G.R. No.

181531 July 31, 2009 NO UNION = 1

NATIONAL UNION OF WORKERS IN HOTELS, RESTAURANTS AND
ALLIED INDUSTRIES- MANILA PAVILION HOTEL
CHAPTER, Petitioner,
vs.
SECRETARY OF LABOR AND EMPLOYMENT, BUREAU OF LABOR
RELATIONS, HOLIDAY INN MANILA PAVILION HOTEL LABOR UNION
AND ACESITE PHILIPPINES HOTEL CORPORATION, Respondents.
DECISION
CARPIO MORALES, J.:
National Union of Workers in Hotels, Restaurants and Allied
Industries – Manila Pavilion Hotel Chapter (NUWHRAIN-MPHC),
herein petitioner, seeks the reversal of the Court of Appeals
November 8, 2007 Decision1 and of the Secretary of Labor and
Employment’s January 25, 2008 Resolution2 in OS-A-9-52-05 which
affirmed the Med-Arbiter’s Resolutions dated January 22, 20073 and
March 22, 2007.4
A certification election was conducted on June 16, 2006 among the
rank-and-file employees of respondent Holiday Inn Manila Pavilion
Hotel (the Hotel) with the following results:
EMPLOYEES IN VOTERS’ LIST = 353
TOTAL VOTES CAST = 346
NUWHRAIN-MPHC = 151
HIMPHLU = 169
SPOILED = 3
SEGREGATED = 22
In view of the significant number of segregated votes, contending
unions, petitioner, NUHWHRAIN-MPHC, and respondent Holiday Inn
Manila Pavillion Hotel Labor Union (HIMPHLU), referred the case
back to Med-Arbiter Ma. Simonette Calabocal to decide which
among those votes would be opened and tallied. Eleven (11) votes
were initially segregated because they were cast
by dismissed employees, albeit the legality of their dismissal was
still pending before the Court of Appeals. Six other votes were
segregated because the employees who cast them were already
occupying supervisory positions at the time of the election. Still five
other votes were segregated on the ground that they were cast
by probationary employees and, pursuant to the existing Collective
Bargaining Agreement (CBA), such employees cannot vote. It bears
noting early on, however, that the vote of one Jose Gatbonton
(Gatbonton), a probationary employee, was counted.
By Order of August 22, 2006, Med-Arbiter Calabocal ruled for the
opening of 17 out of the 22 segregated votes, specially those cast by
the 11 dismissed employees and those cast by the six supposedly
supervisory employees of the Hotel.
Petitioner, which garnered 151 votes, appealed to the Secretary of
Labor and Employment (SOLE), arguing that the votes of the
probationary employees should have been opened considering that
probationary employee Gatbonton’s vote was tallied. And petitioner
averred that respondent HIMPHLU, which garnered 169 votes,

1
should not be immediately certified as the bargaining agent, as the
opening of the 17 segregated ballots would push the number of
valid votes cast to 338 (151 + 169 + 1 + 17), hence, the 169 votes
which HIMPHLU garnered would be one vote short of the majority
which would then become 169.
By the assailed Resolution of January 22, 2007, the Secretary of
Labor and Employment (SOLE), through then Acting Secretary
Luzviminda Padilla, affirmed the Med-Arbiter’s Order. It held that
pursuant to Section 5, Rule IX of the Omnibus Rules Implementing
the Labor Code on exclusion and inclusion of voters in a certification
election, the probationary employees cannot vote, as at the time
the Med-Arbiter issued on August 9, 2005 the Order granting the
petition for the conduct of the certification election, the six
probationary employees were not yet hired, hence, they could not
vote.
The SOLE further held that, with respect to the votes cast by the 11
dismissed employees, they could be considered since their dismissal
was still pending appeal.
As to the votes cast by the six alleged supervisory employees, the
SOLE held that their votes should be counted since their promotion
took effect months after the issuance of the above-said August 9,
2005 Order of the Med-Arbiter, hence, they were still considered as
rank-and-file.
Respecting Gatbonton’s vote, the SOLE ruled that the same could be
the basis to include the votes of the other probationary employees,
as the records show that during the pre-election conferences, there
was no disagreement as to his inclusion in the voters’ list, and
neither was it timely challenged when he voted on election day,
hence, the Election Officer could not then segregate his vote.
2
The SOLE further ruled that even if the 17 votes of the dismissed
and supervisory employees were to be counted and presumed to be
in favor of petitioner, still, the same would not suffice to overturn
the 169 votes garnered by HIMPHLU.
In fine, the SOLE concluded that the certification of HIMPHLU as the
exclusive bargaining agent was proper.
Petitioner’s motion for reconsideration having been denied by the
SOLE by Resolution of March 22, 2007, it appealed to the Court of
Appeals.
By the assailed Decision promulgated on November 8, 2007, the
appellate court affirmed the ruling of the SOLE. It held that, contrary
to petitioner’s assertion, the ruling in Airtime Specialist, Inc. v.
Ferrer Calleja5 stating that in a certification election, all rank-and-file
employees in the appropriate bargaining unit, whether probationary
or permanent, are entitled to vote, is inapplicable to the case at bar.
For, the appellate court continued, the six probationary employees
were not yet employed by the Hotel at the time the August 9, 2005
Order granting the certification election was issued. It thus held that
Airtime Specialist applies only to situations wherein the
probationary employees were already employed as of the date of
filing of the petition for certification election.
Respecting Gatbonton’s vote, the appellate court upheld the SOLE’s
finding that since it was not properly challenged, its inclusion could
no longer be questioned, nor could it be made the basis to include
the votes of the six probationary employees.
The appellate court brushed aside petitioner’s contention that the
opening of the 17 segregated votes would materially affect the
results of the election as there would be the likelihood of a run-off
election in the event none of the contending unions receive a
majority of the valid votes cast. It held that the "majority"
contemplated in deciding which of the unions in a certification
election is the winner refers to the majority of valid votes cast, not
the simple majority of votes cast, hence, the SOLE was correct in
ruling that even if the 17 votes were in favor of petitioner, it would
still be insufficient to overturn the results of the certification
election.
Petitioner’s motion for reconsideration having been denied by
Resolution of January 25, 2008, the present recourse was filed.
since Gatbonton’s vote was counted, then the votes of the 6 other
probationary employees should likewise be included in the tally.
Petitioner goes on to posit that the word "order" in Section 5, Rule 9
of Department Order No. 40-03 reading "[A]ll employees who are
members of the appropriate bargaining unit sought to be
represented by the petitioner at the time of the issuance of
the order granting the conduct of certification election shall be
allowed to vote" refers to an order which has already become final
and executory, in this case the March 10, 2002 Order of the SOLE.

Petitioner’s contentions may be summarized as follows: Petitioner thus concludes that if March 10, 2006 is the reckoning
date for the determination of the eligibility of workers, then all the
1. Inclusion of Jose Gatbonton’s vote but excluding the vote of the
segregated votes cast by the probationary employees should be
six other probationary employees violated the principle of equal
opened and counted, they having already been working at the Hotel
protection and is not in accord with the ruling in Airtime Specialists,
on such date.
Inc. v. Ferrer-Calleja;
Respecting the certification of HIMPHLU as the exclusive bargaining
2. The time of reckoning for purposes of determining when the
agent, petitioner argues that the same was not proper for if the 17
probationary employees can be allowed to vote is not August 9,
votes would be counted as valid, then the total number of votes
2005 – the date of issuance by Med-Arbiter Calabocal of the Order
cast would have been 338, not 321, hence, the majority would be
granting the conduct of certification elections, but March 10, 2006 –
170; as such, the votes garnered by HIMPHLU is one vote short of
the date the SOLE Order affirmed the Med-Arbiter’s Order.
the majority for it to be certified as the exclusive bargaining agent.
3. Even if the votes of the six probationary employees were
The relevant issues for resolution then are first, whether employees
included, still, HIMPHLU could not be considered as having obtained
on probationary status at the time of the certification elections
a majority of the valid votes cast as the opening of the 17 ballots
should be allowed to vote, and second, whether HIMPHLU was able
would increase the number of valid votes from 321 to 338, hence,
to obtain the required majority for it to be certified as the exclusive
for HIMPHLU to be certified as the exclusive bargaining agent, it
bargaining agent.
should have garnered at least 170, not 169, votes.
On the first issue, the Court rules in the affirmative.
Petitioner justifies its not challenging Gatbonton’s vote because it
was precisely its position that probationary employees should be The inclusion of Gatbonton’s vote was proper not because it was
allowed to vote. It thus avers that justice and equity dictate that not questioned but because probationary employees have the right
to vote in a certification election. The votes of the six other

3
probationary employees should thus also have been counted. As assist labor unions for purposes of collective bargaining: provided,
Airtime Specialists, Inc. v. Ferrer-Calleja holds: however, that supervisory employees shall not be eligible for
membership in a labor union of the rank-and-file employees but
In a certification election, all rank and file employees in the
may form, join or assist separate labor unions of their own.
appropriate bargaining unit, whether probationary or permanent
Managerial employees shall not be eligible to form, join or assist any
are entitled to vote. This principle is clearly stated in Art. 255 of the
labor unions for purposes of collective bargaining. Alien employees
Labor Code which states that the "labor organization designated or
with valid working permits issued by the Department may exercise
selected by the majority of the employees in an appropriate
the right to self-organization and join or assist labor unions for
bargaining unit shall be the exclusive representative of the
purposes of collective bargaining if they are nationals of a country
employees in such unit for purposes of collective bargaining."
which grants the same or similar rights to Filipino workers, as
Collective bargaining covers all aspects of the employment relation
certified by the Department of Foreign Affairs.
and the resultant CBA negotiated by the certified union binds all
employees in the bargaining unit. Hence, all rank and file For purposes of this section, any employee, whether employed for a
employees, probationary or permanent, have a substantial interest definite period or not, shall beginning on the first day of his/her
in the selection of the bargaining representative. The Code makes service, be eligible for membership in any labor organization.
no distinction as to their employment status as basis for eligibility in
All other workers, including ambulant, intermittent and other
supporting the petition for certification election. The law refers to
workers, the self-employed, rural workers and those without any
"all" the employees in the bargaining unit. All they need to be
definite employers may form labor organizations for their mutual
eligible to support the petition is to belong to the "bargaining unit."
aid and protection and other legitimate purposes except collective
(Emphasis supplied)
bargaining. (Emphasis supplied)
Rule II, Sec. 2 of Department Order No. 40-03, series of 2003, which
The provision in the CBA disqualifying probationary employees from
amended Rule XI of the Omnibus Rules Implementing the Labor
voting cannot override the Constitutionally-protected right of
Code, provides:
workers to self-organization, as well as the provisions of the Labor
Rule II Code and its Implementing Rules on certification elections and
jurisprudence thereon.
Section 2. Who may join labor unions and workers' associations. - All
persons employed in commercial, industrial and agricultural A law is read into, and forms part of, a contract. Provisions in a
enterprises, including employees of government owned or contract are valid only if they are not contrary to law, morals, good
controlled corporations without original charters established under customs, public order or public policy.6
the Corporation Code, as well as employees of religious, charitable,
Rule XI, Sec. 5 of D.O. 40-03, on which the SOLE and the appellate
medical or educational institutions whether operating for profit or
court rely to support their position that probationary employees
not, shall have the right to self-organization and to form, join or

4
hired after the issuance of the Order granting the petition for the
conduct of certification election must be excluded, should not be
read in isolation and must be harmonized with the other provisions
of D.O. Rule XI, Sec. 5 of D.O. 40-03, viz:
Rule XI
xxxx
Section 5. Qualification of voters; inclusion-exclusion. - All
employees who are members of the appropriate bargaining unit
sought to be represented by the petitioner at the time of the
issuance of the order granting the conduct of a certification election
shall be eligible to vote. An employee who has been dismissed from
work but has contested the legality of the dismissal in a forum of
appropriate jurisdiction at the time of the issuance of the order for
the conduct of a certification election shall be considered a qualified
voter, unless his/her dismissal was declared valid in a final judgment
at the time of the conduct of the certification election. (Emphasis
supplied)
xxxx
Section 13. Order/Decision on the petition. - Within ten (10) days
from the date of the last hearing, the Med-Arbiter shall issue a
formal order granting the petition or a decision denying the same.
In organized establishments, however, no order or decision shall be
issued by the Med-Arbiter during the freedom period.
The order granting the conduct of a certification election shall state
the following:
(a) the name of the employer or establishment;
(b) the description of the bargaining unit;
5
(c) a statement that none of the grounds for dismissal enumerated
in the succeeding paragraph exists;
(d) the names of contending labor unions which shall appear as
follows: petitioner union/s in the order in which their petitions were
filed, forced intervenor, and no union; and
(e) a directive upon the employer and the contending union(s) to
submit within ten (10) days from receipt of the order, the certified
list of employees in the bargaining unit, or where necessary, the
payrolls covering the members of the bargaining unit for the last
three (3) months prior to the issuance of the order. (Emphasis
supplied)
xxxx
Section 21. Decision of the Secretary. - The Secretary shall have
fifteen (15) days from receipt of the entire records of the petition
within which to decide the appeal. The filing of the memorandum of
appeal from the order or decision of the Med-Arbiter stays the
holding of any certification election.
The decision of the Secretary shall become final and executory after
ten (10) days from receipt thereof by the parties. No motion for
reconsideration of the decision shall be entertained. (Emphasis
supplied)
In light of the immediately-quoted provisions, and prescinding from
the principle that all employees are, from the first day of their
employment, eligible for membership in a labor organization, it is
evident that the period of reckoning indetermining who shall be
included in the list of eligible voters is, in cases where a timely
appeal has been filed fromthe Order of the Med-
Arbiter, the date when the Order of the Secretary of Labor and Empl
oyment,
whether affirmingor denying the appeal, becomes final and executo
ry.
The filing of an appeal to the SOLE from the Med-Arbiter’s Order
stays its execution, in accordance with Sec. 21, and rationally, the
Med-Arbiter cannot direct the employer to furnish him/her with the
list of eligible voters pending the resolution of the appeal.
During the pendency of the appeal, the employer may hire
additional employees. To exclude the employees hired after the
issuance of the Med-Arbiter’s Order but before the appeal has been
resolved would violate the guarantee that every employee has the
right to be part of a labor organization from the first day of their
service.
In the present case, records show that the probationary employees,
including Gatbonton, were included in the list of employees in the
bargaining unit submitted by the Hotel on May 25, 2006 in
compliance with the directive of the Med-Arbiter after the appeal
and subsequent motion for reconsideration have been denied by
the SOLE, rendering the Med-Arbiter’s August 22, 2005 Order final
and executory 10 days after the March 22, 2007 Resolution (denying
the motion for reconsideration of the January 22 Order denying the
appeal), and rightly so. Because, for purposes of self-organization,
those employees are, in light of the discussion above, deemed
eligible to vote.
A certification election is the process of determining the sole and
exclusive bargaining agent of the employees in an appropriate
bargaining unit for purposes of collective bargaining. Collective
bargaining, refers to the negotiated contract between a legitimate
labor organization and the employer concerning wages, hours of
work and all other terms and conditions of employment in a
bargaining unit.7
6
The significance of an employee’s right to vote in a certification
election cannot thus be overemphasized. For he has considerable
interest in the determination of who shall represent him in
negotiating the terms and conditions of his employment.
Even if the Implementing Rules gives the SOLE 20 days to decide the
appeal from the Order of the Med-Arbiter, experience shows that it
sometimes takes months to be resolved. To rule then that only
those employees hired as of the date of the issuance of the Med-
Arbiter’s Order are qualified to vote would effectively
disenfranchise employees hired during the pendency of the appeal.
More importantly, reckoning the date of the issuance of the Med-
Arbiter’s Order as the cut-off date would render inutile the remedy
of appeal to the SOLE.1avvph!1
But while the Court rules that the votes of all the probationary
employees should be included, under the particular circumstances
of this case and the period of time which it took for the appeal to be
decided, the votes of the six supervisory employees must be
excluded because at the time the certification elections was
conducted, they had ceased to be part of the rank and file, their
promotion having taken effect two months before the election.
As to whether HIMPHLU should be certified as the exclusive
bargaining agent, the Court rules in the negative. It is well-settled
that under the so-called "double majority rule," for there to be a
valid certification election, majority of the bargaining unit must
have voted AND the winning union must have garnered majority of
the valid votes cast.
Prescinding from the Court’s ruling that all the probationary
employees’ votes should be deemed valid votes while that of the
supervisory employees should be excluded, it follows that the
number of valid votes cast would increase – from 321 to 337. Under
Art. 256 of the Labor Code, the union obtaining the majority of the
valid votes cast by the eligible voters shall be certified as the sole
and exclusive bargaining agent of all the workers in the appropriate
bargaining unit. This majority is 50% + 1. Hence, 50% of 337 is 168.5
+ 1 or at least 170.
HIMPHLU obtained 169 while petitioner received 151 votes. Clearly,
HIMPHLU was not able to obtain a majority vote. The position of
both the SOLE and the appellate court that the opening of the 17
segregated ballots will not materially affect the outcome of the
certification election as for, so they contend, even if such member
were all in favor of petitioner, still, HIMPHLU would win, is thus
untenable.
It bears reiteration that the true importance of ascertaining the
number of valid votes cast is for it to serve as basis for computing
the required majority, and not just to determine which union won
the elections. The opening of the segregated but valid votes has
thus become material. To be sure, the conduct of a certification
election has a two-fold objective: to determine the appropriate
bargaining unit and to ascertain the majority representation of the
bargaining representative, if the employees desire to be
represented at all by anyone. It is not simply the determination of
who between two or more contending unions won, but whether it
effectively ascertains the will of the members of the bargaining unit
as to whether they want to be represented and which union they
want to represent them.
Having declared that no choice in the certification election
conducted obtained the required majority, it follows that a run-off
election must be held to determine which between HIMPHLU and
petitioner should represent the rank-and-file employees.
7
A run-off election refers to an election between the labor unions
receiving the two (2) highest number of votes in a certification or
consent election with three (3) or more choices, where such a
certified or consent election results in none of the three (3) or more
choices receiving the majority of the valid votes cast; provided that
the total number of votes for all contending unions is at least fifty
percent (50%) of the number of votes cast.8 With 346 votes cast,
337 of which are now deemed valid and HIMPHLU having only
garnered 169 and petitioner having obtained 151 and the choice
"NO UNION" receiving 1 vote, then the holding of a run-off election
between HIMPHLU and petitioner is in order.
WHEREFORE, the petition is GRANTED. The Decision dated
November 8, 2007 and Resolution dated January 25, 2008 of the
Court of Appeals affirming the Resolutions dated January 22, 2007
and March 22, 2007, respectively, of the Secretary of Labor and
Employment in OS-A-9-52-05 are ANNULLED and SET ASIDE.
The Department of Labor and Employment-Bureau of Labor
Relations is DIRECTED to cause the holding of a run-off election
between petitioner, National Union of Workers in Hotels,
Restaurants and Allied Industries-Manila Pavilion Hotel Chapter
(NUWHRAIN-MPC), and respondent Holiday Inn Manila Pavilion
Hotel Labor Union (HIMPHLU).
SO ORDERED.
G.R. No. 211145
SAMAHAN NG MANGGAGAWA SA HANJIN SHIPYARD rep. by
its President, ALFIE ALIPIO, Petitioner
vs.
BUREAU OF LABOR RELATIONS, HANJIN HEAVY INDUSTRIES
AND CONSTRUCTION CO., LTD. (HHIC-PIDL.),, Respondents
DECISION
mendoza, J.:
The right to self-organization is not limited to unionism. Workers may also
form or join an association for mutual aid and protection and for other
legitimate purposes.
This is a petition for review on certiorari seeking to reverse and set aside
the July 4, 2013 Decision1 and the January 28, 2014 Resolution2 of the
Court of Appeals (CA) in CA-G.R. SP No. 123397, which reversed the
November 28, 2011 Resolution3 of the Bureau of Labor Relations (BLR)
and reinstated the April 20, 2010 Decision 4 of the Department of Labor
and Employment (DOLE) Regional Director, cancelling the registration
of Samahan ng Manggagawa sa Hanjin Shipyard (Samahan) as a worker's
association under Article 243 (now Article 249) of the Labor Code.
The Facts
On February 16, 2010, Samahan, through its authorized representative,
Alfie F. Alipio, filed an application for registration 5 of its name "Samahan
ng Mga Manggagawa sa Hanjin Shipyard" with the DOLE. Attached to the
application were the list of names of the association's officers and members,
signatures of the attendees of the February 7, 2010 meeting, copies of their
Constitution and By-laws. The application stated that the association had a
total of 120 members.
On February 26, 2010, the DOLE Regional Office No. 3, City of San
Fernando, Pampanga (DOLE-Pampanga), issued the corresponding
certificate of registration6 in favor of Samahan.
On March 15, 2010, respondent Hanjin Heavy Industries and Construction
Co., Ltd. Philippines (Hanjin), with offices at Greenbeach 1, Renondo
Peninsula, Sitio Agustin, Barangay Cawag, Subic Bay Freeport Zone, filed
a petition7 with DOLE-Pampanga praying for the cancellation of
registration of Samahan' s association on the ground that its members did
not fall under any of the types of workers enumerated in the second
sentence of Article 243 (now 249).
Hanjin opined that only ambulant, intermittent, itinerant, rural workers, self-
employed, and those without definite employers may form a workers'
association. It further posited that one third (1/3) of the members of the
8
association had definite employers and the continued existence and
registration of the association would prejudice the company's goodwill.
On March 18, 2010, Hanjin filed a supplemental petition,8 adding the
alternative ground that Samahan committed a misrepresentation in
connection with the list of members and/or voters who took part in the
ratification of their constitution and by-laws in its application for
registration. Hanjin claimed that Samahan made it appear that its members
were all qualified to become members of the workers' association.
On March 26, 2010, DOLE-Pampanga called for a conference, wherein
Samahan requested for a 10-day period to file a responsive pleading. No
pleading, however, was submitted. Instead, Samahan filed a motion to
dismiss on April 14, 2010.9
The Ruling of the DOLE Regional Director
On April 20, 2010, DOLE Regional Director Ernesto Bihis ruled in favor of
Hanjin. He found that the preamble, as stated in the Constitution and By-
Laws of Samahan, was an admission on its part that all of its members were
employees of Hanjin, to wit:
KAMI, ang mga Manggagawa sa HANJIN Shipyard (SAMAHAN) ay
naglalayong na isulong ang pagpapabuti ng kondisyon sa paggawa at
katiyakan sa hanapbuhay sa pamamagitan ng patuloy na pagpapaunlad ng
kasanayan ng para sa mga kasapi nito. Naniniwala na sa pamamagitan ng
aming mga angking lakas, kaalaman at kasanayan ay aming maitataguyod
at makapag-aambag sa kaunlaran ng isang lipunan. Na mararating at
makakamit ang antas ng pagkilala, pagdakila at pagpapahalaga sa mga
tulad naming mga manggagawa.
XXX10
The same claim was made by Samahan in its motion to dismiss, but it failed
to adduce evidence that the remaining 63 members were also employees of
Hanjin. Its admission bolstered Hanjin's claim that Samahan committed
misrepresentation in its application for registration as it made an express
representation that all of its members were employees of the former. Having
a definite employer, these 57 members should have formed a labor union for
collective bargaining.11 The dispositive portion of the decision of the Dole
Regional Director, reads:
WHEREFORE, premises considered, the petition is hereby GRANTED.
Consequently, the Certificate of Registration as Legitimate Workers
Association (LWA) issued to the SAMAHAN NG MGA MANGGAGAWA
SA HANJIN SHIPYARD (SAMAHAN) with Registration Numbers
R0300-1002-WA-009 dated February 26, 2010 is hereby CANCELLED,
and said association is dropped from the roster of labor organizations of this
Office.
SO DECIDED.12
The Ruling of the Bureau of Labor Relations
Aggrieved, Samahan filed an appeal13 before the BLR, arguing that Hanjin
had no right to petition for the cancellation of its registration. Samahan
pointed out that the words "Hanjin Shipyard," as used in its application for
registration, referred to a workplace and not as employer or company. It
explained that when a shipyard was put up in Subic, Zambales, it became
known as Hanjin Shipyard. Further, the remaining 63 members signed
the Sama-Samang Pagpapatunay which stated that they were either
working or had worked at Hanjin. Thus, the alleged misrepresentation
committed by Samahan had no leg to stand on.14
In its Comment to the Appeal,15 Hanjin averred that it was a party-
ininterest. It reiterated that Samahan committed misrepresentation in its
application for registration before DOLE Pampanga. While Samahan
insisted that the remaining 63 members were either working, or had at least
worked in Hanjin, only 10 attested to such fact, thus, leaving its 53
members without any workplace to claim.
On September 6, 2010, the BLR granted Samahan's appeal and reversed the
ruling of the Regional Director. It stated that the law clearly afforded the
right to self-organization to all workers including those without definite
employers.16 As an expression of the right to self-organization, industrial,
commercial and self-employed workers could form a workers' association if
they so desired but subject to the limitation that it was only for mutual aid
and protection.17 Nowhere could it be found that to form a workers'
9
association was prohibited or that the exercise of a workers' right to self-
organization was limited to collective bargaining.18
The BLR was of the opinion that there was no misrepresentation on the part
of Samahan. The phrase, "KAMI, ang mga Manggagawa sa Hanjin
Shipyard," if translated, would be: "We, the workers at Hanjin Shipyard."
The use of the preposition "at" instead of "of' would indicate that "Hanjin
Shipyard" was intended to describe a place.19 Should Hanjin feel that the
use of its name had affected the goodwill of the company, the remedy was
not to seek the cancellation of the association's registration. At most, the use
by Samahan of the name "Hanjin Shipyard" would only warrant a change in
the name of the association.20 Thus, the dispositive portion of the BLR
decision reads:
WHEREFORE, the appeal is hereby GRANTED. The Order of DOLE
Region III Director Ernesto C. Bihis dated 20 April 2010 is REVERSED
and SET ASIDE.
Accordingly, Samahan ng mga Manggagawa sa Hanjin Shipyard shall
remain in the roster of legitimate workers' association.21
On October 14, 2010, Hanjin filed its motion for reconsideration.22
In its Resolution,23 dated November 28, 2011, the BLR affirmed its
September 6, 2010 Decision, but directed Samahan to remove the words
"Hanjin Shipyard" from its name. The BLR explained that the Labor Code
had no provision on the use of trade or business name in the naming of a
worker's association, such matters being governed by the Corporation Code.
According to the BLR, the most equitable relief that would strike a balance
between the contending interests of Samahan and Hanjin was to direct
Samahan to drop the name "Hanjin Shipyard" without delisting it from the
roster of legitimate labor organizations. The fallo reads:
WHEREFORE, premises considered, our Decision dated 6 September 2010
is hereby AFFIRMED with a DIRECTIVE for SAMAHAN to remove
"HANJIN SHIPYARD" from its name.
SO RESOLVED.24
Unsatisfied, Samahan filed a petition for certiorari25 under Rule 65 before
the CA, docketed as CA-G.R. SP No. 123397.
In its March 21, 2012 Resolution,26 the CA dismissed the petition because
of Samahan's failure to file a motion for reconsideration of the assailed
November 28, 2011 Resolution.
On April 17, 2012, Samahan filed its motion for reconsideration 27 and on
July 18, 2012, Hanjin filed its comment28 to oppose the same. On October
22, 2012, the CA issued a resolution granting Samahan's motion for
reconsideration and reinstating the petition. Hanjin was directed to file a
comment five (5) days from receipt of notice. 29
On December 12, 2012, Hanjin filed its comment on the petition, 30 arguing
that to require Samahan to change its name was not tantamount to
interfering with the workers' right to self-organization.31 Thus, it prayed,
among others, for the dismissalof the petition for Samahan's failure to file
the required motion for reconsideration.32
On January 17, 2013, Samahan filed its reply. 33
On March 22, 2013, Hanjin filed its memorandum. 34
The Ruling of the Court of Appeals
On July 4, 2013, the CA rendered its decision, holding that the registration
of Samahan as a legitimate workers' association was contrary to the
provisions of Article 243 of the Labor Code. 35 It stressed that only 57 out of
the 120 members were actually working in Hanjin while the phrase in the
preamble of Samahan's Constitution and By-laws, "KAMI, ang mga
Manggagawa sa Hanjin Shipyard," created an impression that all its
members were employees of HHIC. Such unqualified manifestation which
was used in its application for registration, was a clear proof of
misrepresentation which warranted the cancellation of Samahan' s
registration.
It also stated that the members of Samahan could not register it as a
legitimate worker's association because the place where Hanjin's industry
was located was not a rural area. Neither was there any evidence to show
10
that the members of the association were ambulant, intermittent or itinerant
workers.36
At any rate, the CA was of the view that dropping the words "Hanjin
Shipyard" from the association name would not prejudice or impair its
rightto self-organization because it could adopt other appropriate names.
The dispositive portion reads:
WHEREFORE, the petition is DISMISSED and the BLR's directive,
ordering that the words "Hanjin Shipyard" be removed from petitioner
association's name, is AFFIRMED. The Decision dated April 20, 2010 of
the DOLE Regional Director in Case No. Ro300-1003-CP-001, which
ordered the cancellation of petitioner association's registration is
REINSTATED.
SO ORDERED.37
Hence, this petition, raising the following
ISSUES
I. THE COURT OF APPEALS SEfilOUSLY ERRED IN FINDING THAT
SAMAHAN CANNOT FORM A WORKERS' ASSOCIATION OF
EMPLOYEES IN HANJIN AND INSTEAD SHOULD HA VE FORMED
A UNION, HENCE THEIR REGISTRATION AS A WORKERS'
ASSOCIATION SHOULD BE CANCELLED.
II. THE COURT OF APPEALS SERIOUSLY ERRED IN ORDERING
THE REMOVAL/DELETION OF THE WORD "HANJIN" IN THE
NAME OF THE UNION BY REASON OF THE COMPANY'S
PROPERTY RIGHT OVER THE COMP ANY NAME "HANJIN." 38
Samahan argues that the right to form a workers' association is not exclusive
to intermittent, ambulant and itinerant workers. While the Labor Code
allows the workers "to form, join or assist labor organizations of their own
choosing" for the purpose of collective bargaining, it does not prohibit them
from forming a labor organization simply for purposes of mutual aid and
protection. All members of Samahan have one common place of work,
Hanjin Shipyard. Thus, there is no reason why they cannot use "Hanjin
Shipyard" in their name.39
Hanjin counters that Samahan failed to adduce sufficient basis that all its
members were employees of Hanjin or its legitimate contractors, and that
the use of the name "Hanjin Shipyard" would create an impression that all
its members were employess of HHIC.40
Samahan reiterates its stand that workers with a definite employer can
organize any association for purposes of mutual aid and protection. Inherent
in the workers' right to self-organization is its right to name its own
organization. Samahan referred "Hanjin Shipyard" as their common place of
work. Therefore, they may adopt the same in their association's name. 41
The Court's Ruling
The petition is partly meritorious.
Right to self-organization includes
right to form a union, workers '
association and labor management
councils
More often than not, the right to self-organization connotes unionism.
Workers, however, can also form and join a workers' association as well as
labor-management councils (LMC). Expressed in the highest law of the
land is the right of all workers to self-organization. Section 3, Article XIII
of the 1987 Constitution states:
Section 3. The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of
employment opportunities for all. It shall guarantee the rights of all workers
to self-organization, collective bargaining and negotiations, and peaceful
concerted activities, including the right to strike in accordance with law. xxx
[Emphasis Supplied]
And Section 8, Article III of the 1987 Constitution also states:
Section 8. The right of the people, including those employed in the public
and private sectors, to form unions, associations, or societies for purposes
not contrary to law shall not be abridged.
In relation thereto, Article 3 of the Labor Code provides:
11
Article 3. Declaration of basic policy. The State shall afford protection to
labor, promote full employment, ensure equal work opportunities regardless
of sex, race or creed and regulate the relations between workers and
employers. The State shall assure the rights of workers to self-
organization, collective bargaining, security of tenure, and just and
humane conditions of work.
[Emphasis Supplied]
As Article 246 (now 252) of the Labor Code provides, the right to self-
organization includes the right to form, join or assist labor organizations fer
the purpose of collective bargaining through representatives of their own
choosing and to engage in lawful concerted activities for the same purpose
for their mutual aid and protection. This is in line with the policy of the
State to foster the free and voluntary organization of a strong and united
labor movement as well as to make sure that workers participate in policy
and decision-making processes affecting their rights, duties and welfare. 42
The right to form a union or association or to self-organization
comprehends two notions, to wit: (a) the liberty or freedom, that is, the
absence of restraint which guarantees that the employee may act for himself
without being prevented by law; and (b) the power, by virtue of which an
employee may, as he pleases, join or refrain from joining an association. 43
In view of the revered right of every worker to self-organization, the law
expressly allows and even encourages the formation of labor organizations.
A labor organization is defined as "any union or association o[ employees
which exists in whole or in part for the purpose of collective bargaining or
of dealing with employers concerning terms and conditions of
employment."44 A labor organization has two broad rights: (1) to bargain
collectively and (2) to deal with the employer concerning terms and
conditions of employment. To bargain collectively is a right given to a
union once it registers itself with the DOLE. Dealing with the employer, on
the other hand, is a generic description of interaction between employer and
employees concerning grievances, wages, work hours and other terms and
conditions of employment, even if the employees' group is not registered
with the DOLE.45
A union refers to any labor organization in the private sector organized for
collective bargaining and for other legitimate purpose, 46 while a workers'
association is an organization of workers formed for the mutual aid and
protection of its members or for any legitimate purpose other than
collective bargaining.47
Many associations or groups of employees, or even combinations of only
several persons, may qualify as a labor organization yet fall short of
constituting a labor union. While every labor union is a labor organization,
not every labor organization is a labor union. The difference is one of
organization, composition and operation.48
Collective bargaining is just one of the forms of employee participation.
Despite so much interest in and the promotion of collective bargaining, it is
incorrect to say that it is the device and no other, which secures industrial
democracy. It is equally misleading to say that collective bargaining is the
end-goal of employee representation. Rather, the real aim is employee
participation in whatever form it may appear, bargaining or no bargaining,
union or no union.49 Any labor organization which may or may not be a
union may deal with the employer. This explains why a workers' association
or organization does not always have to be a labor union and why employer-
employee collective interactions are not always collective bargaining. 50
To further strengthen employee participation, Article 255 (now 261) 51 of the
Labor Code mandates that workers shall have the right to participate in
policy and decision-making processes of the establishment where they are
employed insofar as said processes will directly affect their rights, benefits
and welfare. For this purpose, workers and employers may form LMCs.
A cursory reading of the law demonstrates that a common element between
unionism and the formation of LMCs is the existence of an employer-
employee relationship. Where neither party is an employer nor an employee
of the other, no duty to bargain collectively would exist.52 In the same
manner, expressed in Article 255 (now 261) is the requirement that such
workers be employed in the establishment before they can participate in
policy and decision making processes.
12
In contrast, the existence of employer-employee relationship is not
mandatory in the formation of workers' association. What the law simply
requires is that the members of the workers' association, at the very least,
share the same interest. The very definition of a workers' association speaks
of "mutual aid and protection."
Right to choose whether to form or
join a union or workers' association
belongs to workers themselves
In the case at bench, the Court cannot sanction the opinion of the CA that
Samahan should have formed a union for purposes of collective bargaining
instead of a workers' association because the choice belonged to it. The
right to form or join a labor organization necessarily includes the right to
refuse or refrain from exercising the 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.53 Also inherent
in the right to self-organization is the right to choose whether to form a
union for purposes of collective bargaining or a workers' association for
purposes of providing mutual aid and protection.
The right to self-organization, however, is subject to certain limitations as
provided by law. For instance, the Labor Code specifically disallows
managerial employees from joining, assisting or forming any labor union.
Meanwhile, supervisory employees, while eligible for membership in labor
organizations, are proscribed from joining the collective bargaining unit of
the rank and file employees.54 Even government employees have the right to
self-organization. It is not, however, regarded as existing or available for
purposes of collective bargaining, but simply for the furtherance and
protection of their interests.55
Hanjin posits that the members of Samahan have definite employers, hence,
they should have formed a union instead of a workers' association. The
Court disagrees. There is no provision in the Labor Code that states that
employees with definite employers may form, join or assist unions only.
The Court cannot subscribe either to Hanjin's position that Samahan's
members cannot form the association because they are not covered by the
second sentence of Article 243 (now 249), to wit:
Article 243. Coverage and employees' right to selforganization. All persons
employed in commercial, industrial and agricultural enterprises and in
religious, charitable, medical, or educational institutions, whether operating
for profit or not, shall have the right to self-organization and to form, join,
or assist labor organizations of their own choosing for purposes of
collective bargaining. Ambulant, intermittent and itinerant workers,
selfemployed people, rural workers and those without any definite
employers may form labor organizations for their mutual aid and protection.
(As amended by Batas Pambansa Bilang 70, May 1, 1980)
[Emphasis Supplied]
Further, Article 243 should be read together with Rule 2 of Department
Order (D. 0.) No. 40-03, Series of 2003, which provides:
RULE II
COVERAGE OF THE RIGHT TO SELF-ORGANIZATION
Section 1. Policy. - It is the policy of the State to promote the free and
responsible exercise of the right to self-organization through the
establishment of a simplified mechanism for the speedy registration of labor
unions and workers associations, determination of representation status and
resolution of inter/intra-union and other related labor relations disputes.
Only legitimate or registered labor unions shall have the right to represent
their members for collective bargaining and other purposes. Workers'
associations shall have the right to represent their members for purposes
other than collective bargaining.
Section 2. Who may join labor unions and workers' associations. - All
persons employed in commercial, industrial and agricultural enterprises,
including employees of government owned or controlled corporations
without original charters established under the Corporation Code, as well as
employees of 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 unions for purposes of collective
bargaining: provided, however, that supervisory employees shall not be
eligible for membership in a labor union of the rank-and-file employees but
may form, join or assist separate labor unions of their own. Managerial
13
employees shall not be eligible to form, join or assist any labor unions for
purposes of collective bargaining. Alien employees with valid working
permits issued by the Department may exercise the right to self-organization
and join or assist labor unions for purposes of collective bargaining if they
are nationals of a country which grants the same or similar rights to Filipino
workers, as certified by the Department of Foreign Affairs.
For purposes of this section, any employee, whether employed for a definite
period or not, shall beginning on the first day of his/her service, be eligible
for membership in any labor organization.
All other workers, including ambulant, intermittent and other workers, the
self-employed, rural workers and those without any definite employers may
form labor organizations for their mutual aid and protection and other
legitimate purposes except collective bargaining.
[Emphases Supplied]
Clearly, there is nothing in the foregoing implementing rules which
provides that workers, with definite employers, cannot form or join a
workers' association for mutual aid and protection. Section 2 thereof even
broadens the coverage of workers who can form or join a workers'
association. Thus, the Court agrees with Samahan's argument that the right
to form a workers' association is not exclusive to ambulant, intermittent and
itinerant workers. The option to form or join a union or a workers'
association lies with the workers themselves, and whether they have definite
employers or not.
No misrepresentation on the part
of Samahan to warrant cancellation
of registration
In this case, Samahan's registration was cancelled not because its members
were prohibited from forming a workers' association but because they
allegedly committed misrepresentation for using the phrase, "KAMI, ang
mga Manggagawa sa HANJIN Shipyard."
Misrepresentation, as a ground for the cancellation of registration of a labor
organization, is committed "in connection with the adoption, or ratification
of the constitution and by-laws or amendments thereto, the minutes of
ratification, the list of members who took part in the ratification of the
constitution and by-laws or amendments thereto, and those in connection
with the election of officers, minutes of the election of officers, and the list
of voters, xxx."56
In Takata Corporation v. Bureau of Relations,57 the DOLE Regional
Director granted the petition for the cancellation of certificate of registration
of Samahang Lakas Manggagawa sa Takata (Salamat) after finding that the
employees who attended the organizational meeting fell short of the 20%
union registration requirement. The BLR, however, reversed the ruling of
the DOLE Regional Director, stating that petitioner Takata Corporation
(Takata) failed to prove deliberate and malicious misrepresentation on the
part of respondent Salamat. Although Takata claimed that in the list of
members, there was an employee whose name appeared twice and another
was merely a project employee, such facts were not considered
misrepresentations in the absence of showing that the respondent
deliberately did so for the purpose of increasing their union membership.
The Court ruled in favor of Salamat.
In S.S. Ventures International v. S.S. Ventures Labor Union,58 the petition
for cancellation of certificate of registration was denied. The Court wrote:
If the union's application is infected by falsification and like serious
irregularities, especially those appearing on the face of the application and
its attachments, a union should be denied recognition as a legitimate
labor organization. Prescinding from these considerations, the issuance to
the Union of Certificate of Registration No. R0300-oo-02-UR-0003
necessarily implies that its application for registration and the supporting
documents thereof are prima facie free from any vitiating irregularities.
Another factor which militates against the veracity of the allegations in
the Sinumpaang Petisyon is the lack of particularities on how, when and
where respondent union perpetrated the alleged fraud on each
member. Such details are crucial for in the proceedings for cancellation
of union registration on the ground of fraud or misrepresentation, what
needs to be established is that the specific act or omission of the union
deprived the complaining employees-members of their right to choose.
[Emphases Supplied]
14
Based on the foregoing, the Court concludes that misrepresentation, to be a
ground for the cancellation of the certificate of registration, must be done
maliciously and deliberately. Further, the mistakes appearing in the
application or attachments must be grave or refer to significant matters. The
details as to how the alleged fraud was committed must also be indubitably
shown.
The records of this case reveal no deliberate or malicious intent to commit
misrepresentation on the part of Samahan.1âwphi1 The use of such words
"KAMI, ang mga Manggagawa sa HANJIN Shipyard" in the preamble of
the constitution and by-laws did not constitute misrepresentation so as to
warrant the cancellation of Samahan's certificate of registration. Hanjin
failed to indicate how this phrase constitutes a malicious and deliberate
misrepresentation. Neither was there any showing that the alleged
misrepresentation was serious in character. Misrepresentation is a devious
charge that cannot simply be entertained by mere surmises and conjectures.
Even granting arguendo that Samahan' s members misrepresented
themselves as employees or workers of Hanjin, said misrepresentation does
not relate to the adoption or ratification of its constitution and by-laws or to
the election of its officers.
Removal of the word "Hanjin Shipyard"
from the association 's name, however,
does not infringe on Samahan 's right to
self-organization
Nevertheless, the Court agrees with the BLR that "Hanjin Shipyard" must
be removed in the name of the association. A legitimate workers'
association refers to an association of workers organized for mutual aid and
protection of its members or for any legitimate purpose other than collective
bargaining registered with the DOLE.59Having been granted a certificate of
registration, Samahan's association is now recognized by law as a legitimate
workers' association.
According to Samahan, inherent in the workers' right to selforganization is
its right to name its own organization. It seems to equate the dropping of
words "Hanjin Shipyard" from its name as a restraint in its exercise of the
right to self-organization. Hanjin, on the other hand, invokes that "Hanjin
Shipyard" is a registered trade name and, thus, it is within their right to
prohibit its use.
As there is no provision under our labor laws which speak of the use of
name by a workers' association, the Court refers to the Corporation Code,
which governs the names of juridical persons. Section 18 thereof provides:
No corporate name may be allowed by the Securities and Exchange
Commission if the proposed name is identical or deceptively or confusingly
similar to that of any existing corporation or to any other name already
protected by law or is patently deceptive, confusing or contrary to existing
laws. When a change in the corporate name is approved, the Commission
shall issue an amended certificate of incorporation under the amended
name.
[Emphases Supplied]
The policy underlying the prohibition in Section 18 against the registration
of a corporate name which is "identical or deceptively or confusingly
similar" to that of any existing corporation or which is "patently deceptive"
or "patently confusing" or "contrary to existing laws," is the avoidance of
fraud upon the public which would have occasion to deal with the entity
concerned, the evasion of legal obligations and duties, and the reduction of
difficulties of administration and supervision over corporations.60
For the same reason, it would be misleading for the members of Samahan to
use "Hanjin Shipyard" in its name as it could give the wrong impression that
all of its members are employed by Hanjin.
Further, Section 9, Rule IV of D.O. No. 40-03, Series of 2003 explicitly
states:
The change of name of a labor organization shall not affect its legal
personality. All the rights and obligations of a labor organization under its
old name shall continue to be exercised by the labor organization under its
new name.
Thus, in the directive of the BLR removing the words "Hanjin Shipyard,"
no abridgement of Samahan's right to self-organization was committed.
15
WHEREFORE, the petition is PARTIALLY GRANTED. The July 4,
2013 Decision and the January 28, 2014 Resolution of the Court of Appeals
are hereby REVERSED and SET ASIDE. The September 6, 2010
Resolution of the Bureau of Labor Relations, as modified by its November
28, 2011 Resolution, is REINSTATED. SO ORDERED.
THIRD DIVISION
[G.R. NO. 171153 : September 12, 2007]
SAN MIGUEL CORPORATION EMPLOYEES UNION PHILIPPINE
TRANSPORT AND GENERAL WORKERS ORGANIZATION
(SMCEU PTGWO), Petitioner, v. SAN MIGUEL PACKAGING
PRODUCTS EMPLOYEES UNION PAMBANSANG DIWA NG
MANGGAGAWANG PILIPINO (SMPPEU PDMP),Respondent 1 .
DECISION
CHICO-NAZARIO, J.:
In this Petition for Review on Certiorari under Rule 45 of the Revised
Rules of Court, petitioner SAN MIGUEL CORPORATION EMPLOYEES
UNION-PHILIPPINE TRANSPORT AND GENERAL WORKERS
ORGANIZATION (SMCEU-PTGWO) prays that this Court reverse and set
aside the (a) Decision2 dated 9 March 2005 of the Court of Appeals in CA-
G.R. SP No. 66200, affirming the Decision3 dated 19 February 2001 of the
Bureau of Labor Relations (BLR) of the Department of Labor and
Employment (DOLE) which upheld the Certificate of Registration of
respondent SAN MIGUEL PACKAGING PRODUCTS EMPLOYEES
UNION PAMBANSANG DIWA NG MANGGAGAWANG PILIPINO
(SMPPEU PDMP); and (b) the Resolution4dated 16 January 2006 of the
Court of Appeals in the same case, denying petitioner's Motion for
Reconsideration of the aforementioned Decision.
The following are the antecedent facts:
Petitioner is the incumbent bargaining agent for the bargaining unit
comprised of the regular monthly-paid rank and file employees of the three
divisions of San Miguel Corporation (SMC), namely, the San Miguel
Corporate Staff Unit (SMCSU), San Miguel Brewing Philippines (SMBP),
and the San Miguel Packaging Products (SMPP), in all offices and plants of
SMC, including the Metal Closure and Lithography Plant in Laguna. It had
been the certified bargaining agent for 20 years - from 1987 to 1997.
Respondent is registered as a chapter of Pambansang Diwa ng
Manggagawang Pilipino (PDMP). PDMP issued Charter Certificate No. 112
to respondent on 15 June 1999.5 In compliance with registration
requirements, respondent submitted the requisite documents to the BLR for
the purpose of acquiring legal personality.6 Upon submission of its charter
certificate and other documents, respondent was issued Certificate of
Creation of Local or Chapter PDMP-01 by the BLR on 6 July
1999.7 Thereafter, respondent filed with the Med-Arbiter of the DOLE
Regional Officer in the National Capital Region (DOLE-NCR), three
separate petitions for certification election to represent SMPP, SMCSU, and
SMBP.8 All three petitions were dismissed, on the ground that the separate
petitions fragmented a single bargaining unit.9
On 17 August 1999, petitioner filed with the DOLE-NCR a petition seeking
the cancellation of respondent's registration and its dropping from the rolls
of legitimate labor organizations. In its petition, petitioner accused
respondent of committing fraud and falsification, and non-compliance with
registration requirements in obtaining its certificate of registration. It raised
allegations that respondent violated Articles 239(a), (b) and (c) 10 and
234(c)11 of the Labor Code. Moreover, petitioner claimed that PDMP is not
a legitimate labor organization, but a trade union center, hence, it cannot
directly create a local or chapter. The petition was docketed as Case No.
NCR-OD-9908-007-IRD.12
On 14 July 2000, DOLE-NCR Regional Director Maximo B. Lim issued an
Order dismissing the allegations of fraud and misrepresentation, and
irregularity in the submission of documents by respondent. Regional
Director Lim further ruled that respondent is allowed to directly create a
local or chapter. However, he found that respondent did not comply with the
20% membership requirement and, thus, ordered the cancellation of its
certificate of registration and removal from the rolls of legitimate labor
organizations.13Respondent appealed to the BLR. In a Decision dated 19
February 2001, it declared:
16
As a chartered local union, appellant is not required to submit the number of
employees and names of all its members comprising at least 20% of the
employees in the bargaining unit where it seeks to operate. Thus, the
revocation of its registration based on non-compliance with the 20%
membership requirement does not have any basis in the rules.
Further, although PDMP is considered as a trade union center, it is a
holder of Registration Certificate No. FED-11558-LC issued by the BLR on
14 February 1991, which bestowed upon it the status of a legitimate labor
organization with all the rights and privileges to act as representative of its
members for purposes of collective bargaining agreement. On this basis,
PDMP can charter or create a local, in accordance with the provisions of
Department Order No. 9.
WHEREFORE, the appeal is hereby GRANTED. Accordingly, the decision
of the Regional Director dated July 14, 2000, canceling the registration of
appellant San Miguel Packaging Products Employees Union-Pambansang
Diwa ng Manggagawang Pilipino (SMPPEU-PDMP) is REVERSED and
SET ASIDE. Appellant shall hereby remain in the roster of legitimate labor
organizations.14
While the BLR agreed with the findings of the DOLE Regional Director
dismissing the allegations of fraud and misrepresentation, and in upholding
that PDMP can directly create a local or a chapter, it reversed the Regional
Director's ruling that the 20% membership is a requirement for respondent
to attain legal personality as a labor organization. Petitioner thereafter filed
a Motion for Reconsideration with the BLR. In a Resolution rendered on 19
June 2001 in BLR-A-C-64-05-9-00 (NCR-OD-9908-007-IRD), the BLR
denied the Motion for Reconsideration and affirmed its Decision dated 19
February 2001.15
Invoking the power of the appellate court to review decisions of quasi-
judicial agencies, petitioner filed with the Court of Appeals a Petition
for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure docketed
as CA-G.R. SP No. 66200. The Court of Appeals, in a Decision dated 9
March 2005, dismissed the petition and affirmed the Decision of the BLR,
ruling as follows:
In Department Order No. 9, a registered federation or national union may
directly create a local by submitting to the BLR copies of the charter
certificate, the local's constitution and by-laws, the principal office address
of the local, and the names of its officers and their addresses. Upon
complying with the documentary requirements, the local shall be issued a
certificate and included in the roster of legitimate labor organizations. The
[herein respondent] is an affiliate of a registered federation PDMP, having
been issued a charter certificate. Under the rules we have reviewed, there is
no need for SMPPEU to show a membership of 20% of the employees of
the bargaining unit in order to be recognized as a legitimate labor union.
xxx
In view of the foregoing, the assailed decision and resolution of the BLR are
AFFIRMED, and the petition is DISMISSED.16
Subsequently, in a Resolution dated 16 January 2006, the Court of Appeals
denied petitioner's Motion for Reconsideration of the aforementioned
Decision.
Hence, this Petition for Certiorari under Rule 45 of the Revised Rules of
Court where petitioner raises the sole issue of:
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
COMMITTED REVERSIBLE ERROR IN RULING THAT PRIVATE
RESPONDENT IS NOT REQUIRED TO SUBMIT THE NUMBER OF
EMPLOYEES AND NAMES OF ALL ITS MEMBERS COMPRISING
AT LEAST 20% OF THE EMPLOYEES IN THE BARGAINING UNIT
WHERE IT SEEKS TO OPERATE.
The present petition questions the legal personality of respondent as a
legitimate labor organization.
Petitioner posits that respondent is required to submit a list of members
comprising at least 20% of the employees in the bargaining unit before it
may acquire legitimacy, citing Article 234(c) of the Labor Code which
stipulates that 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
17
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; andcralawlibrary
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.17
Petitioner also insists that the 20% requirement for registration of
respondent must be based not on the number of employees of a single
division, but in all three divisions of the company in all the offices and
plants of SMC since they are all part of one bargaining unit. Petitioner
refers to Section 1, Article 1 of the Collective Bargaining Agreement
(CBA),18 quoted hereunder:
ARTICLE 1
SCOPE
Section 1. Appropriate Bargaining Unit. The appropriate bargaining unit
covered by this Agreement consists of all regular rank and file employees
paid on the basis of fixed salary per month and employed by the COMPANY
in its Corporate Staff Units (CSU), San Miguel Brewing Products (SMBP)
and San Miguel Packaging Products (SMPP) and in different operations
existing in the City of Manila and suburbs, including Metal Closure and
Lithography Plant located at Canlubang, Laguna subject to the provisions of
Article XV of this Agreement provided however, that if during the term of
this Agreement, a plant within the territory covered by this Agreement is
transferred outside but within a radius of fifty (50) kilometers from the
Rizal Monument, Rizal Park, Metro Manila, the employees in the
transferred plant shall remain in the bargaining unit covered by this
Agreement. (Emphasis supplied.)
Petitioner thus maintains that respondent, in any case, failed to meet this
20% membership requirement since it based its membership on the number
of employees of a single division only, namely, the SMPP.
There is merit in petitioner's contentions.
A legitimate labor organization19 is defined as "any labor organization duly
registered with the Department of Labor and Employment, and includes any
branch or local thereof."20 The mandate of the Labor Code is to ensure
strict compliance with the requirements on registration because a legitimate
labor organization is entitled to specific rights under the Labor Code, 21 and
are involved in activities directly affecting matters of public interest.
Registration requirements are intended to afford a measure of protection to
unsuspecting employees who may be lured into joining unscrupulous or fly-
by-night unions whose sole purpose is to control union funds or use the
labor organization for illegitimate ends.22Legitimate 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
representative23 of all the employees in an appropriate collective bargaining
unit for purposes of collective bargaining.24 The acquisition of rights by any
union or labor organization, particularly the right to file a petition for
certification election, first and foremost, depends on whether or not the
labor organization has attained the status of a legitimate labor
organization.25
A perusal of the records reveals that respondent is registered with the BLR
as a "local" or "chapter" of PDMP and was issued Charter Certificate No.
112 on 15 June 1999. Hence, respondent was directly chartered by PDMP.
The procedure for registration of a local or chapter of a labor organization is
provided in Book V of the Implementing Rules of the Labor Code, as
amended by Department Order No. 9 which took effect on 21 June 1997,
and again by Department Order No. 40 dated 17 February 2003. The
Implementing Rules as amended by D.O. No. 9 should govern the
resolution of the petition at bar since respondent's petition for certification
18
election was filed with the BLR in 1999; and that of petitioner on 17 August
1999.26
The applicable Implementing Rules enunciates a two-fold procedure for the
creation of a chapter or a local. The first involves the affiliation of an
independent union with a federation or national union or industry union.
The second, finding application in the instant petition, involves the direct
creation of a local or a chapter through the process of chartering.27
A duly registered federation or national union may directly create a local or
chapter by submitting to the DOLE Regional Office or to the BLR two
copies of the following:
(a) A charter certificate issued by the federation or national union indicating
the creation or establishment of the local/chapter;
(b) The names of the local/chapter's officers, their addresses, and the
principal office of the local/chapter; andcralawlibrary
(c) The local/chapter's constitution and by-laws; Provided, That where the
local/chapter's constitution and by-laws is the same as that of the federation
or national union, this fact shall be indicated accordingly.
All the foregoing supporting requirements shall be certified under oath by
the Secretary or the Treasurer of the local/chapter and attested to by its
President.28
The Implementing Rules stipulate that a local or chapter may be directly
created by a federation or national union. A duly constituted local or
chapter created in accordance with the foregoing shall acquire legal
personality from the date of filing of the complete documents with the
BLR.29 The issuance of the certificate of registration by the BLR or the
DOLE Regional Office is not the operative act that vests legal personality
upon a local or a chapter under Department Order No. 9. Such legal
personality is acquired from the filing of the complete documentary
requirements enumerated in Section 1, Rule VI.30
Petitioner insists that Section 3 of the Implementing Rules, as amended by
Department Order No. 9, violated Article 234 of the Labor Code when it
provided for less stringent requirements for the creation of a chapter or
local. This Court disagrees.
Article 234 of the Labor Code provides that an independent labor
organization acquires legitimacy only upon its registration with the BLR:
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; andcralawlibrary
(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. (Italics supplied.)
It is emphasized that the foregoing pertains to the registration of an
independent labor organization, association or group of unions or workers.
However, the creation of a branch, local or chapter is treated differently.
This Court, in the landmark case of Progressive Development Corporation
v. Secretary, Department of Labor and Employment,31 declared that when
an unregistered union becomes a branch, local or chapter, some of the
aforementioned requirements for registration are no longer necessary or
compulsory. Whereas an applicant for registration of an independent union
is mandated to submit, among other things, the number of employees and
names of all its members comprising at least 20% of the employees in the
bargaining unit where it seeks to operate, as provided under Article 234 of
the Labor Code and Section 2 of Rule III, Book V of the Implementing
19
Rules, the same is no longer required of a branch, local or chapter. 32 The
intent of the law in imposing less requirements in the case of a branch or
local of a registered federation or national union is to encourage the
affiliation of a local union with a federation or national union in order to
increase the local union's bargaining powers respecting terms and
conditions of labor.33
Subsequently, in Pagpalain Haulers, Inc. v. Trajano34 where the validity of
Department Order No. 9 was directly put in issue, this Court was
unequivocal in finding that there is no inconsistency between the Labor
Code and Department Order No. 9.
As to petitioner's claims that respondent obtained its Certificate of
Registration through fraud and misrepresentation, this Court finds that the
imputations are not impressed with merit. In the instant case, proof to
declare that respondent committed fraud and misrepresentation remains
wanting. This Court had, indeed, on several occasions, pronounced that
registration based on false and fraudulent statements and documents confer
no legitimacy upon a labor organization irregularly recognized, which, at
best, holds on to a mere scrap of paper. Under such circumstances, the labor
organization, not being a legitimate labor organization, acquires no rights. 35
This Court emphasizes, however, that a direct challenge to the legitimacy of
a labor organization based on fraud and misrepresentation in securing its
certificate of registration is a serious allegation which deserves careful
scrutiny. Allegations thereof should be compounded with supporting
circumstances and evidence. The records of the case are devoid of such
evidence. Furthermore, this Court is not a trier of facts, and this doctrine
applies with greater force in labor cases. Findings of fact of administrative
agencies and quasi-judicial bodies, such as the BLR, which have acquired
expertise because their jurisdiction is confined to specific matters, are
generally accorded not only great respect but even finality.36
Still, petitioner postulates that respondent was not validly and legitimately
created, for PDMP cannot create a local or chapter as it is not a legitimate
labor organization, it being a trade union center.
Petitioner's argument creates a predicament as it hinges on the legitimacy of
PDMP as a labor organization. Firstly, this line of reasoning attempts to
predicate that a trade union center is not a legitimate labor organization. In
the process, the legitimacy of PDMP is being impugned, albeit indirectly.
Secondly, the same contention premises that a trade union center cannot
directly create a local or chapter through the process of chartering.
Anent the foregoing, as has been held in a long line of cases, the legal
personality of a legitimate labor organization, such as PDMP, cannot be
subject to a collateral attack. The law is very clear on this matter. Article
212 (h) of the Labor Code, as amended, defines a legitimate labor
organization37 as "any labor organization duly registered with the DOLE,
and includes any branch or local thereof."38 On the other hand, a trade
union center is any group of registered national unions or federations
organized for the mutual aid and protection of its members; for assisting
such members in collective bargaining; or for participating in the
formulation of social and employment policies, standards, and programs,
and is duly registered with the DOLE in accordance with Rule III, Section 2
of the Implementing Rules.39
The Implementing Rules stipulate that a labor organization shall be deemed
registered and vested with legal personality on the date of issuance of its
certificate of registration. Once a certificate of registration is issued to a
union, its legal personality cannot be subject to collateral attack.40 It may be
questioned only in an independent petition for cancellation in accordance
with Section 5 of Rule V, Book V of the Implementing Rules. The
aforementioned provision is enunciated in the following:
Sec. 5. Effect of registration. The labor organization or workers' association
shall be deemed registered and vested with legal personality on the date of
issuance of its certificate of registration. Such legal personality cannot
thereafter be subject to collateral attack, but may be questioned only in an
independent petition for cancellation in accordance with these Rules.
PDMP was registered as a trade union center and issued Registration
Certificate No. FED-11558-LC by the BLR on 14 February 1991. Until the
certificate of registration of PDMP is cancelled, its legal personality as a
legitimate labor organization subsists. Once a union acquires legitimate
status as a labor organization, it continues to be recognized as such until its
certificate of registration is cancelled or revoked in an independent action
for cancellation.41 It bears to emphasize that what is being directly
20
challenged is the personality of respondent as a legitimate labor
organization and not that of PDMP. This being a collateral attack, this Court
is without jurisdiction to entertain questions indirectly impugning the
legitimacy of PDMP.
Corollarily, PDMP is granted all the rights and privileges appurtenant to a
legitimate labor organization,42and continues to be recognized as such until
its certificate of registration is successfully impugned and thereafter
cancelled or revoked in an independent action for cancellation.
We now proceed to the contention that PDMP cannot directly create a local
or a chapter, it being a trade union center.
This Court reverses the finding of the appellate court and BLR on this
ground, and rules that PDMP cannot directly create a local or chapter.
After an exhaustive study of the governing labor law provisions, both
statutory and regulatory,43 we find no legal justification to support the
conclusion that a trade union center is allowed to directly create a local or
chapter through chartering. Apropos, we take this occasion to reiterate the
first and fundamental duty of this Court, which is to apply the law. The
solemn power and duty of the Court to interpret and apply the law does not
include the power to correct by reading into the law what is not written
therein.44
Presidential Decree No. 442, better known as the Labor Code, was enacted
in 1972. Being a legislation on social justice,45 the provisions of the Labor
Code and the Implementing Rules have been subject to several
amendments, and they continue to evolve, considering that labor plays a
major role as a socio-economic force. The Labor Code was first amended by
Republic Act No. 6715, and recently, by Republic Act No. 9481.
Incidentally, the term trade union center was never mentioned under
Presidential Decree No. 442, even as it was amended by Republic Act No.
6715. The term trade union center was first adopted in the Implementing
Rules, under Department Order No. 9.
Culling from its definition as provided by Department Order No. 9, a trade
union center is any group of registered national unions or federations
organized for the mutual aid and protection of its members; for assisting
such members in collective bargaining; or for participating in the
formulation of social and employment policies, standards, and programs,
and is duly registered with the DOLE in accordance with Rule III, Section 2
of the Implementing Rules.46 The same rule provides that the application for
registration of an industry or trade union center shall be supported by the
following:
(a) The list of its member organizations and their respective presidents and,
in the case of an industry union, the industry where the union seeks to
operate;
(b) The resolution of membership of each member organization, approved
by the Board of Directors of such union;
(c) The name and principal address of the applicant, the names of its
officers and their addresses, the minutes of its organizational meeting/s, and
the list of member organizations and their representatives who attended
such meeting/s; andcralawlibrary
(d) A copy of its constitution and by-laws and minutes of its ratification by
a majority of the presidents of the member organizations, provided that
where the ratification was done simultaneously with the organizational
meeting, it shall be sufficient that the fact of ratification be included in the
minutes of the organizational meeting.47
Evidently, while a "national union" or "federation" is a labor organization
with at least ten locals or chapters or affiliates, each of which must be a duly
certified or recognized collective bargaining agent;48a trade union center, on
the other hand, is composed of a group of registered national unions or
federations.49
The Implementing Rules, as amended by Department Order No. 9, provide
that "a duly registered federation or national union" may directly create a
local or chapter. The provision reads:
Section 1. Chartering and creation of a local/chapter. - A duly registered
federation or national union may directly create a local/chapter by
submitting to the Regional Office or to the Bureau two (2) copies of the
following:
21
(a) A charter certificate issued by the federation or national union indicating
the creation or establishment of the local/chapter;
(b) The names of the local/chapter's officers, their addresses, and the
principal office of the local/chapter; andcralawlibrary
(c) The local/chapter's constitution and by-laws; provided that where the
local/chapter's constitution and by-laws is the same as that of the federation
or national union, this fact shall be indicated accordingly.
All the foregoing supporting requirements shall be certified under oath by
the Secretary or the Treasurer of the local/chapter and attested to by its
President.50
Department Order No. 9 mentions two labor organizations either of which is
allowed to directly create a local or chapter through chartering - a duly
registered federation or a national union. Department Order No. 9 defines a
"chartered local" as a labor organization in the private sector operating at
the enterprise level that acquired legal personality through a charter
certificate, issued by a duly registered federation or national union and
reported to the Regional Office in accordance with Rule III, Section 2-E of
these Rules.51
Republic Act No. 9481 or "An Act Strengthening the Workers'
Constitutional Right to Self-Organization, Amending for the Purpose
Presidential Decree No. 442, As Amended, Otherwise Known as the Labor
Code of the Philippines" lapsed52 into law on 25 May 2007 and became
effective on 14 June 2007.53 This law further amends the Labor Code
provisions on Labor Relations.
Pertinent amendments read as follows:
SECTION 1. Article 234 of Presidential Decree No. 442, as amended,
otherwise known as the Labor Code of the Philippines, is hereby further
amended to read as follows:
ART. 234. Requirements of Registration. - A federation, national union or
industry or trade union center or an independent union 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) In case the applicant is an independent union, the names of all its
members comprising at least twenty percent (20%) of all the employees in
the bargaining unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies
of its annual financial reports; andcralawlibrary
(e) Four 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.
SECTION 2. A new provision is hereby inserted into the Labor Code as
Article 234-A to read as follows:
ART. 234-A. Chartering and Creation of a Local Chapter. - A duly
registered federation or national union may directly create a local chapter
by issuing a charter certificate indicating the establishment of the local
chapter. The chapter shall acquire legal personality only for purposes of
filing a petition for certification election from the date it was issued a
charter certificate.
The chapter shall be entitled to all other rights and privileges of a legitimate
labor organization only upon the submission of the following documents in
addition to its charter certificate:
(a) The names of the chapter's officers, their addresses, and the principal
office of the chapter; andcralawlibrary
(b) The chapter's constitution and by-laws: Provided, That where the
chapter's constitution and by-laws are the same as that of the federation or
the national union, this fact shall be indicated accordingly.
22
The additional supporting requirements shall be certified under oath by the
secretary or treasurer of the chapter and attested by its president. (Emphasis
ours.)
Article 234 now includes the term trade union center, but interestingly, the
provision indicating the procedure for chartering or creating a local or
chapter, namely Article 234-A, still makes no mention of a "trade union
center."
Also worth emphasizing is that even in the most recent amendment of the
implementing rules,54 there was no mention of a trade union center as being
among the labor organizations allowed to charter.
This Court deems it proper to apply the Latin maxim expressio unius est
exclusio alterius. Under this maxim of statutory interpretation, the
expression of one thing is the exclusion of another. When certain persons or
things are specified in a law, contract, or will, an intention to exclude all
others from its operation may be inferred. If a statute specifies one
exception to a general rule or assumes to specify the effects of a certain
provision, other exceptions or effects are excluded.55 Where the terms are
expressly limited to certain matters, it may not, by interpretation or
construction, be extended to other matters.56Such is the case here. If its
intent were otherwise, the law could have so easily and conveniently
included "trade union centers" in identifying the labor organizations allowed
to charter a chapter or local. Anything that is not included in the
enumeration is excluded therefrom, and a meaning that does not appear nor
is intended or reflected in the very language of the statute cannot be placed
therein.57 The rule is restrictive in the sense that it proceeds from the
premise that the legislating body would not have made specific
enumerations in a statute if it had the intention not to restrict its meaning
and confine its terms to those expressly mentioned.58 Expressium facit
cessare tacitum.59 What is expressed puts an end to what is implied. Casus
omissus pro omisso habendus est. A person, object or thing omitted must
have been omitted intentionally.
Therefore, since under the pertinent status and applicable implementing
rules, the power granted to labor organizations to directly create a chapter or
local through chartering is given to a federation or national union, then a
trade union center is without authority to charter directly.
The ruling of this Court in the instant case is not a departure from the policy
of the law to foster the free and voluntary organization of a strong and
united labor movement,60 and thus assure the rights of workers to self-
organization.61 The mandate of the Labor Code in ensuring strict
compliance with the procedural requirements for registration is not without
reason. It has been observed that the formation of a local or chapter
becomes a handy tool for the circumvention of union registration
requirements. Absent the institution of safeguards, it becomes a convenient
device for a small group of employees to foist a not-so-desirable federation
or union on unsuspecting co-workers and pare the need for wholehearted
voluntariness, which is basic to free unionism.62 As a legitimate labor
organization is entitled to specific rights under the Labor Code and involved
in activities directly affecting public interest, it is necessary that the law
afford utmost protection to the parties affected.63 However, as this Court has
enunciated in Progressive Development Corporation v. Secretary of
Department of Labor and Employment, it is not this Court's function to
augment the requirements prescribed by law. Our only recourse, as
previously discussed, is to exact strict compliance with what the law
provides as requisites for local or chapter formation. 64
In sum, although PDMP as a trade union center is a legitimate labor
organization, it has no power to directly create a local or chapter. Thus,
SMPPEU-PDMP cannot be created under the more lenient requirements for
chartering, but must have complied with the more stringent rules for
creation and registration of an independent union, including the 20%
membership requirement.
WHEREFORE, the instant Petition is GRANTED. The Decision dated 09
March 2005 of the Court of Appeals in CA-GR SP No. 66200
is REVERSED and SET ASIDE. The Certificate of Registration of San
Miguel Packaging Products Employees Union Pambansang Diwa ng
Manggagawang Pilipino is ORDERED CANCELLED, and SMPPEU-
PDMP DROPPED from the rolls of legitimate labor organizations.
Costs against petitioner.
SO ORDERED.
G.R. No. 177024 October 30, 2009
23
THE HERITAGE HOTEL MANILA (OWNED AND OPERATED BY
GRAND PLAZA HOTEL CORPORATION)Petitioner,
vs.
PINAG-ISANG GALING AT LAKAS NG MGA MANGGAGAWA SA
HERITAGE MANILA (PIGLAS-HERITAGE),Respondent.
DECISION
ABAD, J.:
This case is about a company’s objections to the registration of its rank and
file union for non-compliance with the requirements of its registration.
The Facts and the Case
Sometime in 2000, certain rank and file employees of petitioner Heritage
Hotel Manila (petitioner company) formed the "Heritage Hotel Employees
Union" (the HHE union). The Department of Labor and Employment-
National Capital Region (DOLE-NCR) later issued a certificate of
registration1 to this union.
Subsequently, the HHE union filed a petition for certification election2 that
petitioner company opposed. The company alleged that the HHE union
misrepresented itself to be an independent union, when it was, in truth, a
local chapter of the National Union of Workers in Hotel and Restaurant and
Allied Industries (NUWHRAIN). The company claimed that the HHE union
intentionally omitted disclosure of its affiliation with NUWHRAIN because
the company’s supervisors union was already affiliated with it.3 Thus, the
company also filed a petition for the cancellation of the HHE union’s
registration certificate.4
Meanwhile, the Med-Arbiter granted the HHE union’s petition for
certification election.5 Petitioner company appealed the decision to the
Secretary of Labor but the latter denied the appeal.6 The Secretary also
denied petitioner’s motion for reconsideration, prompting the company to
file a petition for certiorari7 with the Court of Appeals.
On October 12, 2001 the Court of Appeals issued a writ of injunction
against the holding of the HHE union’s certification election, effective until
the petition for cancellation of that union’s registration shall have been
resolved with finality.8 The decision of the Court of Appeals became final
when the HHE union withdrew the petition for review that it filed with this
Court.9
On December 10, 2003 certain rank and file employees of petitioner
company held a meeting and formed another union, the respondent Pinag-
Isang Galing at Lakas ng mga Manggagawa sa Heritage Manila (the
PIGLAS union). This union applied for registration with the DOLE-
NCR10 and got its registration certificate on February 9, 2004. Two months
later, the members of the first union, the HHE union, adopted a resolution
for its dissolution. The HHE union then filed a petition for cancellation of
its union registration.11
On September 4, 2004 respondent PIGLAS union filed a petition for
certification election12 that petitioner company also opposed, alleging that
the new union’s officers and members were also those who comprised the
old union. According to the company, the employees involved formed the
PIGLAS union to circumvent the Court of Appeals’ injunction against the
holding of the certification election sought by the former union. Despite the
company’s opposition, however, the Med-Arbiter granted the petition for
certification election.13
On December 6, 2004 petitioner company filed a petition to cancel the
union registration of respondent PIGLAS union. 14 The company claimed
that the documents submitted with the union’s application for registration
bore the following false information:
(a) The List of Members showed that the PIGLAS union had 100 union
members;15
(b) The Organizational Minutes said that 90 employees attended the
meeting on December 10, 2003;16
(c) The Attendance Sheet of the meeting of December 10, 2003 bore the
signature of 127 members who ratified the union’s Constitution and By-
Laws;17 and
(d) The Signature Sheet bore 128 signatures of those who attended that
meeting.18
24
Petitioner company alleged that the misrepresentation was evidenced by the
discrepancy in the number of union members appearing in the application
and the list as well as in the number of signatories to the attendance and
signature sheets. The minutes reported that only 90 employees attended the
meeting. The company further alleged that 33 members of respondent
PIGLAS union were members of the defunct HHE union. This, according to
the company, violated the policy against dual unionism and showed that the
new union was merely an alter ego of the old.
On February 22, 2005 the DOLE-NCR denied the company’s petition to
cancel respondent PIGLAS union’s registration for the reason that the
discrepancies in the number of members stated in the application’s
supporting documents were not material and did not constitute
misrepresentation. As for the charge of dual unionism, the same is not a
ground for canceling registration. It merely exposed a union member to a
possible charge of disloyalty, an internal matter. Here, the members of the
former union simply exercised their right to self-organization and to the
freedom of association when they subsequently joined the PIGLAS union. 19
On appeal, the Bureau of Labor Relation (BLR) affirmed the ruling of the
DOLE-NCR. It reasoned that respondent PIGLAS union’s organization
meeting lasted for 12 hours. It was possible for the number of attendees to
have increased from 90 to 128 as the meeting progressed. Besides, with a
total of 250 employees in the bargaining unit, the union needed only 50
members to comply with the 20 percent membership requirement. Thus, the
union could not be accused of misrepresentation since it did not pad its
membership to secure registration.
As for the issue of dual unionism, it has become moot and academic, said
the BLR, because of the dissolution of the old union and the cancellation of
its certificate of registration.20
Petitioner company filed a petition for certiorari with the Court of
Appeals,21 assailing the order of the BLR. But the latter court dismissed the
petition, not being accompanied by material documents and portions of the
record.22 The company filed a motion for reconsideration, attaching parts of
the record that were deemed indispensable but the court denied it for lack of
merit.23 Hence, the company filed this petition for review under Rule 45.
Issues Presented
The petition presents the following issues:
1. Whether or not the Court of Appeals erred in dismissing the petition for
certiorari before it for failure of petitioner company to attach certain
material portions of the record;
2. Whether or not the union made fatal misrepresentation in its application
for union registration; and
3. Whether or not "dual unionism" is a ground for canceling a union’s
registration.
The Rulings of the Court
First. While the Court of Appeals correctly dismissed the company’s
petition initially for failure to attach material portions of the record, the
court should have bended back a little when petitioner company
subsequently attached those missing materials to its motion for
reconsideration. As a general rule, petitions for certiorari that lack copies of
essential pleadings and portions of the record may be dismissed but this rule
has not been regarded as absolute. The omission may be cured.24
The Court of Appeals has three courses of action when the annexes to the
petition are insufficient. It may dismiss the petition,25 require the
submission of the relevant documents, or order the filing of an amended
petition with the required pleadings or documents. A petition lacking in
essential pleadings or portions of the record may still be given due course,
or reinstated if earlier dismissed, upon subsequent submission of the
necessary documents or to serve the higher interest of justice. 26
Second. Since a remand of the case to the Court of Appeals for a
determination of the substantive issues will only result in more delays and
since these issues have been amply argued by the opposing sides in the
various pleadings and documents they submitted to this Court, the case may
now be resolved on the merits.
Did respondent PIGLAS union commit fraud and misrepresentation in its
application for union registration? We agree with the DOLE-NCR and the
25
BLR that it did not. Except for the evident discrepancies as to the number of
union members involved as these appeared on the documents that supported
the union’s application for registration, petitioner company has no other
evidence of the alleged misrepresentation. But those discrepancies alone
cannot be taken as an indication that respondent misrepresented the
information contained in these documents.
The charge that a labor organization committed fraud and misrepresentation
in securing its registration is a serious charge and deserves close scrutiny. It
is serious because once such charge is proved, the labor union acquires none
of the rights accorded to registered organizations. Consequently, charges of
this nature should be clearly established by evidence and the surrounding
circumstances.27
Here, the discrepancies in the number of union members or employees
stated in the various supporting documents that respondent PIGLAS union
submitted to labor authorities can be explained. While it appears in the
minutes of the December 10, 2003 organizational meeting that only 90
employees responded to the roll call at the beginning, it cannot be assumed
that such number could not grow to 128 as reflected on the signature sheet
for attendance. The meeting lasted 12 hours from 11:00 a.m. to 11:00 p.m.
There is no evidence that the meeting hall was locked up to exclude late
attendees.1 a vv p h i 1
There is also nothing essentially mysterious or irregular about the fact that
only 127 members ratified the union’s constitution and by-laws when 128
signed the attendance sheet. It cannot be assumed that all those who
attended approved of the constitution and by-laws. Any member had the
right to hold out and refrain from ratifying those documents or to simply
ignore the process.
At any rate, the Labor Code28 and its implementing rules29 do not require
that the number of members appearing on the documents in question should
completely dovetail. For as long as the documents and signatures are shown
to be genuine and regular and the constitution and by-laws democratically
ratified, the union is deemed to have complied with registration
requirements.
Petitioner company claims that respondent PIGLAS union was required to
submit the names of all its members comprising at least 20 percent of the
employees in the bargaining unit. Yet the list it submitted named only 100
members notwithstanding that the signature and attendance sheets reflected
a membership of 127 or 128 employees. This omission, said the company,
amounted to material misrepresentation that warranted the cancellation of
the union’s registration.
But, as the labor authorities held, this discrepancy is immaterial. A
comparison of the documents shows that, except for six members, the
names found in the subject list are also in the attendance and signature
sheets. Notably, the bargaining unit that respondent PIGLAS union sought
to represent consisted of 250 employees. Only 20 percent of this number or
50 employees were required to unionize. Here, the union more than
complied with such requirement.
Labor laws are liberally construed in favor of labor especially if doing so
would affirm its constitutionally guaranteed right to self-
organization.30 Here, the PIGLAS union’s supporting documents reveal the
unmistakable yearning of petitioner company’s rank and file employees to
organize. This yearning should not be frustrated by inconsequential
technicalities.
Third. The fact that some of respondent PIGLAS union’s members were
also members of the old rank and file union, the HHE union, is not a ground
for canceling the new union’s registration. The right of any person to join an
organization also includes the right to leave that organization and join
another one. Besides, HHE union is dead. It had ceased to exist and its
certificate of registration had already been cancelled. Thus, petitioner’s
arguments on this point may also be now regarded as moot and academic.
WHEREFORE, the Court DENIES the petition and AFFIRMS the
decision of the Bureau of Labor Relations in BLR-A-26-3-05 dated May 26,
2006.
SO ORDERED.
G.R. No. 178989 March 18, 2010
26
EAGLE RIDGE GOLF & COUNTRY CLUB, Petitioner,
vs.
COURT OF APPEALS and EAGLE RIDGE EMPLOYEES UNION
(EREU), Respondents.
DECISION
VELASCO, JR., J.:
In this petition for certiorari under Rule 65, Eagle Ridge Golf & Country
Club (Eagle Ridge) assails and seeks to nullify the Resolutions of the Court
of Appeals (CA) dated April 27, 20071 and June 6, 2007,2 issued in CA-
G.R. SP No. 98624, denying a similar recourse petitioner earlier interposed
to set aside the December 21, 2006 Decision3 of the Bureau of Labor
Relations (BLR), as reiterated in a Resolution4 of March 7, 2007.
Petitioner Eagle Ridge is a corporation engaged in the business of
maintaining golf courses. It had, at the end of CY 2005, around 112 rank-
and-file employees. The instant case is an off-shot of the desire of a number
of these employees to organize themselves as a legitimate labor union and
their employer’s opposition to their aspiration.
The Facts
On December 6, 2005, at least 20% of Eagle Ridge’s rank-and-file
employees—the percentage threshold required under Article 234(c) of the
Labor Code for union registration—had a meeting where they organized
themselves into an independent labor union, named "Eagle Ridge
Employees Union" (EREU or Union),5 elected a set of officers,6and
ratified7 their constitution and by-laws.8
On December 19, 2005, EREU formally applied for registration9 and filed
BLR Reg. Form No. I-LO, s. 199810 before the Department of Labor and
Employment (DOLE) Regional Office IV (RO IV). In time, DOLE RO IV
granted the application and issued EREU Registration Certificate (Reg.
Cert.) No. RO400-200512-UR-003.
The EREU then filed a petition for certification election in Eagle Ridge
Golf & Country Club, docketed as Case No. RO400-0601-RU-002. Eagle
Ridge opposed this petition,11 followed by its filing of a petition for the
cancellation12 of Reg. Cert. No. RO400-200512-UR-003. Docketed as
RO400-0602-AU-003, Eagle Ridge’s petition ascribed misrepresentation,
false statement, or fraud to EREU in connection with the adoption of its
constitution and by-laws, the numerical composition of the Union, and the
election of its officers.
Going into specifics, Eagle Ridge alleged that the EREU declared in its
application for registration having 30 members, when the minutes of its
December 6, 2005 organizational meeting showed it only had 26 members.
The misrepresentation was exacerbated by the discrepancy between the
certification issued by the Union secretary and president that 25 members
actually ratified the constitution and by-laws on December 6, 2005 and the
fact that 26 members affixed their signatures on the documents, making one
signature a forgery.
Finally, Eagle Ridge contended that five employees who attended the
organizational meeting had manifested the desire to withdraw from the
union. The five executed individual affidavits or Sinumpaang Salaysay13 on
February 15, 2006, attesting that they arrived late at said meeting which
they claimed to be drinking spree; that they did not know that the
documents they signed on that occasion pertained to the organization of a
union; and that they now wanted to be excluded from the Union. The
withdrawal of the five, Eagle Ridge maintained, effectively reduced the
union membership to 20 or 21, either of which is below the mandatory
minimum 20% membership requirement under Art. 234(c) of the Labor
Code. Reckoned from 112 rank-and-file employees of Eagle Ridge, the
required number would be 22 or 23 employees.
As a counterpoint, EREU, in its Comment,14 argued in gist:
1) the petition for cancellation was procedurally deficient as it does not
contain a certification against forum shopping and that the same was
verified by one not duly authorized by Eagle Ridge’s board;
2) the alleged discrepancies are not real for before filing of its application
on December 19, 2005, four additional employees joined the union on
December 8, 2005, thus raising the union membership to 30 members as of
December 19, 2005;
27
3) the understatement by one member who ratified the constitution and by-
laws was a typographical error, which does not make it either grave or
malicious warranting the cancellation of the union’s registration;
4) the retraction of 5 union members should not be given any credence for
the reasons that: (a) the sworn statements of the five retracting union
members sans other affirmative evidence presented hardly qualify as clear
and credible evidence considering the joint affidavits of the other members
attesting to the orderly conduct of the organizational meeting; (b) the
retracting members did not deny signing the union documents; (c)
following, Belyca Corporation v. Ferrer-Calleja15 and Oriental Tin Can
Labor Union v. Secretary of Labor and Employment,16 it can be presumed
that "duress, coercion or valuable consideration" was brought to bear on the
retracting members; and (d) citing La Suerte Cigar and Cigarette Factory v.
Director of Bureau of Labor Relations,17 Belyca Corporation and Oriental
Tin Can Labor Union, where the Court ruled that "once the required
percentage requirement has been reached, the employees’ withdrawal from
union membership taking place after the filing of the petition for
certification election will not affect the petition," it asserted the applicability
of said ruling as the petition for certification election was filed on January
10, 2006 or long before February 15, 2006 when the affidavits of retraction
were executed by the five union members, thus contending that the
retractions do not affect nor be deemed compelling enough to cancel its
certificate of registration.
The Union presented the duly accomplished union membership
forms18 dated December 8, 2005 of four additional members. And to rebut
the allegations in the affidavits of retraction of the five union members, it
presented the Sama-Samang Sinumpaang Salaysay19 dated March 20, 2006
of eight union members; another Sama-Samang Sinumpaang
Salaysay,20 also bearing date March 20, 2006, of four other union members;
and the Sworn Statement21 dated March 16, 2006 of the Union’s legal
counsel, Atty. Domingo T. Añonuevo. These affidavits attested to the
orderly and proper proceedings of the organizational meeting on December
6, 2005.
In its Reply,22 Eagle Ridge reiterated the grounds it raised in its petition for
cancellation and asserted further that the four additional members were
fraudulently admitted into the Union. As Eagle Ridge claimed, the
applications of the four neither complied with the requirements under
Section 2, Art. IV of the union’s constitution and by-laws nor were they
shown to have been duly received, issued receipts for admission fees,
processed with recommendation for approval, and approved by the union
president.
Moreover, Eagle Ridge presented another Sinumpaang Salaysay23 of
retraction dated March 15, 2006 of another union member. The membership
of EREU had thus been further reduced to only 19 or 20. This same member
was listed in the first Sama-Samang Sinumpaang Salaysay24 presented by
the Union but did not sign it.
The Ruling of the DOLE Regional Director
After due proceedings, the DOLE Regional Director, Region IV-A,
focusing on the question of misrepresentation, issued on April 28, 2006 an
Order25 finding for Eagle Ridge, its petition to cancel Reg. Cert. No.
RO400-200512-UR-003 being granted and EREU being delisted from the
roster of legitimate labor organizations.
Aggrieved, the Union appealed to the BLR, the recourse docketed as BLR
A-C-30-5-31-06 (Case No. RO400-0602-AU-003).
The Ruling of the BLR
Initially, the BLR, then headed by an Officer-in-Charge (OIC),
affirmed26 the appealed order of the DOLE Regional Director.
Undeterred by successive set backs, EREU interposed a motion for
reconsideration, contending that:
1) Contrary to the ruling of the BLR OIC Director, a certificate of non-
forum shopping is mandatory requirement, under Department Order No.
(DO) 40-03 and the Rules of Court, non-compliance with which is a ground
to dismiss a petition for cancellation of a certificate of registration;
2) It was erroneous for both the Regional Director and the BLR OIC
Director to give credence to the retraction statements of union members
which were not presented for reaffirmation during any of the hearings of the
28
case, contrary to the requirement for the admission of such evidence under
Sec. 11, Rule XI of DO 40-03.
In a Decision dated December 21, 2006, the BLR, now headed by Director
Rebecca C. Chato, set aside the July 28, 2006 order of the BLR OIC
Director, disposing as follows:
WHEREFORE, the motion for reconsideration is hereby GRANTED and
our Resolution dated 28 July 2006 is hereby VACATED. Accordingly, the
Eagle Ridge Employees Union (EREU) shall remain in the roster of
legitimate organizations.
In finding for the Union, the BLR Director eschewed procedural
technicalities. Nonetheless, she found as without basis allegations of
misrepresentation or fraud as ground for cancellation of EREU’s
registration.
In turn aggrieved, Eagle Ridge sought but was denied reconsideration per
the BLR’s Resolution dated March 7, 2007.
Eagle Ridge thereupon went to the CA on a petition for certiorari.
The Ruling of the CA
On April 27, 2007, the appellate court, in a terse two-page
Resolution,27 dismissed Eagle Ridge’s petition for being deficient, as:
1. the questioned [BLR] Decision dated December 21, 2006 and the
Resolution dated March 7, 2007 Resolution [appended to the petition] are
mere machine copies; and
2. the verification and certification of non-forum shopping was subscribed
to by Luna C. Piezas on her representation as the legal counsel of the
petitioner, but sans [the requisite] Secretary’s Certificate or Board
Resolution authorizing her to execute and sign the same.
The CA later denied, in its second assailed resolution, Eagle Ridge’s motion
for reconsideration, albeit the latter had submitted a certificate to show that
its legal counsel has been authorized, per a board resolution, to represent the
corporation.
The Issues
Eagle Ridge is now before us via this petition for certiorari on the
submissions that:
I.
[THE CA] COMMITTED SERIOUS ERROR AND GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN DISMISSING THE COMPANY’S PETITION FOR
CERTIORARI AND DENYING ITS MOTION FOR
RECONSIDERATION CONSIDERING THAT THE COMPANY’S
PREVIOUS COUNSEL WAS AUTHORIZED TO REPRESENT THE
COMPANY IN THE PETITION FOR CERTIORARI FILED BEFORE
THE [CA];
II.
IN ORDER NOT TO FURTHER PREJUDICE THE COMPANY, IT IS
RESPECTFULLY SUBMITTED THAT THIS HONORABLE COURT
COULD TAKE COGNIZANCE OF THE MERITS OF THIS CASE AND
RESOLVE THAT BASED ON THE EVIDENCE ON RECORD, THERE
WAS FRAUD, MISREPRESENTATION AND/OR FALSE STATEMENT
WHICH WARRANT THE CANCELLATION OF CERTIFICATE OF
REGISTRATION OF EREU.28
The Court’s Ruling
We dismiss the petition.
Procedural Issue: Lack of Authority
Certiorari is an extraordinary, prerogative remedy and is never issued as a
matter of right.29 Accordingly, the party who seeks to avail of it must
strictly observe the rules laid down by law.30
Petitions for certiorari under Rule 65 of the Rules of Court require a "sworn
certification of non-forum shopping as provided in the third paragraph of
Section 3, Rule 46."31 Sec. 3, paragraphs 4 and 6 of Rule 46 pertinently
provides:
29
SEC. 3. Contents and filing of petition; effect of non-compliance with
requirements. — x x x x
xxxx
xxxx
The petitioner shall also submit together with the petition a sworn
certification that he has not theretofore commenced any action
involving the same issues in the Supreme Court, the Court of Appeals x x
x, or any other tribunal or agency; if there is such other action or
proceeding, he must state the status of the same x x x.
xxxx
The failure of the petitioner to comply with any of the foregoing
requirements shall be sufficient ground for the dismissal of the petition.
(Emphasis supplied.)
Evidently, the Rules requires the petitioner, not his counsel, to sign under
oath the requisite certification against non-forum shopping. Such
certification is a peculiar personal representation on the part of the principal
party, an assurance to the court that there are no other pending cases
involving basically the same parties, issues, and cause of action. 32
In the instant case, the sworn verification and certification of non-forum
shopping in the petition for certiorari of Eagle Ridge filed before the CA
carried the signature of its counsel without the requisite authority.
Eagle Ridge tried to address its faux pas by submitting its board secretary’s
Certificate33 dated May 15, 2007, attesting to the issuance on May 10, 2007
of Board Resolution No. ERGCCI 07/III-01 that authorized its counsel of
record, Atty. Luna C. Piezas, to represent it before the appellate court.
The CA, however, rejected Eagle Ridge’s virtual plea for the relaxation of
the rules on the signing of the verification and certification against forum
shopping, observing that the board resolution adverted to was approved
after Atty. Piezas has signed and filed for Eagle Ridge the petition for
certiorari.
The appellate court’s assailed action is in no way tainted with grave abuse
of discretion, as Eagle Ridge would have this Court believed. Indeed, a
certification of non-forum shopping signed by counsel without the proper
authorization is defective and constitutes a valid cause for dismissal of the
petition.34
The submission of the board secretary’s certificate through a motion for
reconsideration of the CA’s decision dismissing the petition for certiorari
may be considered a substantial compliance with the Rules of Court. 35 Yet,
this rule presupposes that the authorizing board resolution, the approval of
which is certified to by the secretary’s certification, was passed within the
reglementary period for filing the petition. This particular situation does not,
however, obtain under the premises. The records yield the following
material dates and incidents: Eagle Ridge received the May 7, 2007
resolution of the BLR Director on March 9, 2007, thus giving it 60 days or
up to May 8, 2007 to file a petition for certiorari, as it in fact filed its
petition on April 18, 2007 before the CA. The authorization for its counsel,
however, was only issued in a meeting of its board on May 10, 2007 or a
couple of days beyond the 60-day reglementary period referred to in filing a
certiorari action. Thus, there was no substantial compliance with the Rules.
As with most rules of procedure, however, exceptions are invariably
recognized and the relaxation of procedural rules on review has been
effected to obviate jeopardizing substantial justice.36 This liberality stresses
the importance of review in our judicial grievance structure to accord every
party litigant the amplest opportunity for the proper and just disposition of
his cause, freed from the constraints of technicalities.37 But concomitant to a
liberal interpretation of the rules of procedure should be an effort on the part
of the party invoking liberality to adequately explain his failure to abide by
the rules.381avvphi1
To us, Eagle Ridge has not satisfactorily explained its failure to comply. It
may be true, as Eagle Ridge urges, that its counsel’s authority to represent
the corporation was never questioned before the DOLE regional office and
agency. But EREU’s misstep could hardly lend Eagle Ridge comfort. And
obviously, Eagle Ridge and its counsel erred in equating the latter’s
representation as legal counsel with the authority to sign the verification and
the certificate of non-forum shopping in the former’s behalf. We note that
30
the authority to represent a client before a court or quasi-judicial agency
does not require an authorizing board resolution, as the counsel-client
relationship is presumed by the counsel’s representation by the filing of a
pleading on behalf of the client. In filing a pleading, the counsel affixes his
signature on it, but it is the client who must sign the verification and the
certification against forum shopping, save when a board resolution
authorizes the former to sign so.
It is entirely a different matter for the counsel to sign the verification and
the certificate of non-forum shopping. The attestation or certification in
either verification or certification of non-forum shopping requires the act of
the principal party. As earlier indicated, Sec. 3 of Rule 46 exacts this
requirement; so does the first paragraph of Sec. 5 of Rule 7 pertinently
reading:
SEC. 5. Certification against forum shopping. — The plaintiff or principal
party shall certify under oath in the complaint or other initiatory pleading
asserting a claim for relief, or in a sworn certification annexed thereto and
simultaneously filed therewith: (a) that he has not theretofore commenced
any action or filed any claim involving the same issues in any court, tribunal
or quasi-judicial agency and, to the best of his knowledge, no such other
action or claim is pending therein; (b) if there is such other pending action
or claim, a complete statement of the present status thereof; and (c) if he
should thereafter learn that the same or similar action or claim has been
filed or is pending, he shall report that fact within five (5) days therefrom to
the court wherein his aforesaid complaint or initiatory pleading has been
filed. (Emphasis added.)
It is, thus, clear that the counsel is not the proper person to sign the
certification against forum shopping. If, for any reason, the principal party
cannot sign the petition, the one signing on his behalf must have been duly
authorized.39
In addition, Eagle Ridge maintains that the submitted board resolution,
albeit passed after the filing of the petition was filed, should be treated as a
ratificatory medium of the counsel’s act of signing the sworn certification of
non-forum shopping.
We are not inclined to grant the desired liberality owing to Eagle Ridge’s
failure to sufficiently explain its failure to follow the clear rules.
If for the foregoing considerations alone, the Court could very well dismiss
the instant petition. Nevertheless, the Court will explore the merits of the
instant case to obviate the inequity that might result from the outright denial
of the petition.
Substantive Issue: No Fraud in the Application
Eagle Ridge cites the grounds provided under Art. 239(a) and (c) of the
Labor Code for its petition for cancellation of the EREU’s registration. On
the other hand, the Union asserts bona fide compliance with the registration
requirements under Art. 234 of the Code, explaining the seeming
discrepancies between the number of employees who participated in the
organizational meeting and the total number of union members at the time it
filed its registration, as well as the typographical error in its certification
which understated by one the number of union members who ratified the
union’s constitution and by-laws.
Before their amendment by Republic Act No. 9481 40 on June 15, 2007, the
then governing Art. 234 (on the requirements of registration of a labor
union) and Art. 239 (on the grounds for cancellation of union registration)
of the Labor Code respectively provided as follows:
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 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;
31
xxxx
(e) Four copies (4) 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.41
xxxx
ART. 239. GROUNDS FOR CANCELLATION OF UNION
REGISTRATION. –– The following shall constitute grounds for cancellation
of union registration:
(a) Misrepresentation, false statements or fraud in connection with the
adoption or ratification of the constitution and by-laws or amendments
thereto, the minutes of ratification, and the list of members who took
part in the ratification;
xxxx
(c) Misrepresentation, false statements or fraud in connection with the
election of officers, minutes of the election of officers, the list of voters,
or failure to submit these documents together with the list of the newly
elected/appointed officers and their postal addresses within thirty (30) days
from election.42 (Emphasis supplied.)
A scrutiny of the records fails to show any misrepresentation, false
statement, or fraud committed by EREU to merit cancellation of its
registration.
First. The Union submitted the required documents attesting to the facts of
the organizational meeting on December 6, 2005, the election of its officers,
and the adoption of the Union’s constitution and by-laws. It submitted
before the DOLE Regional Office with its Application for Registration and
the duly filled out BLR Reg. Form No. I-LO, s. 1998, the following
documents, to wit:
(a) the minutes of its organizational meeting43 held on December 6, 2005
showing 26 founding members who elected its union officers by secret
ballot;
(b) the list of rank-and-file employees44 of Eagle Ridge who attended the
organizational meeting and the election of officers with their individual
signatures;
(c) the list of rank-and-file employees45 who ratified the union’s constitution
and by-laws showing the very same list as those who attended the
organizational meeting and the election of officers with their individual
signatures except the addition of four employees without their
signatures, i.e., Cherry Labajo, Grace Pollo, Annalyn Poniente and Rowel
Dolendo;
(d) the union’s constitution and by-laws46 as approved on December 6,
2005;
47
(e) the list of officers and their addresses;
(f) the list of union members48 showing a total of 30 members; and
(g) the Sworn Statement49 of the union’s elected president and secretary. All
the foregoing documents except the sworn statement of the president and
the secretary were accompanied by Certifications50by the union secretary
duly attested to by the union president.
Second. The members of the EREU totaled 30 employees when it applied
on December 19, 2005 for registration. The Union thereby complied with
the mandatory minimum 20% membership requirement under Art. 234(c).
Of note is the undisputed number of 112 rank-and-file employees in Eagle
Ridge, as shown in the Sworn Statement of the Union president and
secretary and confirmed by Eagle Ridge in its petition for cancellation.
Third. The Union has sufficiently explained the discrepancy between the
number of those who attended the organizational meeting showing 26
employees and the list of union members showing 30. The difference is due
to the additional four members admitted two days after the organizational
meeting as attested to by their duly accomplished Union Membership
forms. Consequently, the total number of union members, as of December
8, 2005, was 30, which was truthfully indicated in its application for
registration on December 19, 2005.
32
As aptly found by the BLR Director, the Union already had 30 members
when it applied for registration, for the admission of new members is
neither prohibited by law nor was it concealed in its application for
registration. Eagle Ridge’s contention is flawed when it equated the
requirements under Art. 234(b) and (c) of the Labor Code. Par. (b) clearly
required the submission of the minutes of the organizational meetings and
the list of workers who participated in the meetings, while par. (c) merely
required the list of names of all the union members comprising at least 20%
of the bargaining unit. The fact that EREU had 30 members when it applied
for registration on December 19, 2005 while only 26 actually participated in
the organizational meeting is borne by the records.
Fourth. In its futile attempt to clutch at straws, Eagle Ridge assails the
inclusion of the additional four members allegedly for not complying with
what it termed as "the sine qua non requirements" for union member
applications under the Union’s constitution and by-laws, specifically Sec. 2
of Art. IV. We are not persuaded. Any seeming infirmity in the application
and admission of union membership, most especially in cases of
independent labor unions, must be viewed in favor of valid membership.
The right of employees to self-organization and membership in a union
must not be trammeled by undue difficulties. In this case, when the Union
said that the four employee-applicants had been admitted as union members,
it is enough to establish the fact of admission of the four that they had duly
signified such desire by accomplishing the membership form. The fact, as
pointed out by Eagle Ridge, that the Union, owing to its scant membership,
had not yet fully organized its different committees evidently shows the
direct and valid acceptance of the four employee applicants rather than deter
their admission—as erroneously asserted by Eagle Ridge.
Fifth. The difference between the number of 26 members, who ratified the
Union’s constitution and by-laws, and the 25 members shown in the
certification of the Union secretary as having ratified it, is, as shown by the
factual antecedents, a typographical error. It was an insignificant mistake
committed without malice or prevarication. The list of those who attended
the organizational meeting shows 26 members, as evidenced by the
signatures beside their handwritten names. Thus, the certification’s
understatement by one member, while not factual, was clearly an error, but
neither a misleading one nor a misrepresentation of what had actually
happened.
Sixth. In the more meaty issue of the affidavits of retraction executed by six
union members, we hold that the probative value of these affidavits cannot
overcome those of the supporting affidavits of 12 union members and their
counsel as to the proceedings and the conduct of the organizational meeting
on December 6, 2005. The DOLE Regional Director and the BLR OIC
Director obviously erred in giving credence to the affidavits of retraction,
but not according the same treatment to the supporting affidavits.
The six affiants of the affidavits of retraction were not presented in a
hearing before the Hearing Officer (DOLE Regional Director), as required
under the Rules Implementing Book V of the Labor Code covering Labor
Relations. Said Rules is embodied in Department Order No. (DO) 40-03
which was issued on February 17, 2003 and took effect on March 15, 2003
to replace DO 9 of 1997. Sec. 11, Rule XI of DO 40-03 specifically
requires:
Section 11. Affirmation of testimonial evidence. – Any affidavit
submitted by a party to prove his/her claims or defenses shall be re-
affirmed by the presentation of the affiant before the Med-Arbiter
or Hearing Officer, as the case may be. Any affidavit submitted without
the re-affirmation of the affiantduring a scheduled hearing shall not be
admitted in evidence, except when the party against whom the affidavit is
being offered admits all allegations therein and waives the examination of
the affiant.
It is settled that affidavits partake the nature of hearsay evidence, since they
are not generally prepared by the affiant but by another who uses his own
language in writing the affiant’s statement, which may thus be either
omitted or misunderstood by the one writing them. 51 The above rule affirms
the general requirement in adversarial proceedings for the examination of
the affiant by the party against whom the affidavit is offered. In the instant
case, it is required for affiants to re-affirm the contents of their affidavits
during the hearing of the instant case for them to be examined by the
opposing party, i.e., the Union.
33
For their non-presentation and consonant to the above-quoted rule, the six
affidavits of retraction are inadmissible as evidence against the Union in the
instant case. Moreover, the affidavit and joint-affidavits presented by the
Union before the DOLE Regional Director were duly re-affirmed in the
hearing of March 20, 2006 by the affiants. Thus, a reversible error was
committed by the DOLE Regional Director and the BLR OIC Director in
giving credence to the inadmissible affidavits of retraction presented by
Eagle Ridge while not giving credence to the duly re-affirmed affidavits
presented by the Union.
Evidently, the allegations in the six affidavits of retraction have no
probative value and at the very least cannot outweigh the rebutting
attestations of the duly re-affirmed affidavits presented by the Union.
Seventh. The fact that six union members, indeed, expressed the desire to
withdraw their membership through their affidavits of retraction will not
cause the cancellation of registration on the ground of violation of Art.
234(c) of the Labor Code requiring the mandatory minimum 20%
membership of rank-and-file employees in the employees’ union.
The six retracting union members clearly severed and withdrew their union
membership. The query is whether such separation from the Union can
detrimentally affect the registration of the Union.
We answer in the negative.
Twenty percent (20%) of 112 rank-and-file employees in Eagle Ridge
would require a union membership of at least 22 employees (112 x 205 =
22.4). When the EREU filed its application for registration on December 19,
2005, there were clearly 30 union members. Thus, when the certificate of
registration was granted, there is no dispute that the Union complied with
the mandatory 20% membership requirement.
Besides, it cannot be argued that the six affidavits of retraction retroact to
the time of the application of registration or even way back to the
organizational meeting. Prior to their withdrawal, the six employees in
question were bona fide union members. More so, they never disputed
affixing their signatures beside their handwritten names during the
organizational meetings. While they alleged that they did not know what
they were signing, it bears stressing that their affidavits of retraction were
not re-affirmed during the hearings of the instant case rendering them of
little, if any, evidentiary value.
With the withdrawal of six union members, there is still compliance with
the mandatory membership requirement under Art. 234(c), for the
remaining 24 union members constitute more than the 20% membership
requirement of 22 employees.
Eagle Ridge further argues that the list of union members includes a
supervisory employee. This is a factual issue which had not been raised at
the first instance before the DOLE Regional Director and cannot be
appreciated in this proceeding. To be sure, Eagle Ridge knows well who
among its personnel belongs or does not belong to the supervisory group.
Obviously, its attempt to raise the issue referred to is no more than an
afterthought and ought to be rejected.
Eighth. Finally, it may not be amiss to note, given the factual antecedents
of the instant case, that Eagle Ridge has apparently resorted to filing the
instant case for cancellation of the Union’s certificate of registration to bar
the holding of a certification election. This can be gleaned from the fact that
the grounds it raised in its opposition to the petition for certification election
are basically the same grounds it resorted to in the instant case for
cancellation of EREU’s certificate of registration. This amounts to a clear
circumvention of the law and cannot be countenanced.
For clarity, we reiterate the following undisputed antecedent facts:
(1) On December 6, 2005, the Union was organized, with 26 employees of
Eagle Ridge attending;
(2) On December 19, 2005, the Union filed its formal application for
registration indicating a total of 30 union members with the inclusion of
four additional members on December 8, 2005 (Reg. Cert. No. RO400-
200512-UR-003 was eventually issued by the DOLE RO IV-A);
(3) On January 10, 2006, the Union filed before the DOLE RO IV-A its
petition for certification election in Eagle Ridge;
34
(4) On February 13, 2006, Eagle Ridge filed its Position Paper opposing the
petition for certification election on essentially the same grounds it raised in
the instant case; and
(5) On February 24, 2006, Eagle Ridge filed the instant case for cancellation
of the Union’s certificate of registration on essentially the same grounds it
raised in its opposition to the Union’s petition for certification election.
Evidently, as the Union persuasively argues, the withdrawal of six member-
employees from the Union will affect neither the Union’s registration nor its
petition for certification election, as their affidavits of retraction were
executed after the Union’s petition for certification election had been filed.
The initial five affidavits of retraction were executed on February 15, 2006;
the sixth, on March 15, 2006. Indisputably, all six were executed way after
the filing of the petition for certification election on January 10, 2006.
In Eastland Manufacturing Company, Inc. v. Noriel,52 the Court
emphasized, and reiterated its earlier rulings,53 that "even if there were less
than 30% [the required percentage of minimum membership then] of the
employees asking for a certification election, that of itself would not be a
bar to respondent Director ordering such an election provided, of course,
there is no grave abuse of discretion."54 Citing Philippine Association of
Free Labor Unions v. Bureau of Labor Relations,55 the Court emphasized
that a certification election is the most appropriate procedure for the desired
goal of ascertaining which of the competing organizations should represent
the employees for the purpose of collective bargaining.56
Indeed, where the company seeks the cancellation of a union’s registration
during the pendency of a petition for certification election, the same
grounds invoked to cancel should not be used to bar the certification
election. A certification election is the most expeditious and fairest mode of
ascertaining the will of a collective bargaining unit as to its choice of its
exclusive representative.57 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.58
The Court ends this disposition by reproducing the following apt excepts
from its holding in S.S. Ventures International, Inc. v. S.S. Ventures Labor
Union (SSVLU) on the effect of the withdrawal from union membership
right before or after the filing of a petition for certification election:
We are not persuaded. As aptly noted by both the BLR and CA, these
mostly undated written statements submitted by Ventures on March 20,
2001, or seven months after it filed its petition for cancellation of
registration, partake of the nature of withdrawal of union membership
executed after the Union’s filing of a petition for certification election on
March 21, 2000. We have in precedent cases said that the employees’
withdrawal from a labor union made before the filing of the petition for
certification election is presumed voluntary, while withdrawal after the
filing of such petition is considered to be involuntary and does not
affect the same. Now then, if a withdrawal from union membership
done after a petition for certification election has been filed does not
vitiate such petition, is it not but logical to assume that such withdrawal
cannot work to nullify the registration of the union? Upon this light, the
Court is inclined to agree with the CA that the BLR did not abuse its
discretion nor gravely err when it concluded that the affidavits of retraction
of the 82 members had no evidentiary weight.59 (Emphasis supplied.)
WHEREFORE, premises considered, we DISMISS the instant petition for
lack of merit.
Costs against petitioner.
SO ORDERED.
G.R. No. 169717 March 16, 2011
SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL
SOLIDARITY OF UNIONS IN THE PHILIPPINES FOR
EMPOWERMENT AND REFORMS (SMCC-SUPER), ZACARRIAS
JERRY VICTORIO-Union President,Petitioner,
vs.
CHARTER CHEMICAL and COATING
CORPORATION, Respondent.
DECISION
35
DEL CASTILLO, J.:
The right to file a petition for certification election is accorded to a labor
organization provided that it complies with the requirements of law for
proper registration. The inclusion of supervisory employees in a labor
organization seeking to represent the bargaining unit of rank-and-file
employees does not divest it of its status as a legitimate labor organization.
We apply these principles to this case.
This Petition for Review on Certiorari seeks to reverse and set aside the
Court of Appeal’s March 15, 2005 Decision1 in CA-G.R. SP No. 58203,
which annulled and set aside the January 13, 2000 Decision2 of the
Department of Labor and Employment (DOLE) in OS-A-6-53-99 (NCR-
OD-M-9902-019) and the September 16, 2005 Resolution3 denying
petitioner union’s motion for reconsideration.
Factual Antecedents
On February 19, 1999, Samahang Manggagawa sa Charter Chemical
Solidarity of Unions in the Philippines for Empowerment and Reforms
(petitioner union) filed a petition for certification election among the regular
rank-and-file employees of Charter Chemical and Coating Corporation
(respondent company) with the Mediation Arbitration Unit of the DOLE,
National Capital Region.
On April 14, 1999, respondent company filed an Answer with Motion to
Dismiss4 on the ground that petitioner union is not a legitimate labor
organization because of (1) failure to comply with the documentation
requirements set by law, and (2) the inclusion of supervisory employees
within petitioner union.5
Med-Arbiter’s Ruling
On April 30, 1999, Med-Arbiter Tomas F. Falconitin issued a
Decision6 dismissing the petition for certification election. The Med-Arbiter
ruled that petitioner union is not a legitimate labor organization because the
Charter Certificate, "Sama-samang Pahayag ng Pagsapi at Authorization,"
and "Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga Sumang-
ayon at Nagratipika sa Saligang Batas" were not executed under oath and
certified by the union secretary and attested to by the union president as
required by Section 235 of the Labor Code7 in relation to Section 1, Rule VI
of Department Order (D.O.) No. 9, series of 1997. The union registration
was, thus, fatally defective.
The Med-Arbiter further held that the list of membership of petitioner union
consisted of 12 batchman, mill operator and leadman who performed
supervisory functions. Under Article 245 of the Labor Code, said
supervisory employees are prohibited from joining petitioner union which
seeks to represent the rank-and-file employees of respondent company.
As a result, not being a legitimate labor organization, petitioner union has
no right to file a petition for certification election for the purpose of
collective bargaining.
Department of Labor and Employment’s Ruling
On July 16, 1999, the DOLE initially issued a Decision8 in favor of
respondent company dismissing petitioner union’s appeal on the ground that
the latter’s petition for certification election was filed out of time. Although
the DOLE ruled, contrary to the findings of the Med-Arbiter, that the
charter certificate need not be verified and that there was no independent
evidence presented to establish respondent company’s claim that some
members of petitioner union were holding supervisory positions, the DOLE
sustained the dismissal of the petition for certification after it took judicial
notice that another union, i.e., Pinag-isang Lakas Manggagawa sa Charter
Chemical and Coating Corporation, previously filed a petition for
certification election on January 16, 1998. The Decision granting the said
petition became final and executory on September 16, 1998 and was
remanded for immediate implementation. Under Section 7, Rule XI of D.O.
No. 9, series of 1997, a motion for intervention involving a certification
election in an unorganized establishment should be filed prior to the finality
of the decision calling for a certification election. Considering that
petitioner union filed its petition only on February 14, 1999, the same was
filed out of time.
On motion for reconsideration, however, the DOLE reversed its earlier
ruling. In its January 13, 2000 Decision, the DOLE found that a review of
the records indicates that no certification election was previously conducted
in respondent company. On the contrary, the prior certification election filed
36
by Pinag-isang Lakas Manggagawa sa Charter Chemical and Coating
Corporation was, likewise, denied by the Med-Arbiter and, on appeal, was
dismissed by the DOLE for being filed out of time. Hence, there was no
obstacle to the grant of petitioner union’s petition for certification
election, viz:
WHEREFORE, the motion for reconsideration is hereby GRANTED and
the decision of this Office dated 16 July 1999 is MODIFIED to allow the
certification election among the regular rank-and-file employees of Charter
Chemical and Coating Corporation with the following choices:
1. Samahang Manggagawa sa Charter Chemical-Solidarity of Unions in the
Philippines for Empowerment and Reform (SMCC-SUPER); and
2. No Union.
Let the records of this case be remanded to the Regional Office of origin for
the immediate conduct of a certification election, subject to the usual pre-
election conference.
SO DECIDED.9
Court of Appeal’s Ruling
On March 15, 2005, the CA promulgated the assailed Decision, viz:
WHEREFORE, the petition is hereby GRANTED. The assailed Decision
and Resolution dated January 13, 2000 and February 17, 2000 are hereby
[ANNULLED] and SET ASIDE.
SO ORDERED.10
In nullifying the decision of the DOLE, the appellate court gave credence to
the findings of the Med-Arbiter that petitioner union failed to comply with
the documentation requirements under the Labor Code. It, likewise, upheld
the Med-Arbiter’s finding that petitioner union consisted of both rank-and-
file and supervisory employees. Moreover, the CA held that the issues as to
the legitimacy of petitioner union may be attacked collaterally in a petition
for certification election and the infirmity in the membership of petitioner
union cannot be remedied through the exclusion-inclusion proceedings in a
pre-election conference pursuant to the ruling in Toyota Motor Philippines
v. Toyota Motor Philippines Corporation Labor Union. 11 Thus, considering
that petitioner union is not a legitimate labor organization, it has no legal
right to file a petition for certification election.
Issues
I Section 11, Rule XI of D.O. No. 9, series of 1997, as amended, nor are they
Whether x x x the Honorable Court of Appeals committed grave abuse of
discretion tantamount to lack of jurisdiction in granting the respondent
[company’s] petition for certiorari (CA G.R. No. SP No. 58203) in spite of
the fact that the issues subject of the respondent company[’s] petition was
already settled with finality and barred from being re-litigated.
II
Whether x x x the Honorable Court of Appeals committed grave abuse of
discretion tantamount to lack of jurisdiction in holding that the alleged
mixture of rank-and-file and supervisory employee[s] of petitioner [union’s]
membership is [a] ground for the cancellation of petitioner [union’s] legal
personality and dismissal of [the] petition for certification election.
III
Whether x x x the Honorable Court of Appeals committed grave abuse of
discretion tantamount to lack of jurisdiction in holding that the alleged
failure to certify under oath the local charter certificate issued by its mother
federation and list of the union membership attending the organizational
meeting [is a ground] for the cancellation of petitioner [union’s] legal
personality as a labor organization and for the dismissal of the petition for
certification election.12
Petitioner Union’s Arguments
Petitioner union claims that the litigation of the issue as to its legal
personality to file the subject petition for certification election is barred by
the July 16, 1999 Decision of the DOLE. In this decision, the DOLE ruled
that petitioner union complied with all the documentation requirements and
that there was no independent evidence presented to prove an illegal
mixture of supervisory and rank-and-file employees in petitioner union.
37
After the promulgation of this Decision, respondent company did not move
for reconsideration, thus, this issue must be deemed settled.
Petitioner union further argues that the lack of verification of its charter
certificate and the alleged illegal composition of its membership are not
grounds for the dismissal of a petition for certification election under
grounds for the cancellation of a union’s registration under Section 3, Rule
VIII of said issuance. It contends that what is required to be certified under
oath by the local union’s secretary or treasurer and attested to by the local
union’s president are limited to the union’s constitution and by-laws,
statement of the set of officers, and the books of accounts.
Finally, the legal personality of petitioner union cannot be collaterally
attacked but may be questioned only in an independent petition for
cancellation pursuant to Section 5, Rule V, Book IV of the Rules to
Implement the Labor Code and the doctrine enunciated in Tagaytay
Highlands International Golf Club Incoprorated v. Tagaytay Highlands
Empoyees Union-PTGWO.13
Respondent Company’s Arguments
Respondent company asserts that it cannot be precluded from challenging
the July 16, 1999 Decision of the DOLE. The said decision did not attain
finality because the DOLE subsequently reversed its earlier ruling and, from
this decision, respondent company timely filed its motion for
reconsideration.
On the issue of lack of verification of the charter certificate, respondent
company notes that Article 235 of the Labor Code and Section 1, Rule VI of
the Implementing Rules of Book V, as amended by D.O. No. 9, series of
1997, expressly requires that the charter certificate be certified under oath.
It also contends that petitioner union is not a legitimate labor organization
because its composition is a mixture of supervisory and rank-and-file
employees in violation of Article 245 of the Labor Code. Respondent
company maintains that the ruling in Toyota Motor Philippines vs. Toyota
Motor Philippines Labor Union14 continues to be good case law. Thus, the
illegal composition of petitioner union nullifies its legal personality to file
the subject petition for certification election and its legal personality may be
collaterally attacked in the proceedings for a petition for certification
election as was done here.
Our Ruling
The petition is meritorious.
The issue as to the legal personality of petitioner union is not barred by the
July 16, 1999 Decision of the DOLE.
A review of the records indicates that the issue as to petitioner union’s legal
personality has been timely and consistently raised by respondent company
before the Med-Arbiter, DOLE, CA and now this Court. In its July 16, 1999
Decision, the DOLE found that petitioner union complied with the
documentation requirements of the Labor Code and that the evidence was
insufficient to establish that there was an illegal mixture of supervisory and
rank-and-file employees in its membership. Nonetheless, the petition for
certification election was dismissed on the ground that another union had
previously filed a petition for certification election seeking to represent the
same bargaining unit in respondent company.
Upon motion for reconsideration by petitioner union on January 13, 2000,
the DOLE reversed its previous ruling. It upheld the right of petitioner
union to file the subject petition for certification election because its
previous decision was based on a mistaken appreciation of facts.15 From this
adverse decision, respondent company timely moved for reconsideration by
reiterating its previous arguments before the Med-Arbiter that petitioner
union has no legal personality to file the subject petition for certification
election.
The July 16, 1999 Decision of the DOLE, therefore, never attained finality
because the parties timely moved for reconsideration. The issue then as to
the legal personality of petitioner union to file the certification election was
properly raised before the DOLE, the appellate court and now this Court.
The charter certificate need not be certified under oath by the local union’s
secretary or treasurer and attested to by its president.
38
Preliminarily, we must note that Congress enacted Republic Act (R.A.) No.
948116 which took effect on June 14, 2007.17 This law introduced
substantial amendments to the Labor Code. However, since the operative
facts in this case occurred in 1999, we shall decide the issues under the
pertinent legal provisions then in force (i.e., R.A. No. 6715,18 amending
Book V of the Labor Code, and the rules and regulations 19 implementing
R.A. No. 6715, as amended by D.O. No. 9, 20
series of 1997) pursuant to our ruling in Republic v. Kawashima Textile
Mfg., Philippines, Inc.21
In the main, the CA ruled that petitioner union failed to comply with the
requisite documents for registration under Article 235 of the Labor Code
and its implementing rules. It agreed with the Med-Arbiter that the Charter
Certificate, Sama-samang Pahayag ng Pagsapi at Authorization, and
Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at
Nagratipika sa Saligang Batas were not executed under oath. Thus,
petitioner union cannot be accorded the status of a legitimate labor
organization.
We disagree.
The then prevailing Section 1, Rule VI of the Implementing Rules of Book
V, as amended by D.O. No. 9, series of 1997, provides:
Section 1. Chartering and creation of a local chapter — A duly registered
federation or national union may directly create a local/chapter by
submitting to the Regional Office or to the Bureau two (2) copies of the
following:
(a) A charter certificate issued by the federation or national union indicating
the creation or establishment of the local/chapter;
(b) The names of the local/chapter’s officers, their addresses, and the
principal office of the local/chapter; and
(c) The local/chapter’s constitution and by-laws provided that where the
local/chapter’s constitution and by-laws [are] the same as [those] of the
federation or national union, this fact shall be indicated accordingly.
All the foregoing supporting requirements shall be certified under oath by
the Secretary or the Treasurer of the local/chapter and attested to by its
President.
As readily seen, the Sama-samang Pahayag ng Pagsapi at Authorization and
Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at
Nagratipika sa Saligang Batas are not among the documents that need to be
submitted to the Regional Office or Bureau of Labor Relations in order to
register a labor organization. As to the charter certificate, the above-quoted
rule indicates that it should be executed under oath. Petitioner union
concedes and the records confirm that its charter certificate was not
executed under oath. However, in San Miguel Corporation (Mandaue
Packaging Products Plants) v. Mandaue Packing Products Plants-San
Miguel Corporation Monthlies Rank-and-File Union-FFW (MPPP-SMPP-
SMAMRFU-FFW),22 which was decided under the auspices of D.O. No. 9,
Series of 1997, we ruled –
In San Miguel Foods-Cebu B-Meg Feed Plant v. Hon. Laguesma, 331 Phil.
356 (1996), the Court ruled that it was not necessary for the charter
certificate to be certified and attested by the local/chapter officers. Id. While
this ruling was based on the interpretation of the previous
Implementing Rules provisions which were supplanted by the 1997
amendments, we believe that the same doctrine obtains in this case.
Considering that the charter certificate is prepared and issued by the
national union and not the local/chapter, it does not make sense to have
the local/chapter’s officers x x x certify or attest to a document which
they had no hand in the preparation of.23 (Emphasis supplied)
In accordance with this ruling, petitioner union’s charter certificate need not
be executed under oath. Consequently, it validly acquired the status of a
legitimate labor organization upon submission of (1) its charter
certificate,24 (2) the names of its officers, their addresses, and its principal
office,25 and (3) its constitution and by-laws26— the last two requirements
having been executed under oath by the proper union officials as borne out
by the records.
The mixture of rank-and-file and supervisory employees in petitioner union
does not nullify its legal personality as a legitimate labor organization.
39
The CA found that petitioner union has for its membership both rank-and-
file and supervisory employees. However, petitioner union sought to
represent the bargaining unit consisting of rank-and-file employees. Under
Article 24527 of the Labor Code, supervisory employees are not eligible for
membership in a labor organization of rank-and-file employees. Thus, the
appellate court ruled that petitioner union cannot be considered a legitimate
labor organization pursuant to Toyota Motor Philippines v. Toyota Motor
Philippines Corporation Labor Union28 (hereinafter Toyota).
Preliminarily, we note that petitioner union questions the factual findings of
the Med-Arbiter, as upheld by the appellate court, that 12 of its members,
consisting of batchman, mill operator and leadman, are supervisory
employees. However, petitioner union failed to present any rebuttal
evidence in the proceedings below after respondent company submitted in
evidence the job descriptions29 of the aforesaid employees. The job
descriptions indicate that the aforesaid employees exercise recommendatory
managerial actions which are not merely routinary but require the use of
independent judgment, hence, falling within the definition of supervisory
employees under Article 212(m)30 of the Labor Code. For this reason, we
are constrained to agree with the Med-Arbiter, as upheld by the appellate
court, that petitioner union consisted of both rank-and-file and supervisory
employees.
Nonetheless, the inclusion of the aforesaid supervisory employees in
petitioner union does not divest it of its status as a legitimate labor
organization. The appellate court’s reliance on Toyota is misplaced in view
of this Court’s subsequent ruling in Republic v. Kawashima Textile Mfg.,
Philippines, Inc.31 (hereinafter Kawashima). In Kawashima, we explained at
length how and why the Toyota doctrine no longer holds sway under the
altered state of the law and rules applicable to this case, viz:
R.A. No. 6715 omitted specifying the exact effect any violation of the
prohibition [on the co-mingling of supervisory and rank-and-file
employees] would bring about on the legitimacy of a labor
organization.
It was the Rules and Regulations Implementing R.A. No. 6715 (1989
Amended Omnibus Rules) which supplied the deficiency by introducing the
following amendment to Rule II (Registration of Unions):
"Sec. 1. Who may join unions. - x x x Supervisory employees and security
guards shall not be eligible for membership in a labor organization of
the rank-and-file employees but may join, assist or form separate labor
organizations of their own; Provided, that those supervisory employees
who are included in an existing rank-and-file bargaining unit, upon the
effectivity of Republic Act No. 6715, shall remain in that unit x x x.
(Emphasis supplied) and Rule V (Representation Cases and Internal-Union
Conflicts) of the Omnibus Rules, viz:
"Sec. 1. Where to file. - A petition for certification election may be filed
with the Regional Office which has jurisdiction over the principal office of
the employer. The petition shall be in writing and under oath.
Sec. 2. Who may file. - Any legitimate labor organization or the employer,
when requested to bargain collectively, may file the petition.
The petition, when filed by a legitimate labor organization, shall contain,
among others:
xxxx
(c) description of the bargaining unit which shall be the employer unit
unless circumstances otherwise require; and provided further, that the
appropriate bargaining unit of the rank-and-file employees shall not
include supervisory employees and/or security guards. (Emphasis
supplied)
By that provision, any questioned mingling will prevent an otherwise
legitimate and duly registered labor organization from exercising its right to
file a petition for certification election.
Thus, when the issue of the effect of mingling was brought to the fore
in Toyota, the Court, citing Article 245 of the Labor Code, as amended by
R.A. No. 6715, held:
"Clearly, based on this provision, a labor organization composed of both
rank-and-file and supervisory employees is no labor organization at all. It
cannot, for any guise or purpose, be a legitimate labor organization. Not
being one, an organization which carries a mixture of rank-and-file and
supervisory employees cannot possess any of the rights of a legitimate
40
labor organization, including the right to file a petition for certification
election for the purpose of collective bargaining. It becomes necessary,
therefore, anterior to the granting of an order allowing a certification
election, to inquire into the composition of any labor organization
whenever the status of the labor organization is challenged on the basis
of Article 245 of the Labor Code.
xxxx
In the case at bar, as respondent union's membership list contains the names
of at least twenty-seven (27) supervisory employees in Level Five positions,
the union could not, prior to purging itself of its supervisory employee
members, attain the status of a legitimate labor organization. Not being one,
it cannot possess the requisite personality to file a petition for certification
election." (Emphasis supplied)
In Dunlop, in which the labor organization that filed a petition for
certification election was one for supervisory employees, but in which the
membership included rank-and-file employees, the Court reiterated that
such labor organization had no legal right to file a certification election to
represent a bargaining unit composed of supervisors for as long as it
counted rank-and-file employees among its members.
It should be emphasized that the petitions for certification election involved
in Toyota and Dunlop were filed on November 26, 1992 and September 15,
1995, respectively; hence, the 1989 Rules was applied in both cases.
But then, on June 21, 1997, the 1989 Amended Omnibus Rules was further
amended by Department Order No. 9, series of 1997 (1997 Amended
Omnibus Rules). Specifically, the requirement under Sec. 2(c) of the 1989
Amended Omnibus Rules – that the petition for certification election
indicate that the bargaining unit of rank-and-file employees has not been
mingled with supervisory employees – was removed. Instead, what the 1997
Amended Omnibus Rules requires is a plain description of the bargaining
unit, thus:
Rule XI
Certification Elections
xxxx
Sec. 4. Forms and contents of petition. - The petition shall be in writing and
under oath and shall contain, among others, the following: x x x (c) The
description of the bargaining unit.
In Pagpalain Haulers, Inc. v. Trajano, the Court had occasion to uphold the
validity of the 1997 Amended Omnibus Rules, although the specific
provision involved therein was only Sec. 1, Rule VI, to wit:
"Section. 1. Chartering and creation of a local/chapter.- A duly registered
federation or national union may directly create a local/chapter by
submitting to the Regional Office or to the Bureau two (2) copies of the
following: a) a charter certificate issued by the federation or national union
indicating the creation or establishment of the local/chapter; (b) the names
of the local/chapter's officers, their addresses, and the principal office of the
local/chapter; and (c) the local/ chapter's constitution and by-laws; provided
that where the local/chapter's constitution and by-laws is the same as that of
the federation or national union, this fact shall be indicated accordingly.
All the foregoing supporting requirements shall be certified under oath by
the Secretary or the Treasurer of the local/chapter and attested to by its
President."
which does not require that, for its creation and registration, a local or
chapter submit a list of its members.
Then came Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay Highlands
Employees Union-PGTWO in which the core issue was whether mingling
affects the legitimacy of a labor organization and its right to file a petition
for certification election. This time, given the altered legal milieu, the Court
abandoned the view in Toyota and Dunlopand reverted to its
pronouncement in Lopez that while there is a prohibition against the
mingling of supervisory and rank-and-file employees in one labor
organization, the Labor Code does not provide for the effects thereof. Thus,
the Court held that after a labor organization has been registered, it may
exercise all the rights and privileges of a legitimate labor organization. Any
mingling between supervisory and rank-and-file employees in its
membership cannot affect its legitimacy for that is not among the grounds
for cancellation of its registration, unless such mingling was brought about
41
by misrepresentation, false statement or fraud under Article 239 of the
Labor Code.
In San Miguel Corp. (Mandaue Packaging Products Plants) v. Mandaue
Packing Products Plants-San Miguel Packaging Products-San Miguel
Corp. Monthlies Rank-and-File Union-FFW, the Court explained that since
the 1997 Amended Omnibus Rules does not require a local or chapter to
provide a list of its members, it would be improper for the DOLE to deny
recognition to said local or chapter on account of any question pertaining to
its individual members.
More to the point is Air Philippines Corporation v. Bureau of Labor
Relations, which involved a petition for cancellation of union registration
filed by the employer in 1999 against a rank-and-file labor organization on
the ground of mixed membership: the Court therein reiterated its ruling
in Tagaytay Highlands that the inclusion in a union of disqualified
employees is not among the grounds for cancellation, unless such inclusion
is due to misrepresentation, false statement or fraud under the circumstances
enumerated in Sections (a) and (c) of Article 239 of the Labor Code.
All said, while the latest issuance is R.A. No. 9481, the 1997 Amended
Omnibus Rules, as interpreted by the Court in Tagaytay Highlands, San
Miguel and Air Philippines, had already set the tone for
it. Toyota and Dunlop no longer hold sway in the present altered state of the
law and the rules.32 [Underline supplied]
The applicable law and rules in the instant case are the same as those
in Kawashima because the present petition for certification election was
filed in 1999 when D.O. No. 9, series of 1997, was still in effect.
Hence, Kawashimaapplies with equal force here. As a result, petitioner
union was not divested of its status as a legitimate labor organization even if
some of its members were supervisory employees; it had the right to file the
subject petition for certification election.
The legal personality of petitioner union cannot be collaterally attacked by
respondent company in the certification election proceedings.
Petitioner union correctly argues that its legal personality cannot be
collaterally attacked in the certification election proceedings. As we
explained in Kawashima:
Except when it is requested to bargain collectively, an employer is a mere
bystander to any petition for certification election; such proceeding is non-
adversarial and merely investigative, for the purpose thereof is to determine
which organization will represent the employees in their collective
bargaining with the employer. The choice of their representative is the
exclusive concern of the employees; the employer cannot have any partisan
interest therein; it cannot interfere with, much less oppose, the process by
filing a motion to dismiss or an appeal from it; not even a mere allegation
that some employees participating in a petition for certification election are
actually managerial employees will lend an employer legal personality to
block the certification election. The employer's only right in the proceeding
is to be notified or informed thereof.
The amendments to the Labor Code and its implementing rules have
buttressed that policy even more.33
WHEREFORE, the petition is GRANTED. The March 15, 2005 Decision
and September 16, 2005 Resolution of the Court of Appeals in CA-G.R. SP
No. 58203 are REVERSED and SET ASIDE. The January 13, 2000
Decision of the Department of Labor and Employment in OS-A-6-53-99
(NCR-OD-M-9902-019) is REINSTATED.
No pronouncement as to costs.
SO ORDERED.
G.R. No. 163532 March 10, 2010
YOKOHAMA TIRE PHILIPPINES, INC., Petitioner,
vs.
YOKOHAMA EMPLOYEES UNION, Respondent.
RESOLUTION
CARPIO, J.:
42
This is a petition1 for review on certiorari under Rule 45 of the Rules of
Court. The petition challenges the 16 January 2004 Decision2 and 12 May
2004 Resolution3 of the Court of Appeals in CA-G.R. SP No. 65460. The
Court of Appeals affirmed the 12 March4 and 3 May5 2001 Resolutions of
the Bureau of Labor Relations (BLR) in BLR-A-C-7-2-05-01, reversing the
18 December 2000 Decision6 of the Department of Labor and Employment
(DOLE) Regional Office No. 3, San Fernando, Pampanga (Regional
Office), in Case No. RO300-0001-CP-002.
Yokohama Employees Union (YEU) is the labor organization of the rank-
and-file employees of Yokohama Tire Philippines, Inc. (YTPI). YEU was
registered as a legitimate labor labor union on 10 September 1999.
YEU filed before the Regional Office a petition for certification election.
YTPI filed before the Regional Office a petition7 dated 24 January 2000 for
the revocation of YEU’s registration. YTPI alleged that YEU violated
Article 239(a)8 of the Labor Code: (1) YEU fraudulently included the
signature of a certain Ronald O. Pineda (Pineda) in the organizational
documents; (2) Pineda was not aware of any election of union officers; (3)
YEU fraudulently obtained the employees’ signatures by making them
believe that they were signing a petition for a 125% increase in the
minimum wage, not a petition for registration; (4) the employees did not
belong to a single bargaining unit; and (5) YEU fraudulently stated in its
organizational meeting minutes that its second vice president was Bernard
David, not Bernardo David.
In its 18 December 2000 Decision, the Regional Office granted the 24
January 2000 petition. The Regional Office held that YEU committed
misrepresentation: (1) YEU failed to remove Pineda’s signature from the
organizational documents despite instructions to do so; and (2) YEU
declared that it conducted an election of union officers when, in truth, it did
not.
YEU appealed the 18 December 2000 Decision to the BLR. In its 12 March
2001 Resolution, the BLR reversed the 18 December 2000 Decision. The
BLR found that (1) Pineda did not approach any officer of YEU to have his
signature removed from the organizational documents; (2) Pineda’s
affidavit that no election of officers took place was unreliable and
inconsistent with his earlier written statement; (3) the affidavit of a certain
Rachelle Gonzales (Gonzales) that no election of officers took place was
unreliable and inconsistent with her earlier resignation letter; (4) the
affidavit of a certain Arthur Calma (Calma) did not state that no election of
officers took place; (5) at least 82 other members of YEU did not question
the legality of YEU’s organization; and (6) 50 YEU members executed
a Sama-Samang Pahayag9 stating that:
3. Noong ika-25 ng Hulyo 1999, kami ay dumalo sa isang pulong para sa
pag-oorganisa ng aming Unyon at pagraratipika ng Saligang Batas at
Alituntunin nito. x x x
xxxx
5. Walang katotohanan ang alegasyon ng Yokohama na walang naganap
na pagpupulong kaugnay ng pag-oorganisa o pagtatayo namin ng
Unyon. Nakakatuwa ring isipin ang alegasyon ng kompanya na hindi namin
lubos na naiintindihan ang aming kapasyahang magtayo at sumapi sa
aming Unyon.
6. Malinaw na ginagawa ng kompanya ang lahat ng paraan upang
hadlangan ang aming karapatan sa pag-oorganisa at kilalanin bilang
kinatawan ng lahat ng mga regular na manggagawa para sa sama-samang
pakikipagtawaran.
7. Sa kabila ng lahat ng ito, kami ay lubos pa ring naninindigan sa aming
Unyon at patuloy na ipaglalaban ang aming karapatan sa pag-oorganisa at
sa sama-samang pakikipagtawaran;10
The BLR also held that (1) YTPI was estopped from questioning the fact
that the Sama-Samang Pahayag was an unsworn document since it filed the
24 January 2000 petition for the revocation of YEU’s registration based on
unsworn documents; (2) the fact that there was no express mention of an
election of union officers in the Sama-Samang Pahayag did not necessarily
mean that no election occurred; (3) there was an organizational meeting and
an organizational meeting may include an election of union officers; (4) any
infirmity in the election of union officers may be remedied under the last
paragraph11 of Article 241 of the Labor Code and under Rule XIV of DOLE
Department Order No. 9; and (5) cancellation of union registration must be
done with great caution.
43
YTPI filed before the BLR a motion12 for reconsideration. In its 3 May
2001 Resolution, the BLR denied the motion for lack of merit.
YTPI filed before the Court of Appeals a petition13 for certiorari under Rule
65 of the Rules of Court. In its 16 January 2004 Decision, the Court of
Appeals denied the petition and held that the BLR did not commit grave
abuse of discretion: (1) Pineda’s affidavit that no election of officers took
place was unreliable and inconsistent with his earlier written statement; (2)
Gonzales’ affidavit that no election of officers took place was unreliable and
inconsistent with her earlier resignation letter; (3) Calma’s affidavit was
unreliable because he admitted that he stayed at the organizational meeting
for only 20 minutes; (4) the affidavit of a certain Bernardino David (David)
that no election of officers took place was unreliable and inconsistent with
his earlier sinumpaang salaysay; (5) David’s affidavit was only filed before
the BLR when YTPI filed its motion for reconsideration of the BLR’s 12
March 2001 Resolution; (6) Pineda did not approach any officer of YEU to
have his signature removed from the organizational documents; (7)
the Sama-Samang Pahayag was entitled to credit even if it was an unsworn
document; (8) the allegation that the signatures of a certain Denry
Villanueva (Villanueva) and a certain Apolinar Bognot (Bognot) in
the Sama-Samang Pahayag were forged was only raised for the first time
before the BLR when YTPI filed its motion for reconsideration of the
BLR’s 12 March 2001 Resolution; (9) Villanueva and Bognot were not
signatories to YEU’s organizational documents; (10) cancellation of union
registration must be done with great caution; (11) YTPI, in filing the
petition for revocation of YEU’s registration, had the burden of proving that
YEU committed fraud and misrepresentation; and (12) YTPI failed to prove
that YEU committed fraud and misrepresentation.1avvphi1
YTPI filed before the Court of Appeals a motion14 for reconsideration. In its
12 May 2004 Resolution, the Court of Appeals denied the motion for lack
of merit.
Hence, the present petition. YTPI raises as issues that (1) the Court of
Appeals erred in finding that YEU did not commit fraud or
misrepresentation, and (2) the Court of Appeals erred in holding that YTPI
had the burden of proving that YEU committed fraud and
misrepresentation.
The petition is unmeritorious.
The Court of Appeals found that YEU did not commit fraud or
misrepresentation:
Anent whether an election of officers was conducted or not, the petitioner
relied largely on the affidavit of Pineda to substantiate its claim that no
election of officers was held by the union. However, respondent BLR
Director accorded greater credence to Pineda’s handwritten statement,
wherein he made references to at least 2 meetings he had attended during
which he had signed the organizational documents, than to Pineda’s
later affidavit, whereby he denied any knowledge of the holding of an
election. A perusal of the affirmative handwritten statement easily explains
why the public respondent preferred it to the negating affidavit, to wit:
Noong unang araw na pumirma ako galing ako sa graveyard. Pagkatapos
yung pangalawang meetinggraveyard din ako, pinapirma ako doon sa
siyam (9) na pirasong papel noong umagang pag-uwi namin. x x x
July 25, 99 - Unang Pirmahan
July 26, 99 - Pinirmahan ko ang siyam na piraso
July 27, 99 - Pinatatanggal ko ang aking pangalan sa listahan
The petitioner also relied on the affidavit of Ma. Rachelle Gonzales attesting
that there was no election of officers, but respondent BLR Director
dismissed the affidavit as nothing but the petitioner’s belated attempt to
establish its claim about the election being held considering that Gonzales
did not even intimate such matter in her handwritten resignation letter to
YEU.
Another affidavit, that of Arthur Calma, stated that no election was held,
but, again, respondent BLR Director gave Calma’s affidavit scant
consideration because the affiant admittedly remained in the YEU office for
only 20 minutes. In contrast, the public respondent accorded more weight to
the sama-samang pahayag executed by 50 YEU members who averred
about the holding of an organizational meeting. The public respondent
justifiably favored the latter, deeming the meeting to include the holding of
44
an election of officers, for, after all, Art. 234, (b), Labor Code, does not
itself distinguish between the two.
Respondent BLR Director is further assailed for not taking into
consideration the affidavit asserting that no election of officers was ever
conducted, which Bernardino David, YEU’s second vice president,
executed. The omission is not serious enough, however, because
the affidavit was submitted only when the petitioner moved for the
reconsideration of the questioned decision, and because the affidavit was
even inconsistent with David’s earlier sinumpaang salaysay, whereby he
attested to his attendance at the organizational meeting and to his election
thereat as vice president.
As to the inclusion of Pineda’s signature in the organizational documents,
the BLR Director correctly ruled that evidence to prove the participation of
YEU in the failure to delete Pineda’s signature from the organizational
documents was wanting. It is not deniable that Pineda never approached any
officer of YEU; and that Pineda approached a certain Tonton whom he
knew to be a union organizer but who was not an officer of the union nor an
employee of the company.
If the petitioner was [sic] sincere and intent on this imputed error, its effort
to show so does not [sic] appear in the record. What appears is its abject
failure to establish Tonton’s actual identity. The petitioner seemed content
in making the insinuation in the petition for certiorari that Tonton was
widely recognized as the organizer behind the creation of YEU. That was
not enough.
In sum, the BLR Director was neither capricious nor whimsical in his
exercise of judgment, and, therefore, did not commit grave abuse of
discretion. For certiorari to lie, more than mere abuse of discretion is
required to be established by the petitioner. Herein, no degree of abuse of
discretion was attendant.15
YTPI claims that the Court of Appeals erred in finding that YEU did not
commit fraud or misrepresentation. YTPI stated that:
There was evidence that respondent committed fraud and misrepresentation
in its failure to omit the name of Ronald Pineda prior to the filing of the
respondents organizational documents with the Department of Labor and
Employment. On the other hand, the Regional Director held that there
was no election of officers that had taken place during respondent’s
alleged organizational meeting as there was no proof of such
election.16(Emphasis in the original)
The Court is not convinced. A petition for review on certiorari under Rule
45 of the Rules of Court should include only questions of law — questions
of fact are not reviewable. A question of law exists when the doubt centers
on what the law is on a certain set of facts, while a question of fact exists
when the doubt centers on the truth or falsity of the alleged facts. There is a
question of law if the issue raised is capable of being resolved without need
of reviewing the probative value of the evidence. Once the issue invites a
review of the evidence, the question is one of fact.17
Whether YEU committed fraud and misrepresentation in failing to remove
Pineda’s signature from the list of employees who supported YEU’s
application for registration and whether YEU conducted an election of its
officers are questions of fact. They are not reviewable.
Factual findings of the Court of Appeals are binding on the Court. Absent
grave abuse of discretion, the Court will not disturb the Court of Appeals’
factual findings.18 In Encarnacion v. Court of Appeals,19 the Court held that,
"unless there is a clearly grave or whimsical abuse on its part, findings of
fact of the appellate court will not be disturbed. The Supreme Court will
only exercise its power of review in known exceptions such as gross
misappreciation of evidence or a total void of evidence." YTPI failed to
show that the Court of Appeals gravely abused its discretion.
The Court of Appeals held that YTPI had the burden of proving that YEU
committed fraud and misrepresentation:
The cancellation of union registration at the employer’s instance, while
permitted, must be approached with caution and strict scrutiny in order that
the right to belong to a legitimate labor organization and to enjoy the
privileges appurtenant to such membership will not be denied to the
employees. As the applicant for cancellation, the petitioner naturally had the
burden to present proof sufficient to warrant the cancellation. The petitioner
was thus expected to satisfactorily establish that YEU committed
45
misrepresentations, false statements or fraud in connection with the election
of its officers, or with the minutes of the election of officers, or in the list of
votes, as expressly required in Art. 239, (c), Labor Code. But, as the
respondent BLR Director has found and determined, and We fully agree
with him, the petitioner simply failed to discharge its burden.20
YTPI claims that the Court of Appeals erred in holding that YTPI had the
burden of proving that YEU committed fraud and misrepresentation. YTPI
stated that:
5.5 In the Decision dated 16 January 2004, the Honorable Court of Appeals
upheld the BLR Director’s ruling that the petitioner had the burden of
proving that subject election of officers never took place.
5.6 However, the petitioner does not have the burden of proof vis-à-vis
whether or not the said elections took place. The respondent has the
burden of proof in showing that an election of officers took
place.21 (Emphasis in the original)
The Court is not convinced. YTPI, being the one which filed the petition for
the revocation of YEU’s registration, had the burden of proving that YEU
committed fraud and misrepresentation. YTPI had the burden of proving the
truthfulness of its accusations — that YEU fraudulently failed to remove
Pineda’s signature from the organizational documents and that YEU
fraudulently misrepresented that it conducted an election of officers.
In Heritage Hotel Manila v. Pinag-Isang Galing at Lakas ng mga
Manggagawa sa Heritage Manila,22 the employer filed a petition to revoke
the registration of its rank-and-file employees’ union, accusing it of
committing fraud and misrepresentation. The Court held that the petition
was rightfully denied because the employer failed to prove that the labor
union committed fraud and misrepresentation. The Court held that:
Did respondent PIGLAS union commit fraud and misrepresentation in its
application for union registration? We agree with the DOLE-NCR and the
BLR that it did not. Except for the evident discrepancies as to the number of
union members involved as these appeared on the documents that supported
the union’s application for registration, petitioner company has no other
evidence of the alleged misrepresentation. But those discrepancies alone
cannot be taken as an indication that respondent misrepresented the
information contained in these documents.
The charge that a labor organization committed fraud and
misrepresentation in securing its registration is a serious charge and
deserves close scrutiny. It is serious because once such charge is proved,
the labor union acquires none of the rights accorded to registered
organizations. Consequently, charges of this nature should be clearly
established by evidence and the surrounding
circumstances.23 (Emphasis supplied)
WHEREFORE, we DENY the petition. We AFFIRM the 16 January 2004
Decision and 12 May 2004 Resolution of the Court of Appeals in CA-G.R.
SP No. 65460.
SO ORDERED.
G.R. No. 196276 June 4, 2014
TAKATA (PHILIPPINES) CORPORATION, Petitioner,
vs.
BUREAU OF LABOR RELATIONS and SAMAHANG LAKAS
MANGGAGAWA NG TAKATA (SALAMAT),Respondents.
DECISION
PERALTA, J.:
Before us is a petition for review on certiorari filed by petitioner TAKATA
Philippines Corporation assailing the Decision1 dated December 22, 2010
and the Resolution2 dated March 28, 2011 of the Court of Appeals in CA-
G.R. SP No. 112406.
On July 7, 2009, petitioner filed with the Department of Labor and
Employment (DOLE) Regional Office a Petition3for Cancellation of the
Certificate of Union Registration of Respondent Samahang Lakas
Manggagawa ng Takata (SALAMA1) on the ground that the latter is guilty
of misrepresentation, false statement and fraud with respect to the number
of those who participated in the organizational meeting, the adoption and
ratification of its Constitution and By-Laws, and in the election of its
46
officers. It contended that in the May 1, 2009 organizational meeting of
respondent, only 68 attendees signed the attendance sheet, and which
number comprised only 17% of the total number of the 396 regular rank-
and-file employees which respondent sought to represent, and hence,
respondent failed to comply with the 20% minimum membership
requirement. Petitioner insisted that the document "Pangalan ng mga Kasapi
ng Unyon" bore no signatures of the alleged 119 union members; and that
employees were not given sufficient information on the documents they
signed; that the document "Sama-Samang Pahayag ng Pagsapi" was not
submitted at the time of the filing of respondent's application for union
registration; that the 119 union members were actually only 117; and, that
the total number of petitioner's employees as of May 1, 2009 was 470, and
not 396 as respondent claimed.4
Respondent denied the charge and claimed that the 119 union members
were more than the 20% requirement for union registration. The document
"Sama-Samang Pahayag ng Pagsapi sa Unyon" which it presented in its
petition for certification election5 supported their claim of 119 members.
Respondent also contended that petitioner was estopped from assailing its
legal personality as it agreed to a certification election and actively
participated in the pre-election conference of the certification election
proceedings.6 Respondent argued that the union members were informed of
the contents of the documents they signed and that the 68 attendees to the
organizational meeting constituted more than 50% of the total union
membership, hence, a quo rumexisted for the conduct of the said meeting. 7
On August 27, 2009, DOLE Regional Director, Atty. Ricardo S. Martinez,
Sr., issued a Decision8 granting the petition for cancellation of respondent's
certificate of registration, the dispositive portion of which reads:
WHEREFORE, from the foregoing considerations, the petition is hereby
GRANTED. Accordingly, the respondent Union Certificate of Registration
No. RO400A-2009-05-01-UR-LAG, dated May 19, 2009 is hereby
REVOCKED (sic) and /or CANCELLED pursuant to paragraph (a) & (b),
Section 3, Rule XIV of Department Order No. 40-03 and the Samahang
Lakas ng Manggagawa ng TAKATA (SALAMAT) is hereby delisted from
the roll of legitimate labor organization of this office. 9
In revoking respondent's certificate of registration, the Regional Director
found that the 68 employees who attended the organizational meeting was
obviously less than 20% of the total number of 396 regular rank-and-file
employees which respondent sought to represent, hence, short of the union
registration requirement; that the attendance sheet which contained the
signatures and names of the union members totalling to 68 contradicted the
list of names stated in the document denominated as "Pangalan ng mga
Kasaping Unyon." The document "Sama-Samang Pahayag ng Pagsapi" was
not attached to the application for registration as it was only submitted in
the petition for certification election filed by respondent at a later date. The
Regional Director also found that the proceedings in the cancellation of
registration and certification elections are two different and entirely separate
and independent proceedings which were not dependent on each other.
Dissatisfied, respondent, through Bukluran ng Manggagawang Pilipino
(BMP) Paralegal Officer, Domingo P. Mole, filed a Notice and
Memorandum of Appeal10 with the Bureau of Labor Relations (BLR).
However, on September 28,2009, respondent, through its counsels, Attys.
Napoleon C. Banzuela, Jr. and Jehn Louie W. Velandrez, filed an Appeal
Memorandum with Formal Entry of Appearance 11 to the Office of the
DOLE Secretary, which the latter eventually referred to the BLR. Petitioner
filed an Opposition to the Appeals12 praying for their dismissal on the
ground of forum shopping as respondent filed two separate appeals in two
separate venues; and for failing to avail of the correct remedy within the
period; and that the certificate of registration was tainted with fraud,
misrepresentation and falsification.
In its Answer,13 respondent claimed that there was no forum shopping as
BMP's Paralegal Officer was no longer authorized to file an appeal on
behalf of respondent as the latter's link with BMP was already terminated
and only the Union President was authorized to file the appeal; and that it
complied with Department Order No. 40-03.
On December 9, 2009, after considering respondent's Appeal Memorandum
with Formal Entry of Appearance and petitioner's Answer, the BLR
rendered its Decision14 reversing the Order of the Regional Director, the
decretal portion of which reads:
47
WHEREFORE, the appeal is hereby GRANTED. The Decision of Regional
Director Ricardo S. Martinez, Sr., dated 27 August 2009, is hereby
REVERSEDand SET ASIDE.
Accordingly, Samahang Lakas Manggagawa ng TAKATA (SALAMAT)
shall remain in the roster of labor organizations.15
In reversing, the BLR found that petitioner failed to prove that respondent
deliberately and maliciously misrepresented the number of rank-and-file
employees. It pointed out petitioner's basis for the alleged noncompliance
with the minimum membership requirement for registration was the
attendance of 68 members to the May 1, 2009 organizational meeting
supposedly comprising only 17% of the total 396 regular rank-and-file
employees. However, the BLR found that the list of employees who
participated in the organizational meeting was a separate and distinct
requirement from the list of the names of members comprising at least 20%
of the employees in the bargaining unit; and that there was no requirement
for signatures opposite the names of the union members; and there was no
evidence showing that the employees assailed their inclusion in the list of
union members.
Petitioner filed a motion for reconsideration, which was denied by the BLR
in a Resolution16 dated January 8, 2010.
Undaunted, petitioner went to the CA via a petition for certiorari under Rule
65.
After the submission of the parties' respective pleadings, the case was
submitted for decision.
On December 22, 2010, the CA rendered its assailed decision which denied
the petition and affirmed the decision of the BLR. Petitioner's motion for
reconsideration was denied in a Resolution dated March 29, 2011.
Hence this petition for review filed by petitioner raising the following
issues, to wit:
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND
SERIOUS ERROR IN AFFIRMING THE DECISION OF PUBLIC
RESPONDENT BLR AND NOT FINDING ANY VIOLATION BY
SAMAHANG LAKAS MANGGAGAWA SA TAKATA (SALAMAT) OF
THE RULE ON FORUM SHOPPING IN THE FILING OF TWO
VERIFIED APPEALS FOR AND ITS BEHALF. BOTH OF THE
APPEALS SHOULD HAVE BEEN DISMISSED OUTRIGHT BY
PUBLIC RESPONDENT BLR, ON GROUND OF FORUM SHOPPING.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN
FINDING THAT THE APPLICATION FOR REGISTRATION OF
SAMAHANG LAKAS MANGGAGAWA SA TAKATA (SALAMAT)
WAS COMPLIANT WITH THE LAW. CONSIDERING THE
CIRCUMSTANCES OBTAINING IN THE REGISTRATION OF
SALAMAT, IT IS CLEAR THAT THE SAME IS TAINTED WITH
FRAUD, MISREPRESENTATION AND FALSIFICATION. SALAMAT
DID NOT POSSESS THE REQUIREDNUMBER OF MEMBERS AT
THE TIME OF FILING OF ITS APPLICATION FOR REGISTRATION,
HENCE, IT SHOULD BE HELD GUILTY OF MISREPRESENTATION,
AND FALSE STATEMENTS AND FRAUD IN CONNECTION
THEREWITH.17
Anent the first issue, petitioner contends that respondent had filed two
separate appeals with two different representations at two different venues,
in violation of the rule on multiplicity of suits and forum shopping, and
instead of dismissing both appeals, the appeal erroneously filed before the
Labor Secretary was the one held validly filed, entertained and even
granted; that it is not within the discretion of BLR to choose which between
the two appeals should be entertained, as it is the fact of the filing of the two
appeals that is being prohibited and not who among the representatives
therein possessed the authority.
We are not persuaded.
We find no error committed by the CA in finding that respondent
committed no forum shopping. As the CA correctly concluded, to wit:
It is undisputed that BMP Paralegal Officer Domingo P. Mole was no
longer authorized to file an appeal on behalf of union SALAMAT and that
BMP was duly informed that its services was already terminated.
SALAMAT even submitted before the BLR its "Resolusyon Blg. 01-2009"
terminating the services of BMP and revoking the representation of Mr.
48
Domingo Mole in any of the pending cases being handled by him on behalf
of the union. So, considering that BMP Paralegal Officer Domingo P. Mole
was no longer authorized to file an appeal when it filed the Notice and
Memorandum of Appeal to DOLE Regional Office No. IV-A, the same can
no longer be treated as an appeal filed by union SALAMAT. Hence, there is
no forum shopping to speak of in this case as only the Appeal Memorandum
with Formal Entry of Appearance filed by Atty. Napoleon C. Banzuela, Jr.
and Atty. Jehn Louie W. Velandrez is sanctioned by SALAMAT. 18
Since Mole's appeal filed with the BLR was not specifically authorized by
respondent, such appeal is considered to have not been filed at all. It has
been held that "if a complaint is filed for and in behalf of the plaintiff who is
not authorized to do so, the complaint is not deemed filed.
An unauthorized complaint does not produce any legal effect." 19
Respondent through its authorized representative filed its Appeal
Memorandum with Formal Entry of Appearance before the Labor Secretary,
and not with the BLR. As the appeal emanated from the petition for
cancellation of certificate of registration filed with the Regional Office, the
decision canceling the registration is appealable to the BLR, and not with
the Labor Secretary. However, since the Labor Secretary motu propio
referred the appeal with the BLR, the latter can now act on it. Considering
that Mole's appeal with the BLR was not deemed filed, respondent’s appeal,
through Banzuela and Associates, which the Labor Secretary referred to the
BLR was the only existing appeal with the BLR for resolution. There is,
therefore, no merit to petitioner's claim that BLR chose the appeal of
Banzuela and Associates over Mole's appeal.
The case of Abbott Laboratories Philippines, Inc. v. Abbott Laboratories
Employees Union20 cited by petitioner is not at all applicable in this case as
the issue therein is the authority of the Labor Secretary to review the
decision of the Bureau of Labor Relations rendered in the exercise of its
appellate jurisdiction over decision of the Regional Director in cases
involving cancellations of certificate of registration of labor unions. We
found no grave abuse of discretion committed by the Secretary of Labor in
not acting on therein petitioner's appeal. The decision of the Bureau of
Labor Relations on cases brought before it on appeal from the Regional
Director are final and executory. Hence, the remedy of the aggrieved party
is to seasonably avail of the special civil action of certiorari under Rule 65
and the Rules of Court. In this case, after the Labor Secretary motu propio
referred respondent's appeal filed with it to the BLR which rendered its
decision reversing the Regional Director, petitioner went directly to the CA
via a petition for certiorari under Rule 65.
As to the second issue, petitioner seeks the cancellation of respondent's
registration on grounds offraud and misrepresentation bearing on the
minimum requirement of the law as to its membership, considering the big
disparity in numbers, between the organizational meeting and the list of
members, and so misleading the BLR that it obtained the minimum required
number of employees for purposes of organization and registration.
We find no merit in the arguments.
Art. 234 of the Labor Code provides:
ART. 234. Requirements of Registration. - A federation, national union or
industry or trade union center or an independent union 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 (₱50.00)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) In case the applicant is an independent union, the names of all its
members comprising at least twenty percent (20%) of all the employees in
the bargaining unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies
of its annual financial reports; and
(e) Four 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."
49
And after the issuance of the certificate of registration, the labor
organization's registration could be assailed directly through cancellation of
registration proceedings in accordance with Articles 238 and 239 of the
Labor Code. And the cancellation of union certificate of registration and the
grounds thereof are as follows:
ART. 238. Cancellation of Registration. - The certificate of registration of
any legitimate labor organization, whether national or local, may be
cancelled by the Bureau, after due hearing, only on the grounds specified in
Article 239 hereof.
ART. 239. Grounds for Cancellation of Union Registration. - The following
may constitute grounds for cancellation of union registration:
(a) Misrepresentation, false statement or fraud in connection with the
adoption or ratification of the constitution and by-laws or amendments
thereto, the minutes of ratification, and the list of members who took part in
the ratification;
(b) Misrepresentation, false statements or fraud in connection with the
election of officers, minutes of the election of officers, and the list of voters;
(c) Voluntary dissolution by the members.
Petitioner's charge that respondent committed misrepresentation and fraud
in securing its certificate of registration is a serious charge and must be
carefully evaluated. Allegations thereof should be compounded with
supporting circumstances and evidence.21 We find no evidence on record to
support petitioner's accusation.
Petitioner's allegation of misrepresentation and fraud is based on its claim
that during the organizational meeting on May 1, 2009, only 68 employees
attended, while respondent claimed that it has 119 members as shown in the
document denominated as "Pangalan ng mga Kasapi ng Unyon;" hence,
respondent misrepresented on the 20% requirement of the law as to its
membership.
We do not agree.
It does not appear in Article 234 (b) of the Labor Code that the attendees in
the organizational meeting must comprise 20% of the employees in the
bargaining unit. In fact, even the Implementing Rules and Regulations of
the Labor Code does not so provide. It is only under Article 234 (c) that
requires the names of all its members comprising at least twenty percent
(20%) of all the employees in the bargaining unit where it seeks to operate.
Clearly, the 20% minimum requirement pertains to the employees’
membership in the union and not to the list of workers who participated in
the organizational meeting. Indeed, Article 234 (b) and (c) provide for
separate requirements, which must be submitted for the union's registration,
and which respondent did submit. Here, the total number of employees in
the bargaining unit was 396, and 20% of which was about 79. Respondent
submitted a document entitled "Pangalan ng Mga Kasapi ng Unyon"
showing the names of 119 employees as union members, thus respondent
sufficiently complied even beyond the 20% minimum membership
requirement. Respondent also submitted the attendance sheet of the
organizational meeting which contained the names and signatures of the 68
union members who attended the meeting. Considering that there are 119
union members which are more than 20% of all the employees of the
bargaining unit, and since the law does not provide for the required number
of members to attend the organizational meeting, the 68 attendees which
comprised at least the majority of the 119 union members would already
constitute a quorum for the meeting to proceed and to validly ratify the
Constitution and By-laws of the union. There is, therefore, no basis for
petitioner to contend that grounds exist for the cancellation of respondent's
union registration. For fraud and misrepresentation to be grounds for
cancellation of union registration under Article 239 of the Labor Code, the
nature of the fraud and misrepresentation must be grave and compelling
enough to vitiate the consent of a majority of union members.22
Petitioner's claim that the alleged union members signed documents without
adequate information is not persuasive. The one who alleges a fact has the
burden of proving it and a mere allegation is not evidence. 23 In fact, we note
that not one of those listed in the document denominated as "Pangalan ng
Mga Kasaping Unyon" had come forward to deny their membership with
respondent. Notably, it had not been rebutted that the same union members
had signed the document entitled "Sama-Samang Pahayag ng Pagsapi,"
thus, strengtheningtheir desire to be members of the respondent union.
50
Petitioner claims that in the list of members, there was an employee whose
name appeared twice and another employee who was merely a project
employee. Such could not be considered a misrepresentation in the absence
of showing that respondent deliberately did so for the purpose of increasing
their union membership. In fact, even if those two names were not included
in the list of union members, there would still be 117 members which was
still more than 20% of the 396 rank-and-file employees.
As to petitioner's argument that the total number of its employees as of May
1, 2009 was 470, and not396 as respondent claimed, still the 117 union
members comprised more than the 20% membership requirement for
respondent's registration.
In Mariwasa Siam Ceramics v. Secretary of the Department of Labor and
Employment,24 we said:
For the purpose of de-certifying a union such as respondent, it must be
shown that there was misrepresentation, false statement or fraud in
connection with the adoption or ratification of the constitution and by-laws
or amendments thereto, the minutes of ratification; or, in connection with
the election of officers, the minutes of the election of officers, the list of
voters, or failure to submit these documents together with the list of the
newly elected-appointed officers and their postal addresses to the BLR.
The bare fact that two signatures appeared twice on the list of those who
participated in the organizational meeting would not, to our mind, provide a
valid reason to cancel respondent’s certificate of registration. The
cancellation of a union’s registration doubtless has an impairing dimension
on the right of labor to self-organization. For fraud and misrepresentation to
be grounds for cancellation of union registration under the Labor Code, the
nature of the fraud and misrepresentation must be grave and compelling
enough to vitiate the consent of a majority of union members.1âwphi1
In this case, we agree with the BLR and the CA that respondent could not
have possibly committed misrepresentation, fraud, or false statements. The
alleged failure of respondent to indicate with mathematical precision the
total number of employees in the bargaining unit is of no moment,
especially as it was able to comply with the 20% minimum membership
requirement. Even if the total number of rank-and-file employees of
petitioner is 528, while respondent declared that it should only be 455, it
still cannot be denied that the latter would have more than complied with
the registration requirement.25
WHEREFORE, premises considered, the petition for review is DENIED.
The Decision dated December 22, 2010 and the Resolution dated March 28,
2011 of the Court of Appeals, in CA-G.R. SP No. 112406, are AFFIRMED.
SO ORDERED.
G.R. No. 208986, January 13, 2016
HIJO RESOURCES CORPORATION, Petitioner, v. EPIFANIO P.
MEJARES, REMEGIO C. BALURAN, JR., DANTE SAYCON, AND
CECILIO CUCHARO, REPRESENTED BY NAMABDJERA-
HRC, Respondents.
DECISION
CARPIO, J.:
The Case
This petition for review1 assails the 29 August 2012 Decision2 and the 13
August 2013 Resolution3 of the Court of Appeals in CA-G.R. SP No.
04058-MIN. The Court of Appeals reversed and set aside the Resolutions
dated 29 June 2009 and 16 December 2009 of the National Labor Relations
Commission (NLRC) in NLRC No. MIC-03-000229-08 (RAB XI-09-
00774-2007), and remanded the case to the Regional Arbitration Branch,
Region XI, Davao City for further proceedings.
The Facts
Respondents Epifanio P. Mejares, Remegio C. Baluran, Jr., Dante Saycon,
and Cecilio Cucharo (respondents) were among the complainants,
represented by their labor union named "Nagkahiusang Mamumuo ng Bit,
Djevon, at Raquilla Farms sa Hijo Resources Corporation"
(NAMABDJERA-HRC), who filed with the NLRC an illegal dismissal case
against petitioner Hijo Resources Corporation (HRC).
51
Complainants (which include the respondents herein) alleged that petitioner
HRC, formerly known as Hijo Plantation Incorporated (HPI), is the owner
of agricultural lands in Madum, Tagum, Davao del Norte, which were
planted primarily with Cavendish bananas. In 2000, HPI was renamed as
HRC. In December 2003, HRC's application for the conversion of its
agricultural lands into agri-industrial use was approved. The machineries
and equipment formerly used by HPI continued to be utilized by HRC.
Complainants claimed that they were employed by HPI as farm workers in
HPI's plantations occupying various positions as area harvesters, packing
house workers, loaders, or labelers. In 2001, complainants were absorbed by
HRC, but they were working under the contractor-growers: Buenaventura
Tano (Bit Farm); Djerame Pausa (Djevon Farm); and Ramon Q. Laurente
(Raquilla Farm). Complainants asserted that these contractor-growers
received compensation from HRC and were under the control of HRC. They
further alleged that the contractor-growers did not have their own
capitalization, farm machineries, and equipment.
On 1 July 2007, complainants formed their union NAMABDJERA-HRC,
which was later registered with the Department of Labor and Employment
(DOLE). On 24 August 2007, NAMABDJERA-HRC filed a petition for
certification election before the DOLE.
When HRC learned that complainants formed a union, the three contractor-
growers filed with the DOLE a notice of cessation of business operations. In
September 2007, complainants were terminated from their employment on
the ground of cessation of business operations by the contractor-growers of
HRC. On 19 September 2007, complainants, represented by
NAMABDJERA-HRC, filed a case for unfair labor practices, illegal
dismissal, and illegal deductions with prayer for moral and exemplary
damages and attorney's fees before the NLRC.
On 19 November 2007, DOLE Med-Arbiter Lito A. Jasa issued an
Order,4 dismissing NAMABDJERA-HRC's petition for certification
election on the ground that there was no employer-employee relationship
between complainants (members of NAMABDJERA-HRC) and HRC.
Complainants did not appeal the Order of Med-Arbiter Jasa but pursued the
illegal dismissal case they filed.
On 4 January 2008, HRC filed a motion to inhibit Labor Arbiter Maria
Christina S. Sagmit and moved to dismiss the complaint for illegal
dismissal. The motion to dismiss was anchored on the following arguments:
(1) Lack of jurisdiction under the principle of res judicata; and (2) The
Order of the Med-Arbiter finding that complainants were not employees of
HRC, which complainants did not appeal, had become final and executory.
The Labor Arbiter's Ruling
On 5 February 2008, Labor Arbiter Sagmit denied the motion to inhibit.
Labor Arbiter Sagmit likewise denied the motion to dismiss in an Order
dated 12 February 2008. Labor Arbiter Sagmit held that res judicata does
not apply. Citing the cases of Manila Golf & Country Club, Inc. v.
IAC5 and Sandoval Shipyards, Inc. v. Pepito,6 the Labor Arbiter ruled that
the decision of the Med-Arbiter in a certification election case, by the nature
of that proceedings, does not foreclose further dispute between the parties as
to the existence or non-existence of employer-employee relationship
between them. Thus, the finding of Med-Arbiter Jasa that no employment
relationship exists between HRC and complainants does not bar the Labor
Arbiter from making his own independent finding on the same issue. The
non-litigious nature of the proceedings before the Med-Arbiter does not
prevent the Labor Arbiter from hearing and deciding the case. Thus, Labor
Arbiter Sagmit denied the motion to dismiss and ordered the parties to file
their position papers.
HRC filed with the NLRC a petition for certiorari with a prayer for
temporary restraining order, seeking to nullify the 5 February 2008 and 12
February 2008 Orders of Labor Arbiter Sagmit.
The Ruling of the NLRC
The NLRC granted the petition, holding that Labor Arbiter Sagmit gravely
abused her discretion in denying HRC's motion to dismiss. The NLRC held
that the Med-Arbiter Order dated 19 November 2007 dismissing the
52
certification election case on the ground of lack of employer-employee
relationship between HRC and complainants (members of
NAMABDJERA-HRC) constitutes res judicata under the concept of
conclusiveness of judgment, and thus, warrants the dismissal of the case.
The NLRC ruled that the Med-Arbiter exercises quasi-judicial power and
the Med-Arbiter's decisions and orders have, upon their finality, the force
and effect of a final judgment within the purview of the doctrine of res
judicata.
On the issue of inhibition, the NLRC found it moot and academic in view of
Labor Arbiter Sagmit's voluntary inhibition from the case as per Order
dated 11 March 2009.
The Ruling of the Court of Appeals
The Court of Appeals found the ruling in the Sandoval case more applicable
in this case. The Court of Appeals noted that the Sandoval case, which also
involved a petition for certification election and an illegal dismissal case
filed by the union members against the alleged employer, is on all fours
with this case. The issue in Sandoval on the effect of the Med-Arbiter's
findings as to the existence of employer-employee relationship is the very
same issue raised in this case. On the other hand, the case of Chris
Garments Corp. v. Hon. Sto. Tomas7 cited by the NLRC, which involved
three petitions for certification election filed by the same union, is of a
different factual milieu.
The Court of Appeals held that the certification proceedings before the
Med-Arbiter are non-adversarial and merely investigative. On the other
hand, under Article 217 of the Labor Code, the Labor Arbiter has original
and exclusive jurisdiction over illegal dismissal cases. Although the
proceedings before the Labor Arbiter are also described as non-litigious, the
Court of Appeals noted that the Labor Arbiter is given wide latitude in
ascertaining the existence of employment relationship. Thus, unlike the
Med-Artbiter, the Labor Arbiter may conduct clarificatory hearings and
even avail of ocular inspection to ascertain facts speedily.
Hence, the Court of Appeals concluded that the decision in a certification
election case does not foreclose further dispute as to the existence or non-
existence of an employer-employee relationship between HRC and the
complainants.
On 29 August 2012, the Court of Appeals promulgated its Decision, the
dispositive portion of which reads:chanRoblesvirtualLawlibrary
WHEREFORE, the petition is hereby GRANTED and the assailed
Resolutions dated June 29, 2009 and December 16, 2009 of the National
Labor Relations Commission are hereby REVERSED AND SET ASIDE.
Let NLRC CASE No. RAB-XI-09-00774-0707 be remanded to the
Regional Arbitration Branch, Region XI, Davao City for further
proceedings.
SO ORDERED.8ChanRoblesVirtualawlibrary
cralawlawlibrary
The Issue
Whether the Court of Appeals erred in setting aside the NLRC ruling and
remanding the case to the Labor Arbiter for further proceedings.
The Ruling of the Court
We find the petition without merit.
There is no question that the Med-Arbiter has the authority to determine the
existence of an employer-employee relationship between the parties in a
petition for certification election. As held in M. Y. San Biscuits, Inc. v.
Acting Sec. Laguesma:9chanroblesvirtuallawlibrary
Under Article 226 of the Labor Code, as amended, the Bureau of Labor
Relations (BLR), of which the med-arbiter is an officer, has the following
jurisdiction -
53
"ART. 226. Bureau of Labor Relations. - The Bureau of Labor Relations
and the Labor Relations Divisionfs] 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.
The Bureau shall have fifteen (15) working days to act on labor cases before
it, subject to extension by agreement of the parties." (Italics supplied)
From the foregoing, the BLR has the original and exclusive jurisdiction
to inter alia, decide all disputes, grievances or problems arising from or
affecting labor-management relations in all workplaces whether agricultural
or non-agricultural. Necessarily, in the exercise of this jurisdiction over
labor-management relations, the med-arbiter has the authority, original and
exclusive, to determine the existence of an employer-employee relationship
between the parties.
Apropos to the present case, once there is a determination as to the
existence of such a relationship, the med-arbiter can then decide the
certification election case. As the authority to determine the employer-
employee relationship is necessary and indispensable in the exercise of
jurisdiction by the med-arbiter, his finding thereon may only be reviewed
and reversed by the Secretary of Labor who exercises appellate jurisdiction
under Article 259 of the Labor Code, as amended, which provides -
"ART. 259. Appeal from certification election orders. - Any party to an
election may appeal the order or results of the election as determined by the
Med-Arbiter directly to the Secretary of Labor and Employment on the
ground that the rules and regulations or parts thereof established by the
Secretary of Labor and Employment for the conduct of the election have
been violated. Such appeal shall be decided within fifteen (15) calendar
days."10
cralawlawlibrary

In this case, the Med-Arbiter issued an Order dated 19 November 2007,
dismissing the certification election case because of lack of employer-
employee relationship between HRC and the members of the respondent
union. The order dismissing the petition was issued after the members of the
respondent union were terminated from their employment in September
2007, which led to the filing of the illegal dismissal case before the NLRC
on 19 September 2007. Considering their termination from work, it would
have been futile for the members of the respondent union to appeal the
Med-Arbiter' s order in the certification election case to the DOLE
Secretary. Instead, they pursued the illegal dismissal case filed before the
NLRC.
The Court is tasked to resolve the issue of whether the Labor Arbiter, in the
illegal dismissal case, is bound by the ruling of the Med-Arbiter regarding
the existence or non-existence of employer-employee relationship between
the parties in the certification election case.
The Court rules in the negative. As found by the Court of Appeals, the facts
in this case are very similar to those in the Sandoval case, which also
involved the issue of whether the ruling in a certification election case on
the existence or non-existence of an employer-employee relationship
operates as res judicata in the illegal dismissal case filed before the NLRC.
In Sandoval, the DOLE Undersecretary reversed the finding of the Med-
Arbiter in a certification election case and ruled that there was no employer-
employee relationship between the members of the petitioner union and
Sandoval Shipyards, Inc. (SSI), since the former were employees of the
subcontractors. Subsequently, several illegal dismissal cases were filed by
some members of the petitioner union against SSI. Both the Labor Arbiter
and the NLRC ruled that there was no employer-employee relationship
between the parties, citing the resolution of the DOLE Undersecretary in the
certification election case. The Court of Appeals reversed the NLRC ruling
and held that the members of the petitioner union were employees of SSI.
On appeal, this Court affirmed the appellate court's decision and ruled that
the Labor Arbiter and the NLRC erred in relying on the pronouncement of
the DOLE Undersecretary that there was no employer-employee
relationship between the parties. The Court cited the ruling in the Manila
54
Golf11 case that the decision in a certification election case, by the very
nature of that proceeding, does not foreclose all further dispute between the
parties as to the existence or non-existence of an employer-employee
relationship between them.
This case is different from the Chris Garments case cited by the NLRC
where the Court held that the matter of employer-employee relationship has
been resolved with finality by the DOLE Secretary, whose factual findings
were not appealed by the losing party. As mentioned earlier, the Med-
Arbiter's order in this case dismissing the petition for certification
election on the basis of non-existence of employer-employee
relationship was issued after the members of the respondent union were
dismissed from their employment. The purpose of a petition for
certification election is to determine which organization will represent the
employees in their collective bargaining with the employer.12The
respondent union, without its member-employees, was thus stripped of
its personality to challenge the Med-Arbiter's decision in the
certification election case. Thus, the members of the respondent union
were left with no option but to pursue their illegal dismissal case filed
before the Labor Arbiter. To dismiss the illegal dismissal case filed before
the Labor Arbiter on the basis of the pronouncement of the Med-Arbiter in
the certification election case that there was no employer-employee
relationship between the parties, which the respondent union could not even
appeal to the DOLE Secretary because of the dismissal of its members,
would be tantamount to denying due process to the complainants in the
illegal dismissal case. This, we cannot allow.
WHEREFORE, we DENY the petition. We AFFIRM the 29 August
2012 Decision and the 13 August 2013 Resolution of the Court of Appeals
in CA-G.R. SP No. 04058-MIN.
SO ORDERED.
G.R. No. 207971
ASIAN INSTITUTE OF MANAGEMENT, Petitioner,
vs.
ASIAN INSTITUTE OF MANAGEMENT FACULTY
ASSOCIATION, Respondent.
DECISION
DEL CASTILLO, J.:
1
This Petition for Review on Certiorari assails the January 8, 2013
Decision2 of the Court of Appeals (CA) which dismissed the Petition
for Certiorari3in CA-G.R. SP No. 114122, and its subsequent June 27, 2013
Resolution 4denying herein petitioner's Motion for Reconsideration. 5
Factual Antecedents
Petitioner Asian Institute of Management (AIM) is a duly registered non-
stock, non-profit educational institution. Respondent Asian Institute of
Management Faculty Association (AFA) is a labor organization composed
of members of the AIM faculty, duly registered under Certificate of
Registration No. NCR-UR-12-4076-2004.
On May 16, 2007, respondent filed a petition for certification
election6 seeking to represent a bargaining unit in AIM consisting of forty
(40) faculty members. The case was docketed as DOLE Case No. NCR-
OD-M-0705-007. Petitioner opposed the petition, claiming that
respondent's members are neither rank-and-file nor supervisory, but rather,
managerial employees.7
On July 11, 2007, petitioner filed a petition for cancellation of
respondent's certificate of registration8 - docketed as DOLE Case No.
NCROD-0707-001-LRD - on the grounds of misrepresentation in
registration and that respondent is composed of managerial employees who
are prohibited from organizing as a union.
On August 30, 2007, the Med-Arbiter in DOLE Case No. NCR-OD-M-
0705-007 issued an Order9 denying the petition for certification election on
the ground that AIM' s faculty members are managerial employees. This
Order was appealed by respondent before the Secretary of the Department
of Labor and Employment (DOLE), 10 who reversed foe same via a
February 20, 2009 Decision 11 and May 4, 2009 Resolution, 12 decreeing
thus:
55
WHEREFORE, the appeal filed by the Asian Institute of Management
Faculty Association (AIMFA) is GRANTED. The Order dated 30 August
2007 of DOLE-NCR Mediator-Arbiter Michael T. Parado is hereby
REVERSED and SET ASIDE.
Accordingly, let the entire records of the case be remanded to DOLEN CR
for the conduct of a certification election among the faculty members of the
Asian Institute of Management (AIM), with the following choices:
1. ASIAN INSTITUTE OF MANAGEMENT FACULTY ASSOCIATION
(AIMFA); and
2. No Union.
SO ORDERED.13
Meanwhile, in DOLE Case No. NCR-OD-0707-001-LRD, an Order14 dated
February 16, 2009 was issued by DOLE-NCR Regional Director Raymundo
G. Agravante granting AIM's petition for cancellation of respondent's
certificate of registration and ordering its delisting from the roster of
legitimate labor organizations. 1bis Order was appealed by respondent
before the Bureau labor Relations15 (BLR), which, in a December 29, 2009
Decision,16 reversed the same and ordered respondent's retention in the
roster of legitimate labor organizations. The BLR held that the grounds
relied upon in the petition for cancellation are not among the grounds
authorized under Article 239 of the Labor Code, 17 and that respondent's
members are not managerial employees. Petitioner moved to reconsider, but
was rebuffed in a March 18, 2010 Resolution. 18
CA-G.R. SP No.109487 and G.R. No.197089
Petitioner filed a Petition for Certiorari before the CA, questioning the
DOLE Secretary's February 20, 2009 Decision and May 4, 2009 Resolution
relative to DOLE Case No. NCR-OD-M-0705-007, or respondent's petition
for certification election. Docketed as CA-G.R. SP No. 109487, the petition
is based on the arguments that 1) the bargaining unit within AIM sought to
be represented is composed of managerial employees who are not eligible to
join, assist, or form any labor organization, and 2) respondent is not a
legitimate labor organization that may conduct a certification election.
On October 22, 2010, the CA rendered its Decision19 containing the
following pronouncement:
AIM insists that the members of its tenure-track faculty are managerial
employees, and therefore, ineligible to join, assist or form a labor
organization. It ascribes grave abuse of discretion on SOLE 20 for its rash
conclusion that the members of said tenure-track faculty are not managerial
employees solely because the faculty's actions are still subject to evaluation,
review or final approval by the board of trustees ("BOT'). AIM argues that
the BOT does not manage the day-to-day affairs, nor the making and
implementing of policies of the Institute, as such functions are vested with
the tenure-track faculty.
We agree.
Article 212(m) of the Labor Code defines managerial employees as:
'ART. 212. Definitions. – x x x
(m) 'Managerial employee' is one who is vested with powers or
prerogatives to lay down and execute management policies and/or to hire,
transfer, suspend, lay-off, recall, discharge, assign or discipline employees.
Supervisory employees are those who, in the interest of the employer,
effectively recommend such managerial actions if the exercise of such
authority is not merely routinary or clerical in nature but requires the use of
independent judgment. All employees not falling within any of the above
definitions are considered rank-and-file employees for purposes of this
Book.'
There are, therefore, two (2) kinds of managerial employees under Art.
212(m) of the Labor Code. Those who 'lay down x x x management
policies', such as the Board of Trustees, and those who 'execute
management policies and/or hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees'.
xxxx
On its face, the SOLE's opinion is already erroneous because in claiming
that the 'test of 'supervisory' or 'managerial status' depends on whether a
person possesses authority to act in the interest of his employer in the matter
56
specified in Article 212(m) of the Labor Code and Section l(m) of its
Implementing Rules', he obviously was referring to the old definition of a
managerial employee. Such is evident in his use of 'supervisory or
managerial status', and reference to 'Section l(m) of its Implementing
Rules'. For presently, as aforequoted in Article 212(m) of the Labor Code
and as amended by Republic Act 6715 which took effect on March 21,
1989, a managerial employee is already different from a supervisory
employee. x x x
xxxx
In further opining that a managerial employee is one whose 'authority is
not merely routinary or clerical in nature but requires the use of
independent judgment', a description which fits now a supervisory
employee under Section l(t), Rule I, Book V of the Omnibus Rules
Implementing the Labor Code, it then follows that the SOLE was not aware
of the change in the law and thus gravely abused its discretion amounting to
lack of jurisdiction in concluding that AIM's 'tenure-track' faculty
are not managerial employees.
SOLE further committed grave abuse of discretion when it concluded that
said tenure-track faculty members are not managerial employees on the
basis of a 'footnote' in AIM's Policy Manual, which provides that
'the policy[-] making authority of the faculty members is merely
recommendatory in nature considering that the faculty standards they
formulate are still subject to evaluation, review or final approval by the
[AIM]'s Board of Trustees'. x x x
xxxx
Clearly, AIM's tenure-track faculty do not merely recommend faculty
standards.1âwphi1 They 'determine all faculty standards', and are thus
managerial employees. The standards' being subjected to the approval of the
Board of Trustees would not make AIM's tenure-track faculty non-
managerial because as earlier mentioned, managerial employees are now of
two categories: (1) those who 'lay down policies', such as the members of
the Board of Trustees, and (2) those who 'execute management policies
(etc.)’, such as AIM's tenure-track faculty.
xxxx
It was also grave abuse of discretion on the part of the SOLE when he
opined that AIM' s tenure-track faculty members are not managerial
employees, relying on an impression that they were subjected to rigid
observance of regular hours of work as professors. x x x
xxxx
More importantly, it behooves the SOLE to deny AFA's appeal in light
of the February 16, 2009 Order of Regional Director Agravante
delisting AFA from the roster of legitimate labor organizations. For,
only legitimate labor organizations are given the right to be certified as
sole and exclusive bargaining agent in an establishment.
xxxx
Here, the SOLE committed grave abuse of discretion by giving due course
to AFA's petition for certification election, despite the fact that: (1) AFA's
members are managerial employees; and (2) AFA is not a legitimate labor
organization. 'These facts rendered AFA ineligible, and without any right to
file a petition for certification election, the object of which is to determine
the sole and exclusive bargaining representative of qualified AIM
employees.
WHEREFORE, the instant petition is GRANTED. The assailed Decision
dated February 20, 2009 and Resolution dated May 4, 2009 are
hereby REVERSED and SET ASIDE. The Order dated August 30, 2007
of Mediator-Arbiter Parado is hereby REINSTATED.
SO ORDERED.21 (Emphasis in the original)
Respondent sought reconsideration, but was denied. It thus instituted a
Petition for Review on Certiorari before this Court on July 4, 2011. The
Petition, docketed as G.R. No. 197089, remains pending to date.
The Assailed Ruling of the Court of Appeals
Meanwhile, relative to DOLE Case No. NCR-OD-0707-001-LRD or
petitioner AIM's petition for cancellation of respondent's certificate of
registration, petitioner filed on May 24, 20 l 0 a Petition
57
for Certiorari22before the CA, questioning the BLR's December 29, 2009
decision and March 18, 2010 resolution. The petition, docketed as CA-G.R.
SP No. 114122, alleged that the BLR committed grave abuse of discretion
in granting respondent's appeal and affirming its certificate of registration
notwithstanding that its members are managerial employees who may not
join, assist, or form a labor union or organization.
On January 8, 2013, the CA rendered the assailed Decision, stating as
follows:
The petition lacks merit
xxxx
It is therefore incumbent upon the Institute to prove that the BLR committed
grave abuse of discretion in issuing the questioned
Decision.1âwphi1 Towards this end, AIM must lay the basis by showing
that any of the grounds provided under Article 239 of the Labor Code,
exists, to wit:
Article 239. Grounds for cancellation of union registration. - The following
may constitute grounds for cancellation of union registration:
(a) Misrepresentation, false statement or fraud in connection with the
adoption or ratification of the constitution and by-laws or amendments
thereto, the minutes of ratification, and the list of members who took part in
the ratification;
(b) Misrepresentation, false statements or fraud in connection with the
election of officers, minutes of the election of officers, and the list of voters;
(c) Voluntary dissolution by the members.
Article 238 of the Labor Code provides that the enumeration of the grounds
for cancellation of union registration, is exclusive; in other words, no other
grow1ds for cancellation is acceptable, except for the three (3) grounds
stated in Article 239. The scope of the grounds for cancellation has been
explained-
For the purpose of de-certifying a union such as respondent, it must be
shown that there was misrepresentation, false statement or fraud in
connection with the adoption or ratification of the constitution and by-laws
or amendments thereto; the minutes of ratification; or, in connection with
the election of officers, the minutes of the election of officers, the list of
voters, or failure to submit these documents together with the list of the
newly elected-appointed officers and their postal addresses to the BLR.
The bare fact that two signatures appeared twice on the list of those who
participated in the organizational meeting would not, to our mind, provide a
valid reason to cancel respondent's certificate of registration. The
cancellation of a union's registration doubtless has an impairing dimension
on the right of labor to self-organization. For fraud and misrepresentation to
be grounds for cancellation of union registration under the Labor Code, the
nature of the fraud andmisrepresentation must be grave and compelling
enough to
vitiate the consent of a majority of union members.23
In this regard, it has also been held that:
Another factor which militates against the veracity of the allegations in
the Sinumpaang Petisyon is the lack of particularities on how, when and
where respondent union perpetrated the alleged fraud on each member.
Such details are crucial for, in the proceedings for cancellation of union
registration on the ground of fraud or misrepresentation, what needs to be
established is that the specific act or omission of the union deprived the
complaining employees-members of their right to choose.24
A cursory reading of the Petition shows that AIM did NOT allege any
specific act of fraud or misrepresentation committed by AFA. What is clear
is that the Institute seeks the cancellation of the registration of AFA based
on Article 245 of the Labor Code on the ineligibility of managerial
employees to form or join labor unions. Unfortunately for the petitioner,
even assuming that there is a violation of Article 245, such violation will
not result in the cancellation of the certificate of registration of a labor
organization.
It should be stressed that a Decision had already been issued by the DOLE
in the Certification Election case; and the Decision ordered the conduct of a
certification election among the faculty members of the Institute, basing its
58
directive on the finding that the members of AFA were not managerial
employees and are therefore eligible to form, assist and join a labor union.
As a matter of fact, the certification election had already been held on
October 16, 2009, albeit the results have not yet been resolved as
inclusion/exclusion proceedings are still pending before the DOLE. The
remedy available to the Institute is not the instant Petition, but to question
the status of the individual union members of the AFA in the
inclusion/exclusion proceedings pursuant to Article 245-A of the Labor
Code, which reads:
Article 245-A. Effect of inclusion as members of employees outside the
bargaining unit. - The inclusion as union members of employees outside the
bargaining unit shall not be a ground for the cancellation of the registration
of the union. Said employees are automatically deemed removed from the
list of membership of said union.
Petitioner insists that Article 245-A is not applicable to this case as all AF A
members are managerial employees. We are not persuaded.
The determination of whether any or all of the members of AFA should be
considered as managerial employees is better left to the DOLE because,
It has also been established that in the determination of whether or not
certain employees are managerial employees, this Court accords due respect
and therefore sustains the findings of fact made by quasi-judicial agencies
which are supported by substantial evidence considering their expertise in
their respective fields.25
From the discussion, it is manifestly clear that the petitioner foiled to prove
that the BLR committed grave abuse of discretion; consequently, the
Petition must fail.
WHEREFORE, the Petition is hereby DENIED. The Decision and
Resolution of public respondent Bureau of Labor Relations in BLR-A-C-
19-3-6-09 (NCR-OD-0707-001) are hereby AFFIRMED.
SO ORDERED.26 (Emphasis in the original)
Petitioner filed its Motion for Reconsideration, which was denied by the CA
via its June 27, 2013 Resolution. Hence, the instant Petition.
In a November 10, 2014 Resolution,27 the Court resolved to give due course
to the Petition.
Issue
Petitioner claims that the CA seriously erred in affirming the dispositions of
the BLR and thus validating the respondent's certificate of registration
notwithstanding the fact that its members are all managerial employees who
are disqualified from joining, assisting, or forming a labor organization.
Petitioner's Arguments
Praying that the assailed CA dispositions be set aside and that the DOLE-
NCR Regional Director's February 16, 2009 Order granting AIM's petition
for cancellation of respondent's certificate of registration and ordering its
delisting from the roster of legitimate labor organizations be reinstated
instead, petitioner maintains in its Petition and Reply28that respondent's
members are all managerial employees; that the CA erred in declaring that
even if respondent's members are all managerial employees, this alone is not
a ground for cancellation of its certificate of registration; that precisely, the
finding in DOLE Case No. NCR-ODM- 0705-007, which the CA affirmed
in CA-G.R. SP No. 109487, is that respondent's members are managerial
employees; that respondent's declaration that its members are eligible to
join, assist, or form a labor organization is an act of misrepresentation,
given the finding in CA-G.R. SP No. 109487 that they are managerial
employees; and that the grounds for cancellation of union registration
enumerated in Article 239 of the Labor Code are not exclusive.
Respondent's Arguments
In its Comment,29 respondent maintains that the CA was right to treat
petitioner’s case for cancellation of its union registration with
circumspection; that petitioner's ground for filing the petition for
cancellation is not recognized under Article 239; that petitioner's accusation
of misrepresentation is unsubstantiated, and is being raised for the first time
at this stage; that its members are not managerial employees; and that
petitioner's opposition to respondent's attempts at self-organization
constitutes harassment, oppression, and violates the latter's rights under the
Labor Code and the Constitution.
59
Our Ruling
In Holy Child Catholic School v. Hon. Sto. Tomas, 30this Court declared that
"[i]n case of alleged inclusion of disqualified employees in a union, the
proper procedure for an employer like petitioner is to directly file a petition
for cancellation of the union's certificate of registration due to
misrepresentation, false statement or fraud under the circumstances
enumerated in Article 239 of the Labor Code, as amended."
On the basis of the ruling in the above-cited case, it can be said that
petitioner was correct in filing a petition for cancellation of respondent's
certificate of registration. Petitioner's sole ground for seeking cancellation
of respondent's certificate of registration - that its members are managerial
employees and for this reason, its registration is thus a patent nullity for
being an absolute violation of Article 245 of the Labor Code which declares
that managerial employees are ineligible to join any labor organization ---
is, in a sense, an accusation that respondent is guilty of misrepresentation
for registering under the claim that its members are not managerial
employees.
However, the issue of whether respondent's members are managerial
employees is still pending resolution by way of petition for review
on certiorari in G.R. No. 197089, which is the culmination of all
proceedings in DOLE Case No. NCR-OD-M-0705-007 -- where the issue
relative to the nature of respondent's membership was first raised by
petitioner itself and is there fiercely contested. The resolution of this issue
cannot be pre-empted; until it is determined with finality in G.R. No. l
97089, the petition for cancellation of respondent's certificate of registration
on the grounds alleged by petitioner cannot be resolved. As a matter of
courtesy and in order to avoid conflicting decisions, We must await the
resolution of the petition in G.R. No. 197089.
x x x If a particular point or question is in issue in the second action, and the
judgment will depend on the determination of that particular point or
question, a former judgment between the same parties or their privies will
be final and conclusive in the second if that same point or question was in
issue and adjudicated in the first suit. x x x Identity of cause of action is not
required, but merely identity of issues.31 (Citation omitted)
WHEREFORE, considering that the outcome of this case depends on the
resolution of the issue relative to the nature of respondent's membership
pending in G.R. No. 197089, this case is ordered CONSOLIDATED with
G.R. No. 197089.
SO ORDERED.
G.R. No. 75039 January 28, 1988
FRANKLIN BAKER COMPANY OF THE PHILIPPINES, petitioner,
vs.
HONORABLE CRESENCIO B. TRAJANO, DIRECTOR OF
BUREAU OF LABOR RELATIONS, FRANKLIN BAKER
BROTHERHOOD ASSOCIATION (TECHNICAL AND OFFICE
EMPLOYEES)-ASSOCIATION OF TRADE UNIONS
(ATU), respondents.
PARAS, J.:
This is a petition for certiorari seeking the annulment of. (a) the Order of
Mediator-Arbiter Conchita J. Martinez of the Ministry of Labor and
Employment, Davao City, dated September 17, 1984 in LRD Case No. R-
22 MED-ROXI-UR-28-84 entitled "In Re: Petition for Certification
Election Among the Office and Technical Employees of Franklin Baker
Company of the Philippines, Davao Plant at Coronan, Sta. Cruz, Davao del
Sur, Franklin Baker Company of the Philippines, Davao Plant, Employer,
Franklin Baker Brotherhood Association (Technical and Office
Employees)-Association of Trade Unions (ATU)," insofar as it includes the
managerial employees (inspectors, foremen and supervisors) in the
certification election; (b) the Order of April 7, 1986 of Director Cresencio
B. Trajano, also of the MOLE, dismissing the appeal of aforesaid Order of
September 17, 1985 for lack of merit; and (c) the Order of June 6, 1986 of
said Director denying reconsideration of his Order of April 7, 1986 and
affirming the same in toto (Rollo, p. 90).
In brief, the undisputed facts of this case are as follows:
60
On April 23, 1984, private respondent Franklin Baker Brotherhood
Association-(ATU) filed a petition for certification election among the
office and technical employees of petitioner company with the Ministry of
Labor and Employment, Regional Office No. XI, Davao City, docketed as
LRD No. R-22, MED-ROXI-UR-2884. Among other things, it alleges that
Franklin Baker Company of the Phils. Davao Plant, had in its employ
approximately ninety (90) regular technical and office employees, which
group is separate and distinct from the regular rank and file employees and
is excluded from the coverage of existing Collective Bargaining Agreement.
Petitioner company did not object to the holding of such an election but
manifested that out of the ninety (90) employees sought to be represented
by the respondent union, seventy four (74) are managerial employees while
two (2) others are confidential employees, hence, must be excluded from the
certification election and from the bargaining unit that may result from such
election (Rollo, p. 3).
Hearings were held and thereafter, the parties agreed to file their respective
memoranda. Likewise, petitioner filed a reply to private respondent's
Memorandum (Rollo, p. 4).
Subsequently, on September 17, 1984, Med-Arbiter Conchita J. Martinez
issued an order, the dispositive part of which reads:
Accordingly, the petition is hereby granted and a certification election
among the office and technical employees of Franklin Baker Company of
the Philippines, Davao Plant is ordered within twenty (20) days from receipt
hereof. The choices shall be the following:
1. Franklin Baker Brotherhood Association-(ATU)
2. No Union
The representation officer assigned shall call the parties for a pre-election
conference at least five (5) days before the date of the election to thresh out
the mechanics of the election, the finalization of the list of voters, the
posting of notices and other relevant matters.
The company's latest payroll shall be the basis for determining the office
and technical workers qualified to vote.
SO ORDERED. (Rollo, pp. 47-48).
From the aforequoted order petitioner Company appealed to the Bureau of
Labor Relations, docketed as BLR Case No. A-22884, praying that the
appealed order be set aside and another be issued declaring the seventy four
(74) inspectors, foremen and supervisors as managerial employees.
During the pendency of the appeal, sixty one (61) of the employees
involved, filed a Motion to Withdraw the petition for certification election
praying therein for their exclusion from the Bargaining Unit and for a
categorical declaration that they are managerial employees, as they are
performing managerial functions (Rollo, p. 4).
On April 7, 1986, public respondent Bureau of Labor Relations Cresencio
B. Trajano issued a Resolution affirming the order dated September 17,
1984, the dispositive part of which reads:
WHEREFORE, the appealed Order dated September 17, 1985 is hereby
affirmed and the appeal dismissed for lack of merit. Let the certification
election among the office and technical employees of Franklin Baker
Company of the Philippines proceed without delay.
The latest payrolls of the company shall be used as basis of determining the
list of eligible voters. (Rollo, p. 77),
Petitioner company sought the reconsideration of the aforequoted resolution
but its motion was denied by Director Cresencio B. Trajano in his order
dated June 6, 1986, the dispositive part of which reads:
WHEREFORE, the appeal of respondent company is, dismissed for lack of
merit and the Bureau's Resolution dated April 1986 affirmed in toto.
Let, therefore, the pertinent papers of this case be immediately forwarded to
the Office of origin for the conduct of the certification election. (Rollo, p.
90).
Hence, this petition.
In the resolution of July 30, 1986, the Second Division of this Court without
giving due course to the petition required the respondents to file their
comment (Rollo, p. 91). On August 28, 1986, public respondent filed its
61
comment (Rollo, pp. 99 to 102). Likewise private respondent filed its
comment on September 5, 1986 (Rollo, pp. 104 to 107).
In the resolution of September 8, 1986, petitioner was required to file its
reply to public respondent's comment (Rollo, p. 119) which reply was filed
on September 18, 1986 (Rollo, pp. 122-127).
On October 20, 1986, this Court resolved to give due course to the petition
and required the parties to file their respective Memoranda (Rollo, p. 133).
In compliance with said resolution, petitioner and private respondent filed
their Memoranda on December 8, 1986 and December 29, 1986,
respectively (Rollo, pp. 183-187). On the other hand, public respondent
filed with this Court a manifestation (Rollo, p. 153) to the effect that it is
adopting as its memorandum its comment dated August 18, 1986 (Rollo, p.
99) which manifestation was noted by this Court in its resolution dated
November 26, 1986
(Rollo, p. 155).
The lone assignment of error raised by petitioner states:
Public respondent acted with grave abuse of discretion amounting to lack of
jurisdiction when he ruled that the 76 employees subject of this petition are
not managerial employees (inspectors, foremen, supervisors and the like)
and therefore, may participate in the certification election among the office
and technical employees. Such ruling is contrary to jurisprudence and to the
factual evidence presented by petitioner which was not rebutted by private
respondent union and is therefore patently baseless.
From this assigned error two questions are raised by petitioner, namely: (1)
whether or not subject employees are managerial employees under the
purview of the Labor Code and its Implementing Rules; and (2) whether the
Director of the Bureau of Labor Relations acted with abuse of discretion in
affirming the order of Mediator-Arbiter Conchita J. Martinez.
There is no question that there are in the DAVAO Plant of petitioner
company approximately 90 regular technical and office employees which
form a unit, separate and distinct from the regular rank and file employees
and are excluded from the coverage of existing Collective Bargaining
Agreement; that said group of employees organized themselves as Franklin
Baker Brotherhood Association (technical and office employees) and
affiliated with the local chapter of the Association of trade Unions (ATU), a
legitimate labor organization with Registration Permit No. 8745 (Fed) LC
and with office located at the 3rd Floor of Antwell Bldg., Sta. Ana, Davao
City; that petitioner company did not object to the holding of such
certification, but only sought the exclusion of inspectors, foremen and
supervisors, members of Franklin Baker Brotherhood Association (technical
and office employees) numbering 76 from the certification election on the
ground that they are managerial employees.
A managerial employee is defined as one "who is vested with powers or
prerogatives to lay down and execute management policies and/or to hire,
transfer, suspend, lay-off, recall, discharge, assign or discipline employees,
or to effectively recommend such managerial actions." (Reynolds Phil.
Corp. v. Eslava, 137 SCRA [1985], citing Section 212 (K), Labor Code.
Also pertinent thereto is Section 1 (M) of the Implementing Rules and
Regulations, which is practically a restatement of the above provision of
law.
To sustain its posture, that the inspectors, foreman and supervisors
numbering 76 are managerial employees, petitioner painstakingly
demonstrates that subject employees indeed participate in the formulation
and execution of company policies and regulations as to the conduct of
work in the plant, exercised the power to hire, suspend or dismiss
subordinate employees and effectively recommend such action, by citing
concrete cases, among which are: (1) Mr. Ponciano Viola, a wet process
inspector, who while in the performance of his duty, found Mr. Enrique
Asuncion, a trimmer "forging", falsifying and simulating a company time
card (timesheet) resulting in payroll padding, immediately recommended
the dismissal of said erring employee, resulting in the latter's discharge.
(Employer's Memo, Rollo, p.18); (2) Mr. Manuel Alipio, an opening
inspector, recommended for suspension Nut Operator Ephraim Dumayos
who was caught in the act of surreptitiously transferring to a co-worker's bin
some whole nuts which act constitutes a violation of company policy; (3)
Mr. Sofronio Abangan, a line inspector, censured and thereafter
recommended the suspension of Mr. Romeo Fullante, for being remiss in
the proper and accurate counting of nuts; (4) Binleader Dionisio Agtang was
62
required to explain his inefficiency of Mr. Saturnino Bangkas, Bin Loading
Inspector; (5) for disobeying the orders of Bin Loading Inspector Mauricio
Lumanog's order, Macario Mante, Eduardo Adaptor, Rodolfo Irene and
George Rellanos were all recommended for suspension which culminated in
an investigation conducted by Lumanog's higher bosses (Ibid., p. 20).
It has also been shown that subject employees have the power to hire, as
evidenced by the hiring of Rolando Asis, Roy Layson, Arcadio Gaudicos
and Felix Arciaga, upon the recommendation of Opening Inspector Serafin
Suelo, Processing Inspector Leonardo Velez and Laureano C. Lim, Opening
Inspector (Ibid., p. 21).
It will be noted, however, that in the performance of their duties and
functions and in the exercise of their recommendatory powers, subject
employees may only recommend, as the ultimate power to hire, fire or
suspend as the case may be, rests upon the plant personnel manager.
The test of "supervisory" or "managerial status" depends on whether a
person possesses authority to act in the interest of his employer in the matter
specified in Article 212 (k) of the Labor Code and Section 1 (m) of its
Implementing Rules and whether such authority is not merely routinary or
clerical in nature, but requires the use of independent judgment. Thus,
where such recommendatory powers as in the case at bar, are subject to
evaluation, review and final action by the department heads and other
higher executives of the company, the same, although present, are not
effective and not an exercise of independent judgment as required by law
(National Warehousing Corp. v. CIR, 7 SCRA 602-603 [1963]).
Furthermore, in line with the ruling of this Court, subject employees are not
managerial employees because as borne by the records, they do not
participate in policy making but are given ready policies to execute and
standard practices to observe, thus having little freedom of action (National
Waterworks and Sewerage Authority v. NWSA Consolidated, L-18938, 11
SCRA 766 [1964]).
Petitioner's contention that the Director of the Bureau of Labor Relations
acted with abuse of discretion amounting to lack of jurisdiction in holding
that the 76 employees are not managerial employees and must be included
in the certification election has no basis in fact and in law. Neither is its
contention that the use of the word's "and/or" categorically shows that Even if We regard the employees concerned as "managerial employees,"
performance of the functions enumerated in the law qualifies an employee they can still join the union of the rank and file employees. They cannot
as a managerial employee. however form their own exclusive union as "managerial employees"
(Bulletin Publishing Corporation v. Sanchez, 144 SCRA 628).
It is well settled that the findings of fact of the Ministry of Labor and
National Labor Relations Commission are entitled to great respect, unless PREMISES CONSIDERED, the petition is DISMISSED, and the assailed
the findings of fact and the conclusions made therefrom, are not supported resolution and orders are AFFIRMED.
by substantial evidence, or when there is grave abuse of discretion
committed by said public official (Kapisanan ng Manggagawa sa Camara SO ORDERED.
Shoes, 2nd Heirs of Santos Camara, et al., 111 SCRA 477 [1982];
International hardwood and Veneer Co. of the Philippines v. Leonardo, 117
SCRA 967 [1982]; Pan-Phil-Life, Inc. v. NLRC, 114 SCRA 866 [1982];
Pepsi-Cola Labor Union-BF LUTUPAS Local Chapter N-896 v. NLRC,
114 SCRA 930 [1982]; Egyptair v. NLRC, 148 SCRA 125 [1987]; RJL
Martinez Fishing Corp. v. NLRC, G.R. Nos. 63550-51, 127 SCRA 455
[1984]; and Reyes v. Phil. Duplicators, G.R. No. 54996, 109 SCRA 489
[1981]).

By "grave abuse of discretion" is meant, such capricious and whimsical

exercise of judgment as is equivalent to lack of jurisdiction. The abuse of
discretion must be grave as where the power is exercised in an arbitrary or
despotic manner by reason of passion or personal hostility and must be so
patent and gross as to amount to an evasion of positive duty or to a virtual
refusal to perform the duty enjoined by or to act at all in contemplation of
law (G.R. No. 59880, George Arguelles [Hda. Emma Arguelles v. Romeo
Yang, etc.], September 11, 1987).
Pagkakaisa ng mga Manggagawa sa Triumph International v. Ferrer—
Moreover, this Court has ruled that findings of administrative agencies
Calleja,181 SCRA 449
which have acquired expertise, like the Labor Ministry, are accorded respect
and finality (Special Events and Central Shipping Office Workers Union v. 260 Phil. 125
San Miguel Corp., 122 SCRA 557 [1983] and that the remedy of certiorari
does not lie in the absence of any showing of abuse or misuse of power
properly vested in the Ministry of Labor and Employment (Buiser v.
Leogardo, Jr., 131 SCRA 151 [1984]). GUTIERREZ, JR., J.:

After a careful review of the records, no plausible reason could be found to Once again we uphold the existing law which encourages one-union, one-
disturb the findings of fact and the conclusions of law of the Ministry of company policy in this petition for certiorari with prayer for preliminary
Labor. injunction. The petitioner assails the resolutions of the public respondent
dated August 24, 1988 and October 28, 1988 both ordering the holding of a

63
certification election among certain monthly-paid employees of Triumph
International Philippines, Inc. (Triumph International for brevity).
The petitioner is the recognized collective bargaining agent of the rank-and-
file employees of Triumph International with which the latter has a valid
and existing collective bargaining agreement effective up to September 24,
1989.
On November 25, 1987, a petition for certification election was filed by the
respondent union with the Department of Labor and Employment.
On January 30, 1988, a motion to dismiss the petition for certification
election was filed by Triumph International on the grounds that the
respondent union cannot lawfully represent managerial employees and that
the petition cannot prosper by virtue of the contract - bar rule. On the same
grounds, the petitioner, as intervenor, filed its opposition to the petition on
February 18, 1988.
On April 13, 1988, the Labor Arbiter issued an order granting the petition
for certification election and directing the holding of a certification election
to determine the sole and exclusive bargaining representative of all
monthly-paid administrative, technical, confidential and supervisory
employees of Triumph International.
On appeal, the public respondent on August 24, 1988 affirmed the Labor
Arbiter's order with certain modifications as follows:
"WHEREFORE, premises considered, the order appealed from is hereby
affirmed subject to the modification in that the subject employees sought to
be represented by the petitioner union are given the option whether to join
the existing bargaining unit composed of daily paid rank-and-file
employees. If they opt to join, the pertinent provision of the existing CBA
should be amended so as to include them in its coverage." (Rollo, p. 19)
On September 5, 1988, Triumph International filed a motion for
reconsideration which was denied by the public respondent in a resolution
dated October 28, 1988.
The sole issue presented by the petitioner in the instant case is whether or
not the public respondent gravely abused its discretion in ordering the
64
immediate holding of a certification election among the workers sought to
be represented by the respondent union.
The petitioner argues that the members of respondent union are managerial
employees who are expressly excluded from joining, assisting or forming
any labor organization under Art. 245 of the Labor Code.
In the determination of whether or not the members of respondent union are
managerial employees, we accord due respect and, therefore, sustain the
findings of fact made by the public respondent pursuant to the time-honored
rule that findings of fact of quasi-judicial agencies like the Bureau of Labor
Relations which are supported by substantial evidence are binding on us and
entitled to great respect considering their expertise in their respective fields
(see Phil. Airlines Employees Asso. (PALEA) v. Ferrer-Calleja, 162 SCRA
426 [1988]; Producers Bank of the Philippines v. National Labor Relations
Commission, G.R. No. 76001, September 5, 1988; Salvador Lacorte v. Hon.
Amado G. Inciong, et al, G.R. No. 52034, September 27, 1988; Johnson and
Johnson Labor Union - FFW, et al. v. Director of Labor Relations, G.R.
No. 76427, February 21, 1989; Teofila Arica, et al. v. National Labor
Relations Commission, et al., G.R. No. 78210, February 28, 1989; A. M.
Oreta & Co., Inc. v. National Labor Relations Commission, G.R. No.
74004, August 10, 1989). According to the Med-Arbiter, while the
functions, and we may add, the titles of the personnel sought to be
organized appear on paper to involve an apparent exercise of managerial
authority, the fact remains that none of them discharge said functions. The
petitioner has failed to show reversible error insofar as this finding is
concerned.
In ruling that the members of respondent union are rank-and-file and not
managerial employees, the public respondent made the following findings:
"x x x (1) They do not have the power to lay down and execute management
policies as they are given ready policies merely to execute and standard
practices to observe; 2) they do not have the power to hire, transfer,
suspend, lay-off, recall, discharge, assign or discipline employees but only
to recommend for such actions as the power rests upon the personnel
manager; and 3) they do not have the power to effectively recommend any
managerial actions as their recommendations have to pass through the
department manager for review, the personnel manager for attestation and
the general manager/president for final actions. x x x " (At pp. 17-18, Rollo)
The petitioner further argues that while it has recognized those signatories
and employees occupying the positions of Assistant Manager, Section
Chief, Head Supervisor and Supervisor as managerial employees under the
existing collective bargaining agreement, in the event that they are declared
as rank-and-file employees in the present case they are not precluded from
joining and they should join the petitioner.
We find the aforesaid contention of the petitioner meritorious in the absence
of a showing that there are compelling reasons such as the denial of the
right to join the petitioner which is the certified bargaining unit to the
members of respondent union or that there are substantial distinctions
warranting the recognition of a separate group of rank-and-file employees
even as there is an existing bargaining agent for rank-and-file employees.
In the case of Philtranco Service Enterprises v. Bureau of Labor Relations,
et al., G.R. No. 85343 promulgated on June 28, 1989, we stated that:
"The Labor Code recognizes two (2) principal groups of employees,
namely, the managerial and the rank and file groups. Thus, Art, 212 (k) of
the Code provides:
xxx xxx xxx
"(k) 'Managerial employee' is one who is vested with powers or prerogatives
to lay down and execute management policies and/or to hire, transfer,
suspend, lay-off, recall, discharge, assign or discipline employees, or to
effectively recommend such managerial action. All employees not falling
within this definition are considered rank and file employees for purposes of
this Book.
"In implementation of the aforequoted provision of the law, Section 11 of
Rule II, Book V of the Omnibus Rules implementing the Labor Code did
away with existing supervisory unions classifying the members either as
managerial or rank and file employees depending on the work they perform.
If they discharge managerial functions, supervisors are prohibited from
forming or joining any labor organization. If they do not perform
managerial work, they may join the rank and file union and if none exists,
65
they may form one such rank and file organization. This rule was
emphasized in the case of Bulletin Publishing Corp. v. Sanchez, (144 SCRA
628 [1986])."
We have explicitly explained in the case of Franklin Baker Company of the
Philippines v. Trajano, 157 SCRA 416 [1988] that:
"The test of 'supervisory' or 'managerial status' depends on whether a person
possesses authority to act in the interest of his employer in the matter
specified in Article 212 (k) of the Labor Code and Section 1 (m) of its
Implementing Rules and whether such authority is not merely routinary or
clerical in nature, but requires the use of independent judgment. Thus,
where such recommendatory powers as in the case at bar, are subject to
evaluation, review and final action by the department heads and other
higher executives of the company, the same, although present, are not
effective and not an exercise of independent judgment as required by law
(National Warehousing Corp. v. CIR, 7 SCRA 602-603 [1963])."
The public respondent, in its factual findings, found that the supervisory
employees sought to be represented by the respondent union are not
involved in policy-making and their recommendatory powers are not even
instantly effective since the same are still subject to review by at least three
managerial heads (department manager, personnel manager and general
manager) before final action can be taken. Hence, it is evidently settled that
the said employees do not possess a managerial status. The fact that their
work designations are either managers or supervisors is of no moment
considering that it is the nature of their functions and not the said
nomenclatures or titles of their jobs which determines their statuses
(see Engineering Equipment, Inc. v. National Labor Relations Commission,
133 SCRA 752 [1984] citing National Waterworks and Sewerage Authority
v. NWSA Consolidated Unions, 11 SCRA 766 [1964]).
Under the old Industrial Peace Act (Republic Act No. 875), the term
"supervisors" had the following definition, to wit:
"SEC. 2. Definitions As used in this Act
xxx xxx xxx
(k) 'Supervisor' means any person having authority in the interest of an
employer, to hire, transfer, suspend, lay-off, recall, discharge, assign,
recommend, or discipline other employees, or responsibly to direct them,
and to adjust their grievances, or effectively to recommend such acts if, in
connection with the foregoing, the exercise of such authority is not of a
merely routinary or clerical nature but requires the use of independent
judgment."
Section 3 of the same Act further provides that the supervisors as defined
above shall not be eligible for membership in a labor organization of
employees under their supervision but may form separate organizations of
their own.
With the enactment of the Labor Code (Presidential Decree No. 442 as
amended), the term "supervisor" was replaced by "managerial employee."
Book V, Art. 212, subparagraph (k) of said Code reads:
"(k) 'Managerial Employee' is one who is vested with power or prerogatives
to lay down and execute management policies and/or to hire, transfer,
suspend, lay-off, recall, discharge, assign or discipline employees, or to
effectively recommend such managerial actions. All Employees not falling
within this definition are considered rank and file employees for purposes of
this Book."
Art. 245 of the aforementioned Code prohibits managerial employees from
joining, assisting or forming any labor organization. Hence, employees who
had then formed supervisory unions were classified either as managerial or
rank-and-file depending on their functions in their respective work
assignments. (Bulletin Publishing Corp. v. Sanchez, supra.)
The recent amendments to the Labor Code contain separate definitions for
managerial and supervisory employees. Section 4 of Republic Act No. 6715
states that:
"Section 4, Article 212 of the Labor Code of the Philippines, as amended, is
further amended to read as follows:
xxx xxx xxx
66
"(m) 'Managerial Employee' is one who is vested with powers or
prerogatives to lay down and execute management policies and/or to hire,
transfer, suspend, lay-off, recall, discharge, assign or discipline employees.
Supervisory employees are those who, in the interest of the employer,
effectively recommend such management actions if the exercise of such
authority is not merely routinary or clerical in nature but requires the use of
independent judgment. All employees not falling within any of the above
definitions are considered rank-and-file employees for purposes of this
Book.
Section 18 of the same Act retains the provision on the ineligibility of
managerial employees to join any labor organization. However, the right of
supervisory employees to form their own union is revived under the said
section which states, in part, to wit:
"x x x Supervisory employees shall not be eligible for membership in a
labor organization of the rank-and-file employees but may join, assist or
form separate labor organizations of their own."
Thus, the right of supervisory employees to organize under the Industrial
Peace Act is once more recognized under the present amendments to the
Labor Code. (see Adamson & Adamson, Inc., v. The Court of Industrial
Relations, 127 SCRA 268 [1984]). In the absence of any grave abuse of
discretion on the part of the public respondent as to the status of the
members of the respondent union, we adopt its findings that the employees
sought to be represented by the respondent union are rank-and-file
employees.
There is no evidence in the records which sufficiently distinguishes and
clearly separates the group of employees sought to be represented by the
private respondents into managerial and supervisory on one hand or
supervisory and rank-and-file on the other. The respondents' pleadings do
not show the distinctions in functions and responsibilities which
differentiate the managers from the supervisors and sets apart the rank-and-
file from either the managerial or supervisory groups. As a matter of fact,
the formation of a supervisor's union was never before the Labor Arbiter
and the Bureau of Labor Relations and neither is the issue before us. We,
therefore, abide by the public respondent's factual findings in the absence of
a showing of grave abuse of discretion.
In the case at bar, there is no dispute that the petitioner is the exclusive
bargaining representative of the rank-and-file employees of Triumph
International. A careful examination of the records of this case reveals no
evidence that rules out the commonality of interests among the rank-and-file
members of the petitioner and the herein declared rank-and-file employees
who are members of the respondent union. Instead of forming another
bargaining unit, the law requires them to be members of the existing one.
The ends of unionism are better served if all the rank-and-file employees
with substantially the same interests and who invoke their right to self-
organization are part of a single unit so that they can deal with their
employer with just one and yet potent voice. The employees' bargaining
power with management is strengthened thereby. Hence, the circumstances
of this case impel us to disallow the holding of a certification election
among the workers sought to be represented by the respondent union for
want of proof that the right of said workers to self-organization is being
suppressed.
Commissions, 149 SCRA 470 [1987]). The members of the respondent
union should wait for the proper time.
The CBA in this case expired on September 24, 1989. If a new CBA with
the same provisions as the old one has been executed, its terms should be
amended so as to conform to the tenor of this decision.
WHEREFORE, in view of the foregoing, the assailed resolutions of the
public respondent dated August 24, 1988 and October 28, 1988 are
hereby SET ASIDE. The restraining order dated January 11, 1989 issued by
the Court is made permanent.
SO ORDERED.

Once again we enunciate that the proliferation of unions in an employer unit

is discouraged as a matter of policy unless compelling reasons exist which G.R. No. 164561 August 30, 2006
deny a certain and distinct class of employees the right to self-organization
CATHAY PACIFIC STEEL CORPORATION, BENJAMIN CHUA
for purposes of collective bargaining. (seeGeneral Rubber & Footwear
JR., VIRGILIO AGERO, and LEONARDO VISORRO,
Corporation v. Bureau of Labor Relations, 155 SCRA 283 [1987]).
JR., Petitioners,
Anent the correlative issue of whether or not the contract-bar rule applies to vs.
the present case, Rule V, Section 3, Book V of the Implementing Rules and HON. COURT OF APPEALS, CAPASCO UNION OF
Regulations of the Labor Code is written in plain and simple terms. It SUPERVISORY EMPLOYEES (CUSE) and ENRIQUE
provides in effect that if a collective bargaining agreement validly exists, a TAMONDONG III, Respondents.
petition for certification election can only be entertained within sixty (60)
days prior to the expiry date of said agreement. Respondent union's petition
for certification election was filed on November 25, 1987. At the time of the DECISION
filing of the said petition, a valid and existing CBA was present between
petitioner and Triumph International. The CBA was effective up to CHICO-NAZARIO, J.:
September 24, 1989. There is no doubt that the respondent union's CBA
This is a special civil action for Certiorari under Rule 65 of the Rules of
constituted a bar to the holding of the certification election as petitioned by
Court seeking to annul and set aside, on the ground of grave abuse of
the respondent union with public respondent. (see Associated Trade Unions
discretion amounting to lack or excess of jurisdiction, (1) the Decision 1 of
[ATU] v. Trajano, 162 SCRA 318 [1988], Federation of Democratic Trade
the Court of Appeals in CA-G.R. SP No. 57179 dated 28 October 2003
Union v. Pambansang Kilusan ng Paggawa, 156 SCRA 482
which annulled the Decision 2 of the National Labor Relations Commission
[1987]; Tanduay Distilling Labor Union v. National Labor Relations
(NLRC) in NLRC Case No. 017822-99 dated 25 August 1999, thereby,

67
reinstating the Decision 3 of Acting Executive Labor Arbiter Pedro C.
Ramos dated 7 August 1998; and (2) the Resolution 4 of the same court,
dated 3 June 2004, which denied the petitioners’ Motion for
Reconsideration.
Herein petitioners are Cathay Pacific Steel Corporation (CAPASCO), a
domestic corporation engaged in the business of manufacturing steel
products; Benjamin Chua, Jr. (now deceased), the former CAPASCO
President; Virgilio Agerro, CAPASCO’s Vice-President; and Leonardo
Visorro, Jr., CAPASCO’s Administrative-Personnel Manager. Herein
private respondents are Enrique Tamondong III, the Personnel
Superintendent of CAPASCO who was previously assigned at the
petitioners’ Cainta Plant, and CAPASCO Union of Supervisory Employees
(CUSE), a duly registered union of CAPASCO.
The facts of the case are as follows:
Four former employees of CAPASCO originally filed this labor case before
the NLRC, namely: Fidel Lacambra, Armando Dayson, Reynaldo
Vacalares, and Enrique Tamondong III. However, in the course of the
proceedings, Fidel Lacambra 5 and Armando Dayson 6 executed a Release
and Quitclaim, thus, waiving and abandoning any and all claims that they
may have against petitioner CAPASCO. On 3 November 1999, Reynaldo
Vacalares also signed a Quitclaim/Release/Waiver. 7 Hence, this Petition
shall focus solely on issues affecting private respondent Tamondong.
Petitioner CAPASCO, hired private respondent Tamondong as Assistant to
the Personnel Manager for its Cainta Plant on 16 February 1990. Thereafter,
he was promoted to the position of Personnel/Administrative Officer, and
later to that of Personnel Superintendent. Sometime in June 1996, the
supervisory personnel of CAPASCO launched a move to organize a union
among their ranks, later known as private respondent CUSE. Private
respondent Tamondong actively involved himself in the formation of the
union and was even elected as one of its officers after its creation.
Consequently, petitioner CAPASCO sent a memo 8 dated 3 February 1997,
to private respondent Tamondong requiring him to explain and to
discontinue from his union activities, with a warning that a continuance
thereof shall adversely affect his employment in the company. Private
respondent Tamondong ignored said warning and made a reply letter 9 on 5
68
February 1997, invoking his right as a supervisory employee to join and
organize a labor union. In view of that, on 6 February 1997, petitioner
CAPASCO through a memo 10 terminated the employment of private
respondent Tamondong on the ground of loss of trust and confidence, citing
his union activities as acts constituting serious disloyalty to the company.
Private respondent Tamondong challenged his dismissal for being illegal
and as an act involving unfair labor practice by filing a Complaint for Illegal
Dismissal and Unfair Labor Practice before the NLRC, Regional Arbitration
Branch IV. According to him, there was no just cause for his dismissal and
it was anchored solely on his involvement and active participation in the
organization of the union of supervisory personnel in CAPASCO. Though
private respondent Tamondong admitted his active role in the formation of a
union composed of supervisory personnel in the company, he claimed that
such was not a valid ground to terminate his employment because it was a
legitimate exercise of his constitutionally guaranteed right to self-
organization.
In contrast, petitioner CAPASCO contended that by virtue of private
respondent Tamondong’s position as Personnel Superintendent and the
functions actually performed by him in the company, he was considered as a
managerial employee, thus, under the law he was prohibited from joining a
union as well as from being elected as one of its officers. Accordingly,
petitioners maintained their argument that the dismissal of private
respondent Tamondong was perfectly valid based on loss of trust and
confidence because of the latter’s active participation in the affairs of the
union.
On 7 August 1998, Acting Executive Labor Arbiter Pedro C. Ramos
rendered a Decision in favor of private respondent Tamondong, decreeing
as follows:
WHEREFORE, premises considered, judgment is hereby rendered finding
[petitioner CAPASCO] guilty of unfair labor practice and illegal dismissal.
Concomitantly, [petitioner CAPASCO] is hereby ordered:
1. To cease and desist from further committing acts of unfair labor practice,
as charged;
2. To reinstate [private respondent Tamondong] to his former position
without loss of seniority rights and other privileges and 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 herein partially computed
as follows:
a) P167,076.00 - backwages from February 7, 1997 to August 7, 1998;
b) P18,564.00 - 13th month pay for 1997 and 1998;
c) P4,284.00 - Holiday pay for 12 days;
d) P3,570.00 - Service Incentive Leave for 1997 and 1998.
P 193,494.00 - Total partial backwages and benefits. 11
Aggrieved, petitioners appealed the afore-quoted Decision to the NLRC. On
25 August 1999, the NLRC rendered its Decision modifying the Decision of
the Acting Executive Labor Arbiter Pedro C. Ramos, thus:
WHEREFORE, premises all considered, the decision appealed from is
hereby MODIFIED:
a) Dismissing the Complaint for Illegal Dismissal filed by [private
respondent Tamondong] for utter lack of merit;
b) Dismissing the Complaint for Unfair Labor Practice for lack of factual
basis;
c) Deleting the awards to [private respondent Tamondong] of backwages,
moral and exemplary damages, and attorney’s fees;
d) Affirming the awards to [private respondent Tamondong], representing
13th month pay for 1997 and 1998, holiday pay for 12 days, and service
incentive leave for 1997 totaling P26,418.00; and
e) Ordering the payment of backwages to [private respondent Tamondong]
reckoned from 16 September 1998 up to the date of this Decision. 12
Petitioners filed a Motion for Clarification and Partial Reconsideration,
while, private respondent Tamondong filed a Motion for Reconsideration of
69
the said NLRC Decision, but the NLRC affirmed its original Decision in its
Resolution13 dated 25 November 1999.
Dissatisfied with the above-mentioned Decision of the NLRC, private
respondents Tamondong and CUSE filed a Petition for Certiorari under
Rule 65 of the Rules of Court before the Court of Appeals, alleging grave
abuse of discretion on the part of the NLRC. Then, the Court of Appeals in
its Decision dated 28 October 2003, granted the said Petition. The
dispositive of which states that:
WHEREFORE, premises considered, the instant Petition for Certiorari is
GRANTED and the herein assailed Decision dated August 25, 1999 of the
NLRC, Third Division is ANNULLED and SET ASIDE. Accordingly, the
Decision dated August 7, 1998 of NLRC, RAB IV Acting Executive Labor
Arbiter Pedro C. Ramos, insofar as [private respondent Tamondong] is
concerned is hereby REINSTATED. 14
Consequently, petitioners filed a Motion for Reconsideration of the
aforesaid Decision of the Court of Appeals. Nonetheless, the Court of
Appeals denied the said Motion for Reconsideration for want of convincing
and compelling reason to warrant a reversal of its judgment.
Hence, this present Petition for Certiorari under Rule 65 of the 1997 Rules
of Civil Procedure.
In the Memorandum 15 filed by petitioners, they aver that private respondent
Tamondong as Personnel Superintendent of CAPASCO was performing
functions of a managerial employee because he was the one laying down
major management policies on personnel relations such as: issuing memos
on company rules and regulations, imposing disciplinary sanctions such as
warnings and suspensions, and executing the same with full power and
discretion. They claim that no further approval or review is necessary for
private respondent Tamondong to execute these functions, and the notations
"NOTED BY" of petitioner Agerro, the Vice-President of petitioner
CAPASCO, on the aforesaid memos are nothing but mere notice that
petitioner Agerro was aware of such company actions performed by private
respondent Tamondong. Additionally, private respondent Tamondong was
not only a managerial employee but also a confidential employee having
knowledge of confidential information involving company policies on
personnel relations. Hence, the Court of Appeals acted with grave abuse of
discretion amounting to lack or excess of jurisdiction when it held that
private respondent Tamondong was not a managerial employee but a mere
supervisory employee, therefore, making him eligible to participate in the
union activities of private respondent CUSE.
Petitioners further argue that they are not guilty of illegal dismissal and
unfair labor practice because private respondent Tamondong was validly
dismissed and the reason for preventing him to join a labor union was the
nature of his position and functions as Personnel Superintendent, which
position was incompatible and in conflict with his union activities.
Consequently, it was grave abuse of discretion on the part of the Court of
Appeals to rule that petitioner CAPASCO was guilty of illegal dismissal
and unfair labor practice.
Lastly, petitioners maintain that the Court of Appeals gravely abused its
discretion when it reinstated the Decision of Executive Labor Arbiter Pedro
C. Ramos holding CAPASCO liable for backwages, 13th month pay,
service incentive leave, moral damages, exemplary damages, and attorney’s
fees.
On the other hand, private respondents, assert that the assailed Decision
being a final disposition of the Court of Appeals is appealable to this Court
by a Petition for Review on Certiorari under Rule 45 of the Rules of Court
and not under Rule 65 thereof. They also claim that petitioners new ground
that private respondent Tamondong was a confidential employee of
CAPASCO, thus, prohibited from participating in union activities, is not a
valid ground to be raised in this Petition for Certiorari seeking the reversal
of the assailed Decision and Resolution of the Court of Appeals.
Now, given the foregoing arguments raise by both parties, the threshold
issue that must first be resolved is whether or not the Petition for Certiorari
under Rule 65 of the 1997 Rules of Civil Procedure is the proper remedy for
the petitioners, to warrant the reversal of the Decision and Resolution of the
Court of Appeals dated 28 October 2003 and 3 June 2004, respectively.
The petition must fail.
70
The special civil action for Certiorari is intended for the correction of errors
of jurisdiction only or grave abuse of discretion amounting to lack or excess
of jurisdiction. Its principal office is only to keep the inferior court within
the parameters of its jurisdiction or to prevent it from committing such a
grave abuse of discretion amounting to lack or excess of jurisdiction. 16
The essential requisites for a Petition for Certiorari under Rule 65 are: (1)
the writ is directed against a tribunal, a board, or an officer exercising
judicial or quasi-judicial function; (2) such tribunal, board, or officer has
acted without or in excess of jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction; and (3) there is no appeal or any
plain, speedy, and adequate remedy in the ordinary course of law. 17 Excess
of jurisdiction as distinguished from absence of jurisdiction means that an
act, though within the general power of a tribunal, board or officer is not
authorized, and invalid with respect to the particular proceeding, because
the conditions which alone authorize the exercise of the general power in
respect of it are wanting. 18 Without jurisdiction means lack or want of legal
power, right or authority to hear and determine a cause or causes,
considered either in general or with reference to a particular matter. It
means lack of power to exercise authority. 19 Grave abuse of discretion
implies such capricious and whimsical exercise of judgment as is equivalent
to lack of jurisdiction or, in other words, where the power is exercised in an
arbitrary manner by reason of passion, prejudice, or personal hostility, and it
must be so patent or gross as to amount to an evasion of a positive duty or
to a virtual refusal to perform the duty enjoined or to act at all in
contemplation of law. 20
In the case before this Court, petitioners fail to meet the third requisite for
the proper invocation of Petition for Certiorari under Rule 65, to wit: that
there is no appeal or any plain, speedy, and adequate remedy in the ordinary
course of law. They simply alleged that the Court of Appeals gravely abuse
its discretion which amount to lack or excess of jurisdiction in rendering the
assailed Decision and Resolution. They did not bother to explain why an
appeal cannot possibly cure the errors committed by the appellate court. It
must be noted that the questioned Decision of the Court of Appeals was
already a disposition on the merits; this Court has no remaining issues to
resolve, hence, the proper remedy available to the petitioners is to file
Petition for Review under Rule 45 not under Rule 65.
Additionally, the general rule is that a writ of certiorari will not issue where
the remedy of appeal is available to the aggrieved party. The remedies of
appeal in the ordinary course of law and that of certiorari under Rule 65 of
the Revised Rules of Court are mutually exclusive and not alternative or
cumulative. 21 Time and again this Court reminded members of the bench
and bar that the special civil action of Certiorari cannot be used as a
substitute for a lost appeal 22 where the latter remedy is available. Such a
remedy will not be a cure for failure to timely file a Petition for Review on
Certiorari under Rule 45. Nor can it be availed of as a substitute for the lost
remedy of an ordinary appeal, especially if such loss or lapse was
occasioned by one’s own negligence or error in the choice of remedies. 23
In the case at bar, petitioners received on 9 June 2004 the Resolution of the
Court of Appeals dated 3 June 2004 denying their Motion for
Reconsideration. Upon receipt of the said Resolution, they had 15 days or
until 24 June 2004 within which to file an appeal by way of Petition for
Review under Rule 45, but instead of doing so, they just allowed the 15 day
period to lapse, and then on the 61st day from receipt of the Resolution
denying their Motion for Reconsideration, they filed this Petition for
Certiorari under Rule 65 alleging grave abuse of discretion on the part of the
appellate court. Admittedly, this Court, in accordance with the liberal spirit
pervading the Rules of Court and in the interest of justice, has the discretion
to treat a Petition for Certiorari as a Petition for Review on Certiorari under
Rule 45, especially if filed within the reglementary period for filing a
Petition for Review. 24 However, in the present case, this Court finds no
compelling reason to justify a liberal application of the rules, as this Court
did in the case of Delsan Transport Lines, Inc. v. Court of Appeals. 25 In the
said case, this Court treated the Petition for Certiorari filed by the petitioner
therein as having been filed under Rule 45 because said Petition was filed
within the 15-day reglementary period for filing a Petition for Review on
Certiorari. Petitioner’s counsel therein received the Court of Appeals
Resolution denying their Motion for Reconsideration on 26 October 1993
and filed the Petition for Certiorari on 8 November 1993, which was within
the 15-day reglementary period for filing a Petition for Review on
Certiorari. It cannot therefore be claimed that the Petition was used, as a
substitute for appeal after that remedy has been lost through the fault of the
petitioner. 26 Conversely, such was not the situation in the present case.
Hence, this Court finds no reason to justify a liberal application of the rules.
71
Accordingly, where the issue or question involves or affects the wisdom or
legal soundness of the decision, and not the jurisdiction of the court to
render said decision, the same is beyond the province of a petition for
certiorari. 27 It is obvious in this case that the arguments raised by the
petitioners delved into the wisdom or legal soundness of the Decision of the
Court of Appeals, therefore, the proper remedy is a Petition for Review on
Certiorari under Rule 45. Consequently, it is incumbent upon this Court to
dismiss this Petition.
In any event, granting arguendo, that the present petition is proper, still it is
dismissible. The Court of Appeals cannot be said to have acted with grave
abuse of discretion amounting to lack or excess of jurisdiction in annulling
the Decision of the NLRC because the findings of the Court of Appeals that
private respondent Tamondong was indeed a supervisory employee and not
a managerial employee, thus, eligible to join or participate in the union
activities of private respondent CUSE, were supported by evidence on
record. In the Decision of the Court of Appeals dated 28 October 2003, it
made reference to the Memorandum 28 dated 12 September 1996, which
required private respondent Tamondong to observe fixed daily working
hours from 8:00 am to 12:00 noon and from 1:00 pm to 5:00 pm. This
imposition upon private respondent Tamondong, according to the Court of
Appeals, is very uncharacteristic of a managerial employee. To support such
a conclusion, the Court of Appeals cited the case of Engineering Equipment,
Inc. v. NLRC 29 where this Court held that one of the essential
characteristics 30 of an employee holding a managerial rank is that he is not
subjected to the rigid observance of regular office hours or maximum hours
of work.
Moreover, the Court of Appeals also held that upon careful examination of
the documents submitted before it, it found out that:
[Private respondent] Tamondong may have possessed enormous powers and
was performing important functions that goes with the position of Personnel
Superintendent, nevertheless, there was no clear showing that he is at
liberty, by using his own discretion and disposition, to lay down and
execute major business and operational policies for and in behalf of
CAPASCO. [Petitioner] CAPASCO miserably failed to establish that
[private respondent] Tamondong was authorized to act in the interest of the
company using his independent judgment. x x x. Withal, [private
respondent] Tamondong may have been exercising certain important
powers, such as control and supervision over erring rank-and-file
employees, however, x x x he does not possess the power to hire, transfer,
terminate, or discipline erring employees of the company. At the most, the
record merely showed that [private respondent] Tamondong informed and
warned rank-and-file employees with respect to their violations of
CAPASCO’s rules and regulations. x x x. [Also, the functions performed by
private respondent such as] issuance of warning 31 to employees with
irregular attendance and unauthorized leave of absences and requiring
employees to explain regarding charges of abandonment of work, are
normally performed by a mere supervisor, and not by a manager. 32
Accordingly, Article 212(m) of the Labor Code, as amended, differentiates
supervisory employees from managerial employees, to wit: supervisory
employees are those who, in the interest of the employer, effectively
recommend such managerial actions, if the exercise of such authority is not
merely routinary or clerical in nature but requires the use of independent
judgment; whereas, managerial employees are those who are vested with
powers or prerogatives to lay down and execute management policies
and/or hire, transfer, suspend, lay off, recall, discharge, assign or discipline
employees. Thus, from the foregoing provision of the Labor Code, it can be
clearly inferred that private respondent Tamondong was just a supervisory
employee. Private respondent Tamondong did not perform any of the
functions of a managerial employee as stated in the definition given to it by
the Code. Hence, the Labor Code 33 provisions regarding disqualification of
a managerial employee from joining, assisting or forming any labor
organization does not apply to herein private respondent Tamondong. Being
a supervisory employee of CAPASCO, he cannot be prohibited from
joining or participating in the union activities of private respondent CUSE,
and in making such a conclusion, the Court of Appeals did not act
whimsically, capriciously or in a despotic manner, rather, it was guided by
the evidence submitted before it. Thus, given the foregoing findings of the
Court of Appeals that private respondent is a supervisory employee, it is
indeed an unfair labor practice 34 on the part of petitioner CAPASCO to
dismiss him on account of his union activities, thereby curtailing his
constitutionally guaranteed right to self-organization. 35
72
With regard to the allegation that private respondent Tamondong was not
only a managerial employee but also a confidential employee, the same
cannot be validly raised in this Petition for Certiorari. It is settled that an
issue which was not raised in the trial court cannot be raised for the first
time on appeal. This principle applies to a special civil action for certiorari
under Rule 65. 36 In addition, petitioners failed to adduced evidence which
will prove that, indeed, private respondent was also a confidential
employee.
WHEREFORE, premises considered, the instant Petition is DISMISSED.
The Decision and Resolution of the Court of Appeals dated 28 October
2003 and 3 June 2004, respectively, in CA-G.R. SP No. 57179, which
annulled the Decision of the NLRC in NLRC Case No. 017822-99 dated 25
August 1999, thereby, reinstating the Decision of Acting Executive Labor
Arbiter Pedro C. Ramos dated 7 August 1998, is hereby AFFIRMED. With
costs against petitioners.
SO ORDERED.
G.R. No. 110399 August 15, 1997
SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT
UNION AND ERNESTO L. PONCE, President, petitioners,
vs.
HONORABLE BIENVENIDO E. LAGUESMA IN HIS CAPACITY
AS UNDERSECRETARY OF LABOR AND EMPLOYMENT,
HONORABLE DANILO L. REYNANTE IN HIS CAPACITY AS
MED-ARBITER AND SAN MIGUEL CORPORATION, respondents.
ROMERO, J.:
This is a Petition for Certiorari with Prayer for the Issuance of Preliminary
Injunction seeking to reverse and set aside the Order of public respondent,
Undersecretary of the Department of Labor and Employment, Bienvenido
E. Laguesma, dated March 11, 1993, in Case No. OS MA A-2-70-
911 entitled "In Re: Petition for Certification Election Among the
Supervisory and Exempt Employees of the San Miguel Corporation
Magnolia Poultry Plants of Cabuyao, San Fernando and Otis, San Miguel
Corporation Supervisors and Exempt Union, Petitioner." The Order
excluded the employees under supervisory levels 3 and 4 and the so-called
exempt employees from the proposed bargaining unit and ruled out their
participation in the certification election.
The antecedent facts are undisputed:
On October 5, 1990, petitioner union filed before the Department of Labor
and Employment (DOLE) a Petition for Direct Certification or Certification
Election among the supervisors and exempt employees of the SMC
Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis.
On December 19, 1990, Med-Arbiter Danilo L. Reynante issued an Order
ordering the conduct of certification election among the supervisors and
exempt employees of the SMC Magnolia Poultry Products Plants of
Cabuyao, San Fernando and Otis as one bargaining unit.
On January 18, 1991, respondent San Miguel Corporation filed a Notice of
Appeal with Memorandum on Appeal, pointing out, among others, the
Med-Arbiter's error in grouping together all three (3) separate plants, Otis,
Cabuyao and San Fernando, into one bargaining unit, and in including
supervisory levels 3 and above whose positions are confidential in nature.
On July 23, 1991, the public respondent, Undersecretary Laguesma, granted
respondent company's Appeal and ordered the remand of the case to the
Med-Arbiter of origin for determination of the true classification of each of
the employees sought to be included in the appropriate bargaining unit.
Upon petitioner-union's motion dated August 7, 1991, Undersecretary
Laguesma granted the reconsideration prayed for on September 3, 1991 and
directed the conduct of separate certification elections among the
supervisors ranked as supervisory levels 1 to 4 (S1 to S4) and the exempt
employees in each of the three plants at Cabuyao, San Fernando and Otis.
On September 21, 1991, respondent company, San Miguel Corporation filed
a Motion for Reconsideration with Motion to suspend proceedings.
On March 11, 1993, an Order was issued by the public respondent granting
the Motion, citing the doctrine enunciated in Philips Industrial
Development, Inc. v. NLRC 2 case. Said Order reads in part:
73
. . . Confidential employees, like managerial employees, are not allowed to
form, join or assist a labor union for purposes of collective bargaining.
In this case, S3 and S4 Supervisors and the so-called exempt employees are
admittedly confidential employees and therefore, they are not allowed to
form, join or assist a labor union for purposes of collective bargaining
following the above court's ruling. Consequently, they are not allowed to
participate in the certification election.
WHEREFORE, the Motion is hereby granted and the Decision of this
Office dated 03 September 1991 is hereby modified to the extent that
employees under supervisory levels 3 and 4 (S3 and S4) and the so-called
exempt employees are not allowed to join the proposed bargaining unit and
are therefore excluded from those who could participate in the certification
election. 3
Hence this petition.
For resolution in this case are the following issues:
1. Whether Supervisory employees 3 and 4 and the exempt employees of
the company are considered confidential employees, hence ineligible from
joining a union.
2. If they are not confidential employees, do the employees of the three
plants constitute an appropriate single bargaining unit.
On the first issue, this Court rules that said employees do not fall within the
term "confidential employees" who may be prohibited from joining a union.
There is no question that the said employees, supervisors and the exempt
employees, are not vested with the powers and prerogatives to lay down and
execute management policies and/or to hire, transfer, suspend, layoff, recall,
discharge or dismiss employees. They are, therefore, not qualified to be
classified as managerial employees who, under Article 245 4 of the Labor
Code, are not eligible to join, assist or form any labor organization. In the
very same provision, they are not allowed membership in a labor
organization of the rank-and-file employees but may join, assist or form
separate labor organizations of their own. The only question that need be
addressed is whether these employees are properly classified as confidential
employees or not.
Confidential employees are those who (1) assist or act in a confidential
capacity, (2) to persons who formulate, determine, and effectuate
management policies in the field of labor relations. 5 The two criteria are
cumulative, and both must be met if an employee is to be considered a
confidential employee — that is, the confidential relationship must exist
between the employee and his supervisor, and the supervisor must handle
the prescribed responsibilities relating to labor relations. 6
The exclusion from bargaining units of employees who, in the normal
course of their duties, become aware of management policies relating to
labor relations is a principal objective sought to be accomplished by the
''confidential employee rule." The broad rationale behind this rule is that
employees should not be placed in a position involving a potential conflict
of interests. 7 "Management should not be required to handle labor relations
matters through employees who are represented by the union with which the
company is required to deal and who in the normal performance of their
duties may obtain advance information of the company's position with
regard to contract negotiations, the disposition of grievances, or other labor
relations matters." 8
There have been precedents in this regards, thus in Bulletin Publishing
Company v. Hon. Augusto Sanchez, 9 the Court held that "if these
managerial employees would belong to or be affiliated with a Union, the
latter might not be assured of their loyalty to the Union in view of evident
conflict of interest. The Union can also become company-dominated with
the presence of managerial employees in Union membership." The same
rationale was applied to confidential employees in "Golden Farms,
Inc. v. Ferrer-Calleja" 10 and in the more recent case of "Philips Industrial
Development, Inc. v. NLRC" 11 which held that confidential employees, by
the very nature of their functions, assist and act in a confidential capacity to,
or have access to confidential matters of, persons who exercise managerial
functions in the field of labor relations. Therefore, the rationale behind the
ineligibility of managerial employees to form, assist or join a labor union
was held equally applicable to them. 12
74
An important element of the "confidential employee rule" is the employee's
need to use labor relations information. Thus, in determining the
confidentiality of certain employees, a key question frequently considered is
the employee's necessary access to confidential labor relations
information. 13
It is the contention of respondent corporation that Supervisor employees 3
and 4 and the exempt employees come within the meaning of the term
"confidential employees" primarily because they answered in the
affirmative when asked "Do you handle confidential data or documents?" in
the Position Questionnaires submitted by the Union. 14 In the same
questionnaire, however, it was also stated that the confidential information
handled by questioned employees relate to product formulation, product
standards and product specification which by no means relate to "labor
relations." 15
Granting arguendo that an employee has access to confidential labor
relations information but such is merely incidental to his duties and
knowledge thereof is not necessary in the performance of such duties, said
access does not render the employee a confidential employee. 16 "If access
to confidential labor relations information is to be a factor in the
determination of an employee's confidential status, such information must
relate to the employer's labor relations policies. Thus, an employee of a
labor union, or of a management association, must have access to
confidential labor relations information with respect to his employer, the
union, or the association, to be regarded a confidential employee, and
knowledge of labor relations information pertaining to the companies with
which the union deals, or which the association represents, will not cause an
employee to be excluded from the bargaining unit representing employees
of the union or association." 17 "Access to information which is regarded by
the employer to be confidential from the business standpoint, such as
financial information 18 or technical trade secrets, will not render an
employee a confidential employee." 19
Herein listed are the functions of supervisors 3 and higher:
1. To undertake decisions to discontinue/temporarily stop shift operations
when situations require.
2. To effectively oversee the quality control function at the processing lines
in the storage of chicken and other products.
3. To administer efficient system of evaluation of products in the outlets.
4. To be directly responsible for the recall, holding and rejection of direct
manufacturing materials.
5. To recommend and initiate actions in the maintenance of sanitation and
hygiene throughout the plant. 20
It is evident that whatever confidential data the questioned employees may
handle will have to relate to their functions. From the foregoing functions, it
can be gleaned that the confidential information said employees have access
to concern the employer's internal business operations. As held
in Westinghouse Electric Corporation v. National Labor Relations
Board, 21 "an employee may not be excluded from appropriate bargaining
unit merely because he has access to confidential information concerning
employer's internal business operations and which is not related to the field
of labor relations."
It must be borne in mind that Section 3 of Article XIII of the 1987
Constitution mandates the State to guarantee to "all" workers the right to
self-organization. Hence, confidential employees who may be excluded
from bargaining unit must be strictly defined so as not to needlessly deprive
many employees of their right to bargain collectively through
representatives of their choosing. 22
In the case at bar, supervisors 3 and above may not be considered
confidential employees merely because they handle "confidential data" as
such must first be strictly classified as pertaining to labor relations for them
to fall under said restrictions. The information they handle are properly
classifiable as technical and internal business operations data which, to our
mind, has no relevance to negotiations and settlement of grievances wherein
the interests of a union and the management are invariably adversarial.
Since the employees are not classifiable under the confidential type, this
Court rules that they may appropriately form a bargaining unit for purposes
of collective bargaining. Furthermore, even assuming that they are
confidential employees, jurisprudence has established that there is no legal
75
prohibition against confidential employees who are not performing
managerial functions to form and join a union. 23
In this connection, the issue of whether the employees of San Miguel
Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando,
and Otis constitute a single bargaining unit needs to be threshed out.
It is the contention of the petitioner union that the creation of three (3)
separate bargaining units, one each for Cabuyao, Otis and San Fernando as
ruled by the respondent Undersecretary, is contrary to the one-company,
one-union policy. It adds that Supervisors level 1 to 4 and exempt
employees of the three plants have a similarity or a community of interests.
This Court finds the contention of the petitioner meritorious.
An appropriate bargaining unit may be defined as "a group of employees of
a given employer, comprised of all or less than all of the entire body of
employees, which the collective interest of all the employees, consistent
with equity to the employer, indicate to be best suited to serve the reciprocal
rights and duties of the parties under the collective bargaining provisions of
the
law." 24
A unit to be appropriate must effect a grouping of employees who have
substantial, mutual interests in wages, hours, working conditions and other
subjects of collective bargaining. 25
It is readily seen that the employees in the instant case have "community or
mutuality of interests," which is the standard in determining the proper
constituency of a collective bargaining unit. 26 It is undisputed that they all
belong to the Magnolia Poultry Division of San Miguel Corporation. This
means that, although they belong to three different plants, they perform
work of the same nature, receive the same wages and compensation, and
most importantly, share a common stake in concerted activities.
In light of these considerations, the Solicitor General has opined that
separate bargaining units in the three different plants of the division will
fragmentize the employees of the said division, thus greatly diminishing
their bargaining leverage. Any concerted activity held against the private
respondent for a labor grievance in one bargaining unit will, in all
probability, not create much impact on the operations of the private
respondent. The two other plants still in operation can well step up their
production and make up for the slack caused by the bargaining unit engaged
in the concerted activity. This situation will clearly frustrate the provisions
of the Labor Code and the mandate of the Constitution. 27
The fact that the three plants are located in three different places, namely, in
Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and in San Fernando,
Pampanga is immaterial. Geographical location can be completely
disregarded if the communal or mutual interests of the employees are not
sacrificed as demonstrated in UP v. Calleja-Ferrer where all non-academic
rank and file employee of the University of the Philippines in Diliman,
Quezon City, Padre Faura, Manila, Los Baños, Laguna and the Visayas
were allowed to participate in a certification election. We rule that the
distance among the three plants is not productive of insurmountable
difficulties in the administration of union affairs. Neither are there regional
differences that are likely to impede the operations of a single bargaining
representative.
WHEREFORE, the assailed Order of March 11, 1993 is hereby SET
ASIDE and the Order of the Med-Arbiter on December 19, 1990 is
REINSTATED under which a certification election among the supervisors
(level 1 to 4) and exempt employees of the San Miguel Corporation
Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis as
one bargaining unit is ordered conducted.
SO ORDERED.
G.R. No. 161933 April 22, 2008
STANDARD CHARTERED BANK EMPLOYEES UNION (SCBEU-
NUBE), petitioner,
vs.
STANDARD CHARTERED BANK and ANNEMARIE DURBIN, in
her capacity as Chief Executive Officer, Philippines, Standard
Chartered Bank, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
76
For resolution is an appeal by certiorari filed by petitioner under Rule 45 of
the Rules of Court, assailing the Decision1 dated October 9, 2002 and
Resolution2 dated January 26, 2004 issued by the Court of Appeals (CA),
dismissing their petition and affirming the Secretary of Labor and
Employment's Orders dated May 31, 2001 and August 30, 2001.
Petitioner and the Standard Chartered Bank (Bank) began negotiating for a
new Collective Bargaining Agreement (CBA) in May 2000 as their 1998-
2000 CBA already expired. Due to a deadlock in the negotiations, petitioner
filed a Notice of Strike prompting the Secretary of Labor and Employment
to assume jurisdiction over the labor dispute.
On May 31, 2001, Secretary Patricia A. Sto. Tomas of the Department of
Labor and Employment (DOLE) issued an Order with the following
dispositive portion:
WHEREFORE, PREMISES CONSIDERED, the Standard Chartered Bank
and the Standard Chartered Bank Employees Union are directed to execute
their collective bargaining agreement effective 01 April 2001 until 30
March 2003 incorporating therein the foregoing dispositions and the
agreements they reached in the course of negotiations and conciliation. All
other submitted issues that were not passed upon are dismissed.
The charge of unfair labor practice for bargaining in bad faith and the claim
for damages relating thereto are hereby dismissed for lack of merit.
Finally, the charge of unfair labor practice for gross violation of the
economic provisions of the CBA is hereby dismissed for want of
jurisdiction.
SO ORDERED.3
Both petitioner and the Bank filed their respective motions for
reconsideration, which were denied by the Secretary per Order dated August
30, 2001.4
Petitioner sought recourse with the CA via a petition for certiorari, and in
the assailed Decision dated October 9, 20025 and Resolution dated January
26, 2004,6 the CA dismissed their petition and affirmed the Secretary's
Orders.
Hence, herein petition based on the following grounds:
I.
THE COURT A QUO ERRED IN DECIDING THAT THERE WAS NO
BASIS FOR REVISING THE SCOPE OF EXCLUSIONS FROM THE
APPROPRIATE BARGAINING UNIT UNDER THE CBA.
II.
THE COURT A QUO ERRED IN DECIDING THAT A ONE-MONTH OR
LESS TEMPORARY OCCUPATION OF A POSITION (ACTING
CAPACITY) DOES NOT MERIT ADJUSTMENT IN
REMUNERATION.7
The resolution of this case has been overtaken by the execution of the
parties' 2003-2005 CBA. While this would render the case moot and
academic, nevertheless, the likelihood that the same issues will come up in
the parties' future CBA negotiations is not far-fetched, thus compelling its
resolution. Courts will decide a question otherwise moot if it is capable of
repetition yet evading review.[8]
The CBA provisions in dispute are the exclusion of certain employees from
the appropriate bargaining unit and the adjustment of remuneration for
employees serving in an acting capacity for one month.
In their proposal, petitioner sought the exclusion of only the following
employees from the appropriate bargaining unit – all managers who are
vested with the right to hire and fire employees, confidential employees,
those with access to labor relations materials, Chief Cashiers, Assistant
Cashiers, personnel of the Telex Department and one Human Resources
(HR) staff.9
In the previous 1998-2000 CBA,10 the excluded employees are as follows:
A. All covenanted and assistant officers (now called National Officers)
B. One confidential secretary of each of the:
1. Chief Executive, Philippine Branches
2. Deputy Chief Executive/Head, Corporate Banking Group
77
3. Head, Finance
4. Head, Human Resources
5. Manager, Cebu
6. Manager, Iloilo
7. Covenanted Officers provided said positions shall be filled by new
recruits.
C. The Chief Cashiers and Assistant Cashiers in Manila, Cebu and Iloilo,
and in any other branch that the BANK may establish in the country.
D. Personnel of the Telex Department
E. All Security Guards
F. Probationary employees, without prejudice to Article 277 (c) of the
Labor Code, as amended by R.A. 6715, casuals or emergency employees;
and
G. One (1) HR Staff11
The Secretary, however, maintained the previous exclusions because
petitioner failed to show that the employees sought to be removed from the
list qualify for exclusion.12
With regard to the remuneration of employees working in an acting
capacity, it was petitioner's position that additional pay should be given to
an employee who has been serving in a temporary/acting capacity for one
week. The Secretary likewise rejected petitioner's proposal and instead,
allowed additional pay for those who had been working in such capacity for
one month. The Secretary agreed with the Bank's position that a restrictive
provision would curtail management's prerogative, and at the same time,
recognized that employees should not be made to work in an acting capacity
for long periods of time without adequate compensation.
The Secretary's disposition of the issues raised by petitioner were affirmed
by the CA.13 The Court sustains the CA.
Whether or not the employees sought to be excluded from the appropriate
bargaining unit are confidential employees is a question of fact, which is not
a proper issue in a petition for review under Rule 45 of the Rules of
Court.14 This holds more true in the present case in which petitioner failed
to controvert with evidence the findings of the Secretary and the CA.
The disqualification of managerial and confidential employees from joining
a bargaining unit for rank and file employees is already well-entrenched in
jurisprudence. While Article 245 of the Labor Code limits the ineligibility
to join, form and assist any labor organization to managerial employees,
jurisprudence has extended this prohibition to confidential employees or
those who by reason of their positions or nature of work are required to
assist or act in a fiduciary manner to managerial employees and hence, are
likewise privy to sensitive and highly confidential records. 15
In this case, the question that needs to be answered is whether the Bank's
Chief Cashiers and Assistant Cashiers, personnel of the Telex Department
and HR staff are confidential employees, such that they should be excluded.
As regards the qualification of bank cashiers as confidential
employees, National Association of Trade Unions (NATU) – Republic
Planters Bank Supervisors Chapter v. Torres16 declared that they are
confidential employees having control, custody and/or access to confidential
matters, e.g., the branch's cash position, statements of financial condition,
vault combination, cash codes for telegraphic transfers, demand drafts and
other negotiable instruments, pursuant to Sec. 1166.4 of the Central Bank
Manual regarding joint custody, and therefore, disqualified from joining or
assisting a union; or joining, assisting or forming any other labor
organization.17
Golden Farms, Inc. v. Ferrer-Calleja18 meanwhile stated that "confidential
employees such as accounting personnel, radio and telegraph
operators who, having access to confidential information, may become the
source of undue advantage. Said employee(s) may act as spy or spies of
either party to a collective bargaining agreement." 19
Finally, in Philips Industrial Development, Inc. v. National Labor Relations
Commission,20 the Court designated personnel staff, in which human
resources staff may be qualified, as confidential employees because by the
78
very nature of their functions, they assist and act in a confidential capacity
to, or have access to confidential matters of, persons who exercise
managerial functions in the field of labor relations.
Petitioner insists that the foregoing employees are not confidential
employees; however, it failed to buttress its claim. Aside from its
generalized arguments, and despite the Secretary's finding that there was no
evidence to support it, petitioner still failed to substantiate its claim.
Petitioner did not even bother to state the nature of the duties and functions
of these employees, depriving the Court of any basis on which it may be
concluded that they are indeed confidential employees. As aptly stated by
the CA:
While We agree that petitioner's proposed revision is in accordance with the
law, this does not necessarily mean that the list of exclusions enumerated in
the 1998-2000 CBA is contrary to law. As found by public
respondent, petitioner failed to show that the employees sought to be
removed from the list of exclusions are actually rank and file employees
who are not managerial or confidential in status and should,
accordingly, be included in the appropriate bargaining unit.
Absent any proof that Chief Cashiers and Assistant Cashiers, personnel
of the Telex department and one (1) HR Staff have mutuality of interest
with the other rank and file employees, then they are rightfully
excluded from the appropriate bargaining unit. x x x21(Emphasis
supplied)
Petitioner cannot simply rely on jurisprudence without explaining how and
why it should apply to this case. Allegations must be supported by evidence.
In this case, there is barely any at all.
There is likewise no reason for the Court to disturb the conclusion of the
Secretary and the CA that the additional remuneration should be given to
employees placed in an acting capacity for one month. The CA correctly
stated:
Likewise, We uphold the public respondent's Order that no employee
should be temporarily placed in a position (acting capacity) for more than
one month without the corresponding adjustment in the salary. Such order
of the public respondent is not in violation of the "equal pay for equal work"
principle, considering that after one (1) month, the employee performing the
job in an acting capacity will be entitled to salary corresponding to such
position.
xxxx
In arriving at its Order, the public respondent took all the relevant evidence
into account and weighed both parties arguments extensively. Thus, public
respondent concluded that a restrictive provision with respect to employees
being placed in an acting capacity may curtail management's valid exercise
of its prerogative. At the same time, it recognized that employees should not
be made to perform work in an acting capacity for extended periods of time
without being adequately compensated. x x x22
Thus, the Court reiterates the doctrine that:
[T]he office of a petition for review on certiorari under Rule 45 of the Rules
of Court requires that it shall raise only questions of law. The factual
findings by quasi-judicial agencies, such as the Department of Labor and
Employment, when supported by substantial evidence, are entitled to great
respect in view of their expertise in their respective fields. Judicial review of
labor cases does not go so far as to evaluate the sufficiency of evidence on
which the labor official's findings rest. It is not our function to assess and
evaluate all over again the evidence, testimonial and documentary, adduced
by the parties to an appeal, particularly where the findings of both the trial
court (here, the DOLE Secretary) and the appellate court on the matter
coincide, as in this case at bar. The Rule limits that function of the Court to
the review or revision of errors of law and not to a second analysis of the
evidence. x x x Thus, absent any showing of whimsical or capricious
exercise of judgment, and unless lack of any basis for the conclusions made
by the appellate court be amply demonstrated, we may not disturb such
factual findings.23
WHEREFORE, the petition is DENIED.
SO ORDERED.
G.R. No. 157117 November 20, 2006
79
COASTAL SUBIC BAY TERMINAL, INC., Petitioner,
vs.
DEPARTMENT OF LABOR and EMPLOYMENT – OFFICE OF
THE SECRETARY, COASTAL SUBIC BAY TERMINAL, INC.
SUPERVISORY UNION-APSOTEU, and COASTAL SUBIC BAY
TERMINAL, INC. RANK-AND-FILE UNION-ALU-
TUCP, Respondents.
DECISION
QUISUMBING, J.:
For review on certiorari is the Court of Appeals’ Decision1 dated August
31, 2001, in CA-G.R. SP No. 54128 and the Resolution2 dated February 5,
2003, denying petitioner’s motion for reconsideration. The Court of
Appeals had affirmed the Decision3 dated March 15, 1999 of the Secretary
of the Department of Labor and Employment (DOLE) reversing the
Mediator Arbiter’s dismissal of private respondents’ petitions for
certification election.
The facts are as follows:
On July 8, 1998, private respondents Coastal Subic Bay Terminal, Inc.
Rank-and-File Union (CSBTI-RFU) and Coastal Subic Bay Terminal, Inc.
Supervisory Union (CSBTI-SU) filed separate petitions for certification
election before Med-Arbiter Eladio de Jesus of the Regional Office No. III.
The rank-and-file union insists that it is a legitimate labor organization
having been issued a charter certificate by the Associated Labor Union
(ALU), and the supervisory union by the Associated Professional,
Supervisory, Office and Technical Employees Union (APSOTEU). Private
respondents also alleged that the establishment in which they sought to
operate was unorganized.
Petitioner Coastal Subic Bay Terminal, Inc. (CSBTI) opposed both petitions
for certification election alleging that the rank-and-file union and
supervisory union were not legitimate labor organizations, and that the
proposed bargaining units were not particularly described.
Without ruling on the legitimacy of the respondent unions, the Med-Arbiter
dismissed, without prejudice to refiling, both petitions which had been
consolidated. The Med-Arbiter held that the ALU and APSOTEU are one
and the same federation having a common set of officers. Thus, the
supervisory and the rank-and-file unions were in effect affiliated with only
one federation.4
The Med-Arbiter ruled as follows:
Viewed in the light of all the foregoing, this Office finds the simultaneous
filing of the instant petitions to be invalid and unwarranted. Consequently,
this Office has no recourse but to dismiss both petitions without prejudice to
the refiling of either.
WHEREFORE, PREMISES CONSIDERED, let the instant petitions be, as
they are hereby DISMISSED.
SO ORDERED.5
Both parties appealed to the Secretary of Labor and Employment, who
reversed the decision of the Med-Arbiter. The Secretary thru Undersecretary
R. Baldoz, ruled that CSBTI-SU and CSBTI-RFU have separate legal
personalities to file their separate petitions for certification election. The
Secretary held that APSOTEU is a legitimate labor organization because it
was properly registered pursuant to the 1989 Revised Rules and Regulations
implementing Republic Act No. 6715, the rule applicable at the time of its
registration. It further ruled that ALU and APSOTEU are separate and
distinct labor unions having separate certificates of registration from the
DOLE. They also have different sets of locals. The Secretary declared
CSBTI-RFU and CSBTI-SU as legitimate labor organizations having been
chartered respectively by ALU and APSOTEU after submitting all the
requirements with the Bureau of Labor Relations (BLR). Accordingly, the
Secretary ordered the holding of separate certification election, viz:
WHEREFORE, the decision of the Med-Arbiter, Regional Office No. III is
hereby REVERSED. Let separate certification elections be conducted
immediately among the appropriate employees of CSBTI, after the usual
pre-election conference, with the following choices:
I. For all rank and file employees of CSBTI:
80
1. COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-FILE
UNION-ALU-TUCP; and
2. NO UNION.
II. For all supervisory employees of CSBTI:
1. COASTAL SUBIC BAY TERMINAL, INC. SUPERVISORY
EMPLOYEES UNION-APSOTEU; and
2. NO UNION.
The latest payroll of the employer, including its payrolls for the last three
months immediately preceding the issuance of this decision, shall be the
basis for determining the qualified list of voters.
SO DECIDED.6
The motion for reconsideration was also denied.7
On appeal, the Court of Appeals affirmed the decision of the Secretary. 8 It
held that there was no grave abuse of discretion on the part of the Secretary;
its findings are supported by evidence on record; and thus should be
accorded with respect and finality.9
The motion for reconsideration was likewise denied.10 Hence, the instant
petition by the company anchored on the following grounds:
I
THE HONORABLE COURT OF APPEALS ERRED IN RELYING ON
THE "1989 REVISED RULES AND REGULATIONS IMPLEMENTING
RA 6715" AS BASIS TO RECOGNIZE PRIVATE RESPONDENT
APSOTEU’S REGISTRATION BY THE DOLE REGIONAL DIRECTOR.
II
THE HONORABLE COURT OF APPEALS ERRED WHEN IT
AFFIRMED PUBLIC RESPONDENT’S APPLICATION OF THE
PRINCIPLE OF STARE DECISIS TO HASTILY DISPOSE OF THE
LEGAL PERSONALITY ISSUE OF APSOTEU.
III
THE HONORABLE COURT OF APPEALS DID NOT DECIDE IN
ACCORD WITH LAW AND JURISPRUDENCE WHEN IT AFFIRMED
PUBLIC RESPONDENT’S APPLICATION OF THE "UNION
AUTONOMY" THEORY.
IV
IN AFFIRMING PUBLIC RESPONDENT’S FINDING THAT PRIVATE
RESPONDENTS ARE "SEPARATE FEDERATIONS," THE
HONORABLE COURT OF APPEALS:
(1) IGNORED JURISPRUDENCE RECOGNIZING THE BINDING
NATURE OF A MED-ARBITER’S FACTUAL FINDINGS; AND
(2) DISREGARDED EVIDENCE ON RECORD OF "ILLEGAL
COMMINGLING."11
Plainly, the issues are (1) Can the supervisory and the rank-and-file unions
file separate petitions for certification election?; (2) Was the Secretary’s
decision based on stare decisis correct?; and (3) Were private respondents
engaged in commingling?
The issue on the status of the supervisory union CSBTI-SU depends on the
status of APSOTEU, its mother federation.
Petitioner argues that APSOTEU improperly secured its registration from
the DOLE Regional Director and not from the BLR; that it is the BLR that
is authorized to process applications and issue certificates of registration in
accordance with our ruling in Phil. Association of Free Labor Unions v.
Secretary of Labor;12 that the certificates of registration issued by the
DOLE Regional Director pursuant to the rules are questionable, and
possibly even void ab initio for being ultra vires; and that the Court of
Appeals erred when it ruled that the law applicable at the time of
APSOTEU’s registration was the 1989 Revised Implementing Rules and
Regulations of Rep. Act No. 6715.
Petitioner insists that APSOTEU lacks legal personality, and its chartered
affiliate CSBTI-SU cannot attain the status of a legitimate labor
81
organization to file a petition for certification election. It relies on Villar v.
Inciong,13 where we held therein that Amigo Employees Union was not a
duly registered independent union absent any record of its registration with
the Bureau.
Pertinent is Article 23514 of the Labor Code which provides that
applications for registration shall be acted upon by the Bureau. "Bureau" as
defined under the Labor Code means the BLR and/or the Labor Relations
Division in the Regional Offices of the Department of Labor. 15 Further,
Section 2, Rule II, Book V of the 1989 Revised Implementing Rules of the
Labor Code (Implementing Rules) provides that:
Section 2. Where to file application; procedure – Any national labor
organization or labor federation or local union may file an application for
registration with the Bureau or the Regional Office where the applicant’s
principal offices is located. The Bureau or the Regional Office shall
immediately process and approve or deny the application. In case of
approval, the Bureau or the Regional Office shall issue the registration
certificate within thirty (30) calendar days from receipt of the application,
together with all the requirements for registration as hereinafter provided. 16
The Implementing Rules specifically Section 1, Rule III of Book V, as
amended by Department Order No. 9, thus:
SECTION 1. Where to file applications. – The application for registration
of any federation, national or industry union or trade union center shall be
filed with the Bureau. Where the application is filed with the Regional
Office, the same shall be immediately forwarded to the Bureau within forty-
eight (48) hours from filing thereof, together with all the documents
supporting the registration.
The applications for registration of an independent union shall be filed with
and acted upon by the Regional Office where the applicant’s principal office
is located ….
xxxx
The DOLE issued Department Order No. 40-03, which took effect on
March 15, 2003, further amending Book V of the above implementing rules.
The new implementing rules explicitly provide that applications for
registration of labor organizations shall be filed either with the Regional
Office or with the BLR.17
Even after the amendments, the rules did not divest the Regional Office and
the BLR of their jurisdiction over applications for registration by labor
organizations. The amendments to the implementing rules merely specified
that when the application was filed with the Regional Office, the application
would be acted upon by the BLR.
The records in this case showed that APSOTEU was registered on March 1,
1991. Accordingly, the law applicable at that time was Section 2, Rule II,
Book V of the Implementing Rules, and not Department Order No. 9 which
took effect only on June 21, 1997. Thus, considering further that
APSOTEU’s principal office is located in Diliman, Quezon City, and its
registration was filed with the NCR Regional Office, the certificate of
registration is valid.
The petitioner misapplied Villar v. Inciong.18 In said case, there was no
record in the BLR that Amigo Employees Union was registered.19
Did the Court of Appeals err in its application of stare decisis when it
upheld the Secretary’s ruling that APSOTEU is a legitimate labor
organization and its personality cannot be assailed unless in an independent
action for cancellation of registration certificate? 20
We think not.
Section 5, Rule V, Book V of the Implementing Rules states:
Section 5. Effect of registration – The labor organization or workers’
association shall be deemed registered and vested with legal personality on
the date of issuance of its certificate of registration. Such legal personality
cannot thereafter be subject to collateral attack, but maybe questioned only
in an independent petition for cancellation in accordance with these Rules. 21
Thus, APSOTEU is a legitimate labor organization and has authority to
issue charter to its affiliates.22 It may issue a local charter certificate to
CSBTI-SU and correspondingly, CSBTI-SU is legitimate.
82
Are ALU, a rank-and-file union and APSOTEU, a supervisory union one
and the same because of the commonalities between them? Are they
commingled?
The petitioner contends that applying by analogy, the doctrine of piercing
the veil of corporate fiction, APSOTEU and ALU are the same federation.
Private respondents disagree.
First, as earlier discoursed, once a labor union attains the status of a
legitimate labor organization, it continues as such until its certificate of
registration is cancelled or revoked in an independent action for
cancellation.23 In addition, the legal personality of a labor organization
cannot be collaterally attacked.24 Thus, when the personality of the labor
organization is questioned in the same manner the veil of corporate fiction
is pierced, the action partakes the nature of a collateral attack. Hence, in the
absence of any independent action for cancellation of registration against
either APSOTEU or ALU, and unless and until their registrations are
cancelled, each continues to possess a separate legal personality. The
CSBTI-RFU and CSBTI-SU are therefore affiliated with distinct and
separate federations, despite the commonalities of APSOTEU and ALU.
Under the rules implementing the Labor Code, a chartered local union
acquires legal personality through the charter certificate issued by a duly
registered federation or national union, and reported to the Regional Office
in accordance with the rules implementing the Labor Code. 25 A local union
does not owe its existence to the federation with which it is affiliated. It is a
separate and distinct voluntary association owing its creation to the will of
its members. Mere affiliation does not divest the local union of its own
personality, neither does it give the mother federation the license to act
independently of the local union. It only gives rise to a contract of agency,
where the former acts in representation of the latter. 26 Hence, local unions
are considered principals while the federation is deemed to be merely their
agent.27 As such principals, the unions are entitled to exercise the rights and
privileges of a legitimate labor organization, including the right to seek
certification as the sole and exclusive bargaining agent in the appropriate
employer unit.1âwphi1
A word of caution though, under Article 245 of the Labor
Code,28 supervisory employees are not eligible for membership in a labor
union of rank-and-file employees. The supervisory employees are allowed
to form their own union but they are not allowed to join the rank-and-file
union because of potential conflicts of interest.29 Further, to avoid a
situation where supervisors would merge with the rank-and-file or where
the supervisors’ labor union would represent conflicting interests, a local
supervisors’ union should not be allowed to affiliate with the national
federation of unions of rank-and-file employees where that federation
actively participates in the union activity within the company. 30 Thus, the
limitation is not confined to a case of supervisors wanting to join a rank-
and-file union. The prohibition extends to a supervisors’ local union
applying for membership in a national federation the members of which
include local unions of rank-and-file employees.31 In De La Salle University
Medical Center and College of Medicine v. Laguesma, we reiterated the rule
that for the prohibition to apply, it is not enough that the supervisory union
and the rank-and-file union are affiliated with a single federation. In
addition, the supervisors must have direct authority over the rank-and-file
employees.32
In the instant case, the national federations that exist as separate entities to
which the rank-and-file and supervisory unions are separately affiliated
with, do have a common set of officers. In addition, APSOTEU, the
supervisory federation, actively participates in the CSBTI-SU while ALU,
the rank-and-file federation, actively participates in the CSBTI-RFU, giving
occasion to possible conflicts of interest among the common officers of the
federation of rank-and-file and the federation of supervisory unions. For as
long as they are affiliated with the APSOTEU and ALU, the supervisory
and rank-and-file unions both do not meet the criteria to attain the status of
legitimate labor organizations, and thus could not separately petition for
certification elections.1âwphi1
The purpose of affiliation of the local unions into a common enterprise is to
increase the collective bargaining power in respect of the terms and
conditions of labor.33 When there is commingling of officers of a rank-and-
file union with a supervisory union, the constitutional policy on labor is
circumvented. Labor organizations should ensure the freedom of employees
to organize themselves for the purpose of leveling the bargaining process
but also to ensure the freedom of workingmen and to keep open the corridor
of opportunity to enable them to do it for themselves.
83
WHEREFORE, the petition is GRANTED. The Court of Appeals’
Decision dated August 31, 2001, in CA-G.R. SP No. 54128 and the
Resolution dated February 5, 2003 are SET ASIDE. The decision of the
Med-Arbiter is hereby AFFIRMED.
SO ORDERED.
G.R. NOS. 178085 - 178086
UNIVERSITY OF THE IMMACULATE CONCEPTION, Petitioner,
vs.
OFFICE OF THE SECRETARY OF LABOR AND EMPLOYMENT;,
UIC TEACHING AND NONTEACHING EMPLOYEES UNION-
FFW, OFELIA DIAPUEZ, MELANIE DE LA ROSA, ANGELINA
ABADILLA, LELIAN CONCON, MARY ANN DE RAMOS,
ZENAIDA CANOY, ALMA VILLA CARLOS, PAULINA PALMA
GIL, JOSIE BOSTON, GEMMA GALOPE and LEAH
CRUZA, Respondents.
DECISION
JARDELEZA, J.:
These consolidated cases stem from the labor dispute between petitioner
University of the Immaculate Conception (UIC) and respondent UIC
Teaching and Non-Teaching Employees Union - FFW (the "Union") dating
back to 1994. On January 23, 1995, the Secretary of Labor and Employment
(the "Secretary") assume.d jurisdiction over the dispute, docketed as OS-AJ-
003-95, pursuant to his powers under Section 263(g) of the Labor
Code.1 The first consolidated case involves a question of whether the
Secretary has the authority to order the creation of a tripartite committee to
determine the amount of net incremental proceeds of tuition fee increases;
the second case concerns the legality of the dismissal of 12 employees in
connection with the labor dispute.
I
The following findings of fact by the Court of Appeals are undisputed:
UIC is a non-stock, non-profit educational institution with campuses at Fr.
Selga and Bonifacio Sts., Davao City. Private respondent [the Union] is the
certified sole bargaining agent of UIC’s rank and file employees.
On 20 June 1994, the Union filed a notice of strike on the grounds of
bargaining deadlock and unfair labor practice. On 20 July 1994, the
National Conciliation and Mediation Board (NCMB) called the parties to a
conference where they agreed that an increase be granted to the workers in
the amount equivalent to: seventy-five percent (75%) of increment ent on
the tuition fee for the first year, eighty percent (80%) for the second year,
and eighty percent (80%) for the third year.
On the same occasion, the UIC demanded the exclusion of secretaries,
registrars, accounting personnel and guidance counselors from the
bargaining unit, on account of their being confidential employees. When the
parties agreed to submit this particular issue to voluntary arbitration, the
arbitration panel sustained the UIC on 08 November 1994. The Union’s
motion for reconsideration thereto was denied by the arbitration panel on 08
February 1995.
Accordingly, the UIC gave the affected employees namely: Melanie de la
Rosa, Angelina Abadilla, Jovita Mamburan, Zenaida Canoy, Gemma
Galope, Paulina Palma Gil, Lelian Concon, Mary Ann de Ramos, Alma
Villacarlos, [Leah] Cruza, [Ofelia] Diapuez and Josie Boston [collectively,
except Jovita Mamburan, the "Respondent Employees"] the option to
choose between keeping their positions or resigning from the Union. When
they elected to keep both their positions and their union membership, UIC
sent them notices of termination on 21 February 1995, which led into a
notice of strike filed by the Union on 10 March 1995.
In an Order dated 28 March 1995, the [Secretary] suspended the effects of
the said termination pending the determination of its legality and ordered
UIC to reinstate the respondent employees under the same conditions
prevailing prior to the labor dispute. This Order was later modified by the
[Secretary] directing the payroll reinstatement of the respondent employees,
instead of physical reinstatement. On 15 September 1995, the UIC filed a
petition for certiorari on the said payroll reinstatement. The Court of
Appeals denied the same in its 08 October 2001 Decision and 10 January
84
2002 Resolution. These were affirmed by the Supreme Court on 14 January
2005 [448 SCRA 190].
On 20 June 2006, the [Secretary] issued a Resolution ruling that the
respondent employees were illegally dismissed and directed UIC to reinstate
them (except for Jovita Mamburan who died on 18 October 2003) and to
pay them backwages and other benefits. UIC’s motion for reconsideration
thereto was denied by the [Secretary] on 18 September 2006.
Meanwhile, on [20 January 1995],2 the Union filed its second notice of
strike mostly on the grounds of bargaining deadlock on the issues of
computing the seventy percent (70%) incremental proceeds and unfair labor
practices. On 23 January 1995, the [Secretary] assumed jurisdiction over the
dispute, issued a Return-to-Work Order and enjoined the parties to desist
from all acts which might exacerbate the situation.
On 08 October 1998, the [Secretary] issued an Order directing the parties to
execute a collective bargaining agreement (CBA) embodying all items
agreed upon by the parties and the salary increases consisting of the
following: 1st year – 75% of increment increase of tuition fee; 2nd year –
80% of increment increase of tuition fee; and 3rd year – 80% of increment
increase of tuition fee. The [Secretary] likewise upheld the validity of the
strike declared by the Union on 20 January 1995. This Order was
challenged by UIC before the Court of Appeals and the Supreme Court,
both of which affirmed the same. The fallo of the Supreme Court decision
reads:
WHEREFORE, the Court DENIES the petition and enjoins the parties to
comply with the directive of the
Secretary of Labor and Employment to negotiate a collective bargaining
agreement in good faith.
No costs.
SO ORDERED.
On 21 April 2004, UIC and the Union signed an Agreement (21 April 2004
Agreement hereafter) before the DOLE, the second paragraph of which
provides:
["The parties agreed that all issues in this particular case have been settled,
except the issue on whether the full settlement clause in the CBA to be
signed by the parties bars the filing and/or continuation of alleged illegal
dismissal cases which arose in the year 1994 and which the Secretary of
Labor had ruled not to have bee Assumption of Jurisdiction case pending
with the Office of the Secretary which is agreed upon to be submitted for
voluntary arbitration before the Honorable Secretary of Labor.]
["Likewise in the interpretation and implementation of the full settlement
clause,]3 the parties agree that the net incremental proceeds for the five [5]
school years of the CBA (1995-1996 to 1999-2000) will be computed and
compared with the actual amount distributed to the employees for each of
these five [5] years. If the amount distributed in any of these 5 school years
is less than what is provided in the CBA, the University shall pay the
deficiency. If the amount distributed in any of these 5 school years is more
than what is provided in the CBA, the excess shall be chargeable to the
[seventy percent] 70% share of the employees in the school year 2004-2005.
On 17 May 2004, the Union moved before the [Secretary] for the creation
of a tripartite committee to compute the net proceeds of the tuition fee
increases for the school years 1995-2000. UIC opposed the motion stating
that the computation should be done by the grievance machinery provided
for in the CBA about to be signed by the parties.
On 08 June 2004, the parties signed the CBA (08 June 2004 CBA hereafter)
for school years 1995-2000. On that occasion, the parties agreed to rescind
the aforequoted paragraph of the 21 April 2004 Agreement to give way for
the signing of the CBA. The 08 June 2004 CBA was submitted to the
Regional Labor Office on 14 July 2004.
As mentioned earlier, on 05 July 2004, the DOLE issued an Order granting
the motion to create a tripartite committee. UIC moved for reconsideration
but the same was denied in an Order dated 19 May 2005.
On 09 December 2004, the Union submitted bargaining proposals for
school years 2005-2010, but UIC refused to bargain on the ground that out
of more than 200 rank and file employees of the UIC, only 37 employees
are members of the Union. UIC also disclosed that it refused to sign the
85
application to register their 08 June 2004 CBA because it was ratified by
only 47 employees.
Meanwhile, the Union named three (3) representatives to compose the
tripartite committee. UIC, on the other hand, initially refused to name their
representatives contending that the computation was no longer called for
and that the 08 June 2004 CBA was not ratified. When UIC named its three
representatives, the tripartite committee held meetings on 14 September
2005 and 18 October 2005 wherein both parties presented their respective
computations. On 18 September 2006, the [Secretary] issued a [second]
Resolution (18 September 2006 Resolution hereafter) disposing as follows:
WHEREFORE, this Office hereby Orders:
1. The University to distribute the total amount of P11,070,473.00 to the
affected employees in equal lump-sum amounts.
2. Any illegal dismissal [case] filed against the University shall continue,
without further delay.
SO ORDERED.4
On November 20, 2006, UIC filed two separate Petitions for Certiorari
before the Court of Appeals. In the first petition, docketed as CAG. R. SP
No. 01396-MIN (the "Net Incremental Proceeds Case"), UIC assailed the
Secretary’s order mandating the creation of a tripartite committee for the
purpose of computing the net incremental proceeds, and the subsequent
computation and award of Php11,070,473.00 representing the net
incremental proceeds covering the school years 1995 to 2000.5 In the
second petition, docketed as CA-G.R. SP No. 01398-MIN (the "Illegal
Dismissal Case"), UIC assailed the Secretary’s finding that the Respondent
Employees were illegally dismissed, as well as the award of full back wages
and other monetary benefits.6 The Court of Appeals ordered the
consolidation of the two cases on December 14, 2006. 7
On April 24, 2007, the Court of Appeals promulgated its Decision denying
the consolidated petitions.8 In the Net Incremental Proceeds Case, the
appellate court held that the power of the Secretary to assume jurisdiction
over labor disputes under Article 263(g) of the Labor Code is plenary and
discretionary in nature, which necessarily involves the power to resolve
questions incidental to the labor dispute.9 The Court of Appeals also
affirmed the amount of net incremental proceeds as computed by the
tripartite committee, finding that UIC failed to substantiate its claims for
deductions.10 In the Illegal Dismissal Case, the Court of Appeals upheld the
Secretary’s conclusion that the Respondent Employees were illegally
dismissed on the ground that UIC could not validly prevent them from
joining the Union since they did not perform managerial functions. The
appellate court opined that notwithstanding the confidential nature of
Respondent Employees’ position, they were not prohibited from joining the
Union; hence, their dismissal by UIC was not legally justified. 11 The Court
of Appeals subsequently denied UIC’s motions for reconsideration on May
31, 2007.12
Aggrieved, UIC filed the present petition, where it essentially raises the
same arguments with respect to the Secretary’s creation of the tripartite
committee, computation of net incremental proceeds, finding of illegal
dismissal, and award of back wages.
In its comment, respondent Union counters that it was constrained to file an
urgent motion with the Office of the Secretary for the creation of a tripartite
committee because there was no other way to solve the issue on
computation of the incremental proceeds, considering that UIC had ignored
and rejected the existence and efficacy of the CBA.13 On the issue of the
computation of the net incremental proceeds, the Union maintains that the
parties had mutually agreed on the manner of computing the same. 14 With
regard to the Illegal Dismissal Case, the Union points out that the
Respondent Employees were dismissed on the same date that the
termination notices were sent, in violation of their right to due process. 15
In a separate comment filed by the Respondent Employees, they claim that
they have the right to maintain their union membership not for the purpose
of collective bargaining, but for legal representation in dealing with the
employer; thus, there is no legal justification for their dismissal.16 They
further assert that the matter of back wages and other monetary benefits is
already barred by res judicata since the Secretary’s award merely complied
with our ruling in G.R. No. 151379 17 affirming the payroll reinstatement of
the Respondent Employees.18
86
On July 9, 2007, we issued a temporary restraining order directing the
respondents to refrain from enforcing the Court of Appeals’ April 24, 2007
Decision and May 31, 2007 Resolution.19
II
A
In LMG Chemicals Corporation v. Secretary of Labor, we already settled
the extent of the Secretary’s jurisdiction under Article 263(g):
It is well settled in our jurisprudence that the authority of the Secretary of
Labor to assume jurisdiction over a labor dispute causing or likely to cause
a strike or lockout in an industry indispensable to national interest includes
and extends to all questions and controversies arising therefrom. The power
is plenary and discretionary in nature to enable him to effectively and
efficiently dispose of the primary dispute.20 (Emphasis in original.)
The powers of the Secretary in "national interest" cases are not set by metes
and bounds. Rather, the Secretary is given wide latitude to adopt appropriate
means to finally resolve the labor dispute. The doctrine of "great breadth of
discretion"21 possessed by the Secretary dates back to our earlier rulings
which recognized the broad powers of the former Court of Industrial
Relations (CIR), which had jurisdiction over national interest cases prior to
the enactment of the Labor Code. In Philippine Marine Radio Officers’
Association v. CIR, decided in 1957, we held that "[i]f the [CIR] is granted
authority to find a solution in an industrial dispute and such solution
consists in the ordering of employees to return back to work, it cannot be
contended that the [CIR] does not have the power or jurisdiction to carry
that solution into effect."22 Again, in FEATI University v. Bautista: "Once
the jurisdiction is acquired pursuant to the presidential certification, the CIR
may exercise its broad powers as provided in Commonwealth Act 103. All
phases of the labor dispute and the employer-employee relationship may be
threshed out before the CIR, and the CIR may issue such order or orders as
may be necessary to make effective the exercise of its
jurisdiction."23 Judicial authorities defining the scope of the former CIR’s
power in respect of national interest cases apply mutatis mutandis in cases
involving the Secretary’s assumption of jurisdiction under Article 263(g). In
the Secretary’s exercise of such broad discretion, the prevailing rule is that
we will not interfere or substitute the Secretary’s judgment with our own,
unless grave abuse is cogently shown.24 And in determining whether the
acts of the Secretary constitute grave abuse of discretion, the standard we
apply is that of reasonableness.25
Here, the Secretary ordered the creation of a tripartite committee for the
purpose of resolving one of the contentious issues in OS-AJ-003-95, i.e., the
computation of the net incremental proceeds under Republic Act No.
6728,26 as increased by mutual agreement of the parties. It must be recalled
that the second notice of strike filed by the Union on January 20, 1995 was
triggered by, among others, the bargaining deadlock on the very issue of the
correct computation of the net incremental proceeds. The notice of strike
consequently prompted the Secretary to assume jurisdiction over the
dispute. It cannot therefore be denied that the disposition of the net
incremental proceeds issue is necessary to resolve the long-standing dispute
between UIC and the Union. Put simply, there is a reasonable connection
between the Secretary’s order and the settlement of the labor dispute.
Accordingly, we conclude that it is well within the allowable area of
discretion that the Secretary ordered the creation of the tripartite committee.
The authority to create the tripartite committee flows from the jurisdiction
conferred by Article 263(g) to the Secretary. A grant of jurisdiction, in the
absence of prohibitive legislation, implies the necessary and usual incidental
powers essential to effectuate it27— also referred to as "incidental
jurisdiction." Incidental jurisdiction includes the power and authority of an
office or tribunal to do all things reasonably necessary for the administration
of justice within the scope of its jurisdiction, and for the enforcement of its
judgment and mandates. Incidental jurisdiction is presumed to attach upon
the conferment of jurisdiction over the main case, unless explicitly withheld
by the legislature. In this regard, we find nothing in the Labor Code that
prohibits the Secretary from creating ad hoc committees to aid in the
resolution of labor disputes after he has assumed jurisdiction. The primary
objective of Article 263(g) is not merely to terminate labor disputes between
private parties; rather, it is the promotion of the common good considering
that a prolonged strike or lockout in an industry indispensable to the
national interest can be inimical to the economy.28 Hence, provided that the
Secretary’s orders are reasonably connected with the objective of the law, as
it is in this case, courts will not disturb the same.
87
B
UIC argues that the Secretary gravely abused his discretion because at the
time he ordered the creation of the tripartite committee, the parties had
already signed — but not yet ratified — the final draft of the CBA, which
contains grievance mechanism provisions. UIC posits that the grievance
procedure in the signed CBA should apply insofar as the determination of
the net incremental proceeds is concerned. In support of its contention, UIC
cites University of San Agustin Employees’ Union – FFW v. Court of
Appeals,29 where we held that the grievance machinery embodied in the
CBA must be recognized and enforced by the Secretary. In response, the
Union asserts that UIC itself had rejected and disregarded the execution and
efficacy of the CBA and, thus, cannot rely on the grievance machinery
contained in the same CBA.
UIC’s reliance in University of San Agustin is misplaced. In said case, there
was already a valid and subsisting five-year CBA between the parties. The
CBA provided, among others, that the economic provisions shall be for a
term of three years. Towards the end of the third year of the CBA, as the
economic provisions were about to expire, the employer and the union
reached an impasse on economic matters, ultimately resulting in a labor
dispute.30 Thus, at the time the dispute arose in University of San Agustin,
the grievance machinery was in place. The existence of an effective CBA
was an important factual consideration for the Court’s holding that the
grievance machinery must be respected.
In this case, however, the facts show that the CBA had not been ratified by
the majority of all workers in the bargaining unit, as required by Article 231
of the Labor Code, when the Secretary mandated the creation of the
tripartite committee. Compliance with the ratification requirement is
mandatory; otherwise, the CBA is ineffective.31In fact, UIC itself admits
that the CBA did not become effective for want of ratification. 32 The CBA
not having been ratified, there was no enforceable grievance machinery to
speak of — unlike in University of San Agustin. When the Secretary
ordered the creation of the tripartite committee, the dispute was already
almost a decade old. Certainly, the Secretary cannot be faulted for
endeavoring to settle the issue involving the net incremental benefits once
and for all.
UIC’s additional argument that the matter of net incremental proceeds is a
non-issue, since it would be covered by the full settlement clause in the
CBA, deserves scant consideration. As already discussed, the CBA—
including the full settlement clause — did not take effect. Furthermore, we
observe that UIC is effectively proposing that the Union waived its rights to
the net incremental proceeds when the latter subsequently agreed to
disregard the second paragraph of the agreement dated April 21, 2004.
However, for a waiver to be effective, it must be certain and
unequivocal33 and cannot be presumed.34 We rule that the mere omission of
the paragraph pertaining to the manner of computing the net incremental
proceeds is insufficient to prove the intent of the Union to abandon the
rights of its members with respect to such proceeds.
C disregard certain fundamental evidentiary rules. While the rules of evidence
Next, UIC assails the tripartite committee’s computation of the net
incremental proceeds, which was affirmed by the Secretary and the Court of
Appeals. UIC is essentially asking us to review and evaluate the probative
value of the evidence presented below. Suffice it to say that such exercise is
not proper in an appeal by certiorari. In a petition for review under Rule 45,
only questions of law may be put in issue.35 We cannot emphasize to
litigants enough that the Supreme Court is not a trier of facts. 36 It is not our
function to analyze or weigh the evidence all over again. 37Corollary to this
is the doctrine that findings of fact of labor tribunals, when affirmed by the
Court of Appeals, are accorded not only great respect but even finality. 38 In
this case, the tripartite committee, the Secretary, and the Court of Appeals
were unanimous in disallowing the deductions being claimed by UIC. We
find no cogent reason to disturb the same.
In any case, the rationale for the disallowance of deductions in the
proceedings below, i.e., the amounts being claimed did not appear in UIC’s
audited financial statements, is consistent with established jurisprudence. In
Asia Brewery v. TPMA,39we held:
In Restaurante Las Conchas v. Llego, several employees filed a case for
illegal dismissal after the employer closed its restaurant business. The
employer sought to justify the closure through unaudited financial
statements showing the alleged losses of the business. We ruled that such
88
financial statements are mere self-serving declarations and inadmissible in
evidence even if the employees did not object to their presentation before
the Labor Arbiter. Similarly, in Uichico v. National Labor Relations
Commission, the services of several employees were terminated on the
ground of retrenchment due to alleged serious business losses suffered by
the employer.
We ruled that by submitting unaudited financial statements, the employer
failed to prove the alleged business losses, viz:
"… It is true that administrative and quasijudicial bodies like the NLRC are
not bound by the technical rules of procedure in the adjudication of cases.
However, this procedural rule should not be construed as a license to
prevailing in the courts of law or equity are not controlling in proceedings
before the NLRC, the evidence presented before it must at least have a
modicum of admissibility for it to be given some probative value. The
Statement of Profit and Losses submitted by Crispa, Inc. to prove its alleged
losses, without the accompanying signature of a certified public accountant
or audited by an independent auditor, are nothing but self-serving
documents which ought to be treated as a mere scrap of paper devoid of any
probative value. For sure, this is not the kind of sufficient and convincing
evidence necessary to discharge the burden of proof required of petitioners
to establish the alleged losses suffered by Crispa, Inc. in the years
immediately preceding 1990 that would justify the retrenchment of
respondent employees. …"
(Emphasis in original.)
While the above-cited cases involve proof necessary to establish losses in
cases of business closure or retrenchment, we see no reason why this rule
should not equally apply to the determination of the proper level of wage
award in cases where the Secretary of Labor assumes jurisdiction in a labor
dispute pursuant to Article 263(g) of the Labor Code. 40 (Citations omitted.)
Parenthetically, we cannot agree with UIC’s contention that the
computation of the net incremental proceeds did not comply with our ruling
in St. Joseph’s College v. St. Joseph’s College Workers’ Association.41 We
note that the basic formula used by the tripartite committee, and agreed
upon by the parties, is consistent with St. Joseph’s College, including
deductions for "non-paying students like scholars," "students who did not
pay,"
"increase in salaries," and "increases in related benefits." 42 However, some
of the amounts submitted by UIC were disallowed by the tripartite
committee for being inadmissible and self-serving, based as they were on
unaudited financial statements.1âwphi1 As a result, certain items in the
initial formula no longer appeared in the final computation. Such
disallowance, however, should not be interpreted as a departure from St.
Joseph’s College; it simply means that the deduction is effectively nil
because the amounts claimed had not been adequately proved.
III
The resolution of the Illegal Dismissal Case rests upon the determination of
whether or not a confidential employee’s refusal to vacate his or her union
membership is a valid ground for dismissal. The Secretary and the Court of
Appeals believe it is not. We reverse.
As a preliminary matter, we clarify that the issue of whether or not the
Respondent Employees are confidential employees has long been settled
and its reexamination is already barred by res judicata. In VA Case No. XI-
354- 02-94 (the "Arbitration Case"), the panel of voluntary arbitrators had
already determined that the Respondent Employees are confidential
employees who must be excluded from the bargaining unit. The panel’s
decision dated November 8, 199443 and resolution of the motion for
reconsideration dated February 8, 199544 became final and executory after
we dismissed the Union’s petition for certiorari on June 21, 1995 45 without
any further incidents. The Arbitration Case having attained finality, the
issues resolved therein may no longer be disturbed or modified.
A Nonetheless, employers do not have unbridled authority to dismiss
The just causes for terminating an employee, confidential or not, are
enumerated in Article 282 of the Labor Code:
Art. 282. Termination by employer. An employer may terminate an
employment for any of the following causes:
89
(a) Serious misconduct or willful disobedience by the employee of the
lawful orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by
his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of
his employer or any immediate member of his family or his duly authorized
representatives; and
(e) Other causes analogous to the foregoing.
UIC cites willful disobedience and "loss of confidence" as the grounds for
dismissing the Respondent Employees. In its termination letters dated
February 21, 1995, UIC informed the Respondent Employees that because
of their continued union membership notwithstanding the voluntary
arbitration decision, "management no longer has any trust and confidence in
you in the delicate, sensitive and confidential position you hold." 46
Generally, employers are given wide latitude in terminating the services of
employees who perform functions which by their nature require the
employer's full trust and confidence.47 It is well established that an
employer cannot be compelled to continue in employment an employee
guilty of acts inimical to the interest of the employer and justifying loss of
confidence in him.48 It has been held that when an employee has been guilty
of breach of trust or his employer has ample reason to distrust him, a labor
tribunal cannot deny the employer the authority to dismiss him. 49 To
constitute a valid ground for dismissal, it is sufficient that there be some
reasonable basis, supported by substantial evidence, for such loss of
confidence.50
employees by simply invoking Article 282(c). The loss of confidence must
be genuine and cannot be used as a subterfuge for causes which are illegal,
improper and unjust.51 "Loss of confidence as a ground for dismissal has
never been intended to afford an occasion for abuse by the employer of its
prerogative, as it can easily be subject to abuse because of its subjective
nature."52
In Cruz v. Court of Appeals,53 we summarized the guidelines when loss of
confidence constitutes a valid ground for dismissal:
[T]he language of Article 282(c) of the Labor Code states that the loss of
trust and confidence must be based on willful breach of the trust reposed in
the employee by his employer. Such breach is willful if it is done
intentionally, knowingly, and purposely, without justifiable excuse, as
distinguished from an act done carelessly, thoughtlessly, heedlessly or
inadvertently. Moreover, it must be based on substantial evidence and not
on the employer's whims or caprices or suspicions otherwise, the employee
would eternally remain at the mercy of the employer. Loss of confidence
must not be indiscriminately used as a shield by the employer against a
claim that the dismissal of an employee was arbitrary. And, in order to
constitute a just cause for dismissal, the act complained of must be
workrelated and shows that the employee concerned is unfit to continue
working for the employer. In addition, loss of confidence as a just cause for
termination of employment is premised on the fact that the employee
concerned holds a position of responsibility, trust and confidence or that the
employee concerned is entrusted with confidence with respect to delicate
matters, such as the handling or care and protection of the property and
assets of the employer. The betrayal of this trust is the essence of the
offense for which an employee is penalized.54
In determining whether loss of confidence is a just cause for dismissal under
Article 282(c), we laid down the following requisites in the 2008 case of
Bristol Myers Squibb (Phils.), Inc. v. Baban:55
(a) The employee must hold a position of trust and confidence.
(b) There must be a willful act that would justify the loss of trust and
confidence.56
As a rule, loss of confidence may only be invoked by the employer against
an employee occupying a position of responsibility, trust and
confidence57 — hence, the first requisite. Ordinarily, this would require us
to make a determination with regard to the true nature of the Respondent
Employees’ positions. But given the facts of this case, noting in particular
the final and executory decision in the Arbitration Case which deemed
Respondent Employees as confidential employees, we only now need to
90
determine whether confidential employees hold positions of trust and
confidence.
The leading case explaining what is a "position of trust and confidence" is
Mabeza v. NLRC,58 where we held that:
[L]oss of confidence should ideally apply only to cases involving
employees occupying positions of trust and confidence or to those situations
where the employee is routinely charged with the care and custody of the
employer's money or property. To the first class belong managerial
employees, i.e., those vested with the powers or prerogatives to lay down
management policies and/or to hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees or effectively recommend such
managerial actions; and to the second class belong cashiers, auditors,
property custodians, etc., or those who, in the normal and routine exercise
of their functions, regularly handle significant amounts of money or
property. …59
Bristol Myers and subsequent cases60 essentially follow the same formula
by subdividing positions of trust and confidence into two classes:
managerial employees and fiduciary rank-and-file employees. Respondent
Employees fall under the latter category.
We understand that Mabeza’s failure to specifically mention the category of
"confidential employees" may cause some confusion, at least superficially,
with respect to the applicability of Article 282(c) to this specific class of
employees. For the sake of avoiding any future misperception, we rule that
confidential employees must perforce hold positions of trust and
confidence. Mabeza’s silence regarding confidential employees may simply
be attributed to the fact that confidential employees do not constitute a
distinct category of employees based on the plain text of the Labor Code.
But jurisprudence recognizes the existence of such category, 61 and it has
been held that confidentiality may attach to a managerial, supervisory, or
rank-and-file position.62 As the commentator Azucena aptly notes:
… Confidentiality is not a matter of official rank, it is a matter of job
content and authority. It is not measured by closeness to or distance from
top management but by the significance of the jobholder’s role in the
pursuit of corporate objectives and strategy. In principle, every managerial
position is confidential — one does not become a manager without having
gained the confidence of the appointing authority. But not every
confidential employee is managerial; he may be a supervisory or even a
rank-andfile employee. Confidentiality, in other words, cuts across the
pyramid of jobs from the base to the apex, from messengerial to
managerial.63
A confidential employee is defined as one entrusted with confidence on
delicate matters, or with the custody, handling, or care and protection of the
employer’s property.64 For all intents and purposes, the terms
"confidential employee" and "employee holding a position of trust and
confidence" are synonymous. Fundamentally, the two categories mentioned
in Mabeza are simply subcategories of the broader category of confidential
employees.
The essence of the second requisite is that the loss of confidence must be
based on a willful breach of trust founded on clearly established
facts.65 Here, it is not disputed that the Respondent Employees refused to
resign from the Union, notwithstanding the decision in the Arbitration Case.
Respondent Employees do not claim that they were coerced into retaining
their union membership; in fact, they even insist upon their right to join the
Union. The voluntariness of Respondent Employees’ refusal to vacate their
union membership — which constitutes the "willful act" — is therefore
unequivocally established.
We hold that the willful act of refusing to leave the Union is sufficient basis
for UIC to lose its trust and confidence on Respondent Employees. There
was just cause for dismissing the Respondent Employees. Our conclusion
follows the same reasoning why we finally adopted the doctrine that
confidential employees should be excluded from the bargaining unit and
disqualified from joining any union:66 employees should not be placed in a
position involving a potential conflict of interests.67 In this regard, the Court
of Appeals erred in holding that Respondent Employees are allowed to join
the Union.68 If Respondent Employees were allowed to retain their union
membership, UIC would not be assured of their loyalty because of the
apparent conflict between the employees’ personal interests and their duty
as confidential employees. Such a result is likely to create an atmosphere of
91
distrust between UIC and the confidential employees, and it would be nigh
unreasonable to compel UIC to continue in employment persons whom it no
longer trusts to handle delicate matters.
Finally, the Secretary cites Article 248 of the Labor Code to support his
conclusion that Respondent Employees were illegally dismissed.69 Article
248(a) considers as unfair labor practice an employer’s act of interfering
with, restraining or coercing employees in the exercise of their right to self-
organization. However, it is well established that the right to self-
organization under the Labor Code does not extend to managerial70 and
confidential employees,71 while supervisory employees are not allowed to
join the rank-and-file union.72 In view of the limitation imposed upon these
specific classes of employees, Article 248(a) should therefore be interpreted
to cover only interference with the right to self-organization of bona fide
members of the bargaining unit. The provision finds no application in this
case which involves confidential employees who are, by law, denied the
right to join labor unions.
B
Although there is just cause for dismissing the Respondent Employees, we
find that UIC failed to comply with the mandatory two notice due process
requirement. Under our labor laws, the employer has the burden of proving
that the dismissed employee has been served two written notices: (a) one to
apprise him of the particular acts or omissions for which his dismissal is
sought, and (b) the other to inform him of the employer's decision to dismiss
him.73 The first notice must state that the employer seeks dismissal for the
act or omission charged against the employee; otherwise, the notice does
not comply with the rules.74 The records show that UIC sent only one such
written notice to Respondent Employees on February 21, 1995, i.e., a notice
of termination effective at the close of business of the same date.75 We do
not agree with UIC’s submission that the agreement to arbitrate and the
request to comply with the arbitration decision constitute the "first notice"
required by law,76 considering that UIC was unable to establish by
substantial evidence that these categorically contain what is legally required
to appear in the first notice. In fine, we agree with the observation of the
Court of Appeals that the Respondent Employees were hastily terminated. 77
Pursuant to the doctrine laid down in Agabon v. NLRC,78 the dismissal for
just cause remains valid but UIC should be held liable, by way of nominal
damages, for non-compliance with procedural due process. Conformably
with existing jurisprudence,79 UIC is liable to pay each of the Respondent
Employees the sum of Php30,000.00 as nominal damages.
C the unauthorized practice of law before the Supreme Court and the Court of
Notwithstanding our ruling that there was just cause for dismissal, we reject
UIC’s claim for reimbursement of the amount it has paid to Respondent
Employees for being contrary to established jurisprudence. The prevailing
rule is that an employee cannot be compelled to reimburse the salaries and
wages he received during the pendency of the appeal, notwithstanding the
subsequent reversal of the order of reinstatement.80 As we held in the case
of Garcia v. Philippine Airlines, Inc., "it is obligatory on the part of the
employer to reinstate and pay the wages of the dismissed employee during
the period of appeal until reversal by the higher court." 81
Furthermore, in G.R. No. 151379, we already affirmed the Secretary’s order
to reinstate the Respondent Employees in UIC’s payroll until the validity of
their termination is finally resolved. Respondents correctly point out that the
back wages now being disputed by UIC actually represent Respondent
Employees’ unpaid salaries pursuant to the order of payroll reinstatement in
our previous decision. The Secretary precisely ordered the payment of back
wages because UIC had been remiss in making payments, despite the
immediately executory nature of a reinstatement order. 82
IV
On November 23, 2007, UIC filed an Omnibus Motion83 asking us to,
among others, cite Alfredo Olvida in contempt for unauthorized practice of
law. UIC alleges that Olvida, a non-lawyer, "has been preparing, signing
and filing pleadings before this Honorable Court and even before the Court
of Appeals in CA-G.R. SP Nos. 01396-MIN and 01398-MIN."84 In a
resolution dated February 11, 2008, we ordered Olvida to file a comment on
the motion to cite him in contempt.85 Olvida submitted his comment on
April 10, 2008, in which he did not deny the allegations but justified his acts
by stating that he is the Regional Legal Assistant of the Federation of Free
Workers (FFW) and is authorized by the Union to handle the cases. 86 He
92
also mentioned past instances wherein he prepared and signed pleadings for
local affiliates of FFW in matters pending before the Supreme Court and the
Court of Appeals, without having been held in contempt in those previous
instances.87
Since the facts are not disputed, it is clear that Olvida willfully engaged in
Appeals in these consolidated cases. There can be no question that one who
prepares, signs, and files pleadings in court is engaged in the practice of
law.88 Olvida is not covered by the exception under Article 222(a) of the
Labor Code,89 which only pertains to proceedings before the NLRC and
labor arbiters and do not extend to courts of law. Not being a member of the
Philippine Bar, Olvida had no authority to act as the Union’s counsel in the
proceedings before the Court of Appeals and, now, before us. Under Section
3(e), Rule 71 of the Rules of Court, the act of "[a]ssuming to be an
attorney… and acting as such without authority" constitutes indirect
contempt. Accordingly, we find Olvida guilty of indirect contempt.
We want to clarify, however, that our ruling on indirect contempt is the
exception rather than the rule. Counsel for UIC ought to know that under
the Rules of Court, a charge for indirect contempt must be initiated through
a verified petition, unless the charge is directly made by the court against
which the contemptuous act is committed.90 In Mallari v. GSIS, we quoted
with approval Justice Regalado’s comments on Section 4 of Rule 71:
This new provision clarifies with a regulatory norm the proper procedure for
commencing contempt proceedings. While such proceeding has been
classified as a special civil action under the former Rules, the heterogeneous
practice, tolerated by the courts, has been for any party to file a mere motion
without paying any docket or lawful fees therefor and without complying
with the requirements for initiatory pleadings, which is now required in the
second paragraph of this amended section. Worse, and as a consequence of
unregulated motions for contempt, said incidents sometimes remain pending
for resolution although the main case has already been decided.
There are other undesirable aspects but, at any rate, the same may now be
eliminated by this amendatory procedure.
Henceforth, except for indirect contempt proceedings initiated motu proprio
by order of or a formal charge by the offended court, all charges shall be
commenced by a verified petition with full compliance with the
requirements therefor and shall be disposed of in accordance with the
second paragraph of this section.91
(Emphasis in original.)
One exception to the above rule is that the Supreme Court may, incidental
to its power to suspend its own rules whenever the interest of justice
requires,92 resolve an issue involving indirect contempt when there is
(a) no factual controversy to be resolved or the case falls under the res ipsa
loquitur rule and (b) only after granting the respondent the opportunity to
comment.93 We resolve UIC’s pending motion on the basis of this
exception, and only to fully dispose of all pending issues in these
consolidated cases. While we do not condone the initiation of indirect
contempt proceedings by mere motion without payment of the proper
docket fees, requiring UIC to file a verified petition for indirect contempt
will only serve to prolong the dispute between the parties.
WHEREFORE, the petition is PARTIALLY GRANTED and the appealed
Decision dated April 24, 2007 and Resolution dated May 31, 2007 with
respect to CA-G.R. SP. No. 01398-MIN are MODIFIED as follows:
(1) petitioner’s dismissal of Melanie de la Rosa, Angelina Abadilla, Zenaida
Canoy, Gemma Galope, Paulina Palma Gil, Lelian Concon, Mary Ann de
Ramos, Alma Villacarlos, Leah Cruza, Ofelia Diapuez and Josie Boston is
hereby declared valid for just cause and petitioner is therefore authorized to
remove the aforementioned employees from its payroll upon finality of this
decision; and (2) petitioner is ordered to pay each of the Respondent-
Employees the sum of Thirty Thousand Pesos (Php30,000.00) as nominal
damages for non-compliance with the mandatory procedural due process
requirements. The Decision and Resolution are AFFIRMED in all other
respects.
Petitioner's motion to cite Alfredo Olvida for indirect contempt is hereby
GRANTED. Alfredo Olvida is ordered to pay a FINE of Two Thousand
Pesos (Php2,000.00) for assuming to be an attorney and acting as such
93
without authority, with a STERN WARNING that repetition of the same or
similar offense in the future will be dealt with more severely.
Finally, the Temporary Restraining Order issued on July 9, 2007 is hereby
LIFTED effective immediately.
SO ORDERED.
G.R. No. 116194 February 2, 2000
SUGBUANON RURAL BANK, INC., petitioner,
vs.
HON. UNDERSECRETARY BIENVENIDO E. LAGUESMA,
DEPARTMENT OF LABOR AND EMPLOYMENT, MED-ARBITER
ACHILLES MANIT, DEPARTMENT OF LABOR AND
EMPLOYMENT, REGIONAL OFFICE NO. 7, CEBU CITY, AND
SUGBUANON RURAL BANK, INC. — ASSOCIATION OF
PROFESSIONAL, SUPERVISORY, OFFICE, AND TECHNICAL
EMPLOYEES UNION-TRADE UNIONS CONGRESS OF THE
PHILIPPINES,respondents.
QUISUMBING, J.:
In this special civil action for certiorari and prohibition, petitioner seeks the
annulment of the April 27, 1994 Resolution of the Department of Labor and
Employment, affirming the order of the Med-Arbiter, dated December 9,
1993, which denied petitioner's motion to dismiss respondent union's
petition for certification election.
Petitioner Sugbuanon Rural Bank, Inc., (SRBI, for brevity) is a duly-
registered banking institution with principal office in Cebu City and a
branch in Mandaue City. Private respondent SRBI Association of
Professional, Supervisory, Office, and Technical Employees Union
(APSOTEU) is a legitimate labor organization affiliated with the Trade
Unions Congress of the Philippines (TUCP).1âwphi1.nêt
On October 8, 1993, the DOLE Regional Office in Cebu City granted
Certificate of Registration No. R0700-9310-UR-0064 to APSOTEU-TUCP,
hereafter referred to as the union.
On October 26, 1993, the union filed a petition for certification election of
the supervisory employees of SRBI. It alleged, among others, that: (1)
APSOTEU-TUCP was a labor organization duly-registered with the Labor
Department; (2) SRBI employed 5 or more supervisory employees; (3) a
majority of these employees supported the petition: (4) there was no
existing collective bargaining agreement (CBA) between any union and
SRBI; and (5) no certification election had been held in SRBI during the
past 12 months prior to the petition.
On October 28, 1993, the Med-Arbiter gave due course to the petition. The
pre-certification election conference between SRBI and APSOTEU-TUCP
was set for November 15, 1993.
On November 12, 1993, SRBI filed a motion to dismiss the union's petition.
It sought to prevent the holding of a certification election on two
grounds. First, that the members of APSOTEU-TUCP were in fact
managerial or confidential employees. Thus, following the doctrine
in Philips Industrial Development Corporation v. National Labor Relations
Commission,1 they were disqualified from forming, joining, or assisting any
labor organization. Petitioner attached the job descriptions of the employees
concerned to its motion. Second, the Association of Labor Unions-Trade
Unions Congress of the Philippines or ALU-TUCP was representing the
union. Since ALU-TUCP also sought to represent the rank-and-file
employees of SRBI, there was a violation of the principle of separation of
unions enunciated in Atlas Lithographic Services, Inc. v. Laguesma.2
The union filed its opposition to the motion to dismiss on December 1,
1993. It argued that its members were not managerial employees but merely
supervisory employees. The members attached their affidavits describing
the nature of their respective duties. The union pointed out that Article 245
of the Labor Code expressly allowed supervisory employees to form, join,
or assist their own unions.
On December 9, 1993, the Med-Arbiter denied petitioner's motion to
dismiss. He scheduled the inclusion-exclusion proceedings in preparation
for the certification election on December 16, 1993.
94
SRBI appealed the Med-Arbiter's decision to the Secretary of Labor and
Employment. The appeal was denied for lack of merit. The certification
election was ordered.
On June 16, 1994, the Med-Arbiter scheduled the holding of the
certification election for June 29, 1994. His order identified the following
SRBI personnel as the voting supervisory employees in the election: the
Cashier of the Main Office, the Cashier of the Mandaue Branch, the
Accountant of the Mandaue Branch, and the Acting Chief of the Loans
Department.
On June 17, 1994, SRBI filed with the Med-Arbiter an urgent motion to
suspend proceedings. The Med-Arbiter denied the same on June 21, 1994.
SRBI then filed a motion for reconsideration. Two days later, the Med-
Arbiter cancelled the certification election scheduled for June 29, 1994 in
order to address the motion for reconsideration.
The Med-Arbiter later denied petitioner's motion for reconsideration, SRBI
appealed the order of denial to the DOLE Secretary on December 16, 1993..
On December 22, 1993, petitioner proceeded to file a petition with the
DOLE Regional Office seeking the cancellation of the respondent union's
registration. It averred that the APSOTEU-TUCP members were actually
managerial employees who were prohibited by law from joining or
organizing unions.
On April 22, 1994, respondent DOLE Undersecretary denied SRBI's appeal
for lack of merit. He ruled that APSOTEU-TUCP was a legitimate labor
organization. As such, it was fully entitled to all the rights and privileges
granted by law to a legitimate labor organization, including the right to file
a petition for certification election. He also held that until and unless a final
order is issued cancelling APSOTEU-TUCP's registration certificate, it had
the legal right to represent its members for collective bargaining purposes.
Furthermore, the question of whether the APSOTEU-TUCP members
should be considered as managerial or confidential employees should not be
addressed in the proceedings involving a petition for certification election
but best threshed out in other appropriate proceedings.
On May 25, 1994, SRBI moved for reconsideration of the Undersecretary's
decision which was denied on July 7, 1994. The Med-Arbiter scheduled the
holding of certification elections on August 12, 1994.
Hence the instant petition grounded on the following assignments of error:
I (1) Whether or not the members of the respondent union are managerial
RESPONDENT UNDERSECRETARY LAGUESMA ACTED WITH
GRAVE ABUSE OF DISCRETION AND PALPABLY ERRED:
A: IN HOLDING THAT ART. 257 OF THE LABOR CODE REQUIRES
THE MED-ARBITER TO CONDUCT A CERTIFICATION ELECTION
IN ANY UNORGANIZED ESTABLISHMENT EVEN WHEN THE
PETITIONING UNION DOES NOT POSSESS THE QUALIFICATION
FOR AN APPROPRIATE BARGAINING AGENT; AND
B. IN REFUSING TO ASSUME JURISDICTION OVER THE
PETITIONER'S APPEAL AND TO DISMISS THE RESPONDENT
UNION'S PETITION FOR CERTIFICATION ELECTION.
II
RESPONDENT UNDERSECRETARY LAGUESMA ACTED WITH
GRAVE ABUSE OF DISCRETION AND PALPABLY ERRED IN
DENYING THE PETITIONER'S APPEAL DESPITE THE FACT THAT:
A. THE ALLEGED MEMBERS OF RESPONDENT UNION ARE
MANAGERIAL EMPLOYEES WHO ARE LEGALLY DISQUALIFIED
FROM JOINING ANY LABOR ORGANIZATION.
B. AT THE VERY LEAST, THE ALLEGED MEMBERS OF
RESPONDENT UNION ARE OCCUPYING HIGHLY CONFIDENTIAL
POSITIONS IN PETITIONER AND, THUS, THE LEGAL
DISQUALIFICATION OF MANAGERIAL EMPLOYEES EQUALLY
APPLY TO THEM.
III
IN ANY EVENT, THE CONCLUSIONS REACHED IN THE SUBJECT
RESOLUTIONS ARE CONTRARY TO LAW AND ARE
95
DIAMETRICALLY OPPOSED TO RESPONDENT UNION'S
RECORDED ADMISSIONS AND REPRESENTATIONS.
Considering petitioner's assigned errors, we find two core issues for
immediate resolution:
employees and/or highly-placed confidential employees, hence prohibited
by law from joining labor organizations and engaging in union activities?
(2) Whether or not the Med-Arbiter may validly order the holding of a
certification election upon the filing of a petition for certification election by
a registered union, despite the petitioner's appeal pending before the DOLE
Secretary against the issuance of the union's registration?
The other issues based on the assigned errors could be resolved easily after
the core issues are settled.
Respecting the first issue, Article 212 (m) of the Labor Code defines the
terms "managerial employee" and "supervisory employees" as follows:
Art. 212. Definitions —
(m) "Managerial employee" is one who is vested with powers or
prerogatives to lay down and execute management policies and/or hire,
transfer, suspend, lay-off, recall, discharge, assign or discipline
employees. Supervisory employees are those who, in the interest of the
employer, effectively recommend such managerial actions if the exercise of
such authority is not merely routinary or clerical in nature but requires the
use of independent judgment. All employees not falling within any of the
above definitions are considered rank-and-file employees for purposes of
this Book (Emphasis supplied).
Petitioner submitted detailed job descriptions to support its contention that
the union members are managerial employees and/or confidential
employees proscribed from engaging in labor activities. 3 Petitioner
vehemently argues that the functions and responsibilities of the employees
involved constitute the "very core of the bank's business, lending of money
to clients and borrowers, evaluating their capacity to pay, approving the
loan and its amount, scheduling the terms of repayment, and endorsing
delinquent accounts to counsel for collection."4 Hence, they must be
deemed managerial employees. Petitioner cites Tabacalera Insurance
Co. v. National Labor Relations Commission,5 and Panday v. National
Labor Relations Commission,6 to sustain its submission. In Tabacalera, we
sustained the classification of a credit and collection supervisor by
management as a managerial/supervisory personnel. But in that case, the
credit and collection supervisor "had the power to recommend the hiring
and appointment of his subordinates, as well as the power to recommend
any promotion and/or increase." 7 For this reason he was deemed to be a
managerial employee. In the present case, however, petitioner failed to
show that the employees in question were vested with similar powers. At
best they only had recommendatory powers subject to evaluation, review,
and final decision by the bank's management. The job description forms
submitted by petitioner clearly show that the union members in question
may not transfer, suspend, lay-off, recall, discharge, assign, or discipline
employees. Moreover, the forms also do not show that the Cashiers,
Accountants, and Acting Chiefs of the Loans Department formulate and
execute management policies which are normally expected of management
officers.
Petitioner's reliance on Panday is equally misplaced. There, we held that a
branch accountant is a managerial employee because the said employee had
managerial powers, similar to the supervisor in Tabaculera. Their powers
included recommending the hiring and appointment of his subordinates, as
well as the power to recommend any promotion and/or increase. 8
Here, we find that the Cashiers, Accountant, and Acting Chief of the Loans
Department of the petitioner did not possess managerial powers and duties.
We are, therefore, constrained to conclude that they are not managerial
employees.
Now may the said bank personnel be deemed confidential employees?
Confidential employees are those who (1) assist or act in a confidential
capacity, in regard (2) to persons who formulate, determine, and effectuate
management policies [specifically in the field of labor relations]. 9 The two
criteria are cumulative, and both must be met if an employee is to be
considered a confidential employee — that is, the confidential relationship
96
must exist between the employee and his superior officer; and that officer
must handle the prescribed responsibilities relating to labor relations. 10
Art. 245 of the Labor Code11 does not directly prohibit confidential
employees from engaging in union activities. However, under the doctrine
of necessary implication, the disqualification of managerial employees
equally applies to confidential employees.12 The confidential-employee rule
justifies exclusion of confidential employees because in the normal course
of their duties they become aware of management policies relating to labor
relations.13 It must be stressed, however, that when the employee does not
have access to confidential labor relations information, there is no legal
prohibition against confidential employees from forming, assisting, or
joining a union.14
Petitioner contends that it has only 5 officers running its day-to-day affairs.
They assist in confidential capacities and have complete access to the bank's
confidential data. They form the core of the bank's management team.
Petitioner explains that:
. . . Specifically: (1) the Head of the Loans Department initially approves
the loan applications before they are passed on to the Board for
confirmation. As such, no loan application is even considered by the Board
and approved by petitioner without his stamp of approval based upon his
interview of the applicant and determination of his (applicant's) credit
standing and financial capacity. The same holds true with respect to
renewals or restructuring of loan accounts. He himself determines what
account should be collected, whether extrajudicially or judicially, and settles
the problems or complaints of borrowers regarding their accounts;
(2) the Cashier is one of the approving officers and authorized signatories of
petitioner. He approves the opening of accounts, withdrawals and
encashment, and acceptance of check deposits. He deals with other banks
and, in the absence of the regular Manager, manages the entire office or
branch and approves disbursements of funds for expenses; and
(3) the Accountant, who heads the Accounting Department, is also one of
the authorized signatories of petitioner and, in the absence of the Manager
or Cashier, acts as substitute approving officer and assumes the
management of the entire office. She handles the financial reports and
reviews the debit/credit tickets submitted by the other departments. 15
Petitioner's explanation, however, does not state who among the employees
has access to information specifically relating to its labor to relations
policies. Even Cashier Patricia Maluya, who serves as the secretary of the
bank's Board of Directors may not be so classified. True, the board of
directors is responsible for corporate policies, the exercise of corporate
powers, and the general management of the business and affairs of the
corporation. As secretary of the bank's governing body. Patricia Maluya
serves the bank's management, but could not be deemed to have access to
confidential information specifically relating to SRBI's labor relations
policies, absent a clear showing on this matter. Thus, while petitioner's
explanation confirms the regular duties of the concerned employees, it
shows nothing about any duties specifically connected to labor relations.
As to the second issue. One of the rights of a legitimate labor organization
under Article 242(b) of the Labor Code is the right to be certified as the
exclusive representative of all employees in an appropriate bargaining unit
for purposes of collective bargaining. Having complied with the
requirements of Art. 234, it is our view that respondent union is a legitimate
labor union. Article 257 of the Labor Code mandates that a certification
election shall automatically be conducted by the Med-Arbiter upon the
filing of a petition by a legitimate labor organization.16Nothing is said
therein that prohibits such automatic conduct of the certification election if
the management appeals on the issue of the validity of the union's
registration. On this score, petitioner's appeal was correctly dismissed.
Petitioner argues that giving due course to respondent union's petition for
certification election would violate the separation of unions doctrine. 17 Note
that the petition was filed by APSOTEU-TUCP, a legitimate labor
organization. It was not filed by ALU. Nor was it filed by TUCP, which is a
national labor federation of with which respondent union is affiliated.
Petitioner says that respondent union is a mere alter ego of ALU. The
records show nothing to this effect. What the records instead reveal is that
respondent union was initially assisted by ALU during its preliminary
stages of organization. A local union maintains its separate personality
despite affiliation with a larger national federation.18 Petitioner alleges that
97
ALU seeks to represent both respondent union and the rank-and-file union.
Again, we find nothing in the records to support this bare assertion.
The law frowns on a union where the membership is composed of both
supervisors and rank-and-file employees, for fear that conflicts of interest
may arise in the areas of discipline, collective bargaining, and
strikes.19 However, in the present case, none of the members of the
respondent union came from the rank-and-file employees of the bank.
Taking into account the circumstances in this case, it is our view that
respondent Undersecretary committed no reversible error nor grave abuse of
discretion when he found the order of the Med-Arbiter scheduling a
certification election in order. The list of employees eligible to vote in said
certification election was also found in order, for none was specifically
disqualified from union membership.1âwphi1.nêt
WHEREFORE, the instant petition is hereby DISMISSED. No
pronouncement as to costs.
SO ORDERED.
G.R. No. 162025 August 3, 2010
TUNAY NA PAGKAKAISA NG MANGGAGAWA SA ASIA
BREWERY, Petitioner,
vs.
ASIA BREWERY, INC., Respondent.
DECISION
VILLARAMA, JR., J.:
For resolution is an appeal by certiorari filed by petitioner under Rule 45 of
the 1997 Rules of Civil Procedure, as amended, assailing the
Decision1 dated November 22, 2002 and Resolution2 dated January 28,
2004 rendered by the Court of Appeals (CA) in CA-G.R. SP No. 55578,
granting the petition of respondent company and reversing the Voluntary
Arbitrator’s Decision3 dated October 14, 1999.
The facts are:
Respondent Asia Brewery, Inc. (ABI) is engaged in the manufacture, sale
and distribution of beer, shandy, bottled water and glass products. ABI
entered into a Collective Bargaining Agreement (CBA),4 effective for five
(5) years from August 1, 1997 to July 31, 2002, with Bisig at Lakas ng mga
Manggagawa sa Asia-Independent (BLMA-INDEPENDENT), the
exclusive bargaining representative of ABI’s rank-and-file employees. On
October 3, 2000, ABI and BLMA-INDEPENDENT signed a renegotiated
CBA effective from August 1, 2000 to 31 July 2003. 5
Article I of the CBA defined the scope of the bargaining unit, as follows:
Section 1. Recognition. The COMPANY recognizes the UNION as the sole
and exclusive bargaining representative of all the regular rank-and-file daily
paid employees within the scope of the appropriate bargaining unit with
respect to rates of pay, hours of work and other terms and conditions of
employment. The UNION shall not represent or accept for membership
employees outside the scope of the bargaining unit herein defined.
Section 2. Bargaining Unit. The bargaining unit shall be comprised of all
regular rank-and-file daily-paid employees of the COMPANY. However,
the following jobs/positions as herein defined shall be excluded from the
bargaining unit, to wit:
1. Managers
2. Assistant Managers
3. Section Heads
4. Supervisors
5. Superintendents
6. Confidential and Executive Secretaries
7. Personnel, Accounting and Marketing Staff
8. Communications Personnel
9. Probationary Employees
10. Security and Fire Brigade Personnel
98
11. Monthly Employees
12. Purchasing and Quality Control Staff6 [emphasis supplied.]
Subsequently, a dispute arose when ABI’s management stopped deducting
union dues from eighty-one (81) employees, believing that their
membership in BLMA-INDEPENDENT violated the CBA. Eighteen (18)
of these affected employees are QA Sampling Inspectors/Inspectresses and
Machine Gauge Technician who formed part of the Quality Control Staff.
Twenty (20) checkers are assigned at the Materials Department of the
Administration Division, Full Goods Department of the Brewery Division
and Packaging Division. The rest are secretaries/clerks directly under their
respective division managers.7
BLMA-INDEPENDENT claimed that ABI’s actions restrained the
employees’ right to self-organization and brought the matter to the
grievance machinery. As the parties failed to amicably settle the
controversy, BLMA-INDEPENDENT lodged a complaint before the
National Conciliation and Mediation Board (NCMB). The parties
eventually agreed to submit the case for arbitration to resolve the issue of
"[w]hether or not there is restraint to employees in the exercise of their right
to self-organization."8
In his Decision, Voluntary Arbitrator Bienvenido Devera sustained the
BLMA-INDEPENDENT after finding that the records submitted by ABI
showed that the positions of the subject employees qualify under the rank-
and-file category because their functions are merely routinary and clerical.
He noted that the positions occupied by the checkers and secretaries/clerks
in the different divisions are not managerial or supervisory, as evident from
the duties and responsibilities assigned to them. With respect to QA
Sampling Inspectors/Inspectresses and Machine Gauge Technician, he ruled
that ABI failed to establish with sufficient clarity their basic functions as to
consider them Quality Control Staff who were excluded from the coverage
of the CBA. Accordingly, the subject employees were declared eligible for
inclusion within the bargaining unit represented by BLMA-
INDEPENDENT.9
On appeal, the CA reversed the Voluntary Arbitrator, ruling that:
WHEREFORE, foregoing premises considered, the questioned decision of
the Honorable Voluntary Arbitrator Bienvenido De Vera is hereby
REVERSED and SET ASIDE, and A NEW ONE ENTERED
DECLARING THAT:
a) the 81 employees are excluded from and are not eligible for inclusion in
the bargaining unit as defined in Section 2, Article I of the CBA;
b) the 81 employees cannot validly become members of respondent and/or
if already members, that their membership is violative of the CBA and that
they should disaffiliate from respondent; and
c) petitioner has not committed any act that restrained or tended to restrain
its employees in the exercise of their right to self-organization.
NO COSTS.
SO ORDERED.10
BLMA-INDEPENDENT filed a motion for reconsideration. In the
meantime, a certification election was held on August 10, 2002 wherein
petitioner Tunay na Pagkakaisa ng Manggagawa sa Asia (TPMA) won. As
the incumbent bargaining representative of ABI’s rank-and-file employees
claiming interest in the outcome of the case, petitioner filed with the CA an
omnibus motion for reconsideration of the decision and intervention, with
attached petition signed by the union officers.11 Both motions were denied
by the CA.12
The petition is anchored on the following grounds:
(1)
THE COURT OF APPEALS ERRED IN RULING THAT THE 81
EMPLOYEES ARE EXCLUDED FROM AND ARE NOT ELIGIBLE
FOR INCLUSION IN THE BARGAINING UNIT AS DEFINED IN
SECTION 2, ARTICLE 1 OF THE CBA[;]
(2)
THE COURT OF APPEALS ERRED IN HOLDING THAT THE 81
EMPLOYEES CANNOT VALIDLY BECOME UNION MEMBERS,
99
THAT THEIR MEMBERSHIP IS VIOLATIVE OF THE CBA AND
THAT THEY SHOULD DISAFFILIATE FROM RESPONDENT;
(3)
THE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT
PETITIONER (NOW PRIVATE RESPONDENT) HAS NOT
COMMITTED ANY ACT THAT RESTRAINED OR TENDED TO
RESTRAIN ITS EMPLOYEES IN THE EXERCISE OF THEIR RIGHT
TO SELF-ORGANIZATION.13
Although Article 245 of the Labor Code limits the ineligibility to join, form
and assist any labor organization to managerial employees, jurisprudence
has extended this prohibition to confidential employees or those who by
reason of their positions or nature of work are required to assist or act in a
fiduciary manner to managerial employees and hence, are likewise privy to
sensitive and highly confidential records.14 Confidential employees are thus
excluded from the rank-and-file bargaining unit. The rationale for their
separate category and disqualification to join any labor organization is
similar to the inhibition for managerial employees because if allowed to be
affiliated with a Union, the latter might not be assured of their loyalty in
view of evident conflict of interests and the Union can also become
company-denominated with the presence of managerial employees in the
Union membership.15Having access to confidential information,
confidential employees may also become the source of undue advantage.
Said employees may act as a spy or spies of either party to a collective
bargaining agreement.16
In Philips Industrial Development, Inc. v. NLRC,17 this Court held that
petitioner’s "division secretaries, all Staff of General Management,
Personnel and Industrial Relations Department, Secretaries of Audit, EDP
and Financial Systems" are confidential employees not included within the
rank-and-file bargaining unit.18 Earlier, in Pier 8 Arrastre & Stevedoring
Services, Inc. v. Roldan-Confesor,19 we declared that legal secretaries who
are tasked with, among others, the typing of legal documents, memoranda
and correspondence, the keeping of records and files, the giving of and
receiving notices, and such other duties as required by the legal personnel of
the corporation, fall under the category of confidential employees and hence
excluded from the bargaining unit composed of rank-and-file employees.20
Also considered having access to "vital labor information" are the executive 7. Caralipio, Juanita P. Materials Mr. Andres G. Co
secretaries of the General Manager and the executive secretaries of the
Quality Assurance Manager, Product Development Manager, Finance 8. Elmido, Ma. Rebecca S. Materials Mr. Andres G. Co
Director, Management System Manager, Human Resources Manager,
9. Giron, Laura P. Materials Mr. Andres G. Co
Marketing Director, Engineering Manager, Materials Manager and
Production Manager.21 10. Mane, Edna A. Materials Mr. Andres G. Co
In the present case, the CBA expressly excluded "Confidential and
Executive Secretaries" from the rank-and-file bargaining unit, for which
reason ABI seeks their disaffiliation from petitioner. Petitioner, however, xxxx
maintains that except for Daisy Laloon, Evelyn Mabilangan and Lennie
Saguan who had been promoted to monthly paid positions, the following
secretaries/clerks are deemed included among the rank-and-file employees
of ABI:22 C2 BREWERY DIVISION

NAME DEPARTMENT IMMEDIATE SUPERIOR

C1 ADMIN DIVISION 1. Laloon, Daisy S. Brewhouse Mr. William Tan

1. Angeles, Cristina C. Transportation Mr. Melito K. Tan

2. Barraquio, Carina P. Transportation Mr. Melito K. Tan1. Arabit, Myrna F. Bottling Production Mr. Julius Palmare

3. Cabalo, Marivic B. Transportation Mr. Melito K. Tan2. Burgos, Adelaida D. Bottling Production Mr. Julius Palmare

4. Fameronag, Leodigario C. Transportation Mr. Melito K. Tan3. Menil, Emmanuel S. Bottling Production Mr. Julius Palmare

4. Nevalga, Marcelo G. Bottling Production Mr. Julius Palmare

1. Abalos, Andrea A. Materials Mr. Andres G. Co

2. Algire, Juvy L. Materials Mr. Andres G. Co 1. Mapola, Ma. Esraliza T. Bottling Maintenance Mr. Ernesto Ang

3. Anoñuevo, Shirley P. Materials Mr. Andres G. Co 2. Velez, Carmelito A. Bottling Maintenance Mr. Ernesto Ang

4. Aviso, Rosita S. Materials Mr. Andres G. Co

5. Barachina, Pauline C. Materials Mr. Andres G. Co 1. Bordamonte, Rhumela D. Bottled Water Mr. Faustino Teton

6. Briones, Catalina P. Materials Mr. Andres G. Co 2. Deauna, Edna R. Bottled Water Mr. Faustino Teton

100
 3. Punongbayan, Marylou F.
4. Saguan, Lennie Y.
1. Alcoran, Simeon A.
2. Cervantes, Ma. Sherley Y.
3. Diongco, Ma. Teresa M.
4. Mabilangan, Evelyn M.
5. Rivera, Aurora M.
6. Salandanan, Nancy G.
1. Magbag, Ma. Corazon C.
1. Capiroso, Francisca A.
1. Alconaba, Elvira C.
2. Bustillo, Bernardita E.
3. Catindig, Ruel A.
4. Sison, Claudia B.
xxxx
101
Bottled Water Mr. Faustino Tetonche
Bottled Water Mr. Faustino Tetonche
C3 PACKAGING DIVISION
Full Goods Mr. Tsoi Wah Tung
1. Alvarez, Ma. Luningning L. GP Administration Ms. Susan Bella
Full Goods Mr. Tsoi Wah Tung
2. Cañiza, Alma A. GP Technical Mr. Chen Tsai Tya
Full Goods Mr. Tsoi Wah Tung
3. Cantalejo, Aida S. GP Engineering Mr. Noel Fernande
Full Goods Mr. Tsoi Wah Tung
4. Castillo, Ma. Riza R. GP Production Mr. Tsai Chen Chi
Full Goods Mr. Tsoi Wah Tung
5. Lamadrid, Susana C. GP Production Mr. Robert Bautist
Full Goods Mr. Tsoi Wah Tung
6. Mendoza, Jennifer L. GP Technical Mr. Mel Oña
As can be gleaned from the above listing, it is rather curious that there
would be several secretaries/clerks for just one (1) department/division
Tank Farm/ Mr. Manuel Yu Liat tasks which are mostly routine and clerical. Respondent insisted
performing
they fall under the "Confidential and Executive Secretaries" expressly
Cella Services
excluded by the CBA from the rank-and-file bargaining unit. However,
perusal of the job descriptions of these secretaries/clerks reveals that their
assigned duties and responsibilities involve routine activities of recording
Quality Assurance Ms. Regina
andMirasol
monitoring, and other paper works for their respective departments
while secretarial tasks such as receiving telephone calls and filing of office
correspondence appear to have been commonly imposed as additional
duties.23 Respondent failed to indicate who among these numerous
Engineering Mr. Clemente Wong
secretaries/clerks have access to confidential data relating to management
Electrical Mr. Jorgepolicies that could give rise to potential conflict of interest with their Union
Villarosa
membership. Clearly, the rationale under our previous rulings for the
Civil Works Mr. Rogerexclusion
Giron of executive secretaries or division secretaries would have little or
no significance considering the lack of or very limited access to confidential
Utilities Mr. Venancio Alconaba
information of these secretaries/clerks. It is not even farfetched that the job
category may exist only on paper since they are all daily-paid workers.
Quite understandably, petitioner had earlier expressed the view that the
positions were just being "reclassified" as these employees actually
discharged routine functions.
We thus hold that the secretaries/clerks, numbering about forty (40), are
rank-and-file employees and not confidential employees.
With respect to the Sampling Inspectors/Inspectresses and the Gauge
Machine Technician, there seems no dispute that they form part of the
Quality Control Staff who, under the express terms of the CBA, fall under a
distinct category. But we disagree with respondent’s contention that the
twenty (20) checkers are similarly confidential employees being "quality
control staff" entrusted with the handling and custody of company
properties and sensitive information.
Again, the job descriptions of these checkers assigned in the storeroom
section of the Materials Department, finishing section of the Packaging
Department, and the decorating and glass sections of the Production
Department plainly showed that they perform routine and mechanical tasks
preparatory to the delivery of the finished products.24While it may be
argued that quality control extends to post-production phase -- proper
packaging of the finished products -- no evidence was presented by the
respondent to prove that these daily-paid checkers actually form part of the
company’s Quality Control Staff who as such "were exposed to sensitive,
vital and confidential information about [company’s] products" or "have
knowledge of mixtures of the products, their defects, and even their
formulas" which are considered ‘trade secrets’. Such allegations of
respondent must be supported by evidence.25
Consequently, we hold that the twenty (20) checkers may not be considered
confidential employees under the category of Quality Control Staff who
were expressly excluded from the CBA of the rank-and-file bargaining unit.
Confidential employees are defined as those who (1) assist or act in a
confidential capacity, (2) to persons who formulate, determine, and
effectuate management policies in the field of labor relations. The two (2)
criteria are cumulative, and both must be met if an employee is to be
considered a confidential employee – that is, the confidential relationship
must exist between the employee and his supervisor, and the supervisor
must handle the prescribed responsibilities relating to labor relations. The
exclusion from bargaining units of employees who, in the normal course of
their duties, become aware of management policies relating to labor
relations is a principal objective sought to be accomplished by the
102
"confidential employee rule."26 There is no showing in this case that the
secretaries/clerks and checkers assisted or acted in a confidential capacity to
managerial employees and obtained confidential information relating to
labor relations policies. And even assuming that they had exposure to
internal business operations of the company, respondent claimed, this is not
per se ground for their exclusion in the bargaining unit of the daily-paid
rank-and-file employees.27
Not being confidential employees, the secretaries/clerks and checkers are
not disqualified from membership in the Union of respondent’s rank-and-
file employees. Petitioner argues that respondent’s act of unilaterally
stopping the deduction of union dues from these employees constitutes
unfair labor practice as it "restrained" the workers’ exercise of their right to
self-organization, as provided in Article 248 (a) of the Labor Code.
Unfair labor practice refers to "acts that violate the workers’ right to
organize." The prohibited acts are related to the workers’ right to self
organization and to the observance of a CBA. For a charge of unfair labor
practice to prosper, it must be shown that ABI was motivated by ill will,
"bad faith, or fraud, or was oppressive to labor, or done in a manner
contrary to morals, good customs, or public policy, and, of course, that
social humiliation, wounded feelings or grave anxiety resulted x x x"28 from
ABI’s act in discontinuing the union dues deduction from those employees
it believed were excluded by the CBA. Considering that the herein dispute
arose from a simple disagreement in the interpretation of the CBA provision
on excluded employees from the bargaining unit, respondent cannot be said
to have committed unfair labor practice that restrained its employees in the
exercise of their right to self-organization, nor have thereby demonstrated
an anti-union stance.
WHEREFORE, the petition is GRANTED. The Decision dated November
22, 2002 and Resolution dated January 28, 2004 of the Court of Appeals in
CA-G.R. SP No. 55578 are hereby REVERSED and SET ASIDE. The
checkers and secretaries/clerks of respondent company are hereby declared
rank-and-file employees who are eligible to join the Union of the rank-and-
file employees.
No costs.
SO ORDERED. eligible voters, i.e., petitioner submitted a list of 23 employees for the San
Fernando plant and 33 for the Cabuyao plant, while respondent listed 60
G.R. No. 146206 August 1, 2011 and 82, respectively.4
SAN MIGUEL FOODS, INCORPORATED, Petitioner, On August 31, 1998, Med-Arbiter Agatha Ann L. Daquigan issued an
vs. Order5 directing Election Officer Cynthia Tolentino to proceed with the
SAN MIGUEL CORPORATION SUPERVISORS and EXEMPT conduct of certification election in accordance with Section 2, Rule XII of
UNION, Respondent. Department Order No. 9.
DECISION On September 30, 1998, a certification election was conducted and it
PERALTA, J.: yielded the following results,6 thus:

The issues in the present case, relating to the inclusion of employees in Cabuyao San Fernando Total
supervisor levels 3 and 4 and the exempt employees in the proposed Plant Plant
bargaining unit, thereby allowing their participation in the certification
election; the application of the "community or mutuality of interests" test;
Yes 23 23 46
and the determination of the employees who belong to the category of
confidential employees, are not novel.
No 0 0 0
In G.R. No. 110399, entitled San Miguel Corporation Supervisors and
Exempt Union v. Laguesma,1 the Court held that even if they handle
Spoiled 2 0 2
confidential data regarding technical and internal business operations,
supervisory employees 3 and 4 and the exempt employees of petitioner San
Miguel Foods, Inc. (SMFI) are not to be considered confidential employees, Segregated 41 35 76
because the same do not pertain to labor relations, particularly, negotiation
and settlement of grievances. Consequently, they were allowed to form an Total Votes Cast 66 58 124
appropriate bargaining unit for the purpose of collective bargaining. The
Court also declared that the employees belonging to the three different
On the date of the election, September 30, 1998, petitioner filed the
plants of San Miguel Corporation Magnolia Poultry Products Plants in
Omnibus Objections and Challenge to Voters,7questioning the eligibility to
Cabuyao, San Fernando, and Otis, having "community or mutuality of
vote by some of its employees on the grounds that some employees do not
interests," constitute a single bargaining unit. They perform work of the
belong to the bargaining unit which respondent seeks to represent or that
same nature, receive the same wages and compensation, and most
there is no existence of employer-employee relationship with petitioner.
importantly, share a common stake in concerted activities. It was immaterial
Specifically, it argued that certain employees should not be allowed to vote
that the three plants have different locations as they did not impede the
as they are: (1) confidential employees; (2) employees assigned to the live
operations of a single bargaining representative. 2
chicken operations, which are not covered by the bargaining unit; (3)
Pursuant to the Court's decision in G.R. No. 110399, the Department of employees whose job grade is level 4, but are performing managerial work
Labor and Employment – National Capital Region (DOLE-NCR) conducted and scheduled to be promoted; (4) employees who belong to the Barrio
pre-election conferences.3 However, there was a discrepancy in the list of

103
Ugong plant; (5) non-SMFI employees; and (6) employees who are
members of other unions.
On October 21, 1998, the Med-Arbiter issued an Order directing respondent
to submit proof showing that the employees in the submitted list are covered
by the original petition for certification election and belong to the
bargaining unit it seeks to represent and, likewise, directing petitioner to
substantiate the allegations contained in its Omnibus Objections and
Challenge to Voters.8
In compliance thereto, respondent averred that (1) the bargaining unit
contemplated in the original petition is the Poultry Division of San Miguel
Corporation, now known as San Miguel Foods, Inc.; (2) it covered the
operations in Calamba, Laguna, Cavite, and Batangas and its home base is
either in Cabuyao, Laguna or San Fernando, Pampanga; and (3) it submitted
individual and separate declarations of the employees whose votes were
challenged in the election.9
Adding the results to the number of votes canvassed during the September
30, 1998 certification election, the final tally showed that: number of
eligible voters – 149; number of valid votes cast – 121; number of spoiled
ballots - 3; total number of votes cast – 124, with 118 (i.e., 46 + 72 = 118 )
"Yes" votes and 3 "No" votes.10
The Med-Arbiter issued the Resolution11 dated February 17, 1999 directing
the parties to appear before the Election Officer of the Labor Relations
Division on March 9, 1999, 10:00 a.m., for the opening of the segregated
ballots. Thereafter, on April 12, 1999, the segregated ballots were opened,
showing that out of the 76 segregated
votes, 72 were cast for "Yes" and 3 for "No," with one "spoiled" ballot. 12
Based on the results, the Med-Arbiter issued the Order13 dated April 13,
1999, stating that since the "Yes" vote received 97% of the valid votes cast,
respondent is certified to be the exclusive bargaining agent of the
supervisors and exempt employees of petitioner's Magnolia Poultry
Products Plants in Cabuyao, San Fernando, and Otis.
On appeal, the then Acting DOLE Undersecretary, in the Resolution14 dated
July 30, 1999, in OS-A-2-70-91 (NCR-OD-M-9010-017), affirmed the
104
Order dated April 13, 1999, with modification that George C. Matias, Alma
Maria M. Lozano, Joannabel T. Delos Reyes, and Marilyn G. Pajaron be
excluded from the bargaining unit which respondent seeks to represent. She
opined that the challenged voters should be excluded from the bargaining
unit, because Matias and Lozano are members of Magnolia Poultry
Processing Plants Monthly Employees Union, while Delos Reyes and
Pajaron are employees of San Miguel Corporation, which is a separate and
distinct entity from petitioner.
Petitioner’s Partial Motion for Reconsideration15 dated August 14, 1999 was
denied by the then Acting DOLE Undersecretary in the Order 16 dated
August 27, 1999.
In the Decision17 dated April 28, 2000, in CA-G.R. SP No. 55510,
entitled San Miguel Foods, Inc. v. The Honorable Office of the Secretary of
Labor, Bureau of Labor Relations, and San Miguel Corporation
Supervisors and Exempt Union, the Court of Appeals (CA) affirmed with
modification the Resolution dated July 30, 1999 of the DOLE
Undersecretary, stating that those holding the positions of Human Resource
Assistant and Personnel Assistant are excluded from the bargaining unit.
Petitioner’s Motion for Partial Reconsideration18 dated May 23, 2000 was
denied by the CA in the Resolution19dated November 28, 2000.
Hence, petitioner filed this present petition raising the following issues:
I.
WHETHER THE COURT OF APPEALS DEPARTED FROM
JURISPRUDENCE WHEN IT EXPANDED THE SCOPE OF THE
BARGAINING UNIT DEFINED BY THIS COURT'S RULING IN G.R.
NO. 110399.
II.
WHETHER THE COURT OF APPEALS DEPARTED FROM
JURISPRUDENCE - SPECIFICALLY, THIS COURT'S DEFINITION OF
A "CONFIDENTIAL EMPLOYEE" - WHEN IT RULED FOR THE
INCLUSION OF THE "PAYROLL MASTER" POSITION IN THE
BARGAINING UNIT.
III.
WHETHER THIS PETITION IS A "REHASH" OR A "RESURRECTION"
OF THE ISSUES RAISED IN G.R. NO. 110399, AS ARGUED BY
PRIVATE RESPONDENT.
Petitioner contends that with the Court's ruling in G.R. No.
11039920 identifying the specific employees who can participate in the
certification election, i.e., the supervisors (levels 1 to 4) and exempt
employees of San Miguel Poultry Products Plants in Cabuyao, San
Fernando, and Otis, the CA erred in expanding the scope of the bargaining
unit so as to include employees who do not belong to or who are not based
in its Cabuyao or San Fernando plants. It also alleges that the employees of
the Cabuyao, San Fernando, and Otis plants of petitioner’s predecessor, San
Miguel Corporation, as stated in G.R. No. 110399, were engaged in
"dressed" chicken processing, i.e., handling and packaging of chicken meat,
while the new bargaining unit, as defined by the CA in the present case,
includes employees engaged in "live" chicken operations, i.e., those who
breed chicks and grow chickens.
Respondent counters that petitioner’s proposed exclusion of certain
employees from the bargaining unit was a rehashed issue which was already
settled in G.R. No. 110399. It maintains that the issue of union membership
coverage should no longer be raised as a certification election already took
place on September 30, 1998, wherein respondent won with 97% votes.
Petitioner’s contentions are erroneous. In G.R. No. 110399, the Court
explained that the employees of San Miguel Corporation Magnolia Poultry
Products Plants of Cabuyao, San Fernando, and Otis constitute a single
bargaining unit, which is not contrary to the one-company, one-union
policy. An appropriate bargaining unit is defined as a group of employees of
a given employer, comprised of all or less than all of the entire body of
employees, which the collective interest of all the employees, consistent
with equity to the employer, indicate to be best suited to serve the reciprocal
rights and duties of the parties under the collective bargaining provisions of
the law.21
In National Association of Free Trade Unions v. Mainit Lumber
Development Company Workers Union – United Lumber and General
105
Workers of the Phils,22 the Court, taking into account the "community or
mutuality of interests" test, ordered the formation of a single bargaining unit
consisting of the Sawmill Division in Butuan City and the Logging Division
in Zapanta Valley, Kitcharao, Agusan [Del] Norte of the Mainit Lumber
Development Company. It held that while the existence of a bargaining
history is a factor that may be reckoned with in determining the appropriate
bargaining unit, the same is not decisive or conclusive. Other factors must
be considered. The test of grouping is community or mutuality of interest.
This is so because the basic test of an asserted bargaining unit’s
acceptability is whether or not it is fundamentally the combination which
will best assure to all employees the exercise of their collective bargaining
rights.23 Certainly, there is a mutuality of interest among the employees of
the Sawmill Division and the Logging Division. Their functions mesh with
one another. One group needs the other in the same way that the company
needs them both. There may be differences as to the nature of their
individual assignments, but the distinctions are not enough to warrant the
formation of a separate bargaining unit.24
Thus, applying the ruling to the present case, the Court affirms the finding
of the CA that there should be only one bargaining unit for
the employees in Cabuyao, San Fernando, and Otis25 of Magnolia Poultry
Products Plant involved in "dressed" chicken processing and Magnolia
Poultry Farms engaged in "live" chicken operations. Certain factors, such as
specific line of work, working conditions, location of work, mode of
compensation, and other relevant conditions do not affect or impede their
commonality of interest. Although they seem separate and distinct from
each other, the specific tasks of each division are actually interrelated and
there exists mutuality of interests which warrants the formation of a single
bargaining unit.
Petitioner asserts that the CA erred in not excluding the position of Payroll
Master in the definition of a confidential employee and, thus, prays that the
said position and all other positions with access to salary and compensation
data be excluded from the bargaining unit.
This argument must fail. Confidential employees are defined as those who
(1) assist or act in a confidential capacity, in regard (2) to persons who
formulate, determine, and effectuate management policies in the field of
labor relations.26 The two criteria are cumulative, and both must be met if an
employee is to be considered a confidential employee - that is, the
confidential relationship must exist between the employee and his
supervisor, and the supervisor must handle the prescribed responsibilities
relating to labor relations. The exclusion from bargaining units of
employees who, in the normal course of their duties, become aware of
management policies relating to labor relations is a principal objective
sought to be accomplished by the "confidential employee rule." 27
A confidential employee is one entrusted with confidence on delicate, or
with the custody, handling or care and protection of the employer’s
property.28 Confidential employees, such as accounting personnel, should be
excluded from the bargaining unit, as their access to confidential
information may become the source of undue advantage. 29However, such
fact does not apply to the position of Payroll Master and the whole gamut of
employees who, as perceived by petitioner, has access to salary and
compensation data. The CA correctly held that the position of Payroll
Master does not involve dealing with confidential labor relations
information in the course of the performance of his functions. Since the
nature of his work does not pertain to company rules and regulations and
confidential labor relations, it follows that he cannot be excluded from the
subject bargaining unit.
30
Corollarily, although Article 245 of the Labor Code limits the ineligibility
to join, form and assist any labor organization to managerial employees,
jurisprudence has extended this prohibition to
confidential employees or those who by reason of their positions or nature
of work are required to assist or act in a fiduciary manner to managerial
employees and, hence, are likewise privy to sensitive and highly
confidential records.31 Confidential employees are thus excluded from the
rank-and-file bargaining unit. The rationale for their separate category and
disqualification to join any labor organization is similar to the inhibition for
managerial employees, because if allowed to be affiliated with a union, the
latter might not be assured of their loyalty in view of evident conflict of
interests and the union can also become company-denominated with the
presence of managerial employees in the union membership. 32 Having
access to confidential information, confidential employees may also become
106
the source of undue advantage. Said employees may act as a spy or spies of
either party to a collective bargaining agreement.331avvphi1
In this regard, the CA correctly ruled that the positions of Human Resource
Assistant and Personnel Assistant belong to the category of confidential
employees and, hence, are excluded from the bargaining unit, considering
their respective positions and job descriptions. As Human Resource
Assistant,34 the scope of one’s work necessarily involves labor relations,
recruitment and selection of employees, access to employees' personal files
and compensation package, and human resource management. As regards a
Personnel Assistant,35 one's work includes the recording of minutes for
management during collective bargaining negotiations, assistance to
management during grievance meetings and administrative investigations,
and securing legal advice for labor issues from the petitioner’s team of
lawyers, and implementation of company programs. Therefore, in the
discharge of their functions, both gain access to vital labor relations
information which outrightly disqualifies them from union membership.
The proceedings for certification election are quasi-judicial in nature and,
therefore, decisions rendered in such proceedings can attain
finality.36 Applying the doctrine of res judicata, the issue in the
present case pertaining to the coverage of the employees who would
constitute the bargaining unit is now a foregone conclusion.
It bears stressing that a certification election is the sole concern of the
workers; hence, an employer lacks the personality to dispute the same. The
general rule is that an employer has no standing to question the process of
certification election, since this is the sole concern of the workers. 37 Law
and policy demand that employers take a strict, hands-off stance in
certification elections. The bargaining representative of employees should
be chosen free from any extraneous influence of management. A labor
bargaining representative, to be effective, must owe its loyalty to the
employees alone and to no other.38 The only exception is where the
employer itself has to file the petition pursuant to Article 258 39 of the Labor
Code because of a request to bargain collectively.40
With the foregoing disquisition, the Court writes finis to the issues raised so
as to forestall future suits of similar nature.
WHEREFORE, the petition is DENIED. The Decision dated April 28,
2000 and Resolution dated November 28, 2000 of the Court of Appeals, in
CA-G.R. SP No. 55510, which affirmed with modification the Resolutions
dated July 30, 1999 and August 27, 1999 of the Secretary of Labor,
are AFFIRMED.
SO ORDERED.
G.R. No. 172132 July 23, 2014
THE HERITAGE HOTEL MANILA, ACTING THROUGH ITS
OWNER, GRAND PLAZA HOTEL CORPORATION,Petitioner,
vs.
SECRETARY OF LABOR AND EMPLOYMENT; MED-ARBITER
TOMAS F. FALCONITIN; and NATIONAL UNION OF WORKERS
IN THE HOTEL, RESTAURANT and ALLIED INDUSTRIES-
HERITAGE HOTEL MANILA SUPERVISORS CHAPTER
(NUWHRAINHHMSC), Respondents.
DECISION
BERSAMIN, J.:
Although case law has repeatedly held that the employer was but a
bystander in respect of the conduct of the certification election to decide the
labor organization to represent the employees in the bargaining unit, and
that the pendency of the cancellation of union registration brought against
the labor organization applying for the certification election should not
prevent the conduct of the certification election, this review has to look
again at the seemingly never-ending quest of the petitioner employer to stop
the conduct of the certification election on the ground of the pendency of
proceedings to cancel the labor organization's registration it had initiated on
the ground that the membership of the labor organization was a mixture of
managerial and supervisory employees with the rank-and-file employees.
Under review at the instance ofthe employer is the decision promulgated on
December 13, 2005,1 whereby the Court of Appeals (CA) dismissed its
petition for certiorari to assail the resolutions of respondent Secretary of
Labor and Employment sanctioning the conduct of the certification election
initiated by respondent labor organization.2
107
Antecedents
On October 11, 1995, respondent National Union of Workers in Hotel
Restaurant and Allied Industries-HeritageHotel Manila Supervisors Chapter
(NUWHRAIN-HHMSC) filed a petition for certification election,3 seeking
to represent all the supervisory employees of Heritage Hotel Manila. The
petitioner filed its opposition, but the opposition was deemed denied on
February 14, 1996 when Med-Arbiter Napoleon V. Fernando issued his
order for the conduct of the certification election.
The petitioner appealed the order of Med-Arbiter Fernando, but the appeal
was also denied. A pre-election conference was then scheduled. On
February 20, 1998, however, the pre-election conference was suspended
until further notice because of the repeated non-appearance of
NUWHRAIN-HHMSC.4
On January 29, 2000, NUWHRAIN-HHMSC moved for the conduct of the
pre-election conference. The petitioner primarily filed its comment on the
list of employees submitted by NUWHRAIN-HHMSC, and simultaneously
sought the exclusion ofsome from the list of employees for occupying either
confidential or managerial positions.5 The petitioner filed a motion to
dismiss on April 17, 2000,6 raising the prolonged lack of interest of
NUWHRAIN-HHMSC to pursue its petition for certification election.
On May 12, 2000, the petitioner filed a petition for the cancellation of
NUWHRAIN-HHMSC’s registration as a labor union for failing to submit
its annual financial reports and an updated list of members as required by
Article 238 and Article 239 of the Labor Code, docketed as Case No.
NCROD-0005-004-IRD entitled The Heritage Hotel Manila, acting through
its owner, Grand Plaza Hotel Corporation v. National Union of Workers in
the Hotel, Restaurant and Allied Industries-Heritage Hotel Manila
Supervisors Chapter (NUWHRAIN-HHSMC).7 It filed another motion on
June 1, 2000 to seek either the dismissal or the suspension of the
proceedings on the basis of its pending petition for the cancellation of union
registration.8
The following day, however, the Department of Labor and Employment
(DOLE) issued a notice scheduling the certification elections on June 23,
2000.9
Dissatisfied, the petitioner commenced in the CA on June 14, 2000 a special
civil action for certiorari,10 alleging that the DOLE gravely abused its
discretion in not suspending the certification election proceedings. On June
23, 2000, the CA dismissed the petition for certiorarifor nonexhaustion of
administrative remedies.11
The certification election proceeded as scheduled, and
NUWHRAINHHMSC obtained the majority vote of the bargaining
unit.12 The petitioner filed a protest (with motion to defer the certification of
the election results and the winner),13 insisting on the illegitimacy of
NUWHRAIN-HHMSC.
Ruling of the Med-Arbiter
On January 26, 2001, Med-Arbiter Tomas F. Falconitin issued an
order,14 ruling that the petition for the cancellation of union registration was
not a bar to the holding of the certification election, and disposing thusly:
WHEREFORE, premises considered, respondent employer/protestant’s
protest with motion to defer certification of results and winner is hereby
dismissed for lack of merit.
Accordingly, this Office hereby certify pursuant to the rules that
petitioner/protestee, National Union of Workers in Hotels, Restaurants and
Allied Industries-Heritage Hotel Manila Supervisory Chapter
(NUWHRAIN-HHSMC) is the sole and exclusive bargaining agent of all
supervisory employees of the Heritage Hotel Manila acting through its
owner, Grand Plaza Hotel Corporation for purposes of collective bargaining
with respect to wages, and hours of work and other terms and conditions of
employment.
SO ORDERED.
The petitioner timely appealed to the DOLE Secretary claiming that: (a) the
membership of NUWHRAIN-HHMSC consisted of managerial,
confidential, and rank-and-file employees; (b) NUWHRAIN-HHMSC failed
to comply with the reportorial requirements; and (c) Med-Arbiter Falconitin
simply brushed aside serious questions on the illegitimacy of
NUWHRAINHHMSC.15 It contended that a labor union of mixed
membership of supervisory and rank-and-file employees had no legal right
108
to petition for the certification election pursuant to the pronouncements in
Toyota Motor Philippines Corporation v. Toyota Motor Philippines
Corporation Labor Union16 (Toyota Motor) and Dunlop Slazenger (Phils.)
v. Secretary of Labor and Employment17 (Dunlop Slazenger).
Ruling of the DOLE Secretary
On August 21, 2002, then DOLE Secretary Patricia A. Sto. Tomas issued a
resolution denying the appeal,18 and affirming the order of MedArbiter
Falconitin, viz:
WHEREFORE, the appeal is DENIED. The order of the Med- Arbiter dated
26 January 2001 is hereby AFFIRMED.
SO RESOLVED.
DOLE Secretary Sto. Tomas observed that the petitioner’s reliance on
Toyota Motor and Dunlop Slazenger was misplaced because both rulings
were already overturned by SPI Technologies, Inc. v. Department of Labor
and Employment,19 to the effect that once a union acquired a legitimate
status as a labor organization, it continued as such until its certificate of
registration was cancelled or revoked in an independent action for
cancellation.
The petitioner moved for reconsideration.
In denying the motion on October 21, 2002, the DOLE Secretary declared
that the mixture or co-mingling of employees in a union was not a ground
for dismissing a petition for the certification election under Section 11, par.
II, Rule XI of Department Order No. 9; that the appropriate remedy was to
exclude the ineligible employees from the bargaining unit during the
inclusion-exclusion proceedings;20 that the dismissal of the petition for the
certification election based on the legitimacy of the petitioning union would
be inappropriate because it would effectively allow a collateral attack
against the union’s legal personality; and that a collateral attack against the
personality of the labor organization was prohibited under Section 5, Rule V
of Department Order No. 9, Series of 1997. 21
Upon denial of its motion for reconsideration, the petitioner elevated the
matter to the CA by petition for certiorari.22
Ruling of the CA
On December 13, 2005,23 the CA dismissed the petition for certiorari,
giving its following disquisition:
The petition for certiorari filed by the petitioner is, in essence, a
continuation of the debate on the relevance of the Toyota Motor, Dunlop
Slazenger and Progressive Developmentcases to the issues raised.
Toyota Motor and Dunlop Slazengerare anchored on the provisions of
Article 245 of the Labor Code which prohibit managerial employees from
joining any labor union and permit supervisory employees to form a
separate union oftheir own. The language naturally suggests that a labor
organization cannot carry a mixture of supervisory and rank-and-file
employees. Thus, courts have held that a union cannot become a legitimate
labor union if it shelters under its wing both types of employees. But there
are elements of an elliptical reasoning in the holding of these two cases that
a petition for certification election may not prosper until the composition of
the union is settled therein. Toyota Motor, in particular, makes the blanket
statement that a supervisory union has no right to file a certification election
for as long asit counts rank-and-file employees among its ranks. More than
four years after Dunlop Slazenger, the Court clarified in Tagaytay
Highlands International Golf Club Inc vs Tagaytay Highlands Employees
Union-PTGWO that while Article 245 prohibits supervisory employees
from joining a rank-and-file union, it does not provide what the effect is if a
rank-and-fileunion takes in supervisory employees as members, or vice
versa. Toyota Motorand Dunlop Slazenger jump into an unnecessary
conclusion when they foster the notion that Article 245 carries with it the
authorization to inquire collaterally into the issue wherever it rears its ugly
head.
Tagaytay Highlands proclaims, in the light of Department Order 9, that after
a certificate of registration is issued to a union, its legal personality cannot
be subject to a collateral attack. It may be questioned only in an independent
petition for cancellation. In fine, Toyota and Dunlop Slazengerare a spent
force. Since Tagaytay Highlands was handed down after these two cases, it
constitutes the latest expression of the will of the Supreme Court and
supersedes or overturns previous rulings inconsistent with it. From this
perspective, it is needless to discuss whether SPI Technologiesas a mere
109
resolution of the Court may prevail over a full-blown decision that Toyota
Motor or Dunlop Slazenger was. The ruling in SPI Technologies has been
echoed in Tagaytay Highlands, for which reason it is with Tagaytay
Highlands, not SPI Technologies,that the petitioner must joust.
The fact that the cancellation proceeding has not yet been resolved makes it
obvious that the legal personality of the respondent union is still very much
in force. The DOLE has thus every reason to proceed with the certification
election and commits no grave abuse of discretion in allowing it to prosper
because the right to be certified as collective bargaining agent is one of the
legitimate privileges of a registered union. It is for the petitioner to expedite
the cancellation case if it wants to put an end to the certification case, but it
cannot place the issue of the union’s legitimacy in the certification case, for
that would be tantamount to making the collateral attack the DOLE has
staunchly argued to be impermissible.
The reference made by the petitioner to another Progressive Development
case that it would be more prudent for the DOLE to suspend the
certification case until the issue of the legality of the registration is resolved,
has also been satisfactorily answered. Section 11, Rule XI of Department
Order 9 provides for the grounds for the dismissal of a petition for
certification election, and the pendency of a petition for cancellation of
union registration is not one of them. Like Toyota Motor and Dunlop
Slazenger, the second Progressive case came before Department Order 9.
IN VIEW OF THE FOREGOING, the disputed resolutions of the Secretary
of Labor and Employment are AFFIRMED, and the petition is
DISMISSED.
SO ORDERED.
The petitioner sought reconsideration,24 but its motion was denied.
Issues
Hence, this appeal, with the petitioner insisting that:
I
THE COURT OF APPEALS ERRED IN RULING THAT TAGAYTAY
HIGHLANDSAPPLIES TO THE CASE AT BAR
II
[THE HONORABLE COURT OF APPEALS] SERIOUSLY ERRED
WHEN IT DISREGARDED PROGRESSIVE DEVELOPMENT
CORPORATION – PIZZA HUT V. LAGUESMA WHICH HELD THAT
IT WOULD BE MORE PRUDENT TO SUSPEND THE
CERTIFICATION CASE UNTIL THE ISSUE OF THE LEGALITY OF
THE REGISTRATION OF THE UNION IS FINALLY RESOLVED
III
BECAUSE OF THE PASSAGE OFTIME, RESPONDENT UNION NO
LONGER POSSESSES THE MAJORITY STATUS SUCH THAT A NEW
CERTIFICATION ELECTION IS IN ORDER25
The petitioner maintains that the ruling in Tagaytay Highlands International
Golf Club Inc v. Tagaytay Highlands Employees Union
PTGWO26 (Tagaytay Highlands) was inapplicable because it involved the
co-mingling of supervisory and rank-and-file employees in one labor
organization, while the issue here related to the mixture of membership
between two employee groups — one vested with the right to
selforganization (i.e., the rank-and-file and supervisory employees), and the
other deprived of such right (i.e., managerial and confidential employees);
that suspension of the certification election was appropriate because a
finding of "illegal mixture" of membership during a petition for the
cancellation of union registration determined whether or not the union had
met the 20% representation requirement under Article 234(c) of the Labor
Code;27 and that in holding that mixed membership was not a ground for
canceling the union registration, except when such was done through
misrepresentation, false representation or fraud under the circumstances
enumerated in Article 239(a) and (c) of the Labor Code, the CA completely
ignored the 20% requirement under Article 234(c) of the Labor Code.
The petitioner posits that the grounds for dismissing a petition for the
certification election under Section 11, Rule XI of Department Order No. 9,
Series of 1997, were not exclusive because the other grounds available
110
under the Rules of Courtcould be invoked; that in Progressive Development
Corporation v. Secretary, Department of Labor and Employment, 28 the
Court ruled that prudence could justify the suspension of the certification
election proceedings until the issue of the legality of the union registration
could be finally resolved; that the non-submission of the annual financial
statements and the list of members in the period from 1996 to 1999
constituted a serious challenge to NUWHRAIN-HHMSC’s right to file its
petition for the certification election; and that from the time of the conduct
of the certification election on June 23, 2000, the composition of
NUWHRAINHHMSC had substantially changed, thereby necessitating
another certification election to determine the true will of the bargaining
unit.
In short, should the petition for the cancellation of union registration based
on mixed membership of supervisors and managers in a labor union, and the
non-submission of reportorial requirements to the DOLE justify the
suspension of the proceedings for the certification elections or even the
denial of the petition for the certification election?
Ruling
We deny the petition for review on certiorari.
Basic in the realm of labor unionrights is that the certification election is the
sole concern of the workers,29 and the employer is deemed an intruder as far
as the certification election is concerned.30 Thus, the petitioner lacked the
legal personality to assail the proceedings for the certification
election,31 and should stand aside as a mere bystander who could not oppose
the petition, or even appeal the Med-Arbiter’s orders relative to the conduct
of the certification election.32 As the Court has explained in Republic v.
Kawashima Textile Mfg., Philippines, Inc.33(Kawashima):
Except when it is requested to bargain collectively, an employer is a mere
bystander to any petition for certification election; such proceeding is non-
adversarial and merely investigative, for the purpose thereof is to determine
which organization will represent the employees in their collective
bargaining with the employer. The choice of their representative is the
exclusive concern of the employees; the employer cannot have any partisan
interest therein; it cannot interfere with, much less oppose, the process by
filing a motion to dismiss or an appeal from it; not even a mere allegation
that some employees participating in a petition for certification election are
actually managerial employees will lend an employer legal personality to
block the certification election. The employer's only right in the proceeding
is to be notified or informed thereof.
The petitioner’s meddling in the conduct of the certification election among
its employees unduly gave rise to the suspicion that it intended to establish a
company union.34 For that reason, the challenges it posed against the
certification election proceedings were rightly denied.
Under the long established rule, too, the filing of the petition for the
cancellation of NUWHRAIN-HHMSC’s registration should not bar the
conduct of the certification election.35 In that respect, only a final order for
the cancellation of the registration would have prevented
NUWHRAINHHMSC from continuing to enjoy all the rights conferred on
it as a legitimate labor union, including the rightto the petition for the
certification election.36 This rule is now enshrined in Article 238-A of the
Labor Code, as amended by Republic Act No. 9481, 37 which reads:
Article 238-A. Effect of a Petition for Cancellation of Registration. – A
petition for cancellation of union registration shall not suspend the
proceedings for certification election nor shall it prevent the filing of a
petition for certification election.
xxxx
Still, the petitioner assails the failure of NUWHRAIN-HHMSC to submit
its periodic financial reports and updated list of its members pursuant to
Article 238 and Article 239 of the Labor Code. It contends that the serious
challenges against the legitimacy of NUWHRAIN-HHMSC as a union
raised in the petition for the cancellation of union registration should have
cautioned the Med-Arbiter against conducting the certification election.
The petitioner does not convince us.
In The Heritage Hotel Manila v. National Union of Workers in the Hotel,
Restaurant and Allied Industries-Heritage Hotel Manila Supervisors
Chapter (NUWHRAIN-HHMSC),38 the Court declared that the dismissal of
the petition for the cancellation of the registration of NUWHRAIN-
111
HHMSC was proper when viewed against the primordial right of the
workers to self organization, collective bargaining negotiations and peaceful
concerted actions, viz:
xxxx
[Articles 238 and 239 of the Labor Code] give the Regional Director ample
discretion in dealing with a petition for cancellation of a union's registration,
particularly, determining whether the union still meets the requirements
prescribed by law. It is sufficient to give the Regional Director license to
treat the late filing of required documents as sufficient compliance with the
requirements of the law. After all, the law requires the labor organization to
submit the annual financial report and list of members in order to verify if it
is still viable and financially sustainable as an organization so as to protect
the employer and employees from fraudulent or fly-by-night unions. With
the submission of the required documents by respondent, the purpose of the
law has been achieved, though belatedly.
We cannot ascribe abuse of discretion to the Regional Director and the
DOLE Secretary in denying the petition for cancellation of respondent's
registration. The union members and, in fact, all the employees belonging to
the appropriate bargaining unit should not be deprived of a bargaining
agent, merely because of the negligence of the union officers who were
responsible for the submission of the documents to the BLR.
Labor authorities should, indeed, act with circumspection in treating
petitions for cancellation ofunion registration, lest they be accused of
interfering withunion activities. In resolving the petition, consideration must
be taken of the fundamental rights guaranteed by Article XIII, Section 3 of
the Constitution, i.e., the rights of all workers to self-organization,
collective bargaining and negotiations, and peaceful concerted activities.
Labor authorities should bear in mind that registration confers upon a union
the status of legitimacy and the concomitant right and privileges granted by
law to a legitimate labor organization, particularly the right to participate
inor ask for certification election in a bargaining unit. Thus, the cancellation
of a certificate of registration is the equivalent of snuffing out the lifeof a
labor organization. For without such registration, it loses - as a rule - its
rights under the Labor Code.
It is worth mentioning that the Labor Code's provisions on cancellation of
union registration and on reportorial requirements have been recently
amended by Republic Act (R.A.) No. 9481, An Act Strengthening the
Workers’ Constitutional Right to Self-Organization, Amending for the
Purpose Presidential Decree No. 442, As Amended, Otherwise Known as
the Labor Code of the Philippines, which lapsed into law on May 25, 2007
and became effective on June 14, 2007. The amendment sought to
strengthen the workers’ right to self-organization and enhance the
Philippines' compliance with its international obligations as embodied in the
International Labor Organization (ILO) Convention No. 87, pertaining to
the non-dissolution of workers’ organizations by administrative authority.
Thus, R.A. No. 9481 amended Article 239 to read:
ART. 239. Grounds for Cancellation of Union Registration.--The following
may constitute grounds for cancellation of union registration:
(a) Misrepresentation, false statement or fraud in connection with the
adoption or ratification of the constitution and by-laws or amendments
thereto, the minutes of ratification, and the list of members who took part in
the ratification;
(b) Misrepresentation, false statements or fraud in connection with the
election of officers, minutes of the election of officers, and the list of voters;
(c) Voluntary dissolution by the members.
R.A. No. 9481 also inserted inthe Labor Code Article 242-A, which
provides:
ART. 242-A. Reportorial Requirements.--The following are documents
required to be submitted to the Bureau by the legitimate labor organization
concerned:
(a) Its constitution and by-laws, or amendments thereto, the minutes of
ratification, and the list of members who took part in the ratification of the
constitution and by-laws within thirty (30) days from adoption or
ratification of the constitution and by-laws or amendments thereto;
(b) Its list of officers, minutesof the election of officers, and list of voters
within thirty (30) days from election;
112
(c) Its annual financial report within thirty (30) days after the close of every
fiscal year; and
(d) Its list of members at least once a year or whenever required by the
Bureau.
Failure to comply with the above requirements shall not be a ground for
cancellation of union registration but shall subject the erring officers or
members to suspension, expulsion from membership, or any appropriate
penalty.
xxxx
The ruling thereby wrote finisto the challenge being posed by the petitioner
against the illegitimacy of NUWHRAIN-HHMSC.
The remaining issue to be resolved is which among Toyota Motor, Dunlop
Slazenger and Tagaytay Highlands applied in resolving the dispute arising
from the mixed membership in NUWHRAIN-HHMSC.
This is not a novel matter. In Kawashima,39 we have reconciled our rulings
in Toyota Motor, Dunlop Slazengerand Tagaytay Highlands by
emphasizing on the laws prevailing at the time of filing of the petition for
the certification election.
Toyota Motorand Dunlop Slazenger involved petitions for certification
election filed on November 26, 1992 and September 15, 1995, respectively.
In both cases, we applied the Rules and Regulations Implementing R.A. No.
6715 (also known as the 1989 Amended Omnibus Rules), the prevailing
rule then.
The 1989 Amended Omnibus Ruleswas amended on June 21, 1997 by
Department Order No. 9, Series of 1997. Among the amendments was the
removal of the requirement of indicating in the petition for the certification
election that there was no co-mingling of rank-and-fileand supervisory
employees in the membership of the labor union. This was the prevailing
rule when the Court promulgated Tagaytay Highlands, declaring therein that
mixed membership should have no bearing on the legitimacy of a registered
labor organization, unless the co-mingling was due to misrepresentation,
false statement or fraud as provided in Article 239 of the Labor
Code.40 Presently, then, the mixed membership does not result in the
illegitimacy of the registered labor union unless the same was done through
misrepresentation, false statement or fraud according to Article 239 of the
Labor Code. In Air Philippines Corporation v. Bureau of Labor
Relations,41 we categorically explained that—
Clearly, then, for the purpose of de-certifying a union, it is not enough to
establish that the rank-and-file union includes ineligible employees in its
membership. Pursuantto Article 239 (a) and (c) of the Labor Code, it must
be shown that there was misrepresentation, false statement or fraud in
connection withthe adoption or ratification of the constitution and by-laws
or amendments thereto, the minutes of ratification, or in connection with the
election of officers, minutes of the election of officers, the list of voters, or
failure to submit these documents together with the list of the newly
elected-appointed officers and their postal addresses to the BLR.
We note that NUWHRAIN-HHMSC filed its petition for the certification
election on October 11, 1995. Conformably with Kawashima, the applicable
law was the 1989 Amended Omnibus Rules, and the prevailing rule was the
pronouncement in Toyota Motorand Dunlop Slazenger to the effect that a
labor union of mixed membership was not possessed with the requisite
personality to file a petition for the certification election.
Nonetheless, we still rule in favor of NUWHRAIN-HHMSC. We expound.
In both Toyota Motorand Dunlop Slazenger, the Court was convinced that
the concerned labor unions were comprised by mixed rank-and-file and
supervisory employees. In Toyota Motor, the employer submitted the job
descriptions of the concerned employees to prove that there were
supervisors in the petitioning union for rank-and-file employees. In Dunlop
Slazenger, the Court observed that the labor union of supervisors included
employees occupying positions that apparently belonged to the rank-and-
file. In both Toyota Motorand Dunlop Slazenger, the employers were able
to adduce substantial evidence to prove the existence of the mixed
membership. Based on the records herein, however, the petitioner failed in
that respect. To recall, it raised the issue of the mixed membership in its
comment on the list of members submitted by NUWHRAIN-HHMSC, and
in its protest. In the comment, it merely identified the positions that were
either confidential or managerial, but did not present any supporting
113
evidence to prove or explain the identification. In the protest, it only
enumerated the positions that were allegedly confidential and managerial,
and identified two employees that belonged to the rank-and-file, but did
notoffer any description to show that the positions belonged to different
employee groups.
Worth reiterating is that the actualfunctions of an employee, not his job
designation, determined whether the employee occupied a managerial,
supervisory or rank-and-file position.42 As to confidential employees who
were excluded from the right to self-organization, they must (1) assist or act
in a confidential capacity, in regard(2) to persons who formulated,
determined, and effectuated management policies in the field of labor
relations.43 In that regard, mere allegations sanssubstance would not be
enough, most especially because the constitutional right of workers to
selforganization would be compromised.
At any rate, the members of NUWHRAIN-HHSMC had already spoken,
and elected it as the bargaining agent.1âwphi1 As between the rigid
application of Toyota Motorsand Dunlop Slazenger, and the right of the
workers to self-organization, we preferthe latter. For us, the choice is clear
and settled. "What is important is that there is an unmistakeable intent of the
members of [the] union to exercise their right to organize. We cannot
impose rigorous restraints on such right if we are to give meaning to the
protection to labor and social justice clauses of the Constitution." 44
WHEREFORE, the Court DENIES the petition for review on certiorari;
AFFIRMS the decision promulgated on December 13, 2005 by the Court of
Appeals; and ORDERS the petitioner to pay the costs of suit.
SO ORDERED.