G.R. No.

130693
March 4, 2004
MINDANAO STEEL CORPORATION, petitioner,
vs.
MINSTEEL FREE WORKERS ORGANIZATION (MINFREWO-NFL) CAGAYAN DE ORO, respondent.
DECISION
SANDOVAL-GUTIERREZ, J.:
At bar is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the Decision 1 dated May 30,
1997 and Resolution2 dated August 22, 1997 rendered by the Court of Appeals in CA-G.R. SP No. 40919, entitled "Mindanao Steel Corporation vs.
Atty. Marieto Gallego and Minsteel Free Workers Organization MINFREWO-NFL, Cagayan de Oro City."
The undisputed facts of this case are as follows:
On June 29, 1990, Mindanao Steel Corporation (herein petitioner) and Minsteel Free Workers Organization MINFREWO-NFL Cagayan de Oro City
(herein respondent) executed a collective bargaining agreement (CBA) providing for an increase of P20.00 in the workers daily wage.
Prompted by the December 5, 1990 fuel price increase, the Regional Tripartite Wages and Productivity Board (RTWPB) of Region X, Northern
Mindanao, Cagayan de Oro City, issued Interim Wage Order No. RX-02 3. This Interim Wage Order granted to all workers 4 an emergency cost of
living allowance (ECOLA)5 for three (3) months or from January 7, 1991 to April 6, 1991.
Petitioner refused to implement the Interim Wage Order, prompting respondent to file with the National Mediation and Conciliation Board (NCMB) a
complaint for payment of ECOLA against the former. Then the parties, in a Submission Agreement dated April 8, 1991, agreed to submit the case for
voluntary arbitration.
After the parties had submitted their position papers and other pleadings, the Voluntary Arbitrator rendered a Decision dated January 8, 1992 ordering
petitioner to pay respondents members and other workers their ECOLA. Petitioner then filed a motion for reconsideration but was denied in an
Order dated January 28, 1992.
Thereafter, petitioner filed with the Court of Appeals a petition for certiorari with prayer for issuance of a temporary restraining order and/or writ of
preliminary injunction.
On May 30, 1997, the Appellate Court promulgated its Decision affirming the Voluntary Arbitrators Decision dated January 8, 1992 and Order dated
January 28, 1992. The Court of Appeals ratiocinated as follows:
"In the case at bench, Interim Wage Order No. RX-02 was issued specifically to grant employees a temporary allowance pending the
approval of the wage increase being petitioned by them due to the fuel price hike on December 5, 1990.
"The grant of the P20.00 wage increase under the CBA did not have the purpose of granting such temporary allowance due to the
contingency stated in the subject wage order, but was actually intended as wage increase to be effective January 1, 1991. Thus, as stated by
the Supreme Court, it should be termed as wage increase, pure and simple, and not part of the emergency allowance.
"Not to be overlooked is the provision under the CBA which was executed between the parties herein, Section 3, Article VII of which
provides that:
It is hereby agreed that these salary increases shall be exclusive of any wage that may be provided by law as a result of economic change. (p. 55,
rollo)
"There indeed is nothing contrary to law, customs, public order or public policy in a stipulation subordinating, as does the aforesaid
provision in the collective bargaining agreement, contractual wage increases to those imposed or prescribed by law. They were therefore
perfectly free to agree thereon, and having thus agreed, are bound by such stipulation as constituting the law between them." (Filipinas
Golf and Country Club, Inc. vs. NLRC, 176 SCRA 625)
"The increase provided by the subject wage order, moreover, was not intended to be purely a wage increase, that may be credited to any
wage increase granted by employers because of or in anticipation of the fuel price hike, but for emergency purposes for only three months.
"The petitioner should, therefore, not be entitled to the creditable benefit provided by the implementing rules and regulations of interim
wage order no. RX-02.
"This Court thus finds no grave abuse of discretion amounting to lack of excess of jurisdiction on the part of the respondent voluntary
arbitrator in issuing the questioned decision.
"WHEREFORE, THE INSTANT PETITION IS HEREBY DISMISSED FOR LACK OF MERIT.
"SO ORDERED."
On August 22, 1997, the Court of Appeals issued a Resolution denying petitioners motion for reconsideration.
Hence, this petition for review on certiorari.
Petitioner contends that it is exempt from paying the ECOLA because pursuant to the CBA, it already granted a wage increase of P20.00 a day
or P523.20 a month effective January 1, 1991. Likewise, petitioner claims it is entitled to creditable benefits on the basis of Section 7 of Interim
Wage Order No. RX-02 which provides:
"(W)age increases, rice allowance (in kind or cash), and other allowances granted by employers to their workers because of, or in
anticipation of the fuel price hikes on December 05, 1990 and exclusive of compliance with Wage Order Nos. RX-01 and RX-01-A
are creditable, provided that if the amount is less than that prescribed in this Interim Wage Order, the employer shall give the difference."
Along the same line, petitioner maintains that under Section 5 of the Implementing Rules and Regulations of Wage Order No. RX-02, its
grant of wage increase to its workers pursuant to the CBA is considered compliance with the Order, thus:
"Section 5. Creditable Benefits - Any wage increases or adjustments granted between November 22, 1990 and January 06, 1991 shall be
considered as compliance with the Order provided that if the amount is less than that prescribed, the employer shall pay the difference.
"In addition, any of the following shall be considered as compliance:
"a. All forms of wage increases granted unilaterally or under collective bargaining agreement excluding company anniversary
increases and those resulting from regularization, promotion and merit increases.
"b. All kinds of allowances in cash or in kind for whatever purpose, such as transportation, meal allowance, rice subsidy and
others.
"c. All forms of economic assistance such as productivity bonus, housing, bus services for the family and other similar activities."

Petitioners contentions lack merit.

To begin with, any doubt or ambiguity in the contract between management and the union members should be resolved in the light of Article 1702 of
the Civil Code which provides: "(I)n case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent
living for the laborer."6
The basic issue for our resolution is whether or not petitioner is exempt from paying the ECOLA in light of the CBA entered into by the parties.
Pertinent is Section 3, Article VII of the CBA which provides:
"It is hereby agreed that these salary increases shall be exclusive of any wage increase that may be provided by law as a result of any economic
change."
The above provision is clear that the salary increases, such as the P20.00 provided under the CBA, shall not include any wage increase that may be
provided by law as a result of any economic change. Hence, aside from the P20.00 CBA wage increase, respondents members are also entitled to the
ECOLA under the Interim Wage Order.
The CBA provision under Section 3, Article VII needs no interpretation. Contracts which are not ambiguous are to be interpreted according to their
literal meaning and not beyond their obvious intendment. 7
In Mactan Workers Union vs. Aboitiz,8 we held that "the terms and conditions of a collective bargaining contract constitute the law between the
parties. Those who are entitled to its benefits can invoke its provisions. In the event that an obligation therein imposed is not fulfilled, the aggrieved
party has the right to go to court for redress."
Finally, the P20.00 daily wage increase granted by petitioner to its employees under the CBA can not be considered as creditable benefit or
compliance with the Interim Wage Order because such was intended as a CBA or negotiated wage increase and not "because of, or in anticipation
of the fuel price hikes on December 5, 1990 x x x."
Thus, the Court of Appeals did not commit any error when it rendered the assailed Decision and Resolution, the same being consistent with law and
jurisprudence.
WHEREFORE, the petition is DENIED. The assailed Decision dated May 30, 1997 and Resolution dated August 22, 1997 rendered by the Court of
Appeals in CA-G.R. SP No. 40919 are AFFIRMED. Costs against petitioner.
SO ORDERED.
G.R. No. 146728
February 11, 2004
GENERAL MILLING CORPORATION, petitioner,
vs
HON. COURT OF APPEALS, GENERAL MILLING CORPORATION INDEPENDENT LABOR UNION (GMC-ILU), and RITO
MANGUBAT, respondents.
DECISION
QUISUMBING, J.:
Before us is a petition for certiorari assailing the decision1 dated July 19, 2000, of the Court of Appeals in CA-G.R. SP No. 50383, which earlier
reversed the decision2 dated January 30, 1998 of the National Labor Relations Commission (NLRC) in NLRC Case No. V-0112-94.
The antecedent facts are as follows:
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.
On April 28, 1989, GMC and the union concluded a collective bargaining agreement (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.
On November 29, 1991, a day before the expiration of the CBA, the union sent GMC a proposed CBA, with a request that a counterproposal be submitted within ten (10) days.
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.
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.
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.
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."3
Thus, the union filed, on July 2, 1992, a complaint against GMC with the NLRC, Arbitration Division, Cebu City. 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. 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.lawphi1.nt
The union appealed to the NLRC.
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.
6715,4 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. The NLRC also ordered GMC to
pay the attorneys fees.5
In its decision, the NLRC pointed out that upon the effectivity of Rep. Act No. 6715, the duration of a CBA, insofar as the representation aspect is
concerned, is five (5) years which, in the case of GMC-Independent Labor Union was from December 1, 1988 to November 30, 1993. All other
provisions of the CBA are to be renegotiated not later than three (3) years after its execution. Thus, the NLRC held that respondent union remained as

the exclusive bargaining agent with the right to renegotiate the economic provisions of the CBA. Consequently, it was unfair labor practice for GMC
not to enter into negotiation with the union.
The NLRC likewise held that the individual letters of withdrawal from the union submitted by 13 of its members from February to June 1993
confirmed the pressure exerted by GMC on its employees to resign from the union. Thus, the NLRC also found GMC guilty of unfair labor practice
for interfering with the right of its employees to self-organization.
With respect to the unions claim of discrimination, the NLRC found the claim unsupported by substantial evidence.
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.
Hence, the union filed a petition for certioraribefore the Court of Appeals. For failure of the union to attach the required copies of pleadings and
other documents and material portions of the record to support the allegations in its petition, the CA dismissed the petition on February 9, 1999. The
same petition was subsequently filed by the union, this time with the necessary documents. In its resolution dated April 26, 1999, the appellate court
treated the refiled petition as a motion for reconsideration and gave the petition due course.
On July 19, 2000, the appellate court rendered a decision the dispositive portion of which reads:
WHEREFORE, the 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.6
A motion for reconsideration was seasonably filed by GMC, but in a resolution dated October 26, 2000, the CA denied it for lack of merit.
Hence, the instant petition for certiorari alleging that:
I
THE COURT OF APPEALS DECISION VIOLATED THE CONSTITUTIONAL RULE THAT NO DECISION SHALL BE RENDERED BY ANY
COURT WITHOUT EXPRESSING THEREIN CLEARLY AND DISTINCTLY THE FACTS AND THE LAW ON WHICH IT IS BASED.
II
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN REVERSING THE DECISION OF THE NATIONAL LABOR
RELATIONS COMMISSION IN THE ABSENCE OF ANY FINDING OF SUBSTANTIAL ERROR OR GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION.
III
THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN NOT APPRECIATING THAT THE NLRC HAS NO JURISDICTION TO
DETERMINE THE TERMS AND CONDITIONS OF A COLLECTIVE BARGAINING AGREEMENT.7
Thus, in the instant case, the principal issue for our determination is whether or not the Court of Appeals acted with grave abuse of discretion
amounting to lack or excess of jurisdiction in (1) finding GMC guilty of unfair labor practice for violating the duty to bargain collectively and/or
interfering with the right of its employees to self-organization, and (2) imposing upon GMC the draft CBA proposed by the union for two years to
begin from the expiration of the original CBA.lawphi1.nt
On the first issue, Article 253-A of the Labor Code, as amended by Rep. Act No. 6715, states:
ART. 253-A. Terms of a collective bargaining agreement. Any Collective Bargaining Agreement that the parties may enter into shall,
insofar as the representation aspect is concerned, be for a term of five (5) years. No petition questioning the majority status of the
incumbent bargaining agent shall be entertained and no certification election shall be conducted by the Department of Labor and
Employment outside of the sixty-day period immediately before the date of expiry of such five year term of the Collective Bargaining
Agreement. All other provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its
execution....
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, which provides that:
ART. 248. Unfair labor practices of employers. It shall be unlawful for an employer to commit any of the following unfair labor
practice:
...
(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:
ART. 252. Meaning of duty to bargain collectively. The duty to bargain collectively means the performance of a mutual
obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement....
We have held that the crucial question whether or not a party has met his statutory duty to bargain in good faith typically turn$ on the facts
of the individual case.8 There is no per se test of good faith in bargaining. 9Good faith or bad faith is an inference to be drawn from the
facts.10 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. 11
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. Thus:
ART. 250. Procedure in collective bargaining. The following procedures shall be observed in collective bargaining:

(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a statement of its
proposals. The other party shall make a reply thereto not later than ten (10) calendar days from receipt of such notice.
(Underscoring supplied.)
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.12
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 GMC interfere with the employees right to self-organization? The CA found that the letters between February to June 1993 by 13 union
members signifying their resignation from the union clearly indicated that GMC exerted pressure on its employees. The records show that GMC
presented these letters to prove that the union no longer enjoyed the support of the workers. The fact that the resignations of the union members
occurred during the pendency of the case before the labor arbiter shows GMCs desperate attempts to cast doubt on the legitimate status of the union.
We agree with the CAs conclusion that the ill-timed letters of resignation from the union members indicate that GMC had interfered with the right of
its employees to self-organization. Thus, we hold that the appellate court did not commit grave abuse of discretion in finding GMC guilty of unfair
labor practice for interfering with the right of its employees to self-organization.
Finally, 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?
The Code provides:
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.
In Kiok Loy vs. NLRC,13 we found that petitioner therein, Sweden Ice Cream Plant, refused to submit any counter proposal to the CBA proposed by
its employees certified bargaining agent. We ruled that the former had thereby lost its right to bargain the terms and conditions of the CBA. Thus, we
did not hesitate to impose on the erring company the CBA proposed by its employees union - lock, stock and barrel. Our findings in Kiok Loy are
similar to the facts in the present case, to wit:
petitioner Companys approach and attitude stalling the negotiation by a series of postponements, non-appearance at the hearing
conducted, and undue delay in submitting its financial statements, lead to no other conclusion except that it is unwilling to negotiate and
reach an agreement with the Union. Petitioner has not at any instance, evinced good faith or willingness to discuss freely and fully the
claims and demands set forth by the Union much less justify its objection thereto. 14
Likewise, in Divine Word University of Tacloban vs. Secretary of Labor and Employment,15 petitioner therein, Divine Word University of Tacloban,
refused to perform its duty to bargain collectively. Thus, we upheld the unilateral imposition on the university of the CBA proposed by the Divine
Word University Employees Union. We said further:
That being the said case, the petitioner may not validly assert that its consent should be a primordial consideration in the bargaining
process. By its acts, no less than its action which bespeak its insincerity, it has forfeited whatever rights it could have asserted as an
employer.16
Applying the principle in the foregoing cases to the instant case, 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.
We carefully note, however, that as strictly distinguished from the facts of this case, there was no pre-existing CBA between the parties in Kiok
Loy and Divine Word University of Tacloban. Nonetheless, we deem it proper to apply in this case the rationale of the doctrine in the said two cases.
To rule otherwise would be to allow GMC to have its cake and eat it too.
Under ordinary circumstances, it is not obligatory upon either side of a labor controversy to precipitately accept or agree to the proposals of the other.
But an erring party should not be allowed to resort with impunity to schemes feigning negotiations by going through empty gestures. 17 Thus, by
imposing on GMC the provisions of the draft CBA proposed by the union, in our view, the interests of equity and fair play were properly served and
both parties regained equal footing, which was lost when GMC thwarted the negotiations for new economic terms of the CBA.
The findings of fact by the CA, affirming those of the NLRC as to the reasonableness of the draft CBA proposed by the union should not be disturbed
since they are supported by substantial evidence. On this score, we see no cogent reason to rule otherwise. Hence, we hold that the Court of Appeals
did not commit grave abuse of discretion amounting to lack or excess of jurisdiction when it imposed on GMC, after it had committed unfair labor
practice, the draft CBA proposed by the union for the remaining two (2) years of the duration of the original CBA. Fairness, equity, and social justice
are best served in this case by sustaining the appellate courts decision on this issue.
WHEREFORE, the petition is DISMISSED and the assailed decision dated July 19, 2000, and the resolution dated October 26, 2000, of the Court
of Appeals in CA-G.R. SP No. 50383, are AFFIRMED. Costs against petitioner.
SO ORDERED.

G.R. No. 155690

June 30, 2005
CAPITOL MEDICAL CENTER, INC., petitioner,
vs.
HON. CRESENCIANO B. TRAJANO, in his capacity as Secretary of the Department of Labor and Employment, and CAPITOL
MEDICAL CENTER EMPLOYEES ASSOCIATION-AFW, respondents.
SANDOVAL-GUTIERREZ, J.:
For our resolution is the instant petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the
Decision1 dated September 20, 2001 and the Resolution2 dated October 18, 2002 rendered by the Court of Appeals in CA-G.R. SP No. 53479, entitled
"Capitol Medical Center, Inc. vs. Hon. Cresenciano B. Trajano, in his capacity as Secretary of the Department of Labor and Employment and
Capitol Medical Center Employees Association-AFW."
The factual antecedents as gleaned from the records are:
Capitol Medical Center, Inc., petitioner, is a hospital with address at Panay Avenue corner Scout Magbanua Street, Quezon City. Upon the other
hand, 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.
On October 2, 1997, respondent union, through its president Jaime N. Ibabao, sent petitioner a letter requesting a negotiation of their Collective
Bargaining Agreement (CBA).
In its reply dated October 10, 1997, petitioner, challenging the unions legitimacy, refused to bargain with respondent. Subsequently or on October
15, 1997, 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. 3
For its part, on October 29, 1997, 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.
On November 28, 1997, respondent staged a strike.
On December 4, 1997, former Labor Secretary Leonardo A. Quisumbing, now Associate Justice of this Court, 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, thus:
"WHEREFORE, this Office assumes jurisdiction over the labor disputes at Capitol Medical Center pursuant to Article 263 (g) of the Labor Code, as
amended. Consequently, all striking workers are directed to return to work within twenty-four (24) hours from the receipt of this Order and the
management to resume normal operations and accept back all striking workers under the same terms and conditions prevailing before the strike.
Further, parties are directed to cease and desist from committing any act that may exacerbate the situation.
Moreover, parties are hereby directed to submit within 10 days from receipt of this Order proposals and counter-proposals leading to the conclusion
of the collective bargaining agreement in compliance with aforementioned Resolution of the Office as affirmed by the Supreme Court.
SO ORDERED."
Petitioner then filed a motion for reconsideration but was denied in an Order dated April 27, 1998.
On June 23, 1998, 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.,4 we referred the petition to the Court of Appeals for its appropriate action and
disposition.
Meantime, on October 1, 1998, the Regional Director, in NCR-OD-9710-006-IRD, issued an Order denying the petition for cancellation of
respondent unions certificate of registration.5
On September 20, 2001, the Appellate Court rendered a Decision affirming the Orders of the Secretary of Labor. The Court of Appeals held:
"Anent the first issue raised by the petitioner, We find the same untenable. The public respondent acted well within his duty to order the petitioner
hospital to bargain collectively, for it was the surest way to end the dispute. In LMG Chemicals Corporation vs. Secretary of the Department of Labor
and Employment, the Hon. Leonardo A. Quisumbing and Chemical Workers Union (G.R. No. 127422, April 17, 2001), the Supreme Court made the
following pronouncement, to wit:
It is well settled in our jurisprudence that the authority of the Secretary of Labor to assume jurisdiction over a labor dispute causing or likely to cause
a strike or lockout in an industry indispensable to national interest includes and extends to all questions and controversies arising therefrom. The
power is plenary and discretionary in nature to enable him to effectively and efficiently dispose of the primary dispute.
xxxxxx
Indeed, We find no grave abuse of discretion on the part of respondent Secretary of Labor whose power is plenary and includes the resolution of all
controversies arising from the labor dispute. In fact, he was merely following the directive laid down by the Supreme Court (Decision dated February
4, 1997) in the case of Capitol Medical Center Alliance of Concerned Employees-Unified Filipino Service Workers (CMC-ACE-UFSW) vs. Hon.
Bienvenido E. Laguesma, Undersecretary of the Department of Labor and Employment, Capitol Medical Center Employees Association-Alliance of
Filipino Workers and Capitol Medical Center Incorporated and Dra. Thelma Clemente, President, ordering petitioner hospital to collectively bargain
with the Capitol Medical Center Employees Association-Alliance of Filipino Workers (private respondent herein) the certified bargaining agent.
As earlier mentioned, the petition for cancellation was dismissed by the regional director in a decision dated September 30, 1998. x x x.
xxxxxx
Said decision by the regional director was affirmed by the Director of the Bureau of Labor Relations in a resolution dated December 29, 1998,
dismissing the appeal of the petitioner hospital from the said DOLE-NCRs decision.
Finally, the petition for certiorari (docketed as CA-G.R. SP No. 52736) entitled Capitol Medical Center, Inc. vs. Hon. Benedictor R. Bitonio, Jr., in
his capacity as Director of the Bureau of Labor Relations, Department of Labor and Employment; Hon. Maximo B. Lim in his capacity as Regional
Director, National Capital Region, Department of Labor and Employment and Capitol Medical Center Employees Association (CMCEA-AFW), was
dismissed in a decision dated January 11, 2001. The motion for reconsideration which was subsequently filed was denied on March 23, 2001.
xxxxxx
In order to allow an employer to validly suspend the bargaining process, there must be a valid petition for certification election. The mere filing of a
petition does not ipso facto justify the suspension of negotiation by the employer (Colegio de San Juan de Letran vs. Association of Employees and
Faculty of Letran and Eleanor Ambas, G.R. No. 141471, September 18, 2000). If pending a petition for certification, the collective bargaining is

allowed by the Supreme Court to proceed, with more reason should the collective bargaining (in this case) continue since the High Court had
recognized the respondent as the certified bargaining agent in spite of several petitions for cancellation filed against it.
xxxxxx
Secondly, We are inclined to agree with the public respondents statement that the primary assumption of jurisdiction may be exercised by this
Office even without the necessity of prior notice or hearing given to any of the parties disputants. (page 56 of the Rollo).
xxxxxx
We are also not convinced by the arguments raised by the petitioner with respect to its third assigned error. This Court fails to see any supervening
event that would render the execution of the decision of public respondent impossible. The petitioner asserts that the respondent union has lost its
legitimacy, but at every turn it has been ruled by the various labor administrative officials that the respondent union is legitimate. It has failed to
convince the labor administrative officials, We are likewise not persuaded. Unless and until the Certificate of Registration of the union is cancelled, it
(union) remains the certified bargaining agent and the Hospital has the duty to enter into a collective bargaining agreement with it.
xxxxxx
WHEREFORE, premises considered, the instant petition is DENIED, hereby AFFIRMING the two assailed orders, dated December 4, 1997 and
April 27, 1998, of the public respondent in OS-AJ-0024-97 (NCMB-NCR-NS-10-453-97).
SO ORDERED."
On October 18, 2002, the Court of Appeals issued a Resolution denying petitioners motion for reconsideration.
Hence, this petition for review on certiorari.
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.
We are not persuaded.
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."
Moreover, as mentioned earlier, during the pendency of this case before the Court of Appeals, the Regional Director, in NCR-OD-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.
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."
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.
WHEREFORE, the petition is DENIED. The assailed Decision dated September 20, 2001 and the Resolution dated October 18, 2002 of the Court
of Appeals in CA-G.R. SP No. 53479 are AFFIRMED. Costs against petitioner.
SO ORDERED.

G.R. No. 77395 November 29, 1988

BELYCA CORPORATION, petitioner,
vs.
DIR. PURA FERRER CALLEJA, LABOR RELATIONS, MANILA, MINISTRY OF LABOR AND EMPLOYMENT; MED-ARBITER,
RODOLFO S. MILADO, MINISTRY OF LABOR AND EMPLOYMENT, REGIONAL OFFICE NO. 10 AND ASSOCIATED LABOR
UNION (ALU-TUCP), MINDANAO REGIONAL OFFICE, CAGAYAN DE ORO CITY, respondents.
Soriano and Arana Law Offices for petitioner.
The Solicitor General for public respondent.
Francisco D. Alas for respondent Associated Labor Unions-TUCP.
PARAS, J.:
This is a petition for certiorari and prohibition with preliminary injunction seeking to annul or to set aside the resolution of the Bureau of Labor
Relations dated November 24, 1986 and denying the appeal, and the Bureau's resolution dated January 13, 1987 denying petitioner's motion for
reconsideration.
The dispositive portion of the questioned resolution dated November 24, 1986 (Rollo, p. 4) reads as follows:
WHEREFORE, in view of all the foregoing considerations, the Order is affirmed and the appeal therefrom denied.
Let, therefore, the pertinent records of the case be remanded to the office of origin for the immediate conduct of the certification
election.
The dispositive portion of the resolution dated January 13, 1987 (Rollo, p. 92) reads, as follows:
WHEREFORE, the Motion for Reconsideration filed by respondent Belyca Corporation (Livestock Agro-Division) is hereby
dismissed for lack of merit and the Bureau's Resolution dated 24 November 1986 is affirmed. Accordingly, let the records of this
case be immediately forwarded to the Office of origin for the holding of the certification elections.
No further motion shall hereafter be entertained.
The antecedents of the case are as follows:
On June 3, 1986, private respondent Associated Labor Union (ALU)-TUCP, a legitimate labor organization duly registered with the Ministry of
Labor and Employment under Registration Certificate No. 783-IP, filed with the Regional Office No. 10, Ministry of Labor and Employment at
Cagayan de Oro City, a petition for direct certification as the sole and exclusive bargaining agent of all the rank and file employees/workers of Belyca
Corporation (Livestock and Agro-Division), a duly organized, registered and existing corporation engaged in the business of poultry raising, piggery
and planting of agricultural crops such as corn, coffee and various vegetables, employing approximately 205 rank and file employees/workers, the
collective bargaining unit sought in the petition, or in case of doubt of the union's majority representation, for the issuance of an order authorizing the
immediate holding of a certification election (Rollo, p. 18). Although the case was scheduled for hearing at least three times, no amicable settlement
was reached by the parties. During the scheduled hearing of July 31, 1986 they, however, agreed to submit simultaneously their respective position
papers on or before August 11, 1986 (rollo. p. 62).
Petitioner ALU-TUCP, private respondent herein, in its petition and position paper alleged, among others, (1) that there is no existing collective
bargaining agreement between the respondent employer, petitioner herein, and any other existing legitimate labor unions; (2) that there had neither
been a certification election conducted in the proposed bargaining unit within the last twelve (12) months prior to the filing of the petition nor a
contending union requesting for certification as the. sole and exclusive bargaining representative in the proposed bargaining unit; (3) that more than a
majority of respondent employer's rank-and-file employees/workers in the proposed bargaining unit or one hundred thirty-eight (138) as of the date
of the filing of the petition, have signed membership with the ALU-TUCP and have expressed their written consent and authorization to the filing of
the petition; (4) that in response to petitioner union's two letters to the proprietor/ General Manager of respondent employer, dated April 21, 1986 and
May 8, 1 986, requesting for direct recognition as the sole and exclusive bargaining agent of the rank-and-file workers, respondent employer has
locked out 119 of its rank-and-file employees in the said bargaining unit and had dismissed earlier the local union president, vice-president and three
other active members of the local unions for which an unfair labor practice case was filed by petitioner union against respondent employer last July 2,
1986 before the NLRC in Cagayan de Oro City (Rollo, pp. 18; 263).<re||an1w>
Respondent employer, on the other hand, alleged in its position paper, among others, (1) that due to the nature of its business, very few of its
employees are permanent, the overwhelming majority of which are seasonal and casual and regular employees; (2) that of the total 138 rank-and-file
employees who authorized, signed and supported the filing of the petition (a) 14 were no longer working as of June 3, 1986 (b) 4 resigned after June,
1986 (c) 6 withdrew their membership from petitioner union (d) 5 were retrenched on June 23, 1986 (e) 12 were dismissed due to malicious
insubordination and destruction of property and (f) 100 simply abandoned their work or stopped working; (3) that the 128 incumbent employees or
workers of the livestock section were merely transferred from the agricultural section as replacement for those who have either been dismissed,
retrenched or resigned; and (4) that the statutory requirement for holding a certification election has not been complied with by the union (Rollo, p.
26).
The Labor Arbiter granted the certification election sought for by petitioner union in his order dated August 18, 1986 (Rollo, p. 62).
On February 4, 1987, respondent employer Belyca Corporation, appealed the order of the Labor Arbiter to the Bureau of Labor Relations in Manila
(Rollo, p. 67) which denied the appeal (Rollo, p. 80) and the motion for reconsideration (Rollo, p. 92). Thus, the instant petition received in this Court
by mail on February 20, 1987 (Rollo, p. 3).
In the resolution of March 4, 1987, the Second Division of this Court required respondent Union to comment on the petition and issued a temporary
restraining order (,Rollo, p. 95).
Respondent union filed its comment on March 30, 1987 (Rollo, p. 190); public respondents filed its comment on April 8, 1987 (Rollo, p. 218).
On May 4, 1987, the Court resolved to give due course to the petition and to require the parties to submit their respective memoranda within twenty
(20) days from notice (Rollo, p. 225).
The Office of the Solicitor General manifested on June 11, 1987 that it is adopting the comment for public respondents as its memorandum (Rollo, p.
226); memorandum for respondent ALU was filed on June 30, 1987 (Rollo, p. 231); and memorandum for petitioner, on July 30, 1987 (Rollo, p.
435).
The issues raised in this petition are:
I

WHETHER OR NOT THE PROPOSED BARGAINING UNIT IS AN APPROPRIATE BARGAINING UNIT.

II
WHETHER OR NOT THE STATUTORY REQUIREMENT OF 30% (NOW 20%) OF THE EMPLOYEES IN THE PROPOSED
BARGAINING UNIT, ASKING FOR A CERTIFICATION ELECTION HAD BEEN STRICTLY COMPLIED WITH.
In the instant case, respondent ALU seeks direct certification as the sole and exclusive bargaining agent of all the rank-and-file workers of the
livestock and agro division of petitioner BELYCA Corporation (Rollo, p. 232), engaged in piggery, poultry raising and the planting of agricultural
crops such as corn, coffee and various vegetables (Rollo, p. 26). But petitioner contends that the bargaining unit must include all the workers in its
integrated business concerns ranging from piggery, poultry, to supermarts and cinemas so as not to split an otherwise single bargaining unit into
fragmented bargaining units (Rollo, p. 435).<re||an1w>
The Labor Code does not specifically define what constitutes an appropriate collective bargaining unit. Article 256 of the Code provides:
Art. 256. Exclusive bargaining representative.The labor organization designated or selected by the majority
of the employees in an appropriate collective bargaining unit shall be exclusive representative of the
employees in such unit for the purpose of collective bargaining. However, an individual employee or group of
employee shall have the right at any time to present grievances to their employer.
According to Rothenberg, a proper bargaining unit maybe said to be a group of employees of a given employer, comprised of all or less than all of the
entire body of employees, which the collective interests of all the employees, consistent with equity to the employer, indicate to be best suited to
serve reciprocal rights and duties of the parties under the collective bargaining provisions of the law (Rothenberg in Labor Relations, p. 482).
This Court has already taken cognizance of the crucial issue of determining the proper constituency of a collective bargaining unit.
Among the factors considered in Democratic Labor Association v. Cebu Stevedoring Co. Inc. (103 Phil 1103 [1958]) are: "(1) will of employees
(Glove Doctrine); (2) affinity and unity of employee's interest, such as substantial similarity of work and duties or similarity of compensation and
working conditions; (3) prior collective bargaining history; and (4) employment status, such as temporary, seasonal and probationary employees".
Under the circumstances of that case, the Court stressed the importance of the fourth factor and sustained the trial court's conclusion that two separate
bargaining units should be formed in dealing with respondent company, one consisting of regular and permanent employees and another consisting of
casual laborers or stevedores. Otherwise stated, temporary employees should be treated separately from permanent employees. But more importantly,
this Court laid down the test of proper grouping, which is community and mutuality of interest.
Thus, in a later case, (Alhambra Cigar and Cigarette Manufacturing Co. et al. v. Alhambra Employees' Association 107 Phil. 28 [1960]) where the
employment status was not at issue but the nature of work of the employees concerned; the Court stressed the importance of the second factor
otherwise known as the substantial-mutual-interest test and found no reason to disturb the finding of the lower Court that the employees in the
administrative, sales and dispensary departments perform work which has nothing to do with production and maintenance, unlike those in the raw
leaf, cigar, cigarette and packing and engineering and garage departments and therefore community of interest which justifies the format or existence
as a separate appropriate collective bargaining unit.
Still later in PLASLU v. CIR et al. (110 Phil. 180 [1960]) where the employment status of the employees concerned was again challenged, the Court
reiterating the rulings, both in Democratic Labor Association v. Cebu Stevedoring Co. Inc. supra and Alhambra Cigar and Cigarette Co. et al. v.
Alhambra Employees' Association (supra) held that among the factors to be considered are: employment status of the employees to be affected, that
is the positions and categories of work to which they belong, and the unity of employees' interest such as substantial similarity of work and duties.
In any event, whether importance is focused on the employment status or the mutuality of interest of the employees concerned "the basic test of an
asserted bargaining unit's acceptability is whether or not it is fundamentally the combination which will best assure to all employees the exercise of
their collective bargaining rights (Democratic Labor Association v. Cebu Stevedoring Co. Inc. supra)
Hence, still later following the substantial-mutual interest test, the Court ruled that there is a substantial difference between the work performed by
musicians and that of other persons who participate in the production of a film which suffice to show that they constitute a proper bargaining unit.
(LVN Pictures, Inc. v. Philippine Musicians Guild, 1 SCRA 132 [1961]).
Coming back to the case at bar, it is beyond question that the employees of the livestock and agro division of petitioner corporation perform work
entirely different from those performed by employees in the supermarts and cinema. Among others, the noted difference are: their working
conditions, hours of work, rates of pay, including the categories of their positions and employment status. As stated by petitioner corporation in its
position paper, due to the nature of the business in which its livestock-agro division is engaged very few of its employees in the division are
permanent, the overwhelming majority of which are seasonal and casual and not regular employees (Rollo, p. 26). Definitely, they have very little in
common with the employees of the supermarts and cinemas. To lump all the employees of petitioner in its integrated business concerns cannot result
in an efficacious bargaining unit comprised of constituents enjoying a community or mutuality of interest. Undeniably, the rank and file employees of
the livestock-agro division fully constitute a bargaining unit that satisfies both requirements of classification according to employment status and of
the substantial similarity of work and duties which will ultimately assure its members the exercise of their collective bargaining rights.
II
It is undisputed that petitioner BELYCA Corporation (Livestock and Agro Division) employs more or less two hundred five (205) rank-and-file
employees and workers. It has no existing duly certified collective bargaining agreement with any legitimate labor organization. There has not been
any certification election conducted in the proposed bargaining unit within the last twelve (12) months prior to the filing of the petition for direct
certification and/or certification election with the Ministry of Labor and Employment, and there is no contending union requesting for certification as
the sole and exclusive bargaining representative in the proposed bargaining unit.
The records show that on the filing of the petition for certification and/or certification election on June 3, 1986; 124 employees or workers which are
more than a majority of the rank-and-file employees or workers in the proposed bargaining unit had signed membership with respondent ALU-TUCP
and had expressed their written consent and authorization to the filing of the petition. Thus, the Labor Arbiter ordered the certification election on
August 18, 1986 on a finding that 30% of the statutory requirement under Art. 258 of the Labor Code has been met.
But, petitioner corporation contends that after June 3, 1986 four (4) employees resigned; six (6) subsequently withdrew their membership; five (5)
were retrenched; twelve (12) were dismissed for illegally and unlawfully barricading the entrance to petitioner's farm; and one hundred (100) simply
abandoned their work.
Petitioner's claim was however belied by the Memorandum of its personnel officer to the 119 employees dated July 28, 1986 showing that the
employees were on strike, which was confirmed by the finding of the Bureau of Labor Relations to the effect that they went on strike on July 24,
1986 (Rollo, p. 419). Earlier the local union president, Warrencio Maputi; the Vice-president, Gilbert Redoblado and three other active members of

the union Carmen Saguing, Roberto Romolo and Iluminada Bonio were dismissed and a complaint for unfair labor practice, illegal dismissal etc. was
filed by the Union in their behalf on July 2, 1986 before the NLRC of Cagayan de Oro City (Rollo, p. 415).<re||an1w> The complaint was
amended on August 20, 1986 for respondent Union to represent Warrencio Maputi and 137 others against petitioner corporation and Bello Casanova
President and General Manager for unfair labor practice, illegal dismissal, illegal lockout, etc. (Rollo, p. 416).
Under Art. 257 of the Labor Code once the statutory requirement is met, the Director of Labor Relations has no choice but to call a certification
election (Atlas Free Workers Union AFWU PSSLU Local v. Noriel, 104 SCRA 565 [1981]; Vismico Industrial Workers Association (VIWA) v.
Noriel, 131 SCRA 569 [1984]) It becomes in the language of the New Labor Code "Mandatory for the Bureau to conduct a certification election for
the purpose of determining the representative of the employees in the appropriate bargaining unit and certify the winner as the exclusive bargaining
representative of all employees in the unit." (Federacion Obrera de la Industria Tabaquera y Otros Trabajadores de Filipinas v. Noriel, 72 SCRA 24
[1976]; Kapisanan Ng Mga Manggagawa v. Noriel, 77 SCRA 414 [1977]); more so when there is no existing collective bargaining agreement.
(Samahang Manggagawa Ng Pacific Mills, Inc. v. Noriel, 134 SCRA 152 [1985]); and there has not been a certification election in the company for
the past three years (PLUM Federation of Industrial and Agrarian Workers v. Noriel, 119 SCRA 299 [1982]) as in the instant case.
It is significant to note that 124 employees out of the 205 employees of the Belyca Corporation have expressed their written consent to the
certification election or more than a majority of the rank and file employees and workers; much more than the required 30% and over and above the
present requirement of 20% by Executive Order No. 111 issued on December 24, 1980 and applicable only to unorganized establishments under Art.
257, of the Labor Code, to which the BELYCA Corporation belong (Ass. Trade Unions (ATU) v. Trajano, G.R. No. 75321, June 20, 1988).) More
than that, any doubt cast on the authenticity of signatures to the petition for holding a certification election cannot be a bar to its being granted
(Filipino Metals Corp. v. Ople 107 SCRA 211 [1981]). Even doubts as to the required 30% being met warrant holding of the certification election
(PLUM Federation of Industrial and Agrarian Workers v. Noriel, 119 SCRA 299 [1982]). In fact, 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 said
petition. On the contrary, the presumption arises that the withdrawal was not free but was procured through duress, coercion or for a valuable
consideration (La Suerte Cigar and Cigarette Factory v. Director of the Bureau of Labor Relations, 123 SCRA 679 [1983]). Hence, the subsequent
disaffiliation of the six (6) employees from the union will not be counted against or deducted from the previous number who had signed up for
certification elections Vismico Industrial Workers Association (VIWA) v. Noriel 131 SCRA 569 [1984]).<re||an1w> Similarly, until a decision,
final in character, has been issued declaring the strike illegal and the mass dismissal or retrenchment valid, the strikers cannot be denied participation
in the certification election notwithstanding, the vigorous condemnation of the strike and the fact that the picketing were attended by violence. Under
the foregoing circumstances, it does not necessarily follow that the strikers in question are no longer entitled to participate in the certification election
on the theory that they have automatically lost their jobs. (Barrera v. CIR, 107 SCRA 596 [1981]). For obvious reasons, the duty of the employer to
bargain collectively is nullified if the purpose of the dismissal of the union members is to defeat the union in the consent requirement for certification
election. (Samahang Manggagawa Ng Via Mare v. Noriel, 98 SCRA 507 [1980]). As stressed by this Court, the holding of a certification election is a
statutory policy that should not be circumvented. (George and Peter Lines Inc. v. Associated Labor Unions (ALU), 134 SCRA 82 [1986]).
Finally, as a general rule, a certification election is the sole concern of the workers. The only exception is where the employer has to file a petition for
certification election pursuant to Art. 259 of the Labor Code because the latter was requested to bargain collectively. But thereafter the role of the
employer in the certification process ceases. The employer becomes merely a bystander (Trade Union of the Phil. and Allied Services (TUPAS) v.
Trajano, 120 SCRA 64 [1983]).
There is no showing that the instant case falls under the above mentioned exception. However, it will be noted that petitioner corporation from the
outset has actively participated and consistently taken the position of adversary in the petition for direct certification as the sole and exclusive
bargaining representative and/or certification election filed by respondent Associated Labor Unions (ALU)-TUCP to the extent of filing this petition
for certiorari in this Court. Considering that a petition for certification election is not a litigation but a mere investigation of a non-adversary character
to determining the bargaining unit to represent the employees (LVN Pictures, Inc. v. Philippine Musicians Guild, supra; Bulakena Restaurant &
Caterer v. Court of Industrial Relations, 45 SCRA 88 [1972]; George Peter Lines, Inc. v. Associated Labor Union, 134 SCRA 82 [1986]; Tanduay
Distillery Labor Union v. NLRC, 149 SCRA 470 [1987]), and its only purpose is to give the employees true representation in their collective
bargaining with an employer (Confederation of Citizens Labor Unions CCLU v. Noriel, 116 SCRA 694 [1982]), there appears to be no reason for the
employer's objection to the formation of subject union, much less for the filing of the petition for a certification election.
PREMISES CONSIDERED, (a) the petition is DISMISSED for lack of merit (b) resolution of the Bureau of Labor Relations dated Nov. 24, 1986 is
AFFIRMED; and the temporary restraining order issued by the Court on March 4, 1987 is LIFTED permanently.
SO ORDERED.
G.R. No. 85985 August 13, 1993
PHILIPPINE AIRLINES, INC. (PAL), petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER ISABEL P. ORTIGUERRA and PHILIPPINE AIRLINES
EMPLOYEES ASSOCIATION (PALEA), respondents.
Solon Garcia for petitioner.
Adolpho M. Guerzon for respondent PALEA.
MELO, J.:
In the instant petition for certiorari, the Court is presented the issue of whether or not the formulation of a Code of Discipline among employees is a
shared responsibility of the employer and the employees.
On March 15, 1985, the Philippine Airlines, Inc. (PAL) completely revised its 1966 Code of Discipline. The Code was circulated among the
employees and was immediately implemented, and some employees were forthwith subjected to the disciplinary measures embodied therein.
Thus, on August 20, 1985, the Philippine Airlines Employees Association (PALEA) filed a complaint before the National Labor Relations
Commission (NLRC) for unfair labor practice (Case No. NCR-7-2051-85) with the following remarks: "ULP with arbitrary implementation of PAL's
Code of Discipline without notice and prior discussion with Union by Management" (Rollo, p. 41). In its position paper, PALEA contended that PAL,
by its unilateral implementation of the Code, was guilty of unfair labor practice, specifically Paragraphs E and G of Article 249 and Article 253 of the
Labor Code. PALEA alleged that copies of the Code had been circulated in limited numbers; that being penal in nature the Code must conform with
the requirements of sufficient publication, and that the Code was arbitrary, oppressive, and prejudicial to the rights of the employees. It prayed that

implementation of the Code be held in abeyance; that PAL should discuss the substance of the Code with PALEA; that employees dismissed under
the Code be reinstated and their cases subjected to further hearing; and that PAL be declared guilty of unfair labor practice and be ordered to pay
damages (pp. 7-14, Record.)
PAL filed a motion to dismiss the complaint, asserting its prerogative as an employer to prescibe rules and regulations regarding employess' conduct
in carrying out their duties and functions, and alleging that by implementing the Code, it had not violated the collective bargaining agreement (CBA)
or any provision of the Labor Code. Assailing the complaint as unsupported by evidence, PAL maintained that Article 253 of the Labor Code cited by
PALEA reffered to the requirements for negotiating a CBA which was inapplicable as indeed the current CBA had been negotiated.
In its reply to PAL's position paper, PALEA maintained that Article 249 (E) of the Labor Code was violated when PAL unilaterally implemented the
Code, and cited provisions of Articles IV and I of Chapter II of the Code as defective for, respectively, running counter to the construction of penal
laws and making punishable any offense within PAL's contemplation. These provisions are the following:
Sec. 2. Non-exclusivity. This Code does not contain the entirety of the rules and regulations of the company. Every employee
is bound to comply with all applicable rules, regulations, policies, procedures and standards, including standards of quality,
productivity and behaviour, as issued and promulgated by the company through its duly authorized officials. Any violations
thereof shall be punishable with a penalty to be determined by the gravity and/or frequency of the offense.
Sec. 7. Cumulative Record. An employee's record of offenses shall be cumulative. The penalty for an offense shall be
determined on the basis of his past record of offenses of any nature or the absence thereof. The more habitual an offender has
been, the greater shall be the penalty for the latest offense. Thus, an employee may be dismissed if the number of his past
offenses warrants such penalty in the judgment of management even if each offense considered separately may not warrant
dismissal. Habitual offenders or recidivists have no place in PAL. On the other hand, due regard shall be given to the length of
time between commission of individual offenses to determine whether the employee's conduct may indicate occasional lapses
(which may nevertheless require sterner disciplinary action) or a pattern of incorrigibility.
Labor Arbiter Isabel P. Ortiguerra handling the case called the parties to a conference but they failed to appear at the scheduled date. Interpreting such
failure as a waiver of the parties' right to present evidence, the labor arbiter considered the case submitted for decision. On November 7, 1986, a
decision was rendered finding no bad faith on the part of PAL in adopting the Code and ruling that no unfair labor practice had been committed.
However, the arbiter held that PAL was "not totally fault free" considering that while the issuance of rules and regulations governing the conduct of
employees is a "legitimate management prerogative" such rules and regulations must meet the test of "reasonableness, propriety and fairness." She
found Section 1 of the Code aforequoted as "an all embracing and all encompassing provision that makes punishable any offense one can think of in
the company"; while Section 7, likewise quoted above, is "objectionable for it violates the rule against double jeopardy thereby ushering in two or
more punishment for the same misdemeanor." (pp. 38-39, Rollo.)
The labor arbiter also found that PAL "failed to prove that the new Code was amply circulated." Noting that PAL's assertion that it had furnished all
its employees copies of the Code is unsupported by documentary evidence, she stated that such "failure" on the part of PAL resulted in the imposition
of penalties on employees who thought all the while that the 1966 Code was still being followed. Thus, the arbiter concluded that "(t)he phrase
ignorance of the law excuses no one from compliance . . . finds application only after it has been conclusively shown that the law was circulated to all
the parties concerned and efforts to disseminate information regarding the new law have been exerted. (p. 39, Rollo.) She thereupon disposed:
WHEREFORE, premises considered, respondent PAL is hereby ordered as follows:
1. Furnish all employees with the new Code of Discipline;
2. Reconsider the cases of employees meted with penalties under the New Code of Discipline and remand the same for further
hearing; and
3. Discuss with PALEA the objectionable provisions specifically tackled in the body of the decision.
All other claims of the complainant union (is) [are] hereby, dismissed for lack of merit.
SO ORDERED. (p. 40, Rollo.)
PAL appealed to the NLRC. On August 19, 1988, the NLRC through Commissioner Encarnacion, with Presiding Commissioner Bonto-Perez and
Commissioner Maglaya concurring, found no evidence of unfair labor practice committed by PAL and affirmed the dismissal of PALEA's charge.
Nonetheless, the NLRC made the following observations:
Indeed, failure of management to discuss the provisions of a contemplated code of discipline which shall govern the conduct of
its employees would result in the erosion and deterioration of an otherwise harmonious and smooth relationship between them as
did happen in the instant case. There is no dispute that adoption of rules of conduct or discipline is a prerogative of management
and is imperative and essential if an industry, has to survive in a competitive world. But labor climate has progressed, too. In the
Philippine scene, at no time in our contemporary history is the need for a cooperative, supportive and smooth relationship
between labor and management more keenly felt if we are to survive economically. Management can no longer exclude labor in
the deliberation and adoption of rules and regulations that will affect them.
The complainant union in this case has the right to feel isolated in the adoption of the New Code of Discipline. The Code of
Discipline involves security of tenure and loss of employment a property right! It is time that management realizes that to
attain effectiveness in its conduct rules, there should be candidness and openness by Management and participation by the union,
representing its members. In fact, our Constitution has recognized the principle of "shared responsibility" between employers and
workers and has likewise recognized the right of workers to participate in "policy and decision-making process affecting their
rights . . ." The latter provision was interpreted by the Constitutional Commissioners to mean participation in "management"'
(Record of the Constitutional Commission, Vol. II).
In a sense, participation by the union in the adoption of the code if conduct could have accelerated and enhanced their feelings of
belonging and would have resulted in cooperation rather than resistance to the Code. In fact, labor-management cooperation is
now "the thing." (pp. 3-4, NLRC Decision ff. p. 149, Original Record.)
Respondent Commission thereupon disposed:
WHEREFORE, premises considered, we modify the appealed decision in the sense that the New Code of Discipline should be
reviewed and discussed with complainant union, particularly the disputed provisions [.] (T)hereafter, respondent is directed to
furnish each employee with a copy of the appealed Code of Discipline. The pending cases adverted to in the appealed decision if

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still in the arbitral level, should be reconsidered by the respondent Philippine Air Lines. Other dispositions of the Labor Arbiter
are sustained.
SO ORDERED. (p. 5, NLRC Decision.)
PAL then filed the instant petition for certiorari charging public respondents with grave abuse of discretion in: (a) directing PAL "to share its
management prerogative of formulating a Code of Discipline"; (b) engaging in quasi-judicial legislation in ordering PAL to share said prerogative
with the union; (c) deciding beyond the issue of unfair labor practice, and (d) requiring PAL to reconsider pending cases still in the arbitral level (p. 7,
Petition; p. 8,Rollo.)
As stated above, the Principal issue submitted for resolution in the instant petition is whether management may be compelled to share with the union
or its employees its prerogative of formulating a code of discipline.
PAL asserts that when it revised its Code on March 15, 1985, there was no law which mandated the sharing of responsibility therefor between
employer and employee.
Indeed, it was only on March 2, 1989, with the approval of Republic Act No. 6715, amending Article 211 of the Labor Code, that the law explicitly
considered it a State policy "(t)o ensure the participation of workers in decision and policy-making processes affecting the rights, duties and welfare."
However, even in the absence of said clear provision of law, the exercise of management prerogatives was never considered boundless. Thus, in Cruz
vs. Medina (177 SCRA 565 [1989]) it was held that management's prerogatives must be without abuse of discretion.
In San Miguel Brewery Sales Force Union (PTGWO) vs. Ople (170 SCRA 25 [1989]), we upheld the company's right to implement a new system of
distributing its products, but gave the following caveat:
So long as a company's management prerogatives are exercised in good faith for the advancement of the employer's interest and
not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, this
Court will uphold them.
(at p. 28.)
All this points to the conclusion that the exercise of managerial prerogatives is not unlimited. It is circumscribed by limitations found in law, a
collective bargaining agreement, or the general principles of fair play and justice (University of Sto. Tomas vs. NLRC, 190 SCRA 758 [1990]).
Moreover, as enunciated in Abbott Laboratories (Phil.), vs. NLRC (154 713 [1987]), it must be duly established that the prerogative being invoked is
clearly a managerial one.
A close scrutiny of the objectionable provisions of the Code reveals that they are not purely business-oriented nor do they concern the management
aspect of the business of the company as in the San Miguel case. The provisions of the Code clearly have repercusions on the employee's right to
security of tenure. The implementation of the provisions may result in the deprivation of an employee's means of livelihood which, as correctly
pointed out by the NLRC, is a property right (Callanta, vs Carnation Philippines, Inc., 145 SCRA 268 [1986]). In view of these aspects of the case
which border on infringement of constitutional rights, we must uphold the constitutional requirements for the protection of labor and the promotion
of social justice, for these factors, according to Justice Isagani Cruz, tilt "the scales of justice when there is doubt, in favor of the worker" (Employees
Association of the Philippine American Life Insurance Company vs. NLRC, 199 SCRA 628 [1991] 635).
Verily, a line must be drawn between management prerogatives regarding business operations per se and those which affect the rights of the
employees. In treating the latter, management should see to it that its employees are at least properly informed of its decisions or modes action. PAL
asserts that all its employees have been furnished copies of the Code. Public respondents found to the contrary, which finding, to say the least is
entitled to great respect.
PAL posits the view that by signing the 1989-1991 collective bargaining agreement, on June 27, 1990, PALEA in effect, recognized PAL's "exclusive
right to make and enforce company rules and regulations to carry out the functions of management without having to discuss the same with PALEA
and much less, obtain the latter'sconformity thereto" (pp. 11-12, Petitioner's Memorandum; pp 180-181, Rollo.) Petitioner's view is based on the
following provision of the agreement:
The Association recognizes the right of the Company to determine matters of management it policy and Company operations and
to direct its manpower. Management of the Company includes the right to organize, plan, direct and control operations, to hire,
assign employees to work, transfer employees from one department, to another, to promote, demote, discipline, suspend or
discharge employees for just cause; to lay-off employees for valid and legal causes, to introduce new or improved methods or
facilities or to change existing methods or facilities and the right to make and enforce Company rules and regulations to carry out
the functions of management.
The exercise by management of its prerogative shall be done in a just reasonable, humane and/or lawful manner.
Such provision in the collective bargaining agreement may not be interpreted as cession of employees' rights to participate in the deliberation of
matters which may affect their rights and the formulation of policies relative thereto. And one such mater is the formulation of a code of discipline.
Indeed, industrial peace cannot be achieved if the employees are denied their just participation in the discussion of matters affecting their rights.
Thus, even before Article 211 of the labor Code (P.D. 442) was amended by Republic Act No. 6715, it was already declared a policy of the State, "(d)
To promote the enlightenment of workers concerning their rights and obligations . . . as employees." This was, of course, amplified by Republic Act
No 6715 when it decreed the "participation of workers in decision and policy making processes affecting their rights, duties and welfare." PAL's
position that it cannot be saddled with the "obligation" of sharing management prerogatives as during the formulation of the Code, Republic Act No.
6715 had not yet been enacted (Petitioner's Memorandum, p. 44; Rollo, p. 212), cannot thus be sustained. While such "obligation" was not yet
founded in law when the Code was formulated, the attainment of a harmonious labor-management relationship and the then already existing state
policy of enlightening workers concerning their rights as employees demand no less than the observance of transparency in managerial moves
affecting employees' rights.
Petitioner's assertion that it needed the implementation of a new Code of Discipline considering the nature of its business cannot be overemphasized.
In fact, its being a local monopoly in the business demands the most stringent of measures to attain safe travel for its patrons. Nonetheless, whatever
disciplinary measures are adopted cannot be properly implemented in the absence of full cooperation of the employees. Such cooperation cannot be
attained if the employees are restive on account, of their being left out in the determination of cardinal and fundamental matters affecting their
employment.
WHEREFORE, the petition is DISMISSED and the questioned decision AFFIRMED. No special pronouncement is made as to costs.
SO ORDERED.

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