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Republic of the Philippines SUPREME COURT Manila


G.R. No. 77231 May 31, 1989 SAN JOSE CITY ELECTRIC SERVICE COOPERATIVE, INC. (SAJELCO), petitioner, vs. MINISTRY OF LABOR AND EMPLOYMENT and MAGKAISA-ADLO, respondents. MEDIALDEA, J.: This is a petition for certiorari under Rule 65 of the Rules of Court. Petitioner San Jose City Electric Service Cooperative, Inc. (SAJELCO, for brevity) seeks the reversal of the Order (pp. 38-40, Rollo) of Pura Ferrer-Calleja, Director of Bureau of Labor Relations in BLR Case No. A10-259-86 which affirmed the Order of Med-Arbiter Antonio R. Cortez to conduct a certification election among the rank-and-file employees of SAJELCO. The antecedent facts of the instant case are as follows: On July 29, 1986, private respondent Manggagawang Nagkakaisa ng SAJELCO-Association of Democratic Labor Organization (MAGKAISAADLO) filed a petition (pp. 16-18, Rollo) for direct certification election with the Regional Office No. 111 of the Department of Labor and Employment in San Fernando, Pampanga. The petition alleged that MAGKAISA-ADLO is a legitimate labor organization duly registered with the Ministry of Labor and Employment; that there are more or less fiftyfour (54) rank and file employees in SAJELCO; that almost 62% of the employees sought to be represented have supported the filing of the petition; that there has been no valid certification election held in

SAJELCO during the twelve (12) month period prior to the filing of the petition and that there is no other union in the bargaining unit. In its answer (pp. 19-21, Rollo), SAJELCO opposed the petition for direct certification election contending, inter alia, that the employees who sought to be represented by private respondent are membersconsumers of the Cooperative itself and at the same time composed the General Assembly which, pursuant to the By-laws is also the final arbiter of any dispute arising in the Cooperative. Thus: 5. That some, if not most, of the employees who sought to be represented by the petitioner, are member-consumers, and as such are members of the General or Special Assembly which is the final arbiter on any dispute which a member and/or the Board, or the Cooperative may have, and that such "some"of said alleged supporters, in their capacity as member-consumers, enjoy two personalities in that as employees and/or members of the General Assembly, and therefore cannot fairly and prudently represent such opposing personalities that merge into one juridical or natural person, and these special and unique status or personalities of the supposed supporters cannot qualify to be represented by the petitioner, without doing injustice, in equity and unfair status or advantage to those member-consumers who have not that destiny or status of becoming employees; 6 No valid and lawful representation can be obtained by petitioner in behalf of the supposed supporters, who are also member-consumer, that are bound by the Article of Incorporation, By-laws of the respondent Cooperative and pertinent Decrees and laws, to support and defend the basic policies of the Government on Electric Cooperatives; 7. There is no possible legal way by which to dismantle the personalities of some of the supporters of the petitioner, as employees, from their status as consumer-members, who are, under the By-laws, part and parcels of the General or Special Assembly that finally decides any dispute, and no reasonable or valid scale of justice could be invoked to divide a person who, in conscience, is also the other fellow against whom a remedy is sought for in allowing this to happen is tantamount to slaughtering a man to his own ends;

On September 5, 1986, the Med-Arbiter who was assigned to the case issued an Order (pp. 24-26, Rollo) granting the petition for direct certification election on the basis of the pleadings filed. The Order said that while some of the members of petitioner union are members of the cooperative, it cannot be denied that they are also employees within the contemplation of the Labor Code and are therefore entitled to enjoy all the benefits of employees, including the right to selforganization (pp. 25, Rollo). This Order was appealed by SAJELCO to the Bureau of Labor Relations. In its appeal, (pp. 27-36, Rollo) SAJELCO reiterated its position that: . . . upon the principle that in electric cooperative as in the case of respondent, there is a merger of the consumer-members that composed of the assembly and that of the rank-and-file members of the petitioners-into one person or juridical status thus rendering the proposed collective bargaining agent ineffective and/or uncalled for considering that a grievance machinery for employees and/or memberconsumers of the cooperative-has been provided for by the By-laws as a built-in over-all arbiter involving disputes affecting said cooperative; Respondent Director of the Bureau of Labor Relations dismissed the appeal and sustained the ruling of the Med-Arbiter in an order dated January 5, 1987. On February 19, 1987, SAJELCO filed the instant petition for certiorari praying that the order of respondent Director be set aside and another one rendered denying the holding or conduct of a certification election among the rank and file employees of SAJELCO. In a letter dated June 20, 1987, Atty. Ricardo Soto, Jr., counsel for private respondent union, manifested that a direct certification election was conducted in SAJELCO, there being no restraining order from this Court enjoining the holding thereof Likewise, Atty. Soto was of the opinion that in view of the direct certification election conducted, the petition brought before this Court by SAJELCO has become moot and academic (p. 48, Rollo). Attached to his letter is a copy of the minutes of the certification election held on April 13, 1987 showing that of forty three (43) employees who voted, thirty (30) voted for respondent union and thirteen (13) voted for "no union."

In the resolution of this court (First Division) dated September 29, 1987, respondents were required to comment on the petition. The Solicitor General filed its comment dated October 30, 1987 wherein it took a stand contrary to that of respondent Director. To support its stand, the Solicitor General argued firstly, that the union members who seek to be represented by the union are the very members of the cooperative, thereby resulting in a fusion of two personalities. Thus, it will be inconsistent for the union members to bargain with themselves. Secondly, he said that article 243 of the Labor Code; requires that before one can form, join or assist a labor union, he must first be employed and to be an employee one must be under hire and must have no involvement in the ownership of the firm. A labor union is formed for purposes of collective bargaining. The duty to bargain exists only between employer and employees and not between an employer and his co-owners. Thirdly, he also said that under the National Electrification Decree (P.D. No. 269, August 6, 1973) members of an electric cooperative such as petitioner, besides contributing financially to its establishments and maintenance, participate in its management. In the latter aspect, they possess the powers and prerogatives of managerial employees who are not eligible to join, assist or form any labor organization (pp. 4-6 of Comment; pp 43-45, Rollo). On November 25, 1987, We required Atty. Soto, Jr. to comment on the comment of the Solicitor General (p. 47, Rollo). However, the notices sent to him were returned and stamped "moved to an unknown address." But respondent Director of the Bureau of Labor Relations filed a comment on the aforesaid comment of the Solicitor General reiterating his stand that members of private respondent union fall under the general provision of Article 244 of the Code on who are qualified to form, join or assist in the formation of unions as they are neither managerial employees nor persons belonging to subversive organizations. Thus, on May 25, 1988, we gave due course to the petition (p. 79, Rollo). The only issue presented for resolution in this petition is whether or not the employees-members of an electric cooperative can organize themselves for purposes of collective bargaining. This Court had the occasion to rule on this issue in the consolidated cases of Batangas I-Electric Cooperative Labor Union vs. Romeo Young,

et al., G.R. No. 62386, Bulacan II- Electric Cooperative, Inc., vs. Hon. Eliseo A. Penaflor, et al., G.R. No. 70880 and Albay Electric Cooperative vs. Crescencio B. Trajano et. al., G.R. No. 74560 (November 9, 1988), citing the case of Cooperative Rural Bank of Davao City, Inc. vs. Pura Ferrer-Calleja, G.R. No. 77951, September 26,1988, where it was held that: A cooperative, therefore, is by its nature different from an ordinary business concern being run either, by persons, partnerships or corporations. Its owners and/or members are the ones who run and operate the business while the others are its employees. As above stated, irrespective of the name of shares owned by its members they are entitled to cast one vote each in deciding upon the affair of the cooperative. Their share capital earn limited interests, They enjoy special privileges as exemption from income tax and sales taxes, preferential right to supply their products to State agencies and even exemption from minimum wage laws. An employee therefore of such a cooperative who is a member and coowner thereof cannot invoke the right to collective bargaining for certainly an owner cannot bargain with himself or his co-owners. In the opinion of August 14, 1981 of the Solicitor General, he corectly opined that employees of cooperatives who are themselves members of the cooperative have no right to form or join labor organizations for purposes of collective bargaining for being themselves co-owners of the cooperative. However, in so far as it involves cooperatives with employees who are not members or co-owners thereof, certainly such employees are entitled to exercise the rights of all workers to organization, collective bargaining, negotiations and others as are enshrined in the Constitution and existing laws of the country. In this petition, San Jose City Electric Service Cooperative, Inc. (SAJELCO) claims that its employees are also members of the cooperative. It cited Section 17(18) of its By-laws which declares that: The Board shall also create positions for subordinate employees and fix their duties and remunerations. Only member-consumers or members of their immediate family shall be employed by the cooperative (Emphasis supplied).

The above-cited provision, however, mentions two types of employees, namely: the members-consumers and the members of their immediate families. As regards employees of SAJELCO who are membersconsumers, the rule is settled that they are not qualified to form, join or assist labor organizations for purposes of collective bargaining. The reason for withholding from employees of a cooperative who are members-co-owners the right to collective bargaining is clear: an owner cannot bargain with himself. However, employees who are not members-consumers may form, join or assist labor organizations for purposes of collective bargaining notwithstanding the fact that employees of SAJELCO who are not members-consumers were employed ONLY because they are members of the immediate family of members-consumers. The fact remains that they are not themselves members-consumers, and as such, they are entitled to exercise the rights of all workers to organization, collective bargaining, negotiations and others as are enshrined in Section 8, Article III and Section 3, Article XIII of the 1987 Constitution, Labor Code of the Philippines and other related laws (Cooperative Rural Bank of Davao City, Inc., supra, p. 10). ACCORDINGLY, the petition is GRANTED. The assailed Order of respondent Pura Ferrer-Calleja, Director of the Bureau of Labor Relations is hereby MODIFIED to the effect that only the rank-and-file employees of petitioner who are not its members-consumers are entitled to self-organization, collective bargaining, and negotiations, while other employees who are members-consumers thereof cannot enjoy such right. The direct certification election conducted on April 13, 1987 is hereby set aside. The Regional Office III of the Department of Labor and Employment in San Fernando, Pampanga is hereby directed: (a) to determine the number of rank and file employees of SAJELCO who are not themselves members-consumers; (b) to resolve whether or not there is compliance with the requirements set forth in Article 257 of the Labor Code; and (c) in the affirmative, to immediately conduct a direct certification election among the rank and file employees of SAJELCO who are not members-consumers.


Narvasa, Cruz, Gancayco and Grio-Aquino, JJ., concur.

Republic of the Philippines SUPREME COURT Manila



CRUZ, J.:p The law looks with disfavor upon quitclaims and releases by employees who are inveigled or pressured into signing them by unscrupulous employers seeking to evade their legal responsibilities. On the other hand, there are legitimate waivers that represent a voluntary settlement of laborer's claims that should be respected by the courts as the law between the parties. In the case at bar, the petitioners claim that they were forced to sign their respective releases in favor of their employer, the herein private respondent, by reason of their dire necessity. The latter, for its part, insists that the petitioner entered into the compromise agreement freely and with open eyes and should not now be permitted to reject their solemn commitments. The controversy began when the petitioners, along with several coemployees, filed a complaint against the private respondent for unfair labor practices, underpayment, and non-payment of overtime, holiday, and other benefits. This was decided in favor of the complainants on

October 6,1987. The motion for reconsideration, which was treated as an appeal, was dismissed in a resolution dated February 17, 1988, the dispositive portion of which read as follows: WHEREFORE, the instant appeal is hereby DISMISSED and the questioned Order affirmed with the modification that the monetary awards to Jeric Dequito, Custodio Ganuhay Conrado Mori and Rogelio Veloso are hereby deleted for being settled. Let execution push through with respect to the awards to Alfredo Veloso and Edito Liguaton. On February 23, 1988, the private respondent filed a motion for reconsideration and recomputation of the amount awarded to the petitioners. On April 15, 1988, while the motion was pending, petitioner Alfredo Veloso, through his wife Connie, signed a Quitclaim and Release for and in consideration of P25,000.00, 1 and on the same day his counsel, Atty. Gaga Mauna, manifested "Satisfaction of Judgment" by receipt of the said sum by Veloso. 2 For his part, petitioner Liguaton filed a motion to dismiss dated July 16, 1988, based on a Release and Quitclaim dated July 19,1988 , 3 for and in consideration of the sum of P20,000.00 he acknowledged to have received from the private respondent. 4 These releases were later impugned by the petitioners on September 20, 1988, on the ground that they were constrained to sign the documents because of their "extreme necessity." In an Order dated December 16, 1988, the Undersecretary of Labor rejected their contention and ruled: IN VIEW THEREOF, complainants Motion to Declare Quitclaim Null and Void is hereby denied for lack of merit and the compromise agreements/settlements dated April 15, 1988 and July 19, 1988 are hereby approved. Respondents' motion for reconsideration is hereby denied for being moot and academic. Reconsideration of the order having been denied on March 7, 1989, the petitioners have come to this Court on certiorari. They ask that the quitclaims they have signed be annulled and that writs of execution be issued for the sum of P21,267.92 in favor of Veloso and the sum of P26,267.92 in favor of Liguaton in settlement of their claims.

Their petition is based primarily on Pampanga Sugar Development Co., Inc. v. Court of Industrial Relations, 5 where it was held: ... while rights may be waived, the same must not be contrary to law, public order, public policy, morals or good customs or prejudicial to a third person with a right recognized by law. (Art. 6, New Civil Code) ... The above-quoted provision renders the quitclaim agreements void ab initio in their entirety since they obligated the workers concerned to forego their benefits, while at the same time, exempted the petitioner from any liability that it may choose to reject. This runs counter to Art. 22 of the new Civil Code which provides that no one shall be unjustly enriched at the expense of another. The Court had deliberated on the issues and the arguments of the parties and finds that the petition must fail. The exception and not the rule shall be applied in this case. The case cited is not apropos because the quitclaims therein invoked were secured by the employer after it had already lost in the lower court and were subsequently rejected by this Court when the employer invoked it in a petition for certiorari. By contrast, the quitclaims in the case before us were signed by the petitioners while the motion for reconsideration was still pending in the DOLE, which finally deemed it on March 7, 1989. Furthermore, the quitclaims in the cited case were entered into without leave of the lower court whereas in the case at bar the quitclaims were made with the knowledge and approval of the DOLE, which declared in its order of December 16, 1988, that "the compromise agreement/settlements dated April 15, 1988 and July 19, 1988 are hereby approved." It is also noteworthy that the quitclaims were voluntarily and knowingly made by both petitioners even if they may now deny this. In the case of Veloso, the quitclaim he had signed carried the notation that the sum stated therein had been paid to him in the presence of Atty. Gaga Mauna, his counsel, and the document was attested by Atty. Ferdinand Magabilin, Chief of the Industrial Relations Division of the National Capitol Region of the DOLE. In the case of Liguaton, his quitclaim was made with the assistance of his counsel, Atty. Leopoldo Balguma, who also notarized it and later confirmed it with the filing of the motion to dismiss Liguaton's complaint.

The same Atty. Balguma is the petitioners' counsel in this proceeding. Curiously, he is now challenging the very same quitclaim of Liguaton that he himself notarized and invoked as the basis of Liguaton's motion to dismiss, but this time for a different reason. whereas he had earlier argued for Liguaton that the latter's signature was a forgery, he has abandoned that contention and now claims that the quitclaim had been executed because of the petitioners' dire necessity. "Dire necessity" is not an acceptable ground for annulling the releases, especially since it has not been shown that the employees had been forced to execute them. It has not even been proven that the considerations for the quitclaims were unconscionably low and that the petitioners had been tricked into accepting them. While it is true that the writ of execution dated November 24, 1987, called for the collection of the amount of P46,267.92 each for the petitioners, that amount was still subject to recomputation and modification as the private respondent's motion for reconsideration was still pending before the DOLE. The fact that the petitioners accepted the lower amounts would suggest that the original award was exorbitant and they were apprehensive that it would be adjusted and reduced. In any event, no deception has been established on the part of the Private respondent that would justify the annulment of the Petitioners' quitclaims. The applicable law is Article 227 of the Labor Code providing clearly as follows: Art. 227. Compromise agreements. Any compromise settlement, including those involving labor standard laws, voluntarily agreed upon by the parties with the assistance of the Bureau or the regional office of the Department of Labor, shall be final and binding upon the parties. The National Labor Relations Commission or any court shall not assume jurisdiction over issues involved therein except in case of noncompliance thereof or if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation or coercion. The petitioners cannot renege on their agreement simply because they may now feel they made a mistake in not awaiting the resolution of the private respondent's motion for reconsideration and recomputation. The possibility that the original award might have been affirmed does

not justify the invalidation of the perfectly valid compromise agreements they had entered into in good faith and with full voluntariness. In General Rubber and Footwear Corp. vs. Drilon, 6 we "made clear that the Court is not saying that accrued money claims can never be effectively waived by workers and employees." As we later declared in Periquet v. NLRC: 7

Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply because of a change of mind. It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will step in to annul the questionable transaction. But where it is shown that the person making the waiver did so voluntarily, with full understanding of what he was doing, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking. As in this case. We find that the questioned quitclaims were voluntarily and knowingly executed and that the petitioners should not be relieved of their waivers on the ground that they now feel they were improvident in agreeing to the compromise. What they call their "dire necessity" then is no warrant to nullify their solemn undertaking, which cannot be any less binding on them simply because they are laborers and deserve the protection of the Constitution. The Constitution protects the just, and it is not the petitioners in this case. WHEREFORE, the petition is DISMISSED, with costs against the petitioners. It is so ordered. Narvasa (Chairman), Gancayco, Grio-Aquino and Medialdea, JJ., concur.

Republic of the Philippines SUPREME COURT Manila


G.R. Nos. 43633-34 September 14, 1990 PABLO ARIZALA, SERGIO MARIBAO, LEONARDO JOVEN, and FELINO BULANDUS, petitioners, vs. THE COURT OF APPEALS and THE PEOPLE OF THE PHILIPPINES, respondents. Januario T. Seno for petitioners. NARVASA, J.: Under the Industrial Peace Act, 1 government-owned or controlled corporations had the duty to bargain collectively and were otherwise subject to the obligations and duties of employers in the private sector.

2 The Act also prohibited supervisors to become, or continue to be, members of labor organizations composed of rank-and-file employees, 3 and prescribed criminal sanctions for breach of the prohibition. 4 It was under the regime of said Industrial Peace Act that the Government Service Insurance System (GSIS, for short) became bound by a collective bargaining agreement executed between it and the labor organization representing the majority of its employees, the GSIS Employees Association. The agreement contained a "maintenance-ofmembership" clause, 5 i.e., that all employees who, at the time of the execution of said agreement, were members of the union or became members thereafter, were obliged to maintain their union membership in good standing for the duration of the agreement as a condition for their continued employment in the GSIS. There appears to be no dispute that at that time, the petitioners occupied supervisory positions in the GSIS. Pablo Arizala and Sergio Maribao were, respectively, the Chief of the Accounting Division, and the Chief of the Billing Section of said Division, in the Central Visayas Regional Office of the GSIS. Leonardo Joven and Felino Bulandus were, respectively, the Assistant Chief of the Accounting Division (sometimes Acting Chief in the absence of the Chief) and the Assistant Chief of the Field Service and Non-Life Insurance Division (and Acting Division Chief in the absence of the Chief), of the same Central Visayas Regional Office of the GSIS. Demands were made on all four of them to resign from the GSIS Employees Association, in view of their supervisory positions. They refused to do so. Consequently, two (2) criminal cases for violation of the Industrial Peace Act were lodged against them in the City Court of Cebu: one involving Arizala and Maribao 6 and the other, Joven and Bulandus. 7 Both criminal actions resulted in the conviction of the accused in separate decisions. 8 They were each sentenced "to pay a fine of P 500.00 or to suffer subsidiary imprisonment in case of insolvency." They appealed to the Court of Appeals. 9 Arizala's and Maribao's appeal was docketed as CA-G.R. No. 14724-CR; that of Joven and Bulandus, as CAG.R. No. 14856-CR. The appeals were consolidated on motion of the appellants, and eventuated in a judgment promulgated on January 29, 1976 affirming

the convictions of all four appellants. The appellants moved for reconsideration. They argued that when the so called "1973 Constitution" took effect on January 17, 1973 pursuant to Proclamation No. 1104, the case of Arizala and Maribao was still pending in the Court of Appeals and that of Joven and Bulandus, pending decision in the City Court of Cebu; that since the provisions of that constitution and of the Labor Code subsequently promulgated (eff., November 1, 1974), repealing the Industrial Peace Act-placed employees of all categories in government-owned or controlled corporations without distinction within the Civil Service, and provided that the terms and conditions of their employment were to be "governed by the Civil Service Law, rules and regulations" and hence, no longer subject of collective bargaining, the appellants ceased to fall within the coverage of the Industrial Peace Act and should thus no longer continue to be prosecuted and exposed to punishment for a violation thereof. They pointed out further that the criminal sanction in the Industrial Peace Act no longer appeared in the Labor Code. The Appellate Court denied their plea for reconsideration. Hence, the present petition for review on certiorari. The crucial issue obviously is whether or not the petitioners' criminal liability for a violation of the Industrial Peace Act may be deemed to have been obliterated in virtue of subsequent legislation and the provisions of the 1973 and 1987 Constitutions. The petitioners' contention that their liability had been erased is made to rest upon the following premises: 1. Section 1, Article XII-B of the 1973 Constitution does indeed provide that the "Civil Service embraces every branch, agency, subdivision and instrumentality of the government, including government-owned or controlled corporations, .. administered by an independent Civil Service Commission. 2. Article 292 of the Labor Code repealed such parts and provisions of the Industrial Peace Act as were "not adopted as part" of said Code "either directly or by reference." The Code did not adopt the provision of the Industrial Peace Act conferring on employees of governmentowned or controlled corporations the right of self-organization and collective bargaining; in fact it made known that the "terms and conditions of employment of all government employees, including

employees of government-owned and controlled corporations," would thenceforth no longer be fixed by collective bargaining but "be governed by the Civil Service Law, rules and regulations." 10

3. The specific penalty for violation of the prohibition on supervisors being members in a labor organization of employees under their supervision has disappeared. 4. The Code also modified the concept of unfair labor practice, decreeing that thenceforth, "it shall be considered merely as an administrative offense rather than a criminal offense (and that) (u)nfair labor practice complaints shall x x be processed like any ordinary labor disputes." 11 On the other hand, in justification of the Appellate Tribunal's affirmance of the petitioners' convictions of violations of the Industrial Peace Act, the People1) advert to the fact that said Labor Code also states that "all actions or claims accruing prior to ... (its) effectivity ... shall be determined in accordance with the laws in force at the time of their accrual;" and 2) argue that the legislature cannot generally intervene and vacate the judgment of the courts, either directly or indirectly, by the repeal of the statute under which said judgment has been rendered. The legal principles governing the rights of self-organization and collective bargaining of rank-and-file employees in the governmentparticularly as regards supervisory, and high level or managerial employees have undergone alterations through the years. Republic Act No. 875 As already intimated, under RA 875 (the Industry Peace Act), 12 persons "employed in proprietary functions of the Government, including but not limited to governmental corporations," had the right of self-organization and collective bargaining, including the right to engage in concerted activities to attain their objectives, e.g. strikes. But those "employed in governmental functions" were forbidden to "strike for the purpose of securing changes or modification in their terms and conditions of employment" or join labor organizations which

imposed on their members the duty to strike. The reason obviously was that the terms and conditions of their employment were "governed by law" and hence could not be fixed, altered or otherwise modified by collective bargaining. Supervisory employees were forbidden to join labor organizations composed of employees under them, but could form their own unions. Considered "supervisors' were those 'having authority in the interest of an employer to hire, transfer, suspend, lay-off, recall, discharge, assign, recommend, or discipline other employees, or responsibly to direct them, and to adjust their grievance or effectively to recommend such acts if, in connection with the foregoing, the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment." 13 Republic Act No. 2260

Similar provisions were found in R.A. No. 2260, the Civil Service Act of 1959. This Act declared that the "Philippine Civil Service ... (embraced) all branches, subdivisions and instrumentalities of the government including government-owned and controlled corporations." 14 It prohibited such civil service employees who were "employed in governmental functions" to belong to any labor organization which imposed on their members "the obligation to strike or to join strikes." And one of the first issuances of the President after the proclamation of martial law in September, 1972, was General Order No. 5 which inter alia banned strikes in vital industries," as well as 'all rallies, demonstrations and other forms of group actions." 15 Not so prohibited, however, were those "employed in proprietary functions of the Government including, but not limited to, governmental corporations." 16 The Act also penalized any person who "violates, refuses or neglects to comply with any ... provisions (of the Act) or rules (thereunder promulgated) ... by a fine not exceeding one thousand pesos or by imprisonment not exceeding six months or both such fine and imprisonment in the discretion of the court." 17 The 1973 Constitution

The 1973 Constitution laid down the broad principle that "(t)he State shall assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work," 18 and directed that the "National Assembly shall provide for the standardization of compensation of government officials and employees, including those in government-owned or controlled corporations, taking into account the nature of the responsibilities pertaining to, and the qualifications required for, the positions concerned." 19 PD 442, The Labor Code The Labor Code of the Philippines, Presidential Decree No. 442, enacted within a year from effectivity of the 1973 Constitution, 20 incorporated the proposition that the "terms and conditions of employment of all government employees, including employees of government-owned and controlled corporations ... (are) governed by the Civil Service Law, rules and regulations." 21 It incorporated, too, the constitutional mandate that the salaries of said employees "shall be standardized by the National Assembly." The Labor Code, 22 however "exempted" government employees from the right to self-organization for purposes of collective bargaining. While the Code contained provisions acknowledging the right of "all persons employed in commercial, industrial and agricultural enterprises, including religious, medical or educational institutions operating for profit" to "self-organization and to form, join or assist labor organizations for purposes of collective bargaining," they "exempted from the foregoing provisions: a) security guards; b) government employees, including employees of government government-owned and/ or controlled corporations; c) managerial employees; and d) employees of religious, charitable, medical and educational institutions not operating for profit, provided the latter do not have existing collective agreements or recognized unions at the time of the effectivity of the code or have voluntarily waived their exemption." 23

The reason for denying to government employees the right to "selforganization and to form, join or assist labor organizations for purposes of collective bargaining" is presumably the same as that under the Industrial Peace Act, i.e., that the terms and conditions of government employment are fixed by law and not by collective bargaining. Some inconsistency appears to have arisen between the Labor Code and the Civil Service Act of 1959. Under the Civil Service Act, persons "employed in proprietary functions of the government including, but not limited to, governmental corporations'-not being within "the policy of the Government that the employees therein shall not strike for the purpose of securing changes in their terms and conditions of employment"-could legitimately bargain with their respective employers through their labor organizations, and corollarily engage in strikes and other concerted activities in an attempt to bring about changes in the conditions of their work. They could not however do so under the Labor Code and its Implementing Rules and Regulations; these provided that "government employees, including employees of government-owned and/or controlled corporations," without distinction as to function, were "exempted" (excluded is the better term) from "the right to self-organization and to form, join or assist labor organizations for purposes of collective bargaining," and by implication, excluded as well from the right to engage in concerted activities, such as strikes, as coercive measures against their employers. Members of supervisory unions who were not managerial employees, were declared by the Labor Code to be "eligible to join or assist the rank and file labor organization, and if none exists, to form or assist in the forming of such rank and file organization " 24 Managerial employees, on the other hand, were pronounced as 'not eligible to join, assist or form any labor organization." 25 A "managerial employee" was defined as one vested with power or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such managerial actions." 26 Presidential Decree No. 807 Clarification of the matter seems to have been very shortly attempted by the Civil Service Decree of the Philippines, Presidential Decree No.

807 (eff., Oct. 6,1975) which superseded the Civil Service Law of 1959 (RA 2260) 27 and repealed or modified "all laws, rules and regulations or parts thereof inconsistent with the provisions" thereof. The Decree categorically described the scope and coverage of the "Civil Service" as embracing 44 every branch, agency, subdivision, and instrumentality of the government, including every government owned or controlled corporation whether performing governmental or propriety function. 28 The effect was seemingly to prohibit government employees (including those "employed in proprietary functions of the Government") to "strike for the purpose of securing changes of their terms and conditions of employment," 29 something which, as aforestated, they were allowed to do under the Civil Service Act of 1959. 30 Be this as it may it seems clear that PD 807 (the Civil Service Decree) did not modify the declared ineligibility of "managerial employees" from joining, assisting or forming any labor organization. Executive Order No. 111 Executive Order No. 111, issued by President Corazon C. Aquino on December 24, 1986 in the exercise of legislative powers under the Freedom Constitution, modified the general disqualification above mentioned of 'government employees, including employees of government-owned and/or controlled corporations" from "the right to self-organization and to form, join or assist labor organizations for purposes of collective bargaining.' It granted to employees "of government corporations established under the Corporation Code x x the right to organize and to bargain collectively with their respective employers." 31 To all 'other employees in the civil service, ... (it granted merely) the right to form associations for purposes not contrary to law," 32 not for "purposes of collective bargaining." The 1987 Constitution The provisions of the present Constitution on the matter appear to be somewhat more extensive. They declare that the "right to self organization shall not be denied to government employees;" 33 that the State "shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law;" and that

said workers "shall be entitled to security of tenure, humane conditions of work, and a living wage, ... (and) also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. 34 CSC Memorandum Circular No. 6 Memorandum Circular No. 6 of the Civil Service Commission, issued on April 21, 1987 enjoined strikes by government officials and employees, to wit: 35 ... Prior to the enactment by Congress of applicable laws concerning strike by government employees, and considering that there are existing laws which prohibit government officials and employees from resorting to strike, the Commission enjoins, under pain of administrative sanctions, all government officers and employees from staging strikes, demonstrations, mass leaves, walk-outs and other forms of mass action which will result in temporary stoppage or disruption of public services. To allow otherwise is to undermine or prejudice the government system. Executive Order No. 180 The scope of the constitutional right to self-organization of "government employees" above mentioned, was defined and delineated in Executive Order No. 180 (eff. June 1, 1987). According to this Executive Order, the right of self-organization does indeed pertain to all "employees of all branches, subdivisions, instrumentalities and agencies of the Government, including government-owned or controlled corporations with original charters;" 36 such employees "shall not be discriminated against in respect of their employment by reason of their membership in employees' organizations or participation in the normal activities of their organization x x (and their) employment shall not be subject to the condition that they shall not join or shall relinquish their membership in the employees' organizations. 37 However, the concept of the government employees' right of selforganization differs significantly from that of employees in the private sector. The latter's right of self-organization, i.e., "to form, join or assist labor organizations for purposes of collective bargaining," admittedly

includes the right to deal and negotiate with their respective employers in order to fix the terms and conditions of employment and also, to engage in concerted activities for the attainment of their objectives, such as strikes, picketing, boycotts. But the right of government employees to "form, join or assist employees organizations of their own choosing" under Executive Order No. 180 is not regarded as existing or available for "purposes of collective bargaining," but simply "for the furtherance and protection of their interests." 38 In other words, the right of Government employees to deal and negotiate with their respective employers is not quite as extensive as that of private employees. Excluded from negotiation by government employees are the "terms and conditions of employment ... that are fixed by law," it being only those terms and conditions not otherwise fixed by law that "may be subject of negotiation between the duly recognized employees' organizations and appropriate government authorities," 39 And while EO No. 180 concedes to government employees, like their counterparts in the private sector, the right to engage in concerted activities, including the right to strike, the executive order is quick to add that those activities must be exercised in accordance with law, i.e. are subject both to "Civil Service Law and rules" and "any legislation that may be enacted by Congress," 40 that "the resolution of complaints, grievances and cases involving government employees" is not ordinarily left to collective bargaining or other related concerted activities, but to "Civil Service Law and labor laws and procedures whenever applicable;" and that in case "any dispute remains unresolved after exhausting all available remedies under existing laws and procedures, the parties may jointly refer the dispute to the (Public Sector Labor-Management) Council for appropriate action." 41 What is more, the Rules and Regulations implementing Executive Order No. 180 explicitly provide that since the "terms and conditions of employment in the government, including any political subdivision or instrumentality thereof and government-owned and controlled corporations with original charters are governed by law, the employees therein shall not strike for the purpose of securing changes thereof. 42 On the matter of limitations on membership in labor unions of government employees, Executive Order No. 180 declares that "high

level employees whose functions are normally considered as policy making or managerial, or whose duties are of a highly confidential nature shall not be eligible to join the organization of rank-and-file government employees. 43 A "high level employee" is one "whose functions are normally considered policy determining, managerial or one whose duties are highly confidential in nature. A managerial function refers to the exercise of powers such as: 1. To effectively recommend such managerial actions; 2. To formulate or execute management policies and decisions; or 3. To hire, transfer, suspend, lay off, recall, dismiss, assign or discipline employees. 44

Republic Act No. 6715 The rule regarding membership in labor organizations of managerial and supervisory employees just adverted to, was clarified and refined by Republic Act No. 6715, effective on March 21, 1989, further amending the Labor Code. Under RA 6715 labor unions are regarded as organized either (a) "for purposes of negotiation," or (b) "for furtherance and protection"of the members' rights. Membership in unions organized "for purposes of negotiation" is open only to rank-and-file employees. "Supervisory employees" are ineligible "for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own," i.e., one organized "for furtherance and protection" of their rights and interests. However, according to the Rules implementing RA 6715, "supervisory employees who are included in an existing rank-and- file bargaining unit, upon the effectivity of Republic Act No. 6715 shall remain in that unit ..." Supervisory employees are "those who, in the interest of the employer, effectively recommend such managerial actions 45 if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. 46 Membership in employees' organizations formed for purposes of negotiation are open to rank-and-file employees only, as above mentioned, and not to high level employees. 47 Indeed, "managerial employees" or "high level employees" are, to repeat, "not eligible to join, assist or form any labor organization" at all. 48 A 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." 49 This is how the law now stands, particularly with respect to supervisory employees vis a vis labor organizations of employees under them. Now, the GSIS performs proprietary functions. It is a non-stock corporation, managed by a Board of Trustees exercising the "usual corporate powers." 50 In other words, it exercises all the powers of a corporation under the Corporation Law in so far as they are not otherwise inconsistent with other applicable law. 51 It is engaged essentially in insurance, a business that "is not inherently or exclusively a governmental function, ... (but) is on the contrary, in essence and practice, of a private nature and interest." 52 1. The petitioners contend that the right of self-organization and collectivebargaining had been withdrawn by the Labor Code from government employees including those in government-owned and controlled corporations- chiefly for the reason that the terms and conditions of government employment, all embraced in civil service, may not be modified by collective bargaining because set by law. It is therefore immaterial, they say, whether supervisors are members of rank-and-file unions or not; after all, the possibility of the employer's control of the members of the union thru supervisors thus rendering collective bargaining illusory, which is the main reason for the prohibition, is no longer of any consequence.

This was true, for a time. As already discussed, both under the Labor Code and PD 807, government employees, including those in government-owned or controlled corporations, were indeed precluded from bargaining as regards terms and conditions of employment because these were set by law and hence could not possibly be altered by negotiation. But EO 111 restored the right to organize and to negotiate and bargain of employees of "government corporations established under the Corporation Code." And EO 180, and apparently RA 6715, too, granted to all government employees the right of collective bargaining or

negotiation except as regards those terms of their employment which were fixed by law; and as to said terms fixed by law, they were prohibited to strike to obtain changes thereof. 2. The petitioners appear to be correct in their view of the disappearance from the law of the prohibition on supervisors being members of labor organizations composed of employees under their supervision. The Labor Code (PD 442) allowed supervisors (if not managerial) to join rank-and-file unions. And under the Implementing Rules of RA 6715, supervisors who were members of existing labor organizations on the effectivity of said RA 6715 were explicitly authorized to "remain therein." 3. The correctness of the petitioners' theory that unfair labor practices ceased to be crimes and were deemed merely administrative offenses in virtue of the Labor Code, cannot be gainsaid. Article 250 of the Labor Code did provide as follows: ART. 250. Concept of unfair labor practice.-The concept of unfair labor practice is hereby modified. Henceforth, it shall be considered merely as an administrative offense rather than a criminal offense. Unfair labor practice complaints shall, therefore, be processed like any ordinary labor disputes. But unfair labor practices were declared to be crimes again by later amendments of the Labor Code effected by Batas Pambansa Blg. 70, approved on May 1, 1980. As thus amended, the Code now pertinently reads as follows: ART. 248. Concept of unfair labor practice and procedure for prosecution thereof. Unfair labor practices violate the right of workers and employees to self organization, are inimical to the legitimate interests of both labor and management including their right to bargain collectively and otherwise deal with each other in an atmosphere of freedom and mutual respect, and hinder the promotion of healthy and stable labor management relations. Consequently, unfair labor practices are not only violations of the civil rights of both labor and management but are also offenses against the State which shall be subject to prosecution and punishment as herein provided.

Recovery of civil liability in the administrative proceedings shall bar recovery under the Civil Code. No criminal prosecution under this title may be instituted without a final judgment, finding that an unfair labor practice was committed having been first obtained in the preceding paragraph. ...

The decisive consideration is that at present, supervisors who were already members of a rank-and-file labor organization at the time of the effectivity of R.A. No. 6715, are authorized to "remain therein." It seems plain, in other words, that the maintenance by supervisors of membership in a rank-and-file labor organization even after the enactment of a statute imposing a prohibition on such membership, is not only not a crime, but is explicitly allowed, under present law. Now, in a case decided as early as 1935, People v. Tamayo, 53 where the appellants had appealed from a judgment convicting them of a violation of a municipal -ordinance, and while their appeal was pending, the ordinance was repealed such that the act complained of ceased to be a criminal act but became legal, this Court dismissed the criminal proceedings, pronouncing the effects of the repeal to be as follows: In the leading case of the United States vs. Cuna (12 Phil. 241), and Wing vs. United States (218 U.S. 272), the doctrine was clearly established that in the Philippines repeal of a criminal act by its reenactment, even without a saving clause would not destroy criminal liability. But not a single sentence in either derision indicates that there was any desire to hold that a person could be prosecuted convicted, and punished for acts no longer criminal. There is no question that at common law and in America a much more favorable attitude towards the accused exists relative to statutes that have been repealed than has been adopted here. Our rule is more in conformity with the Spanish doctrine, but even in Spain, where the offense ceased to be criminal, petition cannot be had (1 Pacheco, Commentaries, 296). The repeal here was absolute and not a reenactment and repeal by implication. Nor was there any saving clause. The legislative intent as shown by the action of the municipal is that such conduct, formerly

denounced, is no longer deemed criminal, and it would be illogical for this court to attempt to sentence appellant for the offense that no longer exists. We are therefore of the opinion that the proceedings against appellant must be dismissed. To the same effect and in even more unmistakable language is People v. Almuete 54 where the defendants-appellees were charged under section 39 of Republic Act No. 1199, as amended (the Agricultural Land Tenancy Law of 1954) which penalized pre-threshing by either agricultural tenant or his landlord. They sought and secured a dismissal on the ground, among others, that there was no law punishing the act charged-a reference to the fact that Republic Act No. 1199 had already been superseded by the Agricultural Land Reform Code of 1963 which instituted the leasehold system and abolished share tenancy subject to certain conditions. On appeal by the Government, this Court upheld the dismissal, saying: The legislative intent not to punish anymore the tenant's act of prereaping and pre-threshing without notice to the landlord is inferable from the fact that, as already noted, the Code of Agrarian Reforms did not reenact section 39 of the Agricultural Tenancy Law and that it abolished share tenancy which is the basis for penalizing clandestine pre-reaping and pre-threshing. As held in the Adillo case, 55 the act of pre-reaping and pre-threshing without notice to the landlord, which is an offense under the Agricultural Tenancy Law, had ceased to be an offense under the subsequent law, the Code of Agrarian Reforms. To prosecute it as an offense when the Code of Agrarian Reforms is already in force would be repugnant or abhorrent to the policy and spirit of that Code and would subvert the manifest legislative intent not to punish anymore prereaping and pre-threshing without notice to the landholder. The repeal of a penal law deprives the courts of jurisdiction to punish persons charged with a violation of the old penal law prior to its repeal (People vs. Tamayo, 61 Phil. 225; People vs. Sindiong and Pastor, 77 Phil. 1000; People vs. Binuya, 61 Phil. 208; U.S. vs. Reyes, 10 Phil. 423; U.S. vs. Academia, 10 Phil. 431. See dissent in Lagrimas vs. Director of Prisons, 57 Phil. 247, 252, 254).

The foregoing precedents dictate absolution of the appellants of the offenses imputed to them. WHEREFORE, the judgments of conviction in CA-G.R. No. 14724-CR and CA-G.R. No. 14856-CR, subject of the appeal, as well as those in Crim. Case No. 5275-R and Crim. Case No. 4130-R rendered by the Trial Court, are REVERSED and the accused-appellants ACQUITTED of the charges against them, with