non-exclusion of some employees from the benefits arising from the appealed
Decision.
The first issue poses a procedural question which We shall dwell on after a resolution
of the second issue, this latter issue being of greater significance to the correct
determination of the rights- of all parties concerned as it treats of the merits of the
present petitions.
Hence, anent the second issue of whether or not the complaint for unfair labor
practice can be sustained, this Court rules in favor of the respondent Marcelo
Companies and consequently, the appealed Decision is reversed. This reversal is
inevitable after this Court has pored through the voluminuous records of the case as
well as after applying the established jurisprudence and the law on the matters raised.
We are not unmindful of the plight of the employees in this case but We consider it
oppressive to grant their petition in G.R. No. L38258 for not only is there no evidence
which shows that the respondent Marcelo Companies were seeking for an opportunity
to discharge these employees for union activities, or to discriminate against them
because of such activities, but there is affirmative evidence to establish the contrary
conclusion.
The present controversy is a three-sided conflict, although focus has been greatly
placed upon an alleged labor dispute between complainant LAKAS and the
respondent Marcelo Companies. It would bear emphasizing, however, that what had
been patently disregarded by the respondent industrial court and the parties alike, is
the fact that LAKAS had never been the bargaining representative of any and an of
the local unions then existing in the respondent Marcelo Companies.
Contrary to the pretensions of complainant LAKAS, the respondent Marcelo
Companies did not ignore the demand for collective bargaining contained in its letter
of June 20, 1967. Neither did the companies refuse to bargain at all. What it did was
to apprise LAKAS of the existing conflicting demands for recognition as the
bargaining representative in the appropriate units involved, and suggested the
settlement of the issue by means of the filing of a petition for certification election
before the Court of Industrial Relations. This was not only the legally approved
procedure but was dictated by the fact that there was indeed a legitimate
representation issue. PSSLU, with whom the existing CBAs were entered into, was
demanding of respondent companies to collectively bargain with it; so was Paulino
Lazaro of MUEWA, J.C. Espinas & Associates for MACATIFU and the MFWU, and
the complainant LAKAS for MULU which we understand is the aggrupation of
MACATIFU, MFWU and UNWU. On top of all of these, Jose Roque of UNWU
disauthorized the PSSLU from representing his union; and similarly, Augusta Carreon
of MACATIFU itself informed management as late as July 11, 1967 or after the
demand of LAKAS that no group representing his Union "is not authorized and should
not be entertained. "
Indeed, what We said in Philippine Association of Free Labor Unions (PAFLU) vs.
The Bureau of Labor Relations, 69 SCRA 132, applies as well to this case.
..., in a situation like this where the issue of legitimate
representation in dispute is viewed for not only by one legitimate
labor organization but two or more, there is every equitable ground
warranting the holding of a certification election. In this way, the
issue as to who is really the true bargaining representative of all the
employees may be firmly settled by the simple expedient of an
election.
The above-cited case gives the reason for the need of determining once and for all
the true choice of membership as to who should be their bargaining representative,
which is that, "(E)xperience teaches us, one of the root causes of labor or industrial
disputes is the problem arising from a questionable bargaining representative
entering into CBA concerning terms and conditions of employment. "
Respecting the issue of representation and the right of the employer to demand
reasonable proof of majority representation on the part of the supposed or putative
bargaining agent, the commentaries in Rothenberg on Labor Relations, pp. 42943 1,
are forceful and persuasive, thus:
It is essential to the right of a putative bargaining agent to represent
the employees that it be the delegate of a majority of the
employees and, conversely, an employer is under duty to bargain
collectively only when the bargaining agent is representative of the
majority of the employees. A natural consequence of these
principles is that the employer has the right to demand of the
asserted bargaining agent proof of its representation of its
employees. Having the right to demonstration of this fact, it is not
an 'unfair labor practice' for an employer to refuse to negotiate until
the asserted bargaining agent has presented reasonable proof of
majority representation. It is necessary however, that such demand
be made in good faith and not merely as a pretext or device for
delay or evasion. The employer's right is however to reasonable
proof. ...
... Although an employer has the undoubted right to bargain with a
bargaining agent whose authority has been established, without the
requirement that the bargaining agent be officially certified by the
National Labor Relations Board as such, if the informally presented
evidence leaves a real doubt as to the issue, the employer has a
right to demand a certification and to refuse to negotiate until such
official certification is presented."
The clear facts of the case as hereinbefore restated indusputably show that a
legitimate representation issue confronted the respondent Marcelo Companies. In the
face of these facts and in conformity with the existing jurisprudence.
We hold that there existed no duty to bargain collectively with The complainant
LAKAS on the part of said companies. And proceeding from this basis, it follows that
all acts instigated by complainant LAKAS such as the filing of the Notice of strike on
June 13, 1967 (although later withdrawn) and the 'two strikes of September 4, 1967
and November 7, 1967 were calculated , designed and intended to compel the
respondent Marcelo Companies to recognize or bargain with it notwithstanding that it
was an uncertified union, or in the case of respondent Marcelo Tire and Rubber
Corporation, to bargain with it despite the fact that the MUEWA of Paulino Lazaro vas
already certified as the sole bargaining agent in said respondent company. These
concerted activities executed and carried into effect at the instigation and motivation
of LAKAS ire all illegal and violative of the employer's basic right to bargain
collectively only with the representative supported by the majority of its employees in
each of the bargaining units. This Court is not unaware of the present predicament of
the employees involved but much as We sympathize with those who have been
misled and so lost their jobs through hasty, ill-advised and precipitate moves, We rule
that the facts neither substantiate nor support the finding that the respondent Marcelo
Companies are guilty of unfair labor practice.
There are also other facts which this Court cannot ignore. the complaint of LAKAS
charge that after their first strike of September 4, 1967, management and the striking
employees entered into a Return-to-Work Agreement but that it was violated by the
respondent companies who "refused to admit the members of the three striking local
unions ... and gave reference to the casual employees." (No. 8, Complaint). It is also
alleged that the strike of November 7, 1967 was staged "because of the refusal of the
respondents to accept some union members ... and refusal of respondents to bargain
in good faith with complainant" (No. 9, Complaint). We find however, that in making
these charges, complainant LAKAS lacked candor, truth and fidelity towards the
courts.
It is a fact found by the respondent court, and as revealed by he records of the case,
that the respondent Marcelo Companies did not violate the terms of the Return-to-
Work Agreement negotiated after the first strike. All of the strikers were admitted back
to work except four (4) who opted not to report for work because of the administrative
investigation conducted in connection with the acts of violence perpetrated during the
said strike.
It is also evident from the records that the charge of bargaining in bad faith imputed to
the respondent companies, is hardly credible. In fact, such charge is valid as only
against the complainant LAKAS. The parties had a total of five (5) conferences for
purposes of collective bargaining. It is worth considering that the first strike of
September 4, 1967 was staged less than a week after the fourth CBA conference and
without any benefit of any previous strike notice. In this connection, it must be stated
that the notice of strike filed on June 13, 1967 could not have been the strike notice
for the first strike because it was already withdrawn on July 14, 1967. Thus, from
these stated facts can be seen that the first strike was held while the parties were in
the process of negotiating. Nor can it be sustained that the respondent Marcelo
Companies bargained in bad faith since there were proposals offered by them, but
the complainant LAKAS stood pat on its position that all of their economic demands
should be met and that all of these demands should be granted in all of the
respondent Marcelo Companies. The companies' refusal to accede to the demands of
LAKAS appears to be justified since there is no showing that these companies were
in the same state of financial and economic affairs. There is reason to believe that the
first strike was staged only for the purpose of compelling the respondent Marcelo
Companies to accede to the inflexible demands of the complainant LAKAS. The
records further establish that after the resumption of normal operations following the
first strike and the consequent Return-to-Work Agreement, the striking unions led by
complainant LAKAS and the management of the respondent Marcelo Companies
resumed their bargaining negotiations. And that on October 13, 1967, complainant
LAKAS sent the final drafts of the collective bargaining proposals for MFWU and
UNWU. The second strike of November 7, 1967 was then staged immediately after
which strike, as before, was again lacking of a strike notice. All of these facts show
that it was complainant LAKAS, and not the respondent Marcelo Companies, which
refused to negotiate in the pending collective bargaining process. AR that the facts
show is that the bargaining position of complainant LAKAS was inflexible and that it
was in line with this uncompromising attitude that the strikes were declared,
significantly after notice that management did not or could not meet all of their 17-
points demand.
Respondent court, upholding the contention of petitioner LAKAS that after the second
strike, the respondent Marcelo Companies, despite the strikers' unconditional offer to
return to work, refused to readmit them without "screening" which LAKAS insists to be
"discriminatory hiring of the striking employees, " declared that although the two
strikes were illegal, being economic strikes held in violation of the strike notice
requirement, nevertheless held the Marcelo Companies guilty of unfair labor practice
in discriminating against the complaining employees by refusing to readmit them
while other strikers were admitted back to work. We do not agree.
It is the settled jurisprudence that it is an unfair labor practice for an employer not to
reinstate, or refuse re-employment of members of union who abandon their strike and
make unconditional offer to return to work. 1As indeed Exhibit "B" presents an
unconditional offer of the striking employees to return to work under the same terms
and conditions of employment before the strike, the question then confronting Us is
whether or not on the part of the respondent companies, there was refusal to
reinstate or re-employ the strikers.
We find as a fact that the respondent Marcelo Companies did not refuse to reinstate
or re-employ the strikers, as a consequence of which We overrule the finding of unfair
labor practice against said companies based on the erroneous conclusion )f the
respondent court. It is clear from the records that even before the unconditional offer
to return to work contained in , Exhibit "B" was made, the respondent Marcelo
Companies had already posted notices for the strikers to return back to work.
It is true that upon their return, the strikers were required to fill up a form (Exhibit "49")
wherein they were to indicate the date of their availability for work. But We are more
impressed and are persuaded to accept as true the contention of the respondent
Marcelo Companies that the aforestated requirement was only for purposes of proper
scheduling of the start of work for each returning striker. It must be noted that as a
consequence of the two strikes which were both attended by widespread acts of
violence and vandalism, the businesses of the respondent companies were
completely paralyzed. It would hardly be justiciable to demand of the respondent
companies to readmit all the returning workers in one big force or as each demanded
readmission. There were machines that were not in operating condition because of
long disuse during the strikes. Some of the machines needed more than one worker
to operate them so that in the absence of the needed team of workers, the start of
work by one without his teammates would necessarily be useless, and the company
would be paying for his time spent doing no work. Finally, We take judicial cognizance
of the fact that companies whose businesses were completely paralyzed by major
strikes cannot resume operations at once and in the same state or force as before the
strikes.
But what strikes Us most in lending credence to respondents' allegation that Exhibit
"49" was not meant to screen the strikers, is the fact that an of the returning strikers
who filled up the form were scheduled for work and consequently started with their
jobs. It is only those strikers who refused or failed to fill-up the required form, like the
herein complaining employees, who were not scheduled for work and consequently
have not been re- employed by the respondent Marcelo Companies. Even if there
was a sincere belief on their part that the requirement of Exhibit "49" was a ruse at
"screening" them, this fear would have been dispelled upon notice of the fact that
each and all of their co-strikers who rued up the required form were in fact scheduled
for work and started to work. The stoppage of their work was not, therefore, the direct
consequence of the respondent companies' complained act, Hence, their economic
loss should not be shifted to the employer. 2
It was never the state policy nor Our judicial pronouncement that the employees' right
to self-organization and to engage in concerted activities for mutual aid and
protection, are absolute or be upheld under an circumstances. Thus, in the case
of Royal Interocean Lines, et al. vs. CIR, 3 We cited these authorities giving adequate
panoply to the rights of employer, to wit:
The protection of workers' right to self-organization in no way
interfere with employer's freedom to enforce such rules and orders
as are necessary to proper conduct of his businesses, so long as
employer's supervision is not for the purpose of intimidating or
coercing his employees with respect to their self-organization and
representation. (National Relations Board vs. Hudson Motor Car
Co., C.C.A., 1942, 123 F 2d. 528). "
It is the function of the court to see that the rights of self-
organization and collective bargaining guaranteed by the Act are
amply secured to the employee, but in its effort to prevent the
prescribed unfair labor practice, the court must be mindful of the
welfare of the honest employer (Martel Mills Corp. vs. M.L.R.L.,
C.C.A., 1940,11471 F2d. 264)."
In Pagkakaisang Itinataguyod ng mga Manggagawa sa Ang Tibay (PIMA), Eliseo
Samson, et al., vs. Ang Tibay, Inc., et al., L-22273, May 16, 1967, 20 SCRA 45, We
held that the exaction, by the employer, from the strikers returning to work, of a
promise not to destroy company property and not to commit acts of reprisal against
union members who did not participate in the strike, cannot be considered an unfair
labor practice because it was not intended to discourage union membership. It was
an act of a self- preservation designed to insure peace and order in the employer's
premises. It was also held therein that what the Industrial Peace Act regards as an
unfair labor practice is the discrimination committed by the employer in regard to
tenure of employment for the purpose of encouraging or discouraging union
membership.
In the light of the above ruling and taking the facts and circumstances of the case
before Us in relation to the requirement by the respondent companies in the filling up
of Exhibit "49", We hold and rule that the requirement was an act of self-preservation,
designed to effect cost-savings as well as to insure peace and order within their
premises. Accordingly, the petition in G. R. No. L-38258 should be dismissed, it
having failed to prove, substantiate and justify the unfair labor practice charges
against the respondent Marcelo Companies.
Now to the procedural question posed in the first issue brought about by the
respondent court's denial of the motions to withdraw the complaint respectively filed
by MUEWA, UNWU and MFWU. In their petition (G.R. L-38260) the respondent
Marcelo Companies maintain that the respondent court erred in not dismissing the
complaint even as it knew fully well that the very authority of LAKAS to represent the
labor unions who had precisely disaffiliated from the LAKAS, was open to serious
question and was being ventilated before it. On the other hand, the respondent court
rationalized the denial of the aforestated motions to withdraw by holding that the
complaint was filed by LAKAS on behalf of the individual employees whose names
were attached to the complaint and hence, that the local unions who were not so
authorized by these individual employees, cannot withdraw the said complaint. The
lower court's opinion is erroneous.
Firstly, LAKAS cannot bring any action for and in behalf of the employees who were
members of MUEWA because, as intimated earlier in this Decision, the said local
union was never an affiliate of LAKAS. What appears clearly from the records is that it
was Augusto Carreon and his followers who joined LAKAS, but then Augusto Carreon
was not the recognized president of MUEWA and neither he nor his followers can
claim any legitimate representation of MUEWA. Apparently, it is this split faction of
MUEWA, headed by Augusta Carreon, who is being sought to be represented by
LAKAS. However, it cannot do so because the members constituting this split faction
of MUEWA were still members of MUEWA which was on its own right a duly
registered labor union. Hence, any suit to be brought for and in behalf of them can be
made only by MUEWA, and not LAKAS. It appearing then that Augusta Carreon and
his cohorts did not disaffiliate from MUEWA nor signed any individual affiliation with
LAKAS, LAKAS bears no legal interest in representing MUEWA or any of its
members.
Nor will the lower court's opinion be availing with respect to the complaining
employees belonging to UNWU and MFWU. Although it is true, as alleged by LAKAS,
that when it filed the charge on December 26, 1967, the officers of the movant unions
were not yet then the officers thereof, nevertheless, the moment MFWU and UNWU
separated from and disaffiliated with 'LAKAS to again exercise its rights as
independent local unions, registered before as such, they are no longer affiliates of
LAKAS, as what transpired here. Naturally, there would no longer be any reason or
occasion for LAKAS to continue representing them. Notable is the fact that the
members purportedly represented by LAKAS constitute the mere minority of the
movant unions, as may be inferred from the allegations of the movant unions as well
as the counter-allegations of LAKAS filed below. As such, they cannot prevail or
dictate upon the will of the greater majority of the unions to which they still belong, it
appearing that they never disaffiliated from their unions; or stated in another way,
they are bound by the action of the greater majority. 4
In NARIC Workers' Union vs. CIR, 5 We ruled that, "(a) labor union would go beyond
the limits of its legitimate purposes if it is given the unrestrained liberty to prosecute
any case even for employees who are not members of any union at all. A suit brought
by another in representation of a real party in interest is defective." Under the
uncontroverted facts obtaining herein, the aforestated ruling is applicable, the only
difference being that, here, a labor federation seeks to represent members of a
registered local union never affiliated with it and members of registered local unions
which, in the course of the proceedings before the industrial court, disaffiliated from it.
This is not to say that the complaining employees were without any venue for redress.
Under the aforestated considerations, the respondent court should have directed the
amendment of the complaint by dropping LAKAS as the complainant and allowing the
suit to be further prosecuted in the individual names of those who had grievances. A
class suit under Rule 3, Section 12 of the Rules of Court is authorized and should
suffice for the purpose.

In fairness to the complaining employees, however, We treated their Motion for

Reconsideration of the Decision subject of appeal as curing the defect of the
complaint as the said motion expressly manifested their collective desire to pursue
the complaint for and in their own behalves and disauthorizing LAKAS' counsel from
further representing them. And We have also treated their petition before Us in the
same manner, disregarding the fact that LAKAS remained the petitioning party, as it
appears from the verification that the petition in L38258 was for and in behalf of the
complaining employees. The merits of their petition, however, fall short of
substantiating the charge of unfair labor practice against the respondent Marcelo
Companies. On the other hand, the appeal of the Marcelo Companies in L-38260
must be upheld and sustained.

WHEREFORE, upon the foregoing considerations, the petition in L-38258 is

dismissed and the petition in L-38260 is granted. The decision of the Court of
Industrial Relations is hereby REVERSED and SET ASIDE and a new judgment is
rendered holding that the respondent Marcelo Companies are not guilty of unfair labor
practice.
NATIONAL UNION OF RESTAURANT WORKERS (PTUC), petitioner,
vs.
COURT OF INDUSTRIAL RELATIONS, ET AL., respondents.
Alejandro C. Villavieja for petitioner.
Padilla Law Office for respondents.
BAUTISTA ANGELO, J.:
On June 9, 1960, a complaint for unfair labor practice was lodged against the owners
of Tres Hermanas Restaurant, particularly Mrs. Felisa Herrera, on the ground, among
others, that respondents refused to bargain collectively with the complaining union;
respondents made a counter-proposal in the sense that they would bargain with said
union and would accept its demands if the same would become a company union,
and one Martin Briones, an employee, was separated from the service because he
was found to be the organizer and adviser of the complaining union.
After respondents had filed their answer, wherein they denied the charges of unfair
labor practice filed against them, Judge Emiliano C. Tabigne, who was assigned to
act on the complaint, received the evidence, and on July 28, 1961, rendered decision
exonerating respondents. He found that the charges were not proven and dismissed
the complaint.
The case was taken to the court en banc, where in a split decision the court affirmed
the decision of Judge Tabigne. The case is now before us on a petition for review.
The important findings of the court a quo which are now disputed by the union are: (1)
respondents did not refuse to bargain collectively with the union as in fact they met its
members with the only particularity that they were not able to accept all the demands
of the union; (2) respondents did not interfere, coerce or restrain their employees in
the exercise of their right to join the complaining union; and (3) the dismissal of Martin
Briones was due to the concern of Mrs. Herrera for her life on account of the hatred
that Briones had entertained against her, she being always with him in the car he
used to drive during their business routine. It is claimed that Judge Tabigne
committed a grave abuse of discretion in making the above findings.
Anent the first issue, the court a quo found that in the letter sent by the union to
respondents containing its demands marked in the case as Exhibit 1, there appears
certain marks, opposite each demand, such as a check for those demands to which
Mrs. Felisa Herrera was agreeable, a cross signifying the disapproval of Mrs. Herrera,
and a circle regarding those demands which were left open for discussion on some
future occasion that the parties may deem convenient. Such markings were made
during the discussion of the demands in the meeting called by respondents on May 3,
1960 at their restaurant in Quezon City. The court a quo concluded that the fact that
respondent Herrera had agreed to some of the demands shows that she did not
refuse to bargain collectively with the complaining union.
We can hardly dispute this finding, for it finds support in the evidence. The inference
that respondents did not refuse to bargain collectively with the complaining union
because they accepted some of the demands while they refused the others even
leaving open other demands for future discussion is correct, especially so when those
demands were discussed at a meeting called by respondents themselves precisely in
view of the letter sent by the union on April 29, 1960. It is true that under Section 14
of Republic Act 875 whenever a party serves a written notice upon the employer
making some demands the latter shall reply thereto not later than 10 days from
receipt thereof, but this rendition is merely procedural and as such its non-compliance
cannot be deemed to be an act of unfair labor practice. The fact is that respondents
did not ignore the letter sent by the union so much so that they called a meeting to
discuss its demands, as already stated elsewhere.
It is contended that respondents refused to bargain with the complaining union as
such even if they called a meeting of its officers and employees thereby concluding
that they did not desire to enter into a bargaining agreement with said union. This
conclusion has no rational relation with the main premise of the union for it is belied
by the fact that respondents did actually agree and bargain with the representatives of
the union. While it is true that respondents denied the capacity of the complaining
union to bargain collectively with the respondents this is because they were of the
impression that before a union could have that capacity it must first be certified by the
Court of Industrial Relations as the duly authorized bargaining unit, in fact this is what
they stated in their answer to the petition for certification filed by said union before the
Court of Industrial Relations (See Case No. 763-MC). In said case, another union
known as the International Labor and Marine Union of the Philippines claimed to
represent the majority of the employees of respondent restaurant, and this is what it
alleged in a letter sent to the manager of respondents dated May 25, 1962.
Anent the second issue, the claim of the complaining union has also no basis. This is
premised on a document marked Exhibit C which contains certain alleged counter-
proposals tendered to complainant union the nature of which would apparently
indicate that respondents made use of coercion which interferes with the right of the
employees to self-organization. On this document certain notations were made by
one Ernesto Tan which are indeed derogatory and which were allegedly made by him
upon instructions of respondent Felisa Herrera. Thus, the pertinent notation on which
the union relies is one which states that respondent Herrera would be willing to
recognize the union "if union would be willing to recognize the union", which would
indeed show that Mrs. Herrera interfered with the employees' right to self-
organization. But respondents denied that they ever authorized Ernesto Tan to make
such notation or to represent them in the negotiations, for he was merely a
bookkeeper whose duties were confined to the keeping and examination of their
books of accounts and sales invoices. It appears that he was not even invited to the
meeting but merely volunteered to be present and made those notations on his own
account and initiative. The court a quo gave credence to this stand of respondents, as
can be seen in the following finding: "There is no evidence to show that Ernesto Tan
was authorized to represent management in the meeting held on May 3, 1960, and
that Ernesto Tan, being a mere bookkeeper of respondents, he is not a part of
management although he is the nephew of Mrs. Herrera." We are not prepared to
disturb this finding of the court a quo.
Finally, it is alleged in connection with the third issue that respondent Herrera
dismissed Martin Briones without sufficient cause other than his being the organizer
and adviser of the complaining union. It however appears from the very testimony of
Martin Briones that he is not the only one who organized the complaining union but
together with Galicano Apiz, Pablo Cabreros and Juan Morales, with the particularity
that, as Briones himself had intimated, Apiz, Cabreros and Morales were more active
than himself in organizing the union so much so that they were appointed officers of
that union. And yet, Apiz, Cabreros and Morales were never touched and continued
to be employed in respondents' restaurant. For this reason, the court a quodiscredited
the claim that Briones was dismissed because of union activities but rather because
of the threats he made on Mrs. Herrera, as communicated to her by her sister
Aureata. The following is the finding made by the court a quo on this point: "If it is the
union activities of complainant's members that Mrs. Herrera did not like, Apiz,
Cabreros and Morales should have been dismissed by her also, because said
persons were more active than Briones in the organization of the union. Verily, it was
not the union activities of Martin Briones that prompted Mrs. Herrera to dismiss him,
but her fear for the safety of her life on account of the smouldering members of hatred
that the former had against the latter, the said persons being always together in her
car driven by Briones, during business routine." This finding finds support in the
evidence.

On the strength of the foregoing considerations, we find no justification for disturbing

the findings of the court a quo which led to the dismissal of the complaint under
consideration.1äwphï1.ñët

WHEREFORE, the decision appealed from is affirmed. No costs.

 KIOK LOY, doing business under the name and style SWEDEN ICE
CREAM PLANT, Petitioner, v. NATIONAL LABOR RELATIONS
COMMISSION (NLRC) and PAMBANSANG KILUSAN NG PAGGAWA
(KILUSAN), Respondents.
Ablan and Associates for Petitioner.
Abdulcadir T. Ibrahim for Private Respondent.
DECISION
CUEVAS, J.:
Petition for CERTIORARI to annul the decision 1 of the National Labor
Relations Commission (NLRC) dated July 20, 1979 which found petitioner
Sweden Ice Cream guilty of unfair labor practice for unjustified refusal to
bargain, in violation of par. (g) of Article 249 2 of the New Labor Code, 3
and declared the draft proposal of the Union for a collective bargaining
agreement as the governing collective bargaining agreement between the
employees and the management.chanrobles virtual lawlibrary
The pertinent background facts are as follows:chanrob1es virtual 1aw
library
In a certification election held on October 3, 1978, the Pambansang
Kilusan ng Paggawa (Union for short), a legitimate labor federation, won
and was subsequently certified in a resolution dated November 29, 1978
by the Bureau of Labor Relations as the sole and exclusive bargaining
agent of the rank-and-file employees of Sweden Ice Cream Plant
(Company for short). The Company’s motion for reconsideration of the
said resolution was denied on January 25, 1978.
Thereafter, and more specifically on December 7, 1978, the Union
furnished 4 the Company with two copies of its proposed collective
bargaining agreement. At the same time, it requested the Company for its
counter proposals, Eliciting no response to the aforesaid request, the
Union again wrote the Company reiterating its request for collective
bargaining negotiations and for the Company to furnish them with its
counter proposals. Both requests were ignored and remained unacted
upon by the Company.
Left with no other alternative in its attempt to bring the Company to the
bargaining table, the Union, on February 14, 1979, filed a "Notice of
Strike", with the Bureau of Labor Relations (BLR) on ground of unresolved
economic issues in collective bargaining. 5
Conciliation proceedings then followed during the thirty-day statutory
cooling-off period. But all attempts towards an amicable settlement failed,
prompting the Bureau of Labor Relations to certify the case to the National
Labor Relations Commission (NLRC) for compulsory arbitration pursuant to
Presidential Decree No. 823, as amended. The labor arbiter, Andres
Fidelino, to whom the case was assigned, set the initial hearing for April
29, 1979. For failure however, of the parties to submit their respective
position papers as required, the said hearing was cancelled and reset to
another date. Meanwhile, the Union submitted its position paper. The
Company did not, and instead requested for a resetting which was
granted. The Company was directed anew to submit its financial
statements for the years 1976, 1977, and 1978.
The case was further reset to May 11, 1979 due to the withdrawal of the
Company’s counsel of record, Atty. Rodolfo dela Cruz. On May 24, 1978,
Atty. Fortunato Panganiban formally entered his appearance as counsel for
the Company only to request for another postponement allegedly for the
purpose of acquainting himself with the case. Meanwhile, the Company
submitted its position paper on May 28, 1979.
When the case was called for hearing on June 4, 1979 as scheduled, the
Company’s representative, Mr. Ching, who was supposed to be examined,
failed to appear. Atty. Panganiban then requested for another
postponement which the labor arbiter denied. He also ruled that the
Company has waived its right to present further evidence and, therefore,
considered the case submitted for resolution.
On July 18, 1979, labor arbiter Andres Fidelino submitted its report to the
National Labor Relations Commission. On July 20, 1979, the National Labor
Relations Commission rendered its decision, the dispositive portion of
which reads as follows:chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph
"WHEREFORE, the respondent Sweden Ice Cream is hereby declared guilty
of unjustified refusal to bargain, in violation of Section (g) Article 248 (now
Article 249), of P.D. 442, as amended. Further, the draft proposal for a
collective bargaining agreement (Exh. "E") hereto attached and made an
integral part of this decision, sent by the Union (Private respondent) to the
respondent (petitioner herein) and which is hereby found to be reasonable
under the premises, is hereby declared to be the collective agreement
which should govern the relationship between the parties herein.
SO ORDERED." (Words in parenthesis supplied)
Petitioner now comes before Us assailing the aforesaid decision contending
that the National Labor Relations Commission acted without or in excess of
its jurisdiction or with grave abuse of discretion amounting to lack of
jurisdiction in rendering the challenged decision. On August 4, 1980, this
Court dismissed the petition for lack of merit. Upon motion of the
petitioner, however, the Resolution of dismissal was reconsidered and the
petition was given due course in a Resolution dated April 1, 1981.
Petitioner Company now maintains that its right to procedural due process
has been violated when it was precluded from presenting further evidence
in support of its stand and when its request for further postponement was
denied. Petitioner further contends that the National Labor Relations
Commission’s finding of unfair labor practice for refusal to bargain is not
supported by law and the evidence considering that it was only on May 24.
1979 when the Union furnished them with a copy of the proposed
Collective Bargaining Agreement and it was only then that they came to
know of the Union’s demands; and finally, that the Collective Bargaining
Agreement approved and adopted by the National Labor Relations
Commission is unreasonable and lacks legal basis.
The petition lacks merit. Consequently, its dismissal is in order.
Collective bargaining which is defined as negotiations towards a collective
agreement, 6 is one of the democratic frameworks under the New Labor
Code, designed to stabilize the relation between labor and management
and to create a climate of sound and stable industrial peace. It is a mutual
responsibility of the employer and the Union and is characterized as a legal
obligation. So much so that Article 249, par. (g) of the Labor Code makes
it an unfair labor practice for an employer to refuse "to meet and convene
promptly and expeditiously in good faith for the purpose of negotiating an
agreement with respect to wages, hours of work, and all other terms and
conditions of employment including proposals for adjusting any grievance
or question arising under such an agreement and executing a contract
incorporating such agreement, if requested by either party."cralaw
virtua1aw library
While it is a mutual obligation of the parties to bargain, the employer,
however, is not under any legal duty to initiate contract negotiation. 7 The
mechanics of collective bargaining is set in motion only when the following
jurisdictional preconditions are present, namely, (1) possession of the
status of majority representation of the employees’ representative in
accordance with any of the means of selection or designation provided for
by the Labor Code; (2) proof of majority representation; and (3) a
demand to bargain under Article 251, par. (a) of the New Labor Code . . .
all of which preconditions are undisputedly present in the instant case.
From the over-all conduct of petitioner company in relation to the task of
negotiation, there can be no doubt that the Union has a valid cause to
complain against its (Company’s) attitude, the totality of which is
indicative of the latter’s disregard of, and failure to live up to, what is
enjoined by the Labor Code — to bargain in good faith.chanrobles virtual
lawlibrary
We are in total conformity with respondent NLRC’s pronouncement that
petitioner Company is GUILTY of unfair labor practice. It has been
indubitably established that (1) respondent Union was a duly certified
bargaining agent; (2) it made a definite request to bargain, accompanied
with a copy of the proposed Collective Bargaining Agreement, to the
Company not only once but twice which were left unanswered and unacted
upon; and (3) the Company made no counter proposal whatsoever all of
which conclusively indicate lack of a sincere desire to negotiate. 8 A
Company’s refusal to make counter proposal if considered in relation to
the entire bargaining process, may indicate bad faith and this is specially
true where the Union’s request for a counter proposal is left unanswered. 9
Even during the period of compulsory arbitration before the NLRC,
petitioner Company’s approach and attitude — stalling the negotiation by a
series of postponements, non-appearance at the hearing conducted, and
undue delay in submitting its financial statements, lead to no other
conclusion except that it is unwilling to negotiate and reach an agreement
with the Union. Petitioner has not at any instance, evinced good faith or
willingness to discuss freely and fully the claims and demands set forth by
the Union much less justify its opposition thereto. 10
The case at bar is not a case of first impression, for in the Herald Delivery
Carriers Union (PAFLU) v. Herald Publications 11 the rule had been laid
down that "unfair labor practice is committed when it is shown that the
respondent employer, after having been served with a written bargaining
proposal by the petitioning Union, did not even bother to submit an
answer or reply to the said proposal. This doctrine was reiterated anew in
Bradman v. Court of Industrial Relations 12 wherein it was further ruled
that "while the law does not compel the parties to reach an agreement, it
does contemplate that both parties will approach the negotiation with an
open mind and make a reasonable effort to reach a common ground of
agreement."
As a last-ditch attempt to effect a reversal of the decision sought to be
reviewed, petitioner capitalizes on the issue of due process claiming, that
it was denied the right to be heard and present its side when the Labor
Arbiter denied the Company’s motion for further postponement.
Petitioner’s aforesaid submittal failed to impress Us. Considering the
various postponements granted in its behalf, the claimed denial of due
process appeared totally bereft of any legal and factual support. As herein
earlier stated, petitioner had not even honored respondent Union with any
reply to the latter’s successive letters, all geared towards bringing the
Company to the bargaining table. It did not even bother to furnish or serve
the Union with its counter proposal despite persistent requests made
therefor. Certainly, the moves and overall behavior of petitioner-company
were in total derogation of the policy enshrined in the New Labor Code
which is aimed towards expediting settlement of economic disputes.
Hence, this Court is not prepared to affix its imprimatur to such an illegal
scheme and dubious maneuvers.
Neither are WE persuaded by petitioner-company’s stand that the
Collective Bargaining Agreement which was approved and adopted by the
NLRC is a total nullity for it lacks the company’s consent, much less its
argument that once the Collective Bargaining Agreement is implemented,
the Company will face the prospect of closing down because it has to pay a
staggering amount of economic benefits to the Union that will equal if not
exceed its capital. Such a stand and the evidence in support thereof should
have been presented before the Labor Arbiter which is the proper forum
for the purpose.

We agree with the pronouncement that it is not obligatory upon either side
of a labor controversy to precipitately accept or agree to the proposals of
the other. But an erring party should not be tolerated and allowed with
impunity to resort to schemes feigning negotiations by going through
empty gestures. 13 More so, as in the instant case, where the intervention
of the National Labor Relations Commission was properly sought for after
conciliation efforts undertaken by the BLR failed. The instant case being a
certified one, it must be resolved by the NLRC pursuant to the mandate of
P.D. 873, as amended, which authorizes the said body to determine the
reasonableness of the terms and conditions of employment embodied in
any Collective Bargaining Agreement. To that extent, utmost deference to
its findings of reasonableness of any Collective Bargaining Agreement as
the governing agreement by the employees and management must be
accorded due respect by this Court.

WHEREFORE, the instant petition is DISMISSED. The temporary restraining

order issued on August 27, 1980, is LIFTED and SET ASIDE.
SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, represented by its
President RAYMUNDO HIPOLITO, JR., petitioner, vs. HON. MA. NIEVES
D. CONFESOR, Secretary of Labor, Dept. of Labor & Employment, SAN
MIGUEL CORPORATION, MAGNOLIA CORPORATION (Formerly,
Magnolia Plant) and SAN MIGUEL FOODS, INC. (Formerly, B-Meg
Plant), respondents.
DECISION
KAPUNAN, J.:
This is a petition for certiorari assailing the Order of the Secretary of Labor
rendered on February 15, 1993 involving a labor dispute at San Miguel Corporation.
The facts are as follows:
On June 28, 1990, petitioner-union San Miguel Corporation Employees Union -
PTGWO entered into a Collective Bargaining Agreement (CBA) with private
respondent San Miguel Corporation (SMC) to take effect upon the expiration of the
previous CBA or on June 30, 1989.
This CBA provided, among others, that:
ARTICLE XIV
DURATION OF AGREEMENT
SECTION 1. This Agreement which shall be binding upon the parties
hereto and their respective successors-in-interest, shall become
effective and shall remain in force and effect until June 30, 1992.
SEC. 2. In accordance with Article 253-A of the Labor Code as
amended, the term of this Agreement insofar as the representation
aspect is concerned, shall be for five (5) years from July 1,
1989 to June 30, 1994. Hence, the freedom period for purposes of
such representation shall be sixty (60) days prior to June 30, 1994.
SEC. 3. Sixty (60) days prior to June 30, 1992 either party may
initiate negotiations of all provisions of this Agreement, except
insofar as the representation aspect is concerned. If no agreement is
reached in such negotiations, this Agreement shall nevertheless
remain in force up to the time a subsequent agreement is reached by
the parties.[1]
In keeping with their vision and long term strategy for business expansion, SMC
management informed its employees in a letter dated August 13, 1991 [2]that the
company which was composed of four operating divisions namely: (1) Beer, (2)
Packaging, (3) Feeds and Livestocks, (4) Magnolia and Agri-business would undergo
a restructuring.[3]
Effective October 1, 1991, Magnolia and Feeds and Livestock Division were
spun-off and became two separate and distinct corporations: Magnolia Corporation
(Magnolia) and San Miguel Foods, Inc. (SMFI). Notwithstanding the spin-offs, the
CBA remained in force and effect.
After June 30, 1992, the CBA was renegotiated in accordance with the terms of
the CBA and Article 253-A of the Labor Code. Negotiations started sometime in July,
1992 with the two parties submitting their respective proposals and counterproposals.
During the negotiations, the petitioner-union insisted that the bargaining unit of
SMC should still include the employees of the spun-off corporations: Magnolia and
SMFI; and that the renegotiated terms of the CBA shall be effective only for the
remaining period of two years or until June 30, 1994.
SMC, on the other hand, contended that the members/employees who had
moved to Magnolia and SMFI, automatically ceased to be part of the bargaining unit
at the SMC.Furthermore, the CBA should be effective for three years in accordance
with Art. 253-A of the Labor Code.
Unable to agree on these issues with respect to the bargaining unit and duration
of the CBA, petitioner-union declared a deadlock on September 29, 1990.
On October 2, 1992, a Notice of Strike was filed against SMC.
In order to avert a strike, SMC requested the National Conciliation and
Mediation Board (NCMB) to conduct preventive mediation. No settlement was arrived
at despite several meetings held between the parties.
On November 3, 1992, a strike vote was conducted which resulted in a yes vote
in favor of a strike.
On November 4, 1992, private respondents SMC, Magnolia and SMFI filed a
petition with the Secretary of Labor praying that the latter assume jurisdiction over the
labor dispute in a vital industry.
As prayed for, the Secretary of Labor assumed jurisdiction over the labor
dispute on November 10, 1992.[4] Several conciliation meetings were held but still no
agreement/settlement was arrived at by both parties.
After the parties submitted their respective position papers, the Secretary of
Labor issued the assailed Order on February 15, 1993 directing, among others, that
the renegotiated terms of the CBA shall be effective for the period of three (3) years
from June 30, 1992; and that such CBA shall cover only the employees of SMC and
not of Magnolia and SMFI.
Dissatisfied, petitioner-union now comes to this Court questioning this Order of
the Secretary of Labor.
Subsequently, on March 30, 1995,[5] petitioner-union filed a Motion for Issuance
of a Temporary Restraining Order or Writ of Preliminary Injunction to enjoin the
holding of the certification elections in the different companies, maintaining that the
employees of Magnolia and SMFI fall within the bargaining unit of SMC.
 On March 29, 1995, the Court issued a resolution granting the temporary
restraining order prayed for.[6]
Meanwhile, an urgent motion for leave to intervene[7]in the case was filed by the
Samahan ng Malayang Manggagawa-San Miguel Corporation-Federation of Free
Workers (SMM-SMC-FFW) through its authorized representiative, Elmer S. Armando,
alleging that it is one of the contending parties adversely effected by the temporary
restraining order.
The Intervenor cited the case of Daniel S.L. Borbon v. Hon. Bienvenido B.
Laguesma,[8] G.R. No. 101766, March 5, 1993, where the Court recognized the
separation of the employees of Magnolia from the SMC bargaining unit. It then prayed
for the lifting of the temporary restraining order.
Likewise, Efren Carreon, Acting President of the SMCEU-PTGWO, filed a
petition for the withdrawal/dismissal of the petition considering that the temporary
restraining order jeopardized the employees right to conclude a new CBA. At the
same time, he challenged the legal personality of Mr. Raymundo Hipolito, Jr. to
represent the Union as its president when the latter was already officially dismissed
from the company on October 4, 1994.
Amidst all these pleadings, the following primordial issues arise:
1) Whether or not the duration of the renegotiated terms of the CBA is to
be effective for three years or for only two years; and
2) Whether or not the bargaining unit of SMC includes also the employees
of Magnolia and SMFI.
Petitioner-union contends that the duration for the non-representation provisions
of the CBA should be coterminous with the term of the bargaining agency which in
effect shall be for the remaining two years of the current CBA, citing a previous
decision of the Secretary of Labor on December 14, 1992 in the matter of the labor
dispute at Philippine Refining Company.[9]
However, the Secretary of Labor, in her questioned Order of February 15,
1993 ruled that the renegotiated terms of the CBA at SMC should run for a period of
three (3) years.
We agree with the Secretary of Labor.
Pertinent to the first issue is Art. 253-A of the Labor Code as amended which
reads:
ART. 253-A. Terms of a Collective Bargaining Agreement. Any
Collective Bargaining Agreement that the parties may enter into
shall, insofar as the representation aspect is concerned, be for a
term of five (5) years. No petition questioning the majority status of
the incumbent bargaining agent shall be entertained and no
certification election shall be conducted by the Department of Labor
and Employment outside of the sixty-day period immediately before
the date of expiry of such five year term of the Collective Bargaining
Agreement. All other provisions of the Collective Bargaining
Agreement shall be renegotiated not later than three (3) years after
its execution. Any agreement on such other provisions of the
Collective Bargaining Agreement entered into within six (6) months
from the date of expiry of the term of such other provisions as fixed
in such Collective Bargaining Agreement, shall retroact to the day
immediately following such date. If any such agreement is entered
into beyond six months, the parties shall agree on the duration of
retroactivity thereof. In case of a deadlock in the renegotiation of
the collective bargaining agreement, the parties may exercise their
rights under this Code. (underlining supplied.)
Article 253-A is a new provision. This was incorporated by Section 21 of
Republic Act No. 6715 (the Herrera-Veloso Law) which took effect on March 21,
1989. This new provision states that the CBA has a term of five (5) years instead of
three years, before the amendment of the law as far as the representation aspect is
concerned. All other provisions of the CBA shall be negotiated not later than three (3)
years after its execution. The representation aspect refers to the identity and majority
status of the union that negotiated the CBA as the exclusive bargaining
representative of the appropriate bargaining unit concerned. All other provisions
simply refers to the rest of the CBA, economic as well as non-economic provisions,
except representation.[10]
As the Secretary of Labor herself observed in the instant case, the law is clear
and definite on the duration of the CBA insofar as the representation aspect is
concerned, but is quite ambiguous with the terms of the other provisions of the
CBA. It is a cardinal principle of statutory construction that the Court must ascertain
the legislative intent for the purpose of giving effect to any statute. The history of the
times and state of the things existing when the act was framed or adopted must be
followed and the conditions of the things at the time of the enactment of the law
should be considered to determine the legislative intent. [11] We look into the
discussions leading to the passage of the law:
THE CHAIRMAN (REP. VELASCO): . . . the CBA, insofar as the economic
provisions are concerned . . .
THE CHAIRMAN (SEN. HERRERA): Maximum of three years?
THE CHAIRMAN (SEN. VELOSO): Maximum of three years.
THE CHAIRMAN (SEN. HERRERA): Present practice?
THE CHAIRMAN (REP. VELOSO): In other words, after three years puwede
nang magnegotiate in that CBA for the remaining two years.
THE CHAIRMAN (REP. HERRERA): You can negotiate for one year, two years
or three years but assuming three years which, I think, thats the likelihood.
...
THE CHAIRMAN (REP. VELOSO): Yes.
THE CHAIRMAN (SEN. HERRERA): Three years, the new union, assuming
there will be a change of agent, at least he has one year to administer and
to adjust, to develop rapport with the management. Yan ang importante.
You know, for us na nagne-negotiate, and hazard talaga sa negotiation,
when we negotiate with somebody na hindi natin kilala, then, we are
governed by our biases na ito ay destroyer ng Labor; ang mga employer,
ito bayaran ko lang ito okay na.
Yan ang nangyayari, but let us give that allowance for one year to let them
know.
Actually, ang thrust natin ay industrial peace, and there can be no
industrial peace if you encourage union to fight each other. Yan ang
problema.[12]
xxxxxxxxx
HON. ISIDRO: Madali iyan, kasi these two periods that are mentioned in the
CBA seem to provide some doubts later on in the implementation. Sabi
kasi rito, insofar as representation issue is concerned, seven years ang
lifetime . . .
HON. CHAIRMAN HERRERA: Five years.
HON. ISIDRO: Five years, all the others three years.
HON. CHAIRMAN HERRERA: No. Ang three years duon sa terms and
conditions, not later than three years.
HON. ISIDRO: Not later than three years, so within three years you have to
make a new CBA.
HON. CHAIRMAN HERRERA: Yes.
HON. ISIDRO: That is again for purposes of renewing the terms, three years na
naman iyan then, seven years . . .
HON. CHAIRMAN HERRERA: Not later than three years.
HON. ISIDRO: Assuming that they usually follow the period three years nang
three years, but under this law with respect to representation five years,
ano? Now, after three years, nagkaroon ng bagong terms, tapos na iyong
term, renewed na iyong terms, ang karapatan noon sa representation
issue mayroon pang two years left.
HON. CHAIRMAN HERRERA: One year na lang because six years nang lahat,
three plus three.
HON ISIDRO: Hindi, two years pa rin ang natitira, eh. Three years pa lang ang
natatapos. So, another CBA was formed and this CBA mayroon na naman
siyang bagong five years with respect to representation issue.
HON. CHAIRMAN HERRERA: Hindi. Hindi na. Ganito iyan. Iyong terms and
conditions for three years.
HON. ISIDRO: Yes.
HON. CHAIRMAN HERRERA: On the third year you can start negotiating to
change the terms and conditions.
HON. ISIDRO: Yes.
HON. CHAIRMAN HERRERA: Assuming you will follow the practice . . .
HON. ISIDRO: Oo.
HON. CHAIRMAN HERRERA: But on the fifth year, ang representation status
now can be questioned, so baka puwedeng magkaroon ng certification
election. If the incumbent union loses, then the new union administers the
contract for one year to give him time to know his counterpart the
employer, before he can negotiate for a new term. Iyan ang advantage.
HON. ISIDRO: Kasi, when the CBA has only a three-year lifetime with respect
to the terms and conditions and then, so you have to renew that in three
years you renew for another three years, mayroon na naman another five
years iyong ano . . .
HON. ANIAG: Hindi, ang natitira duon sa representation two years na lang.
HON. CHAIRMAN HERRERA: Two years na lang sa representation.
HON. ANIAG: So that if they changed the union, iyong last year. . . .
HON. CHAIRMAN HERRERA: Iyon lang, that you have to administer the
contract. Then, voluntary arbitration na kayo and then mayroon ka nang
probisyon retroact on the date of the expiry date.Pagnatalo and incumbent
unyon, mag-aassume and new union, administer the contract. As far as
the term ang condition, for one year, and that will give him time and the
employer to know each other.
HON. JABAR: Boy, let us be realistic. I think if a new union wins a certification
election, it would not want to administer a CBA which has not been
negotiated by the union itself.
HON. CHAIRMAN HERRERA: That is not true, Hon. This is true because what
is happening now in the country is that the term ng contract natin, duon din
mage-expire ang representation. Iyon and nangyari. That is where you
have the gulo. Ganoon and nangyari. So, ang nangyari diyan, pag-
mayroon certification election, expire ang contract, ano ang usual issue -
company union. I can you (sic) give you more what the incumbent union is
giving. So ang mangyayari diyan, pag-negotiate mo hardline na agad.
HON. CHAIRMAN VELOSO: Mon, for four years?
HON. ISIDRO: Ang tingin ko lang dito, iyong distinction between the terms and
the representation aspect why do we have to distinguish between three
and five? Whats wrong with having a uniform expiration period?
HON. CHAIRMAN HERRERA: Five years.
HON. ISIDRO: Puro three years.
HON. CHAIRMAN HERRERA: That is what we are trying to avoid because ang
reality diyan, Mart, pagpasok mo sa kumpanya, mag-ne-negotiate ka ng
 six months, thats the average, aabot pa minsan ng one year. Pagkatapos
ng negotiation mo, signing kayo. There will be an allowed period of one
year. Third year na, uumpisahan naman ang organizations, papasok na
ang ibang unyon because the reality in Trade Union committee, they
organize, we organize. So, actually, you have only industrial peace for one
year, effective industrial peace. That is what we are trying to
change. Otherwise, we will continue to discourage the investors and the
union will never grow because every other year it has to use its money for
the certification election. Ang grabe pang practice diyan, mag-a-advance
ang federation for three years union dues para panggastos lang sa
certification election. That is what we are trying to avoid.
HON. JABAR: Although there are unions which really get advances.
HON. CHAIRMAN HERRERA: Pag nag-survey tayo sa mga unyon, ganoon
ang mangyayari. And I think our responsibility here is to create a legal
framework to promote industrial peace and to develop responsible and fair
labor movement.
HON. CHAIRMAN VELOSO: In other words, the longer the period of the
effectivity . . .
xxx
HON. CHAIRMAN VELOSO. (continuing) . . in other words, the longer the
period of effectivity of the CBA, the better for industrial peace.
HON. CHAIRMAN HERRERA: representation status.
HON. CHAIRMAN VELOSO: Only on
HON. CHAIRMAN HERRERA: the representations.
HON. CHAIRMAN VELOSO: But on the economic issues.
HON. CHAIRMAN HERRERA: You have to review that. The parties will have to
review that.
HON. CHAIRMAN VELOSO: At least on second year.
HON. CHAIRMAN HERRERA: Not later than 3 years ang karamihan ng mga,
mag-negotiate when the company is (interrupted)[13]
xxx
From the aforesaid discussions, the legislators were more inclined to have the
period of effectivity for three (3) years insofar as the economic as well as non-
economic provisions are concerned, except representation.
Obviously, the framers of the law wanted to maintain industrial peace and
stability by having both management and labor work harmoniously together without
any disturbance. Thus, no outside union can enter the establishment within five (5)
years and challenge the status of the incumbent union as the exclusive bargaining
agent. Likewise, the terms and conditions of employment (economic and non-
economic) can not be questioned by the employers or employees during the period of
effectivity of the CBA. The CBA is a contract between the parties and the parties must
respect the terms and conditions of the agreement. [14] Notably, the framers of the law
did not give a fixed term as to the effectivity of the terms and conditions of
employment. It can be gleaned from their discussions that it was left to the parties to
fix the period.
In the instant case, it is not difficult to determine the period of effectivity for the
non-representation provisions of the CBA. Taking it from the history of their CBAs,
SMC intended to have the terms of the CBA effective for three (3) years reckoned
from the expiration of the old or previous CBA which was on June 30, 1989, as it
provides:
SECTION 1. This Agreement which shall be binding upon the parties
hereto and their respective successors-in-interest, shall become
effective and shall remain in force and effect until June 30, 1992.
The argument that the PRC case is applicable is indeed misplaced. We quote
with favor the Order of the Secretary of Labor in the light of SMCs peculiar situation
as compared with PRCs company situation.
It is true that in the Philippine Refining Company case (OS-AJ-0031-
91 (sic), Labor Dispute at Philippine Refining Company), we ruled
that the term of the renegotiated provisions of the CBA should
coincide with the remaining term of the agency. In doing so, we
placed premium on the fact that PRC has only two (2) unions and no
other union had yet executed a renewed term of 3 years.
Nonetheless, in ruling for a shortened term, we were guided by our
considered perception that the said term would improve, rather than
ruin, the general welfare of both the workers and the company. It is
equally true that once the economic provisions of the CBA expire,
the residual representative status of the union is effective for only 2
more years. However, if circumstances warrant that the contract
duration which it is soliciting from the company for the benefit of the
workers, shall be a little bit longer than its lifespan, then this Office
cannot stand in the way of a more ideal situation. We must not lose
sight of the fact that the primordial purpose of a collective contract
is to promote industrial harmony and stability in the terms and
conditions of employment. To our mind, this objective cannot be
achieved without giving due consideration to the peculiarities and
unique characteristics of the employer. In the case at bar, there is
no dispute that the mother corporation (SMC) spun-off two of its
divisions and thereby gave birth to two (2) other entities now known
as Magnolia Corporation and San Miguel Foods, Inc. In order to effect
a smooth transition, the companies concerned continued to
recognize the existing unions as the bargaining agents of their
respective bargaining units. In the meantime, the other unions in
these companies eventually concluded their CBA negotiations on the
remaining term and all of them agreed on a 3-year cycle. Notably, the
following CBAs were forged incorporating a term of 3-years on the
renegotiated provisions, to wit:
1. SMC - daily-paid employees union (IBM)
2. SMF - monthly-paid employees and daily-paid employees at the
Cabuyao Plant.
There is a direct link between the voluntary recognition by the
company of the continuing representative status of the unions after
the aforementioned spin-offs and the stand of the company for a 3-
year renegotiated cycle when the economic provisions of the
existing CBAs expired, i.e., to maintain stability and avoid confusion
when the umbilical cord of the two divisions were severed from their
parent. These two cannot be considered independently of each other
for they were intended to reinforce one another. Precisely, the
company conceded to face the same union notwithstanding the spin-
offs in order to preserve industrial peace during the infancy of the
two corporations. If the union would insist on a shorter renegotiated
term, then all the advantages gained by both parties in this regard,
would have gone to naught. With this in mind, this office feels that it
will betray its mandate should we order the parties to execute a 2-
year renegotiated term for then chaos and confusion, rather than
tranquility, would be the order of the day. Worse, there is a strong
likelihood that such a ruling might spawn discontent and possible
mass actions against the company coming from the other unions
who had already agreed to a 3-year renegotiated terms. If this
happens, the purpose of this Offices intervention into the parties
controversy would have been defeated.[15]
The issue as to the term of the non-representation provisions of the CBA need
not belabored especially when we take note of the Memorandum of the Secretary of
Labor dated February 24, 1994 which was mentioned in the Resolution of
Undersecretary Bienvenido Laguesma on January 16, 1995 in the certification
election case involving the SMC employees.[16]In said memorandum, the Secretary of
Labor had occasion to clarify the term of the renegotiated terms of the CBA vis-a-
vis the term of the bargaining agent, to wit:
As a matter of policy the parties are encourages (sic) to enter into a
renegotiated CBA with a term which would coincidde (sic) with the
aforesaid five (5) year term of the bargaining representative.
In the event however, that the parties, by mutual agreement, enter
into a renegotiated contract with a term of three (3) years or one
which does not coincide with the said 5-year term, and said
agreement is ratified by majority of the members in the bargaining
unit, the subject contract is valid and legal and therefore, binds the
contracting parties. The same will however not adversely affect the
right of another union to challenge the majority status of the
incumbent bargaining agent within sixty (60) days before the lapse
of the original five (5) year term of the CBA.
Thus, we do not find any grave abuse of discretion on the part of the Secretary
of Labor in ruling that the effectivity of the renegotiated terms of the CBA shall be for
three (3) years.
With respect to the second issue, there is, likewise, no merit in petitioner-unions
assertion that the employees of Magnolia and SMFI should still be considered part of
the bargaining unit of SMC.
Magnolia and SMFI were spun-off to operate as distinct companies on October
1, 1991. Management saw the need for these transformations in keeping with its
vision and long term strategy as it explained in its letter addressed to the employees
dated August 13, 1991:
x x x As early as 1986, we announced the decentralization program
and spoke of the need for structures that can react fast to
competition, a changing environment, shorter product life cycles and
shifts in consumer preference. We further stated in the 1987 Annual
Report to Stockholders that San Miguels businesses will be more
autonomous and self sufficient so as to better acquire and master
new technologies, cope with a labor force with different expertises
and expectations, and master and satisfy the changing needs of our
customers and end-consumers. As subsidiaries, Magnolia and FLD
will gain better industry focus and flexibility, greater awareness of
operating results, and speedier, more responsive decision making.
xxx
We only have to look at the experience of Coca-Cola Bottlers
Philippines, Inc., since this company was organized about ten years
ago, to see the benefits that arise from restructuring a division of
San Miguel into a more competitive organization. As a stand-alone
enterprise, CCBPI engineered a dramatic turnaround and has
sustained its sales and market share leadership ever since.
We are confident that history will repeat itself, and the
transformation of Magnolia and FLD will be successful as that of
CCBPI.[17]
Undeniably, the transformation of the companies was a management
prerogative and business judgment which the courts can not look into unless it is
contrary to law, public policy or morals. Neither can we impute any bad faith on the
part of SMC so as to justify the application of the doctrine of piercing the corporate
veil.[18] Ever mindful of the employees interests, management has assured the
concerned employees that they will be absorbed by the new corporations without loss
of tenure and retaining their present pay and benefits according to the existing
CBAs.[19] They were advised that upon the expiration of the CBAs, new agreements
will be negotiated between the management of the new corporations and the
bargaining representatives of the employees concerned. As a result of the spin-offs:
1. Each of the companies are run by, supervised and controlled by
different management teams including separate human
resource/personnel managers.
2. Each Company enforces its own administrative and operational rules
and policies and are not dependent on each other in their operations.
3. Each entity maintains separate financial statements and are audited
separately from each other.[20]
Indubitably, therefore, Magnolia and SMFI became distinct entities with separate
juridical personalities. Thus, they can not belong to a single bargaining unit as held in
the case of Diatagon Labor Federation Local 110 of the ULGWP v. Ople.[21] We
elucidate:
The fact that their businesses are related and that the 236
employees of Georgia Pacific International Corporation were
originally employees of Lianga Bay Logging Co., Inc. is not a
justification for disregarding their separate personalities. Hence, the
236 employees, who are now attached to Georgia Pacific
International Corporation, should not be allowed to vote in the
certification election at the Lianga Bay Logging Co., Inc. They should
vote at a separate certification election to determine the collective
bargaining representative of the employees of Georgia Pacific
International Corporation.
Petitioner-unions attempt to include the employees of Magnolia and SMFI in the
SMC bargaining unit so as to have a bigger mass base of employees has, therefore,
no more valid ground.
Moreover, in determining an appropriate bargaining unit, the test of grouping is
mutuality or commonality of interests. The employees sought to be represented by
the collective bargaining agent must have substantial mutual interests in terms of
employment and working conditions as evinced by the type of work they
performed.[22] Considering the spin-offs, the companies would consequently have their
respective and distinctive concerns in terms of the nature of work, wages, hours of
work and other conditions of employment. Interests of employees in the different
companies perforce differ. SMC is engaged in the business of beer
manufacturing. Magnolia is involved in the manufacturing and processing of dairy
products[23]while SMFI is involved in the production of feeds and the processing of
chicken.[24] The nature of their products and scales of business may require different
skills which must necessarily be commensurated by different compensation
packages. The different companies may have different volumes of work and different
working conditions. For such reason, the employees of the different companies see
the need to group themselves together and organize themselves into distinctive and
different groups. It would then be best to have separate bargaining units for the
different companies where the employees can bargain separately according to their
needs and according to their own working conditions.
We reiterate what we have explained in the case of University of the Philippines
v. Ferrer-Calleja[25] that:
[T]here are various factors which must be satisfied and considered
in determining the proper constituency of a bargaining unit. No one
particular factor is itself decisive of the determination. The weight
accorded to any particular factor varies in accordance with the
particular question or questions that may arise in a given case. What
are these factors? Rothenberg mentions a good number, but the
most pertinent to our case are: (1) will of the employees (Globe
Doctrine); (2) affinity and unit of employees interest, such as
substantial similarity of work and duties, or similarity of
compensation and working conditions; (3) prior collective bargaining
history; and (4) employment status, such as temporary, seasonal and
probationary employees x x.
xxx
An enlightening appraisal of the problem of defining an appropriate
bargaining unit is given in the 10th Annual Report of the National
Labor Relations Board wherein it is emphasized that the factors
which said board may consider and weigh in fixing appropriate units
are: the history, extent and type of organization of employees; the
history of their collective bargaining; the history, extent and type of
organization of employees in other plants of the same employer, or
other employers in the same industry; the skill wages, work, and
working conditions of the employees; the desires of the employees;
the eligibility of the employees for membership in the union or unions
involved; and the relationship between the unit or units proposed
and the employers organization, management, and operation x x.

x x In said report, it is likewise emphasized that the basic test in

determining the appropriate bargaining unit is that a unit, to be
appropriate, must affect a grouping of employees who have
substantial, mutual interests in wages, hours, working conditions
and other subjects of collective bargaining (citing Smith on Labor
Laws, 316-317; Francisco, Labor Laws, 162) x x.

Finally, we take note of the fact that the separate interests of the employees of
Magnolia and SMFI from those of SMC has been recognized in the case of Daniel
Borbon v. Laguesma.[26] We quote:

Even assuming in gratia argumenti that at the time of the election

they were regular employees of San Miguel, nonetheless, these
workers are no longer connected with San Miguel Corporation in any
manner because Magnolia has ceased to be a division of San Miguel
Corporation and has been formed into a separate corporation with a
personality of its own (p. 305, Rollo). This development, which was
brought to our attention by private respondents, necessarily renders
moot and academic any further discourse on the propriety of the
elections which petitioners impugn via the present recourse (p.
319, Rollo).

In view of all the foregoing, we do not find any grave abuse of discretion on the
part of the Secretary of Labor in rendering the assailed Order.
WHEREFORE, the petition is DISMISSED for lack of merit. The Temporary
Restraining Order issued on March 29, 1995 is lifted.
 DIVINE WORD UNIVERSITY OF TACLOBAN, Petitioner, v.
SECRETARY OF LABOR AND EMPLOYMENT and DIVINE WORD
UNIVERSITY EMPLOYEES UNION-ALU, Respondents.
Generosa R. Jacinto for Petitioner.
Joji L. Barrios for Private Respondent.
DECISION
ROMERO, J.:
Assailed in this petition for certiorari for being violative of the
"constitutional right of employees to self-organization which includes the
right to form, join or assist labor organizations of their own choosing for
purposes of collective bargaining," 1 are the Orders of May 23, 1989 and
January 17, 1990 issued by then Secretary of Labor and Employment
Franklin H. Drilon and Acting Secretary of Labor and Employment Dionisio
D. de la Serna, respectively.chanrobles virtual lawlibrary
Culled from the records are the following facts which led to the filing of the
instant petition:chanrob1es virtual 1aw library
On September 6, 1984, Med-Arbiter Bienvenido C. Elorcha certified the
Divine Word University Employees Union (DWUEU) as the sole and
exclusive bargaining agent of the Divine Word University (University for
brevity). On March 7, 1985, DWUEU submitted its collective bargaining
proposals. On March 26, 1985, the University replied and requested a
preliminary conference to be held on May 28, 1985. However, two days
before the scheduled conference or on May 26, 1985, DWUEU’s resigned
vice-president Mr. Brigido Urminita (or Urmeneta) wrote a letter addressed
to the University unilaterally withdrawing the CBA proposals.
Consequently, the preliminary conference was cancelled. 2
After almost three years, or on March 11, 1988, DWUEU, which had by
then affiliated with the Associated Labor Union, 3 requested a conference
with the University for the purpose of continuing the collective bargaining
negotiations. 4 Not having heard from the University, DWUEU-ALU sent a
follow-up letter on March 23, 1988 reiterating its request for a conference
and warning the University against committing acts of interference through
its various meetings with both the academic and non-academic employees
regarding their union affiliation and activities. Despite the letter, the
University persisted in maintaining silence.
On April 25, 1988, DWUEU-ALU filed with the National Conciliation and
Mediation Board of the Department of Labor and Employment a notice of
strike on the grounds of bargaining deadlock and unfair labor practice acts,
specifically, refusal to bargain, discrimination and coercion on (sic)
employees. 5 The conferences which were held after the filing of the notice
of strike led to the conclusion of an agreement between the University and
DWUEU-ALU on May 10, 1888 with the following terms:chanrobles virtual
lawlibrary
"1. Union will submit their (sic) CBA proposals on Friday, May 13, 1988 for
whatever action management will take.
2. Union and management agrees (sic) to sit down and determine (sic) the
number of employees that will represent their bargaining unit.
3. Conciliation proceedings is (sic) temporarily suspended until the parties
inform this office of further development.
4. The issues of discrimination: re Ms. Colinayo and Ms. Cinco Flores is
settled.
5. Issue (sic) on coercion and refusal to bargain shall be subject of
continuing dialogue.
6. Atty. Jacinto shall be given 10 days notice in the next conciliation
meeting." 6
However, it turned out that an hour before the May 10, 1988 agreement
was concluded, the University had filed a petition for certification election
with the Region VIII office of the Department of Labor and Employment. 7
On the other hand, on May 19, 1988, DWUEU-ALU, consonant with the
agreement, submitted its collective bargaining proposals. These were
ignored by the University. Thereafter, through the National Conciliation
and Mediation Board (NCMB) of Region VIII, marathon conciliation
conferences were conducted but to no avail. Hence, on August 25, 1988,
then Secretary of Labor Franklin M. Drilon, exercising his powers under
Art. 263(g) of the Labor Code, issued an Order assuming jurisdiction over
the labor dispute and directing all striking workers to report back to work
within twenty-four (24) hours and the management to accept them back
under the same terms and conditions prevailing prior to the work
stoppage. The Secretary also designated the NCMB to hear the case and to
submit its report thereon. 8
On the same day, Med-Arbiter Rodolfo S. Milado, acting on the University’s
petition for certification election, issued an Order directing the conduct of a
certification election to be participated in by DWUEU-ALU and "no union,"
after he found the petition to be "well-supported in fact and in law." 9
Said Order prompted the DWUEU-ALU to file with the Secretary of Labor
an urgent motion seeking to enjoin Milado from further acting on the
matter of the certification election. On September 20, 1988, the Labor
Secretary granted said motion and directed Milado to hold in abeyance any
and all certification election proceedings at the University pending the
resolution of the labor dispute. 10 The Labor Secretary’s Order, predicated
on his extraordinary powers under Art. 263 (g) of the Labor Code,
conformed with this Court s Resolution of October 29, 1987 in the Bulletin
Today cases (G.R. Nos. 79276 and 79883) where the issue of strong
disagreement among the parties on the question of representation was
deemed subsumed in the labor dispute certified for compulsory arbitration.
The Secretary added:jgc:chanrobles.com.ph
"Underscoring the necessity to conform with this settled doctrine is the
fact that the dispute over which this Office assumed jurisdiction arose from
the alleged continued refusal by the University to negotiate a CBA with the
Union despite the latter’s certification as exclusive bargaining agent in
1984. Necessarily related thereto is the representativity issue raised by
the University in its certification election petition. The resolution of these
issues in one proceeding is, in the words of the Supreme Court, ‘meet and
proper in view of the very special circumstances obtaining in this case, and
will prevent split jurisdiction and that multiplicity of proceedings which the
law abhors’ (24 December 1987 [should be December 17, 1987] resolution
of the Supreme Court in the Bulletin Today cases, supra).chanrobles
virtual lawlibrary
Moreover, to allow a certification election to proceed at this point in time
might further rupture the already strained labor-management relations
pervading at the University. The assumption order issued by this Office
merely served as a temporary bond to hold together such a fragile
relationship. More importantly, the projected election hastily decreed
would preempt the proper resolution of the issues raised and pursued so
zealously by the employees that prompted them to stage their strike." 11
The NCMB of Region VIII conducted hearings on the case from October 17-
18, 1988. On October 26, 1988, the Divine Word University Independent
Faculty and Employees Union (DWUIFEU), which was registered earlier
that day, filed a motion for intervention alleging that it had "at least 20%
of the rank and file employees" of the University. 12
Exercising once again his extraordinary powers under Art. 263(g) of the
Labor Code, the Secretary consolidated "the entire labor dispute including
all incidents arising therefrom, or necessarily related thereto" in his Order
of May 23, 1989 13 and the following cases were "subsumed or
consolidated to the labor dispute" : the petition for certification election
docketed as MED-ARB-Case No. 5-04-88, the DWUEU’s complaint
docketed as NLRC Case No. 8-0321-88, and the University’s complaint
docketed as NLRC Case No. 8-0323-88. Thus, in said Order of May 23,
1989, the Secretary of Labor resolved these issues:" (1) whether there
was refusal to bargain and an impasse in bargaining; (2) whether the
complaints for unfair labor practices against each other filed by both
parties, including the legality of the strike with the NLRC, which later on
was subsumed by the assumption Order, are with merits; and, (3)
whether or not the certification election can be passed upon by this
Office."cralaw virtua1aw library
On the first issue, the Secretary of Labor said:jgc:chanrobles.com.ph
"It is a matter of record that when the Union filed its Notice of Strike (Exh.
A) two of the issues it raised were bargaining deadlock and refusal to
bargain. It is also worth mentioning that the CBA proposals by the Union
were submitted on March 7, 1985 (Exh. 9) after Med-Arbiter Bienvenido
Elorcha issued a certification election Order dated September 6, 1984
(Exh. 4). An examination of the CBA proposals submitted by the Union of
the University showed there was (sic) some negotiations that has (sic)
taken place as indicated on the handwritten notations made in the CBA
proposal (Exh. F). The said proposals include among others, union scope,
union recognition, union security, union rights, job security, practices and
privileges, terms and conditions of work, leave of absence, hours of work,
compensation salary and wages, workers’ rights and safety, workers’
education, retirement longevity pay, strike and lockouts and grievance
machinery.
The said CBA proposals were indorsed by DWU President to Atty. Generosa
R. Jacinto, Divine Word University legal counsel together with a copy of
the Union CBA proposals. The submission of the CBA proposals and the
reply letter of the DWU counsel, dated March 26, 1985 to the Union
indicated that the CBA negotiations process was set into motion. DWU’s
counsel even suggested that the preliminary conference between the union
and the university be scheduled on 28 May 1985 at 2:30 P.M. which
unfortunately did not take place due to the alleged withdrawal of the CBA
proposals.
Undeniably, the Union and the DWU have not been able to conclude a CBA
since its certification on 6 September 1984 by then Med-Arbiter Bienvenido
Elorcha. But the non-conclusion of a CBA within one year, as in this case,
does not automatically authorize the holding of a certification election
when it appears that a bargaining deadlock issue has been submitted to
conciliation by the certified bargaining agent. The records show that the
Notice of Strike was filed by the Union on 25 April 1988, citing bargaining
deadlock as one of the grounds (Annex ‘1’), while the Petition for
Certification Election was filed by the DWU on 10 May 1988. The filing of
the notice of strike was precipitated by the University’s act of not replying
to the Union’s letters of March 11 and March 23, 1988.
This being the case, Section 3, Rule V, Book V of the Rules Implementing
the Labor Code applies and we quote:chanrobles.com:cralaw:red
‘Sec. 3. When to file. In the absence of a collective bargaining agreement
submitted in accordance with Article 231 of the Code, a petition for
certification election may be filed at any time. However, no certification
election may be held within one year from the date of issuance of
declaration of a final certification election result. Neither may a
representation question be entertained it (sic) before the filing of a petition
for certification election, a bargaining deadlock to which an incumbent or
certified bargaining agent is a party has been submitted to conciliation or
arbitration or had become the subject of a valid notice of strike or lockout.’
Clearly, a bargaining deadlock exists and as a matter of fact this is being
conciliated by the National Conciliation and Mediation Board at the time
the University filed its Petition for Certification Election on 10 May 1988. In
fact the deadlock remained unresolved and was in fact mutually agreed
upon to be conciliated further by the NCMB as per items 1 and 5 of the
‘Agreement’ (Exhibit ‘L’).
The aforequoted rule clearly barred the Med-Arbiter from further
entertaining the petition for certification election. Furthermore, the various
communications sent to the University by the Union prior to the filing of
the notice of strike was enough opportunity for the former to raise the
issue of representation if it really casts doubt to the majority status of the
Union. More importantly, if DWU indeed doubted the status of the union,
how come it entered into an agreement with the latter on May 10, 1988.
Apparently, the move to file the petition on the same day was an
afterthought on the part of the University which this Office considers as
fatal." 14
The same Order dismissed not only the case filed by DWUEU-ALU for
unfair labor practice on the ground of the union’s failure to prove the
commission of the unfair labor practice acts specifically complained of
(NLRC Case No. 8-0321-88) but also the complaint filed by the University
for unfair labor practices and illegal strike for "obvious lack of merit
brought about by its utter failure to submit evidence" (NLRC Case No. 8-
0323-88).
Citing the Bulletin Today cases, the said Order pronounced as untenable
the University s claim that the assumption Order earlier issued by the
Office of the Secretary of Labor merely held in abeyance the holding of a
certification election and that the representation issue was not deemed
consolidated by virtue of the said assumption Order. Accordingly, the
Order has this dispositive portion:jgc:chanrobles.com.ph
"WHEREFORE, ALL THE FOREGOING PREMISES CONSIDERED, the Divine
Word University of Tacloban and the Divine Word University Employees
Union are hereby directed to enter into a collective bargaining agreement
by adopting the Union’s CBA proposals sent to the DWU President on 19
May 1988 (Exhibit ‘6’). DWU is hereby warned that any unwarranted delay
in the execution of the collective bargaining agreement will be construed
as an unfair labor practice act. Moreover, the petition for certification
election filed by the University is hereby dismissed for lack of merit and
the Order of Med-Arbiter Rodolfo Milado set aside. Likewise, NLRC CASES
Nos. 8-0321-88 and 8-0323 filed by the Union and the DWU, respectively,
are hereby dismissed for lack of merit.
SO ORDERED." 15
The University filed a motion for the reconsideration of said Order. It was
opposed by the DWUEU-ALU. However, since on May 5, 1989 the DWUEU-
ALU had filed a second notice of strike charging the University with
violation of the return-to-work order of the Secretary of Labor and unfair
labor practices such as dismissal of union officers, coercion of employees
and illegal suspension, 16 the Office of the Secretary called for a series of
conciliation and mediation conferences between the parties. At the July 5,
1989 conference, the University agreed to submit its proposals on how to
settle amicably the labor dispute on or before July 17, 1989.
On said date, however, the University failed to appear. Instead, its
representative phoned in a request for the resetting of the conference
purportedly because its Board of Directors had failed to muster a quorum.
Hence, after so informing ALU’s Eastern Visayas Vice-President, the
conference was rescheduled for July 19, 1989. The University once again
failed to appear.chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph
In view of the University’s intransigence, the DWUEU-ALU pursued its
second notice of strike on November 24, 1989. Four days later, the
University filed with the Office of the Secretary of Labor a motion praying
that said Office assume jurisdiction over the dispute or certify the same to
the NLRC for compulsory arbitration on the ground that the strike affected
not only the University but also its other academic and non-academic
employees, the students and their parents. On December 4, 1989, the
Office of the Secretary of Labor received a Resolution passed by the
students of the University urging said Office’s assumption of jurisdiction
over the labor dispute and the earliest resolution of the case.
Consequently, on December 29, 1989, Secretary Drilon issued an Order
reiterating the August 28, 1988 Order which assumed jurisdiction over the
labor dispute. He ordered all striking workers to return to work within 24
hours and the University to accept them back under the same terms and
conditions of employment; deemed the issues raised in the May 5, 1989
notice of strike as "subsumed in this case" ; ordered the Director of
Regional Office No. VIII to hear the issues raised in said notice of strike
and to submit his findings and recommendations within ten days from
submission of the case by the parties, and enjoined the parties to cease
and desist from any act that may "aggravate the employer-employee
relationship."cralaw virtua1aw library
On January 17, 1990, Acting Secretary of Labor Dionisio L. de la Serna,
"dismissed" for lack of merit the University’s motion for reconsideration
and affirmed the Order of May 23, 1989. He noted the fact that the March
7, 1985 collective bargaining proposals of the DWUEU had not been validly
withdrawn as the union’s Vice-President had resigned and the withdrawal
was signed only by three of the eight members of the Executive Board of
said union. Granting that the withdrawal was valid, the Acting Secretary
believed that it did not "exculpate the University from the duty to bargain
with the Union" because the collective bargaining processes had been "set
in motion from the time the CBA proposals was (sic) received by the
University until the impasse took place on account of its failure to reply to
the Union’s letters pursuing its CBA Proposals dated March 11 and 23,
1988."cralaw virtua1aw library
On the University’s assertion that no negotiations took place insofar as the
March 7, 1985 collective bargaining proposals are concerned, the Acting
Secretary found that:jgc:chanrobles.com.ph
". . . The records indicate otherwise Conciliation meetings were conducted
precisely to discuss the CBA proposals the Union submitted to the
University on March 7, 1985. As a matter of fact, the University admitted
the existence of the deadlock when a provision was incorporated in the
agreement it signed on May 10, 1988 with the Union which
reads:chanrob1es virtual 1aw library
‘a. That on the matter of Bargaining Deadlock —
1. Union will submit their (renewed) CBA proposals on Friday May 13,
1988 for whatever action management will take.
2. Union and Management agree to sit down and determine the number of
employees that will represent (constitute) their bargaining unit;
x x x’
On account of the deadlock regarding the March 7, 1985 CBA proposals, it
was agreed that the Union submit a renewed CBA proposal which it did on
May 19, 1988. The records indicate that no response was made by the
University. The uncooperative posture of the University to respond and
continue with the negotiations could very well be explained when one (1)
hour prior to the start of the conciliation on May 10, 1988, the University
filed a Petition for Certification with (sic) Regional Office. The surreptitious
filing of the petition and at the same time cunningly entering into an
agreement which required the Union to submit a renewed CBA proposal, is
patently negotiating in bad faith. The University should have candidly and
timely raised the issue of representation, if it believed that such issue was
valid, not by entering into an agreement. The May 10, 1988 Agreement
only served to falsely heighten the expectations of the Union and this
Office that a mutually acceptable settlement of the dispute was in the
offing. This Office cannot tolerate such actuations by the University." 17
The Acting Secretary then concluded that for reneging on the agreement
of May 10, 1988 and for its "reluctance and subscription to legal delay,"
the University should be "declared in default." He also maintained that
since under the circumstances the University cannot claim deprivation of
due process, the Office of the Secretary of Labor may rightfully impose the
Union’s May 19, 1988 collective bargaining agreement proposals motu
proprio. On the University’s contention that the motion for intervention of
the DWU-IFEU was not resolved, the Acting Secretary ruled that said
motion was in effect denied when the petition for certification election filed
by the University was dismissed in the Order of May 23, 1989.chanrobles
virtual lawlibrary
Hence, the University had recourse to instant petition.
In its petition for certiorari and prohibition with preliminary injunction filed
on February 9, 1990, the University raises as grounds therefor the
following:jgc:chanrobles.com.ph
"A. Respondent Secretary committed grave and patent abuse of discretion
amounting to lack of jurisdiction in issuing his order dated 17 January
1990 finally denying petitioner’s motion for reconsideration in the face of
the order dated 29 December 1989 and subsequent acts of DOLE official
subsuming the second notice of strike with the first notice of strike.
B. In the absence of a certified CBA and there having been no certification
election held in petitioner unit for more than five (5) years, a certification
election is mandatory.
C. Respondent Secretary committed grave and patent abuse of discretion
in issuing his orders dated 23 May 1989 and 17 January 1990 disregarding
evidence on record, provisions of law and established jurisprudence.
D. Petitioner was denied due process." 18
Citing the dispositive portion of the December 29, 1989 Order of the
Secretary of Labor which states that the issues raised in the May 5, 1989
notice of strike "are ordered subsumed in this case" and elaborating on the
meaning of the word "subsume," i.e., "to include within a larger class,
group, order, etc.," 19 the petitioner University argues that the Secretary
of Labor "cannot resolve petitioner’s and (intervenor) DWU-IFEU’s motions
for reconsideration (in the NS. 1) of the Order dated 23 May 1989 until the
proceedings in the subsumed NS. 2 are terminated." It opines that since
the Regional Director is an extension of the Secretary of Labor, the latter
should have waited for the recommendation of the former on the issues in
notices of strike nos. 1 and 2 before the he issued the Order of January
17, 1990.
We agree with the Acting Secretary of Labor’s observation that the action
for intervention had in effect been denied by the dismissal of the petition
for certification election in the May 23, 1989 Order. The sub silencio
treatment of the motion for intervention in said Order does not mean that
the motion was overlooked. It only means, as shown by the findings of
facts in the same Order, that there was no necessity for the holding of a
certification election wherein the DWU-IFEU could participate. In this
regard, petitioner’s undue interest in the resolution of the DWU-IFEU’s
motion for intervention becomes significant since a certification election is
the sole concern of employees except where the employer itself has to file
a petition for certification election. But once an employer has filed said
petition, as the petitioner did in this case, its active role ceases and it
becomes a mere bystander. Any uncalled-for concern on the part of the
employer may give rise to the suspicion that it is batting for a company
union. 20
Petitioner’s contention that the Acting Secretary of Labor should have
deferred the issuance of the Order of January 17, 1990 until after his
receipt of the Regional Director’s recommendation on the notices of strike
is, under the circumstances, untenable. Ideally, a single decision or order
should settle all controversies resulting from a labor dispute. This is in
consonance with the principle of avoiding multiplicity of suits. However,
the exigencies of a case may also demand that some matters be threshed
out and resolved ahead of the others. Any contrary interpretation of the
Secretary of Labor’s powers under Art. 263(g) of the Labor Code on this
matter would only result in confusion and delay in the resolution of the
manageable aspects of the labor dispute.chanrobles lawlibrary : rednad
In this case, resolution of the motion for reconsideration at the earliest
possible time was urgently needed to set at rest the issues regarding the
first notice of strike, the certification election and the unfair labor practice
cases filed by the University and the DWUEU-ALU. The nature of the
business of the University demanded immediate and effective action on
the part of the respondent public officials. Otherwise, not only the
contending parties in the dispute would be adversely affected but more
importantly, the studentry and their parents. It should be emphasized that
on January 17, 1990, the second notice of strike could not have been
resolved as yet considering that at that time, Regional Director Teddy S.
Cabeltes was still conducting the conference between the parties in
pursuance of the directive in the Order of December 19, 1989. The
Secretary, or for that matter, the Acting Secretary, could not have
intended the efforts of the Regional Director to be inutile or fruitless. Thus,
when he set aside the issues raised in the second notice of strike, the
Acting Secretary was acting in accordance with the exigencies of the
circumstances of the case. Hardly can it be said to be an abuse of his
discretion.
On the issue of whether or not a certification election should have been
ordered by the Secretary of Labor, pertinent are the following respective
provisions of the Labor Code and Rule V, Book V of the Implementing
Rules and Regulations of the same Code:jgc:chanrobles.com.ph
"ART. 258. When an employer may file petition. — When requested to
bargain collectively, an employer may petition the Bureau for an election.
If there is no existing certified collective bargaining agreement in the unit,
the Bureau shall, after hearing, order a certification election.
All certification cases shall be decided within twenty (20) working days.
The Bureau shall conduct a certification election within twenty (20) days in
accordance with the rules and regulations prescribed by the Secretary of
Labor.
Sec. 3. When to file. — In the absence of a collective bargaining
agreement duly registered in accordance with Article 231 of the Code, a
petition for certification election may be filed at any time. However, no
certification election may be held within one year from the date of
issuance of a final certification election result. Neither may a
representation question be entertained if, before the filing of a petition for
certification election, a bargaining deadlock to which an incumbent or
certified bargaining agent is a party had been submitted to conciliation or
arbitration or had become the subject of valid notice of strike or lockout.
(Emphasis supplied)
If a collective bargaining agreement has been duly registered in
accordance with Article 231 of the Code, a petition for certification election
or a motion for intervention can only be entertained within sixty (60) days
prior to the expiry date of such agreement."cralaw virtua1aw library
These provisions make it plain that in the absence of a collective
bargaining agreement, an employer who is requested to bargain
collectively may file a petition for certification election any time except
upon a clear showing that one of these two instances exists: (a) the
petition is filed within one year from the date of issuance of a final
certification election result or (b) when a bargaining deadlock had been
submitted to conciliation or arbitration or had become the subject of a
valid notice of strike or lockout.
While there is no question that the petition for certification election was
filed by the herein petitioner after almost four years from the time of the
certification election and, therefore, there is no question as to the
timeliness of the petition, the problem appears to lie in the fact that the
Secretary of Labor had found that a bargaining deadlock exists.chanrobles
lawlibrary : rednad
A "deadlock" is defined as the "counteraction of things producing entire
stoppage: a state of inaction or of neutralization caused by the opposition
of persons or of factions (as in government or a voting body): standstill."
21 There is a deadlock when there is a "complete blocking or stoppage
resulting from the action of equal and opposed forces; as, the deadlock of
a jury or legislature." 22 The word is synonymous with the word impasse
23 which, within the meaning of the American federal labor laws,
"presupposes reasonable effort at good faith bargaining which, despite
noble intentions, does not conclude in agreement between the parties."
24
A thorough study of the records reveals that there was no "reasonable
effort at good faith bargaining" specially on the part of the University. Its
indifferent attitude towards collective bargaining inevitably resulted in the
failure of the parties to arrive at an agreement. As it was evident that
unilateral moves were being undertaken only by the DWUEU-ALU, there
was no "counteraction" of forces or an impasse to speak of. While
collective bargaining should be initiated by the union, there is a
corresponding responsibility on the part of the employer to respond in
some manner to such acts. This is clear from the provisions of the Labor
Code Art. 250(a) of which states:jgc:chanrobles.com.ph
"ART. 250. Procedure in collective bargaining. — The following procedures
shall be observed in collective bargaining:chanrob1es virtual 1aw library
(a) When a party desires to negotiate an agreement, it shall serve a
written notice upon the other party with a statement of its proposals. The
other party shall make a reply thereto not later than ten (10) calendar
days from receipt of such notice.
(b) Should differences arise on the basis of such notice and reply, either
party may request for a conference which shall begin not later than ten
(10) calendar days from the date of request.
(c) If the dispute is not settled, the Board shall intervene upon request of
either or both parties or at its own initiative and immediately call the
parties to conciliation meetings. The Board shall have the power to issue
subpoenas requiring the attendance of the parties to such meetings. It
shall be the duty of the parties to participate fully and promptly in the
conciliation meetings the Board may call;
(d) During the conciliation proceedings in the Board, the parties are
prohibited from doing any act which may disrupt or impede the early
settlement of the disputes; andchanrobles.com.ph : virtual law library
(e) The Board shall exert all efforts to settle disputes amicably and
encourage the parties to submit their case to a voluntary arbitrator."cralaw
virtua1aw library
Considering the procedure outlined above, the Court cannot help but
notice that the DWUEU was not entirely blameless in the matter of the
delay in the bargaining process. While it is true that as early as March 7,
1985, said union had submitted its collective bargaining proposals and
that, its subsequent withdrawal by the DWUEU Vice-President being
unauthorized and therefore ineffective, the same proposals could be
considered as subsisting, the fact remains that said union remained
passive for three years. The records do not show that during this three-
year period, it exerted any effort to pursue collective bargaining as a
means of attaining better terms of employment.
It was only after its affiliation with the ALU that the same union, through
the ALU Director for Operations, requested an "initial conference" for the
purpose of collective bargaining. 25 That the DWUEU abandoned its
collective bargaining proposals prior to its affiliation with ALU is further
confirmed by the fact that in the aforequoted May 10, 1988 agreement
with the University, said Union bound itself to submit a new set of
proposals on May 13, 1988. Under the circumstances, the agreement of
May 10, 1988 may as well be considered the written notice to bargain
referred to in the aforequoted Art. 250(a) of the Labor Code, which
thereby set into motion the machinery for collective bargaining, as in fact,
on May 19, 1988, DWUEU-ALU submitted its collective bargaining
proposals.
Be that as it may, the Court is not inclined to rule that there has been a
deadlock or an impasse in the collective bargaining process. As the Court
earlier observed, there has not been a "reasonable effort at good faith
bargaining" on the part of the University. While DWUEU-ALU was opening
all possible avenues for the conclusion of an agreement, the record is
replete with evidence on the University’s reluctance and thinly disguised
refusal to bargain with the duly certified bargaining agent, such that the
inescapable conclusion is that the University evidently had no intention of
bargaining with it. Thus, while the Court recognizes that technically, the
University has the right to file the petition for certification election as there
was no bargaining deadlock to speak of, to grant its prayer that the herein
assailed Orders be annulled would put an unjustified premium on bad faith
bargaining.
Bad faith on the part of the University is further exemplified by the fact
that an hour before the start of the May 10, 1988 conference, it
surreptitiously filed the petition for certification election. And yet during
said conference, it committed itself to "sit down" with the Union.
Obviously, the University tried to preempt the conference which would
have legally foreclosed its right to file the petition for certification election.
In so doing, the University failed to act in accordance with Art. 252 of the
Labor Code which defines the meaning of the duty to bargain collectively
as "the performance of a mutual obligation to meet and convene promptly
and expeditiously in good faith." Moreover, by filing the petition for
certification election while agreeing to confer with the DWUEU-ALU, the
University violated the mandate of Art. 19 of the Civil Code that" (e)very
person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and
good faith."cralaw virtua1aw library
Moreover, the University’s unscrupulous attitude towards the DWUEU-ALU
is also betrayed by its belated questioning of the status of the said union.
The communications between them afforded the University ample
opportunity to raise the issue of representation if indeed it was doubtful of
the DWUEU-ALU’s status as a majority union, but it failed to do so. On the
other hand, in the agreement of May 10, 1988, the University even agreed
"to sit down and determine the number of employees that will represent
their bargaining unit." This clearly indicates that the University recognized
the DWUEU-ALU as the bargaining representative of the employees and is,
therefore, estopped from questioning the majority status of the said
union.chanrobles.com.ph : virtual law library

Hence, petitioner’s contention that the DWUEU-ALU’s proposals may not

be unilaterally imposed on it on the ground that a collective bargaining
agreement is a contract wherein the consent of both parties is
indispensable is devoid of merit. A similar argument had already been
disregarded in the case of Kiok Loy v. NLRC, 26 where we upheld the order
of the NLRC declaring the union’s draft CBA proposal as the collective
agreement which should govern the relationship between the parties. Kiok
Loy v. NLRC is applicable in the instant case considering that the facts
therein have also been indubitably established in this case. These factors
are: (a) the union is the duly certified bargaining agent; (b) it made a
definite request to bargain and submitted its collective bargaining
proposals, and (c) the University made no counter proposal whatsoever.
As we said in Kiok Loy," [a] company’s refusal to make counter proposal if
considered in relation to the entire bargaining process, may indicate bad
faith and this is especially true where the Union’s request for a counter
proposal is left unanswered." 27 Moreover, the Court added in the same
case that "it is not obligatory upon either side of a labor controversy to
precipitately accept or agree to the proposals of the other. But an erring
party should not be tolerated and allowed with impunity to resort to
schemes feigning negotiations by going through empty gestures." 28

That being the case, the petitioner may not validly assert that its consent
should be a primordial consideration in the bargaining process. By its acts,
no less than its inaction which bespeak its insincerity, it has forfeited
whatever rights it could have asserted as an employer. We, therefore, find
it superfluous to discuss the two other contentions in its petition.

WHEREFORE, the instant petition is hereby DISMISSED for lack of merit.

This decision is immediately executory. Costs against the petitioner.
NESTLÉ PHILIPPINES, INC., petitioner,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION and UNION OF FILIPRO
EMPLOYEES,respondents.
Siguion Reyna, Montecillo & Ongsiako for petitioner.
Banzuela, Flores, Miralles, Raneses, Sy, Taquio & Associates for private respondent.
GRIÑO-AQUINO, J.:
Nestlé Philippines, Inc., by this petition for certiorari, seeks to annul, on the ground of
grave abuse of discretion, the decision dated August 8, 1989 of the National Labor
Relations Commission (NLRC), Second Division, in Cert. Case No. 0522 entitled, "In
Re: Labor Dispute of Nestlé Philippines, Inc." insofar as it modified the petitioner's
existing non-contributory Retirement Plan.
Four (4) collective bargaining agreements separately covering the petitioner's
employees in its:
1. Alabang/Cabuyao factories;
2. Makati Administration Office. (Both Alabang/Cabuyao factories and Makati
office were represented by the respondent, Union of Filipro Employees
[UFE]);
3. Cagayan de Oro Factory represented by WATU; and
4. Cebu/Davao Sales Offices represented by the Trade Union of the
Philippines and Allied Services (TUPAS),
all expired on June 30, 1987.
Thereafter, UFE was certified as the sole and exclusive bargaining agent for all
regular rank-and-file employees at the petitioner's Cagayan de Oro factory, as well as
its Cebu/Davao Sales Office.
In August, 1987, while the parties, were negotiating, the employees at Cabuyao
resorted to a "slowdown" and walk-outs prompting the petitioner to shut down the
factory. Marathon collective bargaining negotiations between the parties ensued.
On September 2, 1987, the UFE declared a bargaining deadlock. On September 8,
1987, the Secretary of Labor assumed jurisdiction and issued a return to work order.
In spite of that order, the union struck, without notice, at the Alabang/Cabuyao
factory, the Makati office and Cagayan de Oro factory on September 11, 1987 up to
December 8, 1987. The company retaliated by dismissing the union officers and
members of the negotiating panel who participated in the illegal strike. The NLRC
affirmed the dismissals on November 2, 1988.
On January 26, 1988, UFE filed a notice of strike on the same ground of CBA
deadlock and unfair labor practices. However, on March 30, 1988, the company was
able to conclude a CBA with the union at the Cebu/Davao Sales Office, and on
August 5, 1988, with the Cagayan de Oro factory workers. The union assailed the
validity of those agreements and filed a case of unfair labor practice against the
company on November 16, 1988.
After conciliation efforts of the National Conciliation and Mediation Board (NCMB)
yielded negative results, the dispute was certified to the NLRC by the Secretary of
Labor on October 28, 1988.
After the parties had filed their pleadings, the NLRC issued a resolution on June 5,
1989, whose pertinent disposition regarding the union's demand for liberalization of
the company's retirement plan for its workers, provides as follows:
xxx xxx xxx
7. Retirement Plan
The company shall continue implementing its retirement plan modified as
follows:
a) for fifteen years of service or less — an amount equal to 100% of the
employee's monthly salary for every year of service;
b) more than 15 but less than 20 years — 125% of the employee's monthly
salary for every year of service;
c) 20 years or more — 150% of the employee's monthly salary for every year
of service. (pp. 58-59, Rollo.)
Both parties separately moved for reconsideration of the decision.
On August 8, 1989, the NLRC issued a resolution denying the motions for
reconsideration. With regard to the Retirement Plan, the NLRC held:
Anent management's objection to the modification of its Retirement Plan, We
find no cogent reason to alter our previous decision on this matter.
While it is not disputed that the plan is non-contributory on the part of the
workers, tills does not automatically remove it from the ambit of collective
bargaining negotiations. On the contrary, the plan is specifically mentioned
in the previous bargaining agreements (Exhibits "R-1" and "R-4"), thereby
 integrating or incorporating the provisions thereof to the agreement. By
reason of its incorporation, the plan assumes a consensual character which
cannot be terminated or modified at will by either party. Consequently, it
becomes part and parcel of CBA negotiations.
However, We need to clarify Our resolution on this issue. When we
increased the emoluments in the plan, the conditions for the availment of the
benefits set forth therein remain the same. (p. 32, Rollo.)
The petitioner's contention, that employees have no vested or demandable right to a
non-contributory retirement plan, has no merit for employees do have a vested and
demandable right over existing benefits voluntarily granted to them by their employer.
The latter may not unilaterally withdraw, eliminate or diminish such benefits (Art. 100,
Labor Code; Tiangco, et al. vs. Hon. Leogardo, et al., 122 SCRA 267).
This Court ruled similarly in Republic Cement Corporation vs. Honorable Panel of
Arbitrators, G.R. No. 89766, Feb. 19, 1990:

On December 14, 1989, the petitioner filed this petition for certiorari, alleging that
since its retirement plan is non-contributory, it (Nestlé) has the sole and exclusive
prerogative to define the terms of the plan "because the workers have no vested and
demandable rights thereunder, the grant thereof being not a contractual obligation but
merely gratuitous. At most the company can only be directed to maintain the same
but not to change its terms. It should be left to the discretion of the company on how
to improve or mollify the same" (p. 10, Rollo).
The Court agrees with the NLRC's finding that the Retirement Plan was "a collective
bargaining issue right from the start" (p. 109, Rollo) for the improvement of the
existing Retirement Plan was one of the original CBA proposals submitted by the UFE
on May 8, 1987 to Arthur Gilmour, president of Nestlé Philippines. The union's original
proposal was to modify the existing plan by including a provision for early retirement.
The company did not question the validity of that proposal as a collective bargaining
issue but merely offered to maintain the existing non-contributory retirement plan
which it believed to be still adequate for the needs of its employees, and competitive
with those existing in the industry. The union thereafter modified its proposal, but the
company was adamant. Consequently, the impassé on the retirement plan become
one of the issues certified to the NLRC for compulsory arbitration.
The company's contention that its retirement plan is non-negotiable, is not well-
taken.1âwphi1 The NLRC correctly observed that the inclusion of the retirement plan
in the collective bargaining agreement as part of the package of economic benefits
extended by the company to its employees to provide them a measure of financial
security after they shall have ceased to be employed in the company, reward their
loyalty, boost their morale and efficiency and promote industrial peace, gives "a
consensual character" to the plan so that it may not be terminated or modified at will
by either party (p. 32, Rollo).
. . . Petitioner's claim that retirement benefits, being noncontributory in
nature, are not proper subjects for voluntary arbitration is devoid of merit.
The expired CBA previously entered into by the parties included provisions
for the implementation of a "Retirement and Separation Plan." it is only to be
expected that the parties would seek a renewal or an improvement of said
item in the new CBA. In fact, the parties themselves expressly included
retirement benefits among the economic issues to be resolved by voluntary
arbitration. Petitioner is estopped from now contesting the validity of the
increased award granted by the arbitrators. (p. 145, Rollo.)
The NLRC's resolution of the bargaining deadlock between Nestlé and its employees
is neither arbitrary, capricious, nor whimsical. The benefits and concessions given to
the employees were based on the NLRC's evaluation of the union's demands, the
evidence adduced by the parties, the financial capacity of the Company to grant the
demands, its longterm viability, the economic conditions prevailing in the country as
they affect the purchasing power of the employees as well as its concommitant effect
on the other factors of production, and the recent trends in the industry to which the
Company belongs (p. 57, Rollo). Its decision is not vitiated by abuse of discretion.
WHEREFORE, the petition for certiorari is dismissed, with costs against the
petitioner.

The fact that the retirement plan is non-contributory, i.e., that the employees
contribute nothing to the operation of the plan, does not make it a non-issue in the
CBA negotiations. As a matter of fact, almost all of the benefits that the petitioner has
granted to its employees under the CBA — salary increases, rice allowances, mid-
year bonuses, 13th and 14th month pay, seniority pay, medical and hospitalization
plans, health and dental services, vacation, sick & other leaves with pay — are non-
contributory benefits. Since the retirement plan has been an integral part of the CBA
since 1972, the Union's demand to increase the benefits due the employees under
said plan, is a valid CBA issue. The deadlock between the company and the union on
this issue was resolvable by the Secretary of Labor, or the NLRC, after the Secretary
had assumed jurisdiction over the labor dispute (Art. 263, subparagraph [i] of the
Labor Code).