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001 De La Salle v.

De La Salle University Employees Association


[G.R. No. 110072. April 12, 2000
TOPIC: Rule Bargaining Unit
PONENTE: Buena, J.:
FACTS: (chronological order)
1. On December 1986, Dela Salle University (hereinafter referred to as UNIVERSITY) and Dela Salle University Employees
Association - National Federation of Teachers and Employees Union (DLSUEA-NAFTEU), which is composed of regular
non-academic rank and file employees, (hereinafter referred to as UNION) entered into a collective bargaining agreement
with a life span of three (3) years, that is, from December 23, 1986 to December 22, 1989.
2.

During the freedom period, or 60 days before the expiration of the said collective bargaining agreement, the Union
initiated negotiations with the University for a new collective bargaining agreement which, however, turned out to be
unsuccessful, hence, the Union filed a Notice of Strike with the National Conciliation and Mediation Board, National
Capital Region.

3.

After several conciliation-mediation meetings, five (5) out of the eleven (11) issues raised in the Notice of Strike were
resolved by the parties. A partial collective bargaining agreement was thereafter executed by the parties.

4.

On March 18, 1991, the parties entered into a Submission Agreement, identifying the remaining six (6) unresolved issues
for arbitration, namely: "(1) scope of the bargaining unit, (2) union security clause, (3) security of tenure, (4) salary
increases for the third and fourth years [this should properly read second and third years] of the collective bargaining
agreement, (5) indefinite union leave, reduction of the union presidents workload, special leave, and finally, (6) duration of
the agreement." The parties appointed Magsalin as voluntary arbitrator.

5.

On January 19, 1993, the voluntary arbitrator rendered the decision: in the first issue nvolving the scope of the bargaining
unit, ruled that "the Computer Operators assigned at the CSC [Computer Services Center], just like any other Computer
Operators in other units, [should be] included as members of the bargaining unit," after finding that "[e]vidently, the
Computer Operators are presently doing clerical and routinary work and had nothing to do with [the] setting of
management policies for the University, as [may be] gleaned from the duties and responsibilities attached to the position
and embodied in the CSC [Computer Services Center] brochure. They may have, as argued by the University, access to
vital information regarding the Universitys operations but they are not necessarily confidential." Regarding the discipline
officers, the voluntary arbitrator "believes that this type of employees belong (sic) to the rank-and-file on the basis of the
nature of their job." With respect to the employees of the College of St. Benilde, the voluntary arbitrator found that the
College of St. Benilde has a personality separate and distinct from the University and thus, held "that the employees therein
are outside the bargaining unit of the Universitys rank-and-file employees.
the University filed with the Second Division of this Court, a petition for certiorari with temporary restraining order and/or
preliminary injunction assailing the decision of the voluntary arbitrator, as having been rendered "in excess of jurisdiction
and/or with grave abuse of discretion."

6.

Petitioner Contention: the University argues that they are confidential employees and that the Union has already recognized
the confidential nature of their functions According to the University, the Computer Services Center, where these computer
operators work, "processes data that are needed by management for strategic planning and evaluation of systems. It also
houses the Universitys confidential records and information. Moreover, the Computer Operators are in fact the repository
of the Universitys confidential information and data, including those involving and/or pertinent to labor relations.
As to the discipline officers, the University maintains that "they are likewise excluded from the bargaining unit of the rank-and-file
employees under the parties 1986 CBA. The Discipline Officers are clearly alter egos of management as they perform tasks which
are inherent in management [e.g. enforce discipline] The University also alleges that "the Discipline Officers are privy to highly
confidential information ordinarily accessible only to management."
With regard to the employees of the College of St. Benilde, the Union, supported by the Solicitor General at this point, asserts that
the veil of corporate fiction should be pierced, thus, according to the Union, the University and the College of St. Benilde should be
considered as only one entity because the latter is but a mere integral part of the University.
ISSUE(S): whether the computer operators assigned at the Universitys Computer Services Center and the Universitys discipline
officers may be considered as confidential employees and should therefore be excluded from the bargaining unit which is composed
of rank and file employees of the University, and whether the employees of the College of St. Benilde should also be included in the
same bargaining unit;
HELD: NO.
RATIO:

The Court agrees with the Solicitor General that the express exclusion of the computer operators and discipline officers from the
bargaining unit of rank-and-file employees in the 1986 collective bargaining agreement does not bar any re-negotiation for the
future inclusion of the said employees in the bargaining unit.
During the freedom period, the parties may not only renew the existing collective bargaining agreement but may also propose and
discuss modifications or amendments thereto.
With regard to the alleged confidential nature of the said employees functions, after a careful consideration of the pleadings filed
before this Court, we rule that the said computer operators and discipline officers are not confidential employees. As carefully
examined by the Solicitor General, the service record of a computer operator reveals that his duties are basically clerical and
non-confidential in nature. As to the discipline officers, we agree with the voluntary arbitrator that based on the nature of
their duties, they are not confidential employees and should therefore be included in the bargaining unit of rank-and-file
employees.
The Court also affirms the findings of the voluntary arbitrator that the employees of the College of St. Benilde should be excluded
from the bargaining unit of the rank-and-file employees of Dela Salle University, because the two educational institutions have their
own separate juridical personality and no sufficient evidence was shown to justify the piercing of the veil of corporate fiction.
002 SAN MIGUEL FOODS, INCORPORATED V. SAN MIGUEL CORPORATION SUPERVISORS and EXEMPT
UNION
G.R. No. 146206, August 1, 2011
TOPIC: Bargaining unit
PONENTE: PERALTA, J.
FACTS: (Got the facts from Vans previous digest)
1. G.R. No. 110399 (SMC Supervisors and Exempt Union v. Laguesma) the Court held that:
a. Even if they handle 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, because the same do not pertain to labor relations, particularly, negotiation and settlement of grievances.
THUS, ALLOWED TO FORM AN APPROPRIATE BARGAINING UNIT (ABU) FOR THE PURPOSE OF
COLLECTIVE BARGAINING (CB).
b. Employees belonging to the 3 different plants of SMC Magnolia Poultry Products Plants in Cabuyao, San
Fernando, and Otis, having community or mutuality of interests, constitute a single bargaining unit. They perform
work of the same nature, receive the same wages and compensation, and most importantly, share a common stake in
concerted activities. It was immaterial that the three plants have different locations as they did not impede the
operations of a single bargaining representative.
2. Pursuant to the abovementioned Decision, the DOLE-NCR conducted pre-election conferences. However, there was a
discrepancy in the list of eligible voters.
3. Med Arbiter Daquigan issued an Order directing Election Officer Tolentino to proceed with the conduct of certification
election in accordance with Section 2, Rule XII of DO No. 9.
4. A certification election was conducted.
5. On the date of the election, petitioner questioned the eligibility to vote by some of its employees on the grounds that some
employees do not belong to the bargaining unit which respondent seeks to represent or that there is no existence of
employer-employee relationship with petitioner.
a. That certain employees should not be allowed to vote as they are:
i. confidential employees;
ii. employees assigned to the live chicken operations, which are not covered by the bargaining unit;
iii. employees whose job grade is level 4, but are performing managerial work and scheduled to be promoted;
iv. employees who belong to the Barrio Ugong plant;
v. non-SMFI employees; and
vi. employees who are members of other unions.

6. Med-Arbiter issued an Order 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.
7. Respondent averred that:
a. the bargaining unit contemplated in the original petition is the Poultry Division of San Miguel Corporation, now
known as San Miguel Foods, Inc.;
b. it covered the operations in Calamba, Laguna, Cavite, and Batangas and its home base is either in Cabuyao, Laguna
or San Fernando, Pampanga; and
c. it submitted individual and separate declarations of the employees whose votes were challenged in the election.
8. The certification election was conducted.
9. Med Arbiter Order 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.
10. Acting DOLE Undersecretary affirmed Med Arbiters Decision with modification that Matias, Lozano, Delos Reyes and
Pajaron 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. Partial MoR by Petitioners denied!
11. CA affirmed with modification the DOLE Undersecretary, stating that those holding the positions of Human Resource
Assistant and Personnel Assistant are excluded from the bargaining unit. Partial MoR denied
ISSUE(S): 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.
HELD: NO. The Court affirms the finding of the CA that there should be only one bargaining unit for the employees in Cabuyao,
San Fernando, and Otis 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.
DISPOSITIVE PORTION: 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
RATIO:
1. 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, oneunion 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.
2. In National Association of Free Trade Unions v. Mainit Lumber Development Company Workers Union United Lumber and
General Workers of the Phils, 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 units acceptability is whether or not it is fundamentally
the combination which will best assure to all employees the exercise of their collective bargaining rights. 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.
3. 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 Otis 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.
G.R. No. 160352
July 23, 2008
REPUBLIC OF THE PHILIPPINES, represented by (DOLE) vs.
KAWASHIMA TEXTILE MFG., PHILIPPINES, INC.,
TOPIC: Bargaining Agent, Certification Election Proceedings
PONENTE: AUSTRIA-MARTINEZ, J.:
FACTS: (chronological order)
1. KFWU filed with DOLE Regional Office No. IV, a Petition for Certification Election to be conducted in the bargaining unit
composed of 145 rank-and-file employees of respondent. Attached to its petition are a Certificate of Creation of Local/Chapter
issued on January 19, 2000 by DOLE Regional Office No. IV, stating that it [KFWU] submitted to said office a Charter Certificate
issued to it by the national federation Phil. Transport & General Workers Organization (PTGWO), and a Report of Creation of
Local/Chapter.
2. Respondent filed a Motion to Dismiss the petition on the ground that KFWU did not acquire any legal personality because its
membership of mixed rank-and-file and supervisory employees violated Article 245 of the Labor Code, and its failure to submit its
books of account contravened the ruling of the Court in Progressive Development Corporation v. Secretary, Department of Labor
and Employment.
3. Med-Arbiter Bactin found KFWUs legal personality defective and dismissed its petition for certification election.
4. Reason: at least two (2) members of [KFWU], namely: Dany I. Fernandez and Jesus R. Quinto, Jr. are supervisory employees,
having a number of personnel under them. Being supervisory employees, they are prohibited under Article 245 of the Labor Code,
as amended, to join the union of the rank and file employees. Dany I. Fernandez and Jesus R. Quinto, Jr., Chief Engineers of the
Maintenance and Manufacturing Department, respectively, act as foremen to the line engineers, mechanics and other non-skilled
workers and responsible [for] the preparation and organization of maintenance shop fabrication and schedules, inventory and control
of materials and supplies and tasked to implement training plans on line engineers and evaluate the performance of their
subordinates. The above-stated actual functions of Dany I. Fernandez and Jesus R. Quinto, Jr. are clear manifestation that they are
supervisory employees.
Since petitioners members are mixture of rank and file and supervisory employees, petitioner union, at this point [in] time, has not
attained the status of a legitimate labor organization. Petitioner should first exclude the supervisory employees from it membership
before it can attain the status of a legitimate labor organization. The above judgment is supported by the decision of the Supreme
Court in the Toyota Case.
5. KFWU appealed to the DOLE which remanded the case for immediate conduct of certification election, subject to the usual preelection conference, among the rank-and-file employees of Kawashima Textile Manufacturing Philippines, Inc. with the following
choices: Kawashima Free Workers Union-PTGWO Local Chapter No. 803 and No union.
6. Reason: The DOLE held that Med-Arbiter Bactin's reliance on the decisions of the Court in Toyota Motor Philippines
Corporation v. Toyota Motor Philippines Corporation Labor Union and Dunlop Slazenger, Inc. v. Secretary of Labor and
Employment was misplaced, for while Article 245 declares supervisory employees ineligible for membership in a labor organization
for rank-and-file employees, the provision did not state the effect of such prohibited membership on the legitimacy of the labor
organization and its right to file for certification election. Neither was such mixed membership a ground for cancellation of its
registration. Section 11, Paragraph II, Rule XI of Department Order No. 9 "provides for the dismissal of a petition for certification
election based on lack of legal personality of a labor organization only on the following grounds: (1) [KFWU] is not listed by the
Regional Office or the Bureau of Labor Relations in its registry of legitimate labor organizations; or (2) [KFWU's] legal personality
has been revoked or canceled with finality." The DOLE noted that neither ground existed; on the contrary, KFWU's legal
personality was well-established, for it held a certificate of creation and had been listed in the registry of legitimate labor
organizations.
As to the failure of KFWU to file its books of account, the DOLE held that such omission was not a ground for revocation of union
registration or dismissal of petition for certification election, for under Section 1, Rule VI of Department Order No. 9, a local or
chapter like KFWU was no longer required to file its books of account.
7. However, on appeal by respondent, the CA reversed the August 18, 2000 DOLE Decision, thus: Since respondent union clearly
consists of both rank and file and supervisory employees, it cannot qualify as a legitimate labor organization imbued with the
requisite personality to file a petition for certification election. This infirmity in union membership cannot be corrected in the
inclusion-exclusion proceedings during the pre-election conference.
8. The Republic of the Philippines (petitioner) filed the present petition to seek closure on two issues:
ISSUE(S): First, whether a mixed membership of rank-and-file and supervisory employees in a union is a ground for the dismissal
of a petition for certification election in view of the amendment brought about by D.O. 9, series of 1997, which deleted the

phraseology in the old rule that "[t]he appropriate bargaining unit of the rank-and-file employee shall not include the supervisory
employees and/or security guards.
Second, whether the legitimacy of a duly registered labor organization can be collaterally attacked in a petition for a certification
election through a motion to dismiss filed by an employer such as Kawashima Textile Manufacturing Phils., Inc.
HELD: No to both issues.
DISPOSITIVE PORTION: WHEREFORE, the petition is GRANTED. The December 13, 2002 Decision and October 7, 2003
Resolution of the Court of Appeals and the May 17, 2000 Order of Med-Arbiter Anastacio L. Bactin are REVERSED and SET
ASIDE, while the August 18, 2000 Decision and September 28, 2000 Resolution of the Department of Labor and Employment are
REINSTATED.
RATIO:
First Issue:
R.A. No. 9481 took effect only on June 14, 2007; hence, it applies only to labor representation cases filed on or after said date. As
the petition for certification election subject matter of the present petition was filed by KFWU on January 24, 2000, R.A. No. 9481
cannot apply to it.
Instead, the law and rules in force at the time of the filing by KFWU of the petition for certification election on January 24, 2000 are
R.A. No. 6715, amending Book V of Presidential Decree (P.D.) No. 442 (Labor Code), as amended, and the Rules and Regulations
Implementing R.A. No. 6715, as amended by Department Order No. 9, series of 1997.
One area of contention has been the composition of the membership of a labor organization, specifically whether there is a mingling
of supervisory and rank-and-file employees and how such questioned mingling affects its legitimacy.
It was in R.A. No. 875, under Section 3, that such questioned mingling was first prohibited, to wit:
Sec. 3. Employees right to self-organization. Employees shall have the right to self-organization and to form, join or assist labor
organizations of their own choosing for the purpose of collective bargaining through representatives of their own choosing and to
engage in concerted activities for the purpose of collective bargaining and other mutual aid or protection. Individuals employed as
supervisors shall not be eligible for membership in a labor organization of employees under their supervision but may form separate
organizations of their own. (Emphasis supplied)
Nothing in R.A. No. 875, however, tells of how the questioned mingling can affect the legitimacy of the labor organization. Under
Section 15, the only instance when a labor organization loses its legitimacy is when it violates its duty to bargain collectively; but
there is no word on whether such mingling would also result in loss of legitimacy.
Then the Labor Code was enacted in 1974 without reproducing Sec. 3 of R.A. No. 875. The provision in the Labor Code closest to
Sec. 3 is Article 290, which is deafeningly silent on the prohibition against supervisory employees mingling with rank-and-file
employees in one labor organization.
Members of supervisory unions who do not fall within the definition of managerial employees shall become eligible to join or assist
the rank and file organization. The determination of who are managerial employees and who are not shall be the subject of
negotiation between representatives of supervisory union and the employer. If no agreement s reached between the parties, either or
both of them ma bring the issue to the nearest Regional Office for determination. (Emphasis supplied)
The obvious repeal of the last clause of Sec. 3, R.A. No. 875 prompted the Court to declare in Bulletin v. Sanchez that supervisory
employees who do not fall under the category of managerial employees may join or assist in the formation of a labor organization
for rank-and-file employees, but they may not form their own labor organization.
Effective 1989, R.A. No. 6715 restored the prohibition against the questioned mingling in one labor organization. Unfortunately,
just like R.A. No. 875, R.A. No. 6715 omitted specifying the exact effect any violation of the prohibition 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.
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 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.
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.
Then came Tagaytay Highlands Intl. 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 Dunlop and 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 by misrepresentation, false statement or fraud under 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.
Consequently, the Court reverses the ruling of the CA and reinstates that of the DOLE granting the petition for certification election
of KFWU.
Second Issue:
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.
CASE LAW/ DOCTRINE: Mixture of rank-and-file and supervisors does not remove a unions legitimacy. Also, employers are
only bystanders in certification elections. It reiterates another doctrine that only direct attacks on a unions legitimacy is allowed
not collateral ones.
004 St. James School of QC v. SM of St. James
Nov. 23, 2005
Topic: Bargaining Agent, Certification Election Proceedings
FACTS: (chronological order)
1. The respondent union filed a petition for Certification Election to determine the Collective Bargaining Representative of
the motor pool, construction and transportation employees of the petitioner school.
2. Certification Election was granted and it was conducted on June 26, 1999 in the office of the DOLE in Intramuros.
2.1. the total eligible voters were 149, and out of this, 84 voted.
3. The petitioner filed a protest challenging the 84 employees who voted.
3.1. Petitioner alleged that they had 179 rank and file employees and none of those voted in the said election.

3.2. Further, the petitioner argued that those who voted were not their regular employees but rather the construction
workers of their contractor, Arch. Bacoy.
4. Med-Arb. Tomas Falconitin held in favor of the petitioner.
4.1. Holding that at the time of the election the 84 who voted were no longer the employees of the petitioner.
4.2. In support of this ruling, the Med-Arb used the list of eligible employees provided by the petitioner wherein none of
the 84 employees who voted were included.
4.3. It appears that some of the construction projects have already ceased, thus the said employees were no longer entitled.
4.4. Further, Med-Arb held that even if the 84 workers were to be included in the 179 total employees of the petitioner, it
would total to 263 and thus the majority requirement is still not met to constitute a valid CE.
5. The respondent appealed to the Secretary of Labor.
6. DOLE: decision of med-Arb reversed.
6.1. DOLE held that union sought to represent the non-teaching staff of the petitioner.
6.2. The Med-Arb erred in including all the employees of the petitioner whether teaching or non-teaching.
6.3. Also, the list submitted by the petitioner contained only the administrative, teaching, and officer personnel.
7. MR of the petitioner denied.
8. The petitioner now files a petition for certiorari under R65 before the CA.
9. CA: petitioner dismissed. DOLE did not commit GAD in reversing the Med-Arb.
10. MR of petitioner with CA also denied.
11. Hence this petition.
11.1.St. James alleges that it has 179 rank and file employees in its Quezon City Campus. When the certification election
was held, none of these qualified rank and file employees cast their votes because they were all on duty in the school
premises. The 84 voters who cast their votes are employees of Architect Bacoy.
11.2.St. James also alleges that it has 570 rank and file employees in all its campuses. Even if the 84 voters are its
employees, the votes do not constitute a majority vote of its rank and file employees because the quorum should be
based on its 570 rank and file employees.
ISSUE(S): Whether or not the CE is valid?
HELD: Yes. Argument of the petitioner finds no merit.
RATIO:
1.

The members of Samahang Manggagawa are employees in the Tandang Sora campus. Under its constitution and by-laws,
Samahang Manggagawa seeks to represent the motor pool, construction and transportation employees of the Tandang Sora
campus. Thus, the computation of the quorum should be based on the rank and file motor pool, construction and
transportation employees of the Tandang Sora campus and not on all the employees in St. James five campuses. x x x
2. The motor pool, construction and transportation employees of the Tandang Sora campus had 149 qualified voters at the
time of the certification election. Hence, the 149 qualified voters should be used to determine the existence of a quorum.
Since a majority or 84 out of the 149 qualified voters cast their votes, a quorum existed in the certification election.
3. Section 2, Rule XII, Book V of the Omnibus Rules provides:
Section 2. Qualification of voters; inclusion-exclusion proceedings.All employees who are members of the appropriate
bargaining unit sought to be represented by the petitioner at the time of the certification or consent election shall be
qualified to vote. A dis missed employee whose dismissal is being contested in a pending case shall be allowed to vote in the
election.
In case of disagreement over the voters list or over the eligibility of voters, all contested voters shall be allowed to vote.
However, their votes shall be segregated and sealed in individual envelopes in accordance with Section 9 of these Rules.
005 DHL PHILIPPINES CORPORATION UNITED RANK AND FILE ASSOCIATION-FEDERATION OF FREE WORKERS
(DHL-URFA-FFW) vs. BUKLOD NG MANGGAGAWA NG DHL PHILIPPINES CORPORATION
G.R. No. 152094. July 22, 2004
TOPIC: Bargaining Agent, Certification Election Proceedings
PONENTE: PANGANIBAN, J.:
FACTS:
False statements made by union officers before and during a certification election -- that the union is independent and not affiliated
with a national federation -- are material facts likely to influence the election results. This principle finds application in the present
case in which the majority of the employees clearly wanted an independent union to represent them. Thus, after the members
learned of the misrepresentation, and after a majority of them disaffiliated themselves from the union and formed another one, a
new certification election should be held to enable them to express their true will.
The late filing of the Petition for a new election can be excused under the peculiar facts of this case, considering that the employees
concerned did not sleep on their rights, but promptly acted to protect their prerogatives. Petitioner should not be permitted to use

legal technicalities to perpetrate the betrayal foisted by its officers upon the majority of the employees. Procedural technicalities
should not be allowed to suppress the welfare of labor.
The Facts
On November 25, 1997, a certification election was conducted among the regular rank and file employees in the main office and the
regional branches of DHL Philippines Corporation. The contending choices were petitioner and no union.
On January 19, 1998, on the basis of the results of the certification election, with petitioner receiving 546 votes and no union
garnering 348 votes, the election officer certified the former as the sole and exclusive bargaining agent of the rank and file
employees of the corporation.
Meanwhile, on December 19, 1997, Respondent Buklod ng Manggagawa ng DHL Philippines Corporation (BUKLOD) filed with
the Industrial Relations Division of the Department of Labor and Employment (DOLE) a Petition for the nullification of the
certification election. The officers of petitioner were charged with committing fraud and deceit in the election proceedings,
particularly by misrepresenting to the voter-employees that it was an independent union, when it was in fact an affiliate of the
Federation of Free Workers (FFW).
This misrepresentation was supposedly the basis for their selection of petitioner in the certification election. Allegedly supporting
this claim was the fact that those whom it had misled allegedly withdrew their membership from it and subsequently formed
themselves into an independent union. The latter union, BUKLOD, was issued a Certificate of Registration by DOLE on December
23, 1997.
On May 18, 1998, Med-Arbiter Tomas F. Falconitin nullified the November 25, 1997 certification election and ordered the holding
of another one with the following contending choices: petitioner, respondent, and no choice.
Setting aside the Decision of Med-Arbiter Falconitin, DOLE Undersecretary Rosalinda Dimapilis-Baldoz held on appeal that the
issue of representation had already been settled with finality in favor of petitioner, and that no petitions for certification election
would be entertained within one year from the time the election officer had issued the Certification Order.
The CA held that the withdrawal of a great majority of the members of petitioner -- 704 out of 894 of them -- provided a compelling
reason to conduct a certification election anew in order to determine, once and for all, which union reflected their choice.
The appellate court also held that the election officers issuance of a Certification Order on January 19, 1998 was precipitate
because, prior thereto, respondent had filed with the med-arbiter a Petition for nullification of the election. Furthermore, the
Certification was not in accordance with Department Order No. 9 (DO 9), Series of 1997. The charges of fraud and deceit, lodged
immediately after the election by petitioners former members against their officers, should have been treated as protests or issues of
eligibility within the meaning of Section 13 of DO 9.
ISSUE(S): whether or not the certification election is valid.
HELD: No, The circumstances in the present case show that the employees did not sleep on their rights. Hence, their failure to
follow strictly the procedural technicalities regarding the period for filing their protest should not be taken against them. Mere
technicalities should not be allowed to prevail over the welfare of the workers. What is essential is that they be accorded an
opportunity to determine freely and intelligently which labor organization shall act on their behalf. Having been denied this
opportunity by the betrayal committed by petitioners officers in the present case, the employees were prevented from making an
intelligent and independent choice.
RATIO:
Under Section 13 of the Rules Implementing Book V (Labor Relations) of the Labor Code, as amended, the election officers
authority to certify the results of the election is limited to situations in which there has been no protest filed; or if there has been any,
it has not been perfected or formalized within five days from the close of the election proceedings.
Further, Section 14 of the same Rules provides that when a protest has been perfected, only the med-arbiter can proclaim and certify
the winner. Clearly, this rule is based on the election officers function, which is merely to conduct and supervise certification
elections. It is the med-arbiter who is authorized to hear and decide representation cases. Consequently, the decision whether to
certify the results of an election or to set them aside due to incidents occurring during the campaign is within the med-arbiters
discretion.
Petitioner argues that the CA gravely erred in rendering its assailed Decision, considering that no protest or challenge had been
formalized within five days, or raised during the election proceedings and entered in the minutes thereof. Petitioner adds that
respondent did not file any protest, either, against the alleged fraud and misrepresentation by the formers officers during the
election.
We disagree. When the med-arbiter admitted and gave due course to respondents Petition for nullification of the election
proceedings, the election officer should have deferred issuing the Certification of the results thereof. Section 13 of the Implementing
Rules cannot strictly be applied to the present case.

Respondents contention is that a number of employees were lured by their officers into believing that petitioner was an independent
union. Since the employees had long desired to have an independent union that would represent them in collective bargaining, they
voted yes in favor of petitioner. Having been misled, a majority of them eventually disaffiliated themselves from it and formed an
independent union, respondent herein, which thereafter protested the conduct of the election. Having been formed just after such
exercise by the defrauded employees who were former members of petitioner, respondent could not have reasonably filed its protest
within five days from the close of the election proceedings.
Notably, after it had applied for registration with the Bureau of Labor Relations (BLR), respondent filed its Petition to nullify the
certification election. Petitioner insistently opposed the Petition, as respondent had not yet been issued a certificate of registration at
the time. Because such certificate was issued in favor of the latter four days after the filing of the Petition, on December 23, 1997,
the misgivings of the former were brushed aside by the med-arbiter. Indeed, the fact that respondent was not yet a duly registered
labor organization when the Petition was filed is of no moment, absent any fatal defect in its application for registration.
False Statements of Union Officers
The making of false statements or misrepresentations that interfere with the free choice of the employees is a valid ground for
protest. A certification election may be set aside for misstatements made during the campaign, where 1) a material fact has been
misrepresented in the campaign; 2) an opportunity for reply has been lacking; and 3) the misrepresentation has had an impact on the
free choice of the employees participating in the election. A misrepresentation is likely to have an impact on their free choice, if it
comes from a party who has special knowledge or is in an authoritative position to know the true facts. This principle holds true,
especially when the employees are unable to evaluate the truth or the falsity of the assertions.
The fact that the officers of petitioner especially its president, misrepresented it to the voting employees as an independent union
constituted a substantial misrepresentation of material facts of vital concern to those employees. The materiality of such
misrepresentation is self-evident. The employees wanted an independent union to represent them in collective bargaining, free from
outside interference. Thus, upon knowing that petitioner was in fact an affiliate of the FFW, the members disaffiliated from
petitioner and organized themselves into an independent union. Additionally, the misrepresentation came from petitioners
recognized representative, who was clearly in a position to hold himself out as a person who had special knowledge and was in an
authoritative position to know the true facts.
We are not easily persuaded by the argument of petitioner that the employees had sufficient time between the misrepresentation and
the election to check the truth of its claims. They could hardly be expected to verify the accuracy of any statement regarding
petitioner, made to them by its officers. No less than its president stated that it was an independent union. At the time, the employees
had no reason to doubt him.
We sustain the following findings of Med-Arbiter Falconitin:
x x x It must be noted at the outset that [respondent] has charged [petitioners] officers, agents and representative with fraud or
deception in encouraging its members to form or join and vote for DHL Philippines Corporation United Rank-and-File Association
which they represented as an independent labor union not affiliated with any labor federation or national union. Such serious
allegations, supported with affidavits under oath executed by no less than seven hundred four (704) DHL Philippines Corporations
employees nationwide, cannot just be ignored.x x x
This finding of fact of a quasi-judicial agency of DOLE is persuasive upon the courts.
Although petitioner won in the election, it is now clear that it does not represent the majority of the bargaining employees, owing to
the affiliation of its members with respondent. The present uncertainty as to which union has their support to represent them for
collective bargaining purposes is a salient factor that this Court has seriously considered.
The bargaining agent must be truly representative of the employees. At the time of the filing by respondent of the Petition for
nullification, allegiances and loyalties of the employees were like shifting sands that radically affected their choice of an appropriate
bargaining representative. The polarization of a good number of them followed their discovery of the fraud committed by the
officers of petitioner. At any rate, the claim that 704 of the employees are affiliated with respondent is not sufficiently rebutted by
any evidence on record.
The purpose of a certification election is precisely to ascertain the majority of the employees choice of an appropriate bargaining
unit -- to be or not to be represented by a labor organization and, in the affirmative case, by which one.
Once disaffiliation has been demonstrated beyond doubt, a certification election is the most expeditious way of determining which
union should be the exclusive bargaining representative of the employees.
06 STA. LUCIA EAST COMMERCIAL CORPORATION, Petitioner v. HON. SECRETARY OF LABOR AND
EMPLOYMENT and
STA. LUCIA EAST COMMERCIAL
CORPORATION WORKERS ASSOCIATION (CLUP LOCAL CHAPTER), Respondents
G.R. No. 162355, August 14, 2009
TOPIC:
PONENTE: CARPIO, J.

FACTS:
On 2001, Confederated Labor Union of the Philippines (CLUP) instituted a petition for certification election among the regular
rank- and-file employees of Sta. Lucia East Commercial Corporation (THE CORPORATION) and its Affiliates. The affiliate
companies included in the petition were SLE Commercial, SLE Department Store, SLE Cinema, Robsan East Trading, Bowling
Center, Planet Toys, Home Gallery and Essentials.
On August 2001, Med-Arbiter Bactin ordered the dismissal of the petition due to inappropriateness of the bargaining unit.
Later CLUP in its local chapter under THE CORPORATION reorganized itself and re- registered as CLUP-Sta. Lucia East
Commercial Corporation Workers Association (herein THE UNION), limiting its membership to the rank- and-file employees of
Sta. Lucia East Commercial Corporation.
On the same date, THE UNION filed the instant petition for certification election. It claimed that no certification election has been
held among them within the last 12 months prior to the filing of the petition, and while there is another union registered covering the
same employees, namely Samahang Manggawa sa SLEC [SMSLEC], it has not been recognized as the exclusive bargaining agent
of [THE CORPORATIONs] employees.
On November 2001, THE CORPORATION or THE CORPORATION filed a motion to dismiss the petition. It averred that it has
voluntarily recognized SMSLEC as the exclusive bargaining agent of its regular rank-and-file employees, and that collective
bargaining negotiations already commenced between them. THE CORPORATION argued that the petition should be dismissed for
violating the one year and negotiation bar rules under the Omnibus Rules Implementing the Labor Code.
The CBA between SMSLEC and the corporation was ratified by its rank-and-file employees and registered with DOLE.
In the meantime, on December 2001, the union filed its Opposition to THE CORPORATIONS Motion to Dismiss questioning the
validity of the voluntary recognition of [SMSLEC] by [THE CORPORATION] and their consequent negotiations and execution of a
CBA. According to [THE UNION], the voluntary recognition of [SMSLEC] by [THE CORPORATION] violated the requirements
for voluntary recognition, i.e., non-existence of another labor organization in the same bargaining unit. It pointed out that the time of
the voluntary recognition on 20 July 2001, appellants registration which covers the same group of employees covered by Samahang
Manggagawa sa Sta. Lucia East Commercial, was existing and has neither been cancelled or abandoned.
The Med-Arbiters Ruling
Med-Arbiter Bactin dismissed THE UNIONs petition for direct certification on the ground of contract bar rule. The prior voluntary
recognition of SMSLEC and the CBA between THE CORPORATION and SMSLEC bars the filing of THE UNIONs petition for
direct certification.
THE UNION raised the matter to the Secretary.
The Ruling of the Secretary of Labor and Employment
The Secretary held that the subsequent negotiations and registration of a CBA executed by THE CORPORATION with SMSLEC
could not bar THE UNIONs petition. THE UNION constituted a registered labor organization at the time of THE
CORPORATIONs voluntary recognition of SMSLEC.
THE CORPORATION then filed a petition for certiorari before the appellate court.
The Ruling of the Appellate Court
The appellate court affirmed the ruling of the Secretary
ISSUE(S): Whether THE CORPORATIONs voluntary recognition of SMSLEC was done while a legitimate labor organization
was in existence in the bargaining unit.
HELD: (YES/NO, and a short explanation)
Petition has no merit.
RATIO:
Legitimate Labor Organization
Article 212(g) of the Labor Code defines a labor organization as "any union or association of 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." Upon
compliance with all the documentary requirements, the Regional Office or Bureau shall issue in favor of the applicant labor
organization a certificate indicating that it is included in the roster of legitimate labor organizations.6 Any applicant labor
organization 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.7

Bargaining Unit
The concepts of a union and of a legitimate labor organization are different from, but related to, the concept of a bargaining unit.
A bargaining unit is a "group of employees of a given employer, comprised of all or less than all of the entire body of employees,
consistent with equity to the employer, indicated to be the best suited to serve the reciprocal rights and duties of the parties under the
collective bargaining provisions of the law."
The fundamental factors in determining the appropriate collective bargaining unit are: (1) the will of the employees (Globe
Doctrine); (2) affinity and unity of the employees interest, such as substantial similarity of work and duties, or similarity of
compensation and working conditions (Substantial Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity
of employment status.
(eto yung important) The UNIONS initial problem was that they constituted a legitimate labor organization representing a nonappropriate bargaining unit. However, The union subsequently re-registered as THE UNION, limiting its members to the rank-andfile of THE CORPORATION. THE CORPORATION cannot ignore the union was a legitimate labor organization at the time of
THE CORPORATIONs voluntary recognition of SMSLEC. THE CORPORATION and SMSLEC cannot, by themselves, decide
whether CLUP-THE CORPORATION and its Affiliates Workers Union represented an appropriate bargaining unit.
The inclusion in the union of disqualified employees is not among the grounds for cancellation of registration, unless such inclusion
is due to misrepresentation, false statement or fraud under the circumstances The union having been validly issued a certificate of
registration, should be considered as having acquired juridical personality which may not be attacked collaterally. The proper
procedure for THE CORPORATION is to file a petition for cancellation of certificate of registration of CLUP-THE
CORPORATION and its Affiliates Workers Union and not to immediately commence voluntary recognition proceedings with
SMSLEC.
WHEREFORE, we DENY the petition. We AFFIRM the Decision promulgated on 14 August 2003 as well as the Resolution
promulgated on 24 February 2004 of the Court of Appeals in CA-G.R. SP No. 77015.
007 Samahan Ng Mga Manggagawa Sa SammaLakas Sa Industriya Ng Kapatirang Haligi Ng Alyansa (SammaLikha)
v. Samma Corporation,
G.R. No. 167141 - March 13, 2009
TOPIC: Bargaining Agent, Certification Election Proceedings
PONENTE: J. Brion (First Division)
Facts:

Petitioner Samahan ng mga Manggagawa sa Samma Lakas sa Industriya ng Kapatirang Haligi ng Alyansa (SAMMALIKHA) filed a petition for certification election on July 24, 2001 in the Department of Labor and Employment (DOLE),
Regional Office IV.[4]
o

It claimed that: (1) it was a local chapter of the LIKHA Federation, a legitimate labor organization registered with
the DOLE; (2) it sought to represent all the rank-and-file employees of respondent Samma Corporation; (3) there
was no other legitimate labor organization representing these rank-and-file employees; (4) respondent was not a
party to any collective bargaining agreement and (5) no certification or consent election had been conducted within
the employer unit for the last 12 months prior to the filing of the petition.

Respondent moved for the dismissal of the petition arguing that (1) LIKHA Federation failed to establish its legal
personality; (2) petitioner failed to prove its existence as a local chapter; (3) it failed to attach the certificate of nonforum shopping and (4) it had a prohibited mixture of supervisory and rank-and-file employees.

In an order dated November 12, 2002, Med-Artbiter Arturo Cosuco DISMISSED the petition for certification election due
to: (1) lack of legal personality for failure to attach the certificate of registration purporting to show its legal personality;
(2) prohibited mixture of rank-and-file and supervisory employees and (3) failure to submit a certificate of non-forum
shopping.

On January 17, 2003, Acting Secretary Manuel G. Imson, treating the motion for reconsideration as an appeal, rendered a
decision reversing the order of the med-arbiter. He ruled that the legal personality of a union cannot be collaterally attacked
but may only be questioned in an independent petition for cancellation of registration. Thus, he directed the holding of a
certification election among the rank-and-file employees of respondent, subject to the usual pre-election conference and
inclusion-exclusion proceedings.

Meanwhile, on April 14, 2003, Crispin D. Dannug, Jr., Officer-in-Charge/Regional Director of DOLE Regional Office IV,
issued a resolution revoking the charter certificate of petitioner as local chapter of LIKHA Federation on the ground of
prohibited mixture of supervisory and rank-and-file employees and non-compliance with the attestation clause under

paragraph 2 of Article 235 of the Labor Code.[11] On May 6, 2003, petitioner moved for the reconsideration of this
resolution.

Respondent filed a petition for certiorari[13] in the CA assailing the January 17, 2003 decision and April 3, 2003 resolution
of the Secretary of Labor. In a decision dated August 31, 2004, the CA reversed the same.[14] It denied reconsideration in a
resolution dated February 15, 2005.
o

It held that Administrative Circular No. 04-94 which required the filing of a certificate of non-forum shopping
applied to petitions for certification election. It also ruled that the Secretary of Labor erred in granting the appeal
despite the lack of proof of service on respondent. Lastly, it found that petitioner had no legal standing to file the
petition for certification election because its members were a mixture of supervisory and rank-and-file employees.

ISSUE(S): (1) whether a certificate for non-forum shopping is required in a petition for certification election
(3) whether petitioner had the legal personality to file the petition for certification election.
HELD: (1) NO; a certificate of Non-Forum Shopping is NOT REQUIRED in a petition for Certification Election; (3) Petitioner
has LEGAK PERSONALITY to file the petition for certification election.

DISPOSITIVE PORTION: WHEREFORE, the petition is hereby GRANTED. Let the records of the case be remanded to the
office of origin, the Regional Office IV of the Department of Labor and Employment, for determination of the status of petitioners
legal personality. If petitioner is still a legitimate labor organization, then said office shall conduct a certification election subject to
the usual pre-election conference.
RATIO:

The requirement for a certificate of non-forum shopping refers to complaints, counter-claims, cross-claims, petitions or
applications where contending parties litigate their respective positions regarding the claim for relief of the complainant,
claimant, petitioner or applicant. A certification proceeding, even though initiated by a petition, is not a litigation but
an investigation of a non-adversarial and fact-finding character.
Such proceedings are not predicated upon an allegation of misconduct requiring relief, but,
rather, are merely of an inquisitorial nature. The Board's functions are not judicial in nature, but are
merely of an investigative character. The object of the proceedings is not the decision of any alleged
commission of wrongs nor asserted deprivation of rights but is merely the determination of proper
bargaining units and the ascertainment of the will and choice of the employees in respect of the selection of
a bargaining representative. The determination of the proceedings does not entail the entry of remedial
orders to redress rights, but culminates solely in an official designation of bargaining units and an
affirmation of the employees' expressed choice of bargaining agent.[19](Emphasis supplied)

The same situation holds true for a petition for certification election. Under the omnibus rules implementing the Labor
Code as amended by D.O. No. 9,[22] it is supposed to be filed in the Regional Office which has jurisdiction over the
principal office of the employer or where the bargaining unit is principally situated.[23]
The rules further provide that where two or more petitions involving the same bargaining unit are filed in one Regional
Office, the same shall be automatically consolidated.[24] Hence, the filing of multiple suits and the possibility of conflicting
decisions will rarely happen in this proceeding and, if it does, will be easy to discover.
Notably, under the Labor Code and the rules pertaining to the form of the petition for certification election, there is no
requirement for a certificate of non-forum shopping either in D.O. No. 9, series of 1997 or in D.O. No. 40-03, series of
2003 which replaced the former.[25]
Considering the nature of a petition for certification election and the rules governing it, we therefore hold that the
requirement for a certificate of non-forum shopping is inapplicable to such a petition.
LEGAL PERSONALITY OF PETITIONER

Petitioner argues that the erroneous inclusion of one supervisory employee in the union of rank-and-file employees was not
a ground to impugn its legitimacy as a legitimate labor organization which had the right to file a petition for certification
election.

LIKHA was granted legal personality as a federation under certificate of registration no. 92-1015-032-11638-FEDLC. Subsequently, petitioner as its local chapter was issued its charter certificate no. 2-01.[29] With certificates of
registration issued in their favor, they are clothed with legal personality as legitimate labor organizations:
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 may be questioned only in an independent petition for cancellation in
accordance with these Rules.[30]

Section 3. Acquisition of legal personality by local chapter. - A local/chapter constituted in accordance with Section
1 of this Rule shall acquire legal personality from the date of filing of the complete documents enumerated
therein. Upon compliance with all the documentary requirements, the Regional Office or Bureau of Labor Relations
shall issue in favor of the local/chapter a certificate indicating that it is included in the roster of legitimate labor
organizations.[31]

Such legal personality cannot thereafter be subject to collateral attack, but may be questioned only in an independent petition
for cancellation of certificate of registration.[32] Unless petitioners union registration is cancelled in independent proceedings,
it shall continue to have all the rights of a legitimate labor organization, including the right to petition for certification election.
Furthermore, the grounds for dismissal of a petition for certification election based on the lack of legal personality of a labor
organization are the following: (a) petitioner is not listed by the Regional Office or the Bureau of Labor Relations in its registry
of legitimate labor organizations or (b) its legal personality has been revoked or cancelled with finality in accordance with the
rules.[33]

As mentioned, respondent filed a petition for cancellation of the registration of petitioner on December 14, 2002. In a
resolution dated April 14, 2003, petitioners charter certificate was revoked by the DOLE. But on May 6, 2003, petitioner
moved for the reconsideration of this resolution. Neither of the parties alleged that this resolution revoking petitioners charter
certificate had attained finality. However, in this petition, petitioner prayed that its charter certificate be reinstated in the roster
of active legitimate labor [organizations].[34] This cannot be granted here.

To repeat, the proceedings on a petition for cancellation of registration are independent of those of a petition for certification
election. This case originated from the latter. If it is shown that petitioners legal personality had already been revoked or
cancelled with finality in accordance with the rules, then it is no longer a legitimate labor organization with the right to
petition for a certification election.

Supreme Courts FINAL NOTE: Respondent, as employer, had been the one opposing the holding of a certification election
among its rank-and-file employees. This should not be the case. We have already declared that, in certification elections, the
employer is a bystander; it has no right or material interest to assail the certification election

008 Chris Garments Corporation v. Hon. Patricia A. Sto. Tomas and Chris Garments Workers Union PTGWO
G.R. No. 167426 January 12, 2009
TOPIC:
PONENTE: Quisumbing J.
FACTS:
1. Petitioner assails the CA Resolutions which dismissed its petition for certiorari due to its failure to file a motion for
reconsideration from the SOLE Decision before filing the petition.
2. Petitioner Chris Garments Corporation is engaged in the manufacture and export of quality garments and apparel.
3. On February 8, 2002, respondent Chris Garments Workers Union PTGWO, Local Chapter No. 832, filed a petition for
certification election with the Med-Arbiter.
4. The union sought to represent petitioners rank-and-file employees not covered by its Collective Bargaining Agreement
(CBA) with the Samahan Ng Mga Manggagawa sa Chris Garments CorporationSolidarity of Union in the Philippines for
Empowerment and Reforms (SMCGC-SUPER), the certified bargaining agent of the rank-and-file employees.
5. The union alleged that it is a legitimate labor organization with a Certificate of Creation of Local/Chapter No.
PTGWO-832 issued by the Bureau of Labor Relations.
6. Petitioner moved to dismiss the petition.
- It argued that it has an existing CBA from July 1, 1999 to June 30, 2004 with SMCGC-SUPER which bars any petition for
certification election prior to the 60-day freedom period.
- It also contended that the union members are not its regular employees since they are direct employees of qualified and
independent contractors.
7. The union countered that its members are regular employees of petitioner since:
(1) they are engaged in activities necessary and desirable to its main business although they are called agency employees;

(2) their length of service have spanned an average of four years;


(3) petitioner controlled their work attitude and performance; and
(4) petitioner paid their salaries. The union added that while there is an existing CBA between petitioner and SMCGCSUPER, there are other rank-and-file employees not covered by the CBA who seek representation for collective bargaining
purposes. It also contended that the contract bar rule does not apply.
[MED ARBITER]
-

The Med-Arbiter dismissed the petition.

The Med-Arbiter ruled that there was no employer-employee relationship between the parties since the union itself
admitted that its members are agency employees.

The Med-Arbiter also held that even if the union members are considered direct employees of petitioner, the petition
for certification election will still fail due to the contract bar rule under Article 232 of the Labor Code. Hence, a petition
could only be filed during the 60-day freedom period of the CBA or from May 1, 2004 to June 30, 2004.

Nevertheless, the Med-Arbiter ruled that the union may avail of the CBA benefits by paying agency fees to SMCGCSUPER.
[SOLE RULING]
- In a Resolution[10] dated December 27, 2002, the Secretary of Labor and Employment affirmed the decision of the
Med-Arbiter.
- She ruled that petitioner failed to prove that the union members are employees of qualified and independent contractors
with substantial capital or investment and added that petitioner had the right to control the performance of the work of
such employees.
-

She also noted that the union members are garment workers who performed activities directly related to petitioners
main business.

Thus, the union members may be considered part of the bargaining unit of petitioners rank-and-file employees.
However, she held that the petition could not be entertained except during the 60-day freedom period. She also found
no reason to split petitioners bargaining unit.
2nd Filing of PCE
- On May 16, 2003, the union filed a second petition for certification election. The Med-Arbiter dismissed the petition on
the ground that it was barred by a prior judgment.
- On appeal, the Secretary of Labor and Employment affirmed the decision of the Med-Arbiter.
3rd Filing of PCE
- On June 4, 2004, the union filed a third petition for certification election.
- The Med-Arbiter dismissed the petition on the grounds that no employer-employee relationship exists between the
parties and that the case was barred by a prior judgment.
-

On appeal, the Secretary of Labor and Employment granted the petition in a Decision (Granted the appeal filed by
Chris Garments Workers Union PTGWO. Med Arbiter Ruling is Reversed and Set aside. Case REMANDED to
Regional ffoc of origin for the immediate conduct of certification election. Pursuant to Section 13(e), Rule VIII of
Department Order No. 40-03, the employer is hereby directed to submit to the office of origin, within ten (10) days
from receipt hereof, the certified list of its employees in the bargaining unit or when necessary a copy of its payroll
covering the same employees for the last three (3) months preceding the issuance of this Decision.
[CA Ruling]
- Petitioner received a copy of the decision on January 25, 2005.
- On February 4, 2005, petitioner filed a petition for certiorari with the Court of Appeals which was dismissed due to its
failure to file a motion for reconsideration of the decision before filing the petition.
- Incidentally, a certification election was conducted on June 21, 2005 among petitioners rank-and-file employees where
SMCGC-SUPER emerged as the winning union.

On January 20, 2006, the Med-Arbiter certified SMCGC-SUPER as the sole and exclusive bargaining agent of all the
rank-and-file employees of petitioner.

ISSUE:
(1) Is a motion for reconsideration necessary before a party can file a petition for certiorari from the decision of the Secretary of
Labor and Employment?
(2) Is the case barred by res judicata or conclusiveness of judgment? and
(3) Is there an employer-employee relationship between petitioner and the union members?
HELD:
(1) No. It is settled that the filing of a motion for reconsideration is a prerequisite to the filing of a special civil action for
certiorari to give the lower court the opportunity to correct itself. This rule, however, admits of exceptions, such as when a
motion for reconsideration would be useless under the circumstances
(2) No.
Instant case is DENIED due to lack of merit.
RATIO:
(1) It is settled that the filing of a motion for reconsideration is a prerequisite to the filing of a special civil action for certiorari
to give the lower court the opportunity to correct itself.[17] This rule, however, admits of exceptions, such as when a motion
for reconsideration would be useless under the circumstances.
-

Under Department Order No. 40-03, Series of 2003, the decision of the Secretary of Labor and Employment shall be
final and executory after ten days from receipt thereof by the parties and that it shall not be subject of a motion for
reconsideration.

In this case, the Decision dated January 18, 2005 of the Secretary of Labor and Employment was received by petitioner
on January 25, 2005. It would have become final and executory on February 4, 2005, the tenth day from petitioners
receipt of the decision. However, petitioner filed a petition for certiorari with the Court of Appeals on even
date. Clearly, petitioner availed of the proper remedy since Department Order No. 40-03 explicitly prohibits the
filing of a motion for reconsideration. Such motion becomes dispensable and not at all necessary.

(2) The doctrine of res judicata provides that a final judgment or decree on the merits by a court of competent jurisdiction is
conclusive of the rights of the parties or their privies in all later suits on points and matters determined in the former suit.
[20] The elements of res judicata are: (1) the judgment sought to bar the new action must be final; (2) the decision must have
been rendered by a court having jurisdiction over the subject matter and the parties; (3) the disposition of the case must be a
judgment on the merits; and (4) there must be as between the first and second action, identity of parties, subject matter, and
causes of action.[21]
-

Res judicata has a dual aspect: first, bar by prior judgment which is provided in Rule 39, Section 47(b)[22] of the 1997
Rules of Civil Procedure and second, conclusiveness of judgment which is provided in Section 47(c)[23] of the same
Rule.

In the instant case, there is no dispute as to the presence of the first three elements of res judicata. The Resolution
dated December 27, 2002 of the Secretary of Labor and Employment on the first petition for certification election
became final and executory. It was rendered on the merits and the Secretary of Labor and Employment had jurisdiction
over the case. Now, is the fourth element identity of parties, subject matter, and causes of action between the first and
third petitions for certification election present? We hold in the negative.

The Secretary of Labor and Employment dismissed the first petition as it was filed outside the 60-day freedom period. At
that time therefore, the union has no cause of action since they are not yet legally allowed to challenge openly and
formally the status of SMCGC-SUPER as the exclusive bargaining representative of the bargaining unit. Such dismissal,
however, has no bearing in the instant case since the third petition for certification election was filed well within the 60day freedom period. Otherwise stated, there is no identity of causes of action to speak of since in the first petition, the

union has no cause of action while in the third, a cause of action already exists for the union as they are now legally
allowed to challenge the status of SMCGC-SUPER as exclusive bargaining representative.
(3) The matter of employer-employee relationship has been resolved with finality by the Secretary of Labor and Employment
in the Resolution dated December 27, 2002. Since petitioner did not appeal this factual finding, then, it may be considered
as the final resolution of such issue. To reiterate, conclusiveness of judgment has the effect of preclusion of issues
CASE LAW/ DOCTRINE:
[Motion for Reconsideration]
In this case, the Decision dated January 18, 2005 of the Secretary of Labor and Employment was received by petitioner
on January 25, 2005. It would have become final and executory on February 4, 2005, the tenth day from petitioners
receipt of the decision. However, petitioner filed a petition for certiorari with the Court of Appeals on even date.
Clearly, petitioner availed of the proper remedy since Department Order No. 40-03 explicitly prohibits the filing of a
motion for reconsideration. Such motion becomes dispensable and not at all necessary
[Cause of Action]
- The Secretary of Labor and Employment dismissed the first petition as it was filed outside the 60-day freedom period.
At that time therefore, the union has no cause of action since they are not yet legally allowed to challenge openly and
formally the status of SMCGC-SUPER as the exclusive bargaining representative of the bargaining unit. Such
dismissal, however, has no bearing in the instant case since the third petition for certification election was filed well
within the 60-day freedom period. Otherwise stated, there is no identity of causes of action to speak of since in the first
petition, the union has no cause of action while in the third, a cause of action already exists for the union as they are
now legally allowed to challenge the status of SMCGC-SUPER as exclusive bargaining representative
[Conclusiveness of Judgment]
The matter of employer-employee relationship has been resolved with finality by the Secretary of Labor and
Employment in the Resolution dated December 27, 2002. Since petitioner did not appeal this factual finding, then, it
may be considered as the final resolution of such issue. To reiterate, conclusiveness of judgment has the effect of
preclusion of issues
009 NUWHRAIN-Manila Pavilion Hotel Chapter v. Secretary
G.R. No. 181531July 31, 2009
TOPIC:
PONENTE: Carpio Morales J.
FACTS:
1. National Union of Workers in Hotels, Restaurants and Allied Industries Manila Pavilion Hotel Chapter (NUWHRAINMPHC), herein petitioner, seeks the reversal of the CA Decision and of the Secretary of Labor and Employments
Resolution which affirmed the Med-Arbiters Resolutions
2. 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
NO UNION = 1
SPOILED = 3
SEGREGATED = 22
3.

4.
5.

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
CA. 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 Gatbontons vote was
tallied. And petitioner averred that respondent HIMPHLU, which garnered 169 votes, 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.
SOLE RULING:

By the assailed Resolution, (SOLE), through then Acting Secretary Luzviminda Padilla, affirmed the Med-Arbiters
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 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.

It 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 Gatbontons 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.

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.

SOLE concluded that the certification of HIMPHLU as the exclusive bargaining agent was proper.

Petitioners motion for reconsideration having been denied by the SOLE by Resolution, it appealed to the Court of Appeals.
CA Ruling:

It affirmed the ruling of the SOLE. It held that, contrary to petitioners assertion, the ruling in Airtime Specialist, Inc. v.
Ferrer Calleja 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 Gatbontons vote, the appellate court upheld the SOLEs 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.

brushed aside petitioners 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.
Petitioners motion for reconsideration having been denied by Resolution of January 25, 2008, the present recourse was filed.
Petitioners Contentions:

Inclusion of Jose Gatbontons vote but excluding the vote of the six other probationary employees violated the principle of
equal protection and is not in accord with the ruling in Airtime Specialists, Inc. v. Ferrer-Calleja;

The time of reckoning for purposes of determining when the probationary employees can be allowed to vote is not August
9, 2005 the date of issuance by Med-Arbiter Calabocal of the Order granting the conduct of certification elections, but
March 10, 2006 the date the SOLE Order affirmed the Med-Arbiters Order.

Even if the votes of the six probationary employees were included, still, HIMPHLU could not be considered as having
obtained a majority of the valid votes cast as the opening of the 17 ballots would increase the number of valid votes from
321 to 338, hence, for HIMPHLU to be certified as the exclusive bargaining agent, it should have garnered at least 170,
not 169, votes.

Petitioner justifies its not challenging Gatbontons vote because it was precisely its position that probationary employees
should be allowed to vote. It thus avers that justice and equity dictate that since Gatbontons 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 thus concludes that if March 10, 2006 is the reckoning date for the determination of the eligibility of workers,
then all the segregated votes cast by the probationary employees should be opened and counted, they having already been
working at the Hotel on such date.
Respecting the certification of HIMPHLU as the exclusive bargaining agent, petitioner argues that the same was not
proper for if the 17 votes would be counted as valid, then the total number of votes cast would have been 338, not 321,
hence, the majority would be 170; as such, the votes garnered by HIMPHLU is one vote short of the majority for it to be
certified as the exclusive bargaining agent.

ISSUE:
(1) whether employees on probationary status at the time of the certification elections should be allowed to vote, and
(2) whether HIMPHLU was able to obtain the required majority for it to be certified as the exclusive bargaining agent.
HELD:
(1) The Court rules in the affirmative.
(2) As to whether HIMPHLU should be certified as the exclusive bargaining agent, the Court rules in the negative. It is wellsettled 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.
RATIO:
(1) First Issue:
The inclusion of Gatbontons vote was proper not because it was not questioned but because probationary
employees have the right to vote in a certification election. The votes of the six other probationary employees
should thus also have been counted. As Airtime Specialists, Inc. v. Ferrer-Calleja holds:
In a certification election, all rank and file employees in the appropriate bargaining unit, whether probationary or permanent are
entitled to vote. This principle is clearly stated in Art. 255 of the Labor Code which states that the labor organization designated or
selected by the majority of the employees in an appropriate bargaining unit shall be the exclusive representative of the employees in
such unit for purposes of collective bargaining. Collective bargaining covers all aspects of the employment relation and the resultant
CBA negotiated by the certified union binds all employees in the bargaining unit. Hence, all rank and file employees, probationary
or permanent, have a substantial interest in the selection of the bargaining representative. The Code makes no distinction as to their
employment status as basis for eligibility in supporting the petition for certification election. The law refers to all the employees in
the bargaining unit. All they need to be eligible to support the petition is to belong to the bargaining unit.

Rule II, Sec. 2 of Department Order No. 40-03, series of 2003, which amended Rule XI of the Omnibus Rules
Implementing the Labor Code
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. (Emphasis supplied)
The provision in the CBA disqualifying probationary employees from voting cannot override the Constitutionallyprotected right of workers to self-organization, as well as the provisions of the Labor Code and its Implementing
Rules on certification elections and jurisprudence thereon.
A law is read into, and forms part of, a contract. Provisions in a contract are valid only if they are not contrary to
law, morals, good customs, public order or public policy
Rule XI, Sec. 5 of D.O. 40-03, on which the SOLE and the appellate court rely to support their position that
probationary employees 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,
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 in determining who shall be included
in the list of eligible voters is, in cases where a timely appeal has been filed from the Order of the Med-Arbiter, the
date when the Order of the Secretary of Labor and Employment, whether affirming or denying the appeal, becomes
final and executory.
The filing of an appeal to the SOLE from the Med-Arbiters 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-Arbiters 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-Arbiters 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 selforganization, 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.
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-Arbiters 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-Arbiters
Order as the cut-off date would render inutile the remedy of appeal to the SOLE.
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.

(2) Second Issue


Prescinding from the Courts 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 runoff election must be held to determine which between HIMPHLU and petitioner should represent the rank-and-file
employees.
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. 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.
CASE LAW/ DOCTRINE:

Probationary employees can join a union and can vote in a CE

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. In a certification election for the bargaining unit of rank and file
employees, all rank and file employees, whether probationary or permanent are entitled to vote. As long as probationary
employees belong to the defined bargaining unit, they are eligible to support the petition for certification election.
004 Eagle Ridge Golf & Country Club v. CA
G.R. No. 178989 March 18, 2010
TOPIC:
PONENTE: VELASCO, JR., J.:
NATURE: petition for certiorari
FACTS:
1. Eagle Ridge = corporation engaged in maintaining golf courses.

a. At the end of 2005 it had 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 employers opposition to their aspiration.
3. Dec 6, 2005 - at least 20% of Eagle Ridges rank-and-file employees
a. (percentage threshold required in Labor Code for union registration)
b. they had a meeting where they organized themselves into an independent labor union, named Eagle Ridge Employees
Union (EREU or Union), elected officers, and ratified their constitution & by-laws.
4. Dec 19 - EREU formally applied for registration and filed BLR Reg. Form No. I-LO, s. 1998 before the DOLE Regional
Office IV (RO IV).
a. In time, DOLE RO IV granted the application and issued EREU Registration Certificate (Reg. Cert.)
5. The EREU then filed a petition for certification election in Eagle Ridge Golf & Country Club.
a. Eagle Ridge opposed this petition, followed by its filing of a petition for the cancellation of Reg. Cert.
b. Eagle Ridges 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.
6. Eagle Ridge alleged
a.
EREU declared in its application for registration having 30 members, when the minutes of its Dec 6, organizational
meeting showed it only had 26 members.
b.
The misrepresentation = discrepancy between the certification issued by the Union secretary and president that 25
members actually ratified the constitution and by-laws, 26 signed the documents, making one a forgery.
c.
5 employees who attended the organizational meeting had manifested the desire to withdraw from the union.
i. executed individual affidavits or Sinumpaang Salaysay on Feb 15, attesting that they arrived late to the
meeting which they claimed to be drinking spree; 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.
1.
The withdrawal of the 5, Eagle Ridge maintained, effectively reduced the union membership to 20 or
21, either of which is below the mandatory minimum 20% out of 112 (should be 22-23).
EREU argued
d.
the petition for cancellation was procedurally deficient
i. no certification against forum shopping and that the same was verified by one not duly authorized by Eagle
Ridges board;
e.
the alleged discrepancies are not real for before filing of its application on Dec 19, 4 additional employees joined the
union on Dec 8, raising the union membership to 30.
f.
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 unions registration;
g.
the retraction of 5 union members should not be given any credence for the reasons that:
i. (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;
ii. (b) the retracting members did not deny signing the union documents;
iii. (c) following, Belyca Corporation v. Ferrer-Calleja and Oriental Tin Can Labor Union v. Secretary of Labor
and Employment, it can be presumed that duress, coercion or valuable consideration was brought to bear on
the retracting members; and
iv. (d) citing La Suerte Cigar and Cigarette Factory v. Director of Bureau of Labor Relations,
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 Jan 10, 2006 or long before Feb 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.
7. The Union presented the duly accomplished union membership forms dated Dec 8, 2005 of 4 additional members.
a. And to rebut the allegations in the affidavits of retraction of the 5 union members, it presented the Sama-Samang
Sinumpaang Salaysay dated March 20, 2006 of 8 union members; another Sama-Samang Sinumpaang Salaysay, also
bearing date March 20, of 4 other union members; and the Sworn Statement dated March 16, 2006 of the Unions legal
counsel, Atty. Domingo T. Aonuevo. These affidavits attested to the orderly and proper proceedings of the
organizational meeting on December 6, 2005.
8. Eagle Ridge
a. asserted further that the 4 additional members were fraudulently admitted into the Union.
b. claimed, the applications of the 4 neither complied with the requirements under Section 2, Art. IV of the unions
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.
c. presented another Sinumpaang Salaysay of retraction dated March 15, 2006 of another union member.
i. The membership of EREU had thus been further reduced to only 19 or 20.
2.

ii. This same member was listed in the first Sama-Samang Sinumpaang Salaysay presented by the Union but did
not sign it.
DOLE Regional Dirsctor
9. Decided in favor of Eagle Ridge, and granted its petition to cancel the Reg. Cert. being granted and EREU being delisted from
the roster of legitimate labor organizations.
BLR (on the unions appeal)
10. Initially, headed by the OIC, affirmed the appealed order.; MR granted.
a. In finding for the Union, the BLR Director eschewed procedural technicalities.
b. found as without basis allegations of misrepresentation or fraud as ground for cancellation of EREUs registration.
CA 11. dismissed the petition for certiorari.; MR - denied
ISSUE(S): WON there was fraud in the application to merit the cancellation of the EREUs registration
HELD: NO.
DISPOSITIVE PORTION: WHEREFORE, premises considered, we DISMISS the instant petition for lack of merit.
RATIO:
Procedural Issue: Lack of Authority
1. Certiorari is an extraordinary, prerogative remedy and is never issued as a matter of right. Accordingly, the party who seeks to
avail of it must strictly observe the rules laid down by law.
2. Petitions for certiorari under Rule 65 of the Rules of Court require a sworn certification of non-forum shopping.
3. 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.
4. 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.
a. Eagle Ridge tried to address its faux pas by submitting its board secretarys Certificate 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.
5.
The CA, however, rejected Eagle Ridges 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.
6. The appellate courts 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.
7.
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.
8. To us, Eagle Ridge has not satisfactorily explained its failure to comply. It may be true, as Eagle Ridge urges, that its counsels
authority to represent the corporation was never questioned before the DOLE regional office and agency. But EREUs misstep
could hardly lend Eagle Ridge comfort. And obviously, Eagle Ridge and its counsel erred in equating the latters representation
as legal counsel with the authority to sign the verification and the certificate of non-forum shopping in the formers behalf. We
note that 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 counsels 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.
9.
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.
10. 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.
a.
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 counsels act of signing the sworn certification of nonforum shopping.
11. We are not inclined to grant the desired liberality owing to Eagle Ridges failure to sufficiently explain its failure to follow the
clear rules.
12. 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
13. Eagle Ridge cites the grounds provided under Art. 239(a) and (c) of the Labor Code for its petition for cancellation of the
EREUs registration.
14. 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 unions constitution and by-laws.
15. A scrutiny of the records fails to show any misrepresentation, false statement, or fraud committed by EREU to merit
cancellation of its registration.
a.
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 Unions 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:
1.
the minutes of its organizational meeting held on December 6, 2005 showing 26 founding members
who elected its union officers by secret ballot;
2.
the list of rank-and-file employees of Eagle Ridge who attended the organizational meeting and the
election of officers with their individual signatures;
3.
the list of rank-and-file employees who ratified the unions 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;
4.
the unions constitution and by-laws as approved on December 6, 2005;
5.
the list of officers and their addresses;
6.
the list of union members showing a total of 30 members; and
7.
the Sworn Statement of the unions elected president and secretary. All the foregoing documents
except the sworn statement of the president and the secretary were accompanied by Certifications by
the union secretary duly attested to by the union president.
b.
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.
c.
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.
i. 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 Ridges 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.
d.
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 Unions 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.
i. 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 admissionas erroneously asserted by Eagle
Ridge.
e.
Fifth. The difference between the number of 26 members, who ratified the Unions 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 certifications understatement by one member, while not factual, was clearly an error,
but neither a misleading one nor a misrepresentation of what had actually happened.
f.
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.
i. 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:
1.
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 MedArbiter or Hearing Officer, as the case may be. Any affidavit submitted without the reaffirmation of the affiant during 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.
ii. 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 affiants statement, which may thus be either
omitted or misunderstood by the one writing them. 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.
iii. 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.
iv. 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.
g.
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.
i. 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.
ii. We answer in the negative.
iii. 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.
iv. 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.
v. 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.
vi. 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.
h.
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 Unions 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 EREUs
certificate of registration. This amounts to a clear circumvention of the law and cannot be countenanced.
16. Evidently, as the Union persuasively argues, the withdrawal of six member-employees from the Union will affect neither the
Unions registration nor its petition for certification election, as their affidavits of retraction were executed after the Unions
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.

17. In Eastland Manufacturing Company, Inc. v. Noriel - 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.
a.
Citing Philippine Association of Free Labor Unions v. Bureau of Labor Relations, 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.
18. Indeed, where the company seeks the cancellation of a unions 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. 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.
19. 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) a. 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 Unions 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.
Before their amendment by Republic Act No. 9481 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;
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.
xxxx
ART. 239. GROUNDS FOR CANCELLATION OF UNION REGISTRATION. The following shall constitute grounds for
cancellation of union registration:
Misrepresentation, false statements or fraud in connection with the adoption or ratification of the
constitution and by-laws or amendments thereto, theminutes 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.
011 PICOP Resources, Inc. v. Taeca
August 9, 2010 G.R. No. 160828
PONENTE: Peralta, J.
FACTS:
1. Feb 13, 2001 - respondents Anacleto Taeca, Loreto Uriarte, Joseph Balgoa, Jaime Campos, Geremias Tato, Martiniano
Magayon, Manuel Abucay and fourteen (14) others filed a Complaint for ULP, illegal dismissal and money claims against
petitioner PICOP Resources, Incorporated (PRI), Wilfredo Fuentes (in his capacity as PRI's Vice President/Resident
Manager), Atty. Romero Boniel (in his capacity as PRI's Manager of Legal/Labor), Southern Philippines Federation of Labor
(SPFL), Atty. Wilbur T. Fuentes (in his capacity as Secretary General of SPFL), Pascasio Trugillo (in his capacity as Local
President of Nagkahiusang Mamumuo sa PICOP Resources, Inc.- SPFL [NAMAPRI-SPFL]) and Atty. Proculo Fuentes, Jr. (in
his capacity as National President of SPFL).

2.

Respondents were regular rank-and-file employees of PRI and bona fide members of Nagkahiusang Mamumuo sa PRI
Southern Philippines Federation of Labor (NAMAPRI-SPFL), which is the collective bargaining agent for the rank-and-file
employees of petitioner PRI.
3. PRI has a CBA with NAMAPRI-SPFL for a period of five (5) years from May 22, 1995 until May 22, 2000.
a. The CBA contained the following union security provisions:
Article II- Union Security and Check-Off
Section 6. Maintenance of membership.
6.1 All employees within the appropriate bargaining unit who are members of the UNION at the time of
the signing of this AGREEMENT shall, as a condition of continued employment by the COMPANY,
maintain their membership in the UNION in good standing during the effectivity of this AGREEMENT.
6.2 Any employee who may hereinafter be employed to occupy a position covered by the bargaining unit
shall be advised by the COMPANY that they are required to file an application for membership with the
UNION within thirty (30) days from the date his appointment shall have been made regular.
6.3 The COMPANY, upon the written request of the UNION and after compliance with the requirements
of the New Labor Code, shall give notice of termination of services of any employee who shall fail to
fulfill the condition provided in Section 6.1 and 6.2 of this Article, but it assumes no obligation to
discharge any employee if it has reasonable grounds to believe either that membership in the UNION was
not available to the employee on the same terms and conditions generally applicable to other members, or
that membership was denied or terminated for reasons other than voluntary resignation or non-payment of
regular union dues. Separation under the Section is understood to be for cause, consequently, the dismissed
employee is not entitled to separation benefits provided under the New Labor Code and in this
AGREEMENT.
4. May 16, 2000 - Atty. Proculo P. Fuentes (Atty. Fuentes) sent a letter to the management of PRI demanding the termination of
employees who allegedly campaigned for, supported and signed the Petition for Certification Election of the Federation of
Free Workers Union (FFW) during the effectivity of the CBA.NAMAPRI-SPFL considered said act of campaigning for and
signing the petition for certification election of FFW as an act of disloyalty and a valid basis for termination for a cause in
accordance with its Constitution and By-Laws, and the terms and conditions of the CBA, specifically Article II, Sections 6.1
and 6.2 on Union Security Clause.
5. May 23; letter - Mr. Pascasio Trugillo requested the management of PRI to investigate those union members who signed the
Petition for Certification Election of FFW during the existence of their CBA. NAMAPRI-SPFL, likewise, furnished PRI with
machine copy of the authorization letters dated March 19, 20 and 21, 2000, which contained the names and signatures of
employees.
6. Acting on the letters of the NAMAPRI-SPFL - Atty. Romero A. Boniel issued a memorandum addressed to the concerned
employees to explain in writing within 72 hours why their employment should not be terminated due to acts of disloyalty as
alleged by their Union.
a. Within the period from May 26 to June 2, 2000, a number of employees who were served explanation memorandum
submitted their explanation, while some did not.
b. June 2; letter - Atty. Boniel endorsed the explanation letters of the employees to Atty. Fuentes for evaluation and final
disposition in accordance with the CBA.
7. After evaluation - Atty. Fuentes advised the management of PRI that the Union found the member's explanations to be
unsatisfactory. He reiterated the demand for termination, but only of 46 member-employees, including respondents.
8. Oct 16 - PRI served notices of termination for causes to the 31 out of the 46 employees whom NAMAPRIL-SPFL sought to be
terminated on the ground of acts of disloyalty committed against it when respondents allegedly supported and signed the
Petition for Certification Election of FFW before the freedom period during the effectivity of the CBA.
a. A Notice dated October 21, 2000 was also served on the Department of Labor and Employment Office (DOLE),
Caraga Region.
9. Respondents then accused PRI of Unfair Labor Practice punishable under Article 248 (a), (b), (c), (d) and (e) of the Labor
Code, while Atty. Fuentes and Wilbur T. Fuentes and Pascasio Trujillo were accused of violating Article 248 (a) and (b) of the
Labor Code.
10. Respondents a.
Alleged none of them ever withdrew their membership from NAMAPRI-SPFL or submitted to PRI any union dues
and check-off disauthorizations against NAMAPRI-SPFL.
b.
claimed that they continue to remain on record as bona fide members of NAMAPRI-SPFL.
c.
pointed out that a patent manifestation of ones disloyalty would have been the explicit resignation or withdrawal of
membership from the Union accompanied by an advice to management to discontinue union dues and check-off
deductions.
d.
insisted that mere affixation of signature on such authorization to file a petition for certification election was not per
se an act of disloyalty.
e.
claimed that while it may be true that they signed the said authorization before the start of the freedom period, the
petition of FFW was only filed with the DOLE on May 18, 2000, or 58 days after the start of the freedom period.

f.

maintained that their acts of signing the authorization signifying support to the filing of a Petition for Certification
Election of FFW was merely prompted by their desire to have a certification election among the rank-and-file
employees of PRI with hopes of a CBA negotiation in due time; and not to cause the downfall of NAMAPRI-SPFL.
g.
contended that there was lack of procedural due process. Both the letter dated May 16, 2000 of Atty. Fuentes and the
follow-up letter dated May 23, 2000 of Trujillo addressed to PRI did not mention their names. Respondents stressed
that NAMAPRI-SPFL merely requested PRI to investigate union members who supported the Petition for
Certification Election of FFW. Respondents claimed that they should have been summoned individually, confronted
with the accusation and investigated accordingly and from where the Union may base its findings of disloyalty and,
thereafter, recommend to management the termination for causes.
h.
argued that at the time NAMAPRI-SPFL demanded their termination, it was no longer the bargaining representative
of the rank-and-file workers of PRI, because the CBA had already expired on May 22, 2000. Hence, there could be no
justification in PRIs act of dismissing respondents due to acts of disloyalty.
i.
asserted that the act of PRI, Wilfredo Fuentes and Atty. Boniel in giving in to the wishes of the Union in discharging
them on the ground of disloyalty to the Union amounted to interference with, restraint or coercion of respondents
exercise of their right to self-organization. The act indirectly required petitioners to support and maintain their
membership with NAMAPRI-SPFL as a condition for their continued employment. The acts of NAMAPRI-SPFL,
Atty. Fuentes and Trujillo amounted to actual restraint and coercion of the petitioners in the exercise of their rights to
self-organization and constituted acts of unfair labor practice.
11. Labor Arbiter - declared the respondents dismissal to be illegal and ordered PRI to reinstate respondents to their former or
equivalent positions without loss of seniority rights and to jointly and solidarily pay their backwages.
12. NLRC - reversed the decision of the Labor Arbiter; thus, declaring the dismissal of respondents from employment as legal.
MR denied.
13. CA - reversed and set aside the assailed Resolutions of the NLRC and reinstated the Labor Arbiters decision.
ISSUE(S): Whether an existing CBA can be given its full force and effect in all its terms and condition including its union security
clause, even beyond the 5-year period when no new cba has yet been entered into.
RATIO:
NLRC; review of decisions. The power of the Court of Appeals to review NLRC decisions via Rule 65 or Petition for Certiorari has
been settled as early as in our decision in St. Martin Funeral Home v. National Labor Relations Commission. This Court held that
the proper vehicle for such review was a Special Civil Action for Certiorari under Rule 65 of the Rules of Court, and that this action
should be filed in the Court of Appeals in strict observance of the doctrine of the hierarchy of courts. Moreover, it is already settled
that under Sec. 9 of B.P. 129, as amended, the Court of Appeals pursuant to the exercise of its original jurisdiction over Petitions
for Certiorari is specifically given the power to pass upon the evidence, if and when necessary, to resolve factual issues.
We now come to the main issue of whether there was just cause to terminate the employment of respondents.
1. PRI argued that the dismissal of the respondents was valid and legal. It claimed to have acted in good faith at the instance of
the incumbent union pursuant to the Union Security Clause of the CBA.
2. Citing Article 253 of the Labor Code, PRI contends that as parties to the CBA, they are enjoined to keep the status quo and
continue in full force and effect the terms and conditions of the existing CBA during the 60-day period and/or until a new
agreement is reached by the parties.
3. Petitioner's argument is untenable.
4. Union security" is a generic term, which is applied to and comprehends "closed shop," union shop," "maintenance of
membership," or any other form of agreement which imposes upon employees the obligation to acquire or retain union
membership as a condition affecting employment. There is union shop when all new regular employees are required to join the
union within a certain period as a condition for their continued employment. There is maintenance of membership shop when
employees, who are union members as of the effective date of the agreement, or who thereafter become members, must
maintain union membership as a condition for continued employment until they are promoted or transferred out of the
bargaining unit, or the agreement is terminated. A closed shop, on the other hand, may be defined as an enterprise in which, by
agreement between the employer and his employees or their representatives, no person may be employed in any or certain
agreed departments of the enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member in
good standing of a union entirely comprised of or of which the employees in interest are a part.
5. However, in terminating the employment of an employee by enforcing the union security clause, the employer needs to
determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the enforcement of the
union security provision in the CBA; and (3) there is sufficient evidence to support the decision of the union to expel the
employee from the union. These requisites constitute just cause for terminating an employee based on the union security
provision of the CBA.
6. As to the first requisite, there is no question that the CBA between PRI and respondents included a union security clause,
specifically, a maintenance of membership as stipulated in Sections 6 of Article II, Union Security and Check-Off. Following
the same provision, PRI, upon written request from the Union, can indeed terminate the employment of the employee who
failed to maintain its good standing as a union member.
7. Secondly, it is likewise undisputed that NAMAPRI-SPFL, in two (2) occasions demanded from PRI, in their letters dated May
16 and 23, 2000, to terminate the employment of respondents due to their acts of disloyalty to the Union.

8.
9.

10.
11.

12.

13.

14.

15.

16.

17.

However, as to the third requisite, we find that there is no sufficient evidence to support the decision of PRI to terminate the
employment of the respondents.
PRI alleged that respondents were terminated from employment based on the alleged acts of disloyalty they committed when
they signed an authorization for the Federation of Free Workers (FFW) to file a Petition for Certification Election among all
rank-and-file employees of PRI. It contends that the acts of respondents are a violation of the Union Security Clause, as
provided in their Collective Bargaining Agreement.
We are unconvinced.
We are in consonance with the Court of Appeals when it held that the mere signing of the authorization in support of the
Petition for Certification Election of FFW on March 19, 20 and 21, or before the freedom period, is not sufficient ground to
terminate the employment of respondents inasmuch as the petition itself was actually filed during the freedom period. Nothing
in the records would show that respondents failed to maintain their membership in good standing in the Union. Respondents
did not resign or withdraw their membership from the Union to which they belong. Respondents continued to pay their union
dues and never joined the FFW.
Significantly, petitioner's act of dismissing respondents stemmed from the latter's act of signing an authorization letter to file a
petition for certification election as they signed it outside the freedom period. However, we are constrained to believe that an
authorization letter to file a petition for certification election is different from an actual Petition for Certification
Election. Likewise, as per records, it was clear that the actual Petition for Certification Election of FFW was filed only on May
18, 2000.[17] Thus, it was within the ambit of the freedom period which commenced from March 21, 2000 until May 21, 2000.
Strictly speaking, what is prohibited is the filing of a petition for certification election outside the 60-day freedom period.
[18] This is not the situation in this case. If at all, the signing of the authorization to file a certification election was merely
preparatory to the filing of the petition for certification election, or an exercise of respondents right to self-organization.
Moreover, PRI anchored their decision to terminate respondents employment on Article 253 of the Labor Code which states
that it shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and
conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties. It
claimed that they are still bound by the Union Security Clause of the CBA even after the expiration of the CBA; hence, the
need to terminate the employment of respondents.
Petitioner's reliance on Article 253 is misplaced.
The provision of Article 256 of the Labor Code is particularly enlightening. It reads:
Article 256. Representation issue in organized establishments. - In organized establishments, when a verified
petition questioning the majority status of the incumbent bargaining agent is filed before the Department of Labor
and Employment within the sixty-day period before the expiration of a collective bargaining agreement, the MedArbiter shall automatically order an election by secret ballot when the verified petition is supported by the written
consent of at least twenty-five percent (25%) of all the employees in the bargaining unit to ascertain the will of the
employees in the appropriate bargaining unit. To have a valid election, at least a majority of all eligible voters in the
unit must have cast their votes. The labor union receiving the majority of the valid votes cast shall be certified as
the exclusive bargaining agent of all the workers in the unit. When an election which provides for three or more
choices results in no choice receiving a majority of the valid votes cast, a run-off election shall be conducted
between the labor unions receiving the two highest number of votes: Provided, That the total number of votes for all
contending unions is at least fifty per cent (50%) of the number of votes cast.
At the expiration of the freedom period, the employer shall continue to recognize the majority status of the
incumbent bargaining agent where no petition for certification election is filed.
Applying the same provision, it can be said that while it is incumbent for the employer to continue to recognize the majority
status of the incumbent bargaining agent even after the expiration of the freedom period, they could only do so when no
petition for certification election was filed. The reason is, with a pending petition for certification, any such agreement entered
into by management with a labor organization is fraught with the risk that such a labor union may not be chosen thereafter as
the collective bargaining representative. The provision for status quo is conditioned on the fact that no certification election
was filed during the freedom period.Any other view would render nugatory the clear statutory policy to favor certification
election as the means of ascertaining the true expression of the will of the workers as to which labor organization would
represent them.
In the instant case, four (4) petitions were filed as early as May 12, 2000. In fact, a petition for certification election was
already ordered by the Med-Arbiter of DOLE Caraga Region on August 23, 2000. Therefore, following Article 256, at the
expiration of the freedom period, PRI's obligation to recognize NAMAPRI-SPFL as the incumbent bargaining agent does not
hold true when petitions for certification election were filed, as in this case.
Moreover, the last sentence of Article 253 which provides for automatic renewal pertains only to the economic provisions of
the CBA, and does not include representational aspect of the CBA. An existing CBA cannot constitute a bar to a filing of a
petition for certification election. When there is a representational issue, thestatus quo provision in so far as the need to await
the creation of a new agreement will not apply. Otherwise, it will create an absurd situation where the union members will be
forced to maintain membership by virtue of the union security clause existing under the CBA and, thereafter, support another
union when filing a petition for certification election. If we apply it, there will always be an issue of disloyalty whenever the
employees exercise their right to self-organization. The holding of a certification election is a statutory policy that should not
be circumvented, or compromised.

18. Time and again, we have ruled that we adhere to the policy of enhancing the welfare of the workers. Their freedom to choose
who should be their bargaining representative is of paramount importance. The fact that there already exists a bargaining
representative in the unit concerned is of no moment as long as the petition for certification election was filed within the
freedom period. What is imperative is that by such a petition for certification election the employees are given the opportunity
to make known of who shall have the right to represent them thereafter. Not only some, but all of them should have the right to
do so. What is equally important is that everyone be given a democratic space in the bargaining unit concerned.
19. We will emphasize anew that the power to dismiss is a normal prerogative of the employer. This, however, is not without
limitations. The employer is bound to exercise caution in terminating the services of his employees especially so when it is
made upon the request of a labor union pursuant to the Collective Bargaining Agreement. Dismissals must not be arbitrary and
capricious. Due process must be observed in dismissing an employee, because it affects not only his position but also his
means of livelihood. Employers should, therefore, respect and protect the rights of their employees, which include the right to
labor.
a. An employee who is illegally dismissed is entitled to the twin reliefs of full backwages and reinstatement. If
reinstatement is not viable, separation pay is awarded to the employee. In awarding separation pay to an illegally
dismissed employee, in lieu of reinstatement, the amount to be awarded shall be equivalent to one month salary for
every year of service. Under Republic Act No. 6715, employees who are illegally dismissed are entitled to full
backwages, inclusive of allowances and other benefits, or their monetary equivalent, computed from the time their
actual compensation was withheld from them up to the time of their actual reinstatement. But if reinstatement is no
longer possible, the backwages shall be computed from the time of their illegal termination up to the finality of the
decision. Moreover, respondents, having been compelled to litigate in order to seek redress for their illegal dismissal,
are entitled to the award of attorneys fees equivalent to 10% of the total monetary award.
DISPOSITION: WHEREFORE, the petition is DENIED. The Decision dated July 25, 2003 and the Resolution dated October 23,
2003 of the Court of Appeals in CA-G.R. SP No. 71760, which set aside the Resolutions dated October 8, 2001 and April 29, 2002
of the National Labor Relations Commission in NLRC CA No. M-006309-2001, are AFFIRMED accordingly. Respondents are
hereby awarded full backwages and other allowances, without qualifications and diminutions, computed from the time they were
illegally dismissed up to the time they are actually reinstated. Let this case be remanded to the Labor Arbiter for proper
computation of the full backwages due respondents, in accordance with Article 279 of the Labor Code, as expeditiously as possible.
Dismissal; union security. In terminating the employment of an employee by enforcing the union security clause, the employer
needs to determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the enforcement of the
union security provision in the CBA; and (3) there is sufficient evidence to support the decision of the union to expel the employee
from the union. These requisites constitute just cause for terminating an employee based on the union security provision of the
CBA.
The petitioner failed to satisfy the third requirement since nothing in the records would show that respondents failed to maintain
their membership in good standing in the union. Significantly, petitioners act of dismissing respondents stemmed from the latters
act of signing an authorization letter to file a petition for certification election as they signed it outside the freedom period. The mere
signing of an authorization letter before the freedom period is not sufficient ground to terminate the employment of respondents
inasmuch as the petition itself was actually filed during the freedom period. The court emphasizes anew that the employer is bound
to exercise caution in terminating the services of his employees especially so when it is made upon the request of a labor union
pursuant to the Collective Bargaining Agreement.
012 Legend International Resorts v. Kilusang Manggagawa ng Legend
February 23, 2011 G.R. No. 169754
Topic: Bargaining Agent, Certification Election Proceedings
Ponente: Del Castillo, J.
FACTS:
1. June 6, 2001: KML filed with the Med-Arbitration Unit of the DOLE Pampanga a Petition for Certification Election.
2. KML alleged:
a. that it is a legitimate labor organization of the rank and file employees of Legend International Resorts Limited (LEGEND).
b. that it was issued its Certificate of Registration by the DOLE on May 18, 2001.
3. LEGEND moved to dismiss the petition.
4. LEGEND alleged:
a. that KML is not a legitimate labor organization because its membership is a mixture of rank and file and supervisory employees
b. that KML committed acts of fraud and misrepresentation when it made it appear that certain employees attended its general membership
meeting on April 5, 2001 when in reality some of them were either at work; have already resigned as of March 2001; or were abroad.
5. In its Comment, KML argued:
a. that even if 41 of its members are indeed supervisory employees and therefore excluded from its membership, the certification election
could still proceed because the required number of the total rank and file employees necessary for certification purposes is still sustained.
b. that its legitimacy as a labor union could not be collaterally attacked in the certification election proceedings but only through a separate
and independent action for cancellation of union registration.
c. KML asserted that LEGEND failed to substantiate its claim of fraud and misrepresentation.
Ruling of the Med-Arbiter

a.
b.
c.

rendered judgment dismissing for lack of merit the petition for certification election.
there were several supervisory employees in KMLs membership in violation of Article 245 of Labor Code. KML is not a legitimate
labor organization.
KML was also found to have fraudulently procured its registration certificate by misrepresenting that 70 employees were among those
who attended its organizational meeting on April 5, 2001 when in fact they were either at work or elsewhere.

Ruling of the Office of the Secretary of DOLE


a. granting KMLs appeal thereby reversing and setting aside the Med-Arbiters Decision.
b. held that KMLs legitimacy as a union could not be collaterally attacked
a. opined that Article 245 of the Labor Code merely provides for the prohibition on managerial employees to form or join a union and the
ineligibility of supervisors to join the union of the rank and file employees and vice versa.
b. It declared that any violation of the provision of Article 245 does not ipso facto render the existence of the labor organization illegal.
c. grounds for dismissal of a petition for certification election does not include mixed membership in one union.
6.

LEGEND filed its Motion for Reconsideration. It also alleged that on August 24, 2001, it filed a Petition for Cancellation of Union
Registration of KML which was granted by the DOLE Regional Office
7. Office of the Secretary of DOLE denied LEGENDs motion for reconsideration. It opined that Section 11, paragraph II(a), Rule XI of
Department Order No. 9 requires a final order of cancellation before a petition for certification election may be dismissed on the ground of
lack of legal personality. Besides, it noted that the November 7, 2001 Decision of DOLE Regional Office No. III of San Fernando,
Pampanga in a case was reversed by the Bureau of Labor Relations in a Decision dated March 26, 2002.
8. LEGEND filed a Petition for Certiorari with the Court of. LEGEND alleged that the Office of the Secretary of DOLE gravely abused its
discretion in reversing and setting aside the Decision of the Med-Arbiter despite substantial and overwhelming evidence against KML.
9. KML alleged that the Decision dated March 26, 2002 of the BLR denying LEGENDs petition for cancellation and upholding KMLs
legitimacy as a labor organization has already become final and executory, entry of judgment having been made on August 21, 2002.
10. The Office of the Secretary of DOLE also filed its Comment asserting that KMLs legitimacy cannot be attacked collaterally. Finally, the
Office of the Secretary of DOLE stressed that LEGEND has no legal personality to participate in the certification election proceedings.
Ruling of the Court of Appeals
a. finding no grave abuse of discretion on the part of the Office of the Secretary of DOLE.
b. the issue on the legitimacy of KML as a labor organization has already been settled with finality.
c. The March 26, 2002 Decision of the Bureau of Labor Relations upholding the legitimacy of KML as a labor organization had long
become final and executory for failure of LEGEND to appeal the same.
d. Thus, having already been settled that KML is a legitimate labor organization, the latter could properly file a petition for certification
election. There was nothing left for the Office of the Secretary of DOLE to do but to order the holding of such certification election.
11. LEGEND filed a Motion for Reconsideration alleging, among others, that it has appealed to the Court of Appeals the March 26, 2002
Decision in Case No. RO300-0108-CP-001 denying its petition for cancellation and that it is still pending resolution.
12. CA denied LEGENDs motion for reconsideration.
13. PETITIONERS ARGUMENTS:
a. LEGEND submits that the Court of Appeals grievously erred in ruling that the March 26, 2002 Decision denying its Petition for
Cancellation of KMLs registration has already become final and executory. It asserts that it has seasonably filed a Petition for Certiorari
before the CA docketed as CA-G.R. SP No. 72659 assailing said Decision. In fact, on June 30, 2005, the Court of Appeals granted the
petition, reversed the March 26, 2002 Decision of the Bureau of Labor Relations and reinstated the November 7, 2001 Decision of the
DOLE Regional Office III ordering the cancellation of KMLs registration.
b. Finally, LEGEND posits that the cancellation of KMLs certificate of registration should retroact to the time of its issuance. It thus claims
that the petition for certification election and all of KMLs activities should be nullified because it has no legal personality to file the
same, much less demand collective bargaining with LEGEND.
c. LEGEND thus prays that the September 20, 2001 Decision of the Med-Arbiter dismissing KMLs petition for certification election be
reinstated.
14. RESPONDENTS ARGUMENTS:
a. In its Comment filed before this Court dated March 21, 2006, KML insists that the Decision of the Bureau of Labor Relations upholding
its legitimacy as a labor organization has already attained finality hence there was no more hindrance to the holding of a certification
election. Moreover, it claims that the instant petition has become moot because the certification election sought to be prevented had
already been conducted.
ISSUE/HELD:
WON the cancellation of KMLs certificate of registration should retroact to the time of its issuance. NO!
RATIO:
1. LEGEND has timely appealed the March 26, 2002 Decision of the Bureau of Labor Relations to the Court of Appeals.
2. The cancellation of KMLs certificate of registration should not retroact to the time of its issuance.

Notwithstanding the finality of the Decision canceling the certificate of registration of KML, we cannot subscribe to LEGENDs
proposition that the cancellation of KMLs certificate of registration should retroact to the time of its issuance. LEGEND claims that KMLs petition
for certification election filed during the pendency of the petition for cancellation and its demand to enter into collective bargaining agreement with
LEGEND should be dismissed due to KMLs lack of legal personality.

At any rate, the Court applies the established rule correctly followed by the public respondent that an order to hold a certification election
is proper despite the pendency of the petition for cancellation of the registration certificate of the respondent union. The rationale for this is
that at the time the respondent union filed its petition, it still had the legal personality to perform such act absent an order directing the
cancellation.
That there is a pending cancellation proceedings against the respondent Union is not a bar to set in motion the mechanics of collective
bargaining. If a certification election may still be ordered despite the pendency of a petition to cancel the unions registration certificate x x
x more so should the collective bargaining process continue despite its pendency.
an order to hold a certification election is proper despite the pendency of the petition for cancellation of the registration certificate of the
respondent union. The rationale for this is that at the time the respondent union filed its petition, it still had the legal personality to perform
such act absent an order directing a cancellation.
a certification election can be conducted despite pendency of a petition to cancel the union registration certificate. For the fact is that at the
time the respondent union filed its petition for certification, it still had the legal personality to perform such act absent an order directing its
cancellation.

Based on the foregoing jurisprudence, it is clear that a certification election may be conducted during the pendency of the cancellation
proceedings. This is because at the time the petition for certification was filed, the petitioning union is presumed to possess the legal personality to
file the same. There is therefore no basis for LEGENDs assertion that the cancellation of KMLs certificate of registration should retroact to the
time of its issuance or that it effectively nullified all of KMLs activities, including its filing of the petition for certification election and its demand
to collectively bargain.
3.

The legitimacy of the legal personality of KML cannot be collaterally attacked in a petition for certification election.
The legal personality of a legitimate labor organization cannot be subject to a collateral attack. The law is very clear on this matter. 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 a collateral attack.
In may be questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V, Book V of the Implementing
Rules.
13 Samahang Manggagawa Sa Charter Chemical v. Charter Chemical and Coating Corp.
G.R. No. 169717
March 16, 2011
Topic: Bargaining Agent, Certification Election Proceedings
Ponente: DEL CASTILLO, J.:
FACTS:
1. 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,
NCR
2. Respondent company filed an Answer with Motion to Dismiss on the ground that petitioner union is not a LLO because of: (1)
failure to comply with the documentation requirements, and (2) the inclusion of supervisory employees within petitioner
union.
Med-Arbiters Ruling
(a) Dismissed the petition for certification election.
(b) petitioner union is not a LLO 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 Code in relation to Section 1, Rule VI of Department Order (D.O.) No. 9, series of 1997.
(c) 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
(d) not being a LLO, petitioner union has no right to file a petition for certification election for the purpose of collective
bargaining.
DOLEs Ruling
(a) dismissing petitioner unions appeal on the ground that the latters petition for certification election was filed out of time.
(b) 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 companys 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

(c)

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.
(a) no certification election was previously conducted in respondent company.
(b) prior certification election filed 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.
Court of Appeals Ruling
(a) Nullifying the decision of DOLE, held that petitioner union failed to comply with the documentation requirements
(b) that petitioner union consisted of both rank-and-file and supervisory employees.
(c) 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 preelection conference pursuant to the ruling in Toyota Motor Philippines v. Toyota Motor Philippines Corporation Labor Union.
(d) that petitioner union is not a LLO, it has no legal right to file a petition for certification election.
Petitioner Unions Arguments
(a) 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
(b) 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 Section 11, Rule XI of D.O. No. 9, series of 1997, as amended, nor
are they grounds for the cancellation of a unions registration under Section 3, Rule VIII of said issuance.
(c) that what is required to be certified under oath by the local unions secretary or treasurer and attested to by the local unions
president are limited to the unions constitution and by-laws, statement of the set of officers, and the books of accounts.
(d) legal personality of pet. union cannot be collaterally attacked & may be questioned only in independent petition for
cancellation
ISSUE:
1. WON the alleged mixture of rank-and-file and supervisory employee of petitioner [unions] membership is ground for the
cancellation of petitioner [unions] legal personality and dismissal of petition for certification election. NO!
2. WON 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 [unions] legal personality as a
labor organization and for the dismissal of the petition for certification election. NO!
3. WON the legal personality of the union can be collateraly attacked in a petition for certification election. NO! (TOPIC)
HELD: CA is set aside. DOLE first decision is reinstated.
RATIO:
1. The charter certificate need not be certified under oath by the local unions secretary or treasurer and attested to by its
president.

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/chapters officers x x x
certify or attest to a document which they had no hand in the preparation of.

Petitioner unions charter certificate need not be executed under oath. Consequently, it validly acquired the status of a LLO
upon submission of (1) its charter certificate, (2) the names of its officers, their addresses, and its principal office, and (3) its
constitution and by-laws the last two requirements having been executed under oath by the proper union officials as borne
out by the records.
2.

The mixture of rank-and-file and supervisory employees in petitioner union does not nullify its legal personality as a LLO.
Preliminarily, the 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 descriptions 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 of the Labor Code.
For this reason, the court ruled 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 LLO.

the Court held that after a labor organization has been registered, it may exercise all the rights and privileges of a LLO. 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 by misrepresentation, false
statement or fraud under Article 239 of the Labor Code (Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay Highlands
Employees Union-PGTWO).

3.

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.
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.
014 STA. LUCIA EAST COMMERCIAL CORPORATION, Petitioner,
vs.
HON. SECRETARY OF LABOR AND EMPLOYMENT and STA. LUCIA EAST COMMERCIAL CORPORATION WORKERS
ASSOCIATION (CLUP LOCAL CHAPTER), Respondents.
G.R. No. 162355
August 14, 2009
TOPIC: Voluntary recognition
PONENTE: CARPIO, J.:
FACTS:
14. On 2001, Confederated Labor Union of the Philippines (CLUP) instituted a petition for certification election among the
regular rankand-file employees of Sta. Lucia East Commercial Corporation (THE CORPORATION) and its Affiliates. The
affiliate companies included in the petition were SLE Commercial, SLE Department Store, SLE Cinema, Robsan East Trading,
Bowling Center, Planet Toys, Home Gallery and Essentials. On August 2001, Med-Arbiter Bactin ordered the dismissal of the
petition due to inappropriateness of the bargaining unit. Later CLUP in its local chapter under THE CORPORATION
reorganized itself and reregistered as CLUP-Sta. Lucia East Commercial Corporation Workers Association (herein THE
UNION), limiting its membership to the rankand-file employees of Sta. Lucia East Commercial Corporation. On the same
date, THE UNION or THE UNION filed the instant petition for certification election. It claimed that no certification election
has been held among them within the last 12 months prior to the filing of the petition, and while there is another union
registered covering the same employees, namely Samahang Manggawa sa SLEC [SMSLEC], it has not been recognized as the
exclusive bargaining agent of [THE CORPORATIONs] employees.
15. On November 2001, THE CORPORATION or THE CORPORATION filed a motion to dismiss the petition. It averred that it
has voluntarily recognized SMSLEC as the exclusive bargaining agent of its regular rank-and-file employees, and that
collective bargaining negotiations already commenced between them. THE CORPORATION argued that the petition should
be dismissed for violating the one year and negotiation bar rules under the Omnibus Rules Implementing the Labor Code. The
CBA between SMSLEC and the corporation was ratified by its rank-and-file employees and registered with DOLE. In the
meantime, on December 2001, the union filed its Opposition to THE CORPORATIONS Motion to Dismiss questioning the
validity of the voluntary recognition of [SMSLEC] by [THE CORPORATION] and their consequent negotiations and
execution of a CBA. According to [THE UNION], the voluntary recognition of [SMSLEC] by [THE CORPORATION]
violated the requirements for voluntary recognition, i.e., non-existence of another labor organization in the same bargaining
unit. It pointed out that the time of the voluntary recognition on 20 July 2001, appellants registration which covers the same
group of employees covered by Samahang Manggagawa sa Sta. Lucia East Commercial, was existing and has neither been
cancelled or abandoned. The Med-Arbiters Ruling Med-Arbiter Bactin dismissed THE UNIONs petition for direct
certification on the ground of contract bar rule. The prior voluntary recognition of SMSLEC and the CBA between THE
CORPORATION and SMSLEC bars the filing of THE UNIONs petition for direct certification
16.
17. THE UNION raised the matter to the Secretary. The Ruling of the Secretary of Labor and Employment The Secretary held that
the subsequent negotiations and registration of a CBA executed by THE CORPORATION with SMSLEC could not bar THE
UNIONs petition. THE UNION constituted a registered labor organization at the time of THE CORPORATIONs voluntary

recognition of SMSLEC. THE CORPORATION then filed a petition for certiorari before the appellate court. The Ruling of the
Appellate Court The appellate court affirmed the ruling of the Secretary
ISSUE(S): Whether THE CORPORATIONs voluntary recognition of SMSLEC was done while a legitimate labor organization
was in existence in the bargaining unit.
HELD: NO. We resolve to deny the petition for lack of merit.
RATIO:
20. Legitimate Labor Organization Article 212(g) of the Labor Code defines a labor organization as "any union or association of
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." Upon compliance with all the documentary requirements, the Regional Office or
Bureau shall issue in favor of the applicant labor organization a certificate indicating that it is included in the roster of
legitimate labor organizations.6 Any applicant labor organization 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.7
Bargaining Unit The concepts of a union and of a legitimate labor organization are different from, but related to, the concept of
a bargaining unit. A bargaining unit is a "group of employees of a given employer, comprised of all or less than all of the entire
body of employees, consistent with equity to the employer, indicated to be the best suited to serve the reciprocal rights and
duties of the parties under the collective bargaining provisions of the law." The fundamental factors in determining the
appropriate collective bargaining unit are: (1) the will of the employees (Globe Doctrine); (2) affinity and unity of the
employees interest, such as substantial similarity of work and duties, or similarity of compensation and working conditions
(Substantial Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of employment status.
21.

The UNIONS initial problem was that they constituted a legitimate labor organization representing a nonappropriate
bargaining unit. However, The union subsequently re-registered as THE UNION, limiting its members to the rank-andfile of
THE CORPORATION. THE CORPORATION cannot ignore the union was a legitimate labor organization at the time of THE
CORPORATIONs voluntary recognition of SMSLEC. THE CORPORATION and SMSLEC cannot, by themselves, decide
whether CLUP-THE CORPORATION and its Affiliates Workers Union represented an appropriate bargaining unit. The
inclusion in the union of disqualified employees is not among the grounds for cancellation of registration, unless such
inclusion is due to misrepresentation, false statement or fraud under the circumstances The union having been validly issued a
certificate of registration, should be considered as having acquired juridical personality which may not be attacked
collaterally. The proper procedure for THE CORPORATION is to file a petition for cancellation of certificate of registration
of CLUP-THE CORPORATION and its Affiliates Workers Union and not to immediately commence voluntary recognition
proceedings with SMSLEC.
SLECCs Voluntary Recognition of SMSLEC

22.

The employer may voluntarily recognize the representation status of a union in unorganized establishments.12 SLECC was
not an unorganized establishment when it voluntarily recognized SMSLEC as its exclusive bargaining representative on 20
July 2001. CLUP-SLECC and its Affiliates Workers Union filed a petition for certification election on 27 February 2001 and
this petition remained pending as of 20 July 2001. Thus, SLECCs voluntary recognition of SMSLEC on 20 July 2001, the
subsequent negotiations and resulting registration of a CBA executed by SLECC and SMSLEC are void and cannot bar
CLUP-SLECCWAs present petition for certification election.
Employers Participation in a Petition for Certification Election

23.

24.

We find it strange that the employer itself, SLECC, filed a motion to oppose CLUP-SLECCWAs petition for certification
election. In petitions for certification election, the employer is a mere bystander and cannot oppose the petition or appeal the
Med-Arbiters decision. The exception to this rule, which happens when the employer is requested to bargain collectively, is
not present in the case before us.13

WHEREFORE, we DENY the petition. We AFFIRM the Decision promulgated on 14 August 2003 as well as the Resolution
promulgated on 24 February 2004 of the Court of Appeals in CA-G.R. SP No. 77015.
015 COASTAL SUBIC BAY TERMINAL, INC. v DOLE
G.R. No. 157117. November 20, 2006
TOPIC: Bargaining unit;
PONENTE: Quisumbing, J.
FACTS:

PARTIES
o PETITIONER CSBTCI (COMPANY)
o RESPONDENTS:
CSBTI-RFU (rank and file)
CSBTI-SU-APSOTEU (supervisory)

8 July 1998 CSBTI-RFU and CSBTI-SU filed separate petitions for certification election before Med-Arbiter

CSBTI-RFU insists that it is a legitimate labor organization (LLO) chartered by the Associated Labor Union (ALU),
and
o CSBTI-SU-APSOTEU insists that it is an LLO; chartered by Associated Professional, Supervisory, Office and
Technical Employees Union (APSOTEU).

CSBTI opposed both petitions for certification election;


o GROUND: BOTH not LLO and that the proposed bargaining units were not particularly described.

MED-ARBITER dismissed the petitions (without ruling on the legitimacy of the respondent unions) but without prejudice
to refiling both petitions for certification election.
o RATIO: ALU and APSOTEU are one and the same federation having a common set of officers. Thus, both unions are
affiliated to the same federation

Both parties appealed to the Secretary of Labor and Employment (SOLE);

SOLE Decision reversed the decision of the Med-Arbiter.


o CSBTI-SU and CSBTI-RFU have separate legal personalities to file separate petitions for certification election.
o 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.
o ALU and APSOTEU are separate and distinct labor unions having separate certificates of registration from the DOLE
with different set of locals. They also have different sets of locals.
o CSBTI-RFU and CSBTI-SU are legitimate labor organizations having been chartered respectively by ALU and
APSOTEU after submitting all the requirements with the Bureau of Labor Relations (BLR).
o The Secretary ordered the holding of separate certification election.
o The latest payroll of the employer, including its payrolls for the last 3 months immediately preceding the issuance of
this decision, shall be the basis for determining the qualified list of voters.

CSBTIs MR was also denied.

On appeal, the CA affirmed the decision of the Secretary; MR DENIED

HENCE, SC

CONTENTION OF CSBTCI:
o 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 APSOTEUs registration was the 1989
Revised Implementing Rules and Regulations of Rep. Act No. 6715.
o that APSOTEU lacks legal personality, and its chartered affiliate CSBTI-SU cannot attain the status of a legitimate
labor 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.
ISSUES : WON supervisory and the rank-and-file unions CAN file separate petitions for certification election. NO
HELD : NO
DISPOSITIVE: 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.
RATIO:

The issue on the status of the supervisory union CSBTI-SU DEPENDS on the status of APSOTEU, its mother federation.

Pertinent is Article 235 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.

Further, Section 2, Rule II, Book V of the 1989 Revised IRR of the Labor Code provides that:
o 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 applicants 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.

The Implementing Rules specifically Section 1, Rule III of Book V, as amended by Department Order No. 9 provides that:
o 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 applicants principal office is located . x x x x

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.

Records show that APSOTEU was registered on 1 March 1991.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 21 June 1997.

Considering further that APSOTEUs principal office is located in Diliman, Quezon City, and its registration was filed with the
NCR Regional Office, the certificate of registration is valid.

Villar v Inciong was misapplied ! the union in question in this case has no record in the BLR.

The CA did not err in its application of stare decisis when it upheld the Secretarys ruling that APSOTEU is a legitimate
labor organization and its personality cannot be assailed unless in an independent action for cancellation of registration
certificate.
o

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.

APSOTEU is a legitimate labor organization and has authority to issue charter to its affiliates. It may issue a local
charter certificate to CSBTI-SU and correspondingly, CSBTI-SU is legitimate.

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. ! Again, petitioners are not correct.

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.

The legal personality of a labor organization cannot be collaterally attacked. 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 CSBTIRFU 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.

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.

Hence, local unions are considered principals while the federation is deemed to be merely their agent. 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.1wphi1

Caution: Under Article 245 of the Labor Code, 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.
o

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.

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.

In the case of De La Salle University Medical Center and College of Medicine v. Laguesma, the Court ruled 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.

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 rankand-file and the federation of supervisory unions.
o

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.1wphi1

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.

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.

016 Union of Filipro Employees v. Nestle Phils.,


G.R. Nos. 158930-31 March 3, 2008
TOPIC: Collective Bargaining
PONENTE: CHICO-NAZARIO, J.
FACTS:
UFE-DFA-KMU was the sole and exclusive bargaining agent of the rank-and-file employees of Nestl belonging to the latters
Alabang and Cabuyao plants. On 4 April 2001, as the existing collective bargaining agreement (CBA) between Nestl and UFEDFA-KMU was to end on 5 June 2001, the Presidents of the Alabang and Cabuyao Divisions of UFE-DFA-KMU informed Nestl
of their intent to "open new Collective Bargaining Negotiation for the year 2001-2004 as early as June 2001. In response thereto,
Nestl informed them that it was also preparing its own counter-proposal and proposed ground rules to govern the impending
conduct of the CBA negotiations.
On 29 May 2001, in another letter to the UFE-DFA-KMU (Cabuyao Division only), Nestl reiterated its stance that "unilateral
grants, one-time company grants, company-initiated policies and programs, which include, but are not limited to the Retirement
Plan, Incidental Straight Duty Pay and Calling Pay Premium, are by their very nature not proper subjects of CBA negotiations and
therefore shall be excluded therefrom."
Dialogue between the company and the union thereafter ensued.
On 14 August 2001, however, Nestl requested the National Conciliation and Mediation Board (NCMB), Regional Office No. IV,
Imus, Cavite, to conduct preventive mediation proceedings between it and UFE-DFA-KMU owing to an alleged impasse in said
dialogue; i.e., that despite fifteen (15) meetings between them, the parties failed to reach any agreement on the proposed CBA.
Conciliation proceedings proved ineffective, though, and the UFE-DFA-KMU filed a Notice of Strike on 31 October 2001 with the
NCMB, complaining, in essence, of a bargaining deadlock pertaining to economic issues, i.e., "retirement (plan), panel composition,
costs and attendance, and CBA". On 07 November 2001, another Notice of Strike was filed by the union, this time predicated on
Nestls alleged unfair labor practices, that is, bargaining in bad faith by setting pre-conditions in the ground rules and/or refusing to
include the issue of the Retirement Plan in the CBA negotiations. The result of a strike vote conducted by the members of UFEDFA-KMU yielded an overwhelming approval of the decision to hold a strike.
On 26 November 2001, prior to holding the strike, Nestl filed with the DOLE a Petition for Assumption of Jurisdiction, praying for
the Secretary of the DOLE, Hon. Patricia A. Sto. Tomas, to assume jurisdiction over the current labor dispute in order to effectively
enjoin any impending strike by the members of the UFE-DFA-KMU at the Nestls Cabuyao Plant in Laguna.
On 29 November 2001, Sec. Sto. Tomas issued an Order assuming jurisdiction over the subject labor dispute. The parties are further
directed to meet and convene for the discussion of the union proposals and company counter-proposals before the National
Conciliation and Mediation Board (NCMB) who is hereby designated as the delegate/facilitator of this Office for this purpose. The
NCMB shall report to this Office the results of this attempt at conciliation and delimitation of the issues within thirty (30) days from
the parties receipt of this Order, in no case later than December 31, 2001. If no settlement of all the issues is reached, this Office
shall thereafter define the outstanding issues and order the filing of position papers for a ruling on the merits.
On 7 February 2002, Nestl and UFE-DFA-KMU filed their respective position papers. Nestl addressed several issues concerning
economic provisions of the CBA as well as the non-inclusion of the issue of the Retirement Plan in the collective bargaining
negotiations. On the other hand, UFE-DFA-KMU limited itself to the issue of whether or not the retirement plan was a mandatory
subject in its CBA negotiations.
UFE-DFA-KMU, instead of filing the above-mentioned supplement, filed several pleadings, one of which was a Manifestation with
Motion for Reconsideration of the Order dated February 11, 2002 assailing the Order of February 11, 2002 for supposedly being
contrary to law, jurisprudence and the evidence on record. The union posited that Sec. Sto. Tomas "could only assume jurisdiction
over the issues mentioned in the notice of strike subject of the current dispute," and that the Amended Notice of Strike it filed did
not cite, as one of the grounds, the CBA deadlock.
On 8 March 2002, Sec. Sto. Tomas denied the motion for reconsideration of UFE-DFA-KMU.
Thereafter, UFE-DFA-KMU filed a Petition for Certiorari before the Court of Appeals, alleging that Sec. Sto. Tomas committed
grave abuse of discretion amounting to lack or excess of jurisdiction when she issued the Orders of 11 February 2002 and 8 March
2002.

In the interim, in an attempt to finally resolve the crippling labor dispute between the parties, then Acting Secretary of the DOLE,
Hon. Arturo D. Brion, came out with an Order dated 02 April 2002, ruling that:
a. we hereby recognize that the present Retirement Plan at the Nestl Cabuyao Plant is a unilateral grant that the parties have
expressly so recognized subsequent to the Supreme Courts ruling in Nestl, Phils. Inc. vs. NLRC, G.R. No. 90231, February 4,
1991, and is therefore not a mandatory subject for bargaining;
b. the Unions charge of unfair labor practice against the Company is hereby dismissed for lack of merit;
c. the parties are directed to secure the best applicable terms of the recently concluded CBSs between Nestl Phils. Inc. and it eight
(8) other bargaining units, and to adopt these as the terms and conditions of the Nestl Cabuyao Plant CBA;
d. all union demands that are not covered by the provisions of the CBAs of the other eight (8) bargaining units in the Company are
hereby denied;
e. all existing provisions of the expired Nestl Cabuyao Plant CBA without any counterpart in the CBAs of the other eight
bargaining units in the Company are hereby ordered maintained as part of the new Nestl Cabuyao Plant CBA;
f. the parties shall execute their CBA within thirty (30) days from receipt of this Order, furnishing this Office a copy of the signed
Agreement;
g. this CBA shall, in so far as representation is concerned, be for a term of five (5) years; all other provisions shall be renegotiated
not later than three (3) years after its effective date which shall be December 5, 2001 (or on the first day six months after the
expiration on June 4, 2001 of the superceded CBA).
ISSUE(S):
(1) Whether or not Nestle is guilty of unfair labor practice
(2) Whether or not the DOLE Secretary has jurisdiction under the amended Notice of Strike
HELD:
(1) No. (2) Yes.
RATIO:
(1) UFE-DFA-KMU argues therein that Nestls "refusal to bargain on a very important CBA economic provision constitutes unfair
labor practice. It explains that Nestl set as a precondition for the holding of collective bargaining negotiations the non-inclusion of
the issue of Retirement Plan. In its words, "respondent Nestl Phils., Inc. insisted that the Union should first agree that the
retirement plan is not a bargaining issue before respondent Nestl would agree to discuss other issues in the CBA." It then
concluded that "the Court of Appeals committed a legal error in not ruling that respondent company is guilty of unfair labor
practice. It also committed a legal error in failing to award damages to the petitioner for the ULP committed by the respondent."25
We are unconvinced still.
the purpose of collective bargaining is the reaching of an agreement resulting in a contract binding on the parties; but the failure to
reach an agreement after negotiations have continued for a reasonable period does not establish a lack of good faith. The statutes
invite and contemplate a collective bargaining contract, but they do not compel one. The duty to bargain does not include the
obligation to reach an agreement.
The crucial question, therefore, of whether or not a party has met his statutory duty to bargain in good faith typically turns on the
facts of the individual case. As we have said, there is no per se test of good faith in bargaining. Good faith or bad faith is an
inference to be drawn from the facts. To some degree, the question of good faith may be a question of credibility. The effect of an
employers or a unions individual actions is not the test of good-faith bargaining, but the impact of all such occasions or actions,
considered as a whole, and the inferences fairly drawn therefrom collectively may offer a basis for the finding of the NLRC.
For a charge of unfair labor practice to prosper, it must be shown that Nestl 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 in disclaiming unilateral grants as proper subjects in their collective bargaining
negotiations. While the law makes it an obligation for the employer and the employees to bargain collectively with each other, such
compulsion does not include the commitment to precipitately accept or agree to the proposals of the other. All it contemplates is that
both parties should approach the negotiation with an open mind and make reasonable effort to reach a common ground of
agreement.
Herein, the union merely bases its claim of refusal to bargain on a letter28 dated 29 May 2001 written by Nestl where the latter laid
down its position that "unilateral grants, one-time company grants, company-initiated policies and programs, which include, but
are not limited to the Retirement Plan, Incidental Straight Duty Pay and Calling Pay Premium, are by their very nature not proper
subjects of CBA negotiations and therefore shall be excluded therefrom." But as we have stated in this Courts Decision, said letter
is not tantamount to refusal to bargain. In thinking to exclude the issue of Retirement Plan from the CBA negotiations, Nestl,
cannot be faulted for considering the same benefit as unilaterally granted, considering that eight out of nine bargaining units have
allegedly agreed to treat the Retirement Plan as a unilaterally granted benefit. This is not a case where the employer exhibited an
indifferent attitude towards collective bargaining, because the negotiations were not the unilateral activity of the bargaining
representative. Nestls desire to settle the dispute and proceed with the negotiation being evident in its cry for compulsory
arbitration is proof enough of its exertion of reasonable effort at good-faith bargaining.
In the case at bar, Nestle never refused to bargain collectively with UFE-DFA-KMU. The corporation simply wanted to exclude the
Retirement Plan from the issues to be taken up during CBA negotiations, on the postulation that such was in the nature of a
unilaterally granted benefit. An employers steadfast insistence to exclude a particular substantive provision is no different from a
bargaining representatives perseverance to include one that they deem of absolute necessity. Indeed, an adamant insistence on a
bargaining position to the point where the negotiations reach an impasse does not establish bad faith.[fn24 p.10] It is but natural that

at negotiations, management and labor adopt positions or make demands and offer proposals and counter-proposals. On account of
the importance of the economic issue proposed by UFE-DFA-KMU, Nestle could have refused to bargain with the former but it
did not. And the managements firm stand against the issue of the Retirement Plan did not mean that it was bargaining in bad faith.
It had a right to insist on its position to the point of stalemate.
Herein, Nestl is accused of violating its duty to bargain collectively when it purportedly imposed a pre-condition to its agreement
to discuss and engage in collective bargaining negotiations with UFE-DFA-KMU.
A meticulous review of the record and pleadings of the cases at bar shows that, of the two notices of strike filed by UFE-DFA-KMU
before the NCMB, it was only on the second that the ground of unfair labor practice was alleged. Worse, the 7 November 2001
Notice of Strike merely contained a general allegation that Nestl committed unfair labor practice by bargaining in bad faith for
supposedly "setting pre-condition in the ground rules (Retirement issue)." In contrast, Nestl, in its Position Paper, did not confine
itself to the issue of the non-inclusion of the Retirement Plan but extensively discussed its stance on other economic matters
pertaining to the CBA. It is UFE-DFA-KMU, therefore, who had the burden of proof to present substantial evidence to support the
allegation of unfair labor practice.
A perusal of the allegations and arguments raised by UFE-DFA-KMU in the Memorandum (in G.R. Nos. 158930-31) will readily
disclose the need for the presentation of evidence other than its bare contention of unfair labor practice in order to make certain the
propriety or impropriety of the ULP charge hurled against Nestl. Under Rule XIII, Sec. 4, Book V of the Implementing Rules of
the Labor Code:
x x x. In cases of unfair labor practices, the notice of strike shall as far as practicable, state the acts complained of and the efforts
to resolve the dispute amicably." (Emphasis supplied.)
In the case at bar, except for the assertion put forth by UFE-DFA-KMU, neither the second Notice of Strike nor the records of these
cases substantiate a finding of unfair labor practice. It is not enough that the union believed that the employer committed acts of
unfair labor practice when the circumstances clearly negate even a prima facie showing to warrant such a belief. (Tiu v. National
Labor Relations Commission, G.R. No. 123276, 18 August 1997, 277 SCRA 681, 688.)
Employers are accorded rights and privileges to assure their self-determination and independence and reasonable return of capital.
(Capitol Medical Center, Inc. v. Meris, G.R. No. 155098, 16 September 2005, 470 SCRA 125, 136.) This mass of privileges
comprises the so-called management prerogatives. (Capitol Medical Center, Inc. v. Meris, G.R. No. 155098, 16 September 2005,
470 SCRA 125, 136.) In this connection, the rule is that good faith is always presumed. As long as the companys exercise of the
same is in good faith to advance its interest and not for purpose of defeating or circumventing the rights of employees under the law
or a valid agreement, such exercise will be upheld. (Capitol Medical Center, Inc. v. Meris, G.R. No. 155098, 16 September 2005,
470 SCRA 125, 136.)
There is no per se test of good faith in bargaining. (Hongkong Shanghai Banking Corporation Employees Union v. National Labor
Relations Commission, G.R. No. 125038, 6 November 1997, 281 SCRA 509, 518.) Good faith or bad faith is an inference to be
drawn from the facts. (Hongkong Shanghai Banking Corporation Employees Union v. National Labor Relations Commission, G.R.
No. 125038, 6 November 1997, 281 SCRA 509, 518.) Herein, no proof was presented to exemplify bad faith on the part of Nestl
apart from mere allegation. Construing arguendo that the content of the aforequoted letter of 29 May 2001 laid down a pre-condition
to its agreement to bargain with UFE-DFA-KMU, Nestls inclusion in its Position Paper of its proposals affecting other matters
covered by the CBA negates the claim of refusal to bargain or bargaining in bad faith. Accordingly, since UFE-DFA-KMU failed to
proffer substantial evidence that would overcome the legal presumption of good faith on the part of Nestl, the award of moral and
exemplary damages is unavailing.
(2) This Court is not convinced by the argument raised by UFE-DFA-KMU that the DOLE Secretary should not have gone beyond
the disagreement on the ground rules of the CBA negotiations. The union doggedly asserts that the entire labor dispute between
herein parties concerns only the ground rules.
Lest it be forgotten, it was UFE-DFA-KMU which first alleged a bargaining deadlock as the basis for the filing of its Notice of
Strike; and at the time of the filing of the first Notice of Strike, several conciliation conferences had already been undertaken where
both parties had already exchanged with each other their respective CBA proposals. In fact, during the conciliation meetings before
the NCMB, but prior to the filing of the notices of strike, the parties had already delved into matters affecting the meat of the
collective bargaining agreement.
This Court maintains its original position in the Decision that, based on the Notices of Strike filed by UFE-DFA-KMU, the
Secretary of the DOLE rightly decided on matters of substance. That the union later on changed its mind is of no moment because
to give premium to such would make the legally mandated discretionary power of the Dole Secretary subservient to the whims of
the parties.
PAL v PALEA
GR 142399 March 12, 2008
FACTS: (In chronological order)
1. PAL and PALEA entered into a CBA covering the period of 1986-1989.
2. Part of said agreement required PAL to pay its rank and file employees the following bonuses:
a. 13th Month Pay (Mid-Year Bonus); and
b. Christmas Bonus
3. Prior to the payment of the 13th month pay (mid-year bonus), PAL released a guideline implementing the provision, to wit:
1) Eligibility

a)
b)
2) Amount
a)
b)

Ground employees in the general payroll who are regular as of April 30, 1988;
Other ground employees in the general payroll, not falling within category a) above shall receive their 13th
Month Pay on or before December 24, 1988;

For category a) above, one month basic salary as of April 30, 1988;
Employees covered under 1 b) above shall be paid not less than 1/12 of their
basic salary for every
month of service within the calendar year.
3) Payment Date: May 9, 1988 for category 1 a) above.
4. PALEA assailed the implementation of the foregoing guideline on the ground that all employees of PAL, regular or non-regular,
must be paid their 13th month pay. In fact, in a letter, PALEA, through Herbert C. Baldovino, informed PAL that several regular
employees failed to receive their 13th Month Pay.
5. In response thereto, PAL informed PALEA that rank and file employees who were regularized after 30 April 1988 were not
entitled to the 13th month pay as they were already given their Christmas bonuses on 9 December 1988 per the Implementing Rules
of PD 851.
6. Disagreeing with PAL, PALEA filed a labor complaint for unfair labor practice against petitioner PAL before the NLRC. The
complaint interposed that the cut-off period for regularization should not be used as the parameter for granting the 13th month pay
considering that the law does not distinguish the status of employment; instead, the law covers all employees.
7. PAL countered that those rank and file employees who were not regularized by 30 April of a particular year are, in principle, not
denied their 13th month pay considering they receive said mandatory bonus in the form of the Christmas Bonus; that the Christmas
Bonus given to all its employees is deemed a compliance with Presidential Decree No. 851 and the latters implementing rules; and
that the foregoing has been the practice formally adopted in previous CBAs as early as 1970.
8. LA: Dismissed PALEAs complaint for lack of merit. PAL was not guilty of ULP in withhoulding the grant of the 13th Month
Pay/Mid Year Bonus to the concerned employees. The giving of the particular bonus was said to be merely an additional practice
made in the past, such being the case, it violated no agreement or existing practice or committed ULP, as charged. MOR to the
NLRC.
9. NLRC: GRANTED the MOR. It reversed and set aside this and ORDERED PAL to pay the 13th month pay/mid-year bonus of the
members. It held that after going through the documents submitted by PALEA in support of its contention, the Commission is
convinced that the 13th month pay or mid-year bonus is distinct from the Christmas Bonus, and although PAL already paid its
employees the latter, it must likewise pay them the former. MOR denied!
10. PAL went directly to this Court (SC) via a Petition for Review on Certiorari. However, SC referred this Petition to the CA for
proper disposition.
11. CA: Dismissed PALs petition and affirmed NLRC. From the provision of the said inter-office memo, employees who are
regular as of 30 April 1988 and those regularized thereafter, are entitled for payment of the non-regular employees as provided for
under letter (c) of the Guidelines issued. If the intention is not to include employees regularized beyond 30 April 1988, they would
not have placed letter (c). Well-settled is the rule that all doubts should be resolved in favor of labor. To rule otherwise is a betrayal
of our zealous commitment to uphold the constitutional provision affording protection to labor. MOR denied!
12. PAL filed a Petition for Review on Certiorari under R45 before the SC.
13. PALs arguments:
1) the CBA does not apply to non-regular employees such that any benefits arising from said agreement cannot be made to
apply to them, including the mid-year bonus; and
2) it has always been the company practice not to extend the mid-year bonus to those employees who have not attained
regular status prior to the month of May, when payment of the particular bonus accrues.
14. PALEA counters:
1) benefits to all employees in the collective bargaining unit, including those who do not belong to the chosen bargaining
labor organization, applies;
2) Anent the supposed company practice of PAL not to extend the payment of the 13th month pay or mid-year bonus to
non-regular employees, PALEA contends that non-payment of said benefit is considered a diminution of privileges or
benefits proscribed by PD 851;
3) that petitioner PAL misrepresented that the 13th month pay or mid-year bonus is the same as the Christmas bonus when,
in actuality, the latter is entirely different as it is a benefit paid under the provisions of the CBA, while the former is one
mandated by law, PD 851, in particular.
ISSUE: Whether or not the Court of Appeals committed reversible error in affirming the order of the NLRC for the payment of the
13th month pay or mid-year bonus to its employees regularized after 30 April 1988. NO!
HELD:

APPLICABILITY OF THE CBA


A cursory reading of the 1986-1989 CBA of the parties herein will instantly reveal that Art. I, Sec. 3 of said agreement made its
provision applicable to all employees in the bargaining unit. The particular section specifically defined the scope of application
of the CBA without distinguishing between regular and non-regular employees.

It is a well-settled doctrine that the benefits of a CBA extend to the laborers and employees in the collective bargaining unit,
including those who do not belong to the chosen bargaining labor organization. Otherwise, it would be a clear case of
discrimination.
Hence, to be entitled to the benefits under the CBA, the employees must be members of the bargaining unit, but not
necessarily of the labor organization designated as the bargaining agent. A bargaining unit has been 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, indicates to be the best suited to serve the reciprocal rights and duties of the
parties under the collective bargaining provisions of the law.
At this point, the allegation of PAL that the non-regular employees do not belong to the collective bargaining unit and are thus not
covered by the CBA is unjustified and unsubstantiated. It is apparent that PAL excludes certain employees from the benefits of the
CBA only because they have not yet achieved regular status by the cut-off date, 30 April 1988. There is no showing that the nonregular status of the concerned employees by said cut-off date sufficiently distinguishes their interests from those of the regular
employees so as to exclude them from the collective bargaining unit and the benefits of the CBA.
13TH MONTH PAY NOT EQUIVALENT TO MID-YEAR BONUS. BOTH MUST BE GIVEN
As far as non-regular employees are concerned, PAL alleges that their 13th month pay shall be the same as their Christmas bonus
and will be paid according to the terms governing the latter. SC: wrong!
From the facts of the present Petition, it is crystal clear that PAL is claiming an exemption from payment of the 13th month pay or
mid-year bonus provided in the CBA under the guise of paying the Christmas bonus which it claims to be the equivalent of the 13th
month pay under PD 851.
PD 851 mandates that all employers must pay all their employees receiving a basic salary of not more than P1,000.00 a
month, regardless of the nature of the employment, a 13th month pay not later than 24 December of every year.
Memorandum Order No. 28, dated 13 August 1986, removed the salary ceiling, generally making all employees entitled to the 13th
month pay regardless of the amount of their basic salary, designation or employment status, and irrespective of the method by which
their wages are paid, provided that they have worked for at least one (1) month during a calendar year. Presidential Decree No. 851,
as amended, does admit of certain exceptions or exclusions from its coverage, among which is:
Sec. 3(c). Employers already paying their employees 13-month pay or more in a calendar year or its equivalent at the time of this
issuance.
While employers already paying their employees a 13th month pay or more in a calendar year or its equivalent at the time of the
issuance of PD 851 are already exempted from the mandatory coverage of said law, PAL cannot escape liability in this case by
virtue thereof.
It must be stressed that in the 1986-1989 CBA, petitioner PAL agreed to pay its employees 1) the 13th month pay or the mid-year
bonus, and 2) the Christmas bonus. The 13th month pay, guaranteed by PD 851, is explicitly covered or provided for as the midyear bonus in the CBA, while the Christmas bonus is evidently and distinctly a separate benefit.
PAL may not be allowed to brush off said distinction, and unilaterally and arbitrarily declare that for non-regular employees, their
Christmas bonus is the same as or equivalent to the 13th month pay.
The Christmas bonus in this case is, although, by virtue of its incorporation into the CBA, has become more than just an act of
generosity on the part of petitioner PAL, but a contractual obligation it has undertaken.
Accordingly, if PAL truly intended that the Christmas bonus be treated as the equivalent of the 13th month pay required by law, then
said intention should have been expressly declared in their 1986-1989 CBA, or the separate provision therein on the Christmas
bonus should have been removed because it would only be superfluous. The intention is clear therefore that the bonus provided in
the CBA was meant to be in addition to the legal requirement. x x x A bonus under the CBA is an obligation created by the contract
between the management and workers while the 13th month pay is mandated by the law (P.D. 851).
The non-regular rank and file employees of petitioner PAL as of 30 April 1988, are not actually seeking more benefits than what the
other member-employees of the same bargaining unit are already enjoying. They are only requesting that all members of the
bargaining unit be treated equally and afforded the same privileges and benefits as agreed upon between PALEA and PAL in the
CBA. PAL is committing a patent act of inequity that is grossly prejudicial to the non-regular rank and file employees there
being no rational basis for withholding from the latter the benefit of a Christmas bonus besides the 13th month pay or mid-year
bonus, while the same is being granted to the other rank and file employees of petitioner PAL who have been regularized as of 30
April 1988, although both types of employees are members of the same bargaining unit. As it had willfully and intentionally agreed
to under the terms of the CBA, r PAL must pay its regular and non-regular employees who are members of the bargaining unit
represented by respondent PALEA their 13th month pay or mid-year bonus separately from and in addition to their Christmas
bonus.
018 SAN MIGUEL FOODS, INC., petitioner,
vs.
SAN MIGUEL CORPORATION EMPLOYEES UNION-PTWGO, respondent.
[G.R. NO. 168569; October 5, 2007]
TOPIC: Collective Bargaining
PONENTE: Carpio Morales
FACTS:

San Miguel Corporation Employees Union PTWGO (the Union), was the sole bargaining agent of all the monthly paid
employees of San Miguel Foods, Inc. (SMFI).
On November 9, 1992, some employees of SMFIs Finance Dept., through the Union represented by Moraleda, brough a
grievance against Finance Manager Montesa for discrimination, favoritism, ULP, not flexible, harassment, promoting divisiveness
and sectarianism before SMFI Plant Operations Manager Nava in accordance with Step 1 of the grievance machinery adopted in the
Collective Bargaining Agreement (CBA) forged by SMFI and the Union. The Union sought the following: (1) review, evaluation &
upgrading of Finance staff and (2) promotion of Montesa to other SMC affiliates & subsidiaries.
At the grievance meeting held on January 14, 1993, SMFI informed the union that it planned to address the grievance
through a work management review which would be completed by March 1993. On October 6, 1993, SMFI rendered a decision
stating that it was still in the process of completing the work management review hence, the Unions requests could not be
granted.
On October 20, 1993, the Union filed a complaint before the NLRC Arbitration Branch against SMFI, President Veloso and
Finance Manager Montesa for ULP, unjust discrimination in matters of promotion. Instead of filing a position paper as required by
the labor Arbiter, SMFI filed a motion to dismiss contending that the issues raised in the complaint were grievance issues and
therefore, should be resolved in the grievance machinery provided in the CBA of the parties or in the mandated provisions of
voluntary arbitration which is also provided in the CBA. The Unions position paper specified the acts of ULP of SMFI under Art.
248 (e) and (i) of the Labor Code:
Art. 248. Unfair labor practices of employers. It shall be unlawful for an employer to commit any of the
following unfair labor practices:
(e) discriminate in regard to wages, hours of work, and other terms and conditions of employment in order to
encourage or discourage membership in any labor organization.xxx
(i) to violate a collective bargaining agreement.
By order of February 18, 1994, the Labor Arbiter granted SMFIs motion to dismiss and ordered the remand of the case to
the grievance machinery for completion of the proceedings. Upon the Unions filing of Motion for Reconsideration/Appeal to the
NLRC, this motion was granted and the Labor Arbiter was ordered to continue the proceedings of the Unions complaint. SMFI
filed a petition for certiorari with the SC but was referred to the Court of Appeals. The CA denied SMFIs petition for certiorari, it
holding that the Labor Arbiter has jurisdiction over the complaint of the Union, they having violated the seniority rule under the
CBA by appointing and promoting certain employees which amounted to ULP. Hence, this petition for review on certiorari.
ISSUE(S):
1. WON the Labor Arbiter has jurisdiction over the complaint of the Union.
2. WON SMFIs alleged violation of the CBA constitutes ULP.
HELD: (YES/NO, and a short explanation)
1. No. For an ULP case to be cognizable by the LA, and the NLRC to exercise its appellate jurisdiction, the allegations in the
complaint should show prima facie the concurrence of the two requirements of: (1) gross violation of CBA, and (2) the
violation pertains to the economic provisions of the CBA.
2. No, the alleged acts were not gross violations of the CBA and the violation did not pertain to an economic provision of the
CBA.
RATIO:
On the questioned promotions, the Union did not allege that they were done to encourage or discourage membership in a labor
organization. In fact, those promoted were members of the complaining Union. The promotions do not thus amount to ULP under
Article 248(e) of the Labor Code.
As for the alleged ULP committed under Article 248(i), for violation of a CBA, this Article is qualified by Article 261 of the Labor
Code, the pertinent portion of which latter Article reads:
x x x violations of a Collective Bargaining Agreement, except those which are gross in character, shall no longer be
treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining Agreement. For
purposes of this article, gross violations of Collective Bargaining Agreement shall mean flagrant and/or malicious
refusal to comply with the economic provisions of such agreement. (Emphasis and underscoring supplied)
Silva v. NLRC instructs that for a
ULP case to be cognizable by the Labor Arbiter, and the NLRC to exercise its appellate jurisdiction, the allegations in the
complaint should show prima facie the concurrence of two things, namely: (1) gross violation of the CBA; AND (2) the
violation pertains to the economic provisions of the CBA.17 (Emphasis and underscoring supplied)
As reflected in the above-quoted allegations of the Union in its Position Paper, the Union charges SMFI to have violated the
grievance machinery provision in the CBA. The grievance machinery provision in the CBA is not an economic provision, however,
hence, the second requirement for a Labor Arbiter to exercise jurisdiction of a ULP is not present.
CASE LAW/ DOCTRINE:

ULP case to be cognizable by the Labor Arbiter, and the NLRC to exercise its appellate jurisdiction, the allegations in the complaint
should show prima facie the concurrence of two things, namely:
(1) gross violation of the CBA; AND
(2) the violation pertains to the economic provisions of the CBA.
019 CAPITOL MEDICAL CENTER v. TRAJANO
GR 155690 June 30, 2005
TOPIC: Collective Bargaining
PONENTE: Sandoval-Gutierrez, J.
FACTS:
1. Capitol Medical Center Employees Association-Alliance of Filipino Workers, respondent, is a duly registered labor union acting
as the certified collective bargaining agent of the rank-and-file employees of petitioner hospital Capitol Medical Center, Inc.
2. Respondent union, through its president Jaime N. Ibabao, sent petitioner a letter requesting a negotiation of their Collective
Bargaining Agreement (CBA).
3. In its reply, petitioner, challenging the unions legitimacy, refused to bargain with respondent. Subsequently, petitioner filed with
the Bureau of Labor Relations (BLR), Department of Labor and Employment, a petition for cancellation of respondents certificate
of registration, docketed as NCR-OD-9710-006-IRD.
4. For its part, respondent filed with the National Conciliation and Mediation Board (NCMB), National Capital Region, a notice of
strike, docketed as NCMB-NCR-NS-10-453-97. Respondent alleged that petitioners refusal to bargain constitutes unfair labor
practice. Despite several conferences and efforts of the designated conciliator-mediator, the parties failed to reach an amicable
settlement.
5. Thereafter, respondent staged a strike.
6. Former Labor Secretary Leonardo A. Quisumbing then issued an Order assuming jurisdiction over the labor dispute and ordering
all striking workers to return to work and the management to resume normal operations.
7. Petitioner then filed a motion for reconsideration but was denied in an Order.
8. Petitioner filed with this Court a petition for certiorari assailing the Labor Secretarys Orders. Pursuant to our ruling in St. Martin
Funeral Home vs.The National Labor Relations Commission, et al., we referred the petition to the Court of Appeals for its
appropriate action and disposition.
9. Meantime, the Regional Director, in NCR-OD-9710-006-IRD, issued an Order denying the petition for cancellation of respondent
unions certificate of registration.[5]
10. The Appellate Court rendered a Decision affirming the Orders of the Secretary of Labor.
11. The Court of Appeals issued a Resolution denying petitioners motion for reconsideration.
12. Hence, this petition for review on certiorari.
13. Petitioner contends that its petition for the cancellation of respondent unions certificate of registration involves a prejudicial
question that should first be settled before the Secretary of Labor could order the parties to bargain collectively.
ISSUE:
Whether or not the pendency of a petition for cancellation of union registration precludes collective bargaining
HELD:
No.
RATIO:
1. As aptly stated by the Solicitor General in his comment on the petition, the Secretary of Labor correctly ruled that the pendency
of a petition for cancellation of union registration does not preclude collective bargaining, thus:
That there is a pending cancellation proceedings against the respondent Union is not a bar to set in
motion the mechanics of collective bargaining. If a certification election may still be ordered
despite the pendency of a petition to cancel the unions registration certificate (National Union of
Bank Employees vs. Minister of Labor, 110 SCRA 274), more so should the collective bargaining
process continue despite its pendency. We must emphasize that the majority status of the
respondent Union is not affected by the pendency of the Petition for Cancellation pending against
it. Unless its certificate of registration and its status as the certified bargaining agent are revoked,
the Hospital is, by express provision of the law, duty bound to collectively bargain with the Union.
Indeed, no less than the Supreme Court already ordered the Hospital to collectively bargain with

the Union when it affirmed the resolution of this Office dated November 18, 1994 directing the
management of the Hospital to negotiate a collective bargaining agreement with the Union. That
was the categorical directive of the High Court in its Resolution dated February 4, 1997 in Capitol
Medical Center Alliance of Concerned Employees-United Filipino Service Worker vs. Hon.
Bienvenido E. Laguesma, et al., G.R. No. L-118915.
2. Moreover, as mentioned earlier, during the pendency of this case before the Court of Appeals, the Regional Director, in NCROD-9710-006-IRD, issued an Order on October 1, 1998 denying the petition for cancellation of respondents certificate of
registration. This Order became final and executory and recorded in the BLRs Book of Entries of Judgments on June 3, 1999.
3. Petitioner also maintains that the Secretary of Labor cannot exercise his powers under Article 263 (g) of the Labor Code without
observing the requirements of due process.
Article 263 (g) of the Labor Code, as amended, provides:
ART. 263. Strikes, Picketing and Lockouts.
xxxxxx
(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the
national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same
to the Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the
intended or impending strike or lockout as specified in the assumption or certification order. If one has already taken place at the
time of assumption or certification, all striking or locked out employees shall immediately resume operations and readmit all
workers under the same terms and conditions prevailing before the strike or lockout. The Secretary of Labor and Employment or the
Commission may seek the assistance of law enforcement agencies to ensure compliance with this provision as well as with such
orders as he may issue to enforce the same.
x x x. In labor disputes adversely affecting the continued operation of such hospitals, clinics or medical institutions, it shall be the
duty of the striking union or locking-out employer to provide and maintain an effective skeletal workforce of medical and other
health personnel, whose movement and services shall be unhampered and unrestricted, as are necessary to insure the proper and
adequate protection of the life and health of its patients, most especially emergency cases, for the duration of the strike or
lockout. In such cases, therefore, the Secretary of Labor and Employment is mandated to immediately assume, within
twenty-four (24) hours from knowledge of the occurrence of such a strike or lockout, jurisdiction over the same or certify it
to the Commission for compulsory arbitration. For this purpose, the contending parties are strictly enjoined to comply with such
orders, prohibitions and/or injunctions as are issued by the Secretary of Labor and Employment or the Commission, under pain of
immediate disciplinary action, including dismissal or loss of employment status or payment by the locking-out employer of
backwages, damages and other affirmative relief, even criminal prosecution against either or both of them.
The foregoing notwithstanding, the President of the Philippines shall not be precluded from determining the industries that, in his
opinion, are indispensable to the national interest, and from intervening at any time and assuming jurisdiction over any such labor
dispute in order to settle or terminate the same.
x x x x x x.
4. In Magnolia Poultry Employees Union vs. Sanchez,[6] we held that the discretion to assume jurisdiction may be exercised by the
Secretary of Labor and Employment without the necessity of prior notice or hearing given to any of the parties. The rationale for his
primary assumption of jurisdiction can justifiably rest on his own consideration of the exigency of the situation in relation to the
national interests.
In sum, petitioners submissions are bereft of merit.
Standard Chartered Bank Employees Union vs. Confessor
GR No. 114974
June 16, 2004
Callejo, Sr.
Facts:
Parties:
- Standard Chartered Bank (Bank): foreign banking corporation doing business in the Philippines
- Standard Chartered Bank Employees Union (Union): exclusive bargaining agent of the Bank
Sometime in August 1990, the Bank and Union signed a five-year CBA with a provision to re-negotiate the terms on the
third year.
Before the expiration of the three-year period and within the 60-day freedom period, the Union, thru its president Eddie
Divinagracia, initiated the negotiations and sent a letter containing the Unions proposals covering political provisions and
34 economic provisions.

The bank, thru its country manager Peter Harris, attached counter-proposals. Eventually, both parties agreed to set meetings
to negotiate the CBA.
Before the start of the negotiations, the Union suggested that the Banks lawyers should be excluded from the negotiating
team. Consequently, Cielito Diokno, head of the negotiating panel suggested to the Unions president to exclude Jose
Umali, president of the National Union of Bank Employees (NUBE), the federation to which the Union was affiliated, from
the Unions negotiating panel. However, Umali was retained a member.
During the negotiations, there were certain provisions, which both parties could not agree.
Towards the end of the meeting, the Union manifested that the same should be changed to "DEADLOCKED" to indicate
that such items remained unresolved. Both parties agreed to place the notation "DEFERRED/DEADLOCKED.
On May 18, 1993, the negotiations for the economic provisions commenced. Both parties presented their basis for the
economic proposals. Both parties still could not agree on the economic provisions.
Banks proposal:
- Wage Increase : 1st Year from P1,000 to P1,050.00
- 2nd Year P800.00 no change
- Group Hospitalization Insurance
From: P35,000.00 per illness To : P35,000.00 per illness per year
- Death Assistance For employee
From: P20,000.00 To : P25,000.00
- Dental Retainer Original offer remains the same
Unions proposal:
- Wage Increase: 1st Year - 40%
-

2nd Year - 19.5%

Group Hospitalization InsuranceFrom: P60,000.00 per year to : P50,000.00 per year

Dental:

Temporary Filling/ P150.00

Tooth Extraction

Permanent Filling 200.00

Prophylaxis 250.00

Root Canal From P2,000 per tooth to: 1,800.00 per tooth

Death Assistance:

For Employees: From P45,000.00 to P40,000.00

For Immediate Family Member: From P25,000.00 to P20,000.00

After negotiations, the Union and the Bank failed to agree on the remaining economic provisions of the CBA. The Union
declared a deadlock and filed a Notice of Strike before the National Conciliation and Mediation Board (NCMB).
Thereafter, the Bank filed a complaint for ULP and Damages before the Arbitration Branch of the NLRC in Manila against
the Union. Allegations of the Bank includes:
- Union violated its duty to bargain, as it did not bargain in good faith
- the Union demanded "sky high economic demands," indicative of blue-sky bargaining
- the Union violated its no strike- no lockout clause by filing a notice of strike before the NCMB
- as a consequence of the illegal act, the Bank suffered nominal and actual damages and was forced to litigate and hire the
services of the lawyer
Secretary of Labor and Employment (SOLE) Nieves Confesor issued an Order assuming jurisdiction over the labor dispute
at the Bank. After the parties submitted their position papers, SOLE issued an Order on Oct. 29, 1993 dismissing both the
Bank and Unions ULP complaint for lack of merit and that both parties failed to substantiate their claims.
The SOLE also gave the following economic rewards:
1. Wage Increase:
a) To be incorporated to present salary rates
Fourth year : 7% of basic monthly salary
Fifth year : 5% of basic monthly salary based on the 4th year adjusted salary
b) Additional fixed amount:
Fourth year : P600.00 per month
Fifth year : P400.00 per month
2. Group Insurance
a) Hospitalization : P45,000.00
b) b) Life : P130,000.00
c) c) Accident : P130,000.00

3. Medicine Allowance
Fourth year : P5,500.00
Fifth year : P6,000.00
4. Dental Benefits: Provision of dental retainer as proposed by the Bank, but without diminishing existing benefits
5. Optical Allowance
Fourth year: P2,000.00
Fifth year : P2,500.00
6. Death Assistance
a) Employee : P30,000.00
b) Immediate Family Member : P5,000.00
7. Emergency Leave Five (5) days for each contingency
8. Loans
a) Car Loan : P200,000.00
b) Housing Loan : It cannot be denied that the costs attendant to having ones own home have tremendously gone up. The
need, therefore, to improve on this benefit cannot be overemphasized. Thus, the management is urged to increase the
existing and allowable housing loan that the Bank extends to its employees to an amount that will give meaning and
substance to this CBA benefit
Both parties filed MR, which were denied by Confesor
On March 22, 1994, the Bank and Union signed the CBA. The wage increase took effect and the signing bonuses were
given to the employees covered by the CBA
Thereafter, the Union filed a petition for certiorari under Rule 65 for failure of the SOLE to rule on the ULP charge. They
alleged that:
- The Bank interfered with the Unions choice of negotiator, thereby committing ULP
- Dioknos suggestion that the negotiation be limited as a "family affair" was tantamount to suggesting that Federation
President Jose Umali, Jr. be excluded from the Unions negotiating panel
- The Bank committed surface bargaining when the Bank merely went through the motions of collective bargaining
without the intent to reach an agreement, and made bad faith proposals when it announced that the parties should begin
from a clean slate
Issue: WON the Union was able to substantiate its claim of unfair labor practice against the Bank arising from the latters alleged
"interference" with its choice of negotiator; surface bargaining; making bad faith non-economic proposals; and refusal to furnish the
Union with copies of the relevant data
Held: The petition is bereft of merit.
Dispositive Portion: IN LIGHT OF THE FOREGOING, the October 29, 1993 Order and December 16, 1993 and February 10,
1994 Resolutions of then Secretary of Labor Nieves R. Confesor are AFFIRMED. The Petition is hereby DISMISSED.
Ratio:
On interference under Article 248(a) of the Labor Code
Under the International Labor Organization Convention (ILO) No. 87 FREEDOM OF ASSOCIATION AND
PROTECTION OF THE RIGHT TO ORGANIZE to which the Philippines is a signatory, "workers and employers, without
distinction whatsoever, shall have the right to establish and, subject only to the rules of the organization concerned, to job
organizations of their own choosing without previous authorization
Said provision was incorporated in Article 243 of the Labor Code and in the Constitution wherein an entire section was
devoted emphasizing its mandate to afford protection to labor, and highlights "the principle of shared responsibility"
between workers and employers to promote industrial peace.
Article 248(a) of the Labor Code, considers it an unfair labor practice when an employer interferes, restrains or coerces
employees in the exercise of their right to self-organization or the right to form association. The right to self-organization
necessarily includes the right to collective bargaining.
If an employer interferes in the selection of its negotiators or coerces the Union to exclude from its panel of negotiators a
representative of the Union, and if it can be inferred that the employer adopted the said act to yield adverse effects on the
free exercise to right to self-organization or on the right to collective bargaining of the employees, ULP under Article 248(a)
in connection with Article 243 of the Labor Code is committed. However, substantial evidence or relevant evidence as a
reasonable mind might accept as adequate to support a conclusion is required to support the claim.
In this case, the Union based their allegations on the suggestions of Diokno to exclude Umali from the negotiating panel.
However, records show that after the initiation of the collective bargaining process, with the inclusion of Umali in the
Unions negotiating panel, the negotiations pushed through. The complaint was made only after a deadlock was declared by
the Union.
It is clear that such ULP charge was merely an afterthought. The accusation occurred after the arguments and differences
over the economic provisions became heated and the parties had become frustrated. It happened after the parties started to
involve personalities

On the duty to bargain collectively


Surface bargaining is defined as "going through the motions of negotiating" without any legal intent to reach an
agreement. It involves the question of the intent of the party in question, and usually such intent can only be inferred from
the totality of the challenged partys conduct both at and away from the bargaining table. It involves the question of whether
an employers conduct demonstrates an unwillingness to bargain in good faith or is merely hard bargaining
Based on the minutes of the meetings, there is no showing that the Bank had any intention of violating its duty to bargain
with the Union. The Bank even sent its counter-proposals and the meetings were set for the settlement of their differences.
The minutes of the meetings show that both the Bank and the Union exchanged economic and non-economic proposals and
counter-proposals.
In other words, the Union was not able to show that the Bank did not want to reach a agreement with the Union or settle
their differences
The duty to bargain "does not compel either party to agree to a proposal or require the making of a concession. Hence, the
parties failure to agree did not amount to ULP under Article 248(g) for violation of the duty to bargain.
The approval of the CBA and the release of signing bonus do not necessarily mean that the Union waived its ULP claim
against the Bank during the past negotiations
the Union failed to substantiate its claim that the Bank refused to furnish the information it needed to validate the
guestimates on the data of rank and file. However, Umali failed to put his request in writing as provided for in Article
242(c) of the Labor Code, which states that
To be furnished by the employer, upon written request, with the annual audited financial statements, including the balance
sheet and the profit and loss statement, within thirty (30) calendar days from the date of receipt of the request, after the
union has been duly recognized by the employer or certified as the sole and exclusive bargaining representatives of the
employees in the bargaining unit, or within sixty (60) calendar days before the expiration of the existing collective
bargaining agreement, or during the collective negotiation
On blue-sky bargaining
The Union is not guilty of ULP for engaging in blue-sky bargaining or making exaggerated or unreasonable proposals.
The Bank failed to show that the economic demands made by the Union were exaggerated or unreasonable. The minutes of
the meeting show that the Union based its economic proposals on data of rank and file employees and the prevailing
economic benefits received by bank employees from other foreign banks doing business in the Philippines and other
branches of the Bank in the Asian region.
021 General Milling Corp. vs CA
G.R. No. 146728. February 11, 2004
TOPIC: Collective Bargaining
PONENTE: Quisumbing, J.:
FACTS: (chronological order)
1.

In its two plants located at Cebu City and Lapu-Lapu City, petitioner General Milling Corporation (GMC) employed 190
workers. They were all members of private respondent General Milling Corporation Independent Labor Union (union, for
brevity), a duly certified bargaining agent.

2.

On April 28, 1989, GMC and the union concluded a CBA which included the issue of representation effective for a term of
three years. The CBA was effective for three years retroactive to December 1, 1988. Hence, it would expire on November
30, 1991.

3.

On November 29, 1991, a day before the expiration of the CBA, the union sent GMC a proposed CBA, with a request that a
counter-proposal be submitted within 10 days.

4.

As early as October 1991, however, GMC had received collective and individual letters from workers who stated that they
had withdrawn from their union membership, on grounds of religious affiliation and personal differences. Believing that the
union no longer had standing to negotiate a CBA, GMC did not send any counter-proposal.

5.

On December 16, 1991, GMC wrote a letter to the unions officers, Rito Mangubat and Victor Lastimoso. The letter stated
that it felt there was no basis to negotiate with a union which no longer existed, but that management was nonetheless
always willing to dialogue with them on matters of common concern and was open to suggestions on how the company
may improve its operations.

6.

In answer, the union officers wrote a letter dated December 19, 1991 disclaiming any massive disaffiliation or resignation
from the union and submitted a manifesto, signed by its members, stating that they had not withdrawn from the union.

7.

On January 13, 1992, GMC dismissed Marcia Tumbiga, a union member, on the ground of incompetence. The union
protested and requested GMC to submit the matter to the grievance procedure provided in the CBA. GMC, however,
advised the union to refer to our letter dated December 16, 1991.

8.

Thus, the union filed, on July 2, 1992, a complaint against GMC with the NLRC. The complaint alleged unfair labor
practice on the part of GMC for: (1) refusal to bargain collectively; (2) interference with the right to self-organization; and
(3) discrimination.

9.

The labor arbiter dismissed the case with the recommendation that a petition for certification election be held to determine
if the union still enjoyed the support of the workers.The union appealed to the NLRC.

10. On January 30, 1998, the NLRC set aside the labor arbiters decision. Citing Article 253-A of the Labor Code, as amended
by Rep. Act No. 6715, which fixed the terms of a collective bargaining agreement, the NLRC ordered GMC to abide by the
CBA draft that the union proposed for a period of two (2) years beginning December 1, 1991, the date when the original
CBA ended, to November 30, 1993. With respect to the unions claim of discrimination, the NLRC found the claim
unsupported by substantial evidence.
11. On GMCs motion for reconsideration, the NLRC set aside its decision of January 30, 1998, through a resolution dated
October 6, 1998. It found GMCs doubts as to the status of the union justified and the allegation of coercion exerted by
GMC on the unions members to resign unfounded.
12. On July 19, 2000, the appellate court rendered a decision: petition is hereby GRANTED. The NLRC Resolution of October
6, 1998 is hereby SET ASIDE, and its decision of January 30, 1998 is, except with respect to the award of attorneys fees
which is hereby deleted, REINSTATED
ISSUE(S): whether or not the CA acted with grave abuse of discretion amounting to lack or excess of jurisdiction in finding GMC
guilty of unfair labor practice for violating the duty to bargain collectively and/or interfering with the right of its employees to selforganization. NO
did the CA gravely abuse its discretion when it imposed on GMC the draft CBA proposed by the union for two years commencing
from the expiration of the original CBA? NO
HELD:
RATIO:
The law mandates that the representation provision of a CBA should last for five years. The relation between labor and
management should be undisturbed until the last 60 days of the fifth year. Hence, it is indisputable that when the union requested for
a renegotiation of the economic terms of the CBA on November 29, 1991, it was still the certified collective bargaining agent of the
workers, because it was seeking said renegotiation within five (5) years from the date of effectivity of the CBA on December 1,
1988. The unions proposal was also submitted within the prescribed 3-year period from the date of effectivity of the CBA, albeit
just before the last day of said period. It was obvious that GMC had no valid reason to refuse to negotiate in good faith with the
union. For refusing to send a counter-proposal to the union and to bargain anew on the economic terms of the CBA, the company
committed an unfair labor practice under Article 248 of the Labor Code (g) To violate the duty to bargain collectively as prescribed
by this Code.
Article 252 of the Labor Code elucidates the meaning of the phrase duty to bargain collectively, thus:The duty to bargain
collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the
purpose of negotiating an agreement....
We have held that the crucial question whether or not a party has met his statutory duty to bargain in good faith typically turns
on the facts of the individual case. There is no per setest of good faith in bargaining. Good faith or bad faith is an inference to be
drawn from the facts. The effect of an employers or a unions actions individually is not the test of good-faith bargaining, but the
impact of all such occasions or actions, considered as a whole.
Under Article 252 abovecited, both parties are required to perform their mutual obligation to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating an agreement. The union lived up to this obligation when it presented
proposals for a new CBA to GMC within three (3) years from the effectivity of the original CBA. But GMC failed in its duty under
Article 252. What it did was to devise a flimsy excuse, by questioning the existence of the union and the status of its membership to
prevent any negotiation.
It bears stressing that the procedure in collective bargaining prescribed by the Code is mandatory because of the basic interest
of the state in ensuring lasting industrial peace.
GMCs failure to make a timely reply to the proposals presented by the union is indicative of its utter lack of interest in
bargaining with the union. Its excuse that it felt the union no longer represented the workers, was mainly dilatory as it turned out to
be utterly baseless.
We hold that GMCs refusal to make a counter-proposal to the unions proposal for CBA negotiation is an indication of its bad
faith. Where the employer did not even bother to submit an answer to the bargaining proposals of the union, there is a clear evasion
of the duty to bargain collectively.

Failing to comply with the mandatory obligation to submit a reply to the unions proposals, GMC violated its duty to bargain
collectively, making it liable for unfair labor practice. Perforce, the Court of Appeals did not commit grave abuse of discretion
amounting to lack or excess of jurisdiction in finding that GMC is, under the circumstances, guilty of unfair labor practice.
did the CA gravely abuse its discretion when it imposed on GMC the draft CBA proposed by the union for two years commencing
from the expiration of the original CBA?NO
ART. 253. Duty to bargain collectively when there exists a collective bargaining agreement. ....It shall be the duty of both
parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the
60-day period [prior to its expiration date] and/or until a new agreement is reached by the parties. (Underscoring supplied.)
The provision mandates the parties to keep the status quo while they are still in the process of working out their respective
proposal and counter proposal. The general rule is that when a CBA already exists, its provision shall continue to govern the
relationship between the parties, until a new one is agreed upon. The rule necessarily presupposes that all other things are equal.
That is, that neither party is guilty of bad faith. However, when one of the parties abuses this grace period by purposely delaying the
bargaining process, a departure from the general rule is warranted.
it would be unfair to the union and its members if the terms and conditions contained in the old CBA would continue to be
imposed on GMCs employees for the remaining two (2) years of the CBAs duration. We are not inclined to gratify GMC with an
extended term of the old CBA after it resorted to delaying tactics to prevent negotiations. Since it was GMC which violated the duty
to bargain collectively, based on Kiok Loy and Divine Word University of Tacloban, it had lost its statutory right to negotiate or
renegotiate the terms and conditions of the draft CBA proposed by the union.
022 FVC Labor Union-Philippine Transport and General Workers Organization (FVCLU-PTGWO) v. Sama-Samang
Nagkakaisang Manggagawa Sa FVC-Solidarity Of Independent And General Labor Organizations (SANAMA-FVCSIGLO)
G.R. No. 176249, November 27, 2009
TOPIC: Collective Bargaining
PONENTE: BRION, J.
FACTS:
12. December 22, 1997, the petitioner FVCLU-PTGWO the recognized bargaining agent of the rank-and-file employees of the
FVC Philippines, Incorporated (company) signed a five-year collective bargaining agreement (CBA) with the company. The
five-year CBA period was from February 1, 1998 to January 30, 2003.
13. At the end of the 3rd year of the five-year term and pursuant to the CBA, FVCLU-PTGWO and the company entered into
the renegotiation of the CBA and modified, among other provisions, the CBAs duration. Article XXV, Section 2 of the
renegotiated CBA provides that this re-negotiation agreement shall take effect beginning February 1, 2001 and until May
31, 2003 thus extending the original five-year period of the CBA by four (4) months
14. January 21, 2003, nine (9) days before the January 30, 2003 expiration of the originally-agreed five-year CBA term (and
four [4] months and nine [9] days away from the expiration of the amended CBA period), the respondent Sama-Samang
Nagkakaisang Manggagawa sa FVC-Solidarity of Independent and General Labor Organizations (SANAMA-SIGLO) filed
before the Department of Labor and Employment (DOLE) a petition for certification election for the same rank-and-file unit
covered by the FVCLU-PTGWO CBA.
15. FVCLU-PTGWO moved to dismiss the petition on the ground that the certification election petition was filed outside the
freedom period or outside of the sixty (60) days before the expiration of the CBA on May 31, 2003.
16. June 17, 2003, Med-Arbiter Arturo V. Cosuco dismissed the petition on the ground that it was filed outside the 60-day
period counted from the May 31, 2003 expiry date of the amended CBA -> respondent appealed to DOLE Secretary.
17. DOLE Secretary Patricia A. Sto. Tomas sustained SANAMA-SIGLOs position, thereby setting aside the decision of the
Med-Arbiter. She ordered the conduct of a certification election in the company. FVCLU-PTGWO moved for the
reconsideration of the Secretarys decision
18. November 6, 2003, DOLE Acting Secretary Manuel G. Imson granted the motion; he set aside the August 6, 2003 DOLE
decision and dismissed the petition as the Med-Arbiters Order of June 17, 2003 did. The amended CBA (which extended the
representation aspect of the original CBA by 4 months) had been ratified by members of the bargaining unit some of whom
later organized themselves as SANAMA-SIGLO, the certification election applicant. Since these SANAMA-SIGLO
members fully accepted and in fact received the benefits arising from the amendments, the Acting Secretary rationalized
that they also accepted the extended term of the CBA and cannot now file a petition for certification election based on the
original CBA expiration date. -> Respondent filed a MR -> denied -> sought relief from the CA through a petition for
certiorari under Rule 65 of the Rules of Court based on the grave abuse of discretion the Labor Secretary committed when
she reversed her earlier decision calling for a certification election.

19. CA: in favor of respondent - while the parties may renegotiate the other provisions (economic and non-economic) of the
CBA, this should not affect the five-year representation aspect of the original CBA. If the duration of the renegotiated
agreement does not coincide with but rather exceeds the original five-year term, the same will not adversely affect the right
of another union to challenge the majority status of the incumbent bargaining agent within sixty (60) days before the lapse
of the original five (5) year term of the CBA. In the event a new union wins in the certification election, such union is
required to honor and administer the renegotiated CBA throughout the excess period.
Petitioners Argument
- CA erred in strictly applying Section 11 (11b), Rule XI, Book V of the Omnibus Rules Implementing the Labor Code, as
amended by Department Order No. 9, s. 1997.
- peculiar circumstances the FVCLU-PTGWO referred to relate to the economic and other provisions of the February 1,
1998 to January 30, 2003 CBA that it renegotiated with the company. The renegotiated CBA changed the CBAs remaining
term from February 1, 2001 to May 31, 2003. To FVCLU-PTGWO, this extension of the CBA term also changed the unions
exclusive bargaining representation status and effectively moved the reckoning point of the 60-day freedom period from
January 30, 2003 to May 30, 2003. FVCLU-PTGWO thus moved to dismiss the petition for certification election filed on
January 21, 2003 (9 days before the expiry date on January 30, 2003 of the original CBA) by SANAMA-SIGLO on the
ground that the petition was filed outside the authorized 60-day freedom period.
-Respondent is estopped from questioning the extension of the CBA term under the amendments because its members are
the very same ones who approved the amendments, including the expiration date of the CBA, and who benefited from these
amendments.
- the representation petition had been rendered moot by a new CBA it entered into with the company covering the period
June 1, 2003 to May 31, 2008.
Respondents Side
-

manifested on October 10, 2007 that: since the promulgation of the CA decision on July 25, 2006 or three years after
the petition for certification election was filed, the local leaders of SANAMA-SIGLO had stopped reporting to the
federation office or attending meetings of the council of local leaders; the SANAMA-SIGLO counsel, who is also the
SIGLO national president, is no longer in the position to pursue the present case because the local union and its
leadership, who are principals of SIGLO, had given up and abandoned their desire to contest the representative status of
FVCLU-PTGWO; and a new CBA had already been signed by FVCLU-PTGWO and the company

pursuing the case has become futile, and accordingly simply adopted the CA decision of July 25, 2006 as its position;
its counsel likewise asked to be relieved from filing a comment in the case. We granted the request for relief and
dispensed with the filing of a comment.

ISSUE(S): What is the effect of the amended or extended term of the CBA on the exclusive representation status of the collective
bargaining agent and the right of another union to ask for certification as exclusive bargaining agent.
HELD: Despite an agreement for a CBA with a life of more than five years, either as an original provision or by amendment, the
bargaining unions exclusive bargaining status is effective only for five years and can be challenged within sixty (60) days prior to
the expiration of the CBAs first five years.
DISPOSITIVE PORTION: WHEREFORE, premises considered, we AFFIRM the correctness of the challenged Decision and
Resolution of the Court of Appeals and accordingly DISMISS the petition, but nevertheless DECLARE that no certification
election, pursuant to the underlying petition for certification election filed with the Department of Labor and Employment, can be
enforced as this petition has effectively been abandoned.
RATIO:
4.

FVCLU-PTGWO has taken the view that its exclusive representation status should fully be in step with the term of the
CBA and that this status can be challenged only within 60 days before the expiration of this term. Thus, when the term of
the CBA was extended, its exclusive bargaining status was similarly extended so that the freedom period for the filing of a
petition for certification election should be counted back from the expiration of the amended CBA term.
5. We hold this FVCLU-PTGWO position to be correct, but only with respect to the original five-year term of the CBA which,
by law, is also the effective period of the unions exclusive bargaining representation status. While the parties may agree to
extend the CBAs original five-year term together with all other CBA provisions, any such amendment or term in excess of
five years will not carry with it a change in the unions exclusive collective bargaining status. By express provision of the
above-quoted Article 253-A, the exclusive bargaining status cannot go beyond five years and the representation status is a
legal matter not for the workplace parties to agree upon. In other words, despite an agreement for a CBA with a life of more

than five years, either as an original provision or by amendment, the bargaining unions exclusive bargaining status is
effective only for five years and can be challenged within sixty (60) days prior to the expiration of the CBAs first five years.
6. In the present case, the CBA was originally signed for a period of five years, i.e., from February 1, 1998 to January 30,
2003, with a provision for the renegotiation of the CBAs other provisions at the end of the 3rd year of the five-year CBA
term. Thus, prior to January 30, 2001 the workplace parties sat down for renegotiation but instead of confining themselves
to the economic and non-economic CBA provisions, also extended the life of the CBA for another four months, i.e., from
the original expiry date on January 30, 2003 to May 30, 2003.
7. As discussed above, this negotiated extension of the CBA term has no legal effect on the FVCLU-PTGWOs exclusive
bargaining representation status which remained effective only for five years ending on the original expiry date of January
30, 2003. Thus, sixty days prior to this date, or starting December 2, 2002, SANAMA-SIGLO could properly file a petition
for certification election. Its petition, filed on January 21, 2003 or nine (9) days before the expiration of the CBA and of
FVCLU-PTGWOs exclusive bargaining status, was seasonably filed.
8. We thus find no error in the appellate courts ruling reinstating the DOLE order for the conduct of a certification election. If
this ruling cannot now be given effect, the only reason is SANAMA-SIGLOs own desistance; we cannot disregard its
manifestation that the members of SANAMA themselves are no longer interested in contesting the exclusive collective
bargaining agent status of FVCLU-PTGWO. This recognition is fully in accord with the Labor Codes intent to foster
industrial peace and harmony in the workplace.
G.R. No. 162324
February 4, 2009
RFM CORPORATION-FLOUR DIVISION and SFI FEEDS DIVISION vs. KASAPIAN NG MANGGA-GAWANG
PINAGKAISA-RFM (KAMPI-NAFLU-KMU) and SANDIGAN AT UGNAYAN NG MANGGAGAWANG PINAGKAISASFI (SUMAPI-NAFLU-KMU)
TOPIC: Collective Bargaining
PONENTE: Carpio-Morales
FACTS:
1. Sometime in 2000, RFMs Flour Division and SFI Feeds Division entered into collective bargaining agreements (CBAs) with
their respective labor unions, the Kasapian ng Manggagawang Pinagkaisa-RFM (KAMPI-NAFLU-KMU) for the Flour Division,
and Sandigan at Ugnayan ng Manggagawang Pinagkaisa-SFI (SUMAPI-NAFLU-KMU) for the Feeds Division (respondents). The
CBAs, which contained similar provisions, were effective for five years, from July 1, 2000 up to June 30, 2005.
2. Sec. 3, Art. XVI of each of the CBAs reads:
Section. 3. Special Holidays with Pay The COMPANY agrees to make payment to all daily paid employees, in respect of any of
the days enumerated hereunto if declared as special holidays by the national government:
a) Black Saturday
b) November 1
c) December 31
The compensation rate shall be the regular rate. Any work beyond eight (8) hours shall be paid the standard ordinary premium.
(Emphasis and underscoring supplied)
3. During the first year of the effectivity of the CBAs in 2000, December 31 which fell on a Sunday was declared by the national
government as a special holiday. Respondents thus claimed payment of their members salaries, invoking the above-stated CBA
provision. Petitioner refused the claims for payment, averring that December 31, 2000 was not compensable as it was a rest day. The
controversy resulted in a deadlock, drawing the parties to submit the same for voluntary arbitration.
4. Voluntary Arbitrator (VA) Bernardino M. Volante declared that the above-quoted provision of the CBA is clear. It accordingly
ruled in favor of respondents and ordered petitioner to pay the salaries of respondents members for December 31, 2000, and to pay
attorneys fees to respondents equivalent to 10% of the monetary award.
5. Petitioner appealed to the CA which affirmed the VA.
The appellate court held that if it was indeed petitioners intent to pay the salaries of daily-paid employees during a special holiday,
even if unworked, only if such special holiday fell on weekdays, then it should have been clearly and expressly stipulated in the
CBAs. And it held inapplicable Kimberly Clark Philippines v. Lorredo cited by petitioner which case held that whenever there is a
conflict between the words in the CBA and the evident intention of the parties, the latter prevails. For, so the appellate court
explained, there were no words or provisions in the CBAs which would result in an absurd interpretation vis a vis the parties true
intention.
In sustaining the award of attorneys fees, the appellate court ruled that respondents were entitled thereto as they were compelled to
engage a lawyer to pursue their claims.
RFM appeals to the SC.

ISSUE (S): First: RFM insists that the CBA provision in question was intended to protect the employees from reduction of their
take - home pay, hence, it was not meant to remunerate them on Sundays, which are rest days, or to increase their salaries.
Second: On the award of attorneys fees, petitioner argues that it is not warranted as it did not arbitrarily refuse to pay respondents
demands.
HELD: Both issues lack merit.
DISPOSITIVE PORTION: Petition denied.
RATIO:
First Issue:
If the terms of a CBA are clear and have no doubt upon the intention of the contracting parties, as in the herein questioned
provision, the literal meaning thereof shall prevail. That is settled. As such, the daily-paid employees must be paid their regular
salaries on the holidays which are so declared by the national government, regardless of whether they fall on rest days.
Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford protection to labor. Its
purpose is not merely "to prevent diminution of the monthly income of the workers on account of work interruptions. In other
words, although the worker is forced to take a rest, he earns what he should earn, that is, his holiday pay."(Emphasis and
underscoring supplied)
The CBA is the law between the parties; they are obliged to comply with its provisions. Indeed, if petitioner and respondents
intended the provision in question to cover payment only during holidays falling on work or weekdays, it should have been so
incorporated therein.
Petitioner maintains, however, that the parties failed to foresee a situation where the special holiday would fall on a rest day. The
Court is not persuaded. The Labor Code specifically enjoins that in case of doubt in the interpretation of any law or provision
affecting labor, it should be interpreted in favor of labor.
Second Issue:
Respondents having been compelled to litigate as a result of petitioners failure to satisfy their valid claim, the Court deems it just
and equitable to sustain the award of attorneys fees.
CASE LAW/ DOCTRINE: If the CBA is clear and has no doubts in the contracting parties intentions, literal meaning must
prevail. In cases of doubt, the interpretation favors labor.
024 Farley Fulache, Manolo Jabonero, David Castillo, Jeffrey Lagunzad, Atinen v. ABS-CBN
Topic: Collective Bargaining
FACTS: (chronological order)
Regularization Issue
1. The petitioners filed 2 separate complaints for regularization, ULP, and several money claims against ABS-CBN Cebu.
1.1. The petitioners were drivers, cameramen, editors, and Teleprompters.
1.2. The petitioners alleged that on Dec. 17, 1999, that the ABSCBN-EU and the respondent entered into a CBA effective
from 12/11/99 to 12/10/2002;
1.3. And upon learning of the CBA, they discovered that they were excluded from the coverage because the respondent
considers them as temporary employees.
1.4. They also allege that they must be considered regular employees because they are employees of the respondent for
over a year now, thus should be considered as regular employees.
2. On the part of the respondent, it countered that:
2.1. ABS-CBN claimed that to cope with fluctuating business conditions, it contracts on a case-to-case basis the services of
persons who possess the necessary talent, skills, training, expertise or qualifications to meet the requirements of its
programs and productions. These contracted persons are called talents and are considered independent contractors
who offer their services to broadcasting companies.
2.2. Instead of salaries, ABS-CBN pointed out that talents are paid a pre-arranged consideration called talent fee taken
from the budget of a particular program and subject to a ten percent (10%) withholding tax. Talents do not undergo
probation. Their services are engaged for a specific program or production, or a segment thereof. Their contracts are
terminated once the program, production or segment is completed.
2.3. ABS-CBN alleged that the petitioners services were contracted on various dates by its Cebu station as independent
contractors/off camera talents, and they were not entitled to regularization in these capacities.
3. The 2 complaints were consolidated and assigned to Labor Arbiter Rendoque.
4. Labor Arb. Rendoque: the employees are regular employees of the respondent.
5. ABSCBN appealed to the NLRC alleging that the petitioners are independent contractors.
Illegal Dismissal Issue
6. Meanwhile, pending appeal with the NLRC, the petitioners were dismissed due to their refusal to sign contracts of
employment with Able Services.

7.
8.

The petitioners filed a case for illegal dismissal.


The respondents countered:
8.1. The respondent reviewed its structure and organizational requirements and concluded that the roles occupied by the
petitioners (ie messengerial, janitorial, utility, makeup, wardrobe, etc.) were better handled by legitimate service
contractors.
8.2. Also, the respondent contends that assuming they were indeed illegally dismissed, their relationship was so strained
and that one of the petitioners (Atinen) already executed a quitclaim and release.
9. The case was also handled by Labor Arbiter Rendoque.
10. Labor Arb.: the contracting out of the roles mentioned are valid.
10.1.LA also held that the roles of the petitioners were redundant.
10.2.However, LA awarded the petitioners 1 months salary for every year of service.
11. The respondent appealed he award of the LA to the NLRC.
NLRC decision on Regularization and Illegal Dismissal Issue
12. NLRC:
12.1.On regularization issue (LA affirmed)
12.1.1. There was an employer-employee relationship because the respondent exercised control over the petitioners.
12.1.2. Further the NLRC held that the petitioners are regular workers because they work they did was usually
necessary or desirable in the trade or business of the respondent.
12.1.3. The petitioners couldnt be considered contractual because they werent paid for the result of their work, but
rather they were paid on a monthly basis.
12.2.On illegal dismissal issue (LA reversed)
12.2.1. the petitioners were illegally dismissed
12.2.2. backwages and separation pay must be paid instead of reinstatement.
13. The petitioners filed their MR alleging:
13.1.Fulache, Jabonero, Castillo, and Lagunzad are entitled to reinstatement, backwages, salary increase, other CBA
benefits, etc.
14. The respondents also filed their own MR alleging:
14.1.Fulache, Jabonero, Castillo, and Lagunzad were independent contractors whose services were terminated due to
redundacncy thus no backwages should be paid.
14.2.Also, the petitioners are not entitled to CBA benefits because they never claimed benefits to such in their position
paper filed before the LA, and also the NLRC failed to make a clear finding theyre aprt of the bargaining unit.
15. NLRC on MR:
15.1.on regularization issue: (LA decision reinstated)
15.1.1. petitioners are regular employees entitled to the benefits of such.
15.2.On illegal dismissal issue: (LA decision reinstated)
15.2.1. despite the petitioners being recognized as regulars, they are still redundant.
16. Second MR of the petitioners denied being a prohibited pleading.
17. Petitioners filed petitioner under R65 with the CA alleging:
17.1.NLRC acted with GAD in denying them CBA benefits, finding that theyre not part of the bargaining unit, and not
granting reinstatement.
18. The respondent questioned the propriety of the R65 petition.
18.1.Respondent argued that proper remedy was to appeal the reinstated decision of the LA.
19. CA: ruled against the respondent holding that the petitioner under R65 was jusitified because there being no plain,
adequate, and speedy remedy.
19.1.On the merits, CA held that the petitioners failed to prove theyre entitled to CBA benefits.
19.2.CA also held that the NLRC was correct in reinstating the decision of the LA holding that the petitioners ere not
illegally dismissed because the petitioners positions were redundant.
19.3.Except for separation pay, CA did not grant backwages, damages, and attorneys fees as prayed for.
20. MR of the petitioners with the CA denied.
21. Hence this petition. SA WAKAS!
21.1.Petitioner contends that the CA erred in not considering the evidence they submitted to bolster their claim that theyre
part of the bargaining unit.
21.2.That the CA also erred in not ordering the respondent to pay salaries, allowances, CBA benefits despite the declaration
of the NLRC that theyre regular employees.
21.3.That the CA erred in declaring that drivers are redundant contrary to jurisprudence.
ISSUE(S):
Whether or not the CA erred in holding that theyre not entitled to CBA benefits?
HELD:

RATIO:
1. The petitioners are members of the appropriate bargaining unit because they are regular rank-and-file employees
and do not belong to any of the excluded categories. Specifically, nothing in the records shows that they are supervisory
or confidential employees; neither are they casual nor probationary employees. Most importantly, the labor arbiters
decision of January 17, 2002affirmed all the way up to the CA levelruled against ABS-CBNs submission that they are
independent contractors. Thus, as regular rank-and-file employees, they fall within CBA coverage under the CBAs express
terms and are entitled to its benefits.
2. We see no merit in ABS-CBNs arguments that the petitioners are not entitled to CBA benefits because:
2.1. they did not claim these benefits in their position paper;
2.2. the NLRC did not categorically rule that the petitioners were members of the bargaining unit; and
2.3. there was no evidence of this membership.
3. To further clarify what we stated above, CBA coverage is not only a question of fact, but of law and contract.>> The
factual issue is whether the petitioners are regular rank-and-file employees of ABS-CBN.>> The tribunals below uniformly
answered this question in the affirmative.>> From this factual finding flows legal effects touching on the terms and
conditions of the petitioners regular employment.>> This was what the labor arbiter meant when he stated in his decision
that henceforth they are entitled to the benefits and privileges attached to regular status of their employment.
4. By law, illegally dismissed employees are entitled to reinstatement without loss of seniority rights and other privileges and
to full backwages, inclusive of allowances, and to other benefits or their monetary equivalent from the time their
compensation was withheld from them up to the time of their actual reinstatement. The four dismissed drivers deserve no
less.
025 EMPLOYEES UNION OF BAYER PHILS., FFW vs.BAYER PHILIPPINES, INC
G.R. No. 162943
December 6, 2010
TOPIC: ULP Labor Code:
Arts. 247-249, 261
PONENTE: VILLARAMA, JR., J.:
FACTS: Petitioner Employees Union of Bayer Philippines (EUBP) is the exclusive bargaining agent of all rank-and-file employees
of Bayer Philippines (Bayer), and is an affiliate of the Federation of Free Workers (FFW).
In 1997, EUBP, headed by its president Juanito S. Facundo (Facundo), negotiated with Bayer for the signing of a collective
bargaining agreement (CBA). During the negotiations, EUBP rejected Bayers 9.9% wage-increase proposal resulting in a
bargaining deadlock. Subsequently, EUBP staged a strike, prompting the Secretary of the Department of Labor and Employment
(DOLE) to assume jurisdiction over the dispute.
In November 1997, pending the resolution of the dispute, respondent Avelina Remigio (Remigio) and 27 other union members,
without any authority from their union leaders, accepted Bayers wage-increase proposal. EUBPs grievance committee questioned
Remigios action and reprimanded Remigio and her allies.
On January 7, 1998, the DOLE Secretary issued an arbitral award ordering EUBP and Bayer to execute a CBA retroactive to
January 1, 1997 and to be made effective until December 31, 2001. The said CBA was registered on July 8, 1998 with the Industrial
Relations Division of the DOLE-National Capital Region (NCR).
Meanwhile, the rift between Facundos leadership and Remigios group broadened. On August 3, 1998, barely six months from the
signing of the new CBA, during a company-sponsored seminar, Remigio solicited signatures from union members in support of a
resolution containing the decision of the signatories to: (1) disaffiliate from FFW, (2) rename the union as Reformed Employees
Union of Bayer Philippines (REUBP), (3) adopt a new constitution and by-laws for the union, (4) abolish all existing officer
positions in the union and elect a new set of interim officers, and (5) authorize REUBP to administer the CBA between EUBP and
Bayer. The said resolution was signed by 147 of the 257 local union members. A subsequent resolution was also issued affirming the
first resolution.
A tug-of-war then ensued between the two rival groups, with both seeking recognition from Bayer and demanding remittance of the
union dues collected from its rank-and-file members. On September 8, 1998, Remigios splinter group wrote Facundo, FFW and
Bayer informing them of the decision of the majority of the union members to disaffiliate from FFW. This was followed by another
letter informing Facundo, FFW and Bayer that an interim set of REUBP executive officers and board of directors had been
appointed, and demanding the remittance of all union dues to REUBP. Remigio also asked Bayer to desist from further transacting
with EUBP.
Facundo, meanwhile, sent similar requests to Bayer requesting for the remittance of union dues in favor of EUBP and accusing the
company of interfering with purely union matters. Bayer responded by deciding not to deal with either of the two groups, and by
placing the union dues collected in a trust account until the conflict between the two groups is resolved.
On September 15, 1998, EUBP filed a complaint for unfair labor practice (first ULP complaint) against Bayer for non-remittance of
union dues.
EUBP later sent a letter dated November 5, 1998 to Bayer asking for a grievance conference. The meeting was conducted by the
management on November 11, 1998, with all REUBP officers including their lawyers present. Facundo did not attend the meeting,

but sent two EUBP officers to inform REUBP and the management that a preventive mediation conference between the two groups
has been scheduled on November 12, 1998 before the National Conciliation and Mediation Board (NCMB).
Apparently, the two groups failed to settle their issues as Facundo again sent respondent Dieter J. Lonishen two more letters, dated
January 14, 1999 and September 2, 1999, asking for a grievance meeting with the management to discuss the failure of the latter to
comply with the terms of their CBA. Both requests remained unheeded.
Aggrieved by the said development, EUBP lodged a complaint on March 4, 1999 against Remigios group before the Industrial
Relations Division of the DOLE praying for their expulsion from EUBP for commission of "acts that threaten the life of the union."
On June 18, 1999, Labor Arbiter Jovencio Ll. Mayor, Jr. dismissed the first ULP complaint for lack of jurisdiction. The Arbiter
explained that the root cause for Bayers failure to remit the collected union dues can be traced to the intra-union conflict between
EUBP and Remigios group and that the charges imputed against Bayer should have been submitted instead to voluntary arbitration.
EUBP did not appeal the said decision.
On December 14, 1999, petitioners filed a second ULP complaint against herein respondents docketed as NLRC-RAB-IV Case No.
12-11813-99-L. Three days later, petitioners amended the complaint charging the respondents with unfair labor practice committed
by organizing a company union, gross violation of the CBA and violation of their duty to bargain. Petitioners complained that Bayer
refused to remit the collected union dues to EUBP despite several demands sent to the management. They also alleged that
notwithstanding the requests sent to Bayer for a renegotiation of the last two years of the 1997-2001 CBA between EUBP and
Bayer, the latter opted to negotiate instead with Remigios group.
On even date, REUBP and Bayer agreed to sign a new CBA. Remigio immediately informed her allies of the managements
decision.
In response, petitioners immediately filed an urgent motion for the issuance of a restraining order/injunction before the National
Labor Relations Commission (NLRC) and the Labor Arbiter against respondents. Petitioners asserted their authority as the
exclusive bargaining representative of all rank-and-file employees of Bayer and asked that a temporary restraining order be issued
against Remigios group and Bayer to prevent the employees from ratifying the new CBA. Later, petitioners filed a second amended
complaint to include in its complaint the issue of gross violation of the CBA for violation of the contract bar rule following Bayers
decision to negotiate and sign a new CBA with Remigios group.
Meanwhile, on January 26, 2000, the Regional Director of the Industrial Relations Division of DOLE issued a decision dismissing
the issue on expulsion filed by EUBP against Remigio and her allies for failure to exhaust reliefs within the union and ordering the
conduct of a referendum to determine which of the two groups should be recognized as union officers. EUBP seasonably appealed
the said decision to the Bureau of Labor Relations (BLR). On June 16, 2000, the BLR reversed the Regional Directors ruling and
ordered the management of Bayer to respect the authority of the duly-elected officers of EUBP in the administration of the
prevailing CBA.
Unfortunately, the said BLR ruling came late since Bayer had already signed a new CBA with REUBP on February 21, 2000. The
said CBA was eventually ratified by majority of the bargaining unit.
On June 2, 2000, Labor Arbiter Waldo Emerson R. Gan dismissed EUBPs second ULP complaint for lack of jurisdiction.
Aggrieved by the Labor Arbiters decision to dismiss the second ULP complaint, petitioners appealed the said decision, but the
NLRC denied the appeal. EUBPs motion for reconsideration was likewise denied.
Thus, petitioners filed a Rule 65 petition to the CA. On December 15, 2003, the CA sustained both the Labor Arbiter and the
NLRCs rulings.
Undaunted, petitioners filed this Rule 45 petition before this Court. Initially, the said petition was denied for having been filed out of
time and for failure to comply with the requirements provided in the 1997 Rules of Civil Procedure, as amended. Upon petitioners
motion, however, we decided to reinstate their appeal.
ISSUE(S): whether the act of the management of Bayer in dealing and negotiating with Remigios splinter group despite its validly
existing CBA with EUBP can be considered unfair labor practice
HELD: Yes, It must be remembered that a CBA is entered into in order to foster stability and mutual cooperation between labor and
capital. An employer should not be allowed to rescind unilaterally its CBA with the duly certified bargaining agent it had previously
contracted with, and decide to bargain anew with a different group if there is no legitimate reason for doing so and without first
following the proper procedure.
RATIO: An intra-union dispute refers to any conflict between and among union members, including grievances arising from any
violation of the rights and conditions of membership, violation of or disagreement over any provision of the unions constitution and
by-laws, or disputes arising from chartering or disaffiliation of the union.Sections 1 and 2, Rule XI of Department Order No. 40-03,
Series of 2003 of the DOLE enumerate the circumstances as inter/intra-union disputes. (read the DO) It is clear from the foregoing
that the issues raised by petitioners do not fall under any of the circumstances constituting an intra-union dispute.
Petitioners ULP complaint cannot prosper as against respondents Remigio and Villareal because the issue, as against them,
essentially involves an intra-union dispute based on Section 1 (n) of DOLE Department Order No. 40-03. To rule on the validity or

illegality of their acts, the Labor Arbiter and the NLRC will necessarily touch on the issues respecting the propriety of their
disaffiliation and the legality of the establishment of REUBP issues that are outside the scope of their jurisdiction. Accordingly,
the dismissal of the complaint was validly made, but only with respect to these two respondents.
But are Bayer, Lonishen and Amistoso liable for unfair labor practice? On this score, we find that the evidence supports an answer
in the affirmative.
It must be remembered that a CBA is entered into in order to foster stability and mutual cooperation between labor and capital. An
employer should not be allowed to rescind unilaterally its CBA with the duly certified bargaining agent it had previously contracted
with, and decide to bargain anew with a different group if there is no legitimate reason for doing so and without first following the
proper procedure. If such behavior would be tolerated, bargaining and negotiations between the employer and the union will never
be truthful and meaningful, and no CBA forged after arduous negotiations will ever be honored or be relied upon. Article 253 of the
Labor Code, as amended, plainly provides:
ART. 253. Duty to bargain collectively when there exists a collective bargaining agreement. Where there is a collective
bargaining agreement, the duty to bargain collectively shall also mean that neither party shall terminate or modify such
agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least
sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the status quo and to continue in full
force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is
reached by the parties. (Emphasis supplied.)
This is the reason why it is axiomatic in labor relations that a CBA entered into by a legitimate labor organization that has been duly
certified as the exclusive bargaining representative and the employer becomes the law between them. Additionally, in the Certificate
of Registration issued by the DOLE, it is specified that the registered CBA serves as the covenant between the parties and has the
force and effect of law between them during the period of its duration. Compliance with the terms and conditions of the CBA is
mandated by express policy of the law primarily to afford protection to labor and to promote industrial peace. Thus, when a valid
and binding CBA had been entered into by the workers and the employer, the latter is behooved to observe the terms and conditions
thereof bearing on union dues and representation. If the employer grossly violates its CBA with the duly recognized union, the
former may be held administratively and criminally liable for unfair labor practice.
Respondents Bayer, Lonishen and Amistoso, contend that their acts cannot constitute unfair labor practice as the same did not
involve gross violations in the economic provisions of the CBA, citing the provisions of Articles 248 (1) and 261 of the Labor Code,
as amended. Their argument is, however, misplaced.
Indeed, in Silva v. National Labor Relations Commission, we explained the correlations of Article 248 (1) and Article 261 of the
Labor Code to mean that for a ULP case to be cognizable by the Labor Arbiter, and for the NLRC to exercise appellate jurisdiction
thereon, the allegations in the complaint must show prima facie the concurrence of two things, namely: (1) gross violation of the
CBA; and (2) the violation pertains to the economic provisions of the CBA.
This pronouncement in Silva, however, should not be construed to apply to violations of the CBA which can be considered as gross
violations per se, such as utter disregard of the very existence of the CBA itself, similar to what happened in this case. When an
employer proceeds to negotiate with a splinter union despite the existence of its valid CBA with the duly certified and exclusive
bargaining agent, the former indubitably abandons its recognition of the latter and terminates the entire CBA.
Respondents cannot claim good faith to justify their acts. They knew that Facundos group represented the duly-elected officers of
EUBP. Moreover, they were cognizant of the fact that even the DOLE Secretary himself had recognized the legitimacy of EUBPs
mandate by rendering an arbitral award ordering the signing of the 1997-2001 CBA between Bayer and EUBP. Respondents were
likewise well-aware of the pendency of the intra-union dispute case, yet they still proceeded to turn over the collected union dues to
REUBP and to effusively deal with Remigio. The totality of respondents conduct, therefore, reeks with anti-EUBP animus.
Bayer, Lonishen and Amistoso argue that the case is already moot and academic following the lapse of the 1997-2001 CBA and
their renegotiation with EUBP for the 2006-2007 CBA. They also reason that the act of the company in negotiating with EUBP for
the 2006-2007 CBA is an obvious recognition on their part that EUBP is now the certified collective bargaining agent of its rankand-file employees.
We do not agree. First, a legitimate labor organization cannot be construed to have abandoned its pending claim against the
management/employer by returning to the negotiating table to fulfill its duty to represent the interest of its members, except when
the pending claim has been expressly waived or compromised in its subsequent negotiations with the management. To hold
otherwise would be tantamount to subjecting industrial peace to the precondition that previous claims that labor may have against
capital must first be waived or abandoned before negotiations between them may resume. Undoubtedly, this would be against public
policy of affording protection to labor and will encourage scheming employers to commit unlawful acts without fear of being
sanctioned in the future.
Second, that the management of Bayer decided to recognize EUBP as the certified collective bargaining agent of its rank-and-file
employees for purposes of its 2006-2007 CBA negotiations is of no moment. It did not obliterate the fact that the management of
Bayer had withdrawn its recognition of EUBP and supported REUBP during the tumultuous implementation of the 1997-2001
CBA. Such act of interference which is violative of the existing CBA with EUBP led to the filing of the subject complaint.